What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-02-25 · 58 added, 50 removed, 114 unchanged (49% of the section changed)

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We disclaim any responsibility, except to the extent we are legally required, to update or publicly revise any forward-looking statements to reflect events or circumstances that arise after the date of this document.

SPX Corporation (“SPX”, “our” or “we”) was founded in Muskegon, Michigan in 1912 as the Piston Ring Company and adopted our current name in 1988.

Since 1968, we have been incorporated under the laws of Delaware, and we have been listed on the New York Stock Exchange since 1972.

SPX Technologies, Inc.

(“SPX”, “our”, “the Company”, or “we”) 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.

Legacy SPX was founded in Muskegon, Michigan in 1912 as the Piston Ring Company and adopted the name SPX Corporation in 1988.

Its common stock had been listed on the New York Stock Exchange since 1972.

The terms “SPX,” “we” and “our” include Legacy SPX for periods prior to the consummation of the Holding Company Reorganization as the context requires.

On September 26, 2015, we completed the spin-off to our stockholders (the “Spin-Off”) of all the outstanding shares of SPX FLOW, Inc.

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In the years leading up to the Spin-Off, these businesses experienced significant declines in revenues and profitability associated with weak demand and increased competition within the global power generation markets.

Based on a review of our post-spin portfolio and the belief that a recovery within the power generation markets was unlikely in the foreseeable future, we decided coming out of the Spin-Off that our strategic focus would be on our (i) scalable growth businesses that serve the heating, ventilation and cooling (“HVAC”) and detection and measurement markets and (ii) power transformer and process cooling systems businesses.

a review of our post-spin portfolio and the belief that a recovery within the power generation markets was unlikely in the foreseeable future, we decided coming out of the Spin-Off that our strategic focus at that time would be on our (i) scalable growth businesses that serve the heating, ventilation and cooling (“HVAC”) and detection and measurement markets and (ii) power transformer and process cooling systems businesses.

As a result, we have significantly reduced our exposure to the power generation markets as indicated by the dispositions of our dry cooling and Balcke Dürr businesses during 2016.

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As a result of completing such wind-down activities, we are reporting the Heat Transfer business as a discontinued operation for all periods presented.

Lastly, with its substantial completion of the remaining

scope on the large power projects in South Africa, our South African subsidiary, DBT Technologies (PTY) LTD’s (“DBT”), completed wind-down activities during the fourth quarter of 2021.

As a result of completing wind-down activities, we are now reporting the DBT business as a discontinued operation for all periods presented.

See MD&A and Notes 1 and 4 to our consolidated financial statements for further discussion of these actions.

On February 1, 2019, we completed the acquisition of Sabik Marine (“Sabik”), primarily a manufacturer of obstruction lighting products.

The post-acquisition operating results of Sabik Marine are reflected within our Detection and Measurement reportable segment.

On July 3, 2019 and November 12, 2019, we completed the acquisitions of SGS Refrigeration Inc.

(“SGS”) and Patterson-Kelley, LLC (“Patterson-Kelley”), respectively.

SGS is a manufacturer of industrial refrigeration products, while Patterson-Kelley is a manufacturer and distributor of commercial boilers and water heaters.

The post-acquisition operating results of SGS and Patterson-Kelley are reflected within our HVAC reportable segment.

Lastly, with its substantial completion of its remaining scope on the large power projects in South Africa, our South African subsidiary, DBT Technologies (PTY) LTD (“DBT”), completed wind-down activities during the fourth quarter of 2021.

As a result of completing wind-down activities, we are reporting the DBT business as a discontinued operation for all periods presented.

On September 2, 2020 and November 11, 2020, we completed the acquisitions of ULC Robotics (“ULC”) and Sensors & Software, Inc.

(“Sensors & Software”), respectively.

ULC is leading developer of robotic systems, mechanical learning applications, and inspection technology for the energy, utility, and industrial markets, while Sensors & Software is a manufacturer and distributor of ground penetrating radar products used for locating underground utilities, detecting unexploded ordinances, and geotechnical and geological investigations.

ULC is a leading developer of robotic systems, mechanical learning applications, and inspection technology for the energy, utility, and industrial markets, while Sensors & Software is a manufacturer and distributor of ground penetrating radar products used for locating underground utilities, detecting unexploded ordinances, and geotechnical and geological investigations.

The post-acquisition operating results of ULC and Sensors & Software are reflected within our Detection and Measurement reportable segment.

