What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-05 · 378 added, 232 removed, 634 unchanged (49% of the section changed)

4 unchanged sentences

in millions, except per share amounts)

Three months ended

2023 April 2,

Three months ended Six months ended

Revenues $ 423.3 $ 354.0 $ 823.1 $ 661.1

3 unchanged sentences

Intangible amortization 11.5 7.1 17.8 16.4

Other operating income — ( 0.9 )

Special charges, net — 0.1 — 0.1

Other operating expense, net — 1.9 — 1.0

Operating income 51.3 27.2 101.1 38.6

Other income, net 2.5 6.5

Other income (expense), net — ( 1.7 ) 2.5 4.8

Interest expense ( 5.4 ) ( 2.3 ) ( 7.8 ) ( 4.7 )

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Income from continuing operations $ 0.84 $ 0.42 $ 1.70 $ 0.71

Income (loss) from discontinued operations 0.08 ( 0.04 )

Income (loss) from discontinued operations, net of tax ( 0.05 ) ( 0.13 ) 0.03 ( 0.17 )

Net income per share $ 0.79 $ 0.29 $ 1.73 $ 0.54

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Income from continuing operations $ 0.82 $ 0.41 $ 1.66 $ 0.69

Income (loss) from discontinued operations 0.08 ( 0.03 )

Income (loss) from discontinued operations, net of tax ( 0.05 ) ( 0.13 ) 0.03 ( 0.16 )

Net income per share $ 0.77 $ 0.28 $ 1.69 $ 0.53

24 unchanged sentences

Deferred income taxes 3.1 2.7

Assets of DBT and Heat Transfer (includes cash and equivalents of $ 7.9 and $ 9.3 at April 1, 2023 and December 31, 2022, respectively) (Note 3)

Assets of DBT and Heat Transfer (includes cash and equivalents of $ 8.5 and $ 9.3 at July 1, 2023 and December 31, 2022, respectively) (Note 3)

TOTAL ASSETS $ 2,501.6 $ 1,930.9

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Stockholders' Equity:

Common stock ( 53,442,050 and 45,476,237 is sued and outstanding at April 1, 2023, respectively, and 53,350,918 and 45,291,989 issued and outstanding at December 31, 2022, respectively)

Common stock ( 53,529,856 and 45,581,485 issued and outstanding at July 1, 2023, respectively, and 53,350,918 and 45,291,989 issued and outstanding at December 31, 2022, respectively)

Paid-in capital 1,341.5 1,338.3

Retained deficit ( 8.8 ) ( 51.6 )

Retained earnings (deficit) 27.2 ( 51.6 )

Accumulated other comprehensive income 262.5 257.5

Common stock in treasury ( 7,965,813 and 8,058,929 shares at April 1, 2023 and December 31, 2022, respectively)

Common stock in treasury ( 7,948,371 and 8,058,929 shares at July 1, 2023 and December 31, 2022, respectively)

( 459.1 ) ( 465.5 )

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three months ended April 1, 2023

Stock Paid-In

Capital Retained

Deficit Accum.

Comprehensive

Income Common

Treasury Total

Stockholders’

Three months ended July 1, 2023

Common Stock Paid-In Capital Retained Earnings (Deficit) Accum.

Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity

Balance at April 1, 2023 $ 0.5 $ 1,335.3 $ ( 8.8 ) $ 259.3 $ ( 460.2 ) $ 1,126.1

Net income — — 36.0 — — 36.0

Other comprehensive income, net — — — 3.2 — 3.2

Incentive plan activity

— 3.0 — — — 3.0

Long-term incentive compensation expense

— 3.5 — — — 3.5

Restricted stock unit vesting — ( 0.3 ) — — 1.1 0.8

Balance at July 1, 2023 $ 0.5 $ 1,341.5 $ 27.2 $ 262.5 $ ( 459.1 ) $ 1,172.6

Six months ended July 1, 2023

Common Stock Paid-In Capital Retained Earnings (Deficit) Accum.

Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity

Balance at December 31, 2022 $ 0.5 $ 1,338.3 $ ( 51.6 ) $ 257.5 $ ( 465.5 ) $ 1,079.2

6 unchanged sentences

Restricted stock unit vesting — ( 11.6 ) — — 6.4 ( 5.2 )

Balance at July 1, 2023 $ 0.5 $ 1,341.5 $ 27.2 $ 262.5 $ ( 459.1 ) $ 1,172.6

Three months ended July 2, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity

Balance at April 2, 2022 $ 0.5 $ 1,321.2 $ ( 40.4 ) $ 266.9 $ ( 432.4 ) $ 1,115.8

Three months ended April 2, 2022

Net income — — 13.0 — — 13.0

Other comprehensive loss, net — — — ( 12.9 ) — ( 12.9 )

Incentive plan activity

— 4.0 — — — 4.0

Long-term incentive compensation expense

— 2.5 — — — 2.5

Restricted stock unit vesting — ( 0.4 ) — — 0.3 ( 0.1 )

Common stock repurchases — — — — ( 33.7 ) ( 33.7 )

Balance at July 2, 2022 $ 0.5 $ 1,327.3 $ ( 27.4 ) $ 254.0 $ ( 465.8 ) $ 1,088.6

Six months ended July 2, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

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Net income — — 24.4 — — 24.4

Other comprehensive income, net — — — 3.0 — 3.0

Other comprehensive loss, net — — — ( 9.9 ) — ( 9.9 )

