QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbols(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Revenues | $ | $ | |||||||||
Costs and expenses: | |||||||||||
Cost of products sold | |||||||||||
Selling, general and administrative | |||||||||||
Intangible amortization | |||||||||||
Other operating income | ( | ||||||||||
Operating income | |||||||||||
Other income, net | |||||||||||
Interest expense | ( | ( | |||||||||
Interest income | |||||||||||
Income from continuing operations before income taxes | |||||||||||
Income tax provision | ( | ( | |||||||||
Income from continuing operations | |||||||||||
Income (loss) from discontinued operations, net of tax | |||||||||||
Gain (loss) on disposition of discontinued operations, net of tax | ( | ||||||||||
Income (loss) from discontinued operations, net of tax | ( | ||||||||||
Net income | $ | $ | |||||||||
Basic income per share of common stock: | |||||||||||
Income from continuing operations | $ | $ | |||||||||
Income (loss) from discontinued operations | ( | ||||||||||
Net income per share | $ | $ | |||||||||
Weighted-average number of common shares outstanding — basic | |||||||||||
Diluted income per share of common stock: | |||||||||||
Income from continuing operations | $ | $ | |||||||||
Income (loss) from discontinued operations | ( | ||||||||||
Net income per share | $ | $ | |||||||||
Weighted-average number of common shares outstanding — diluted | |||||||||||
Comprehensive income | $ | $ |
April 1, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Contract assets | |||||||||||
Inventories, net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment: | |||||||||||
Land | |||||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangibles, net | |||||||||||
Other assets | |||||||||||
Deferred income taxes | |||||||||||
Assets of DBT and Heat Transfer (includes cash and equivalents of $ | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Contract liabilities | |||||||||||
Accrued expenses | |||||||||||
Income taxes payable | |||||||||||
Short-term debt | |||||||||||
Current maturities of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred and other income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Liabilities of DBT and Heat Transfer (Note 3) | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingent liabilities (Note 15) | |||||||||||
Stockholders' Equity: | |||||||||||
Common stock ( | |||||||||||
Paid-in capital | |||||||||||
Retained deficit | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Common stock in treasury ( | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
Three months ended April 1, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | Paid-In Capital | Retained Deficit | Accum. Other Comprehensive Income | Common Stock In Treasury | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | |||||||||||||||||||||||||||||||
Incentive plan activity | — | — | — | — | |||||||||||||||||||||||||||||||
Long-term incentive compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Balance at April 1, 2023 | $ | $ | $ | ( | $ | $ | ( | $ |
Three months ended April 2, 2022 | |||||||||||||||||||||||||||||||||||
Common Stock | Paid-In Capital | Retained Deficit | Accum. Other Comprehensive Income | Common Stock In Treasury | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | |||||||||||||||||||||||||||||||
Incentive plan activity | — | — | — | — | |||||||||||||||||||||||||||||||
Long-term incentive compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Balance at April 2, 2022 | $ | $ | $ | ( | $ | $ | ( | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Cash flows from (used in) operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Less: Gain (loss) from discontinued operations, net of tax | ( | ||||||||||
Income from continuing operations | |||||||||||
Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities: | |||||||||||
Gain on change in fair value of equity security | ( | ( | |||||||||
Deferred and other income taxes | ( | ||||||||||
Depreciation and amortization | |||||||||||
Pension and other employee benefits | |||||||||||
Long-term incentive compensation | |||||||||||
Other, net | ( | ||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures: | |||||||||||
Accounts receivable and other assets | ( | ||||||||||
Inventories | ( | ( | |||||||||
Accounts payable, accrued expenses and other | ( | ( | |||||||||
Cash spending on restructuring actions | ( | ||||||||||
Net cash from (used in) continuing operations | ( | ||||||||||
Net cash used in discontinued operations | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from (used in) investing activities: | |||||||||||
Proceeds related to company-owned life insurance policies, net | |||||||||||
Business acquisition, net of cash acquired | ( | ||||||||||
Capital expenditures | ( | ( | |||||||||
Net cash used in continuing operations | ( | ( | |||||||||
Net cash used in discontinued operations | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from (used in) financing activities: | |||||||||||
Borrowings under senior credit facilities | |||||||||||
Repayments under senior credit facilities | ( | ||||||||||
Borrowings under trade receivables arrangement | |||||||||||
Repayments under trade receivables arrangement | |||||||||||
Net repayments under other financing arrangements | ( | ||||||||||
Payment of contingent consideration | ( | ||||||||||
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options | ( | ( | |||||||||
Net cash from (used in) continuing operations | ( | ||||||||||
Net cash used in discontinued operations | ( | ||||||||||
Net cash from (used in) financing activities | ( | ||||||||||
Change in cash and equivalents due to changes in foreign currency exchange rates | ( | ||||||||||
Net change in cash and equivalents | ( | ||||||||||
Consolidated cash and equivalents, beginning of period | |||||||||||
Consolidated cash and equivalents, end of period | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Components of cash and equivalents: | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Cash and equivalents included in assets of DBT and Heat Transfer | |||||||||||
Total cash and equivalents | $ | $ |
April 2, 2022 | |||||||||||||||||
As Previously Presented | Effect of Change | Current Presentation | |||||||||||||||
Income: | |||||||||||||||||
HVAC reportable segment | $ | $ | $ | ||||||||||||||
Detection and Measurement reportable segment | |||||||||||||||||
Total income for segments | |||||||||||||||||
Corporate expense | |||||||||||||||||
Acquisition-related costs (1) | |||||||||||||||||
Long-term incentive compensation expense | |||||||||||||||||
Amortization of intangible assets | |||||||||||||||||
Other operating income | ( | ( | |||||||||||||||
Consolidated operating income | $ | $ | $ |
April 1, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||
Cash and equivalents | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Other current assets | ||||||||||||||
Property, plant and equipment: | ||||||||||||||
Buildings and leasehold improvements | ||||||||||||||
Machinery and equipment | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
Property, plant and equipment, net | ||||||||||||||
Other assets | ||||||||||||||
Total assets of DBT | $ | $ | ||||||||||||
LIABILITIES | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Contract liabilities | ||||||||||||||
Accrued expenses | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities of DBT | $ | $ |
April 1, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||
Other current assets | $ | $ | ||||||||||||
Other assets | ||||||||||||||
Total assets of Heat Transfer | $ | $ | ||||||||||||
LIABILITIES | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Total liabilities of Heat Transfer | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
DBT | |||||||||||
Income (loss) from discontinued operations (1) | $ | $ | ( | ||||||||
Income tax benefit | |||||||||||
Income (loss) from discontinued operations, net | ( | ||||||||||
All other | |||||||||||
Loss from discontinued operations (2) | ( | ||||||||||
Income tax benefit | |||||||||||
Loss from discontinued operations, net | ( | ||||||||||
Total | |||||||||||
Income (loss) from discontinued operations | ( | ||||||||||
Income tax benefit | |||||||||||
Income (loss) from discontinued operations, net | $ | $ | ( |
Three months ended April 1, 2023 | ||||||||||||||||||||
Reportable Segments | HVAC | Detection and Measurement | Total | |||||||||||||||||
Major product lines | ||||||||||||||||||||
Package and process cooling equipment and services, and engineered air movement solutions | $ | $ | $ | |||||||||||||||||
Boilers, comfort heating, and ventilation | ||||||||||||||||||||
Underground locators, inspection and rehabilitation equipment, and robotic systems | ||||||||||||||||||||
Communication technologies, aids to navigation, and transportation systems | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||
Revenues recognized at a point in time | $ | $ | $ | |||||||||||||||||
Revenues recognized over time | ||||||||||||||||||||
$ | $ | $ |
Three months ended April 2, 2022 | ||||||||||||||||||||
Reportable Segments | HVAC | Detection and Measurement | Total | |||||||||||||||||
Major product lines | ||||||||||||||||||||
Package and process cooling equipment and services, and engineered air movement solutions | $ | $ | $ | |||||||||||||||||
Boilers, comfort heating, and ventilation | ||||||||||||||||||||
Underground locators, inspection and rehabilitation equipment, and robotic systems | ||||||||||||||||||||
Communication technologies, aids to navigation, and transportation systems | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||
Revenues recognized at a point in time | $ | $ | $ | |||||||||||||||||
Revenues recognized over time | ||||||||||||||||||||
$ | $ | $ |
Contract Balances | April 1, 2023 | December 31, 2022 | Change | ||||||||||||||
Contract Accounts Receivable(1) | $ | $ | $ | ||||||||||||||
Contract Assets | |||||||||||||||||
Contract Liabilities - current | ( | ( | ( | ||||||||||||||
Contract Liabilities - non-current(2) | ( | ( | |||||||||||||||
Net contract balance | $ | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Revenues: | |||||||||||
HVAC reportable segment | $ | $ | |||||||||
Detection and Measurement reportable segment | |||||||||||
Consolidated revenues | $ | $ | |||||||||
Income: | |||||||||||
HVAC reportable segment | $ | $ | |||||||||
Detection and Measurement reportable segment | |||||||||||
Total income for segments | |||||||||||
Corporate expense | |||||||||||
Acquisition-related and other costs (1) | |||||||||||
Long-term incentive compensation expense | |||||||||||
Amortization of intangible assets | |||||||||||
Other operating income | ( | ||||||||||
Consolidated operating income | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Balance at beginning of year | $ | $ | |||||||||
Special charges | |||||||||||
Utilization — cash | ( | ||||||||||
Currency translation adjustment and other | |||||||||||
Balance at end of period | $ | $ |
April 1, 2023 | December 31, 2022 | ||||||||||
Finished goods | $ | $ | |||||||||
Work in process | |||||||||||
Raw materials and purchased parts | |||||||||||
Total inventories | $ | $ |
December 31, 2022 | Goodwill Resulting from Business Combinations (1) | Foreign Currency Translation | April 1, 2023 | ||||||||||||||||||||
HVAC reportable segment | |||||||||||||||||||||||
Gross goodwill | $ | $ | $ | $ | |||||||||||||||||||
