SPX Technologies, Inc. 10-Q

ITEM 1. Financial Statements SPX TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited; in millions, except per share amounts) Three months ended March 29, 2025 March 30, 2024 Revenues $ 482.6 $ 465.2 Costs and expenses: Cost of products sold 286.7 282.3 Selling, general and administrative 109.5 102.9 Intangible amortization 19.7 14.8 Special charges, net 0.1 0.6 Operating income 66.6 64.6 Other income (expense), net 2.7 ( 4.0 ) Interest expense ( 12.3 ) ( 9.8 ) Interest income 0.9 0.3 Income from continuing operations before income taxes 57.9 51.1 Income tax provision ( 6.2 ) ( 1.9 ) Income from continuing operations 51.7 49.2 Income (loss) from discontinued operations, net of tax — — Loss on disposition of discontinued operations, net of tax ( 0.5 ) ( 0.2 ) Loss from discontinued operations, net of tax ( 0.5 ) ( 0.2 ) Net income $ 51.2 $ 49.0 Basic income per share of common stock: Income from continuing operations $ 1.11 $ 1.07 Loss from discontinued operations ( 0.01 ) — Net income per share $ 1.10 $ 1.07 Weighted-average number of common shares outstanding — basic 46.453 45.828 Diluted income per share of common stock: Income from continuing operations $ 1.10 $ 1.05 Loss from discontinued operations ( 0.01 ) — Net income per share $ 1.09 $ 1.05 Weighted-average number of common shares outstanding — diluted 47.122 46.683 Comprehensive income $ 61.0 $ 38.8 The accompanying notes are an integral part of these statements. 3 SPX TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; in millions, except share data) March 29, 2025 December 31, 2024 ASSETS Current assets: Cash and equivalents $ 177.8 $ 156.9 Accounts receivable, net 319.6 313.6 Contract assets 37.5 11.3 Inventories, net 308.1 271.0 Other current assets 63.8 31.5 Total current assets 906.8 784.3 Property, plant and equipment: Land 23.5 23.5 Buildings and leasehold improvements 113.8 113.3 Machinery and equipment 319.4 308.1 456.7 444.9 Accumulated depreciation ( 233.1 ) ( 226.9 ) Property, plant and equipment, net 223.6 218.0 Goodwill 950.0 834.5 Intangibles, net 853.9 703.0 Other assets 192.5 164.1 Deferred income taxes 2.6 2.4 Assets of DBT and Heat Transfer (includes cash and equivalents of $ 4.4 and $ 4.5 at March 29, 2025 and December 31, 2024, respectively) (Note 3) 8.1 8.2 TOTAL ASSETS $ 3,137.5 $ 2,714.5 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 149.0 $ 128.1 Contract liabilities 80.0 62.3 Accrued expenses 145.4 170.8 Income taxes payable 20.2 19.4 Short-term debt 60.7 10.1 Current maturities of long-term debt 27.6 27.6 Total current liabilities 482.9 418.3 Long-term debt 872.0 577.0 Deferred and other income taxes 98.0 97.8 Other long-term liabilities 228.0 224.2 Liabilities of DBT and Heat Transfer (Note 3) 13.2 12.8 Total long-term liabilities 1,211.2 911.8 Commitments and contingent liabilities (Note 15) Stockholders' Equity: Common stock ( 54,410,396 and 46,695,783 is sued and outstanding at March 29, 2025, respectively, and 54,196,620 and 46,368,240 issued and outstanding at December 31, 2024, respectively) 0.5 0.5 Paid-in capital 1,364.8 1,373.5 Retained earnings 290.0 238.8 Accumulated other comprehensive income 233.4 223.6 Common stock in treasury ( 7,714,613 and 7,828,380 shares at March 29, 2025 and December 31, 2024, respectively) ( 445.3 ) ( 452.0 ) Total stockholders' equity 1,443.4 1,384.4 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,137.5 $ 2,714.5 The accompanying notes are an integral part of these statements. 4 SPX TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited; in millions) Three months ended March 29, 2025 Common Stock Paid-In Capital Retained Earnings Accum. Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity Balance at December 31, 2024 $ 0.5 $ 1,373.5 $ 238.8 $ 223.6 $ ( 452.0 ) $ 1,384.4 Net income — — 51.2 — — 51.2 Other comprehensive income, net — — — 9.8 — 9.8 Incentive plan activity — 6.5 — — — 6.5 Long-term incentive compensation expense — 3.7 — — — 3.7 Restricted stock unit vesting — ( 18.9 ) — — 6.7 ( 12.2 ) Balance at March 29, 2025 $ 0.5 $ 1,364.8 $ 290.0 $ 233.4 $ ( 445.3 ) $ 1,443.4 Three months ended March 30, 2024 Common Stock Paid-In Capital Retained Earnings Accum. Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity Balance at December 31, 2023 $ 0.5 $ 1,353.6 $ 38.3 $ 261.1 $ ( 458.9 ) $ 1,194.6 Net income — — 49.0 — — 49.0 Other comprehensive loss, net — — — ( 10.2 ) — ( 10.2 ) Incentive plan activity — 9.8 — — — 9.8 Long-term incentive compensation expense — 3.3 — — — 3.3 Restricted stock unit vesting — ( 15.1 ) — — 6.1 ( 9.0 ) Balance at March 30, 2024 $ 0.5 $ 1,351.6 $ 87.3 $ 250.9 $ ( 452.8 ) $ 1,237.5 The accompanying notes are an integral part of these statements. 5 SPX TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in millions) Three months ended March 29, 2025 March 30, 2024 Cash flows from (used in) operating activities: Net income $ 51.2 $ 49.0 Less: Loss from discontinued operations, net of tax ( 0.5 ) ( 0.2 ) Income from continuing operations 51.7 49.2 Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities: Special charges, net 0.1 0.6 (Gain) loss on change in fair value of equity security ( 4.5 ) 4.2 Amortization of compensation expense related to acquisition (Refer to Note 3) 4.3 — Deferred and other income taxes ( 0.5 ) ( 3.4 ) Depreciation and amortization 27.0 21.0 Pension and other employee benefits 5.5 4.2 Long-term incentive compensation 3.7 3.3 Other, net 0.2 ( 1.6 ) Changes in operating assets and liabilities, net of effects from acquisitions and divestitures: Accounts receivable and other assets ( 26.3 ) ( 29.5 ) Contribution related to employee retention agreements for acquisition (Refer to Note 3) ( 46.5 ) — Inventories ( 13.8 ) ( 12.0 ) Accounts payable, accrued expenses and other ( 10.8 ) ( 24.9 ) Cash spending on restructuring actions ( 0.5 ) ( 0.4 ) Net cash from (used in) continuing operations ( 10.4 ) 10.7 Net cash used in discontinued operations ( 0.5 ) ( 0.2 ) Net cash from (used in) operating activities ( 10.9 ) 10.5 Cash flows from (used in) investing activities: Proceeds related to company-owned life insurance policies, net 3.0 0.1 Business acquisitions, net of cash acquired ( 304.1 ) ( 294.1 ) Capital expenditures ( 5.5 ) ( 9.9 ) Net cash used in continuing operations ( 306.6 ) ( 303.9 ) Net cash from (used in) discontinued operations — — Net cash used in investing activities ( 306.6 ) ( 303.9 ) Cash flows from (used in) financing activities: Borrowings under senior credit facilities 393.0 557.2 Repayments under senior credit facilities ( 98.0 ) ( 279.2 ) Borrowings under trade receivables arrangement 135.0 65.0 Repayments under trade receivables arrangement ( 85.0 ) ( 47.0 ) Net borrowings (repayments) under other financing arrangements 0.5 ( 0.3 ) Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options ( 9.8 ) ( 3.0 ) Net cash from continuing operations 335.7 292.7 Net cash from (used in) discontinued operations — — Net cash from financing activities 335.7 292.7 Change in cash and equivalents due to changes in foreign currency exchange rates 2.6 1.3 Net change in cash and equivalents 20.8 0.6 Consolidated cash and equivalents, beginning of period 161.4 104.9 Consolidated cash and equivalents, end of period $ 182.2 $ 105.5 Three months ended March 29, 2025 March 30, 2024 Components of cash and equivalents: Cash and equivalents $ 177.8 $ 100.5 Cash and equivalents included in assets of DBT and Heat Transfer 4.4 5.0 Total cash and equivalents $ 182.2 $ 105.5 The accompanying notes are an integral part of these statements. 