Incentive plan activity

— 6.5 — — — 6.5

Long-term incentive compensation expense

— 5.6 — — — 5.6

Restricted stock unit vesting — ( 19.0 ) — — 11.8 ( 7.2 )

Balance at April 2, 2022 $ 0.5 $ 1,321.2 $ ( 40.4 ) $ 266.9 $ ( 432.4 ) $ 1,115.8

Common stock repurchases — — — — ( 33.7 ) ( 33.7 )

Balance at July 2, 2022 $ 0.5 $ 1,327.3 $ ( 27.4 ) $ 254.0 $ ( 465.8 ) $ 1,088.6

The accompanying notes are an integral part of these statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

2023 April 2,

Six months ended

Cash flows from (used in) operating activities:

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Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities:

Special charges, net — 0.1

Gain on change in fair value of equity security ( 3.6 ) ( 4.4 )

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Net cash used in discontinued operations ( 7.0 ) ( 13.0 )

Net cash used in operating activities ( 4.4 ) ( 57.2 )

Net cash from (used in) operating activities 67.6 ( 96.5 )

Cash flows from (used in) investing activities:

Proceeds related to company-owned life insurance policies, net 1.0 1.6

Business acquisition, net of cash acquired — ( 41.8 )

Business acquisitions, net of cash acquired ( 547.1 ) ( 41.4 )

Capital expenditures ( 8.7 ) ( 6.0 )

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Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options ( 2.4 ) ( 5.2 )

Financing Fees Paid ( 1.3 ) —

Repurchases of common stock — ( 33.7 )

Net cash from (used in) continuing operations 426.2 ( 46.7 )

Net cash used in discontinued operations — ( 0.4 )

Net cash from discontinued operations — 0.3

Net cash from (used in) financing activities 426.2 ( 46.4 )

3 unchanged sentences

Consolidated cash and equivalents, end of period $ 95.6 $ 195.2

Three months ended

2023 April 2,

Six months ended

Components of cash and equivalents:

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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 with in “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 Cincinnati Fan

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

(“Cincinnati Fan”), a leader in engineered air movement solutions, including blowers and critical exhaust systems.

W e purchased Cincinnati Fan for cash consideration of $ 145.2 , net of (i) cash acquired of $ 2.5 and (ii) an adjustment to the purchase price received during the second quarter of 2022 related to acquired working capital of $ 0.4 .

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

We purchased ITL for cash consideration 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 withi n our Detection and Measurement reportable segment.

Acquisition of TAMCO

On April 3, 2023, we completed the acquisition of T.

Morrison & Co.

( “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 consideration of $ 125.3 , net of cash acquired of $ 1.0 .

The purchase price is subject to adjustment based upon the final calculation of working capital and cash as of the date of acquisition.

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

Acquisition of ASPEQ

On June 2, 2023, we completed the acquisition of ASPEQ Heating Group ( “ASPEQ”), a leading provider of electrical heating solutions to customers in industrial and commercial markets.

We purchased ASPEQ for cash consideration of $ 421.8 , net of cash acquired of $ 0.9 .

The purchase price is subject to adjustment based upon the final calculation of working capital and cash as of the date of acquisition.

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

The assets acquired and liabilities assumed in the TAMCO and ASPEQ transactions have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts and acquired intangible assets.

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

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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.

It is not practicable to estimate the impact of the one less day on our consolidated operating results for the six months ended July 1, 2023, when compared to the consolidated operating results for the respective 2022 period.

Correction of Prior-Year Classification and Disclosure

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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.

This change had no impact to the amounts previously presented in our condensed consolidated statements of operations for the three and six months ended July 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:

April 2, 2022

As Previously Presented Effect of Change Current Presentation

The impact of this change on the Segment Income previously presented for the three and six months ended July 2, 2022 is summarized below:

Three months ended July 2, 2022 Six months ended July 2, 2022

As Previously Presented Effect of Change Current Presentation As Previously Presented Effect of Change Current Presentation

HVAC reportable segment $ 25.6 $ 2.7 $ 28.3 $ 40.8 $ 8.1 $ 48.9

3 unchanged sentences

Acquisition related costs (1)

— 0.9 0.9 — 1.0 1.0

Long-term incentive compensation expense 2.5 — 2.5 5.6 — 5.6

Amortization of intangible assets — 7.1 7.1 — 16.4 16.4

Other operating income ( 0.9 ) — ( 0.9 )

Special charges, net 0.1 — 0.1 0.1 — 0.1

Other operating expense, net 1.9 — 1.9 1.0 — 1.0

Consolidated operating income $ 27.2 $ — $ 27.2 $ 38.6 $ — $ 38.6

________________________________

(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.

(1) Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ITL acquisition of $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively.

(2) 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.

The London Interbank Offered Rate (“LIBOR”) was 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.

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(3) 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.

Acquisition of ASPEQ

As indicated in Note 1, on June 2, 2023, we completed the acquisition of ASPEQ for $ 421.8 , net of cash acquired of $ 0.9 .

We financed the acquisition with available cash and borrowings under our senior credit facilities.

The assets acquired and liabilities assumed have been recorded at preliminary estimates of fair value as determined by management, based on information currently available and on current assumptions as to future operations and are subject to change upon completion of the acquisition method of accounting.

Final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date, as permitted under GAAP.

The following is a summary of the recorded preliminary fair values of the assets acquired and liabilities assumed for ASPEQ as of June 2, 2023:

Assets acquired:

Current assets, including cash and equivalents of $ 0.9

Property, plant and equipment 10.6

Goodwill 169.3

Intangible assets 246.1

Other assets 1.3

Total assets acquired 469.0

Current liabilities assumed 11.3

Non-current liabilities assumed (1)

Net assets acquired $ 422.7

________________________________

(1) Includes net deferred income tax liabilities and other liabilities of $ 34.0 and $ 1.0 , respectively.

