Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Q4 2022 SPX Technologies Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. to Clegg, conference Relations Vice like speaker to and now Paul today, President would hand over the your Communications. I of Investor ahead. go Please

Paul Clegg

Thank Financial President Chief Reilly. and us. Executive for be Officer call you our Carano, everyone. Accounting available Chief are me our during Mark Chief will today our on Mike the Also and joining Lowe, Gene and afternoon Officer. good Officer, With Thanks Q&A

was issued press year XXXX The containing results quarter our after full and today release fourth close. market for

release our the can follow presentation presentation be March our encourage the in I our slide You of remarks. with a prepared available and our as of well release spx.com. until call find in to the disclosure of on live you the and earnings to discussion webcast during along as the X. this to section at slide replay GAAP A Investor of review Relations a results link website website will our press in webcast

a are safe forward-looking presentation also most and and in recent reminder, comments SEC note our to provisions. Please filings. harbor our subject portions As risk the factors of

comments adjusted and will continued financial to focus largely comparisons of today operations the results results will be only. Our on

reconciliations figures appendix GAAP measures to You of in historical can to find the today’s detailed adjusted their respective presentation.

earnings excludes and amortization impact Our and our way is press income adjusted the expense our release assets it earnings change notice which acquisition-related definition and have that One the our of in a XX-K and expense items, charges, on segment amortization items. aligned is per we non-service loss divestiture of presented with presentation, impairment primarily in share asbestos-related liabilities. exclude you asset the of pension our will

investors we in Conference. EMC Finally, the Sidoti’s be Infrastructure as UBS conducting including and at virtual Dallas well Conference SmallCap with at over the as months, meetings coming will

the turn to I’ll Gene. call that, over with And

Gene Lowe

thank Thanks, for joining and Paul. Good you us. afternoon everyone,

Mark speed. our a consolidated our and CFO. update finance for operational quickly fourth initiatives. growth has first with engineered business strong a coming for an been provide development. in depth excellence Mark as in and brings He we provide call with investments fit the you today, January is on experience call in with excellence quarter. and will the a Carano, SPX’s of initiatives. background to company We’ll This and as public early has record operational segment Mark and On impressive guidance great and CFO is strategy, an products, us growth He also results a up track joined XXXX. our

to have We’re here. Mark, excited to welcome him the team.

Mark Carano

Thanks, coming and the on Gene. SPX several be more today, you getting call an weeks impressive team are of is business a great positioned well and you of that forward here. I’ve and the for met I’m already months. to looking ahead. to has who to excited know opportunities the over I’m

Gene Lowe

Thanks Mark.

I’ll touch the highlights the Now XXXX perspective some provide our from on quarter and on guidance. of some

we continue in exceeded & and strong segments drove end to QX margin and experience markets. demand Detection Our revenue solid both Both our Measurement. performances HVAC expectations across results our with growth, and

and we quarter, and During initiatives, a exposure. ESG legacy progress in additional of liability number made the further improvement the our including our of establishment on continuous key commitments, initiatives in significant progress digital reduction a

backlog. with starting are XXXX we a high ahead, historically Looking level of

XX% which for XXXX growth midpoint. EPS some with our we continuous guidance operational the along and reflects labor constraints, easing our $X.XX, range the our at is supply providing seeing along also are execution. are of adjusted continuous benefiting improvement initiatives, improvement, of which in Today, $X.XX We chain to approximately

year-on-year very well. the adjusted I grew for believe with Adjusted than XXX recent am revenue and with mixed multiple capital acquisition QX helped XX% portfolio full we grew Despite SPX our points and strong remains income of am more XXXX growth growth high level diverse both momentum organic performed initiatives, as our year margin to basis, our on with active XX% our XX%. significant margin year performance expansion. drive our On ability full entering availability pleased segments a deliver results, well basis and to as acquisitions operating Turning quarter, operating resilient enhancement plan. I pipeline data, confident macroeconomic of organic in our our and and XXXX. income

our As creation our in value always, on I’d like progress to framework. touch

As by demand. strong hard divesting progress our meet reduced complexity business XXXX, you liabilities. introduced asbestos risk mitigate our key on leveraging of and and look new constraints, teams made our worked over multiple our legacy initiatives labor customer We levels back to system to supply products, chain and