6 SPX TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited; in millions, except per share data) (1) BASIS OF PRESENTATION Unless otherwise indicated, “we,” “us” and “our” mean SPX Technologies, Inc. and its consolidated subsidiaries (“SPX”). We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations). We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. All of our VIE’s are immaterial, individually and in aggregate, to our condensed consolidated financial statements. From time to time, we may make acquisitions that do not significantly impact our financial position or statements of operations. These acquisitions primarily complement our existing business operations or strategic initiatives with no significant impact to our financial outlook and end markets, or requiring a significant investment of resources. Such acquisitions are not separately identified within this report on Form 10-Q. Acquisition of Ingénia On February 7, 2024, we completed the acquisition of Ingénia Technologies Inc. (“Ingénia”) which specializes in the design and manufacture of custom air handling units that demand high levels of precision and reliability in healthcare, pharmaceutical, education, food processing and industrial end markets. We purchased Ingénia for cash consideration of $ 292.0 , net of (i) an adjustment to the purchase price of $ 2.1 received during the third quarter of 2024 related to acquired working capital and (ii) cash acquired of $ 1.5 . The post-acquisition operating results of Ingénia are reflected within our HVAC reportable segment. Acquisition of KTS On January 27, 2025, we completed the acquisition of Kranze Technology Solutions, Inc. (“KTS”) which specializes in digital interoperability and tactical networking solutions, primarily for the defense industry. We purchased KTS for net cash consideration of $ 342.4 , inclusive of amounts related to future service obligations of certain existing employees of $ 46.5 . The purchase price is subject to adjustment based on the final calculation of working capital and cash as of the date of acquisition. The post-acquisition operating results of KTS are reflected within our Detection and Measurement reportable segment. The assets acquired and liabilities assumed in the KTS transaction 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 tax amounts and other judgmental reserves. Other Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 (“our 2024 Annual Report on Form 10-K”). Interim results are not necessarily indicative of full year results. We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2025 are March 29, June 28, and September 27, compared to the respective March 30, June 29, and September 28 dates of 2024. We had two less days in the first quarter of 2025 and will have one more day in the fourth quarter of 2025 than in the respective 2024 periods. It 7 is not practicable to estimate the impact of the two less days on our consolidated operating results for the three months ended March 29, 2025, when compared to the consolidated operating results for the 2024 respective period. (2) NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In November 2023, the FASB issued ASU No. 2023-07. Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”). ASU 2023-07 was effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements. We have adopted ASU 2023-07 with the additional disclosures included within Note 6. In December 2023, the FASB issued ASU No. 2023-09, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the disclosure impact of ASU 2023-09; however, the standard will not have an impact on our consolidated financial position, results of operations or cash flows. In November 2024, the FASB issued ASU No. 2024-03, which requires companies to disclose, on an interim and annual basis, additional information about specific expense categories in the notes to the financial statements. In addition, ASU 2024-03 requires companies to disclose a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and, on an annual basis, disclose the total amount of selling expenses and our definition of selling expenses. ASU 2024-03, further clarified by ASU 2025-01, will be effective for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, and will be applied on a prospective basis with the option to apply the standard retrospectively, with early adoption permitted. We are currently evaluating the disclosure impact of ASU 2024-03; however, the standard will not have an impact on our consolidated financial position, results of operations or cash flows. (3) ACQUISITIONS AND DISCONTINUED OPERATIONS Acquisitions From time to time, we may make acquisitions that do not significantly impact our financial position or statements of operations. These acquisitions primarily complement our existing business operations or strategic initiatives with no significant impact to our financial outlook and end markets, nor requiring a significant investment of resources. Such acquisitions are not separately identified within this report on Form 10-Q. During the three months ended March 29, 2025, cash outflows, net of cash acquired, related to this activity totaled $ 8.2 . The post-acquisition operating results are reflected within our HVAC reportable segment and have no significant impact to our financial outlook and end markets. Acquisition of KTS As indicated in Note 1, on January 27, 2025, we completed the acquisition of KTS for net cash consideration of $ 342.4 , inclusive of amounts paid related to future service obligations of certain employees of $ 46.5 described further below. We financed the acquisition with available borrowings on our revolving credit facilities under our senior credit facilities. In connection with the acquisition of KTS, and as required by the acquisition agreement, we assumed employee retention agreements with certain employees, totaling $ 46.5 , that include future service obligations. In the event employees forfeit any amounts under the terms of the agreements, such amounts are due to the seller of KTS. We funded the amounts related to these retention agreements through a reduction in the purchase price, with $ 46.5 paid in an escrow account at the time of the acquisition closing, as required by the acquisition agreement. The deferred compensation assets related to these agreements will be amortized over the agreement terms which range from 2 to 8 years. During the three months ended March 29, 2025, we recognized compensation costs of $ 4.3 , which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations, related to such retention agreements. The remaining deferred compensation assets of $ 23.5 and $ 18.7 are recorded within “ Other current assets ” and “ Other assets ” within our condensed consolidated balance sheet as of March 29, 2025, respectively. 8 The following is a summary of the recorded preliminary fair values of the assets acquired and liabilities assumed for KTS as of January 27, 2025: Assets acquired: Current assets (1) $ 66.3 Property, plant and equipment 5.5 Goodwill 105.0 Intangible assets 164.5 Other assets (1) 21.2 Total assets acquired 362.5 Current liabilities assumed 15.4 Other long-term liabilities 4.7 Net assets acquired $ 342.4 ___________________________ (1) Includes $ 26.2 and $ 20.3 within “ Current assets ” and “ Other assets ” , respectively, for deferred compensation assets related to the employee retention agreements discussed previously. The identifiable intangible assets acquired consis t of technology, customer relationships and contracts, trademarks, and customer backlog of $ 79.8 , $ 70.7 , $ 6.7 , and $ 7.3 , respectively, with suc h amounts based on an assessment of the related fair values. We expect to amortize the technology, customer relationships and contracts, trademarks, and customer backlog assets ove r 12.0 , 15.0 , 9.0 , and 2.0 years, respectively. We acquired gro ss receivables of $ 7.2 , which had the same fair value at the acquisition date based on our estimates of