The identifiable intangible assets acquired consist of customer relationships, trademarks, technology, and customer backlog of $ 142.3 , $ 51.5 , $ 47.8 , and $ 4.5 , respectively, with such amounts based on a preliminary assessment of the related fair values.

We expect to amortize the customer relationships, technology, and customer backlog assets over 12.0 , 16.0 , and 1.0 years, respectively, with the trademarks acquired being indefinite lived.

We acquired gross receivables of $ 17.2 , which had a fair value at the acquisition date of $ 17.1 based on our estimates of cash flows expected to be recovered.

The qualitative factors that comprise the recorded goodwill include expected market growth for ASPEQ’s existing operations, increased volumes achieved by selling ASPEQ’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors.

We expect none of the goodwill described above to be deductible for tax purposes.

Between the acquisition date and July 1, 2023, we recognized revenues and a net loss for ASPEQ of $ 8.6 and $ 0.5 , respectively.

The net loss included charges of $ 1.1 associated with the excess fair value (over historical cost) of inventory acquired which was subsequently sold during the period June 2, 2023 through July 1, 2023.

During the three and six months ended July 1, 2023, we incurred acquisition-related costs for ASPEQ of $ 4.6 and $ 5.1 , respectively, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations and “Corporate expense” within consolidated operating income in Note 6.

The following unaudited pro forma information presents our results of operations for the three and six months ended July 1, 2023 and July 2, 2022, respectively, as if the acquisition of ASPEQ had taken place on January 1, 2022.

The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the acquisition been completed as of the date presented, and should not be taken as representative of our future consolidated results of operations.

The pro forma results include estimates and assumptions that management believes are reasonable;

however, these results do not include any anticipated cost savings or expenses of the planned integration of ASPEQ.

These pro forma results of operations have been prepared for comparative purposes only and include additional interest expense on the borrowings required to finance the acquisition, additional depreciation and amortization expense associated with fair value adjustments to the acquired property, plant and equipment and intangible assets, adjustments to reflect charges associated with acquisition-related costs and charges associated with the excess fair value (over historical cost) of inventory acquired and subsequently sold as if they were incurred during the first quarter of 2022, and the related income tax effects.

Three months ended Six months ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Revenues $ 442.0 $ 380.4 $ 870.3 $ 711.8

Income from continuing operations 41.9 12.2 78.8 14.5

Net income 39.6 6.1 80.2 6.8

Income from continuing operations per share of common stock:

Basic $ 0.92 $ 0.27 $ 1.73 $ 0.32

Diluted $ 0.90 $ 0.26 $ 1.69 $ 0.31

Net income per share of common stock:

Basic $ 0.87 $ 0.13 $ 1.76 $ 0.15

Diluted $ 0.85 $ 0.13 $ 1.72 $ 0.15

Other Acquisitions

As indicated in Note 1, on March 31, 2022 and April 3, 2023, we completed the acquisitions of ITL and TAMCO, respectively.

The pro forma effects of these acquisitions are not material to our condensed consolidated results of operations.

Sale of Transformer Solutions Business

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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:

April 1, 2023 December 31, 2022

The major line items constituting DBT ’ s assets and liabilities as of July 1, 2023 and December 31, 2022 are shown below:

July 1, 2023 December 31, 2022

Cash and equivalents $ 8.4 $ 9.3

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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:

April 1, 2023 December 31, 2022

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 July 1, 2023 and December 31, 2022.

The major line items constituting Heat Transfer’s assets and liabilities as of July 1, 2023 and December 31, 2022 are shown below:

July 1, 2023 December 31, 2022

Cash and equivalents $ 0.1 $ —

Other current assets 0.3 0.2

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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:

Three months ended

April 1, 2023 April 2, 2022

For the three and six months ended July 1, 2023 and July 2, 2022, results of operations from our businesses reported as discontinued operations were as follows:

Three months ended Six months ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Income (loss) from discontinued operations (1)

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Loss from discontinued operations (2)

( 0.1 ) ( 0.4 ) ( 0.1 ) ( 0.9 )

Income tax benefit — 0.1 — 0.2

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________________________________

(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.

(1) Income for the six months ended July 1, 2023 resulted primarily from income recorded in connection with dispute resolutions, partially offset by legal costs incurred in connection with various dispute resolution matters related to two large power projects.

Loss for the three months ended July 1, 2023 and the three and six months ended July 2, 2022 resulted primarily from net legal costs incurred in connection with various dispute resolution matters related to two large power projects.

Refer to Note 15 for additional details on these dispute resolution matters.

(2) Loss for the three and six months ended July 1, 2023 and July 2, 2022 resulted primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions.

