Segment Results

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Results

Segment Results

A description of the Company’s two reportable segments, including the specific products manufactured and sold follows below.

In the Industrial Technologies and Services segment, the Company designs, manufactures, markets and services a broad range of compression and vacuum equipment as well as fluid transfer equipment, and loading systems. The Company’s compression and vacuum products are used worldwide in industrial manufacturing, transportation, chemical processing, food and beverage production, clean energy, environmental and other applications. In addition to equipment sales, the Company offers a broad portfolio of service options tailored to customer needs and complete range of aftermarket parts, air treatment equipment, controls and other accessories. The Company’s engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials.

In the Precision and Science Technologies segment, the Company designs, manufactures and markets a broad range of specialized positive displacement pumps, fluid management equipment and aftermarket parts for medical, laboratory, industrial manufacturing, water and wastewater, chemical processing, clean energy, food and beverage, agriculture and other markets. The Company’s products are used for a diverse set of applications including precision dosing of chemicals and supplements, blood dialysis, oxygen therapy, food processing, fluid transfer and dispensing, spray finishing and coating, mixing, high-pressure air and gas management and others. The Company sells primarily through a broad global network of specialized and national distributors and original equipment manufacturers who integrate the Company’s products into their devices and systems.

The Chief Operating Decision Maker (“CODM”) evaluates the performance of the Company’s reportable segments based on, among other measures, Segment Adjusted EBITDA. Management closely monitors the Segment Adjusted EBITDA of each reportable segment to evaluate past performance and actions required to improve profitability. Inter-segment sales and transfers are not significant. Administrative expenses related to the Company’s corporate offices and shared service centers in the United States and Europe, which includes transaction processing, accounting and other business support functions, are allocated to the business segments. Certain administrative expenses, including senior management compensation, treasury, internal audit, tax compliance, certain information technology, and other corporate functions, are not allocated to the business segments.

The following table provides summarized information about the Company’s operations by reportable segment and reconciles Segment Adjusted EBITDA to Income Before Income Taxes for the three month periods ended March 31, 2024 and 2023.

	For the Three Month Period Ended March 31,
	2024		2023
Revenue
Industrial Technologies and Services	$	1,373.4	$	1,317.2
Precision and Science Technologies	296.7		312.1
Total Revenue	$	1,670.1	$	1,629.3
Segment Adjusted EBITDA
Industrial Technologies and Services	$	411.1	$	345.6
Precision and Science Technologies	91.4		94.5
Total Segment Adjusted EBITDA	$	502.5	$	440.1
Less items to reconcile Segment Adjusted EBITDA to Income Before Income Taxes:
Corporate expenses not allocated to segments	$	44.0	$	40.0
Interest expense	36.8		38.9
Depreciation and amortization expense (a)	116.3		113.1
Restructuring and related business transformation costs (b)	10.7		4.3
Acquisition and other transaction related expenses and non-cash charges (c)	15.3		18.0
Stock-based compensation	14.1		12.1
Foreign currency transaction losses (gains), net	(0.7)		1.0
Adjustments to LIFO inventories	6.8		7.8
Cybersecurity incident costs (d)	0.6		—
Interest income on cash and cash equivalents	(11.4)		(4.7)
Other adjustments (e)	0.4		(1.4)
Income Before Income Taxes	269.6		211.0
Provision for income taxes	54.4		48.1
Income (loss) on equity method investments	(10.7)		0.3
Net Income	$	204.5	$	163.2

a)Depreciation and amortization expense excludes $0.9 million and $0.9 million of depreciation of rental equipment for the three month periods ended March 31, 2024 and 2023, respectively.

b)Restructuring and related business transformation costs consist of the following.

	For the Three Month Period Ended March 31,
	2024		2023
Restructuring charges	$	9.7	$	2.9
Facility reorganization, relocation and other costs	1.0		1.4
Total restructuring and related business transformation costs	$	10.7	$	4.3

c)Represents costs associated with successful and abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

d)Represents non-recoverable costs associated with a cybersecurity event.

e)Includes (i) pension and other postemployment plan costs other than service cost and (ii) other miscellaneous adjustments.