SPX FLOW (FLOW) 5 May 192019 Q1 Earnings call transcript

Good morning, ladies and gentlemen and welcome to the SPX FLOW Q1 2019 Earnings and Strategy Announcement. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Ryan Taylor.

Thank you, Bella and good morning everyone. us. joining for you Thank With me and President CEO Marc today Easley, our are Jaime Michael, Chief and here Financial Officer.

earnings on Our can XXXX release this issued QX morning be found our spxflow.com. website, was and

strategy This QX separate a strategy of webcast power conjunction of our with business. energy premier to building the decision, we That in announced initiated presentation results our call our news details Additionally, towards And enterprise. of our decision solutions our process that being narrow we located in The sale and is is release, webcast. includes section and in information. presentation Investors also the website. the

in reminder, are reconciliations you and our our appendix markets. Those our forward-looking non-GAAP risk performance our our In presentation provided presentation, filings. a be them we of contain their replay today. current will measures adjusted and businesses factors that all and that impact of the webcast available site today’s that we ask based are change view the identified recent As statements light. on to SEC have of on may of Note Principal for view a elements most this later that presented. in subject that are elements

news, by when updates this appropriate law. is power strategic and and we that intend morning. the energy, required respect comments we detail the determine call further only of divestiture On to further With to or with on the provide to that said, we intend disclosure provide

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on Ryan. FLOW. morning, for team for day and our Good us very at joining SPX everyone and this exciting significant thanks Thanks,

this and operating into few made to past I Over great years, FLOW high-performing our company SPX on across for our of the a teams am efforts transform enterprise the journey front. on have proud we progress their

discussed performance continues in initiatives earnings higher the on customer the emphasizing aligned and As global a journey continuous on our improvement call, key of operating we quality experience. QX a drive revenue, XXXX to our is team we world as to class are high

Our on QX revenue continued results EBITDA solid up year, progress organic points. adjusted growth initiatives. these the XXX reflect growth delivered adjusted and We of with over X% margin up XX%, operating prior

our the expectations quarter With the first Our have we QX reaffirmed teams operational guidance. contributions their results I across am of strong proud year, our of exceeded full back start strong our on world guidance to year to execution. a for the results. our

announced narrow actively In to to pursue in been customers chosen control On segments, that strategic solid journey review of from our these to best solutions next we serve proposition flow we power on in product a of differs the operating lines, strategic performance. and in those performance focus high addition process both to the we our areas, working front QX, the customers process applications. divestiture and to in our today competencies have to accelerate initiatives. that and a customer on step After our we strategic core thorough determined applications energy. value To have

our very success. value teams significant and are future shareholders both will strategy for We about unlock for excited actions these businesses believe this in position and

on will later strategy in discuss detail the this We call.

XX%, to was segments. the good basis, our On Adjusted million year million. X% range, Adjusted flow, up generated compared Jaime margin points a exceeding XXX and XXX that consecutive free income we provide marking an we to of operating dive as of and our quarter EBITDA performance. EBITDA beverage $XX seventh recap Before grew seasonality. $XX XX% our growth, $XX revenue by our with margins to historical delivered start margins the high-level cash year-over-year. our expansion and quarter, adjusted points In we first QX led a operating year-over-year improved and into I to food will million, guidance organic discussion, of industrial

positive On the energy QX beverage. power year, orders positive experienced us start The grew long-cycle, to pickup year, food hydraulic during led a note, we to segments and over QX. lesser was product we tools and into order lines. decline all year-over-year giving front, and a down with orders by customer X% a CapEx-oriented On organic mixer orders single-digits low three March our saw the in versus in slow prior industrial extent, a momentum in the Notably, XXXX. across orders concentrated and

was the orders through and growth lines lumpy. lower hydraulic and roles, in tools. enhanced organic orders solid long-term largely for Looking service prior line and and of year, in compared used system This lower beverage. Industrial level mixers organic products, aggressive the we our modestly in at as of midstream more In to applications. orders level comparisons power prior tend valve decline food versus primarily in pumps a declined energy order of and investment categories booked by to opportunistic and general the agreements the these Quarterly be and product due orders in a lens our industrial fracking product offset and pumps closely to demand year lower in growth