cash flows expected to be recovered. The qualitative factors that comprise the recorded goodwill include expected domestic and global market growth for KTS's existing operations, increased volumes achieved through product synergies with existing SPX businesses, procurement and operational savings and efficiencies, and various other factors. We expect the goodwill described above to be deductible for tax purposes. We recognized revenues and a net loss for KTS of $ 8.5 and $ 6.4 , respectively, for the three months ended March 29, 2025 with the net loss impacted by charges during the three months ended March 29, 2025 of (i) $ 4.3 of compensation costs related to acquired retention agreements, (ii) $ 3.2 associated with amortization of the various intangible assets mentioned above, and (iii) $ 0.3 associated with the excess fair value (over historical cost) of inventory acquired which was subsequently sold. During the three months ended March 29, 2025, we incurred acquisition-related and other costs for KTS of $ 6.2 , including the $ 4.3 of compensation costs related to acquired retention agreements mentioned above, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations with $ 1.2 and $ 5.0 recorded within “Corporate expense” and “Acquisition-related and other costs”, respectively, within consolidated operating income in Note 6. Acquisition of Ingénia As indicated in Note 1, on February 7, 2024, we completed the acquisition of Ingénia, for $ 292.0 , net of (i) an adjustment to the purchase price of $ 2.1 received during the third quarter of 2024 related to acquired working capital and (ii) cash acquired of $ 1.5 . We financed the acquisition with available borrowings on our revolving credit facilities under our senior credit facilities. The excess of the purchase price over the total of the fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. 9 The following is a summary of the recorded final fair values of the assets acquired and liabilities assumed for Ingénia as of February 7, 2024: Assets acquired: Current assets, including cash and equivalents of $ 1.5 $ 31.2 Property, plant and equipment 73.6 Goodwill 142.4 Intangible assets 97.9 Total assets acquired 345.1 Current liabilities assumed 14.5 Deferred and other income taxes 37.1 Net assets acquired $ 293.5 The identifiable intangible assets acquired consis t of technology, customer relationships, trademarks, and customer backlog of $ 46.7 , $ 23.5 , $ 13.9 , and $ 13.8 , respectively, with suc h amounts based on an assessment of the related fair values. We expect to amortize the technology, customer relationships, trademarks, and customer backlog assets ove r 12.0 , 7.0 , 8.0 , and 1.0 years, respectively. We acquired gro ss receivables of $ 16.1 , which had the same fair value at the acquisition date based on our estimates of cash flows expected to be recovered. The qualitative factors that comprise the recorded goodwill include expected market growth for Ingénia's existing operations, increased volumes achieved by selling Ingénia’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors. We expect no ne of the goodwill described above to be deductible for tax purposes. Additionally, during the three months ended March 29, 2025, we incurred acquisition-related and other costs for Ingénia of $ 0.6 , which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations with $ 0.2 and $ 0.4 recorded within “Corporate expense” and “Acquisition-related and other costs”, respectively, within consolidated operating income in Note 6. 10 The following unaudited pro forma information presents our condensed consolidated results of operations for the three months ended March 29, 2025 and March 30, 2024, respectively, as if the acquisition of KTS and Ingénia had taken place on January 1, 2024 and January 1, 2023, respectively. The unaudited pro forma financial information is not intended to represent or be indicative of our condensed consolidated results of operations that would have been reported had the acquisitions 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 KTS and Ingénia. These pro forma consolidated results of operations have been prepared for comparative purposes only and include additional interest expense on the borrowings required to finance the acquisitions, 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 beginning during the first quarter of 2024 for KTS and first quarter of 2023 for Ingénia, and the related income tax effects. Three months ended March 29, 2025 March 30, 2024 Revenues $ 485.3 $ 491.6 Income from continuing operations 53.9 39.1 Net income 53.4 38.9 Income from continuing operations per share of common stock: Basic $ 1.16 $ 0.85 Diluted $ 1.14 $ 0.84 Net income per share of common stock: Basic $ 1.15 $ 0.85 Diluted $ 1.13 $ 0.83 Wind-Down of DBT Business We completed the wind-down of our DBT Technologies (PTY) LTD (“DBT”) business after ceasing all operations, including those related to two large power projects in South Africa — Kusile and Medupi, in the fourth quarter of 2021. As a result of completing the wind-down plan, we are reporting DBT as a discontinued operation for all periods presented. As previously disclosed, DBT had asserted claims against the remaining prime contractor on the large projects, Mitsubishi Heavy Industries Power — ZAF (f.k.a. Mitsubishi-Hitachi Power Systems Africa (PTY) LTD) (“MHI”), which had also asserted claims against DBT. As previously disclosed in our 2024 Annual Report on Form 10-K, on September 5, 2023, DBT and SPX entered into an agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa (the “Settlement Agreement”). The Settlement Agreement provides for full and final settlement and mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc. as guarantor of DBT's performance on the projects. It also provides that the underlying subcontracts are terminated and all obligations of both parties under the subcontracts have been satisfied in full. 11 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 March 29, 2025 and December 31, 2024. The major line items constituting DBT ’ s assets and liabilities as of March 29, 2025 and December 31, 2024 are shown below: March 29, 2025 December 31, 2024 ASSETS Cash and equivalents $ 4.3 $ 4.4 Other current assets (1) 3.4 3.4 Total assets of DBT $ 7.7 $ 7.8 LIABILITIES Accounts payable (1) $ 0.7 $ 0.7 Contract liabilities (1) 2.1 2.0 Accrued expenses (1) 6.1 5.8 Other long-term liabilities (1) 4.3 4.2 Total liabilities of DBT $ 13.2 $ 12.7 ___________________________ (1) Balances relate primarily to disputed amounts due to or from a subcontractor, engaged by DBT during the Kusile project, that is currently in liquidation. The timing of the ultimate resolution of these matters is uncertain as they are likely to occur as part of the liquidation process. Wind-Down of the Heat Transfer Business We completed the wind-down of our SPX Heat Transfer (“Heat Transfer”) business in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all periods presented. The assets and liabilities of Heat Transfer have been included within “ Assets of DBT and Heat Transfer ” and “ Liabilities of DBT and Heat Transfer, ” respectively, on the condensed consolidated balance sheets as of March 29, 2025 and December 31, 2024. The major line items constituting Heat Transfer ’ s assets and liabilities as of March 29, 2025 and December 31, 2024 are shown below: March 29, 2025 December 31, 2024 ASSETS Cash and equivalents $ 0.1 $ 0.1 Other current assets 0.3 0.3 Total assets of Heat Transfer $ 0.4 $ 0.4 LIABILITIES Accounts payable $ — $ 0.1 Total liabilities of Heat Transfer $ — $ 0.1 Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g. income taxes) may occur. As a result, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods. For the three