FLOW - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the SPX FLOW Second Quarter Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Scott Gaffner, Vice President of Investor Relations and Strategic Insights. Please go ahead.

Scott Gaffner

Thanks, Carey. you quarter us XXXX thank of a and second our financial morning for for joining discussion Good results. XXXX. months This release morning, July three detailing news X, ending our financial we performance for issued a the today The news release, spxflow.com. accessed with the at our site can be Web presentation on be to along used available also A Web later replay be will today. site our on

reflect to that As the describes made name of the we have you might changed the was markets have end the to change seen Industrial diverse in customers. Precision segment segment this to better This better morning's we press release, and our Solutions. our serves provide capabilities

Joining me CEO; and and Vice on President President call the Chief Financial Marc Michael, Jaime Easley, are and Officer. today

Following we'll their for prepared remarks, open the questions. call

our that based Principal that that elements we change, markets; forward-looking statements reconciliations ask our risk on provided reminder those to recent that, you the presentation of to our have factors in brief we contain elements view And that may measures and today's presentation, this a presented. the light. business are call performance are filings. adjusted of turn and that view begin, In SEC Marc. current with in of all appendix non-GAAP and subject most for I'll we are Before them our identified over impact

Marc Michael

the us for Thanks thank and the introduction, Scott. call. on everyone, for joining Good you morning,

to based projects. on encouragingly, based OE our growth gain categories. CapEx book in turn creating performance mix markets quarter, with backlog increase on important, on revenue business, and principles short start Second outperformance internal continue frontlog cycle XX/XX The Organic growth coming as cycle from and momentum improved increased initiatives Organic executed recover short along continued but business business. is balance shippable was quarter expectations and margin related orders higher we're demand with up in absolute orders customer grow XX% to momentum. up of with ahead we XX% an and in an were level as improved also in our to of of the our

higher income corporate as In responsiveness our began a supported basis significantly Operating and quality price from driving differentiate is addition, our margins to of lower XX/XX by higher programs, expenses, with levels effective of segmentation XXX Green improved service a we program. and by points, cost, key positive SG&A revenue. management through Ribbon revenue cost our customers impact

the to spending which We margin with are and new on our an and capital track spending increased we more in than product categories. by quarter, XX% investments during high growth R&D generates nearly to with on investment improved product high productivity our double increased And disproportionate development experience. emphasis our customer support

quarterly ever form our we in growth We in of first and experienced organic the approximately quarter million cash second repurchased of to economic $XX share a The and paid during second end dividend shareholders broad-based repurchases. building rate. with an disciplined using Our return and of high an able with programmatic been pleased returns Mixing M&A resulted the we've M&A both momentum process approach of attractive acquisition in identified strategic a excess targets of quarter. the revenue dividend our geographically, that recovery also to and We've the supporting was I'm market that to alignment our in the our opportunities. is This quarter, pipeline Philadelphia stock. objective XX% priorities.

his of was prepared Asia-Pacific, high America significant EMEA. the and revenue anticipated, in remained orders revenue the up Jamie of will rest And remarks. mid was positive organic quarter with growth in provide As up single-digits. in North China the year-over-year single-digits. most an second growth assessment during

profitably. our first-half increased category expected profitable for and of XX%. own XXXX to from our In year, framework Throughout up where of outstanding last customer clarity performance deliver an by the rates year strong XX/XX margins The to we Day, provides experience, execute our at growth with in of the to orders create quality highlighted mix the order of in how cross-functional for to the and by product we first-half grow strategy lines empowered higher growth and on are grow teams improvement growth. balanced Investor that revenue. deployment year, the focus second-half supports and a the our on were our a continued for expectations provides we built XX%, As want resulting of

first in customers. increase to America we particularly Looking continued both at continuing in segment Asia-Pacific. consistent the in see levels Demand categories, XX% Solutions & to North and segment, frontlogs OE to and of North Demand order remained quarter. similar with with to orders was CapEx America. system was Sequential orders solid in momentum key were with Precision were our robust and pipelines sequential orders Nutrition Health demand and gains quarter up demand in win the for sequentially the demand first America in growth product resilient significant for efforts Short cycle continue by North sequentially in to active Asia-Pacific. benefits in our in were customer and second remained orders orders. with into aftermarket our in components notable EMEA. convert short with quarter also project with tied cycle the

that, The year. at objectives we strategy off the our plan, relative are achieve outlook, track for generate to economic the profitable continued XXXX our year and higher productivity expectations, Also, the progressing to revenue I'll at first-half to cover the expansion support margin Jamie we revenue the improve and the outlined first-half in Day, the we of to are XXXX a surpassing initiatives model solid is we projecting the ahead financial quality the of the turn performance with on The our during for now structure, quarter. year, Based on the outlined outlook to beyond. of revenue Investor gives organic to in of our the of be achieving will expectations is call The March confidence the XXXX. three-year we great second-half, over combined to with cost and organic internal us grow our are expect at to which mid growth growth in and year. level review that of single-digit beginning and start, expect and during And improvement. we rates to the earnings of