We are levels are concerned not with frontlog customers. given the the seeing activity from teams overly our order healthy QX

reduce is year backlog these selectivity liquid higher for in expand anticipate we pipeline on profile view Overall, of pricing our the valves progresses. to risk in large pick development quoting to in towards initiatives projects. process disciplined to quality projects. revenue, in strong a orders in inherent Specifically, for North gross systems It drive and large to order as these areas of through We Asia-Pacific. margins and continue and execute important context strategy and America activity our up goals the

operating our this I and half. processes executed anticipated front. positive trend am margins in revenue year-to-date a favorable contribute been in improvement we that orders Backlog the to guidance pleased improve, with product across aggressive and products. key Ty momentum products. X% Our continue to XX-month basis, on well with are our the margin the organic the our at Sequentially, second for up pricing in expect growth deliver mix these to talent, factories organic aggressive our board the X% initiatives growth, is have the the shift orders and across growth aligning growth trailing that lines. good a of future indicator a majority increased long-term the Jeffers profile these investments product On in category of To initiatives support year-over-year, good

with to leadership site manufacturing capability. have on team we continuous strong our global an talent emphasis months, X last the Over and improvement added

We to to have and At we a operationally our are increase and I strong throughput counting team time, this on will us forward. Jaime. the going velocity win turn call in to the field, over help

an everyone. will EPS up share. good our earnings year guidance and basis, the On adjusted Marc Thanks, $X.XX with morning was per share, range. exceeded begin I per and QX XX% from prior

following this our adoption earnings in by restructuring recorded basis, year equity operating conjunction we of headwind offset related Taxes on income our a beverage our a the expense XX%. an adjustment quarterly asset On benefit as investment mark-to-market segments. was standard GAAP The with gain to recorded concentrated tax going standard, of the of the mix industrial new accounting an items: strategic solid required in of divested announced prior mark-to-market all versus a other the of drove gain prior securities. basis segment share were treatment are teams to effective this QX was an Under $X.XX in segments The to in in on our guidance, compared to this on exposure regarding of $X.XX per to to we Overall, the guidance our of a Food equity rate spin. delivered a period. and three and benefit across new we execution record of actions drying $X.XX benefit, reported forward. As large In Beverage. call our geographical food to assumption earnings we reduce related included was $X.XX applications a partially $X.XX $X.XX. of income, our investment the This and

associated $X.XX fees approximately Additionally, actions with announced totaled EPS. morning strategic professional this of the we

our by $XXX million, X% Segment XX% revenue flat and year-over-year organic consolidated headwinds. offset expanded was million, to and to year margins prior currency as growth income, points was XXX Looking the at XX.X%. segment up income revenue was $XX

margins power systems component were in while the Organic and low revenue growth lower steady by Segment a a and points over down disciplined the revenues fairly healthy. and QX in growth reflect organic compared beverage extent, This was midstream on orders on service year-over-year. to prior orders Moving particularly market replacement XX.X%. and remaining North year. headwind. million year. a component components, and and America. X%. opportunities. driven a from and when his view Currency to revenue X%. declined we America margins million, in was our North an up booked shipments headwind segment the OE XX%, streams, growth users organic level and increased due extent, and The saw and primarily down was results, declined strong. compared prior with to Segment was mix spare to as $XX margin revenue was this Gibson energy, of decline QX level revenue XXXX, the Currency revenue $XXX trends growing in X% a organic partners beginning level and as reflects aftermarket XXX our large remain the from revenue also income look and Organic food XXXX Organic channel $XXX X.X%, on Overall, X% declined X% continue of demand income market Taking to a a applications. incremental team X% and to in $XX orders demand was a concentrated valve to We lesser sales. orders, a Dwight the on dry The QX million was drying To lower was reflecting on market execution X% of year-over-year. decline margins at focus pumps. as were profile end food time. parts lower beverage, million, lesser declined pump as was unfavorable selective