months ended March 29, 2025 and March 30, 2024, results of operations from our businesses reported as discontinued operations were as follows: Three months ended March 29, 2025 March 30, 2024 Loss from discontinued operations (1) $ ( 0.5 ) $ ( 0.4 ) Income tax benefit — 0.2 Loss from discontinued operations, net $ ( 0.5 ) $ ( 0.2 ) ___________________________ 12 (1) Loss for the three months ended March 29, 2025 and March 30, 2024 related primarily to costs incurred to support DBT through the subcontractor liquidation process mentioned above. (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 March 29, 2025 and March 30, 2024: Three months ended March 29, 2025 Reportable Segments HVAC Detection and Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement and handling solutions $ 199.1 $ — $ 199.1 Boilers, electrical heating, and ventilation 123.9 — 123.9 Underground locators, inspection and rehabilitation equipment, and robotic systems — 56.7 56.7 Communication technologies, aids to navigation, and transportation systems — 102.9 102.9 $ 323.0 $ 159.6 $ 482.6 Timing of Revenue Recognition Revenues recognized at a point in time $ 304.1 $ 141.5 $ 445.6 Revenues recognized over time 18.9 18.1 37.0 $ 323.0 $ 159.6 $ 482.6 Three months ended March 30, 2024 Reportable Segments HVAC Detection and Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement and handling solutions $ 187.8 $ — $ 187.8 Boilers, electrical heating, and ventilation 114.6 — 114.6 Underground locators, inspection and rehabilitation equipment, and robotic systems — 61.0 61.0 Communication technologies, aids to navigation, and transportation systems — 101.8 101.8 $ 302.4 $ 162.8 $ 465.2 Timing of Revenue Recognition Revenues recognized at a point in time $ 282.4 $ 138.0 $ 420.4 Revenues recognized over time 20.0 24.8 44.8 $ 302.4 $ 162.8 $ 465.2 13 Contract Balances Our customers are invoiced for products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within our condensed consolidated balance sheets. Our contract balances consisted of the following as of March 29, 2025 and December 31, 2024 : Contract Balances March 29, 2025 December 31, 2024 Change Contract Accounts Receivable (1) $ 311.6 $ 305.4 $ 6.2 Contract Assets 37.5 11.3 26.2 Contract Liabilities - current ( 80.0 ) ( 62.3 ) ( 17.7 ) Contract Liabilities - non-current (2) ( 4.5 ) ( 4.0 ) ( 0.5 ) Net contract balance $ 264.6 $ 250.4 $ 14.2 ___________________________ (1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets. (2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets. The timing of revenue recognition, invoicing and cash collections results in Contract Accounts Receivable, contract assets, and customer advances and deposits (contract liabilities) on our condensed consolidated balance sheets. In general, we receive payments from customers based on a billing schedule established in our contracts. During the three months ended March 29, 2025, changes in contract balances were not materially impacted by any other factors. At March 29, 2025, Contract Account Receivables, contract assets, and current contract liabilities attributable to KTS were $ 7.6 , $ 1.2 , and $ 7.0 , respectively. During the three months ended March 29, 2025, we recognized revenues o f $ 28.7 related to our contract liabilities at December 31, 2024 . Performance Obligations As of March 29, 2025, the aggre gate amount allo cated to remaining performance obligations was $ 201.1 . We expect to recognize revenue on approximately 53 % and 64 % of remaining performance obliga tions over the next 12 and 24 months, respectively, with the remaining recognized thereafter. (5) LEASES There were no material changes to our operating and finance leases during the three months ended March 29, 2025. (6) INFORMATION ON REPORTABLE SEGMENTS We are a global supplier of highly specializ ed, engineered solutions with operations in 16 countries and sales in over 100 countries around the world. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Financial Accounting Standards Board Codification (the “Codification”). We have aggregated our operating segments into the following two reportable segments: HVAC and Detection and Measurement. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. Our CODM, who is our President and Chief Executive Officer, uses revenue and segment income to evaluate the results of each operating segment. Segment income is determined before considering, if applicable, impairments 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 and integration-related costs. There have been no changes in the basis of segmentation or measurement of segment income during 2025. Our CODM assesses revenue and segment income performance in comparison to prior years, previously forecasted results, and anticipated/experienced market trends when determining how to allocate operating and capital resources. The only significant segment expense categories reviewed by our CODM are total selling, general, and administrative expense and cost of products sold. Our 14 CODM does not review asset or liability information for our operating segments as this information is not used to assess performance or allocate resources. HVAC Reportable Segment Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement and handling solutions for the HVAC industrial, commercial, data center, and power generation markets, as well as boilers and electrical heating and ventilation products for the residential, industrial, and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a global customer base in North America, Europe, and Asia. Detection and Measurement Reportable Segment Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base in North America, Europe, Africa, and Asia. Corporate Expense Corporate expense generally relates to the personnel and general operating costs of our corporate headquarters based in Charlotte, North Carolina. Financial data for our reportable segments for the three months ended March 29, 2025 and March 30, 2024 are presented below: 15 Three months ended March 29, 2025 March 30, 2024 HVAC reportable segment Revenues $ 323.0 $ 302.4 Cost of product sold 199.6 185.0 Selling, general and administrative expense 49.5 49.0 Segment income $ 73.9 $ 68.4 Detection and Measurement reportable segment Revenues $ 159.6 $ 162.8 Cost of product sold 86.8 96.4 Selling, general and administrative expense 36.2 35.0 Segment income $ 36.6 $ 31.4 Consolidated revenues $ 482.6 $ 465.2 Consolidated income for segments 110.5 99.8 Corporate expense 14.0 13.9 Acquisition-related and other costs (1) 6.4 2.6 Long-term incentive compensation expense 3.7 3.3 Amortization of acquired intangible assets 19.7 14.8 Special charges, net 0.1 0.6 Consolidated operating income $ 66.6 $ 64.6 Capital expenditures: HVAC reportable segment $ 4.7 $ 8.7 Detection and Measurement reportable segment 0.8 1.0 General corporate — 0.2 Total capital expenditures $ 5.5 $ 9.9 Depreciation and amortization: HVAC reportable segment $ 16.9 $ 14.5 Detection and Measurement reportable segment 9.5 5.9 General corporate 0.6 0.6 Total depreciation and amortization $ 27.0 $ 21.0 Geographic Areas: Revenues: (2) United States $ 403.0 $ 392.9 Canada 30.2 22.2 China 13.0 12.9 United Kingdom 17.4 18.8 Other 19.0 18.4 $ 482.6 $ 465.2 March 29, 2025 December 31, 2024 Tangible Long-Lived Assets: United States $ 308.6 $ 275.5 Canada 82.1 83.3 Other 28.0 25.7 Long-lived assets of continuing operations 418.7 384.5 Long-lived assets of discontinued operations, DBT and Heat Transfer — — Total tangible long-lived assets $ 418.7 $ 384.5 ______________________________ (1) Represents integration costs incurred in connection with acquisitions of $ 6.4 and $ 2.6 during the three months ended March 29, 2025 and March 30, 2024, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the KTS acquisition of $ 0.3 during the three months ended March 29, 2025 and the Ingénia acquisition of $ 0.9 during the three months ended March 30, 2024. (2) Revenues are included in the above geographic areas based on the country that recorded the revenue. 