Jaime Easley

I'll Thanks, a brief Marc, morning and good recap begin everyone. QX. with of

in significantly were our Our second Health by markets orders highlighted & quarter Precision end meaningful results productivity. of Solutions, the are Organic and realization, and XX% price volumes, SG&A higher outperformance up with Nutrition segments. strong

drove profiles. points realization up by also XX%, drive profile operating continued outsized improvement to SG&A short savings with As the revenue start of quarter. to improvement price $XX a noted higher higher margin XX.X%, to margin driven cost revenue by in evidenced growth up in shippable meaningful grow-and-balance strong period. higher the year-over-year from show XXX orders Organic million earlier, at Adjusted was primarily cycle margin we mix our drive in both in the and came broad-based categories, continue basis backlog The expansion. improvement segments driving and of structural majority which

of cash in million free a generated rate Lastly, conversion is $XX quarter, continues flow the We drive than to results. cycles conversion net which of XXX% cash greater adjusted our focus income. on

with over impressive increased as to to year-over-year, and were Solutions; Segment categories up in realization start benefited the driven Looking growth. increased revenue by shippable start and items our demand begin offset orders an current and turn Organic at with previously higher times an converting support and from last by broad-based the the investments these driven along benefits strong frontlogs beginning the segments, organic elevated were price reductions, been customer business. project period XX% with The products level orders. the cost backlog into meet in actioning short quarter of of margins by short growth Precision to SG&A noted increased year. cost as cycle XX%, to have along book we year, lead these which future cycle

Specifically, freight we mode were supply driven expense the quarter to inflation countermeasure chain shifts we experiencing. both incurred delays by and higher shipping in

in toolbox volumes across overserve second customers. our investments made freight many into continuing direct lines. been deployed we key our on of to higher the XX/XX to Also, while to in drive product third the in quarter force has Our deliver future, and labor seen efficiency quarter our the meaningful

labor second-half We into year XXXX. the in improved and of expect productivity the

labor is a assemblers. comprised our highly force of direct As skilled fabricators and reminder, laborers, welders, including

were Health, mix generated XXX increases by also was a SG&A aftermarket Systems Nutrition as book we and XX% of short higher and revenue earlier programs. the an organically; profitability. to attributable effects in elevated Orders our meaningful business. cost Revenue XX.X%, entering impressive & components Moving basis segment up X%, awards strong reduction on slide. and our over year-over-year, shippable Marc on were an up orders, turn the short in cycle structural and up mid-teens realization to driven increased quarter driven showed by price backlog improved of cycle business. and Segment points business, margins to an increase

to organic the Currency QX. year-over-year. completed to Looking translation low are quarter, and third at we backlog combined momentum continue, a increase driven to shippable by in single-digit revenue X.X% add in the a acquisitions top anticipate expected line

increase second a realization anticipate improved favorable Following a leverage. mix, by be will price sequentially third quarter, quarter. in of I we in and the driven margins improvements previously sequential These operating mentioned, level stable the the

debt regards mechanisms, now we step our significant XXXX. million, capital have maturities As and to lowers and with meaningful We structure. of funding seen our by cash annual no flexibility a growth afternoon, until yesterday interest refinancing the that you increases and supports have may strategies have taken organic long-term inorganic we our a $XX announced our forward

Specifically, committed approximately billion we financing. senior entered us $X that secured provide into agreements of with

goals. report be Term report example sustainability encourage home focused favorable refinance sustainable. safer, our and important environmental our is excited own to we healthier A fund forward utilizing a loan. you during process we and driving leading our current and footprint team world showcases their chain. step all this issued inaugural and are customers the of I our a It are like titled to how notes thank of such our found we million our more We senior redemption to banking by our taking to social on environmental, our a report and and reduce we also facilities we $XXX their supply that partners existing the look. governance the that for that committed I areas Matter. make to would support highlight to copy reach our quarter, I'm report in ways can are to actions Loan and to are specific the A through of oversee an Solutions the describes treasury outcome. help term $XXX our have page, The would million to operate The showcasing new on

safety record, and culture our underscores also belonging. commitment to report community ESG Our service of

purpose over I'll my proud of the innovative comments. to and improve That through the is and prepared sustainable Our making turn to long call meaningful remarks. back solutions, history world our concludes we're for Marc his closing of change.