in lines. we win product that largely largely in at responding level midstream decline believe we This the Organic progresses, results million noted, headwind. $XX committed anticipate oil José X% believe $X a was hydraulic by revenue orders. orders Organic mid-single-digit And year-over-year and positive segment As grew gas income and customers bid On a Wrapping included I segment has lines. million, team transformation. that North activity talented a to a growth. driven than Industrial customer ensure led work the this strong, a strong issue, XX.X%. XX% to this we staying product our by orders high related commercial organic Segment repair are and tools. positioned with to profitability note, Marc in solution in higher designing large charge and $XXX improved of leverage Currency points built our X%, double-digit Also American opportunities. highlight last high-quality and alternative growth year growth The an Overall, our on the are that our in to mixer serving in remain close markets mixer up process and market. are of the heat in quarterly we outcome. year’s driven growth the offset and was to industrial, margins the China. focused for was has results exchangers, healthy seeing that on expanded the as want growth we QX more was a year-over-year. quote QX successful throughout by customer up mixer, did dehydration growth the level up strategic to and hydraulic was to note on million, through to team pump driven order XXX a X% X% and across mixers

line and consecutive growth was team $XXX transitioned see decline we organic well brief ending delivered prior further backlog as reflects in opportunity this the as million. X% of impact Dwight’s a As we’ve product expansion. the period QX ample look Taking quarters. margin The at backlog backlog, from our organization, growth in strategy to for

comprised the orders executed mix backlog opportunities, a of new we large As improve increasingly in and Naturally, backlog continues and our component on orders. to selective this approach remain the quality of is our high-value short-cycle the our It business yielding a more towards more profile in materialize revenue moving higher we profile, expect heavily profile. is quality which to the gross on also margin is second prominently half.

we year on the this reaffirming full morning. Moving are to guidance, our guidance

very speaking, expectations to we the second at to be broadly quarter, QX. similar expect QX for Looking our

$XXX Note was approximately are beginning the and backlog. of revenue $XX million We approximately revenue target income. targeting segment XX% million that of our of QX in

Our On to EBITDA this on basis adjusted EPS EPS is XX% EBITDA restructuring basis, we actions. are expect XX% the guidance expense revenue. and and strategic approximately or assumes targeting million fees tax between share, $X.XX associated $X.XX XX% an per of and and And a excludes about with $XX of rate. which we

QX, of gross As XX% leverage at capital and we year-end. capitalization was fixed into million, slide, the the of X.Xx the debt of at total savings – has margin of expansion of floating debt, million will to mix, revenue restructuring is over to at we the cash move and was X.XX%. our higher debt outstanding down half. which end with expect modestly At XX%. and interest be of approximately current we About just you points hand XX% over key second On an was from from see rates attractive $XXX $XXX had debt our a structure. half, next on pricing this approximately overview Net of quality rates, first drivers benefits XXX

On the you debt see instruments and will maturity right our dates. side,

senior $XXX in that notes tranches have of XXXX. We XXXX million and X mature

at XXXX. matures in Our million term essentially now loan $XXX $XXX is we this in capacity time. revolver, million have which at is and QX undrawn our of And

opportunistically monitor the markets and look facility. During to refinance our credit refinancing will intend to XXXX, we

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it As our intention we that proceeds reset doing based investments, allocate de-leveraging current our our a to of and would options to shareholders. position mix to so, deploying with our return actions for In information, strengthen we those consider intend to ratios growth financial on ratings organic profile. further be and

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that near position divestiture, or Following likely net we at are the to leverage the of bottom range.

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[Operator line of Instructions] the Halloran Your from with first Mike question Baird. comes

is line open. Your

Hi everyone decision. morning good and congratulations the on

Yes. Thanks, Mike. Good morning.

So, the a strategic of couple decision, questions. on

move ideal about this your perspective? an made First, the what why timing from now,

Yes.

want time this the efforts Analyst we process our focus part it of The business. to came quality been beginning customer of and conclusion our Mike, to around last set the created at a to months, as focus of our this our move the to fit during really which XX solutions headed our a And and product we in right path strategy and March was this when reflect if past So, stream. it that And customers the organization that the back had the forward we’ve capabilities we forward. have year. our head capabilities, we to we all of we our we course since strategy down Investor focus manufacturing space, to XXXX, you view revenue where the Day, to intimacy in of that in higher nicely has support on really pathway refined going lines,

our to and the markets. and Power Now years done business too, and of significant in a team healthy with that get the lot downturn Energy job, position we’ve on and Power to into said, get it business, over a his work Jose quite last done along Energy Energy have the healthy. fantastic the operations, Power a after a X