I by we remediate and a very and key ESG as proud ESG of momentum accord and more disclosures, reduction our for initiative. a emissions process formally rating our targets SPX safer, underground well company-wide enable efficient realized. a expanded scores a emissions element and business in array positioned cooling ESG that of is human sustainable sustainability on water future. XX% innovative our equipment to saw significantly thrive gas more offers am also In inspection our SPX pipes, considerable leaks highly our commitments, of to adopted on strategic long-term unit, each products efficient carbon that From towers gas rights a policy including world helps our wide Recently, a among XXXX, key entities. incorporated and Paris where tech planning in XXXX. intensity greenhouse adopted increases we in our are

as one We’re also Newsweek of companies. named responsible America’s most by

of pleased team honored the our and being acknowledged. work to recognized be hard is with We are

momentum have in our digital strong where initiative. area is Another we

information of Pro of few within continue to our examples more to experts a we on hydronics mobile that we market helps reflects, of name putting and innovative where solutions at Tools company providing believe initiatives customers heating field is designs, more ever A our our customers our the were products took XXXX, productive, As sustainable. focused enable CoolSpec our our cooling to product in customer boilers, boiler ever is business, enabling successful. solutions for by our In than select platforms and success. new technology important faster see app become digital share In help safer reason to platform. this is Each our in customers fingertips tools business, to technicians our be our it key their a be highly than we tech efficient, compare, more software HVAC cooling engineered configure continue traction include to and leverage and and easier before. to which

accounts infrastructure, more won areas with to management Genfare authorities, our have Measurement, CS ability now branded Genfare the fare cloud-hosted municipal in processing and data With place. including new portal provides point, At continues XX which maintenance of our in Link Link, & to we’re website than In to rider analytics adoption platform drive we and and the of on of and this efficient software potential priorities strong of robotics. account-based prescreen modular management, one transportation management platform, Detection offer geotag net customer use can all develop and AI networks. LiDAR-enabled water concern critical support seeing Link, and ways service to authorities Genfare of transportation valuable functions efficient

turn performance. now Mark call to will I review to the our financial

Mark Carano

Thanks, Gene.

to fourth asset performance include GAAP grew year. adjustments year-on-year. In and adjusted EPS our Full year-on-year also the previously removal the notable to $X.XX, associated quarter, our up XX% customary pension most acquisition-related full with charges. quarter pleased our We for announced impairment on The EPS mark-to-market loss adjusted adjustment asbestos XX% our results are the year $X.XX. assets. was very a costs, gains, Other expense, liabilities is and the divestiture amortization and of of

tax with effective and company. contributed offsetting rate adjusted segment strong momentarily, EPS ITL. segments. line quarter Detection increased X.X% and created a year. headwind a growth acquisition A year-on-year, review drivers, & and resulting compared top will FX HVAC Partially X% in of related across growth rate dollar. from prior including to of with our results the the organic was of higher our in Revenues an both growth In a strength approximately Fan Cincinnati to growth Measurement in tax XX.X% reflects Acquisitions our inorganic to year-on-year organic I XX.X% addition the low our the unusually strong $X.XX fourth review which headwind effective

currency reminder, our strong and in have hedges generally a structure. $XX.X extent, income natural HVAC million, cost XXX in increases a performance on lesser significant driven to measurement. a due detection little by by fluctuations were As profitability $XX.X effect increased and while grew basis our XX.X% These Segment to in overall points. to margin or million

remained in price/cost segments. addition, both tailwind a In modest

both growth by platforms. both of grew For HVAC revenues increased year-on-year. and the price volume in in to XX.X% our contributed quarter, driven XX.X%, organic Heating and cooling segment,