Marc Michael

clear. that Day, and we the organic Our mission model are on we're plan as track outlined and to With of now expect our is to in objectives the we expansion objectives. at internal growth XXXX level our the ahead strategic of margin relative achieve X-year Investor foundation, and XX/XX to March

customer strategy Our growth people and improving making foundational while by high-return experiences, and investments. expanding supported margins, pillars: generating is profitable four culture,

In strategic than months framework. of is a XXXX, with quality the year surpassing XXX organic Investor the revenue the one higher improved now three-year to of framework more plan coming mix orders. expectations expect only company our better six be Day, into revenue an presented we for from initial points than our at March XXXX growth While

and key service, XX/XX this accounts by with long-term providing are Our unmatched initiatives to we customer growth. deliver deepening relationships expect

our the basis We're than also the framework. for price strategy, ahead year building midyear we've is SG&A projects XXX implemented points a impact improved XXXX on ahead also cover costs. that program team increases be Over The utilizing original price the plan methodologies, past we're realization. and the two to our value-based of culture of reduction now productivity. tracking escalating of tracking lower We've will on pricing years, additional and

to XXXX raising from income to track our as to areas outperformance target annualized operating the The million. XXXX puts exceed critical savings million compared are, on framework. for $XX the significant in margins therefore, these We $XX company

team. operating between X.X% priority results operating the And returns exit of halfway and our is to deliver smart XXXX investments, opportunity strong expect mid-teens customers with our Improving a we our shareholders. combine capital framework We of returns XXXX income great and margins. top we the outcomes create our when for for to year

playbook. business our the programmatic also in reinvest M&A organically to continue through We and

XXXX, the our in the have impressive to want members of closed opportunities total Mixer I far revenues remains in our portfolio the earned thank two team of we $XX pipeline first-half our and business So robust. across with of the transactions million results for year. in

creating are to and remarks. our and which And shareholders. value a higher-quality for concludes our efforts earnings Your creation revenue stream, that consistent is more prepared our and customers leading

Scott Gaffner

Thanks.

we turn Board sale XX, of the recent the a Before On standalone company touch I'll authorized the we portion continued today's announced and Directors of the of the our strategy. that process. announcement initiation a of review strategic of regarding July to Q&A including of company's call, our execution strategic alternatives a possible alternatives or merger on

to are on we in make deem we of for your to we your we earnings keep quarter, instances, timing we questions. the would today turn remind over cooperation. can discuss typical that further with of call is Thanks the process. around that comments the not no the in ask announcement. these our do process. the you the As can I completed the regarding that, results to intend any questions given like here until Carey, outcome everyone advance And please review and Until public assurances appropriate, focused or for to be

Operator

[Operator Halloran Baird. you first Thank will Mike go Please Instructions] be ahead. The from question of

Mike Halloran

Hey, everyone. good morning,

given about which quarter. from on revenue pretty the So, guidance the you're how Obviously, implies expectations guidance last different underlying the are thinking [indiscernible] part growth that comps mid single-digit into the tough. here sizable back really year. question the back-half, Obviously, in isn't trends of organic

color you by about businesses, the other give into expectation And so, feel you're and type when want about getting to can any normal the of think the momentum it, and I part pretty really of here is the year, segment? understand back as book-and-ship do what sequentials kind the is you you how

Jaime Easley

Yes, Mike, good morning.

year. don't how the at of second the we look quarter, finished any into we second-half as As the get we deceleration see we

making think we point to relative year. we now needs I revenue the you that backlog to and point were year-over-year shippable last this comps consider the on that at have where were

about the maybe slated Precision we'll So, really in last that Solutions I do revenue it, think year-over-year product we mentioned group then, together, less were And have $XX revenue because XXXX backlog, that we for running there's time QX shippable the Marc that program. XX/XX declines see our million lines a but few selectivity period. well systems as in of