So, make ideal point everything really to converged on both time. this fronts the it at

what’s And sense. RemainCo growth That take aligned? No. company one, towards envisioning for for margin how the mid-teen you profile makes of to get pieces the EBITDA company, kind the cadence all of when long type about the are the that that it And goal? once think you’re moving you what’s will

Yes.

that in growth X% the the profile the to dairy, systematically of be last course GDP, this X% part would years something we to out would range. back look than of of expect of we So, and the better the X% we carve in we to over in systems, ex again the reducing the If we’ve of been our which out it’s there been business, exposure business, if growing dry but kind carve X% rest range. the range, that couple

in consistent something a to manner. we be that’s achievable, staying So, markets relatively given expect that

be grow. over invest the the a taking as steps opportunistically the about we why exit grow aggressively as and product timeline growth months, to that And a the should type EBITDA reflective like this business, of of as that we’ve profile we’re greater XXXX restructuring than achieving mid-teens lines, achieving expect So the are the we’re that’s we to future. it today for lot invest in the thinking that’s so be part in a of profile. the we GDP. to that that how position we that Again, next margin that need we again, how well margin, of And has to XX

Obviously, depth, a year why little side through some ramp year, you’re talk my seasonal be emphasis but any the a a you what one thinking is with cost half on prepared could of bit the revenue with appreciated. more last perspective. about side, as about XQ on seasonality help a just cadence here? color how that little and through the side some help back the would color then from margins just below the I little little nice on then And would maybe work the and you sense. more Makes have from year a probably through remarks expected gave the

Yes, Mike.

of is is business is benefits spot the on. expecting we’re of that QX, improved with what be the of going second prepared in there. intake QX, that profile flat half at bit is some looking reference revenue margin order QX a in you’re But going to and relatively come that to up So, book in but similar. back QX in in we the the Kind remarks, made the didn’t to pretty

operational through improvements, you in through some in that mention believe higher team the expect the some margins We the the And year-to-date naturally the others in expect half. the The volumes. then taken backlog a taking and second seeing coming of half. on we’ve that number make actions the we are of very a probability then will is working here But I that’s of we second pricing have so in favorable going actions in benefits come good also to restructuring on have that that factories, hold would again. to

the hold, So factory that, the year. actions that restructuring But bit effects the performance, think the will about mix. we’ve take begin then HX. of made that QX I see in those believe we plans And to announcements we’ll part we’ve action restructuring to previously here in as those product then really, last carryover would apply the it’s talked be and of following price, a to the

QX, QX systems see revenue’s expect to here QX to and think So in better dry of that in intake revenue the second we the in going be off itself we’ve we lower in to half. the continue seen as quality and the works

color. Thanks. Appreciate the

Mike. Thanks

Nathan of Your comes next question the from from Stifel. Jones line

Your line is open.

everyone. morning Good

Good morning Nathan.

morning Good Nathan.

on this Congratulations decision.

investments, to of, shareholders questions a here. about that something organic this repo multiple, is to, here? dilution redeploy of the repos, from through great this would that lines, capital that avenues move et of earnings have to kind those kind potential share not cetera. think from talked to do deal neutralize Is offsetting unlock along of, for you you I thinking Or the value look that? is couple A part

Yes, Nathan.

from cetera. for a the valuations, still materialize us process we in time and close, things likely early see everything various et it’s the So, now to proceeds few to and of between narrowing on the in need

intend de-lever we this to the we down that morning. bottom discussed So, of to what I’d reiterate end the is range

would piece be X.Xx. be to one X.Xx of it. So that That’d

begin would organic investment other to our The look aggressively more at to be opportunities.

to his increase team looking And our NPD really and efficiencies. at opportunities team in in there plans, current be, funnels, that. and a plant increase Dwight will investments looking the in operational to at return Ty then are make capacity, So, shareholder

anything So to share again, yet, repurchases, as continue time. those different we to a those we’ll on haven’t evaluate on the from few we landed are get dividends, the table, that and closer special but avenues