(4) 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:

Three months ended April 1, 2023

Three months ended July 1, 2023

Reportable Segments HVAC Detection and Measurement Total

1 unchanged sentence

Package and process cooling equipment and services, and engineered air movement solutions $ 173.3 $ — $ 173.3

Boilers, comfort heating, and ventilation 93.3 — 93.3

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 65.9 65.9

Boilers, electrical heating, and ventilation 95.7 — 95.7

Underground locators, inspection and rehabilitation equipment, and robotic systems — 67.2 67.2

Communication technologies, aids to navigation, and transportation systems — 87.1 87.1

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$ 269.0 $ 154.3 $ 423.3

Three months ended April 2, 2022

Six months ended July 1, 2023

Reportable Segments HVAC Detection and Measurement Total

1 unchanged sentence

Package and process cooling equipment and services, and engineered air movement solutions $ 331.6 $ — $ 331.6

Boilers, comfort heating, and ventilation 76.3 — 76.3

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 67.2 67.2

Boilers, electrical heating, and ventilation 189.0 — 189.0

Underground locators, inspection and rehabilitation equipment, and robotic systems — 133.1 133.1

Communication technologies, aids to navigation, and transportation systems — 169.4 169.4

4 unchanged sentences

$ 520.6 $ 302.5 $ 823.1

Three months ended July 2, 2022

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services, and engineered air movement solutions $ 130.5 $ — $ 130.5

Boilers, electrical heating, and ventilation 88.2 — 88.2

Underground locators, inspection and rehabilitation equipment, and robotic systems — 65.4 65.4

Communication technologies, aids to navigation, and transportation systems — 69.9 69.9

$ 218.7 $ 135.3 $ 354.0

Timing of Revenue Recognition

Revenues recognized at a point in time $ 202.8 $ 110.9 $ 313.7

Revenues recognized over time 15.9 24.4 40.3

$ 218.7 $ 135.3 $ 354.0

Six months ended July 2, 2022

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services, and engineered air movement solutions $ 247.3 $ — $ 247.3

Boilers, electrical heating, and ventilation 164.5 — 164.5

Underground locators, inspection and rehabilitation equipment, and robotic systems — 132.6 132.6

Communication technologies, aids to navigation, and transportation systems — 116.7 116.7

$ 411.8 $ 249.3 $ 661.1

Timing of Revenue Recognition

Revenues recognized at a point in time $ 375.9 $ 214.1 $ 590.0

Revenues recognized over time 35.9 35.2 71.1

$ 411.8 $ 249.3 $ 661.1

Contract Balances

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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 :

Contract Balances April 1, 2023 December 31, 2022 Change

Our contract balances consisted of the following as of July 1, 2023 and December 31, 2022:

Contract Balances July 1, 2023 December 31, 2022 Change

Contract Accounts Receivable (1)

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(2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.

T h e $ 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 .

T he $ 14.2 increase in our net contract asset balance from December 31, 2022 to July 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 and six months ended July 1, 2023, we recognized revenues of $ 4.8 and $ 30.6 , respectively, related to our contract liabilities at December 31, 2022.

Performance Obligations

As of April 1, 2023, the aggre gate amount allocat ed to remaining performance obligations was $ 227.0 .

We expect to recognize revenue on approximately 80 % and 91 % of rem aining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.

There have been no material changes to our operating and finance leases during the three months ended April 1, 2023.

As of July 1, 2023, the aggre gate amount all ocated to remaining performance obligations was $ 211.2 .

We expect to recognize revenue on approximately 82 % and 89 % of remaining performance obligations o ver the next 12 and 24 months, respectively, with the remaining recognized thereafter.

There have been no material changes to our operating and finance leases during the three and six months ended July 1, 2023.

(6) INFORMATION ON REPORTABLE SEGMENTS

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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.

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 electrical 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.

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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:

Three months ended

2023 April 2,

Financial data for our reportable segments for the three and six months ended July 1, 2023 and July 2, 2022 are presented below:

Three months ended Six months ended

HVAC reportable segment $ 269.0 $ 218.7 $ 520.6 $ 411.8

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Acquisition-related and other costs (1)

1.5 0.9 2.1 1.0

Long-term incentive compensation expense 3.5 2.5 6.6 5.6

Amortization of intangible assets 11.5 7.1 17.8 16.4

Other operating income — ( 0.9 )

Special charges, net — 0.1 — 0.1

Other operating expense — 1.9 — 1.0

Consolidated operating income $ 51.3 $ 27.2 $ 101.1 $ 38.6

________________________________

(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.

(1) Represents certain acquisition-related costs incurred of $ 1.5 and $ 2.1 during the three and six months ended July 1, 2023, respectively, and $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ASPEQ acquisition of $ 1.1 during the three and six months ended July 1, 2023 and the ITL acquisition of $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively.

(7) 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:

Three months ended

2023 April 2,

There were no special charges for the three and six months ended July 1, 2023.

No significant future charges are expected to be incurred under actions approved as of July 1, 2023.

Special charges, net, for the three and six months ended July 2, 2022 are described in more detail below:

Three months ended Six months ended

HVAC reportable segment $ 0.1 $ 0.1

Detection and Measurement reportable segment — —

Total $ 0.1 $ 0.1

HVAC — Charges for the three and six months ended July 2, 2022 related to severance costs associated with a restructuring action at one of the segment’s cooling businesses.

The following is an analysis of our restructuring liabilities for the six months ended July 1, 2023 and July 2, 2022:

Six months ended

Balance at beginning of year $ — $ 0.3

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(8) INVENTORIES, NET

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:

Inventories are accounted for under the first-in, first-out method and are comprised of the following at July 1, 2023 and December 31, 2022:

2023 December 31,

5 unchanged sentences

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three months ended April 1, 2023 were as follows:

The changes in the carrying amount of goodwill for the six months ended July 1, 2023 were as follows:

2022 Goodwill

1 unchanged sentence

Combinations (1)

Translation April 1,

Translation July 1,

HVAC reportable segment

10 unchanged sentences

__________________________

(1) Reflects an increase in ITL ’ s goodwill of $ 0.8 resulting from revisions to the valuation of certain assets and liabilities.