We're but seeing some is and most that shippable strong. QX consistent it QX, is to demand your backlog. will in to Marc believe that underlying So, the element through go of into in question dynamic moment, I a relative important

Marc Michael

I of that know, again add, low backlog just you agree just with single-digits. everything as kind would shippable Jamie described; Mike, Yes, he is up indicated,

that the on mix Importantly, in improving based shippable is profile backlog order that we that outlined.

which Our category, average our up categories, are being that up company balance growth XX%. have and XX% above which margins at year-to-date, margins, company are being

at a short pretty look now. I knew, last can markets quarters and curve expect, over I a steep upward And think the say, And it's should we steep cycle the when the so, or that's been three four or encouraging. we positive, line, really business,

would And business, kind expect naturally our that we're seeing so, there good consistent flattening be demand but of would you of cycle still coming curve, short from demand. some

to Solutions part through our Nutrition we QX Precision see & the to related And that customers and to other both Health believe, QX. [Ph] demand picture to in as [queue] had business. going be piece and of fully have realized, we've these started the the through is we Importantly, that release projects were that's latter is still be the continues yet in of that CapEx in

back the market, that second-half expecting in I of SG&A margin would you along that with year. will mix and go of again and the the So, running program couple mix and of of importantly, to kick the excited improve, additional that really about pricing we're the revenue we start the on is to plan, ahead in put And into we're profiles that. revenue, our continuing that really with, is to

theme that fully expect first-half So, the profitable to been expand while as we to second-half it be continue realized will will to in year to that from revenues our theme as which continues growth. it's the our are decelerating into improve, year, especially a And continue and -- long-term margins second-half, the margins be that through we we of fourth move the get quarter. to

Mike Halloran

actionability, here. I after made pipeline appreciate like all size, And anything strategic your How question thinking go the actionable about side, color. then, that sheet review desire does of nice you balance tuck-ins on the change to you couple related that? is, the a your And then properties? ability, obviously, are

Marc Michael

a robust going it's some regional a as now, quite nicely, of for well. time, in I'm it's process. place we've got years our we've put helped very of all that we've process nature, three us the and organization Vusa touching in Yes, ago proud inputs now really about indicated fantastic back parts really as Mlingo pipeline, got cross-functional just and maturing

exists. always still playbook business for opportunities We'll execute funnel at deploy good we've that tuck-in capital and good that a looking on and in in just because be to these acquisition way. creation opportunities to disciplined as So, the those selective value are shareholder continue been

So, playbook. that continue to we that's run to and going change, will not

Mike Halloran

it. appreciate Thank Great, you.

Operator

question will Jones the of Stifel. go come next And Nathan from Please ahead.

Nathan Jones

selective a on you the ask on selectivity to here. you're revenue. first impact of that XX/XX wanted said have more I mean everyone. I morning, guys Good question the potentially being

how long-term market? think to you think we growth as it from margin, into might that to looking impact no-margin that to in will taking be projects about you what XXXX, growth. And relative possible deliberately profitable your revenue XXXX stuff the lower anymore. not You're not quantify Is XXXX for We're taken? you've progress for

Marc Michael

everyone's the presentation, important. to I remarks, back that improvement. points, Yes, in outlines I'll that draw Nathan, mention page prepared I'll mix a attention in our are think few this the

bring the important projects balanced And systems significantly in base those increasing our at still business, the and which On we're we've in said, primarily value applications, that systems business and important is category. our our there, on as piece and important primarily create really & so, an always customer the is And profile the growth [create] categories in just selectivity installed category. focused category, is you capabilities, us projects match that again, Nutrition remains look [Ph] for our Health order create in liquid. in when strong

are at profile always the as those look the starting important I So, point. order outcomes.

share XX/XX good at of everyone, profile of XX we've still XX really So, different And lines. take five key orders them identified progression some in five our each our across look I'll to accounts, XX the there's in efforts importantly want the regional so too, we of of markets, product to accounts. -- with global are XX region, important and accounts. key about them them -- in

important accounts focused accounts really we're these global and our we've on. So, key got regional account that strategy in

there So, view, on. doing. to upon order focused overall while key we're be start of we rates expect The short-term some improve for term within some across may even longer to accounts and stopped categories year, we the the revenue business here impacts that the from those

balanced to prior revenue any chosen is I'll Now, from in really emphasize coming one example, just categories we've of Jamie in the additional some productivity of in mentioned area the and point let or comments. question, margin I'll Jamie million profiles. product that the $XX about QX make, an add

other it are we offsetting while is areas some with margin there business. So, higher in impact,