16 (7) SPECIAL CHARGES, NET Special charges, net, for the three months ended March 29, 2025 and March 30, 2024 are described in more detail below: Three months ended March 29, 2025 March 30, 2024 HVAC reportable segment $ ( 0.2 ) $ 0.3 Detection and Measurement reportable segment 0.2 0.3 Corporate 0.1 — Total $ 0.1 $ 0.6 HVAC — Activity for the three months ended March 29, 2025 and March 30, 2024 related pri marily to severance costs associated with a restructuring action at one of the segment's cooling businesses. De tection and Measurement — Charges for the three months ended March 29, 2025 related primarily to severance costs associated with restructuring actions at the segment's inspection and rehabilitation business. Charges for the three months ended March 30, 2024 related primarily to severance costs associated with restructuring actions at the segment's inspection and rehabilitation and aids to navigation businesses. Corporate — Charges for the three months ended March 29, 2025 related primarily to severance costs associated with restructuring actions. No significant future charges are expected t o be incurred under actions approved as of March 29, 2025. The following is an analysis of our restructuring liabilities for the three months ended March 29, 2025 and March 30, 2024: Three months ended March 29, 2025 March 30, 2024 Balance at beginning of year $ 1.8 $ 0.7 Special charges 0.1 0.6 Utilization — cash ( 0.5 ) ( 0.4 ) Currency translation adjustment and other — ( 0.1 ) Balance at end of period $ 1.4 $ 0.8 (8) INVENTORIES, NET Inventories are accounted for under the first-in, first-out method and are comprised of the following at March 29, 2025 and December 31, 2024: March 29, 2025 December 31, 2024 Finished goods $ 73.7 $ 68.5 Work in process 32.2 32.3 Raw materials and purchased parts 202.2 170.2 Total inventories $ 308.1 $ 271.0 Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. 17 (9) GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill for the three months ended March 29, 2025 were as follows: December 31, 2024 Goodwill Resulting from Business Combinations (1) Foreign Currency Translation March 29, 2025 HVAC reportable segment Gross goodwill $ 907.3 $ 5.2 $ 5.8 $ 918.3 Accumulated impairments ( 326.6 ) — ( 3.0 ) ( 329.6 ) Goodwill 580.7 5.2 2.8 588.7 Detection and Measurement reportable segment Gross goodwill 426.6 105.0 3.7 535.3 Accumulated impairments ( 172.8 ) — ( 1.2 ) ( 174.0 ) Goodwill 253.8 105.0 2.5 361.3 Total Gross goodwill 1,333.9 110.2 9.5 1,453.6 Accumulated impairments ( 499.4 ) — ( 4.2 ) ( 503.6 ) Goodwill $ 834.5 $ 110.2 $ 5.3 $ 950.0 ___________________________ (1) Reflects goodwill acquired with the KTS acquisition of $ 105.0 and an immaterial acquisition within the HVAC reportable segment. As indicated in Note 1, the acquired assets, including goodwill, and liabilities assumed in the KTS acquisition 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 March 29, 2025 and December 31, 2024 comprised the following: March 29, 2025 December 31, 2024 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: (1) Customer relationships and contracts $ 496.0 $ ( 113.6 ) $ 382.4 $ 421.1 $ ( 103.3 ) $ 317.8 Technology 262.4 ( 46.3 ) 216.1 181.7 ( 41.3 ) 140.4 Patents 4.5 ( 4.5 ) — 4.5 ( 4.5 ) — Other 86.4 ( 51.3 ) 35.1 71.0 ( 45.7 ) 25.3 849.3 ( 215.7 ) 633.6 678.3 ( 194.8 ) 483.5 Trademarks with indefinite lives 220.3 — 220.3 219.5 — 219.5 Total $ 1,069.6 $ ( 215.7 ) $ 853.9 $ 897.8 $ ( 194.8 ) $ 703.0 ___________________________ (1) The gross carrying value of identifiable intangible assets acquired with the KTS acquisition consist of technology of $ 79.8 , customer relationships and contracts of $ 70.7 , definite-lived trademarks of $ 6.7 , and backlog of $ 7.3 . In connection with the acquisition of KTS, which has definite-lived intangible assets as noted above, we updated our estimated annual amortization expense related to intangible assets to approximately $ 76.0 for the full year 2025, $ 66.0 for 2026, and $ 63.0 for each of the three years thereafter. At March 29, 2025, the net carrying value of intangible assets with determinable lives consisted of $ 371.8 in the HVAC reportable segment and $ 261.8 in the Detection and Measurement reportable segment. At March 29, 2025, trademarks with indefinite lives consisted of $ 156.6 in the HVAC reportable segment and $ 63.7 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. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. In reviewing goodwill and indefinite-lived intangible assets for impairment, we initially perform a 18 qualitative analysis. If there is an indication of impairment, we then perform a quantitative analysis. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. The fair value of the net assets related to the KTS and Ingénia acquisitions approximate their respective carrying values. If KTS and Ingénia are unable to achieve their current financial forecasts, or there is a change in key assumptions used in the fair value analyses (e.g. projected revenues and profit growth rates, industry price multiples, discount rates, etc.) we may be required to record an impairment charge in a future period related to their goodwill. As of March 29, 2025, KTS and Ingénia's goodwill totaled $ 105.0 and $ 134.7 , respectively. We perform our annual indefinite-lived trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment. The fair value of these trademarks is based on applying estimated royalty rates to projected revenues, with resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 17) . The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year. During the fourth quarter of 2024, in connection with the 2024 annual trademark impairment analyses, we determined that the implied value of ASPEQ’s trademarks approximated their carrying value. If ASPEQ is unable to achieve its current revenue forecast, or there is a change in assumptions used in ASPEQ’s analysis (e.g., projected revenues and discount rates, etc.), we may be required to record an impairment charge in a future period related to its trademarks. As of March 29, 2025, ASPEQ’s trademarks totaled $ 51.5 . (10) WARRANTY The following is an analysis of our product warranty accrual for the periods presented: Three months ended March 29, 2025 March 30, 2024 Balance at beginning of year $ 44.7 $ 37.9 Acquisitions — 0.1 Provisions 4.5 4.7 Usage ( 4.4 ) ( 4.2 ) Balance at end of period 44.8 38.5 Less: Current portion of warranty 18.7 16.1 Non-current portion of warranty $ 26.1 $ 22.4 (11) EMPLOYEE BENEFIT PLANS During the fourth quarter of 2023, we initiated the wind-up of our Canadian defined benefit pension plans (collectively, the “Canadian Pension Plans”). We received regulatory approval for the wind-up which was completed during the three months ended March 29, 2025. This transaction resulted in a settlement loss of $ 0.3 recorded in net periodic pension benefit expense during the three months ended March 29, 2025. In addition, and in connection with this wind-up, we remeasured the assets and liabilities of the Canadian Pension Plans, which resulted in a loss of $ 0.5 recorded in net periodic pension benefit expense for the three months ended March 29, 2025. Lastly, as a result of the wind-up, we have eliminated the third-party cost and internal resource requirements associated with administering these benefit plans. Net periodic benefit (income) expense for our pension and postretirement plans include the following components: Domestic Pension Plans Three months ended March 29, 2025 March 30, 2024 Service cost $ — $ — Interest cost 3.0 3.0 Expected return on plan assets ( 2.0 ) ( 2.2 ) Net periodic pension benefit expense $ 1.0 $ 0.8 19 Foreign Pension Plans Three months ended March 29, 2025 March 30, 2024 Service cost $ — $ — Interest cost 1.0 1.4 Expected return on plan assets ( 0.9 ) ( 1.3 ) Settlement loss (1) 0.3 — Recognized net actuarial loss (1) 0.5 — Net periodic pension benefit expense $ 0.9 $ 0.1 __________________________ (1) Relates to the wind-up of the Canadian Pension Plans referred to previously. Postretirement Plans Three months ended March 29, 2025 March 30, 2024 Service cost $ — $ — Interest cost 0.3 0.3 Amortization of unrecognized prior service credits ( 0.8 ) ( 0.8 ) Net periodic postretirement benefit income $ ( 0.5 ) $ ( 0.5 ) (12) INDEBTEDNESS The following summarizes our debt activity (both current and non-current) for the three months ended March 29, 2025: December 31, 2024 Borrowings Repayments Other (5) March 29, 2025 Revolving loans (1) $ 80.0 $ 393.0 $ ( 98.0 ) $ — $ 375.0 Term loans (2) 523.4 — — 0.1 523.5 Trade receivables financing arrangement (3) 9.0 135.0 ( 85.0 ) — 59.0 Other indebtedness (4) 2.3 0.6 ( 0.1 ) — 2.8 Total debt 614.7 $ 528.6 $ ( 183.1 ) $ 0.1 960.3 Less: short-term debt 10.1 60.7 Less: current maturities of long-term debt 27.6 27.6 Total long-term debt $ 577.0 $ 872.0 __________________________ (1) The revolving credit facility extends through August 2027 under the terms of our senior credit agreement and is primarily used to provide liquidity for funding acquisitions, including related fees and expenses, and was utilized as the primary funding mechanism for the KTS acquisition. (2) The term loans are repayable in quarterly installments equal to 1.25 % of the initial term loan balances of $ 545.0 , in 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 $ 1.1 and $ 1.2 at March 29, 2025 and December 31, 2024, respectively. (3) Under this arrangement, we can borrow, on a continuous basis, up to $ 100.0 , as available. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses. At March 29, 2025, we had $ 9.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $ 59.0 . (4) Primarily includes balances under a purchase card program of $ 1.7 and $ 1.1 and finance lease obligations of $ 1.1 and $ 1.2 at March 29, 2025 and December 31, 2024, 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. (5) “Other” includes the impact of amortization of debt issuance costs associated with the term loans. 20 Senior Credit Facilities A detailed description of our senior credit facilities is included in our 2024 Annual Report on Form 10-K. At March 29, 2025, we had $ 614.0 of available borrowing capacity under our revolving credit facilities, after giving effect to borrowings under the domestic revolving loan facility of $ 375.0 and $ 11.0 reserved for outstanding letters of credit. In addition, at March 29, 2025, we had $ 12.8 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 12.2 reserved for outstanding letters of credit. The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 5.8 % at March 29, 2025. At March 29, 2025, we were in compliance with all covenants of our senior credit agreement. Company-owned Life Insurance We have investments in company-owned life insurance (“COLI”) policies, which are recorded at their cash surrender value at each balance sheet date. Changes in the cash surrender value during the period are recorded as a gain or loss within “Other income (expense), net” within our condensed consolidated statements of operations. We have the ability to borrow against a portion of our investment in the COLI policies as an additional source of liquidity. The amounts borrowed totaled $ 39.0 at March 29, 2025 and December 31, 2024 and incur interest at a rate of 5.3 %. After such borrowings, minimal capacity to bo rrow against the policies remains. The cash surrender value of our investments in COLI assets, net of the aforementioned borrowing, was $ 36.3 and $ 36.2 at March 29, 2025 and December 31, 2024, respectively, recorded in “Other assets” on the condensed consolidated ba lance sheets. (13) DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Swaps In 2020, we entered into interest swap agreements (“Initial Swaps”) that covered the period through November 2024, and effectively converted borrowings under our senior credit facilities to a fixed rate of 1.077 %, plus the applicable margin. In September 2024, commensurate with an amendment to our senior credit agreement, we entered into additional interest rate swap agreements (“Additional Swaps”). The Additional Swaps have a notional amount of $ 524.6 , cover the period from December 2024 to June 2026, and effectively convert this portion of the borrowings under our senior credit facilities to a fixed rate of 3.58 %, plus the applicable margin. We have designated, and are accounting for, our Additional Swaps (and, prior to their maturity, accounted for the Initial Swaps) as cash flow hedges. As of March 29, 2025 and December 31, 2024 , the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 1.8 and $ 2.6 , respectively. In addition, the fair value of our interest rate swap agreements, was $ 2.2 recorded as a current asset and $ 3.4 (with $ 2.7 recorded as a current asset and $ 0.7 as a non-current asset) as of March 29, 2025 and December 31, 2024, respectively . Changes in the fair value of our Swaps are reclassified into earnings, as a component of interest expense, when the forecasted transaction impacts earnings. Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, Canadian Dollar, and Euro. From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). Certain of our FX forward contracts are designated as cash flow hedges. Changes in these derivatives’ fair value are included in AOCI and are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded into earnings in the period in which the transaction is no longer considered probable of occurring. We had FX forward contracts with an aggregate notional amount of $ 23.1 and $ 22.9 outstanding as of March 29, 2025 and December 31, 2024, respectively, with all of the $ 23.1 scheduled to mature within one year. There were no unrealized 21 gains/losses recorded in AOCI related to FX forward contracts designated as cash flow hedges as of March 29, 2025 and December 31, 2024. The fair value of these FX forward contracts was less than $ 0.1 at March 29, 2025 and December 31, 2024. In addition to the above, we entered FX forward contracts associated with the Settlement Agreement, to mitigate our exposure to fluctuations in the South African Rand, with a notional amount of South African Rand 480.9 (or $ 24.9 at the time of execution). We designated and accounted for these FX forward contracts as fair value hedges. These FX forward contracts matured during the third quarter of 2024 commensurate with the final payment under the Settlement Agreement. Refer to Note 3 for additional details. (14) STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION Income Per Share The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share: Three months ended March 29, 2025 March 30, 2024 Weighted-average number of common shares used in basic income per share 46.453 45.828 Dilutive securities — Employee stock options and restricted stock units 0.669 0.855 Weighted-average number of common shares and dilutive securities used in diluted income per share 47.122 46.683 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 0.114 and 0.248 , respectively, for the three months ended March 29, 2025, and 0.123 and 0.321 , respectively, for the three months ended March 30, 2024. Long-Term Incentive Compensation Long-term incentive compensation awards may be granted to