(1) Reflects (i) goodwill acquired with the TAMCO and ASPEQ acquisitions o f $ 50.6 and $ 169.3 , respectively and (i i) an incre ase in ITL ’ s goodwill of $ 0.8 resulting from revisions to the valuation of certain assets and liabilities.

As indicated in Note 1, the acquired assets, including goodwill, and liabilities assumed in the TAMCO and ASPEQ acquisitions have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

Other Intangibles, Net

Identifiable intangible assets at April 1, 2023 and December 31, 2022 comprised the following:

April 1, 2023 December 31, 2022

Identifiable intangible assets at July 1, 2023 and December 31, 2022 comprised the following:

July 1, 2023 December 31, 2022

Value Accumulated

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Trademarks with indefinite lives (2)

220.7 — 220.7 168.7 — 168.7

Total $ 812.2 $ ( 106.6 ) $ 705.6 $ 490.3 $ ( 88.7 ) $ 401.6

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.

__________________________

(1) The identifiable intangible assets associated with the TAMCO acquisition consists of customer relationships of $ 59.7 , technology of $ 9.3 , definite-lived trademarks of $ 3.2 , and backlog of $ 1.0 .

The identifiable intangible assets associated with the ASPEQ acquisition consists of customer relationships of $ 142.3 , technology of $ 47.8 , and backlog of $ 4.5 .

(2) Includes $ 51.5 of indefinite-lived trademarks associated with the ASPEQ acquisition.

In connection with the acquisitions of TAMCO and ASPEQ, which have definite-lived intangible assets as noted above, we updated our estimated annual amortization expense related to intangible assets to approximately $ 44.0 for the full year 2023 and $ 46.0 for 2024 and each of the four years thereafter.

At July 1, 2023, the net carrying va lue of intangible assets with determinable lives consisted of $ 354.1 in the HVAC reportable segment and $ 130.8 in the Detection and Measurement reportable segment.

At July 1, 2023, trademarks with indefinite lives consisted of $ 156.7 in the HVAC reportable segment and $ 64.0 in the Detection and Measurement reportable segment.

We review goodwill and indefinite-lived intangible assets for impairment annually during th e 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.

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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 .

As of July 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.

3 unchanged sentences

The following is an analysis of our product warranty accrual for the periods presented:

Three months ended

2023 April 2,

10 Six months ended

Balance at beginning of year $ 34.7 $ 34.8

2 unchanged sentences

Usage ( 7.5 ) ( 5.5 )

Currency translation adjustment — ( 0.2 )

Balance at end of period 35.9 34.9

3 unchanged sentences

On 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:

Of this consideration, $ 9.0 was paid during the first 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 (expense), net” during the first quarter of 2022.

Participants in the SPX U.S.

Pension Plan (the “U.S.

Plan”) are eligible to elect a lump-sum payment option in lieu of a future pension benefit.

During the first half of 2022, $ 10.0 was paid to participants who elected lump-sum payments.

This triggered a plan settlement which resulted in a charge to “Other income (expense), net” of $ 2.3 during the quarter ended July 2, 2022.

In addition, we remeasured assets and liabilities of the U.S.

Plan at July 2, 2022, which resulted in an actuarial loss of $ 1.5 recorded to “Other income (expense), net” during the quarter.

Net periodic benefit (income) expense for our pension and postretirement plans includes the following components:

Domestic Pension Plans

Three months ended

2023 April 2,

Service cost $ — $ —

Three months ended Six months ended

Interest cost $ 3.3 $ 2.3 $ 6.6 $ 4.6

Expected return on plan assets ( 2.2 ) ( 2.1 ) ( 4.4 ) ( 4.2 )

Settlement and actuarial losses (1)

Net periodic pension benefit expense $ 1.1 $ 4.0 $ 2.2 $ 4.2

__________________________

(1) C onsists of an actuarial loss of $ 1.5 and a settlement loss of $ 2.3 for the three and six months ended July 2, 2022.

Foreign Pension Plans

Three months ended

2023 April 2,

Service cost $ — $ —

Three months ended Six months ended

Interest cost $ 1.4 $ 1.0 $ 2.8 $ 2.0

2 unchanged sentences

Postretirement Plans

Three months ended

2023 April 2,

Service cost $ — $ —

Three months ended Six months ended

Interest cost $ 0.3 $ 0.3 $ 0.6 $ 0.6

3 unchanged sentences

__________________________

(1) The three months ended April 2, 2022 includes the impact of the transfer of the retiree life insurance benefits obligation.

(1) The six months ended July 2, 2022 includes the impact of the transfer of the retiree life insurance benefits obligation.

(12) INDEBTEDNESS

The following summarizes our debt activity (both current and non-current) for the three months ended April 1, 2023:

2022 Borrowings Repayments Other April 1,

The following summarizes our debt activity (both current and non-current) for the six months ended July 1, 2023:

2022 Borrowings Repayments Other (6)

Revolving loans (1)

$ — $ 520.0 $ ( 420.0 ) $ — $ 100.0

Term loan (2)

Term loans (2)(3)

244.3 300.0 — ( 1.2 ) 543.1

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(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.

The revolving loan facility was utilized as the initial funding mechanism for the TAMCO and ASPEQ acquisitions and was partially repaid with the funds borrowed on the Incremental Term Loan (see additional discussion below).

(2) As noted below, we amended our senior credit agreement on April 21, 2023, with the amendment making available an incremental term loan facility (“Incremental Term Loan”) in the amount of $ 300.0 .