During chain increased and remained fourth of to also increased Fan. was easing a cost and bookings by cooling headwind. dollar supply constraints. Segment the operational Inorganic The heating. from modest solid. the X% backlog favorable XXX Cincinnati approximately price in was by labor margin quarter, improvements in of the in we improvements $XXX increased million. in reflecting reflecting basis throughput and million FX X.X%, availability particularly in benefited year-on-year strong growth from execution, points, of $XX quarter, income the Overall, acquisition favorable trends And segment the

dollar to XX and in organic a in resulted grew year-on-year. revenues strong grew $X.X X.X% of headwind. all income Commtech strong quarter inspection, Aton points. the & Segment Detection XX.X% For basis increased and margin The and Measurement, million contributors XX.X%. by growth currency Location were

at primarily to project due environment rate strong sales. continue Segment backlog XX% was end to We up a and run million, for $XXX demand large year-on-year, experience orders. solid project quarter

our now no available initiatives. the of quarter, to to liquidity end had our cash strong, quarter at have borrowings we end, financial under growth million support remains our strategic the and sheet significant Turning our credit $XXX facility. At and revolving we of position balance

the asbestos impact divesting approximately our Our which on of included cash hand. cash $XXX with balance funded million was liabilities,

X.Xx. a the year of with we concluded net leverage As result,

generation by For management. year, $XX cash free the to strategic affected was was chain investments In related full supply approximately million. capital working XXXX, cash adjusted flow

normalized During of to cash XXXX, a we generation. return anticipate more rate a run

on our Moving to guidance.

XXXX. jurisdictions. and approximately with initiating EPS a United approximately effective we to we in reflects guidance XXXX the segment, now The is million in of between In higher anticipate that of of $XXX midpoint $X.XX. statutory is million. percentage of XX% a an XXXX rates are growth a due in in our $X.XX rate $XXX States effective year-on-year higher an in adjusted years and prior rate The range anticipate XX%. of for compared notable XX% We of revenue tax approximately tax change One income to HVAC range change to certain

project be that and cadence favorable a the to heating fell our the Detection to to XX.X% price half. margin significant the and year-on-year of of project will XX.XX% in than range approximately midpoint. the range of it year Segment midpoint, or In anticipated or million. modest half the an and of XX% revenue of points the Segment EPS environment. XX% the respect more is of facilities basis XX.X% content of XX% increase due in when anticipate the increase large at cooling XXXX, at revenue to income income cost to is anticipate $XXX in of to efficient With XXXX amount in to we lower approximately a reflecting projects. the quarters, the be first we Measurement XX a & pass-through in anticipate in segment, million we our in anticipated second range In at $XXX margin be margins to production certain typical similar

find As always, to the in presentation. modeling our you will appendix considerations

end I’ll and our of a now to back closing for turn over markets comments. his the Gene review call

Gene Lowe

our demand regional is region. while some project In driven variations orders steady, heating and in in our replacements. North are in & to and market demand supportive with growth current demand solid attractive. supply for America the bookings And remain, for solid APAC and remain solid our environment remains the businesses, by run improving. chain overall conditions In cooling, Thanks, constraints Detection rate industrial see residential we business, our remained and Overall, commercial but XXXX. HVAC of HVAC Mark. Across labor continue products Measurement,

summary, and very momentum our on In our I’m the with strong close multiple pleased important to initiatives. year

year an sheet solid full well M&A midpoint We approximately confident compounding in continue I’m proud are achieve experience to at XX% With and are our growth guidance. for the beginning acquisitions. XXXX to a of our continue value in through creation come. a strong pipeline, active I’m team, capable to balance strategic road years position we of highly our earnings ability map positioned to our on and of growth our executing

XXXX SPX targets. about As we I’m reaching look excited ahead, our

With turn call I’ll that, the back Paul. to

Paul Clegg

Gene. we to go Operator, are to Thanks, ready questions.

Operator

from UBS. Karas Thank of line comes Damian Our of you. Instructions] [Operator question the first

Your line open. is

Damian Karas

Hi, good everyone. evening,

Gene Lowe

Hi, Damian.

Mark Carano

Hi, Damian.