Accumulated impairments | ( | — | ( | ( | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Detection and Measurement reportable segment | |||||||||||||||||||||||
Gross goodwill | |||||||||||||||||||||||
Accumulated impairments | ( | — | ( | ( | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
Gross goodwill | |||||||||||||||||||||||
Accumulated impairments | ( | — | ( | ( | |||||||||||||||||||
Goodwill | $ | $ | $ | $ |
April 1, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||
Intangible assets with determinable lives: | |||||||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Technology | ( | ( | |||||||||||||||||||||||||||||||||
Patents | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
( | ( | ||||||||||||||||||||||||||||||||||
Trademarks with indefinite lives | — | — | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Balance at beginning of year | $ | $ | |||||||||
Acquisitions | |||||||||||
Provisions | |||||||||||
Usage | ( | ( | |||||||||
Balance at end of period | |||||||||||
Less: Current portion of warranty | |||||||||||
Non-current portion of warranty | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Net periodic pension benefit expense | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Net periodic pension benefit income | $ | ( | $ | ( | |||||||
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Amortization of unrecognized prior service credits | ( | ( | |||||||||
Recognized net actuarial losses (1) | |||||||||||
Net periodic postretirement benefit income | $ | ( | $ | ( |
December 31, 2022 | Borrowings | Repayments | Other | April 1, 2023 | |||||||||||||||||||||||||
Revolving loans (1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Term loan(2) | |||||||||||||||||||||||||||||
Trade receivables financing arrangement(3) | |||||||||||||||||||||||||||||
Other indebtedness(4) | ( | ||||||||||||||||||||||||||||
Total debt | $ | $ | ( | $ | |||||||||||||||||||||||||
Less: short-term debt | |||||||||||||||||||||||||||||
Less: current maturities of long-term debt | |||||||||||||||||||||||||||||
Total long-term debt | $ | $ |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Weighted-average number of common shares used in basic income per share | |||||||||||
Dilutive securities — Employee stock options and restricted stock units | |||||||||||
Weighted-average number of common shares and dilutive securities used in diluted income per share |
Unvested PSU’s and RSU’s | Weighted-Average Grant-Date Fair Value Per Share | ||||||||||
Outstanding at December 31, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at April 1, 2023 | $ |
Annual expected stock price volatility | % | ||||
Annual expected dividend yield | % | ||||
Risk-free interest rate | % | ||||
Expected life of stock option (in years) |
Foreign Currency Translation Adjustment | Net Unrealized Gains on Qualifying Cash Flow Hedges(1) | Pension and Postretirement Liability Adjustment(2) | Total | ||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ||||||||||||||||||||
Current-period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Foreign Currency Translation Adjustment | Net Unrealized Gains on Qualifying Cash Flow Hedges(1) | Pension and Postretirement Liability Adjustment(2) | Total | ||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||||||||
Current-period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Amount Reclassified from AOCI | |||||||||||||||||
Three months ended | |||||||||||||||||
April 1, 2023 | April 2, 2022 | Affected Line Item in the Condensed Consolidated Statements of Operations | |||||||||||||||
(Gains) losses on qualifying cash flow hedges: | |||||||||||||||||
Swaps | $ | ( | $ | Interest expense | |||||||||||||
Pre-tax | ( | ||||||||||||||||
Income taxes | ( | ||||||||||||||||
$ | ( | $ | |||||||||||||||
Gains on pension and postretirement items: | |||||||||||||||||
Amortization of unrecognized prior service credits - Pre-tax | $ | ( | $ | ( | Other income, net | ||||||||||||
Income taxes | |||||||||||||||||
$ | ( | $ | ( |
Consolidated Leverage Ratio | Commitment Fee | Term SOFR Loans | ABR Loans | |||||||||||||||||
Less than | % | % | % | |||||||||||||||||
Greater than or equal to | % | % | % | |||||||||||||||||
Greater than or equal to | % | % | % |
Three months ended | |||||||||||||||||
April 1, 2023 | April 2, 2022 | % Change | |||||||||||||||
Revenues | $ | 399.8 | $ | 307.1 | 30.2 | ||||||||||||
Gross profit | 149.9 | 104.0 | 44.1 | ||||||||||||||
% of revenues | 37.5 | % | 33.9 | % | |||||||||||||
Selling, general and administrative expense | 93.8 | 84.2 | 11.4 | ||||||||||||||
% of revenues | 23.5 | % | 27.4 | % | |||||||||||||
Intangible amortization | 6.3 | 9.3 | (32.3) | ||||||||||||||
Other operating income | — | (0.9) | * | ||||||||||||||
Other income, net | 2.5 | 6.5 | (61.5) | ||||||||||||||
Interest expense, net | (1.9) | (2.3) | (17.4) | ||||||||||||||
Income from continuing operations before income taxes | 50.4 | 15.6 | 223.1 | ||||||||||||||
Income tax provision | (11.3) | (2.6) | 334.6 | ||||||||||||||
Income from continuing operations | 39.1 | 13.0 | 200.8 | ||||||||||||||
Components of revenue increase: | |||||||||||||||||
Organic | 30.6 | ||||||||||||||||
Foreign currency | (1.1) | ||||||||||||||||
Acquisitions | 0.7 | ||||||||||||||||
Net revenue increase | 30.2 |
Three months ended | |||||||||||||||||
April 1, 2023 | April 2, 2022 | % Change | |||||||||||||||
Revenues | $ | 251.6 | $ | 193.1 | 30.3 | ||||||||||||
Income | 47.7 | 20.6 | 131.6 | ||||||||||||||
% of revenues | 19.0 | % | 10.7 | % | |||||||||||||
Components of revenue increase: | |||||||||||||||||
Organic | 30.9 | ||||||||||||||||
Foreign currency | (0.6) | ||||||||||||||||
Net revenue increase | 30.3 |
Three months ended | |||||||||||||||||
April 1, 2023 | April 2, 2022 | % Change | |||||||||||||||
Revenues | $ | 148.2 | $ | 114.0 | 30.0 | ||||||||||||
Income | 26.7 | 19.0 | 40.5 | ||||||||||||||
% of revenues | 18.0 | % | 16.7 | % | |||||||||||||
Components of revenue increase: | |||||||||||||||||
Organic | 30.1 | ||||||||||||||||
Foreign currency | (1.9) | ||||||||||||||||
Acquisitions | 1.8 | ||||||||||||||||
Net revenue increase | 30.0 |
Three months ended | |||||||||||||||||
April 1, 2023 | April 2, 2022 | % Change | |||||||||||||||
Total consolidated revenues | $ | 399.8 | $ | 307.1 | 30.2 | ||||||||||||
Corporate expense | 14.6 | 16.6 | (12.0) | ||||||||||||||
% of revenues | 3.7 | % | 5.4 | % | |||||||||||||
Long-term incentive compensation expense | 3.1 | 3.1 | — |
Three months ended | |||||||||||
April 1, 2023 | April 2, 2022 | ||||||||||
Continuing operations: | |||||||||||
Cash flows from (used in) operating activities | $ | 0.8 | $ | (48.6) | |||||||
Cash flows used in investing activities | (3.9) | (43.9) | |||||||||
Cash flows from (used in) financing activities | 62.9 | (11.0) | |||||||||
Cash flows used in discontinued operations | (5.2) | (22.9) | |||||||||
Change in cash and equivalents due to changes in foreign currency exchange rates | 1.0 | (0.1) | |||||||||
Net change in cash and equivalents | $ | 55.6 | $ | (126.5) |
December 31, 2022 | Borrowings | Repayments | Other | April 1, 2023 | |||||||||||||||||||||||||
Revolving loans(1) | $ | — | $ | 20.0 | $ | — | $ | — | $ | 20.0 | |||||||||||||||||||
Term loan(2) | 244.3 | — | — | — | 244.3 | ||||||||||||||||||||||||
Trade receivables financing arrangement(3) | — | 47.0 | — | — | 47.0 | ||||||||||||||||||||||||
Other indebtedness(4) | 2.5 | 0.1 | (0.1) | 0.1 | 2.6 | ||||||||||||||||||||||||
Total debt | 246.8 | $ | 67.1 | $ | (0.1) | $ | 0.1 | 313.9 | |||||||||||||||||||||
Less: short-term debt | 1.8 | 68.9 | |||||||||||||||||||||||||||
Less: current maturities of long-term debt | 2.0 | 3.5 | |||||||||||||||||||||||||||
Total long-term debt | $ | 243.0 | $ | 241.5 |
2.1 | |||||
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101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL) | ||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF* | Inline XBRL Taxonomy Extension Definitions Linkbase Document | ||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101.*) |
SPX TECHNOLOGIES, INC. | |||||||||||
(Registrant) | |||||||||||
Date: May 4, 2023 | By | /s/ Eugene J. Lowe, III | |||||||||
President and Chief Executive Officer | |||||||||||
Date: May 4, 2023 | By | /s/ Mark A. Carano | |||||||||
Vice President, Chief Financial Officer and Treasurer | |||||||||||
Date: May 4, 2023 | /s/ EUGENE J. LOWE, III | ||||
Eugene J. Lowe, III President and Chief Executive Officer |
Date: May 4, 2023 | /s/ MARK A. CARANO | ||||
Mark A. Carano Vice President, Chief Financial Officer and Treasurer | |||||
/s/ EUGENE J. LOWE, III | /s/ MARK A. CARANO | |||||||
Eugene J. Lowe, III President and Chief Executive Officer | Mark A. Carano Vice President, Chief Financial Officer and Treasurer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
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Statement of Financial Position [Abstract] | ||
Cash and equivalents included in assets of DBT and Heat Transfer | $ 7.9 | $ 9.3 |
Common stock issued (in shares) | 53,442,050 | 53,350,918 |
Common stock outstanding (in shares) | 45,476,237 | 45,291,989 |
Treasury stock (in shares) | 7,965,813 | 8,058,929 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions |
Apr. 01, 2023 |
Apr. 02, 2022 |
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Statement of Cash Flows [Abstract] | ||
Cash and equivalents | $ 204.8 | $ 262.8 |
Cash and equivalents included in assets of DBT and Heat Transfer | 7.9 | 6.7 |
Total cash and equivalents | $ 212.7 | $ 269.5 |
BASIS OF PRESENTATION |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION Unless otherwise indicated, “we,” “us” and “our” mean SPX Technologies, Inc. and its consolidated subsidiaries (“SPX”). We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations). We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. All of our VIE’s are immaterial, individually and in aggregate, to our condensed consolidated financial statements. Merger and Consummation of Holding Company Reorganization As of August 15, 2022, SPX Technologies, Inc. (the “Company”) is the successor registrant pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended, to SPX Corporation (“Legacy SPX”) as a result of the completion on August 15, 2022 of a holding company reorganization (the “Holding Company Reorganization”) effected as a merger of Legacy SPX with and into SPX Merger, LLC, a subsidiary of the Company. Each share of Legacy SPX’s common stock, par value $0.01 per share, issued and outstanding immediately prior to the consummation of the Holding Company Reorganization was automatically converted into an equivalent corresponding share of the Company’s common stock having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the corresponding share of Legacy SPX common stock being converted. Accordingly, upon consummation of the Holding Company Reorganization, Legacy SPX stockholders became stockholders of the Company. The terms “SPX,” “we” and “our” include Legacy SPX for periods prior to the consummation of the Holding Company Reorganization as the context requires. Divestiture of Asbestos Liabilities and Certain Assets On November 1, 2022, we divested three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets, to Canvas Holdco LLC (“Canvas”), an entity formed by a joint venture of Global Risk Capital LLC and an affiliate of Premia Holdings Ltd. In connection with the divestiture (the “Asbestos Portfolio Sale”), the divested subsidiaries have agreed to indemnify us and our affiliates for their