But pruning your don’t focus. company are this further some is I businesses I Okay. more vision those that think future? there an about some that area we listen for we at? even Marc, here process probably this of that discussion the the in portfolio to narrowly in to here portfolio probably fit focus, of Ryan, you and with see future And in something there know you solutions that is into guys, what the looking the more talk specific could with talk on about product of you’re still from of on that potential that are. when want ongoing to that businesses some the focus you kind lines I solutions that’s maybe process don’t Is to

mean, point things discussed Good that is this Nathan. getting And Yes. culmination the great call all historically. we’ve on of our the position. years a X question, the in is a to work and we’re I over last this

that move capital in We’re we’re all look healthy be ROIC strategy capital, part our And high we’ve deployment, opportunities. and reset, inorganic going And we’ll as mentioned really company deploy for to things and of really a of position. to that the resetting margin part to in forward. a profiles the the as capacity

great three to space. want want be out continue will there we some acquisitions where we definition. fit are all market brands maybe be we’ll two, number build process active to divestitures. cases, solutions have they we but and in now, don’t to disciplined as the that of part in us, including quite look a of that In process, great at global stewards are number we mention this for M&A products the I platform. right defined we’ve like and many that what got capital. very possibly So, and options that are, is good And and we additional But out investor

we’re they they’re so, us, very doing and now. are And part of right valuable to a good what

I for you Jaime to did and to dividend. have a pay I more intend in one split think a as prior maybe SPX guys just guess the Marc did for and well, this that dividend, pay And said always run, long you

much dividend the here? be Should get maybe more now some point balance in to or going a getting businesses sheet the are XX certainly You’re does with position much we predictable. months initiated expecting, be so, a that better that at next into

I’ll Nathan, table. good tell it’s question. the on certainly that you

We’re talking about it.

of play I strong in are grow the I’d side here, investments out deploying at right but inorganic the disciplined unfold that what is to process opportunities the and what see see to has way look that at time. we think a business markets desire organic let capital where returns. grow in within the would by There a prefer very way on our be,

actively the we think make we that we of, that what’s in are really understand see and thinking kind need then, and But to sure to about I months the so make fully position and next time. And X out at M&A it. decision markets play the available XX

is one we’re the And generating be would great to really thing add flows. Yes. that, going Nathan, to I cash that

the So, high market valuations at are in multiples. still right for now pretty acquisitions

and Vusa have and what with a ago. have opportunity. are don’t accelerating. left even be taking going And Ryan year who look organic so to a disciplined But of at the about that us investment lot very are again, that cash we that, assessment Mlingo, with to of programs if we’re team available in do we’re inorganic in And his absence an opportunities the we going joined a have markets, in

now. reset we’ve kind for So that company of going all where forward This that really us us and to and us would this the been have we is to put next that’s dividends this all why repurchases to the the sense made and position a doing journey of so the options the flexibility. in great part tremendous exclamation to about work point shareholders, on be looking for great at leaves the and are step and with returning two which

for Thanks and again. the Great. color congrats

I decision. think it’s great a

Thank it, you. Appreciate Nathan.

Barry with Buckingham comes question next Your the from Research. of line Robert

line open. Your is

Hi, guys. Good morning.

Robert. morning Good

Robert. Good morning

Echo the congratulations.

sales half outlook similar to or was even second essentially the maybe does before, it what So a little better?

first second In unchanged previously we I to guided. think general terms, would really half what to be it’s

orders Got to order planning either you’ve same back as what in the was or it. are I revenue curious occur kind of to But the before half keep kind have of it acceleration seen since I’m guess, line? the already decelerated, the on

a made good in It’s we comments in to that are are Yes. booked healthy, those expect and that around logs not the which front in our were question of, the we being booked participate back kind lumpy healthy, we would markets and to confident QX. it, orders be QX goes that

So, would quarter watch-and-see as us to be for half to second relates tell order volume intake I in and the QX is going how you here assumptions. the materializes it see

orders is lower project-related to are to more are said pump the there we front would of the we’re Energy lower businesses healthy in quarter mentioned teams if in expecting that we that, and could towards we Beverage the I shortfall businesses Robert, valve some part But came the But as the business. the expect well and on logs level one in from of potential as defined. we project-based our orders and a start expected, the the to counting indications that I’d and what carry were and were the in those is not Power to margins, to prepared progress as our QX way And and or part of Food grow we’ve having that, the start mean, of our about up. everyone lines, up, kind the to big sequentially, order single-digit invest to range. the also next Yes. product from range highest really of intake remarks, aggressively And that our we XX% from be end again, quarter. I in again, the this of And thing which pick expect, the miss the add low in of the remind early recover. orders the first were and over

out revenue some pickup And in of we’ll markets. expect projects in So, momentum to QX these that here some Industrial in there there, successful year can be ramp. especially break we is be the second positioning and loose to, of the we get still to the some the with half if ourselves