Damian Karas

Hi.

so little tougher about just your related comps kind of of Gene, wondering, this factoring what by to financial I bit you you’re continued sounds of achievable try potential commentary X% going how your wanted your be a kind backlog, or of to year? of growth – in year thinking is color just guys guess, about in I that our targets. to business, any the sales the some just know sales healthy sales maybe about to that are to have? open on Or Really, you was outlook. kind you macro some So the weakness hearing you’re light. you’re related asking I orders across and seeing kind setting prudent I the very outlook. growth But

Gene Lowe

Yes.

I So good Damian. it’s question, think a

at a when year we about year. I macroeconomic look very positive at did this approximately you ‘XX, look XX% plan, if put together growth, in do think think it, earnings the had XX% I our we we environment.

backlog. As sit growth America, solid our know, said our in a we do seeing we sales. in where today, is North be very in to bulk markets, relatively no rates. strong or is the come Having expected which really end of you order with flattish GDP we’re that, to And

always say you believe what said share. have guys you is that’s you don’t to have we achieve – what that, for achieve any out always And Having if so what is our have there. want to appropriate we higher I guidance I guidance that, would comments out like the other than So higher. there we know is would looking are to

Mark Carano

I’ll put factors that the fall of impact there Damian, we going Yes, just of a that is Listen, we there number are to within that. out kind to how add forward. probably range

at today, out indicators for are like not they are say that Gene right, woods there chain I probably year, of labor, mixed signaling the they Supply the macro some But moderating those on mentioned, unclear are both at environment, look folks the and As of signals things non-resi are out look leading would the of yellow. flashing we’re what visibility they a been that first and back not expect in where the don’t were. have first yet, has half those of better, half of getting in while but for look tailwind what issues it we the the like half, year. back the And a price might us be cost what the we in of will us. lot on

of year, sort business will That So some half think if the of play its definitely would the on you in performance. about is key you HVAC businesses something think more element weather our that that heating back obviously a side, elements obviously drives of the on in business. the particularly but the about it that and out business, is and

in to that about X leading the limited is there, comments weakness visibility indicators aren’t out my and market on those, months. despite around seeing Cooling, while our we caution up

detection then is particularly that. the has portion much D&M know, that hard But business, us expect it’s the would sensitive environment the there And by is which this half economic be the we towards the year. is event business would that. back and to more beyond a cycle, see So you on profile. short different And a to side impacted slightly radio in weakness that of as business for that of that

it’s kind think a XX% of reasonable So exists. segment our growth based range off guidance I I that the earnings view this income and net-net, revenue targeting mean, of is and

Damian Karas

respect my of second all that. is Detection margin Appreciate Measurement with to guide. the then & question Understood. And

kind top type flattish you’re So margin some but growth, digits, of mid-single trajectory. more nice line expecting

maybe out of mix just primarily about lay that related? how the kind D&S bridge could Or margin So if for you’re you thinking and is that.

Gene Lowe

pass-through mix I these It’s Damian, and lower call revenue, backlog guess, from that – that the some what, business. that a in on there ultimately include a projects margin we Yes. issue, in and some we really large mean, it. than average hit got would orders we results project I right? I’ll saw they you in you referenced start. in I or It’s which see We’ve primarily that mentioned

Damian Karas

it. back guys. the Got will in queue. I get sense. Makes Thanks,

Gene Lowe

Damian. Thanks,

Operator

of you. comes of line from [Operator the Thank Oppenheimer. Instructions] question Bryan next Our Blair

Your line is open.

Bryan Blair

year. guys. the Great to finish Thanks,

Gene Lowe

Thanks, Bryan.

Bryan Blair

of in $X.XX offer the should the particularly Obviously, of that solidly sources one-time-ish little came a beat. more ahead EPS I Maybe we on guess, I’m expectations. if color And anything consider regard. curious in

Paul Clegg

of speaking. start. Paul it – lot really So The Brian, all, I’ll just really was A around of is strong first – execution. this

backlogs. both large chain in our improved, You’ll that get HVAC labor better very strong were nice supply able our also our improved plants as to drive and HVAC. have through and results see we we heating that in throughput in position in backlog of And we where cooling, business and have amounts