asbestos-related liabilities, which encompassed all of our consolidated asbestos-related liabilities and contingent liabilities immediately prior to the divestiture. These indemnification obligations are not subject to any cap or time limitation. As a result of this transaction, the Company divested all obligations with respect to pending and future asbestos claims relating to these matters. The board of managers of the divested subsidiaries each received a solvency opinion from an independent advisory firm that the divested subsidiaries were solvent after giving effect to the Asbestos Portfolio Sale. The agreement for the Asbestos Portfolio Sale contains customary representations and warranties with respect to the divested subsidiaries, the Company, and Canvas. Pursuant to the agreement, the Company and Canvas will each indemnify the other for breaches of representation and warranties or breaches of covenants, subject to certain limitations as set forth in the agreement. Refer to Note 15 for additional details. Acquisition of ECS On August 2, 2021, we completed the acquisition of Enterprise Control Systems Ltd (“ECS”), a leader in the design and manufacture of highly-engineered tactical datalinks and radio frequency (“RF”) countermeasures, including counter-drone and counter-improvised explosive device RF jammers. We purchased ECS for cash consideration of $39.4, net of cash acquired of $5.1. Under the terms of the purchase and sales agreement, the seller was eligible for additional cash consideration of up to $15.4, with payment to be made in the fourth quarter of 2022 upon successful achievement of certain financial performance milestones. The estimated fair value of such contingent consideration as of the date of acquisition was $8.2. During the fourth quarter of 2021, we concluded that the probability of achieving the above financial performance milestones had lessened due to a delay in the execution of a large order, resulting in a reduction of the estimated liability of $6.7. During the first quarter of 2022, we further reduced the estimated liability by $0.9, with such amount recorded within “Other operating income.” The estimated fair value of such contingent consideration was $0.0 at April 1, 2023 and December 31, 2022. The post-acquisition operating results of ECS are reflected within our Detection and Measurement reportable segment. Acquisition of ITL On March 31, 2022, we completed the acquisition of International Tower Lighting, LLC (“ITL”), a leader in the design and manufacture of highly-engineered Aids to Navigation systems, including obstruction lighting for telecommunications towers, wind turbines and numerous other terrestrial obstructions. We purchased ITL for cash proceeds of $40.4, net of (i) cash acquired of $1.1 and (ii) an adjustment to the purchase price received during the third quarter of 2022 related to acquired working capital of $1.4. The post-acquisition operating results of ITL are reflected within our Detection and Measurement reportable segment. Other Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (“our 2022 Annual Report on Form 10-K”). Interim results are not necessarily indicative of full year results. We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2023 are April 1, July 1, and September 30, compared to the respective April 2, July 2, and October 1, 2022 dates. We had one less day in the first quarter of 2023 and will have one more day in the fourth quarter of 2023 than in the respective 2022 periods. It is not practicable to estimate the impact of the one less day on our consolidated operating results for the three months ended April 1, 2023, when compared to the consolidated operating results for the 2022 respective period. Correction of Prior-Year Classification and Disclosure During the fourth quarter of 2022, we concluded that, although the assessment of our reportable segments was performed using the appropriate measures as defined by the Segment Reporting Topic of the Accounting Standards Codification (“Codification”), the disclosure of operating income for each of our reportable segments (“Segment Income”) was not consistent with the measure used by our Chief Operating Decision Maker (“CODM”) when evaluating the results of, or allocating resources to, our reportable segments. We previously disclosed that Segment Income was determined before considering impairments and special charges, long-term incentive compensation, certain other operating income/expense, and other indirect corporate expenses. Our CODM also excludes the impact of intangible asset amortization, inventory step-up charges, and certain other acquisition-related costs from Segment Income. Accordingly, Segment Income, as presented in Note 6, now excludes all of the items noted above. This change had no impact to the amounts previously presented in our condensed consolidated statement of operations for the three months ended April 2, 2022. Although the impact of this change to previously disclosed Segment Income is not material, we revised the prior-year presentation to be consistent with the current-year disclosure. The impact of this change on the Segment Income previously presented for the three months ended April 2, 2022 is summarized below:
______________________________ (1)Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022.
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NEW ACCOUNTING PRONOUNCEMENTS |
3 Months Ended |
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Apr. 01, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on June 30, 2023. In an effort to address the various challenges created by such discontinuance, the Financial Accounting Standards Board (“FASB”) issued three amendments to existing guidance, Accounting Standards Update (“ASU”) No. 2020-04, No. 2021-01, and No. 2022-06, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, etc.) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform. Application of the guidance in the amendments is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2024. In conjunction with entering into an amended and restated credit agreement on August 12, 2022, we adopted this guidance with no material impact on our condensed consolidated financial statements.
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AQUISITIONS AND DISCONTINUED OPERATIONS |
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AQUISITIONS AND DISCONTINUED OPERATIONS | ACQUISITIONS AND DISCONTINUED OPERATIONS As indicated in Note 1, on March 31, 2022, we completed the acquisition of ITL. The pro forma effects of this acquisition are not material to our condensed consolidated results of operations. Sale of Transformer Solutions Business On October 1, 2021, we completed the sale of SPX Transformer Solutions, Inc. During the first quarter of 2022, we agreed to the final adjustment of the purchase price which resulted in a payment to the buyer of $13.9 and an increase to the gain on sale of $0.2. Wind-Down of DBT Business We completed the wind-down of our DBT Technologies (PTY) LTD (“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. 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 1, 2023 and December 31, 2022. The major line items constituting DBT’s assets and liabilities as of April 1, 2023 and December 31, 2022 are shown below:
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 1, 2023 and December 31, 2022. The major line items constituting Heat Transfer’s assets and liabilities as of April 1, 2023 and December 31, 2022 are shown below:
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 1, 2023 and April 2, 2022, results of operations from our businesses reported as discontinued operations were as follows:
___________________________ (1) Income for the three months ended April 1, 2023 resulted primarily from income recorded in connection with a dispute resolution matter (see Note 15 for additional details), partially offset by legal costs incurred in connection with various dispute resolution matters related to two large power projects. The 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. (2) Loss for the three months ended April 2, 2022 resulted primarily from revisions to liabilities retained in connection with prior dispositions.
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES FROM CONTRACTS | REVENUES FROM CONTRACTS Disaggregated Revenues We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three months ended April 1, 2023 and April 2, 2022:
Contract Balances Our customers are invoiced for products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within our condensed consolidated balance sheets. Our contract balances consisted of the following as of April 1, 2023 and December 31, 2022:
___________________________ (1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets. (2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets. The $7.4 increase in our net contract asset balance from December 31, 2022 to April 1, 2023 was due primarily to revenue recognized during the period, partially offset by cash payments received from customers during the period. During the three months ended April 1, 2023, we recognized revenues of $25.8 related to our contract liabilities at December 31, 2022. Performance Obligations As of April 1, 2023, the aggregate amount allocated to remaining performance obligations was $227.0. We expect to recognize revenue on approximately 80% and 91% of remaining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.
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LEASES |
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Apr. 01, 2023 | |
Leases [Abstract] | |
LEASES | LEASES There have been no material changes to our operating and finance leases during the three months ended April 1, 2023. |
LEASES | LEASES There have been no material changes to our operating and finance leases during the three months ended April 1, 2023. |
INFORMATION ON REPORTABLE SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INFORMATION ON REPORTABLE SEGMENTS | INFORMATION ON REPORTABLE SEGMENTS We are a global supplier of highly specialized, engineered solutions with operations in 15 countries and sales in over 100 countries around the world. We have aggregated our operating segments into the following two reportable segments: HVAC and Detection and Measurement. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification. Segment Income is determined before considering, if applicable, impairment and special charges, long-term incentive compensation, certain other operating income/expense, other indirect corporate expenses, intangible asset amortization expense, inventory step-up charges, and certain other acquisition-related costs. This is consistent with the way our CODM evaluates the results of each segment. HVAC Reportable Segment Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement solutions for the HVAC industrial and power generation markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and Asia. Detection and Measurement Reportable Segment Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, Africa, and Asia. Corporate Expense Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters. Financial data for our reportable segments for the three months ended April 1, 2023 and April 2, 2022 are presented below:
______________________________ (1)Includes certain acquisition-related costs incurred during the three months ended April 1, 2023 and April 2, 2022 of $0.6 and $0.1, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022.