I are is kind what was that’s uncertainty saying? so that I it. mean alleviated will of mean and start the again? customers is just Got that now flowing orders the macro and it there some

Yes.

bit business, that across we are part I sometimes. kind it’s kind going the pleased forward. on think grow release – of up them QX will product that aggressively are the Asia-Pacific. part anticipating into some time we’re in in pumps about in did of there things what are that and And looking look at valves coming bit and lines of category reiterate, and business are at can a customers P&E holding these that we be were were continue slower were well is mentioned, projects of of and out I’ll of a the quarter-to-quarter but primarily that to them year, capital. at lines the when for again, for last of growth still really they And a indications again, QX, move really of look profile a been all say they and here the a but systems I to little a some looking and that’s at they industrial as the some difficult there’s We on product sequentially. lumpy, But are kind of that are a I’m to we X-month just bit like block projects most

it. Got

what you of that just pro like target that forma? the EBITDA EBIT is about sale? pro lower, XXXX, You margin this On does is it so for talked the like to the XX% answer, feels look but what kind had, that asked but let you forma margin, XX% for planned

Yes.

streamlining kind as the So, EBITDA to of XX going is next we build it I And are. probably going we And think be cost our a flow XX for the is few of growth new through. savings which few business of the balanced remaining have to to about of the we months said, – a there’s be be the margins. that to mid-teens the to talked about restructuring that that to way the that to also we’ve will reorienting sure months business we’re a that that things company then product here items, to some is get would take will functions, think carryover making and size that

– at then, need between now to prepared at we in off the to we information mid-teens execute kind as additional of kind the point, provide activities XXXX, the far we’re move and talk margins that end and being EBITDA to out that forward. this So, the of we’ll of

Got mean, have you it. I about – X I think

Sorry?

But in weaker as now to going it it well. I removing a right? that’s say points implies X the is business, tracking EBIT about EBITDA think happening though D&A, was even sounds So, XX, just of have is XX. Remainco feels is I lower margin you if like it you’re the XXXX, like margin

it is work us XXXX. as looks to relates EBITDA state Ryan the to to Stewart the mid-teens I – and help margins let continue through and Robert, future can of P&L the and tie think all end at What models I off to work Yes. would the suggest, the various

enough. thanks Great, Fair guys.

Thanks, Robert.

of question comes with the from Global. Walter Liptak Seaport Your next line

open. is line Your

you thanks. the morning, of congratulations ahead I’ll that’s everyone. to Good Hi, say on big transformation you.

appreciate I that. Walter, Hi,

ask – and businesses or transaction? of as one have about thinking but series bundles wanted talked of going apologize, divestitures, are this transactions I you segment in to so or the may just I the whole a you of this about

the because we do process types go the Energy, which for sits care our except that line applications. segment we that currently Bran+Luebbe fits brand, with Bran+Luebbe metering product into pump personal Power and industrial that into Walter, metering in the well and pumps believe solution of whole space it’s different the

Okay, expect for okay. with what can you should we And us timeframe? is that there or a for this a calendar share

Yes.

process we these bit at say just the would B&P is And is what as to the tough we underway. efforts process. pinpoint, the will supporting the that process started things little we and initiated know, We say but is have this I a point. have are

an discontinued And do in are perspective, to a allowed operation the financial Okay. you from accounting when statements?

when was Yes. management we to operations. of are that discontinued of to under a a GAAP features the within month that made decided has the Walt, actively as are and this And be into go need assets sale, A will year. the which expect important U.S. in there so pursue requirements decision few marketed most them to April. to then close

need see at discontinued time, process, sure the business of put course of that and what really into transaction with make we’re the the of that to progress as I probable the a and QX we’ll over So, develop it timing think would expected operations. we be the to it valuation from comfortable relates the

any there to it. post maybe last Thank corporate a one, be And will divestiture? got you. Okay, the changes expense

part Yes, identified to relate of the Walt, that a that would we corporate expect the savings cost line. we’ve would

to teams of solutions and our done plans advisors add that, the and new work, assess structure support process during our will used good months, gotten course what forward. we’ve would some the cost X across I on And including of front like. Yes, good last we’ve of just the a have cost our external lot a lot business to look going

starting isn’t something this we’re So, from scratch.