The proceeds from the Incremental Term Loan were primarily used to fund the acquisition of ASPEQ.

(3) The term loans are repayable in quarterly installments equal to 0.625 % of the balance of $ 545.0 , 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 balances are payable in full on August 12, 2027.

Balances are net of unamortized debt issuance costs of $ 1.9 and $ 0.7 at July 1, 2023 and December 31, 2022, respectively.

(4) 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.

At July 1, 2023, we had $ 12.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $ 30.0 .

(5) Primarily includes balances under a purchase card program of $ 2.0 and $ 1.8 and finance lease obligations of $ 0.5 and $ 0.7 at July 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.

(6) “Other” includes the capitalization and amortization of debt issuance costs.

During the three months ended July 1, 2023, we capitalized $ 1.3 of debt issuance costs associated with the Incremental Term Loan.

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.

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 an Incremental Term Loan in the aggregate amount of $ 300.0 , which was 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 Loan were available to be used to finance, in part, permitted acquisitions, to pay related fees, costs and expenses and for other lawful corporate purposes.

The Incremental Term Loan will mature on August 12, 2027.

We may voluntarily prepay the Incremental Term Loan, in whole or in part, without premium or penalty.

In June 2023, we borrowed $ 300.0 under the Incremental Term Loan in connection with the ASPEQ acquisition.

The interest rate applicable to the Incremental Term Loan is, 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 one , three 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 Loan, 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 for the Incremental Term Loan are as follows:

Consolidated Leverage Ratio Commitment Fee Term SOFR Loans

Less than 2.00 to 1.0

0.225 % 1.500 % 0.500 %

Greater than or equal to 2.00 to 1.0 but less than 3.00 to 1.0

0.250 % 1.625 % 0.625 %

Greater than or equal to 3.00 to 1.0

0.275 % 1.875 % 0.875 %

The Incremental Term Loan is 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.

A detailed description of our remaining senior credit facilities under the Credit Agreement is included in our 2022 Annual Report on Form 10-K.

At July 1, 2023, we had $ 389.2 of available borrowing capacity under our revolving credit facilities, after giving effect to borrowings under the domestic revolving loan facility of $ 100.0 and $ 10.8 reserved for outstanding letters of credit.

In addition, at July 1, 2023, we had $ 9.6 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 15.4 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under the Credit Agreement was approximately 6.8 % at July 1, 2023.

At July 1, 2023, we were in compliance with all covenants of the Credit Agreement.

(13) DERIVATIVE FINANCIAL INSTRUMENTS

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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 .

As of July 1, 2023 and December 31, 2022 , the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 9.2 and $ 11.0 , respectively.

In addition, the fair value of our Swaps was $ 12.3 (with $ 9.0 recorded as a current asset and $ 3.3 as a non-current asset) as of July 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.

4 unchanged sentences

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.

We had FX forward contracts with an aggregate notional amount of $ 9.9 and $ 6.9 outstanding as of July 1, 2023 and December 31, 2022, respectively, with all of the $ 9.9 scheduled to mature within one year.

The fair value of our FX forward contracts was less than $ 0.1 at July 1, 2023 and December 31, 2022.

(14) STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION

1 unchanged sentence

The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share:

Three months ended

2023 April 2,

Three months ended Six months ended

Weighted-average number of common shares used in basic income per share 45.533 45.444 45.457 45.500

1 unchanged sentence

Weighted-average number of common shares and dilutive securities used in diluted income per share 46.627 46.289 46.500 46.370

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.

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 0.228 and 0.535 , r espectively, for the three mon ths ended July 1, 2023, and 0.198 and 0.529 , respectively, for the six months ended July 1, 2023.

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 0.350 and 0.791 , respectively, for the three months ended July 2, 2022, and 0.292 and 0.739 , respectively, for the six months ende d July 2, 2022 .

Long-Term Incentive Compensation

4 unchanged sentences

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.

C ompensation 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 :

Unvested PSU’s and RSU’s Weighted-Average Grant-Date Fair Value Per Share

Outstanding at December 31, 2022 0.530 $ 51.38

Granted 0.155 72.17

Vested ( 0.166 ) 51.86

Forfeited ( 0.001 ) 53.47

Outstanding at April 1, 2023 0.518 $ 57.47

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 37.15 %

Annual expected dividend yield — %

Risk-free interest rate 4.18 %

Expected life of stock option (in years) 6.0

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.

Effective May 9, 2023, we granted 0.014 RSU ’ s to our non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2024.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 3.5 and $ 2.5 for the three months ended July 1, 2023 and July 2, 2022 , respectively, an d $ 6.6 an d $ 5.6 for the six months ended July 1, 2023 and July 2, 2022 , respectively.

The related tax benefit w as $ 0.6 and $ 0.4 for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 1.1 and $ 0.9 for the six months e nded July 1, 2023 and July 2, 2022 , respectively.

Repurchases of Common Stock

On May 10, 2022 and May 9, 2023, our Board of Directors authorized management, in its sole discretion, to repurchase, in any fiscal year, up to $ 100.0 of our common stock, subject to maintaining compliance with all covenants of the Credit Agreement.

Pursuant to this authorization, during the three months ended July 2, 2022, we repurchased approximately 0.7 shares of our common stock for aggregate cash payments of $ 33.7 .