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SPECIAL CHARGES, NET |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SPECIAL CHARGES, NET | SPECIAL CHARGES, NET There were no special charges for the three months ended April 1, 2023 and April 2, 2022. No significant future charges are expected to be incurred under actions approved as of April 1, 2023. The following is an analysis of our restructuring liabilities for the three months ended April 1, 2023 and April 2, 2022:
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INVENTORIES, NET |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES, NET | INVENTORIES, NETInventories are accounted for under the first-in, first-out method and are comprised of the following at April 1, 2023 and December 31, 2022:
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill for the three months ended April 1, 2023 were as follows:
___________________________ (1)Reflects an increase in ITL’s goodwill of $0.8 resulting from revisions to the valuation of certain assets and liabilities. Other Intangibles, Net Identifiable intangible assets at April 1, 2023 and December 31, 2022 comprised the following:
At April 1, 2023, the net carrying value of intangible assets with determinable lives consisted of $92.7 in the HVAC reportable segment and $134.5 in the Detection and Measurement reportable segment. At April 1, 2023, trademarks with indefinite lives consisted of $105.2 in the HVAC reportable segment and $63.8 in the Detection and Measurement reportable segment. We review goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. In reviewing goodwill and indefinite-lived intangible assets for impairment, we initially perform a qualitative analysis. If there is an indication of impairment, we then perform a quantitative analysis. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. During the fourth quarter of 2022, we performed a quantitative analysis on the goodwill of our Cincinnati Fan reporting unit. The Cincinnati Fan analysis indicated that the fair value of its net assets exceeded the related carrying value by less than 10%. A change in assumptions used in Cincinnati Fan’s quantitative analysis (e.g., projected revenues and profit growth rates, discount rates, industry price multiples, etc.) could result in the reporting unit’s estimated fair value being less than the carrying value. If Cincinnati Fan is unable to achieve its current financial forecast, we may be required to record an impairment charge in a future period related to its goodwill. As of April 1, 2023, Cincinnati Fan’s goodwill totaled $54.8. We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment. The fair value of our trademarks is based on applying estimated royalty rates to projected revenues, with resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 17). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year.
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WARRANTY |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY | WARRANTYThe following is an analysis of our product warranty accrual for the periods presented:
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EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANSOn February 17, 2022, we transferred our existing liability under the SPX Postretirement Benefit Plans (the “Plans”) for a group of participants with retiree life insurance benefits to an insurance carrier for consideration payable to the insurance carrier of approximately $10.0. Of this consideration, $9.0 was paid during the quarter ended April 2, 2022, with the remainder paid in the second quarter of 2022. This transaction resulted in a settlement charge of $0.7 recorded to “Other income, net” during the first quarter of 2022. In addition, and in connection with this transfer, we remeasured the assets and liabilities of the Plans as of the transfer date, which resulted in a benefit of $0.4 recorded to “Other income, net” for the three months ended April 2, 2022. Net periodic benefit (income) expense for our pension and postretirement plans include the following components: Domestic Pension Plans
Foreign Pension Plans
Postretirement Plans
(1) The three months ended April 2, 2022 includes the impact of the transfer of the retiree life insurance benefits obligation.
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INDEBTEDNESS | INDEBTEDNESS The following summarizes our debt activity (both current and non-current) for the three months ended April 1, 2023:
__________________________ (1)While not due for repayment until August 2027 under the terms of our senior credit agreement, we classify within current liabilities the portion of the outstanding balance that we believe will be repaid over the next year, with such amount based on an estimate of cash that is expected to be generated over such period. (2)The term loan is repayable in quarterly installments equal to 0.625% of the initial term loan balance of $245.0, beginning in December 2023 and in each of the first three quarters of 2024, and 1.25% during the fourth quarter of 2024, all quarters of 2025 and 2026, and the first two quarters of 2027. The remaining balance is payable in full on August 12, 2027. Balances are net of unamortized debt issuance costs of $0.7 at April 1, 2023 and December 31, 2022. (3)Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses. At April 1, 2023, we had $0.9 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $47.0. (4)Primarily includes balances under a purchase card program of $1.9 and $1.8 and finance lease obligations of $0.7 and $0.7 at April 1, 2023 and December 31, 2022, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. Senior Credit Facilities A detailed description of our senior credit facilities is included in our 2022 Annual Report on Form 10-K. At April 1, 2023, we had $469.2 of available borrowing capacity under our revolving credit facilities, after giving effect to borrowings under the domestic revolving loan facility of $20.0 and $10.8 reserved for outstanding letters of credit. In addition, at April 1, 2023, we had $10.7 of available issuance capacity under our foreign credit instrument facilities after giving effect to $14.3 reserved for outstanding letters of credit. The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 6.4% at April 1, 2023. At April 1, 2023, we were in compliance with all covenants of our senior credit agreement.
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DERIVATIVE FINANCIAL INSTRUMENTS |
3 Months Ended |
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Apr. 01, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Swaps We maintain interest rate swap agreements (“Swaps”) that have a remaining notional amount of $228.1, cover the period through November 2024, and effectively convert this portion of the borrowings under our senior credit facilities to a fixed rate of 1.077%, plus the applicable margin. We have designated and are accounting for our Swaps as cash flow hedges. As of April 1, 2023 and December 31, 2022, the unrealized gain, net of tax, recorded in accumulated other comprehensive income (“AOCI”) was $9.1 and $11.0, respectively. In addition, the fair value of our Swaps was $12.2 (with $9.1 recorded as a current asset and $3.1 as a non-current asset) as of April 1, 2023, and $14.7 (with $8.7 recorded as a current asset and $6.0 as a non-current asset) as of December 31, 2022. Changes in the fair value of our Swaps are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings. Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro. From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). We had FX forward contracts with an aggregate notional amount of $7.5 and $6.9 outstanding as of April 1, 2023 and December 31, 2022, respectively, with all of the $7.5 scheduled to mature within one year. The fair value of our FX forward contracts was less than $0.1 at April 1, 2023 and December 31, 2022.
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STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION |
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STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION | STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION Income Per Share The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share:
The weighted-average number of restricted stock units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period were 0.173 and 0.534, respectively, for the three months ended April 1, 2023, and 0.243 and 0.737, respectively, for the three months ended April 2, 2022. Long-Term Incentive Compensation Long-term incentive compensation awards may be granted to certain eligible employees or non-employee directors. A detailed description of the awards granted prior to 2023 is included in our 2022 Annual Report on Form 10-K. Awards granted on March 1, 2023 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, and time-based restricted stock units (“RSU’s”), while other eligible employees were granted PSU’s and RSU’s. The PSU’s are eligible to vest at the end of a three-year performance period, with performance based on the total return of our stock over the three-year performance period against a peer group within the S&P 600 Capital Goods Index. Stock options and RSU’s vest ratably over the three-year period subsequent to the date of grant. Non-employee directors receive annual long-term incentive awards at the time of our annual meeting of stockholders, with the 2023 meeting scheduled for May 9, 2023. Compensation expense within income from continuing operations related to long-term incentive awards totaled $3.1 for the three months ended April 1, 2023 and April 2, 2022. The related tax benefit was $0.5 for the three months ended April 1, 2023 and April 2, 2022. PSU’s and RSU’s We use the Monte Carlo simulation model valuation technique to determine the fair value of our restricted stock units that contain a market condition (i.e., the PSU’s). The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each PSU. The following table summarizes the PSU and RSU activity from December 31, 2022 through April 1, 2023:
As of April 1, 2023, there was $18.3 of unrecognized compensation cost related to PSU’s and RSU’s. We expect this cost to be recognized over a weighted-average period of 2.5 years. Stock Options On March 1, 2023, we granted 0.074 stock options, all of which were outstanding (but not exercisable) as of April 1, 2023. The exercise price per share of these options is $71.93 and the maximum contractual term of these options is 10 years. The fair value per share of the stock options granted on March 1, 2023 was $31.20. The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following assumptions:
Annual expected stock price volatility is based on a weighted average of SPX’s stock volatility of the most recent six-year historical volatility of a peer company group. There is no annual expected dividend yield as we discontinued dividend payments in 2015 and do not expect to pay dividends for the foreseeable future. The average risk-free interest rate is based on the five-year and seven-year treasury constant maturity rates. The expected option life is based on a three-year pro-rata vesting schedule and represents the period of time that awards are expected to be outstanding. As of April 1, 2023, there was $3.4 of unrecognized compensation cost related to stock options. We expect this cost to be recognized over a weighted-average period of 2.7 years. Accumulated Other Comprehensive Income The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 1, 2023 were as follows:
__________________________ (1)Net of tax provision of $3.1 and $3.7 as of April 1, 2023 and December 31, 2022, respectively. (2)Net of tax provision of $2.4 and $2.7 as of April 1, 2023 and December 31, 2022, respectively. The balances as of April 1, 2023 and December 31, 2022 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 2, 2022 were as follows:
_________________________ (1)Net of tax provision of $2.3 and $0.1 as of April 2, 2022 and December 31, 2021, respectively. (2)Net of tax provision of $3.5 and $3.7 as of April 2, 2022 and December 31, 2021, respectively. The balances as of April 2, 2022 and December 31, 2021 include unamortized prior service credits. The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended April 1, 2023 and April 2, 2022:
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CONTINGENT LIABILITIES AND OTHER MATTERS |
3 Months Ended |
