SPX FLOW, Inc.

Good morning and welcome to the SPX Flow second quarter earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. 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.

Thanks, Carrie. Good morning, and thank you for joining us for a discussion of our second quarter 2021 financial results. This morning we issued a news release detailing our financial performance for the three months ending July 3rd, 2021. The news release, along with a presentation to be used today, can be accessed on our website at spxflow.com. A replay will also be available on our website later today. As you might have seen in this morning's press release, we have changed the name of our industrial segment to Precision Solutions. This change was made to better reflect the diverse end markets the segment serves and better describe the capabilities that we provide to our customers. Joining me on the call today are Mark Michael, President and CEO, and Jamie Easley, Vice President and Chief Financial Officer of Following their prepared remarks, we'll open the call for questions. Before we begin, a brief reminder that elements of this presentation contain forward-looking statements that are based on our current view of our business and markets. Those elements are subject to change, and we ask that you view them in that light. Principal risk factors that may impact our performance are identified in our most recent SEC filings. In the appendix of today's presentation, we have provided reconciliations for all non-GAAP and adjusted measures presented. With that, I'll turn the call over to Mark.

Thanks for the introduction, Scott. Good morning, everyone, and thank you for joining us on the call. Second quarter performance improved as markets continued to recover and our internal initiatives based on 80-20 principles gained momentum. Organic orders were up 16% with growth ahead of expectations based on continued momentum in our short cycle business and encouragingly an increase in OE orders coming from front log related to customer CapEx projects. The absolute level of demand is important, but we're also creating an improved mix of business with outperformance in our higher margin grow and balance categories. Organic revenue was up 14% as we executed on increased shippable backlog to start the quarter, along with growth in short cycle book and term business. In addition, our 80-20 segmentation is driving higher revenue with key customers as we begin to differentiate service levels and responsiveness through our green ribbon program. Operating income margins improved significantly by 260 basis points supported by effective management of price cost, a positive impact from our SG&A cost programs, lower corporate expenses, and a higher quality of revenue. We're on track to nearly double our capital spending with emphasis on investments which generates increased productivity and improved customer experience. And during the quarter, we increased R&D spending by more than 25% to support our new product development with disproportionate investment in our high growth and high margin product categories. Our programmatic M&A process is building momentum with an attractive pipeline of opportunities. We've identified M&A targets using a disciplined approach with an objective of both high returns and alignment to our strategic priorities. This resulted in the acquisition of Philadelphia Mixing in the quarter. I'm also pleased that we've been able to return excess cash to our shareholders in the form of a dividend and share repurchases. We paid our first-ever quarterly dividend during the second quarter and repurchased approximately $25 million of stock. The economic and in-market recovery that we experienced in the second quarter was broad-based geographically, supporting our 14 percent organic revenue growth rate. As anticipated, the revenue growth was most significant in North America and EMEA. China remained positive in the second quarter with organic growth up mid-single digits, and in the rest of Asia Pacific, revenue was up high single digits. Jamie will provide an assessment of year-over-year orders during his prepared remarks. As we highlighted at our investor day, the deployment at 8020 provides a framework to create focus on an outstanding customer experience and provides clarity on how and where we want to grow profitably. Throughout last year, we built cross-functional growth teams that are empowered to own and execute our strategy to deliver profitable growth. In the first half of the year, orders for our growth product lines were up by 26% and our balance category increased by 19%. The strong order performance in the first half of 2021 supports our expected growth rates for the second half of the year with expectations for continued improvement in margins resulting from a higher quality mix of revenue. Looking at sequential orders by segment, we continue to see momentum in demand and the benefits of our efforts to win with key customers. Precision solutions orders were up 14% sequentially with continued increase in demand for short cycle product categories, particularly in North America. OE project pipelines tied to customer CapEx remained active in the second quarter with front logs continuing to convert into orders. Demand was solid in both North America and Asia Pacific. Demand in our nutrition and health segment remained robust and was consistent with the first quarter. Sequential system orders were similar to order levels in the first quarter with significant gains in EMEA. Short cycle orders were also sequentially resilient with notable growth in demand for components and aftermarket in North America and Asia Pacific. The first half of the year is off to a great start, and we are surpassing the expectations we outlined at the beginning of the year. The level of organic growth and margin expansion that we now expect to achieve in 2021 is ahead of plan relative to the three-year model we outlined at our March Investor Day, and we're projecting to be on track to our internal objectives for the year. The economic outlook combined with our strategy to generate higher quality of revenue and improve our cost structure gives us confidence in achieving profitable growth in 2021 and beyond. Based on the solid revenue performance during the first half of the year and the outlook for the second half, we expect organic revenue will grow at mid-single-digit rates during 2021. Also, our productivity initiatives are progressing to expectations, which supports continued earnings improvement. And with that, I'll turn the call over to Jamie to cover the financial review of the quarter.