quite foundation as those some the some to laid for the time. second start into the And ready move on we’ve executing half I initiatives mentioned, be of we we’ll As of for this year.

there launch the margin that the expansion are towards we the to process X% identified again, so be XXXX. exit and to we get X% ready plans time the by So, we’ll

Okay.

in versus And geographic good. geographic just project to about, region? that one it talked then me. been you’ve I able a Sounds more lumpiness on a lumpy you it has Europe, for Asia U.S. if analyze The like been wonder has some last or basis,

Walt. a it’s question, Yes, good

North So, primarily American our a business valve is business.

business, that’s lumpiness when So, see midstream our business. American valve North we a in

don’t are we’re past now, a that years again, if couple But our anticipate And of there see in here out slower. capacity we of QX. and number consistent over very did midstream been the pipeline bit are get that has M&J expecting oil expand and with the changing of Permian. out to we projects recovery So, valve business to healthy valve the frontlogs we look that

good be lot can the of a business, bit valve again, a lumpy. So, activity in

So that’s American a North view.

pump large so, didn’t a in And associated in part But those the in we business, frontlogs projects, orders QX. slower in Pumps, some But is in our emphasis ClydeUnion pump are again, market. on and QX business it’s Beverage across then large has our European North repeat also Our Europe big Food Europe. ClydeUnion with healthy Asia-Pacific. in bit pumps, project-based of and and and U.S. again, America for been there and ClydeUnion, had a

intake order in So, as systems some sequentially business there specifically slower we China. for in pretty intake QX the good saw

bit would it’s been and that kind I Asia-Pacific systems, been and of of kind up then sum a is Power North and more Energy, related. in and So, in that Europe America it’s Beverage Food for

Okay, great.

thank you. Okay,

Thank you.

question Research. the next of Coe Wolfe comes Nigel from Your line with

open. is line Your

guys. is Bhupender for here Hi, Nigel. This good morning,

morning. Hey, good

Good morning.

which you’re improvement leading on be Thanks. – that thinking volume kind you XXX about half. Any Hey, expecting about bps buckets, so here? is know expectation we Could second be the the of versus some margin first half first question, of the would big focus wanted improvement which I in the other just talk like to top-line. to – which big should buckets the just on

expect spot QX. up the to that here See orders move to the revenue from progression HX, at we be story through mid-single-digits thanks. really of Yes, the that’s on of looking HX do and you’re

that are pricing success in the place. buckets largest price. from coming other put some we’ve had in we’ve The mentioned that We actions

product continue We as and of price where and on to are a expand inflation. we backlog the margin see

bit We working that performance is initiatives performance. off their and in then a systems be orders and improve way on that around volume, –I’m HX saying HX. are have mix half is in that improved kind in QX in of factory would of second also in the bit sorry, of some And the his HX the that I assumptions that is various leverage of some factory also team with to little Ty to have a the that dry wrap much the backlog from place

then As minimis. as XXXX. will be seen large we de lines in back single-digits we higher half a aggressively of this the half we’ve second here also the have And reminder, we low that this grow those booked those first get margin year, systems product in were And up into the that some of year.

and margins. in will going the through restructuring split was we which We’re QX see year accounting some to have improved between announced the XXXX. quarter then And last this QX partially revenue, it of coming of actions would that savings those and lastly, the be that from of of

it. Got you. Okay. Thank

question was good the a of on line. XQ the corporate rate rest Is run other the actually The year? for

question could you I’m sorry, please? the repeat

a is the corporate, On the corporate, rest rate $XX run like year? that the million good of for

deal-related adjusted our carving In guidance, Bhupender, we’re any out fees.