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:

The changes in the components of AOCI, net of tax, for the three months ended July 1, 2023 were as follows:

Adjustment Net Unrealized Gains

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Balance at beginning of period $ 243.5 $ 9.1 $ 6.7 $ 259.3

Other comprehensive income before reclassifications 3.9 1.8 — 5.7

Amounts reclassified from accumulated other comprehensive income — ( 1.7 ) ( 0.8 ) ( 2.5 )

Current-period other comprehensive income (loss) 3.9 0.1 ( 0.8 ) 3.2

Balance at end of period $ 247.4 $ 9.2 $ 5.9 $ 262.5

__________________________

(1) Net of tax provision o f $ 3.1 as of July 1, 2023 and April 1, 2023.

(2) Net of tax provision of $ 2.2 and $ 2.4 as of July 1, 2023 and April 1, 2023, respectively.

The balances as of July 1, 2023 and April 1, 2023 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the six months ended July 1, 2023 were as follows:

Adjustment Net Unrealized Gains

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 239.1 $ 11.0 $ 7.4 $ 257.5

Other comprehensive income before reclassifications 8.3 1.5 — 9.8

Amounts reclassified from accumulated other comprehensive income — ( 3.3 ) ( 1.5 ) ( 4.8 )

Current-period other comprehensive income (loss) 8.3 ( 1.8 ) ( 1.5 ) 5.0

Balance at end of period $ 247.4 $ 9.2 $ 5.9 $ 262.5

__________________________

(1) Net of tax provision of $ 3.1 a nd $ 3.7 as of July 1, 2023 and December 31, 2022, respectively.

(2) Net of tax provision of $ 2.2 and $ 2.7 as of July 1, 2023 and December 31, 2022, respectively.

The balances as of July 1, 2023 and December 31, 2022 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the three months ended July 2, 2022 were as follows:

Adjustment Net Unrealized Gains

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 250.1 $ 7.0 $ 9.8 $ 266.9

Other comprehensive income (loss) before reclassifications ( 13.8 ) 1.5 0.1 ( 12.2 )

3 unchanged sentences

__________________________

(1) Net of tax provision o f $ 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 $ 2.9 and $ 2.3 as of July 2, 2022 and April 2, 2022, respectively.

(2) Net of tax provision of $ 3.2 and $ 3.5 as of July 2, 2022 and April 2, 2022, respectively.

The balances as of July 2, 2022 and April 2, 2022 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the six months ended July 2, 2022 were as follows:

Adjustment Net Unrealized Gains

9 unchanged sentences

__________________________

(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:

(1) Net of tax provision of $ 2.9 and $ 0.1 as of July 2, 2022 and December 31, 2021, respectively.

(2) Net of tax provision of $ 3.2 and $ 3.7 as of July 2, 2022 and December 31, 2021, respectively.

The balances as of July 2, 2022 and December 31, 2021 include unamortized prior service credits.

The following summarizes amounts reclassified from each component of AOCI for the three months ended July 1, 2023 and July 2, 2022:

Amount Reclassified from AOCI

Three months ended

April 1, 2023 April 2, 2022 Affected Line Item in the Condensed

July 1, 2023 July 2, 2022 Affected Line Item in the Condensed

Consolidated Statements of Operations

5 unchanged sentences

Gains on pension and postretirement items:

Amortization of unrecognized prior service credits - Pre-tax $ ( 1.0 ) $ ( 1.1 ) Other income, net

Amortization of unrecognized prior service credits - Pre-tax $ ( 1.0 ) $ ( 1.1 ) Other income (expense), net

Income taxes 0.2 0.3

$ ( 0.8 ) $ ( 0.8 )

The following summarizes amounts reclassified from each component of AOCI for the six months ended July 1, 2023 and July 2, 2022:

Amount Reclassified from AOCI

Six months ended

July 1, 2023 July 2, 2022 Affected Line Item in the Condensed

Consolidated Statements of Operations

(Gains) losses on qualifying cash flow hedges:

Swaps $ ( 4.4 ) $ 0.7 Interest expense

Pre-tax ( 4.4 ) 0.7

Income taxes 1.1 ( 0.2 )

$ ( 3.3 ) $ 0.5

Gains on pension and postretirement items:

Amortization of unrecognized prior service credits - Pre-tax $ ( 2.0 ) $ ( 2.2 ) Other income (expense), net

Income taxes 0.5 0.5

$ ( 1.5 ) $ ( 1.7 )

(15) CONTINGENT LIABILITIES AND OTHER MATTERS

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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 liab ilities 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.

Our recorded liab ilities related to these matters, primarily associated with environmental matters, totaled $ 37.7 and $ 39.5 at July 1, 2023 and December 31, 2022, respectively.

Of these amounts, $ 30.6 and $ 30.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at July 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.

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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 recoveri es 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.

During the six months ended July 2, 2022, our payments for asbestos-related claims, net of respective insurance recoveri es of $ 17.0 , were $ 11.2 .

During the three and six months ended July 2, 2022, we recorded charges of $ 2.3 to continuing operations and $ 0.2 to discontinued operations related to revisions of recorded liabilities for asbestos-related claims.

There w ere no other changes in estimates associated with the assets and liabilities related to our asbestos product liability matters during the three and six months ended July 2, 2022.

Large Power Projects in South Africa

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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.”

In March 2023, an arbitration tribunal upheld the decision of the dispute adjudication panel.

As a result, the South African Rand 126.6 (or $ 6.8 ) 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.” Additionally, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $ 1.3 of legal costs incurred related to the arbitration.

Such amount was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the quarter ended July 1, 2023.

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.

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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.

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 $ 18.7 ) 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.

Additionally, in May 2023, the arbitration tribunal ruled DBT was entitled to recover $ 5.5 of legal costs incurred related to the arbitration.