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Apr. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND OTHER MATTERS | CONTINGENT LIABILITIES AND OTHER MATTERS General Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims), environmental matters, product liability matters (which, prior to the Asbestos Portfolio Sale, were predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liabilities related to these matters totaled $38.9 and $39.5 at April 1, 2023 and December 31, 2022, respectively. Of these amounts, $31.6 and $30.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at April 1, 2023 and December 31, 2022, respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, including historical claims and payment experience. While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties. As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations. Asbestos Matters As indicated in Note 1, we completed the Asbestos Portfolio Sale on November 1, 2022, which resulted in the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets. As a result of this transaction, the Company divested all obligations with respect to pending and future asbestos claims relating to these subsidiaries. During the three months ended April 2, 2022, our payments for asbestos-related claims, net of respective insurance recoveries of $7.4, were $7.2. During the three months ended April 2, 2022, there were no other changes in estimates associated with our assets and liabilities related to our asbestos product liability matters. Large Power Projects in South Africa Overview - Since 2008, DBT had been executing on two large power projects in South Africa (Kusile and Medupi), on which it has substantially completed its scope of work. Over such time, the business environment surrounding these projects was difficult, as DBT, along with many other contractors on the projects, experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various subcontractors (including DBT and its subcontractors), and various suppliers. DBT’s remaining responsibilities relate largely to resolution of various claims, primarily between itself and one of its prime contractors, Mitsubishi Heavy Industries Power—ZAF (f.k.a. Mitsubishi-Hitachi Power Systems Africa (PTY) LTD), or “MHI.” The challenges related to the projects have resulted in (i) significant adjustments to our revenue and cost estimates for the projects, (ii) DBT’s submission of numerous change orders to the prime contractors, (iii) various claims and disputes between DBT and other parties involved with the projects (e.g., prime contractors, subcontractors, suppliers, etc.), and (iv) the possibility that DBT may become subject to additional claims, which could be significant. It is possible that some outstanding claims may not be resolved until after the prime contractors complete their scopes of work. Our future financial position, operating results, and cash flows could be materially impacted by the resolution of current and any future claims. Claims by DBT - DBT has asserted claims against MHI of approximately South African Rand 1,000.0 (or $55.3). As DBT prepares these claims for dispute resolution processes, the amounts, along with the characterization, of the claims could change. Of these claims, South African Rand 606.0 (or $33.5), which is inclusive of the amounts awarded in the adjudications referred to below, are currently proceeding through contractual dispute resolution processes and DBT is likely to initiate additional dispute resolution processes. DBT is also pursuing several claims to force MHI to abide by its contractual obligations and provide DBT with certain benefits that MHI may have received from its customer on the projects. In addition to existing asserted claims, DBT believes it has additional claims and rights to recovery based on its performance under the contracts with, and actions taken by, MHI. DBT is continuing to evaluate the claims and the amounts owed to it under the contracts based on MHI’s failure to comply with its contractual obligations. The amounts DBT may recover for current and potential future claims against MHI are not currently known given (i) the extent of current and potential future claims by MHI against DBT (see below for further discussion) and (ii) the unpredictable nature of any dispute resolution processes that may occur in connection with these current and potential future claims. No revenue has been recorded in the accompanying condensed consolidated financial statements with respect to current or potential future claims against MHI. On July 23, 2020, a dispute adjudication panel issued a ruling in favor of DBT on certain matters related to the Kusile and Medupi projects. The panel (i) ruled that DBT had achieved takeover on 9 of the units; (ii) ordered MHI to return $2.3 of bonds (which have been subsequently returned by MHI); (iii) ruled that DBT is entitled to the return of an additional $4.3 of bonds upon the completion of certain administrative milestones; (iv) ordered MHI to pay South African Rand 18.4 (or $1.1 at the time of the ruling) in incentive payments for work performed by DBT (which MHI has subsequently paid); and (v) ruled that MHI waived its rights to assert delay damages against DBT on one of the units of the Kusile project. The ruling is subject to MHI’s rights to seek further arbitration in the matter, as provided in the contracts. As such, the incentive payments noted above have not been recorded in our accompanying condensed consolidated statements of operations. On February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT related to costs incurred in connection with delays on two units of the Kusile project. In connection with the ruling, MHI paid DBT South African Rand 126.6 (or $8.6 at the time of payment). This ruling was subject to final and binding arbitration in this matter. In March 2023, an arbitrator upheld the decision of the dispute adjudication panel. As a result, the South African Rand 126.6 (or $7.0) was recorded as income during the quarter ended April 1, 2023, with such amount recorded within “Gain (loss) on disposition of discontinued operations, net of tax.” On April 28, 2021, a dispute adjudication panel issued a ruling in favor of DBT related to costs incurred in connection with delays on two units of the Medupi project. In connection with the ruling, MHI paid DBT South African Rand 82.0 (or $6.0 at the time of payment). This ruling is subject to MHI’s rights to seek further arbitration in the matter and, thus, the amount awarded has not been reflected in our accompanying condensed consolidated statements of operations. Claims by MHI - On February 26, 2019, DBT received notification of an interim claim consisting of both direct and consequential damages from MHI alleging, among other things, that DBT (i) provided defective product and (ii) failed to meet certain project milestones. In September 2020, MHI made a demand on certain bonds issued in its favor by DBT, based solely on these alleged defects, but without further substantiation or other justification (see further discussion below). On December 30, 2020, MHI notified DBT of its intent to take these claims to binding arbitration even though the vast majority of these claims had not been brought appropriately before a dispute adjudication board as required under the relevant subcontracts. On June 4, 2021, in connection with the arbitration, DBT received a revised version of the claim. Similar to the interim claim, we believe the vast majority of the damages summarized in the revised claim are unsubstantiated and, thus, any loss for the majority of these claims is considered remote. The remainder of the claims in both the interim notification and the revised version largely appear to be direct in nature. On September 21, 2022, an arbitration tribunal ruled that only South African Rand 349.6 (or $19.3) of MHI’s revised claim had been brought appropriately before a dispute adjudication board as required under the relevant subcontracts, with MHI’s other claims dismissed from the arbitration proceedings. MHI subsequently referred the claims dismissed from the arbitration, with approximately South African Rand 400.2 (or $22.1) related to claims that are direct in nature, to a new dispute adjudication panel. DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with any of these claims. As such, no loss has been recorded in the accompanying condensed consolidated financial statements with respect to these claims. DBT intends to vigorously defend itself against these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims; (ii) complexity of contractual relationships between the end customer, MHI, and DBT; (iii) legal interpretation of the contract provisions and application of South African law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that may occur in connection with these claims. In April and July 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $22.5) from MHI alleging that DBT failed to meet certain project milestones related to the construction of the filters for both the Kusile and Medupi projects. DBT has numerous defenses against these claims and, thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the accompanying condensed consolidated financial statements with respect to these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss. In March 2023, MHI submitted to DBT notices of intent to claim totaling South African Rand 1,664.0 (or $92.0) related to DBT’s filter and heater scopes of work, alleging that DBT provided defective product. MHI has provided minimal support for these allegations and DBT believes it has numerous defenses against them. Thus, we do not believe that DBT has a probable loss associated with these allegations and DBT intends to vigorously defend itself against them. As such, no amounts have been recorded in the accompanying condensed consolidated financial statements with respect to these allegations. We currently are unable to estimate the range of potential loss, if any, associated with these allegations due to the (i) lack of support provided by MHI; (ii) complexity of contractual relationships between the end customer, MHI, and DBT; (iii) legal interpretation of the contract provisions and application of South African law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that may occur in connection with these claims. Bonds Issued in Favor of MHI - DBT was obligated with respect to bonds issued by banks in favor of MHI. In September of 2020, MHI made a demand, and received payment of South African Rand 239.6 (or $14.3 at the time of payment), on certain of these bonds. In May 2021, MHI made an additional demand, and received payment of South African Rand 178.7 (or $12.5 at the time of payment), on certain of the remaining bonds at such time. In both cases, we funded the payment as required under the terms of the bonds and our senior credit agreement. In its demands, MHI purported that DBT failed to carry out its obligations to rectify certain alleged product defects and that DBT failed to meet certain project milestones. DBT denies liability for such allegations and, thus, fully intends to seek, and believes it is legally entitled to, reimbursement of the South African Rand 418.3 (or $23.1) that has been paid. On October 11, 2022, a dispute adjudication panel ruled MHI drew on amounts in excess of the bond values stipulated in the contracts and was required to refund DBT South African Rand 90.8 (or $5.0 at the time of payment) of the previously demanded amounts, plus interest of South African Rand 12.5 (or $0.7 at the time of payment). MHI paid these amounts on October 14, 2022. We have reflected the remaining South African Rand 327.5 (or $18.1 and $19.1 as of April 1, 2023 and December 31, 2022, respectively) within “Assets of DBT and Heat Transfer” on the accompanying condensed consolidated balance sheets as of April 1, 2023 and December 31, 2022. All other bonds previously issued in favor of MHI have been returned or cancelled by the issuing banks. In addition, SPX Technologies, Inc. has guaranteed DBT’s performance on these projects to the prime contractors, including MHI. Claim against Surety - On February 5, 2021, DBT received payment of $6.7 on bonds issued in support of performance by one of DBT’s sub-contractors. The sub-contractor maintains a right to seek recovery of such amount and, thus, the amount received by DBT has not been reflected in our condensed consolidated statements of operations. Claim for Contingent Consideration Related to ULC Robotics (“ULC”) Acquisition In connection with our acquisition of ULC in September 2020, the seller of ULC was eligible for additional cash consideration of up to $45.0 upon achievement of certain operating and financial performance milestones. During the third quarter of 2021, we concluded that the operational and financial performance milestones noted above were not achieved and, thus, no amount is due to the seller. On August 23, 2022, the seller of ULC initiated a breach-of-contract lawsuit against us in the United States District Court for the Eastern District of New York claiming that it is entitled to a portion of the additional cash consideration linked to certain operating performance milestones totaling $15.0. SPX has numerous defenses against this claim and, thus, we do not believe we have a probable loss associated with the claim. Litigation Matters We are subject to other legal matters that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannot assure you that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows. Environmental Matters Our operations and properties are subject to federal, state, local and foreign regulatory requirements relating to environmental protection. It is our policy to comply fully with all applicable requirements. As part of our effort to comply, we have a comprehensive environmental compliance program that includes environmental audits conducted by internal and external independent professionals, as well as regular communications with our operating units regarding environmental compliance requirements and anticipated regulations. Based on current information, we believe that our operations are in substantial compliance with applicable environmental laws and regulations, and we are not aware of any violations that could have a material effect, individually or in the aggregate, on our business, financial condition, and results of operations or cash flows. We had liabilities for site investigation and/or remediation at 17 sites that we own or control, as of April 1, 2023 and December 31, 2022. In addition, while we believe that we maintain adequate accruals to cover the costs of site investigation and/or remediation, we cannot provide assurance that new matters, developments, laws and regulations, or stricter interpretations of existing laws and regulations will not materially affect our business or operations in the future. Our environmental accruals cover anticipated costs, including investigation, remediation, and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans. It is our policy to revise an estimate once it becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification. In the case of contamination at offsite, third-party disposal sites, as of April 1, 2023 and December 31, 2022 , we have been notified that we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 9 sites, at which the liability has not been settled, and all of which have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated. In our opinion, after considering accruals established for such purposes, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows. Self-Insured Risk Management Matters We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts. This insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposures.