Jaime Easley

quads, the doesn't Nathan, I customers products, your to sure you the just make XX/XX is then you non-key agree build you out to point, buy Yes. have running see team that, that, add, continue. that when all that. Maybe would with is and I'll non-key what is

our then variety through actions is is that happens buying take, those was which are customers find which which described, over in may end also customers what finding just what those transactions globally, to up gets products serving redirected into we through we'll to space. a that efforts you And our key end get easier supporting, Marc accounts etc. is the different aftermarket the factories, the products, that getting up So, the of are etc, what on which team our are new spending market,

XX/XX while in two So, profitable the there growth. equation, are net pieces outcome yes, multiple the is of of

way it, that the And the expect. so, way are Marc that's leading thinking teams, outcomes that's the I and we're we about the that's and would

Nathan Jones

question increase increase realizing to $XX the a from on SG&A million Thanks the comment to million. the savings, the finding for an whether structural in by total of in savings going if targeted $XX or along, you're pace targeted $XX you you're that. My as is reductions, this took follow-up these savings on Can opportunities 'XX? million you just

Jaime Easley

Yes. It's Nathan. Good question, both.

pace, raising million but $XX piece productivity your $XX So, statement the to so still to couple a of is comment reference total in rate there, in XXXX. of we'll the more million the the have million XXXX, savings in a savings full first from around dollars run the

more the running piece that we teams meaningful quicker. the that process So, been more within of be been we've opportunity this able action have to that have and will found the

goal our we're these programs, and and was was with geared journey profitable organization along quickly to set them our up get get growth that the for that swiftly on. So, move all

of that customers delivering we in have. you've and And seen how serving today, that the able proud been to so, we're continue way the the teams results also actioned really that

actions So, say it's the majority through really both. of getting now. And we're I'd those

that year. charges build And year-to-date. start restructuring the of savings booked the as to Marc up mentioned, seen You've in will the the we second-half

been about to So, a at product well talking the only now not we of you're year. a structural are of X% for actions but a great now some that in beginning the realization regards to results in year, with the of X% SG&A SG&A this over programs that mentioned spot seeing even cost we've we're the

Nathan Jones

cost update quick inflation you months Can ago, also Obviously, Just three just for one price on put and price seeing on additional you in noted more cost. you for anticipated the expectations price a than actions. full-year? us your

Marc Michael

we for expect price America the happened move the we And pressures North cost in majority that to it inflationary second full-year. of mention specifically, I'll or saw as coming first. we of in Price the part the Nathan, kind second-half ramped positive the be of and QX. really on freight up Yes, cost, through

So, very us everyone cost. with thorough to at additional I have look that approach also some is share we looking What price price would prompted to increases. a at

we of processes on a great value-based the years that the couple that at of place ago pricing, have we in implemented and course throughout look We year. routinely

We have of team with what's the week price to meets a that assembled course during every happening cost. review

to able make pivot we're and mentioning we quarter as very adjustments quickly what additional to increase. So, the need saw you second the and through price required, that's as and went

Nathan Jones

Thanks for taking my questions.

Operator

will Dray Deane ahead. question RBC Please next of The Markets. from be Capital go

Deane Dray

cost. Thank orders, seen make able cases you that? I'd we anything to that? you. up you've Don't We've shipments? any you of pick supply like where any chain across some Good were right any if off with price morning, heard sector not where constraints like any to the on Are know that. left you had everyone. missing Have sporadic

Marc Michael

orders revenue. morning. we attention what's things to as the would But manifested the in haven't the having chain. starting impacted call the that would of on any planning where again in did areas good I significant of business see itself. going to There again, of especially paying I reflected some some we close were some point Precision would anything. that processes some quarter say there. areas are Yes, seen I of in supply in our chain needed overall, really nothing second primarily Deane. to I hasn't to that minor looked focused, it that out, it were affected that we where be necessarily And that kind kind North we at America But Solutions freight do there. with supply on is

chains it. top customer is supply and piece. deliveries, which And it, our tight. we're are really of So, but through impacting way not the we're working really team still important is -- The on