Such amount was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the quarter ended July 1, 2023.

MHI subsequently referred the claims dismissed from the arbitration, with approximately South African Rand 394.4 (or $ 21.1 ) related to claims that are direct in nature, to a new dispute adjudication panel.

The panel held a hearing on these matters in June 2023 and a ruling is expected in the third quarter of 2023.

DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with any of these claims.

4 unchanged sentences

(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.

and (iv) unpredictable nature of any dispute resolution processes that have occurred or 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 $ 21.8 ) 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.

18 unchanged sentences

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.

We have reflected the remaining South African Rand 327.5 (or $ 17.5 and $ 19.1 as of July 1, 2023 and December 31, 2022, respectively ) within “Assets of DBT and Heat Transfer” on the accompanying condensed consolidated balance sheets as of July 1, 2023 and December 31, 2022.

All other bonds previously issued in favor of MHI have been returned or cancelled by the issuing banks.

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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.

We had liabilities for site investigation and/or remediation at 17 sites that we own or control, or formerly owned and controlled, as of July 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.

2 unchanged sentences

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.

It is our policy to revise an estimate once the revision 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.

In the case of contamination at offsite, third-party disposal sites, as of July 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.

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Uncertain Tax Benefits

As of April 1, 2023 , we had gross unrecognized tax benefi ts 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.

As of July 1, 2023 , we had gross unrecognized tax ben efits of $ 2.5 (net unrecognized tax benefits of $ 2.4 ).

These 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.

As of July 1, 2023, gross accrued interest totaled $ 1.3 (net accrued interest of $ 1.2 ).

As of July 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 $ 0.6 .

1 unchanged sentence

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.

For the three months ended July 1, 2023, we recorded an income tax provision of $ 7.8 on $ 46.1 of pre-tax income from continuing operations, resulting in an effective rate of 16.9 %.

This compares to an income tax provision for the three months ended July 2, 2022 of $ 4.4 on $ 23.5 of pre-tax income from continuing operations, resulting in an effective rate of 18.7 %.

The most significant items impacting the income tax provision for the second quarters of 2023 and 2022 were (i) $ 1.2 and $ 0.7 of tax benefits, respectively, related to revisions to liabilities for uncertain tax positions and (ii) $ 0.5 and $ 0.0 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period.

In addition, the rate for the three months ended July 1, 2023 was favorably impacted by a tax benefit of $ 1.8 related to the release of valuation allowances recognized against certain deferred tax assets, as we now expect these deferred tax assets to be realized.

For the six months ended July 1, 2023, we recorded an income tax provision of $ 19.1 on $ 96.5 of pre-tax income from continuing operations, resulting in an effective rate of 19.8 %.

This compares to an income tax provision for the six months ended July 2, 2022 of $ 7.0 on $ 39.1 of pre-tax income from continuing operations, resulting in an effective rate of 17.9 %.

The most significant items impacting the income tax provision during the first half of 2023 and 2022 were (i) $ 1.4 and $ 0.7 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the periods and (ii) the $ 1.2 and $ 0.7 , respectively, of the tax benefits noted above related to revisions to liabilities for uncertain tax positions.

In addition, the current year's rate was favorably impacted by a tax benefit of $ 1.8 related to the release of valuation allowances recognized against certain deferred tax assets, as we now expect these deferred tax assets to be realized.

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.

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Valuation Methods Used to Measure Fair Value on a Non-Recurring Basis

Contingent Consideration for Sensors & Software and EC S 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.

Contingent Consideration for Sensors & Software and Enterprise Control Systems Acquisitions — In connection with the acquisition of Sensors & Software in 2020, the sellers were eligible for additional cash consideration of up to $ 3.8 , 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.

In connection with the acquisition of Enterprise Control Systems Ltd in 2021, the seller was eligible for additional cash consideration of up to $ 15.8 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

During the first and second quarters 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 quarters ended April 2, 2022 and July 2, 2022, we reduced the fair value/liability by $ 0.9 and $ 0.4 , respectively, with such amounts recorded to “Other operating expense, net.” The estimated fair value of such contingent consideration was $ 0.0 at July 1, 2023 and December 31, 2022 as we determined no additional cash consideration was due to the seller.

We estimate the fair value of contingent consideration based on the probability of the acquired business achieving the applicable milestones.

1 unchanged sentence

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.

Any asset impairment would result in the asset being recorded at its fair value.

Valuation Methods Used to Measure Fair Value on a Recurring Basis

4 unchanged sentences

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.

As of July 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.

1 unchanged sentence

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.

Duri ng the three and six months ended July 1, 2023 and July 2, 2022, we recorded gains of $ 0.0 and $ 0.0 , and $ 3.6 and $ 4.4 , respectively, to “Other income (expense), net” to reflect an increase in the estimated fair value of the equity security.

As of July 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 July 1, 2023 and December 31, 2022 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments.

Se e Note 12 f or further details.

(18) SUBSEQUENT EVENTS

On April 3, 2023, we completed the acquisition of T.

Morrison & Co.

( “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.

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 one , three 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:

Consolidated Leverage Ratio Commitment Fee Term SOFR Loans

Less than 2.00 to 1.0

0.225 % 1.500 % 0.500 %

Greater than or equal to 2.00 to 1.0 but less than 3.00 to 1.0

0.250 % 1.625 % 0.625 %

Greater than or equal to 3.00 to 1.0

0.275 % 1.875 % 0.875 %

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.

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-Q

Item 1. Financial Statements