certain eligible employees or non-employee directors. A detailed description of the awards granted prior to 2025 is included in our 2024 Annual Report on Form 10-K. Awards granted on March 3, 2025 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, and time-based restricted stock units (“RSU’s”), while other eligible employees were granted PSU’s and RSU’s. The PSU’s are eligible to vest at the end of a three-year performance period, with performance based on the total return of our stock over the three-year performance period against a peer group within the combined S&P 600 Small Cap Capital Goods Index and S&P 400 Mid Cap Capital Goods Index. Stock options and RSU’s vest ratably over the three-year period subsequent to the date of grant. Non-employee directors receive annual long-term incentive awards at the time of our annual meeting of stockholders, with the 2025 meeting scheduled for May 13, 2025. C ompensation expense related to long-term incentive awards totaled $ 3.7 and $ 3.3 for the three months ended March 29, 2025 and March 30, 2024, respectively. The related tax benefit was $ 0.6 for the three months ended March 29, 2025 and March 30, 2024. 22 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. We issued PSU’s to eligible participants on March 3, 2025 and February 28, 2024. We used the following assumptions in determining the fair value of these awards: Annual Expected Stock Price Volatility Annual Expected Dividend Yield Risk-Free Interest Rate Correlation Between Total Shareholder Return for SPX and the Applicable S&P Index March 3, 2025 SPX 35.13 % — % 3.90 % 46.64 % Peer group within S&P 600 Small Cap Capital Goods Index and S&P 400 Mid Cap Capital Goods Index 36.41 % n/a 3.90 % February 28, 2024 SPX 32.26 % — % 4.41 % 49.34 % Peer group within S&P 600 Small Cap Capital Goods Index and S&P 400 Mid Cap Capital Goods Index 37.00 % n/a 4.41 % Annual expected stock price volatility is based on the three-year historical volatility. 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 one-year through three-year daily treasury yield curve rate as of the grant date. The following table summarizes the PSU and RSU activity from December 31, 2024 through March 29, 2025 : Unvested PSU’s and RSU’s Weighted-Average Grant-Date Fair Value Per Share Outstanding at December 31, 2024 0.446 $ 79.22 Granted 0.130 119.88 Vested ( 0.202 ) 57.41 Forfeited ( 0.002 ) 82.67 Outstanding at March 29, 2025 0.372 $ 105.13 As of March 29, 2025 , there was $ 24.1 of unrecognized compensation cost related to PSU’s and RSU’s. We expect this cost to be recognized over a weighted-average period of 2.4 years. Stock Options On March 3, 2025, we granted 0.044 stock options, all of which were outstanding (but not exercisable) as of March 29, 2025 . The exercise price per share of these options is $ 138.60 and the maximum contractual term of these options is 10 years. The fair value per share of the stock options granted on March 3, 2025 was $ 61.23 . 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 38.75 % Annual expected dividend yield — % Risk-free interest rate 3.98 % Expected life of stock option (in years) 6 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. 23 The following table summarizes the stock option activity from December 31, 2024 through March 29, 2025 : Shares Weighted-Average Exercise Price Options outstanding at December 31, 2024 0.787 $ 43.92 Exercised ( 0.185 ) 12.85 Forfeited ( 0.002 ) 71.93 Granted 0.044 138.60 Options outstanding at March 29, 2025 0.644 $ 59.40 As of March 29, 2025 , there was $ 4.2 of unrecognized compensation cost related to stock options. We expect this cost to be recognized over a weighted-average period of 2.6 years. Repurchases of Common Stock On May 14, 2024, 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 our senior credit agreement. No share repurchases were effected pursuant to this and prior authorizations during the three months ended March 29, 2025. Accumulated Other Comprehensive Income The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended March 29, 2025 were as follows: Foreign Currency Translation Adjustment Net Unrealized Gains on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 218.9 $ 2.6 $ 2.1 $ 223.6 Other comprehensive income (loss) before reclassifications 11.2 ( 0.1 ) — 11.1 Amounts reclassified from accumulated other comprehensive income — ( 0.7 ) ( 0.6 ) ( 1.3 ) Current-period other comprehensive income (loss) 11.2 ( 0.8 ) ( 0.6 ) 9.8 Balance at end of period $ 230.1 $ 1.8 $ 1.5 $ 233.4 __________________________ (1) Net of tax provision o f $ 0.4 and $ 0.7 as of March 29, 2025 and December 31, 2024, respectively. (2) Net of tax provision of $ 0.8 and $ 1.0 as of March 29, 2025 and December 31, 2024, respectively. The balances as of March 29, 2025 and December 31, 2024 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended March 30, 2024 were as follows: Foreign Currency Translation Adjustment Net Unrealized Gains on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 251.0 $ 5.7 $ 4.4 $ 261.1 Other comprehensive income (loss) before reclassifications ( 8.3 ) 0.5 — ( 7.8 ) Amounts reclassified from accumulated other comprehensive income — ( 1.8 ) ( 0.6 ) ( 2.4 ) Current-period other comprehensive loss ( 8.3 ) ( 1.3 ) ( 0.6 ) ( 10.2 ) Balance at end of period $ 242.7 $ 4.4 $ 3.8 $ 250.9 _________________________ (1) Net of tax provision of $ 1.4 and $ 1.8 as of March 30, 2024 and December 31, 2023, respectively. (2) Net of tax provision of $ 1.6 and $ 1.8 as of March 30, 2024 and December 31, 2023, respectively. The balances as of March 30, 2024 and December 31, 2023 include unamortized prior service credits. 24 The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended March 29, 2025 and March 30, 2024: Amount Reclassified from AOCI Three months ended March 29, 2025 March 30, 2024 Affected Line Item in the Condensed Consolidated Statements of Operations Gains on qualifying cash flow hedges: Swaps $ ( 1.0 ) $ ( 2.4 ) Interest expense Pre-tax ( 1.0 ) ( 2.4 ) Income taxes 0.3 0.6 $ ( 0.7 ) $ ( 1.8 ) Gains on pension and postretirement items: Amortization of unrecognized prior service credits - Pre-tax $ ( 0.8 ) $ ( 0.8 ) Other income (expense), net Income taxes 0.2 0.2 $ ( 0.6 ) $ ( 0.6 ) (15) CONTINGENT LIABILITIES AND OTHER MATTERS General Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims), environmental matters, claims for contingent consideration on prior acquisitions, product liability matters, and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liab ilities related to these matters, primarily associated with environmental matters, totaled $ 40.3 and $ 39.9 at March 29, 2025 and December 31, 2024, respectively. Of these amounts, $ 32.5 and $ 32.0 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at March 29, 2025 and December 31, 2024 , respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, including historical claims and payment experience. While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties. As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations. Large Power Projects in South Africa On February 5, 2021, DBT received payment of $ 6.7 on bonds issued in support of performance by one of DBT’s subcontractors that is currently in liquidation. The subcontractor or liquidator maintain rights to seek recovery of such amount and, thus, the amount received by DBT has not been reflected in our condensed consolidated statements of operations. 