On April 19, 2021 and August 2, 2021, we completed the acquisitions of Sealite Pty Ltd and affiliated entities, including Sealite USA, LLC (doing business as Avlite Systems) and Star2M Pty Ltd (collectively, “Sealite”), and Enterprise Control Systems Ltd (“ECS”), respectively.

Sealite is a leader in the design and manufacture of marine and aviation Aids to Navigation products, while ECS is a manufacturer and designer of highly-engineered tactical datalinks and radio frequency (“RF”) countermeasures, including counter-drone and counter-IED RF jammers.

The post-acquisition operating results of Sealite and ECS are reflected within our Detection and Measurement reportable segment.

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We are reporting Transformer Solutions as a discontinued operation for all periods presented.

See Notes 1 and 4 to our consolidated financial statements for further details.

In connection with the disposition of Transformer Solutions and its classification as a discontinued operation, we have eliminated the Engineered Solutions reportable segment and have reflected the remaining operations of the former Engineered Solutions reportable segment within the HVAC reportable segment for all periods presented.

O n December 15, 2021, we completed the acquisition of Cincinnati Fan & Ventilator Co., Inc.

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The post-acquisition operating results of Cincinnati Fan are reflected within our HVAC reportable segment.

Unless otherwise indicated, amounts provided in Part I pertain to continuing operations only (see Notes 1 and 4 to our consolidated financial statements for information on discontinued operations).

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.

The post-acquisition operating results of ITL are reflected within our Detection and Measurement reportable segment.

On November 1, 2022, SPX divested three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets, to Canvas Holdco LLC, an entity formed by a joint venture of Global Risk Capital LLC and an affiliate of Premia Holdings Ltd (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.

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 divestiture.

Unless otherwise indicated, the description of our business provided in Part I pertains to continuing operations only (see Notes 1 and 4 to our consolidated financial statements for information on discontinued operations).

We are a diversified, global supplier of infrastructure equipment serving the HVAC and detection and measurement markets.

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Growth for our HVAC businesses will be driven by innovation, increased scalability, and our ability to meet the needs of broader markets.

Our detection and measurement product lines encompass underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, bus fare collection systems, communication technologies, and obstruction lighting.

Our detection and measurement product lines encompass underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, fare collection systems, communication technologies, and obstruction lighting.

Our detection and measurement solutions enable utilities, telecommunication providers and regulators, and municipalities and transit authorities to build, monitor and maintain vital infrastructure.

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In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Financial Accounting Standards Board Codification (“Codification”).

This is consistent with the way our Chief Operating Decision Maker evaluates the results of each segment.

Operating income for our reportable segments is determined before considering 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 Chief Operating Decision Maker (“CODM”) evaluates the results of each segment.

During 2022, management concluded that, although the assessment of our reportable segments was performed using the appropriate measures as defined by the Segment Reporting Topic of the Codification, the disclosure of operating income for each of our reportable segments (“Segment Income”) was not consistent with the measure used by our CODM when evaluating the results of, or allocating resources to, our reportable segments.

We previously disclosed that Segment Income is 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 expense, inventory step-up charges, and certain other acquisition-related costs from Segment Income.

Accordingly, Segment Income, as presented in Note 7 to the consolidated financial statements, now excludes all of the items noted above.

This change had no impact to the amounts previously presented in our consolidated statements of operations for the years ended December 31, 2021 and 2020.

Although the impact of this change to previously disclosed Segment Income is not material, we revised the prior years’ presentation to be consistent with the current year disclosure.

Refer to Notes 1 and 7 to our consolidated financial statements for additional details.

HVAC Reportable Segment

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The segment serves a cu stomer base in North America, Europe, and Asia.

Core brands for our cooling products include Marley, Recold, SGS and Cincinnati Fan, while our heating and ventilation products are sold under the Berko, Qmark, Fahrenheat, Leading Edge, and Patterson-Kelley brands, and o ur WM Technologies s ubsidiary sells its products under the Weil-McLain and Williamson-Thermoflo brands.

Core brands for our cooling products include Marley, Recold, SGS and Cincinnati Fan, while our heating and ventilation products are sold under the Berko, Qmark, Fahrenheat, Leading Edge, Patterson-Kelley, Weil-McLain, and Williamson-Thermoflo brands.

