SPX Technologies, Inc.

Good day, and thank you for standing by. Welcome to the SPX Technologies Q1 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would like now to hand the conference over to Paul Clegg, VP of Investor Relations and Communications.

Thank you, operator, and good afternoon, everyone. Thanks for joining us. With me on the call today are Gene Lowe, our President and Chief Executive Officer, and Mark Carano, our Chief Financial Officer. A press release containing our first quarter 2023 results was issued today after market close. You can find the release in our earnings slide presentation, as well as a link to a live webcast of this call in the investor relations section of our website at spx.com. I encourage you to review our disclosure and discussion of GAAP results in the press release and to follow along with the slide presentation during our prepared remarks. A replay of the webcast will be available on our website until May 11th. As a reminder, portions of our presentation and comments are forward-looking and subject to safe harbor provisions. Please also note the risk factors in our most recent SEC filings. Our comments today will largely focus on adjusted financial results, and comparisons will be to the results of continued operations only. You can find detailed reconciliations of historical adjusted figures to their respective gap measures in the appendix to today's presentation. Our adjusted earnings per share exclude primarily acquisition and strategic transformation costs, non-service pension items, mark-to-market changes, amortization expense, and a gain on the change in the value of an equity security. Finally, we will be conducting meetings with investors over the coming months, including at the William Blair Growth Stock Conference in Chicago on June 7th. And with that, I'll turn the call over to Gene.

Thanks, Paul. Good afternoon, everyone, and thank you for joining us. On the call today, we'll provide you with an update on our consolidated and segment results for the first quarter. We'll also provide an update on our four-year guidance for 2023 and our recent M&A activity. Our Q1 results exceeded our expectations and were the strongest for our first quarter in more than a decade. This performance is driven by a combination of a high starting backlog, continued demand strength across our end markets, and efficient execution by our teams, which is helped by more stable supply chain and labor conditions. Strong performances in both segments helped drive revenue growth of approximately 30 percent. HVAC, in particular, had very strong results, achieving segment margin of 19 percent, the highest ever for a first quarter. In April, we announced the closing of one acquisition in our HVAC cooling platform. And more recently, we announced an agreement to acquire a second company in our HVAC heating platform. Together, we expect these acquisitions to add more than $170 million in run rate revenue and to enhance the margin and growth rate of our HVAC segment. I'll speak about these acquisitions in a moment. Considering our strong performance in the acquisition of TAMCO, We are raising our full-year 2023 guidance for adjusted EPS to a range of $3.80 to $3.95, reflecting year-over-year growth at the midpoint of approximately 25%. I'm pleased to say that with TAMCO, our revenue guidance for our HVAC segment is now more than $1 billion, a new milestone for our company. Turning to our high-level results, for the quarter, Both HVAC and detection and measurement grew revenue by more than 30% organically. Adjusted operating income grew 132% year-on-year with 640 basis points of margin expansion, reflecting the strong segment results. I'm very pleased with our Q1 performance and our positioning for the remainder of 2023. As you look ahead, we continue to see solid demand across our end markets. With a strong backlog, robust order trends, and operational momentum in our plants, I feel confident in our ability to achieve our updated guidance and to continue progressing towards our SPX 2025 targets. As always, I'd like to touch on progress in our value creation framework. During Q1, our teams worked hard to drive efficiencies in our plants and accelerate delivery times to our customers. reflecting the benefits of our continuous improvement initiatives. We also continue to introduce our customers to the benefits of our new digital tools and software applications that can significantly reduce labor in the field, improve quality, and streamline planning and workflow, which enhances customer experience and loyalty. This includes our Q's AI-enabled GraniteNet software, which helps customers with the inspection and condition assessment of water and wastewater assets, and Weill McLean's ProTool tech app, which helps field technicians solve problems on-site, eliminating the need for multiple site visits. We've also made significant progress on our inorganic growth initiative. On April 3rd, we announced the acquisition of TAMCO, and this week, we announced an agreement to acquire Aspect Heating Group. TAMCO is a market leader in motorized and non-motorized dampers that control airflow and large-scale specialty applications in commercial, industrial, and institutional markets. They are well-known for eco-friendly solutions with very low levels of air and critical thermal applications, such as data centers and healthcare facilities. TAMCO further extends our positioning in the attractive engineered air movement market within our cooling platform. We see significant opportunities for further growth in this market by combining TAMCO's high-quality solutions with SPX Technologies' global footprint, marketing and channel infrastructure, and existing air movement offerings. TAMCO has annual revenue of more than $50 million, and its anticipated margins and revenue growth rate are higher than the HVAC segment average. This week, we announced an agreement to acquire Aspect Heating Group, which provides electrical heating solutions for high-value applications in industrial and commercial markets. We anticipate that Aspect will have run rate revenue of more than $120 million in 2023 with higher than average margins. The closing of this transaction is subject to antitrust regulatory approval, and we currently anticipate completion of the transaction in late Q2. This will be our largest acquisition since the spin and will more than double the size of our electric heating product revenue, an area where we see attractive growth opportunities, including decarbonization. Through the combination of Aspect with our Marley Engineered Products business, we see multiple opportunities to drive value for our customers, including more efficient distribution channels, voice of customer-led innovation, digital tools, and the development of next-generation eco-friendly products. I'm very excited about the positioning and growth opportunities that both TAMCO and Aspect create for our HVAC segment, which I believe will provide significant value for our customers and shareholders alike. And now I'll turn the call over to Mark to discuss our financial results in more detail.