25 Resolution of Dispute with Former Representative On January 18, 2024, a jury ruled that one of our businesses within the Detection and Measurement reportable segment had breached its contract and implied duties of good faith and fair dealings in connection with an agreement entered into with a former representative. On January 26, 2024, we negotiated a settlement requiring a payment, paid during the first quarter of 2024, to the former representative of $ 9.0 to resolve all claims related to the matter. Litigation Matters We are subject to other legal matters that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannot give assurance that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows. Environmental Matters Our operations and properties are subject to federal, state, local and foreign regulatory requirements relating to environmental protection. It is our policy to comply fully with all applicable requirements. As part of our effort to comply, we have a comprehensive environmental compliance program that includes environmental audits conducted by internal and external independent professionals, as well as regular communications with our operating units regarding environmental compliance requirements and anticipated regulations. Based on current information, we believe that our operations are in substantial compliance with applicable environmental laws and regulations, and we are not aware of any violations that could have a material effect, individually or in the aggregate, on our business, financial condition, and results of operations or cash flows. We had liabilities for site investigation and/or remediation at 16 sites, that we own or control, as of March 29, 2025 and December 31, 2024. Our environmental accruals cover anticipated costs, including investigation, remediation, and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, changes in our allocation of shared remediation costs, or alteration to the expected remediation plans. It is our policy to revise an estimate once it becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance, litigation or other 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 March 29, 2025 and December 31, 2024, we have been notified that we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 9 sites, at which the liability has not been settled, and all of which have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated. In our opinion, after considering accruals established for such purposes of $ 27.7 and $ 27.4 at March 29, 2025 and December 31, 2024, respectively, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows. That said, 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. 26 Self-Insured Risk Management Matters We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts; however, this insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposures. (16) INCOME AND OTHER TAXES Uncertain Tax Benefits As of March 29, 2025 , we had gross and net unrecognized tax benefi ts of $ 3.1 . All of these net unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of March 29, 2025, gross accrued interest totaled $ 1.5 (net accrued interest of $ 1.4 ). As of March 29, 2025, 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 do not believe that within the next 12 months our previously unrecognized tax benefits will decrease by a material amount. The previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various foreign matters. Organization for Economic Co-operation and Development (“OECD”) Pillar Two Model Rules In December 2021, the OECD issued model rules for a new global minimum tax framework (“Pillar Two”), and various governments around the world have issued, or are in the process of issuing, legislation to implement these rules. We are within the scope of the OECD Pillar Two model rules and continue to assess the impact thereof. As of March 29, 2025 and December 31, 2024, we had $ 2.0 and $ 1.8 , respectively, accrued related to these taxes. Other Tax Matters For the three months ended March 29, 2025, we recorded an income tax provision of $ 6.2 on $ 57.9 of pre-tax income from continuing operations, resulting in an effective rate of 10.7 %. This compares to an income tax provision for the three months ended March 30, 2024 of $ 1.9 on $ 51.1 of pre-tax income from continuing operations, resulting in an effective rate of 3.7 %. The most significant item impacting the income tax provision for the first quarters of 2025 and 2024 was $ 8.5 and $ 10.9 , respectively, of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the periods. We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. U.S. Federal income tax returns are subject to examination for a period of three years after filing the return. We are not currently under examination by the Internal Revenue Service and believe any contingencies in open years are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We regularly have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We regularly have various foreign income tax returns under examination. We believe that any uncertain tax positions related to these examinations have been adequately provided for. 27 An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. (17) FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 — Significant inputs to the valuation model are unobservable. There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. There were no transfers between the three levels of the fair value hierarchy for the periods pres ented. Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets — Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairments result in the asset being recorded at its fair value. Based on the inputs used in the impairment analyses, these assets are classified within Level 3 of the valuation hierarchy. Derivative Financial Instruments — Our financial derivative assets and liabilities include interest rate swaps and FX forward contracts, and are valued using valuation models based on observable market inputs such as forward rates, inte rest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts and interest rate swap agreements, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of March 29, 2025, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Equity Security — We estimate the fair value of an equity security that we hold utilizing a practical expedient under existing guidance, with such estimated fair value based on our ownership percentage applied to the net asset value as provided quarterly by the investee. Based on these inputs, the equity security is classified within Level 3 of the valuation hierarchy. During the first quarter, the net asset value is updated based on the investee’s most recent audited financial statements. During the three months ended March 29, 2025 and March 30, 2024 , we recorded a gain o f $ 4.5 and a loss of $ 4.2 , respectively, to “ Other income (expense), net ” to reflect the change in the estimated fair value of the equity security. As of March 29, 2025 and December 31, 2024, the equity security had an estimated fair value of $ 39.7 and $ 35.2 , resp ectively. We are restricted from transferring this investment without approval of the manager of the investee. Indebtedness and Other — The estimated fair value of our debt instruments as of March 29, 2025 and December 31, 2024 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. 28 (18) SUBSEQUENT EVENT On April 15, 2025, we completed the acquisition of Sigma Heating and Cooling and Omega Heat Pump (“ Sigma & Omega ”) which specialize in highly engineered hydronic heating and cooling equipment, including vertical stack heat pumps and fan coils, institutional heating products, and both air-cooled and water-cooled commercial self-contained units. We purchased Sigma & Omega for n et cash consideration of approximately $ 144.0 . The acquisition was funded primarily through cash, supplemented by borrowings on our revolving credit facilities under our senior credit agreement. The post-acquisition operating results of Sigma & Omega will be reflected within our HVAC reportable segment. 29