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INCOME AND OTHER TAXES |
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Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME AND OTHER TAXES | INCOME AND OTHER TAXES Uncertain Tax Benefits As of April 1, 2023, we had gross unrecognized tax benefits of $4.5 (net unrecognized tax benefits of $4.1). All of these net unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of April 1, 2023, gross accrued interest totaled $2.1 (net accrued interest of $1.8). As of April 1, 2023, we had no accrual for penalties included in our unrecognized tax benefits. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $3.0. The previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various state matters. Other Tax Matters For the three months ended April 1, 2023, we recorded an income tax provision of $11.3 on $50.4 of pre-tax income from continuing operations, resulting in an effective rate of 22.4%. This compares to an income tax provision for the three months ended April 2, 2022 of $2.6 on $15.6 of pre-tax income from continuing operations, resulting in an effective rate of 16.7%. The most significant item impacting the income tax provision for the first quarter of 2023 and 2022 was $0.9 and $0.7, respectively, of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the periods. We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. U.S. Federal income tax returns are subject to examination for a period of three years after filing the return. We are not currently under examination by the Internal Revenue Service and believe any contingencies in open years are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We regularly have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We regularly have various foreign income tax returns under examination. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.
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FAIR VALUE |
3 Months Ended |
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Apr. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: •Level 1 — Quoted prices for identical instruments in active markets. •Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. •Level 3 — Significant inputs to the valuation model are unobservable. There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. There were no transfers between the three levels of the fair value hierarchy for the periods presented. Valuation Methods Used to Measure Fair Value on a Non-Recurring Basis Contingent Consideration for Sensors & Software and ECS Acquisitions — In connection with the acquisition of Sensors & Software, the sellers were eligible for additional cash consideration of up to $3.7, with payment of such contingent consideration dependent upon the achievement of certain milestones. Such contingent consideration totaled $1.3, and was paid during the quarter ended April 2, 2022. In connection with the acquisition of ECS, the seller was eligible for additional cash consideration of up to $15.4, with payment of such contingent consideration dependent upon the achievement of certain milestones. During the first quarter of 2022, we concluded the probability of achieving the financial performance milestones had lessened due to a delay in the execution of certain large orders. Thus, during the quarter ended April 2, 2022, we reduced the fair value/liability by $0.9, with such amount recorded in “Other operating income.” The estimated fair value of such contingent consideration was $0.0 at April 1, 2023 and December 31, 2022. We estimate the fair value of contingent consideration based on the probability of the acquired business achieving the applicable milestones. Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets — Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value. Valuation Methods Used to Measure Fair Value on a Recurring Basis Derivative Financial Instruments — Our financial derivative assets and liabilities include interest rate swaps and FX forward contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of April 1, 2023, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Equity Security — We estimate the fair value of an equity security that we hold utilizing a practical expedient under existing guidance, with such estimated fair value based on our ownership percentage applied to the net asset value as provided quarterly by the investee. The value is updated annually, during the first quarter, based on the investee’s most recent audited financial statements. During the three months ended April 1, 2023 and April 2, 2022, we recorded gains of $3.6 and $4.4, respectively, to “Other income, net” to reflect an increase in the estimated fair value of the equity security. As of April 1, 2023 and December 31, 2022, the equity security had an estimated fair value of $39.4 and $35.8, respectively. Indebtedness and Other — The estimated fair value of our debt instruments as of April 1, 2023 and December 31, 2022 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. See Note 12 for further details.
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SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 3, 2023, we completed the acquisition of T. A. Morrison & Co. Inc. (“TAMCO”), a market leader in motorized and non-motorized dampers that control airflow in large-scale specialty applications in commercial, industrial, and institutional markets. We purchased TAMCO for cash proceeds of approximately $125.0, net of cash acquired of $0.8. The post-acquisition operating results of TAMCO will be reflected within our HVAC reportable segment. On April 21, 2023 (the “Incremental Amendment Effective Date”), we entered into an Incremental Facility Activation Notice (the “Incremental Amendment”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto, which amends the Amended and Restated Credit Agreement, dated as of August 12, 2022 (as amended, the “Credit Agreement”), among the Company, the lenders party thereto, Deutsche Bank AG, as foreign trade facility agent, and the Administrative Agent. The Incremental Amendment provides for additional senior secured term loans in the aggregate amount of $300.0 (the “Incremental Term Loans”), which are available in up to three drawings (subject to customary conditions) from the Incremental Amendment Effective Date to October 18, 2023. The proceeds of the Incremental Term Loans will be used to finance, in part, permitted acquisitions, to pay related fees, costs and expenses and for other lawful corporate purposes. The Incremental Term Loans will mature on August 12, 2027. We may voluntarily prepay the Incremental Term Loans, in whole or in part, without premium or penalty. The interest rates applicable to the Incremental Term Loans are, at our option, equal to either (x) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) the one-month Term SOFR rate plus 1.00%) or (y) the Term SOFR rate for the applicable interest period plus 0.10%, plus, in each case, an applicable margin percentage, which varies based on the Company’s Consolidated Leverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of unrestricted cash and cash equivalents) at the date of determination to Consolidated EBITDA for the four fiscal quarters ended most recently before such date). SPX may elect interest periods of , or six months (and, if consented to by all relevant lenders, any other period not greater than twelve months) for Term SOFR borrowings. SPX will also pay a commitment fee to the incremental lenders on the daily unused amount of the commitments for the Incremental Term Loans, payable quarterly at a per annum rate which also varies based on the Company’s Consolidated Leverage Ratio. The commitment fee rate and interest rate margins are as follows:
The Incremental Term Loans will be guaranteed by certain domestic material subsidiaries of the Company and secured by a first priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries or the domestic subsidiary guarantors and 65% of the voting capital stock (and 100% of the non-voting capital stock) of material first-tier foreign subsidiaries, all subject to certain exceptions and on a pari passu basis with the other credit facilities under the Credit Agreement. On April 28, 2023, we, through SPX Electric Heat, Inc., a wholly owned subsidiary of SPX (“Merger Sub”), entered into an Agreement and Plan of Merger with ASPEQ Parent Holdings, Inc. (“ASPEQ”), and Industrial Growth Partners V, L.P., as representative of the stockholders of ASPEQ, providing for the acquisition by SPX of ASPEQ for aggregate consideration of approximately $418.0 in cash (subject to closing date adjustments) pursuant to a merger of Merger Sub with and into ASPEQ, with ASPEQ being the surviving corporation of the merger (the “Merger”). Consummation of the Merger is subject to various conditions and regulatory approvals. The post-acquisition operating results of ASPEQ will be reflected within our HVAC reportable segment.
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BASIS OF PRESENTATION (Policies) |
3 Months Ended |
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Apr. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations). |
Variable Interest Entity | We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. All of our VIE’s are immaterial, individually and in aggregate, to our condensed consolidated financial statements. |
Use of Estimates | Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (“our 2022 Annual Report on Form 10-K”). Interim results are not necessarily indicative of full year results. |
Fiscal Period | We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2023 are April 1, July 1, and September 30, compared to the respective April 2, July 2, and October 1, 2022 dates. We had one less day in the first quarter of 2023 and will have one more day in the fourth quarter of 2023 than in the respective 2022 periods. It is not practicable to estimate the impact of the one less day on our consolidated operating results for the three months ended April 1, 2023, when compared to the consolidated operating results for the 2022 respective period. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on June 30, 2023. In an effort to address the various challenges created by such discontinuance, the Financial Accounting Standards Board (“FASB”) issued three amendments to existing guidance, Accounting Standards Update (“ASU”) No. 2020-04, No. 2021-01, and No. 2022-06, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, etc.) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform. Application of the guidance in the amendments is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2024. In conjunction with entering into an amended and restated credit agreement on August 12, 2022, we adopted this guidance with no material impact on our condensed consolidated financial statements.
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Inventories, net | Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. |
Goodwill and Other Intangible Assets | We review goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. In reviewing goodwill and indefinite-lived intangible assets for impairment, we initially perform a qualitative analysis. If there is an indication of impairment, we then perform a quantitative analysis. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. During the fourth quarter of 2022, we performed a quantitative analysis on the goodwill of our Cincinnati Fan reporting unit. The Cincinnati Fan analysis indicated that the fair value of its net assets exceeded the related carrying value by less than 10%. A change in assumptions used in Cincinnati Fan’s quantitative analysis (e.g., projected revenues and profit growth rates, discount rates, industry price multiples, etc.) could result in the reporting unit’s estimated fair value being less than the carrying value. If Cincinnati Fan is unable to achieve its current financial forecast, we may be required to record an impairment charge in a future period related to its goodwill. As of April 1, 2023, Cincinnati Fan’s goodwill totaled $54.8. We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment. The fair value of our trademarks is based on applying estimated royalty rates to projected revenues, with resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 17). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year.
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Currency Forward Contracts | Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro. From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”).
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Potential Uncertain Positions | We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. U.S. Federal income tax returns are subject to examination for a period of three years after filing the return. We are not currently under examination by the Internal Revenue Service and believe any contingencies in open years are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We regularly have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We regularly have various foreign income tax returns under examination. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.
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Fair Value | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: •Level 1 — Quoted prices for identical instruments in active markets. •Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. •Level 3 — Significant inputs to the valuation model are unobservable. Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets — Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value. Valuation Methods Used to Measure Fair Value on a Recurring Basis Derivative Financial Instruments — Our financial derivative assets and liabilities include interest rate swaps and FX forward contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of April 1, 2023, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Data for Reportable Segments and Other Operating Segments | The impact of this change on the Segment Income previously presented for the three months ended April 2, 2022 is summarized below:
______________________________ (1)Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022. Financial data for our reportable segments for the three months ended April 1, 2023 and April 2, 2022 are presented below:
______________________________ (1)Includes certain acquisition-related costs incurred during the three months ended April 1, 2023 and April 2, 2022 of $0.6 and $0.1, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022.
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ACQUISITIONS AND DISCONTINUED OPERATIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | 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 1, 2023 and December 31, 2022. The major line items constituting DBT’s assets and liabilities as of April 1, 2023 and December 31, 2022 are shown below:
For the three months ended April 1, 2023 and April 2, 2022, results of operations from our businesses reported as discontinued operations were as follows:
___________________________ (1) Income for the three months ended April 1, 2023 resulted primarily from income recorded in connection with a dispute resolution matter (see Note 15 for additional details), partially offset by legal costs incurred in connection with various dispute resolution matters related to two large power projects. The 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. (2) Loss for the three months ended April 2, 2022 resulted primarily from revisions to liabilities retained in connection with prior dispositions.