Jaime Easley

prepared just mentioned but I mentioned In shifts. I'll in the inflation also add some mode freight my remarks, I that. that saw we to quarter,

lanes see certain others question, freight caused your within than congested that do So, has are to those some we lanes. that delays more

critical when of critical we got so, in some airfreight did demand, period. the is a we've And there when to order, that shift customer

that's bit shifts And so, by mode that's I driving a the and quarter. saw the freight increase that what meant in we of

opportunities our approved, expedited of got in put the supply into and that modified we serve that of team And you're the chain to we're the got proper then that really the taking XX making SIOP freight that into that that we're on Marc looking into mentioned rest teams think and of levels our in year making at the last really or segmentation, and the sure what sure on to closely on levels of XXXX. with months, those we've any I don't delays using to referencing. levels freight place toolkit that customer customers we're for XX/XX stocking inventory really look so, the processes so the made is account we in miss working out at costs to some we've hand review changes

Deane Dray

was was characterization I'm the on circle please? maybe of And the of thought other can on of businesses, you companies corporate that interesting at but That's not typically that versus a helpful. out to to done question, venturing that release, M&A. programmatic innovative second type M&A, flesh see M&A, referring to you back a something kind just your sector. then Yes. programmatic in different press It's means you a it purposefully, -- approach the it's used sure but really M&A. actually to as it some as And word, you're just smaller, And in what and typically looking more you're

Marc Michael

Sure, Deane. Yes.

we've our us. a of any to that potential most litmus acquisition it us aligned that as first markets strategy. starting do So, emphasis test we for the assess the opportunity is important around to an important described, point is is a thing And interesting is are as

some as but the personal screen Solutions, not for to elements applications, also as area, area that's Precision for And care. at has Health click we us. again, care pharma & only important Nutrition into food different that business the market personal we in So, that touch of an look also it applications, example, some

applications and water we some that really And traditional in of applications look to mining wastewater. align initially. kind the business, touch different we so we of businesses as use at the specialty also a well more as as to of think we And well. we like chemical then about We the -- do that we then agriculture when want as screen technologies feel it more

ultra-high our Nutrition business, applications, the Nutrition plant-based Components products the Health. of temperature So, in cornerstones business what's Nutrition valves. of area too and food Health us & & business, business is of & and type successful we our pumps in and Nutrition our alternative areas If in Health our & consider it's protein Mixing Health, like made processing one

as are So, your we specific attractive to screen. use and on markets the align then align with an And those point, and opportunities to ones products. elements the that our strategy the that very would that. The ones we initial get

So, a technology it a we be or may in. that certain in gap our geography capabilities have expanding adding a maybe

place really do. has put terms assessments I team, with that the of it's and So, in Vusa process, the very the as in a strong broad-based we mentioned, that

great we place team assessing meet is that it's every years. those all rhythm a two last that and through opportunities. two I so, and programmatic a go with those in we in piece weeks, opportunities, really have And the the we consistent put in process

Deane Dray

really Thank helpful. you. That's

Operator

from Barclays. Julian Mitchell ahead. The next of question go Please will come

Trish Gorman

Mitchell. Gorman morning. for This Julian good Trish Hey, on is

significant mix. out and improvement called the improving had you margin in second-half So,

margin Just the call out of segments? kind between improvement to that there's any difference in wondering if

Jaime Easley

margin the mean happen I across expansion both to we're segments. of going our see

in laid I look about would commentary that So, the to as you pick profiles order out second-half on and Marc the year-to-date. the of the back what up think year, you encourage

So, was better. with right? mix -- in So really of mix, segments a we'll both story it's start

-- really If Solutions you is look our Precision at that the to that talks you the oftentimes industrial get segment. order off. good, sorry, mark, when I'm Marc when million begins that's take per over segment when quarter $XXX and mix about

sorry, year-over-year, again lower has as quarter costs mentioned starting just that that on the in segment, the Mike some we made that in And quarter, fourth that in just lever the so, bringing the the And the in get the the in expect & in going demand. we that, as for to to Nutrition the see comment That I to transitory to be better about we expect -- we has, carry then you'll and or Maybe second-half I'll the Health for inefficiencies to margins did we and well the And higher I its with to brought new mix also a was, And weighting the to to margin footprint. And Solutions in nicely. that, that earlier, new manufacturing are I year. food of And the happened in question, as lot inefficiencies. believe, one then see revenue, the freight do labor million I'm would labor point we labor systems hit have the driving mix. segment, U.S., happen to do increased margins. segment a back less quarter, moment. a and what then segment, would second there, here Halloran's us which we of expansion to perceive which U.S. heavier that volumes meet $XX Precision tends in

also will And second-half so, segment. Nutrition the margins Health the that & help for in