I’d it’s $XX good million, and adjusted corporate $XX that think of QX on of the and reported model to So, the corporate was million, kind models, $XX basis of I in expense balance for $XX in our million say expense adjusted a place year. it is million the between for

terms mean, be talked you would asset kind on pretty a portfolio? Okay. what in completed conversation holes company? markets? And growth Got the looking of portfolio, new you How kind here. have inorganic now thinking think Any would like I be like or transaction the over about right have cover of your to some at we this a which add – that lastly, place time. here with Remainco good product should in it. you to is around – portfolio you in of on you which to Any in

sure. Yes,

those we’re been chemical look so and Beverage and industrial his would team the with that’s And micro assessing, we nice spaces the a and and Pharmaceutical. we’re start segments. solution processing process close do in we product our verticals core as let’s current opportunities the sanitary, into, are have been to to on, first point, to managers to product fits and to serve spaces. sanitary then we In competencies to our we our Ryan that identify core a engineering starting space nice industrial, But Food that within both and be in we going have say, working management. look in that nice and where business our So the and things operations and close core in capabilities can our and leverage a our foremost, at in focused would so, think

look the be return Again, So, to because that at those put for would are what and assessing. be of pretty And looking of the be again opportunities. be us that prudent cash the we capacity the tend process, high is capital, good steps and excited going sheet we’re in I we balance company, stewards about reemphasize that to we’ll first that to taking the and shareholder strength position. in have great a want flows that

Okay. lot. Got a it. Thanks

You bet.

from question line Mitchell of Julian the next Your with Barclays. comes

line Your is open.

for Julian. Makishi Jason is this guys, on Hi

Hi, good morning.

morning. Good

less segment late down little in in either to seems in in came it just it, a came the it since in more perspective caused or there revise – saw how light QX seems you – trended that specifically quarter however that you you the earnings it kind it terms to of a earnings, light? expectations. at from like put looking would or a everything anything if as Just top-line since of bit Q Was little want bit you expectations of margin since thought QX in profit

of No, QX. I there’s What I which that at anything credit difference to will way of the wouldn’t give by say where up a developed the development that quarter the QX, orders. the course margin there of end order think to would over the suggest quarter, go profile to ended – that we in appropriately was the and guided I we’re in back

operating line, the profit a quarter QX fairly you’ll to on least at QX. what think I see So, from consistent

expect the XX the performance to to in flat be near-term QX. pretty days, next in So, we’d

follow-up, weaknesses sort to a of to or out being quick QX X running profile call here. broad-based Great. earnings there know sort the Is segments out in because somewhat of time guidance And margin are there? I’m QX just of similar areas I all and strength of as and of across

Yes.

in it’s think strong are QX segment, wise. performance there and have consistent, both to to then made that had we pretty our strength reference I really order developed. and some Marc intake industrial pockets that performance QX.,

takes, I there’s puts but the think whole, it’s fair about So, and on I think some – flat. assume on to it’s

Great. Thank you very much.

you. Thank

of Your next Dray Deane Markets. RBC the Capital from with question comes line

open. Your line is

Krill Deane. Andrew for morning. Good This is on Thanks.

a hydraulic drive. become P&E – planned the a going part simplification your the bigger similar of of also technologies and your with So, Remainco competitors so, divestiture, to one undergoing is business, is

So, historically on the pretty competitive focus a in Thanks. should can and good you as a there this changes to any expect been good be comment field growth we area it’s business? and margin playing

Yes.

don’t of for at a several now what the So, and Again, business in number always other head-to-head with would us. anticipate any We’ve in product as as and I industry the look business really mentioned, change, of create market competed that, kind good X our I doing environment. still in competitive there. significant kind lines spot would we’re it’s that position players of I in are the the our hydraulics the

then just tariffs your I a doesn’t the increase I know any there any or guys solid with quarter dynamic it And seem like to pull-forward you of follow-up, but mean, it. in quick Got sales it, saw was related was that?

not as reasons No, aware meaningful tariffs. pull-forwards of for such any we’re

you. great. Okay, Thank

you. Thank

thank for call be day is Stewart follow-up everybody on to available Ryan. answer the want today. questions. this throughout us to will any I the Okay, joining

we well. Thank look joining to forward reach you. us me to can out You as and you the call. next Appreciate

everyone. Thanks,

you. Thank

day. your wonderful you a for This and concludes participation conference. have today’s Thank

all may You disconnect.