Detection and Measurement Reportable Segmen t

Our Detection and Measurement reportable segment had revenues of $ 467.4 , $387.3 and $384.9 in 2021, 2020 and 2019, respectively, and backlo g of $ 153.6 and $ 89.3 as of December 31, 2021 and 2020, respectively.

Our Detection and Measurement reportable segment had revenues of $547.1, $467.4, and $387.3 in 2022, 2021 and 2020, respectively, and backlog of $251.0 and $153.6 as of December 31, 2022 and 2021 , respectively.

Approximately 80% of the segment’s backlog as of December 31, 2022 is expected to be recognized as revenue during 2023.

The segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, bus fare collection systems, communication technologies, and obstruction lighting.

The segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, fare collection systems, communication technologies, and obstruction lighting.

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 Pacific.

The segment serves a global customer base, with a strong presence in North America, Europe, Africa and Asia.

Core brands for our underground pipe and cable locators and inspection and rehabilitation equipment are Radiodetection, Pearpoint, Schonstedt, Dielectric, Riser Bond, Warren G-V, Cues, ULC Robotics, and Sensors & Software.

Our bus fare collection systems, communication technologies, and obstruction lighting are sold under the Genfare, TCI, Flash Technology, Sabik Marine, Sealite, Avlite and ECS brand names, respectively.

Our fare collection systems are sold under the Genfare brand, our communication technologies products are sold under the TCI and ECS brands, and our obstruction lighting products are sold under the Flash Technology, ITL, Sabik Marine, Sealite, and Avlite brands.

We regularly review and negotiate potential acquisitions in the ordinary course of business, some of which are or may be material.

As previously indicated, we acquired Sealite, ECS, and Cincinnati Fan in 2021, ULC and Sensors & Software in 2020, and Sabik, SGS, and Patterson-Kelley in 2019.

As previously indicated, we acquired ITL in 2022, Sealite, ECS, and Cincinnati Fan in 2021, and ULC and Sensors & Software in 2020.

We regularly review and negotiate potential divestitures in the ordinary course of business, some of which are or may be m aterial.

As previously indicated, the divestiture of Transformer Solutions was completed in 2021.

There were no divestitures of businesses in 2020 or 2019.

As previously indicated, the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets, was completed in the fourth quarter of 2022 and the divestiture of Transformer Solutions was completed in 2021.

There were no divestitures in 2020.

As previously indicated, we completed the wind-down of our DBT and Heat Transfer businesses in the fourth quarters of 2021 and 2020, res pectively.

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Patents/Trademarks

We o wn 163 domestic and 265 foreign patents (comprising 154 patent “families”), including 34 patents that were issued in 2021, covering a variety of our products and manufacturing methods.

We o wn 141 domestic and 366 foreign patents (comprising 132 patent “families”) (foreign patents include patents in individual countries in the European Union (“EU”), as well as EU-level patents), including 18 patents that were issued in 2022, covering a variety of our products and manufacturing methods.

We also own a number of registered trademark s.

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We believe that we generally will be able to continue to obtain adequate supplies of key products, components or appropriate substitutes at reasonable costs.

For information regarding COVID-19 impacts, please refer to "MD&A - COVID-19 Pandemic, Supply Chain Disruptions, and Other Economic Factors."

We are subject to increases in the prices of many of our key raw materials, including petroleum-based products and steel.

In recent years, we have generally been able to offset increases in raw material costs.

In recent years, we have generally been able to offset increases in raw material costs through corresponding product pricing actions.

Occasionally, we are subject to long-term supplier contracts, which may increase our exposure to pricing fluctuations.

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We are not significantly dependent on any one or a limited number of suppliers, and we have been able to obtain suitable quantities of raw materials at competitive prices.

For information regarding COVID-19 impacts, please refer to "MD&A - COVID-19 Pandemic, Supply Chain Disruptions, and Other Economic Factors."

For information regarding COVID-19 impacts, please refer to “MD&A - COVID-19 Pandemic, Supply Chain Disruptions and Labor Shortages, and Cost Increases.”

Our competitive position cannot be determined accurately in the aggregate or by reportable or operating segment since we and our competitors do not offer all the same product lines or serve all the same markets.

In addition, specific reliable comparative figures are not available for many of our competitors.

In addition, specific reliable

comparative figures are not available for many of our competitors.

In most product groups, competition comes from numerous concerns, both large and small.

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We believe we compete effectively on the basis of each of these factors as they apply to the various products and services offered.

See “Reportable Segments” above for a discussion of our competitors.

