AQUISITIONS AND DISCONTINUED OPERATIONS

3 Months Ended

Apr. 02, 2022

Acquisitions and Discontinued Operations [Abstract]

ACQUISITIONS AND DISCONTINUED OPERATIONS

As indicated in Note 1, on April 19, 2021, August 2, 2021, December 15, 2021, and March 31, 2022, we completed the acquisitions of Sealite, ECS, Cincinnati Fan, and ITL, respectively. The pro forma effects of these acquisitions are not material to our condensed consolidated results of operations.

Sale of Transformer Solutions Business

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions. During the first quarter of 2022, we reached agreement with the Purchaser on the amount of cash, debt and working capital on the date the Transaction was consummated, for a payment made to the Purchaser of $13.9 with no resulting adjustment to the gain on sale.

The results of Transformer Solutions are presented as a discontinued operation for all periods presented. Major line items constituting pre-tax income and after-tax income of Transformer Solutions for the three months ended April 3, 2021 are shown below:


	Three months ended
	April 3, 2021
Revenues	$	110.6
Costs and expenses:
Cost of product sold	89.4
Selling, general and administrative	9.5


Other expense, net	0.2

Income before income tax	11.5
Income tax provision	(2.9)
Income from discontinued operations, net of tax	$	8.6

Wind-Down of DBT Business

As discussed in Note 1, we completed the wind-down of our DBT business in the fourth quarter of 2021. As a result of completing the wind-down plan, we are reporting DBT as a discontinued operation for all periods presented.

Major line items constituting pre-tax loss and after-tax loss of DBT for the three months ended April 3, 2021 are shown below:


	Three months ended
	April 3, 2021
Revenues	$	0.7
Costs and expenses:
Cost of product sold	1.0
Selling, general and administrative	4.2
Special charges	0.5
Other expense, net	0.2

Loss before tax	(5.2)
Income tax benefit	1.2
Loss after tax	$	(4.0)

The assets and liabilities of DBT have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of April 2, 2022 and December 31, 2021. The major line items constituting DBT's assets and liabilities as of April 2, 2022 and December 31, 2021 are shown below:


	April 2, 2022		December 31, 2021
ASSETS
Cash and equivalents	$	6.7	$	7.8
Accounts receivable, net	10.0		9.1
Other current assets	7.7		7.0
Property, plant and equipment:
Buildings and leasehold improvements	0.3		0.2
Machinery and equipment	1.5		1.5
	1.8		1.7
Accumulated depreciation	(1.6)		(1.5)
Property, plant and equipment, net	0.2		0.2
Other assets	30.4		27.6
Total assets of DBT	$	55.0	$	51.7
LIABILITIES
Accounts payable	$	1.6	$	2.3
Contract liabilities	5.8		5.6
Accrued expenses	25.1		22.4
Other long-term liabilities	5.3		4.9
Total liabilities of DBT	$	37.8	$	35.2

Wind-Down of the Heat Transfer Business

We completed the wind-down of our SPX Heat Transfer (“Heat Transfer”) business in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all periods presented.

The assets and liabilities of Heat Transfer have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of April 2, 2022 and December 31, 2021. The major line items constituting Heat Transfer's assets and liabilities as of April 2, 2022 and December 31, 2021 are shown below:


	April 2, 2022		December 31, 2021
ASSETS
Accounts receivable, net	$	0.1	$	0.1
Other current assets	0.2		0.2
Other assets	0.1		0.2

Total assets of Heat Transfer	$	0.4	$	0.5
LIABILITIES
Accounts payable	$	0.1	$	0.3
Accrued expenses	0.1		0.1
Total liabilities of Heat Transfer	$	0.2	$	0.4

Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g. income taxes) may occur. As a result, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods.

For the three months ended April 2, 2022 and April 3, 2021, results of operations from our businesses reported as discontinued operations were as follows:


	Three months ended
	April 2, 2022		April 3, 2021
Transformer Solutions (1)
Income (loss) from discontinued operations	$	(0.3)	$	11.5
Income tax (provision) benefit	0.1		(2.9)
Income (loss) from discontinued operations, net	(0.2)		8.6

DBT (2)
Loss from discontinued operations	(1.6)		(5.2)
Income tax benefit	0.4		1.2
Loss from discontinued operations, net	(1.2)		(4.0)

Heat Transfer (3)
Loss from discontinued operations	—		(0.1)
Income tax (provision) benefit	—		—
Loss from discontinued operations, net	—		(0.1)

All other (3)
Loss from discontinued operations	(0.2)		(0.9)
Income tax benefit	—		0.2
Loss from discontinued operations, net	(0.2)		(0.7)

Total
Income (loss) from discontinued operations	(2.1)		5.3
Income tax (provision) benefit	0.5		(1.5)
Income (loss) from discontinued operations, net	$	(1.6)	$	3.8

___________________________

(1) Loss for the three months ended April 2, 2022 resulted primarily from revisions to liabilities retained in connection with the disposition.

(2) Loss for the three months ended April 2, 2022 resulted primarily from legal costs incurred in connection with various dispute resolution matters related to two large power projects.

(3) Loss for the three months ended April 2, 2022 and April 3, 2021 resulted primarily from revisions to liabilities retained in connection with prior dispositions.