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REVENUES FROM CONTRACTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three months ended April 1, 2023 and April 2, 2022:
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Contract with Customer, Asset and Liability | Our contract balances consisted of the following as of April 1, 2023 and December 31, 2022:
___________________________ (1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets. (2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.
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INFORMATION ON REPORTABLE SEGMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Data for Reportable Segments and Other Operating Segments | The impact of this change on the Segment Income previously presented for the three months ended April 2, 2022 is summarized below:
______________________________ (1)Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022. Financial data for our reportable segments for the three months ended April 1, 2023 and April 2, 2022 are presented below:
______________________________ (1)Includes certain acquisition-related costs incurred during the three months ended April 1, 2023 and April 2, 2022 of $0.6 and $0.1, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with an acquisition of $0.1 during the three months ended April 2, 2022.
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SPECIAL CHARGES, NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of Restructuring Liabilities | The following is an analysis of our restructuring liabilities for the three months ended April 1, 2023 and April 2, 2022:
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INVENTORIES, NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories are accounted for under the first-in, first-out method and are comprised of the following at April 1, 2023 and December 31, 2022:
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill | The changes in the carrying amount of goodwill for the three months ended April 1, 2023 were as follows:
___________________________ (1)Reflects an increase in ITL’s goodwill of $0.8 resulting from revisions to the valuation of certain assets and liabilities.
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Schedule of Identifiable Intangible Assets | Identifiable intangible assets at April 1, 2023 and December 31, 2022 comprised the following:
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WARRANTY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warranty Accrual | The following is an analysis of our product warranty accrual for the periods presented:
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EMPLOYEE BENEFIT PLANS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit (Income) Expense | Net periodic benefit (income) expense for our pension and postretirement plans include the following components: Domestic Pension Plans
Foreign Pension Plans
Postretirement Plans
(1) The three months ended April 2, 2022 includes the impact of the transfer of the retiree life insurance benefits obligation.
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INDEBTEDNESS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Activity, Current and Noncurrent | The following summarizes our debt activity (both current and non-current) for the three months ended April 1, 2023:
__________________________ (1)While not due for repayment until August 2027 under the terms of our senior credit agreement, we classify within current liabilities the portion of the outstanding balance that we believe will be repaid over the next year, with such amount based on an estimate of cash that is expected to be generated over such period. (2)The term loan is repayable in quarterly installments equal to 0.625% of the initial term loan balance of $245.0, beginning in December 2023 and in each of the first three quarters of 2024, and 1.25% during the fourth quarter of 2024, all quarters of 2025 and 2026, and the first two quarters of 2027. The remaining balance is payable in full on August 12, 2027. Balances are net of unamortized debt issuance costs of $0.7 at April 1, 2023 and December 31, 2022. (3)Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses. At April 1, 2023, we had $0.9 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $47.0. (4)Primarily includes balances under a purchase card program of $1.9 and $1.8 and finance lease obligations of $0.7 and $0.7 at April 1, 2023 and December 31, 2022, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.
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STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Shares Outstanding Used in Computation of Basic and Diluted Income per Share | The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share:
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Summary of PSU and RSU Activity | The following table summarizes the PSU and RSU activity from December 31, 2022 through April 1, 2023:
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Black-Scholes Pricing Model Assumptions | The fair value per share of the stock options granted on March 1, 2023 was $31.20. The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following assumptions:
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Schedule of Changes in Components of Accumulated Other Comprehensive Income, Net of Tax, | The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 1, 2023 were as follows:
__________________________ (1)Net of tax provision of $3.1 and $3.7 as of April 1, 2023 and December 31, 2022, respectively. (2)Net of tax provision of $2.4 and $2.7 as of April 1, 2023 and December 31, 2022, respectively. The balances as of April 1, 2023 and December 31, 2022 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 2, 2022 were as follows:
_________________________ (1)Net of tax provision of $2.3 and $0.1 as of April 2, 2022 and December 31, 2021, respectively. (2)Net of tax provision of $3.5 and $3.7 as of April 2, 2022 and December 31, 2021, respectively. The balances as of April 2, 2022 and December 31, 2021 include unamortized prior service credits.
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Schedule of Amounts Reclassified from Each Component of Other Comprehensive Income (Loss) | The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended April 1, 2023 and April 2, 2022:
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SUBSEQUENT EVENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | The commitment fee rate and interest rate margins are as follows:
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BASIS OF PRESENTATION - Narrative (Details) $ / shares in Units, $ in Millions |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022
USD ($)
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Aug. 02, 2021
USD ($)
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Oct. 01, 2022
USD ($)
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Apr. 02, 2022
USD ($)
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Dec. 31, 2021
USD ($)
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Apr. 01, 2023
USD ($)
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Dec. 31, 2022
USD ($)
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Nov. 01, 2022
subsidiary
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Aug. 15, 2022
$ / shares
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Business Acquisition [Line Items] | |||||||||
Number of wholly-owned subsidiaries divested | subsidiary | 3 | ||||||||
Legacy SPX | |||||||||
Business Acquisition [Line Items] | |||||||||
Common stock (in dollars per share) | $ / shares | $ 0.01 | ||||||||
Enterprise Control Systems Ltd | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 39.4 | ||||||||
Cash acquired | 5.1 | ||||||||
Deferred payment | 15.4 | ||||||||
Contingent consideration liability | $ 8.2 | $ 0.0 | $ 0.0 | ||||||
Reduction in estimated liability | $ 0.9 | $ 6.7 | |||||||
International Tower Lighting, LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 40.4 | ||||||||
Cash acquired | $ 1.1 | ||||||||
Consideration transferred | $ 1.4 |
ACQUISITIONS AND DISCONTINUED OPERATIONS - Sale of Transformer Solutions Business - Narrative (Details) - Discontinued Operations - Transformer Solutions $ in Millions |
3 Months Ended |
---|---|
Apr. 02, 2022
USD ($)
| |
Discontinued Operations | |
Payment to purchaser | $ 13.9 |
Gain on sale | $ 0.2 |
ACQUISITIONS AND DISCONTINUED OPERATIONS - Wind-Down of DBT - Assets and Liabilities of Discontinued Operations (Details) - Discontinued Operations - DBT Technologies - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
ASSETS | ||
Cash and equivalents | $ 7.9 | $ 9.3 |
Accounts receivable, net | 7.2 | 7.6 |
Other current assets | 6.1 | 6.5 |
Property, plant and equipment: | ||
Property, plant and equipment, gross | 0.9 | 0.9 |
Accumulated depreciation | (0.8) | (0.8) |
Property, plant and equipment, net | 0.1 | 0.1 |
Other assets | 18.1 | 19.1 |
Total assets of DBT | 39.4 | 42.6 |
LIABILITIES | ||
Accounts payable | 1.3 | 1.4 |
Contract liabilities | 3.3 | 3.6 |
Accrued expenses | 14.0 | 22.0 |
Other long-term liabilities | 4.3 | 4.6 |
Total liabilities of DBT | 22.9 | 31.6 |
Buildings and leasehold improvements | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 0.2 | 0.2 |
Machinery and equipment | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | $ 0.7 | $ 0.7 |
ACQUISITIONS AND DISCONTINUED OPERATIONS - Wind-Down of Heat Transfer Business - Assets and Liabilities of Discontinued Operations (Details) - Discontinued Operations - SPX Heat Transfer Business - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
ASSETS | ||
Other current assets | $ 0.2 | $ 0.2 |
Other assets | 0.1 | 0.1 |
Total assets of DBT | 0.3 | 0.3 |
LIABILITIES | ||
Accounts payable | 0.1 | 0.1 |
Accrued expenses | 0.1 | 0.1 |
Total liabilities of DBT | $ 0.2 | $ 0.2 |
ACQUISITIONS AND DISCONTINUED OPERATIONS - Results of Operations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
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Discontinued Operations | ||
Income (loss) from discontinued operations, net of tax | $ 3.7 | $ (1.6) |
Discontinued Operations | ||
Discontinued Operations | ||
Income (loss) from discontinued operations | 3.0 | (2.1) |
Income tax benefit | 0.7 | 0.5 |
Income (loss) from discontinued operations, net of tax | 3.7 | (1.6) |
Discontinued Operations | DBT | ||
Discontinued Operations | ||
Income (loss) from discontinued operations | 3.0 | (1.6) |
Income tax benefit | 0.7 | 0.4 |
Income (loss) from discontinued operations, net of tax | 3.7 | (1.2) |
Discontinued Operations | All other | ||
Discontinued Operations | ||
Income (loss) from discontinued operations | 0.0 | (0.5) |
Income tax benefit | 0.0 | 0.1 |
Income (loss) from discontinued operations, net of tax | $ 0.0 | $ (0.4) |
REVENUES FROM CONTRACTS - Contract Balances (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Dec. 31, 2022 |
|
Revenue from Contract with Customer [Abstract] | ||
Contract accounts receivable | $ 271.6 | $ 259.9 |
Increase (decrease) in accounts receivable | 11.7 | |
Contract Assets | 32.2 | 23.9 |
Increase (decrease) in contract with customer, asset, net, current | 8.3 | |