Gene Lowe

adding and that’s Yes. you the think, right, able year-over-year, to saw on We drove as our on supply And its XXX or impact I environment labor I in to right, chain mean, points, really the somewhat. drive that, just really the of some throughput. what is HVAC were receded basis as margin quarter-over-quarter, plants increase

Bryan Blair

Understood. some forward when to Results we were infrastructure excellent. growth? read through accelerate may where and to detail opportunities, most platform Maybe likely SPX see going offer is and really benefit tailwinds those the and additional on

Mark Carano

Yes. give color Brian, some I’ll on you that.

that it place as been municipalities, fair right the larger a starting that I’d see we Detection we we of more I something would now. fruition, move and happening collection see really that’s that are is & there actually projects on some where see there they out to our have platform, be the at that place is you lot of the think first and activity to the seen that side, immediate Measurement the say transportation, most when look in we’ve

of same portfolio look that could of not year the places our at kind lot different the It’s there be said one. Having a time. you not that, it’s all is infrastructure beneficial. across monies all If

business, we XG at, lighting go mills provide towers. up for in our wind longer lighting a You where a example, It’s look process. or months. typically few Those don’t solutions for typically

the typically tail at we’re end so And process. that of

On or other the things other some areas. collection are side like fare

cooling couple So I seeing on say it would some hitting in areas. also a pockets pretty of we’re a the areas. I lot do of interesting see side,

batteries We seeing quite being intriguing. are

of of a type needs data those and semiconductor seeing very typically We’re activity being and as our equipment. healthy, lot for center have cooling

in location So and gas for for that of the activity benefit lines It’s to of for government funding. part our we’re is – the scanners. think really the I’d I and some hospitals, in I educational that’s type that of driver or demand something up That’s say scan seeing I market number detection, is buildings or is there us. be that you what because to as bridges any Fiber you scan platform. know, Paul, Radar always radio good need think to non-resi whether putting bring in some Google a you leader from area economic you’re a typically, what That’s an should out a you’re inspection detection. years. dig net underground want or proxy putting end you whether activity for have of before of

there. with CUES that infrastructure seen activity, wastewater is technology of you’ll robotics our And more the gone see water for some municipalities applications. the we monies highlight, and So our have is have that which general I’ll that. pulled last one to get some along

as into orders that yet. seen haven’t of We converting

seeing some opportunities. where programs are is there We some

next nice portfolio, over some this of you We benefit couple some support think look see a be across us. years. areas will do for if demand do it the this net the to So provide us we at I

Bryan Blair

those offer seller M&A Any And the your actionability great. can shift is funnel, if over in of I more, color ask be in one detail. any the the unsurprisingly pipeline, opportunity tone positive. additional lines composition on would progression helpful near-term? M&A the can of there All Anything terms you along your of expectations,

Gene Lowe

that I’d say good Brian, really our Yes. we strategy. overall, feel about

we platforms, those. we’re six and our have plans, detailed executing of each very for growth So, against

We say it of did activity case of In say I activity level see the slower very the I but the COVID would than is terms healthy right level, some would now. a of of that’s level years, activity. not some

seeing despite are very levels rates interest where are healthy We today.

So, are pleased. we very

they – on way, We high, they things up the it’s are haven’t down. they get are going going interesting. other when very question – multiples are always are the are when We seen things going and

disciplined very on our are We multiples.

positions, As And put you material XXx. some we average, more acquired typically know, profile. leading XXx don’t the And at change we on rates. these we any really good sometimes EBITDA, brought around companies see have have in growth to good to engineered XX% in that products,

of very could would ‘XX, have growth as look and we of the on But positive we that, caution, having said We for a have get larger opportunity, are here always at I feeling think higher disciplined program. return opportunities be But attractive on say you very a we some on be a going always careful. But said, sit are I we if opportunities. to where to very set going our I are you very those. growth we

Bryan Blair

Thanks Understood. guys. again

Operator

Thank you. next Our from Sidoti. of the Steve question comes of Ferazani line Instructions] [Operator

open. Your line is

Steve Ferazani

Good those how SPX now Mark. to evening positioned hitting are to follow-on XXXX how of last the question in that targets. well – Gene. want you do I terms Welcome

recent almost when hit, they last but any acquisition. back significant at now acquisition? reason start months, hit of the XX are time we between since pushing think I I the XX the that most given to months that length they know