Environmental Matters

See “ MD&A — Critical Accounting Estimates — Contingent Liabilities ,” “ Risk Factors - Risks Related to Contingent Liabilities ” and Note 15 to our consolidated financial statements for information regarding environmental matters.

See “ Risk Factors - Risks Related to Contingent Liabilities ,” “ MD&A — Critical Accounting Estimates — Contingent Liabilities ,” and Note 15 to our consolidated financial statements for information regarding environmental matters.

Human Capital Resources

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We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees.

As such, we strive to provide an environment where employees are developed and provided challenging career growth opportunities, and know their inputs and contributions are appreciated.

We offer a “Total Rewards” program that

provides comprehensive compensation and benefits packages that are competitive with the market and choices designed to reward employees and assist them in managing their well-being.

In 2021, we also focused significant time on re-working many of our policies and programs to provide increased flexibility and work-life balance to our team members.

As such, we strive to provide an environment where employees are developed and provided challenging career growth opportunities and know that their efforts and contributions are appreciated.

We offer a “Total Rewards” program that provides comprehensive compensation and benefits packages that are competitive with the market and choices designed to reward employees and assist them in managing their well-being.

We have focused significant time on re-working many of our policies and programs to provide increased flexibility and work-life balance to our team members.

Together, these opportunities present significant growth potential for our employees from a financial, professional, and personal standpoint.

As part of our focus on building and sustaining a highly capable, engaged and motivated workforce that has the ability to deliver on the current and future requirements of the Company, we continue to advance our talent management framework, known as RiSE, which helps us Reach, Identify, Strengthen, and Engage our workforce.

Recent areas of focus include:

the enhancement of our Front-line Leadership Program, introduction of a new on-demand learning platform and the on-going expansion of our talent review and succession planning programs.

We also were able to successfully move even more of our education and training programs to an online format to allow for expanded participation and broader, time-flexible development.

During 2021, we continued our focus on enhancing our Diversity, Equity & Inclusion programs, aimed at ensuring we provide an inclusive environment where everyone feels valued and respected.

We launched our formal Diversity & Inclusion Statement and published an enterprise charter to align the organization on our commitments.

Our Executive Leadership Team and Diversity & Inclusion Council, both comprised of senior leaders from across the enterprise and led by our CEO, facilitated listening sessions with employees from across the globe to learn what was important to them and how we could create an even better work environment.

In response to the feedback received, multiple initiatives were undertaken to increase communications, build the capabilities of our leaders (we trained over 500 employees on how to Create an Inclusive Environment) and on furthering the dialogue across the enterprise.

A Day of Understanding was held in each business to communicate, engage and educate our global teams.

Our networking and action groups, comprised of dozens of “Ambassadors” from across the company, were active participants in the development and implementation of our strategies and programming to ensure that the actions we take drive meaningful and impactful results for our employees.

In 2022, we continued deployment of our Frontline Leader Program and have now trained more than 180 leaders in the fundamentals of effective leadership, communication, and team development.

We also launched the third cohort of our Executive Leadership Development Program expanding the bench strength of our most senior leaders.

We are looking forward to adding the final piece to our leadership development program in 2023 with the launch of our Mid-level Program, “Amplified Leadership.”

At the beginning of 2022, we launched our updated Global Employee Survey.

This annual survey captures employee feedback on topics related to Engagement and Diversity & Inclusion.

The results of the survey informed discussions about what is most important to our employees and helped us develop action plans to focus on those priorities.

During 2022, we continued our focus on enhancing our Diversity & Inclusion programs, aimed at ensuring that we provide an inclusive environment where all employees feel valued and respected.

We launched a new program engaging our entire workforce in a conversation about Unconscious Bias and how we might mitigate biases that typically show up in the workplace.

In addition, we were able to leverage our online learning platform for our leaders, providing continuing education on the value of Diversity & Inclusion and the importance of their roles as leaders, ensuring that all employees have opportunities to contribute their perspectives.

We launched our Diversity & Inclusion calendar highlighting days of celebration or remembrance that further educate our employees on topics that are current and relevant and engaged our global workforce in activities related to World Humanitarian Day.

We believe that through these efforts we can unlock greater potential, provide new opportunities for our employees, and benefit from diverse backgrounds and points of view.

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We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and certain amendments to these reports.

Copies of these reports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC.

Copies of these reports are available free of charge on our website as soon as reasonably

practicable after we file the reports with the SEC.

The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business