Contract Liabilities - current | (65.8) | (52.8) |
Increase (decrease) in contract with customer, liability, current | (13.0) | |
Contract liabilities - non-current | (4.3) | (4.7) |
Increase (decrease) in contract with customer, liability, noncurrent | 0.4 | |
Net contract balance | 233.7 | $ 226.3 |
Increase (decrease) in contract with customers, net | $ 7.4 |
REVENUES FROM CONTRACTS - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Apr. 01, 2023
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Increase in contract with customers, net | $ 7.4 |
Contract with customer, revenue recognized | $ 25.8 |
INFORMATION ON REPORTABLE SEGMENTS - Narrative (Details) |
3 Months Ended |
---|---|
Apr. 01, 2023
country
segment
| |
Segment Reporting [Abstract] | |
Number of countries in which entity operates | 15 |
Number of countries in which entity sells its products and services | 100 |
Number of reportable segments | segment | 2 |
SPECIAL CHARGES, NET (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Restructuring liabilities | ||
Balance at beginning of year | $ 0.0 | $ 0.3 |
Special charges | 0.0 | 0.0 |
Utilization — cash | 0.0 | (0.1) |
Currency translation adjustment and other | 0.0 | 0.0 |
Balance at end of period | $ 0.0 | $ 0.2 |
INVENTORIES, NET (Details) - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 76.7 | $ 73.0 |
Work in process | 29.4 | 25.7 |
Raw materials and purchased parts | 159.6 | 145.3 |
Total inventories | $ 265.7 | $ 244.0 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 227.2 | $ 232.9 |
Goodwill | 458.0 | $ 455.3 |
Cincinnati Fan | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 54.8 | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage of fair value in excess of carrying amount | 10.00% | |
HVAC reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | 92.7 | |
Goodwill | 202.0 | $ 201.3 |
Detection and Measurement reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | 134.5 | |
Goodwill | 256.0 | 254.0 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 169.0 | $ 168.7 |
Trademarks | HVAC reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 105.2 | |
Trademarks | Detection and Measurement reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | $ 63.8 |
WARRANTY (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Analysis of product warranty accrual | ||
Balance at beginning of year | $ 34.7 | $ 34.8 |
Acquisitions | 0.6 | 0.0 |
Provisions | 3.5 | 2.6 |
Usage | (3.1) | (3.0) |
Balance at end of period | 35.7 | 34.4 |
Less: Current portion of warranty | 12.5 | 11.2 |
Non-current portion of warranty | $ 23.2 | $ 23.2 |
EMPLOYEE BENEFIT PLANS - Narrative (Details) - SPX Postretirement Plans - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Feb. 17, 2022 |
|
Employee Benefit Plans | ||
Consideration payable | $ 10.0 | |
Benefit obligation, payment for settlement | $ 9.0 | |
Loss on settlement | 0.7 | |
Remeasurement due to settlement | $ 0.4 |
EMPLOYEE BENEFIT PLANS - Net Periodic Expense (Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Postretirement Plans | ||
Net periodic pension/postretirement benefit expense | ||
Service cost | $ 0.0 | $ 0.0 |
Interest cost | 0.3 | 0.3 |
Amortization of unrecognized prior service credits | (1.0) | (1.1) |
Recognized net actuarial losses | 0.0 | 0.3 |
Net periodic pension benefit expense | (0.7) | (0.5) |
UNITED STATES | ||
Net periodic pension/postretirement benefit expense | ||
Service cost | 0.0 | 0.0 |
Interest cost | 3.3 | 2.3 |
Expected return on plan assets | (2.2) | (2.1) |
Net periodic pension benefit expense | 1.1 | 0.2 |
Foreign Plan | ||
Net periodic pension/postretirement benefit expense | ||
Service cost | 0.0 | 0.0 |
Interest cost | 1.4 | 1.0 |
Expected return on plan assets | (1.6) | (1.5) |
Net periodic pension benefit expense | $ (0.2) | $ (0.5) |
INDEBTEDNESS - Senior Credit Facilities (Details) $ in Millions |
Apr. 01, 2023
USD ($)
|
---|---|
Domestic Line of Credit | |
Line of Credit Facility [Line Items] | |
Amount of available borrowing capacity | $ 469.2 |
Letters of credit issued, amount outstanding | 10.8 |
Foreign credit instrument facility | |
Line of Credit Facility [Line Items] | |
Amount of available borrowing capacity | 10.7 |
Letters of credit issued, amount outstanding | $ 14.3 |
Line of Credit | |
Line of Credit Facility [Line Items] | |
Weighted-average interest rate of senior credit facilities | 6.40% |
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
Additional Swaps | Derivative contracts designated as hedging instruments | ||
Derivative Financial Instruments | ||
Aggregate notional amount | $ 228.1 | |
Additional Swaps | Derivative contracts designated as hedging instruments | Term loan | ||
Derivative Financial Instruments | ||
Fixed rate | 1.077% | |
Swaps | ||
Derivative Financial Instruments | ||
Unrealized gain recorded in AOCI | $ 9.1 | $ 11.0 |
Swaps | Derivative contracts designated as hedging instruments | ||
Derivative Financial Instruments | ||
Derivative fair value | 12.2 | 14.7 |
Current asset | 9.1 | 8.7 |
Non-current asset | 3.1 | 6.0 |
FX Forward Contracts | ||
Derivative Financial Instruments | ||
Aggregate notional amount | 7.5 | 6.9 |
Derivative fair value | 0.1 | $ 0.1 |
FX Forward Contracts | Mature Within One Year | ||
Derivative Financial Instruments | ||
Aggregate notional amount | $ 7.5 |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Components Used For Calculation Of Basic And Diluted Income (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Income Per Share | ||
Weighted-average number of common shares used in basic income per share (in shares) | 45,382 | 45,554 |
Dilutive securities — employee stock options and restricted stock units (in shares) | 1,020 | 891 |
Weighted-average number of common shares and dilutive securities used in diluted income per share (in shares) | 46,402 | 46,445 |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Income Per Share (Details) (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Restricted stock shares/units | ||
Stock-based Compensation | ||
Number of options or units that were excluded from the computation of diluted income per share (in shares) | 173 | 243 |
Stock Options | ||
Stock-based Compensation | ||
Number of options or units that were excluded from the computation of diluted income per share (in shares) | 534 | 737 |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Long Term Incentive Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Stock-based Compensation | ||
Long-term incentive compensation expense | $ 3.1 | $ 3.1 |
Related tax benefit | 0.5 | 0.5 |
Material Reconciling Items | ||
Stock-based Compensation | ||
Long-term incentive compensation expense | $ 3.1 | $ 3.1 |
Performance Shares | ||
Stock-based Compensation | ||
Award vesting period | 3 years |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - PSU's, RSU's (Details) - Performance Stock Units and Restricted Stock Units shares in Thousands |
3 Months Ended |
---|---|
Apr. 01, 2023
$ / shares
shares
| |
Unvested PSU’s and RSU’s | |
Outstanding at beginning of period (in shares) | shares | 530 |
Granted (in shares) | shares | 155 |
Vested (in shares) | shares | (166) |
Forfeited (in shares) | shares | (1) |
Outstanding at end of period (in shares) | shares | 518 |
Weighted-Average Grant-Date Fair Value Per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 51.38 |
Granted (in dollars per share) | $ / shares | 72.17 |
Vested (in dollars per share) | $ / shares | 51.86 |
Forfeited (in dollars per share) | $ / shares | 53.47 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 57.47 |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - PSU's, RSU's Narrative (Details) - Performance Stock Units and Restricted Stock Units $ in Millions |
3 Months Ended |
---|---|
Apr. 01, 2023
USD ($)
| |
Stock-based Compensation | |
Unrecognized compensation cost | $ 18.3 |
Weighted-average period over which unrecognized compensation costs will be recognized | 2 years 6 months |
STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Black-Scholes Option-Pricing Model (Details) - Stock Options |
Mar. 01, 2023 |
---|---|
Black-Scholes Option-Pricing Model [Line Items] | |
Annual expected stock price volatility | 37.15% |
Annual expected dividend yield | 0.00% |
Risk-free interest rate | 4.18% |
Expected life of stock option (in years) | 6 years |
CONTINGENT LIABILITIES AND OTHER MATTERS - General (Details) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 02, 2022
USD ($)
|
Apr. 01, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Nov. 01, 2022
subsidiary
|
|
Contingent Liabilities and Other Matters | ||||
Carrying values of accruals | $ 38,900,000 | $ 39,500,000 | ||
Number of wholly-owned subsidiaries divested | subsidiary | 3 | |||
Insurance recoveries | $ 7,400,000 | |||
Payments for asbestos-related matters, net of insurance recoveries | 7,200,000 | |||
Recorded charges related to asbestos product liability matters | $ 0 | |||
Other Long Term Liabilities | ||||
Contingent Liabilities and Other Matters | ||||
Accruals included in other long-term liabilities | $ 31,600,000 | $ 30,800,000 |
CONTINGENT LIABILITIES AND OTHER MATTERS - Claim for Contingent Consideration related to ULC (Details) - USD ($) $ in Millions |
Aug. 23, 2022 |
Sep. 30, 2020 |
---|---|---|
ULC Robotics | ||
Contingent Liabilities and Other Matters | ||
Deferred payment | $ 15.0 | $ 45.0 |
CONTINGENT LIABILITIES AND OTHER MATTERS - Environmental Matters (Details) - Site investigation and remediation - site |
Apr. 01, 2023 |
Dec. 31, 2022 |
---|---|---|
Environmental Matters | ||
Number of sites | 17 | 17 |
Number of third-party disposal sites for which entity is potentially responsible | 9 | 9 |
INCOME AND OTHER TAXES (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
|
Operating Loss Carryforwards | ||
Gross unrecognized tax benefits | $ 4,500,000 | |
Net unrecognized tax benefits | 4,100,000 | |
Gross accrued interest | 2,100,000 | |
Net accrued interest | 1,800,000 | |
Penalties accrued | 0 | |
Income tax provision | 11,300,000 | $ 2,600,000 |
Pre-tax income (loss) from continuing operations | $ 50,400,000 | $ 15,600,000 |
Effective income tax rate (as a percent) | 22.40% | 16.70% |
Excess tax provision from stock-based compensation awards vested | $ 900,000 | $ 700,000 |
Maximum | ||
Operating Loss Carryforwards | ||
Reasonably possible amount that unrecognized tax benefits could decrease within next 12 months, high end of range | $ 3,000,000.0 |
FAIR VALUE (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 01, 2023 |
Apr. 02, 2022 |
Dec. 31, 2021 |
Dec. 31, 2022 |
Aug. 02, 2021 |
Nov. 11, 2020 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Realized gain on fair value adjustment | $ 3.6 | $ 4.4 | ||||
Security at fair value | 39.4 | $ 35.8 | ||||
Sensors & Software Inc. | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Deferred payment | $ 3.7 | |||||
Contingent consideration liability | 1.3 | |||||
Enterprise Control Systems Ltd | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Deferred payment | $ 15.4 | |||||
Contingent consideration liability | $ 0.0 | $ 0.0 | $ 8.2 | |||
Reduction in estimated liability | $ 0.9 | $ 6.7 |
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