Gene Lowe

so. believe don’t I Steve,

is I That on. did think years. There slow reasons year. slowest we was that. only was for a you our the in various IPL. year are spot bolt-on It Really, was X

where we a of consume One company, ones point time asbestos did of to restructure, out magnitude the had the attention. sale, of lot the of the will management I reorganize liabilities our was sale and

and very about that the that say. good our color I pipeline. I that things could good what give various about feel I guess we very didn’t to you during addition on don’t year feel In say what would is XXXX, happened But happen, I

balance very have we a sheet. So, strong

to debt, that here think at we smart have and deploy we net ways are very forward. We some going X.Xx sitting

us But so primary question, And – to executing it’s move our really, I to don’t need don’t up feel I to targets. back of it. yes, your part in XXXX the we answer

Steve Ferazani

of which stronger allocation, noted debt increasing with would XXXX. you much Great. capital do flow Thanks. outside be expect want or cash you then that of would a Mark, might in that looking cash indicate normalization And anything also you terms should reduction be Any what in capital, on of working M&A, you at more else to thoughts flow?

Mark Carano

Yes. I mean in I would be growth, that or think driving listen, whether that our investing alluded business the inorganic first as to, Gene organic kind in right, in of CapEx method. is on focus business the and

shares stock return like with that of And to the was respect we the have a will deployment to a at unique moment at it’s rule with was in we say and clearly, wouldn’t the of think option. I undervalued felt repurchased have a capital moment options, where keen That at on that past. focus we other of eye primary respect that an capital. I time. out wouldn’t sort as But

Gene Lowe

Yes. I last see we say are I opportunity, I do of to stock, up year, growth comfortable, think which but out allocated think attractive I we see there. And always in XX%. we we very some so. had that’s very have kind would think dislocation the we If

Steve Ferazani

like sounds higher is it note, that On $XX million. this a year, little bit CapEx

Mark Carano

opportunities. growth And right. some are we at we looking are That’s yes, various – looking

throughput, cooling there opportunities bit level, leaning strong where heating growth plant efficiency HVAC the probably the some are at business, and towards have to a improve both rates. little more our We and overall

an I we make a a while this anticipate perhaps So, next that that’s investments. feature those of permanent But of don’t will might year little and our year, be for you sort of cash level what see that, bit elevated flow.

Steve Ferazani

Great. If one I last in. could squeeze one

the am you Just backlog. working I about was you some older some work there backlog out you as go priced to through. I this talked how were quarter, worked were itself see margins to back quarter just for to really recall when trying HVAC kind and guiding there more healthy ago to that going a figure of caution that But and out.

Mark Carano

that with how with the that margins syncs we… of – Sort our

Steve Ferazani

some higher price that there. margin much you backlog a With sitting more if in had was

Mark Carano

a pushing lot really that’s think were through there. driver volume, we But the more Yes. And Steve. I

at suppliers efficiencies. certain you you of that the those the that have – you labor need or site on amount and efficiency most As drive there the is as pies of a see to you look have of all

having like are and that. different things You to switch people from not lines

So, that all those much those plays being up in a drop quarter. nicer to able to and fixed through fourth covering the push costs margins

Gene Lowe

Yes.

our think feel debt mean supposed are And the noting it’s I good we like probably Steve, is. are you one feel our where is where associated asked we – price-cost be. And we I we thing, that. about getting on worth loan to margins term with A repayment, about locked it’s low-Xs.

or than some it our so, some back are you are us nice gives though further term today... X.X% at was that going pay sitting and to not We loan again

Steve Ferazani

for questions. Thanks. Fair enough. Thanks the

Gene Lowe

Thank you.