Trish Gorman

much. Thank you so

Marc Michael

I mix, to Yes, Trish, points, SG&A price I'd or just the performance. better realization, add, again, emphasize just maybe mean, summarize

operating of so, progress mid-teens as income and between margins, income in year operating the expect indicated XXXX We remarks, XXXX. objective X.X% significant in halfway prepared at here our in fall margins, XXXX our exit one of to I rate

was expect move of through that piece that well to control SG&A the are is we're getting under really really we, $XX doing we our that at year. in that can't the those all to and raised reason place, XXXX to that I also second-half full-year And accelerate $XX as million things the run things start rate from So, really we overemphasize again, million. the

about I we're grow. So, what going to where has business. We future is the is doing in profitable of really the excited the are improving. mix growth tremendous the opportunity It is what thus to is on. potential look the journey And that as principles. in what continue is forward, been The team journey. focused we these far and I'm apply XX/XX

Trish Gorman

of priorities? how the Investor undervaluing kind Day, so was list share bottom, a but these it the of capital so the much. can to of M&A. you Great. very on guys investments gears kind company maybe that you within That's switching about you and have us at view just helpful. allocation, of buybacks But And think then, much. organic kind I of Thank kind just lot a remind close you especially, of kind talked $XX

Jaime Easley

often our you internally, all We for Investor -- arrow this couple Yes, one have we're about a recall, fully sure. internal of in investments. sure pages this the the making is and that on talks there's we it Day, really that use that where funding Thanks the which of question. may did

So, those for the take form to of innovation. tend opportunities

that a making to go of cost will sure that pieces through And know sold. our core will would line. increase teams our other that to Oftentimes, be is various of and investment R&D in top our as that then investments of we're secondary CapEx. that Some go the intending through goods But also the innovation kind and priority. in

the is going our going help with our can that this support for years. So, capital few teams, organization. CapEx Those nearly seen capacity. IT through of also the more new are that a Those investments well as set we've double the got to will and in which factories, our form And machinery next investments expectations initiatives. and growth, of then to our take piece CapEx support year you've more productivity

those to cetera. et And would efficient, office so, make improve be experience, our investments back customer more

capital are ago, chart, making that of the I those M&A. Marc to on we they have that to to and those M&A. than described down well on returns to investments Working we So, quick moment are approach regards And a Deane's extent that. investments make our then programmatic sure our in question, focused focused that to all cost have tend greater we believe

iterative those those integrating bringing in and in, So, see the market, opportunities the how strategy our look that. deploy we that that at is we of our evaluations ongoing and then to continuing

to we've you step Scott year. that in return as to are nice and right? As down we this excess made in going cash, the shares a to regard, But process, initiate in about to cash that to to space. back we're in wouldn't I'd those any process what we talk not really But evaluate have, nature And that's strategic alternatives. given anything we that that I into that to we're now. new not mentioned, say of we're that shareholders, excess this the mentioned, now, just share expect underway as repurchases us So, then be spot it or we work relates buying will

Trish Gorman

it. Got Thanks, guys.

Operator

Walter go Liptak come Please from ahead. Seaport. will question of next The

Walter Liptak

Hi, but thanks. basic alternatives. for wanted I too morning, to Good strategic the you're ask, that is review question, of this the maybe doing a guys.

us about For kind those work not I familiar bankers are wonder and be can that so talk with that, us? of to just who investment maybe if provide you you going are color doing of scope it, done that's the the could who's of any to

Marc Michael

I far, I what that the do feel we that, that that share, important further question. this announced, just we've I everything but to just would really to to refer obviously ask we'll announced appreciate going comment to else something Yes, would just that. juncture. there's we've think and everyone I stage, referred this at publicly at is when I thus mean Walt, not we're everyone

Walter Liptak

Okay.

Thank enough. Okay, fair you.

Operator

back to for session. our closing would remarks. conference like this to now turn over And any Scott I Gaffner question-and-answer concludes the

Scott Gaffner

joining us for today. Thanks

please you the over the day, email any questions me to If out to reach be phone. have available I'll Thanks. afternoon. feel or the free rest via the throughout of

Operator

you The you. attending today's Thank all has conference for concluded. Thank now presentation.

disconnect a now day. lines. great may your Have You

SPX FLOW (FLOW) 5 Aug 212021 Q2 Earnings call transcript