Operator

comes Thank of you. UBS. the [Operator Instructions] from Damian This line Karas question of

open. Your is line

Damian Karas

Hey guys.

there. follow-ups Just a few

parse the and the I same kind was wondering heating of for expecting expectation kind First, growth on Is of one stronger other? than of maybe HVAC, out could if the cooling. it you or kind

Gene Lowe

from would Damian, the XXXX. we that the in the cooling fourth really, quarter So as the case look growth That year, determine on to fourth to we see going when throughput typically of heating volumes. the weather reliant you more side. quarter like fourth more Heating, is what know, are or wasn’t we the quarter come in enter

in into high a into take to at that’s we our were we and As account able we backlog as are But to year, quarter, a this fourth the you consideration execute looking into going we know, that. fairly go well guidance. have on

Mark Carano

sort are this of that that ties the infrastructure seeing some some And comments of earlier the I spend, right, opportunities for driven cooling being of our by some product, we Gene think back of Paul, so. are made it about to

Damian Karas

Great. then matters, cash guess had drag. a but asbestos bit XXXX, little capital, messy. of I And working free Okay. a also you a of bit from Obviously, the was a flow perspective a

about going year, number cash you thinking here? you conversion like you or back a to flow get are can is bit a So, it the take XXX% more time? outlook how more this Do little from think to

Mark Carano

not working – I we it conversion. there are What about inventory, will be that we range time. that a around remain think period cash a XX% over not normalizes. XXX% inventories out for is XX-month XX-month of I do period there to that is is range sourcing I you as think a back I XXXX. be the chain My that particularly still But somewhere path on supply would but Damian, are if constrained, normalize, in that’s of to flow that be think as everything will, may really think could think more that free though expectation availability. there a normalized pockets by capital driven

the we strategically, support inventory to more have So there carry decided to business.

Damian Karas

opportunity? a accounts? one digital also just then sales in Are helping Genfare about that? And and of some but mentioned talked – the software complementary thinking as Gene, revenue of that How less Understood. boilers, service, market few Genfare Pro XX sounds a Is initiatives. capturing the think additional that you Link. new last like should outgrow Link on one, these more be or you tool like about and had that’s you with we Is a this others gain subscription? – some it’s an accounts incremental should we you

Gene Lowe

are you think I And right. Yes.

in key us HVAC the is a our think about either great to share much capabilities the think factor if more help initiatives, I really I so heating the tools speaking, and partners And tools why win. field of on our a business, our side, think year. we and to I reps, digital this it’s you contractors gained we much think or the of solutions about we provided digital the hydronics. the had that talked They And market broadly year.

So, we our the feel Most come products with and good detection when you that. And look different. really of really detection measurement software. measurement and it’s of on

is are in the segment. So, you you providing it’s relative on this relative what of revenue to And overall basis that software really is part of general, the solution a see small the to customer. the

oftentimes once million, of of provide and million. engenders this software $XX they their that, us. equipment $XX the loyalty provides buy with Having neighborhood it’s – talking such all we it’s the in said a strategically customer You management that our analytics, data, say, let’s extremely, buy are they asset times, important it of, lot equipment, because

so on the once for on municipality are they say, the specifically XX example, platform typically. our years, on let’s And – goes a for Genfare the example, next platform, our on

are piece so their building attaches Genfare it your area streams. because And equipment the revenue solution collection question, every to fair yes, plugs will But be software. specific very of we into that that into

still streams Now, I relatively to the speaking, would those revenue smaller, were equipment. say

doing the still on the it’s but well, say, side, software And are accounts, SaaS it is Genfare software let’s portion overall and the like smaller growing every relatively the year. So, it’s very a amount of keep typically revenue business. more is we selling, winning of we of

digits more You in talking in margin. it’s and getting terms terms high-single material. of revenue are probably of Actually,

talking probably high yes, it’s Damian, such might margin, that. higher than we about how flavor, that it. because You you are give are some for think you probably talking But

Damian Karas

guys. helpful. luck. That’s Best Yes. of lot a really Thanks

Operator

now I it would you. Paul to turn back Clegg closing like to remarks. Thank for

Paul Clegg

again quarter. us all updating to and forward joining you we look call Thank next your today support. for for Thank you you on the

Operator

and participation And the may conference. in does This today’s thank you now conclude for program you disconnect.

SPX (SPXC) 23 Feb 232022 Q4 Earnings call transcript