SPX FLOW, INC.
FORWARD-LOOKING STATEMENTS
Some of the statements in this document and any documents incorporated by
reference, including any statements as to operational and financial projections,
constitute "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
statements relate to future events or our future financial performance and
involve known and unknown risks, uncertainties and other factors that may cause
our businesses' or our industries' actual results, levels of activity,
performance or achievements to be materially different from those expressed or
implied by any forward-looking statements. Such statements may address our
plans, our strategies, our prospects, or changes and trends in our business and
the markets in which we operate under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" ("MD&A") or in other
sections of this document. In some cases, you can identify forward-looking
statements by terminology such as "may," "could," "would," "should," "expect,"
"plan," "anticipate," "intend," "believe," "estimate," "predict," "project,"
"potential" or "continue" or the negative of those terms or similar expressions.
These statements are only predictions. Actual events or results may differ
materially because of market conditions in our industries or other factors, and
forward-looking statements should not be relied upon as a prediction of actual
results. Among other factors that may affect future performance are: the impact
of the global outbreak of COVID-19 and governmental and other actions taken in
response; cyclical changes and specific industry events in the company's
markets; changes in anticipated capital investment and maintenance expenditures
by customers; availability, limitations or cost increases of raw materials,
component products and/or commodities that cannot be recovered in product
pricing; overruns, the incurrence of delays, penalties or liquidated damages
with respect to long-term fixed-price contracts; international economic,
political, legal, accounting and business developments adversely affecting the
company's ability to do business in emerging markets; ability to identify
acceptable strategic acquisition targets; uncertainties surrounding timing,
successful completion or integration of acquisitions and similar transactions;
inadequate performance by third-party suppliers and subcontractors for
outsourced products; defects or errors in current or planned products; potential
labor disputes, extreme weather conditions and natural and other disasters;
compliance costs associated with environmental laws and regulations; threats
associated with and efforts to combat terrorism and cyber-security risks; global
competitive market conditions, including global reactions to U.S. trade
policies, and resulting effects on sales and pricing; and global economic
factors, including currency exchange rates, difficulties entering new markets
and general economic conditions such as inflation, deflation, interest rates and
credit availability. In addition, management's estimates of future operating
results are based on our current complement of continuing operations, which is
subject to change as management selects strategic markets.
All the forward-looking statements in this document are qualified in their
entirety by reference to the factors discussed herein and under the heading
"Risk Factors" in our 2020 Annual Report on Form 10-K and in any other documents
subsequently filed by us under the Exchange Act that describe risks and factors
that could cause results to differ materially from those projected in these
forward-looking statements. We caution you that these risk factors may not be
exhaustive. We operate in a continually changing business environment and
frequently enter into new businesses and product lines. We cannot predict these
new risk factors, and we cannot assess the impact, if any, of these new risk
factors on our businesses or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those projected in
any forward-looking statements. Accordingly, you should not rely on
forward-looking statements as a prediction of actual results. We undertake no
obligation to update or publicly revise any forward-looking statements to
reflect events or circumstances that arise after the date of this document.
EXECUTIVE OVERVIEW
Impact of the COVID-19 Pandemic
As further discussed below, the COVID-19 pandemic had an adverse impact on our
condensed consolidated financial results for the three months ended April 3,
2021 . These adverse impacts are expected to continue in future quarters of 2021,
and possibly longer, but we are unable to determine the extent, duration, or
nature at this time. Although certain of our product lines (e.g., shorter-cycle
product lines within our Industrial reportable segment) have been impacted more
than others in our portfolio, we believe that our diverse set of products, along
with our strong balance sheet position and available liquidity, position us well
to mitigate further potential adverse impacts of the COVID-19 pandemic. For
example, because we serve customers which produce food, beverages, personal care
items, cleaning products, pharmaceuticals, and specialty chemicals, and serve
critical infrastructure and industrial enablement functions, a majority, but not
all, of our products, services and operations have been classified as
"essential" under various governmental orders restricting business activities
27
--------------------------------------------------------------------------------
implemented in response to the COVID-19 pandemic. While we have temporarily
closed certain of our offices and engineering, service and manufacturing centers
over the past year, and may be required to close additional facilities in the
future in response to governmental orders, other COVID-19 pandemic
safety-related concerns or in response to market conditions affected by
COVID-19, our manufacturing facilities have not experienced significant
interruptions in operations to date.
In terms of liquidity, as of April 3, 2021 , we had over $380.0 of cash and
equivalents on hand and, as discussed in Note 10 to the accompanying
condensed consolidated financial statements, approximately $490.0 of borrowing
capacity under our revolving credit facilities and no debt repayments due under
primary debt obligations until June 2022 . During the past year, we have taken
actions to manage costs and cash flows, including reducing discretionary
spending, and will continue to assess the actual and expected impacts of the
COVID-19 pandemic and any requirements for further actions.
Discontinued Operations
On May 2, 2019 , the Company announced that its Board of Directors had
initiated a process to divest a substantial portion of the Company's former
Power and Energy reportable segment, excluding the Bran+Luebbe product line
(collectively, the "Disposal Group "). In connection with this announcement and
the continued development of the divestiture process thereafter, we reported the
Disposal Group as "held-for-sale", and as discontinued operations, initially as
of the end of our second quarter of 2019.
In November 2019 , we entered into a Purchase and Sale Agreement (the "Sale
Agreement") with an affiliate of Apollo Global Management, LLC (the "Buyer"),
pursuant to which the Company agreed, indirectly through certain of its
subsidiaries, to sell the businesses reflected as discontinued operations in the
accompanying condensed consolidated financial statements to the Buyer for a
gross purchase price of $475.0 (the "Transaction"). The gross purchase price of
$475.0 was subject to (i) reductions based upon the level of certain deductions
of the Disposal Group at the closing date, and (ii) certain adjustments based
upon the level of net working capital, cash and debt of the Disposal Group at
the closing date. The deductions included, for example, components of the
"Contract Liabilities" and certain other current and long-term liabilities of
the Disposal Group , as well as deductions for budgeted but un-incurred capital
expenditures and other business infrastructure costs measured over periods
defined in the Sale Agreement, but in all cases which expired at the closing
date. On March 30, 2020 , we completed the sale of substantially all Disposal
Group businesses and received proceeds from the Buyer of $406.2 , based on an
estimate of certain adjustments to the gross purchase price as of the closing
date and as discussed further above and, to a lesser extent, certain fees.
Unless otherwise indicated, amounts provided in MD&A below pertain to
continuing operations only.
Our Business
SPX FLOW operates in two reportable segments: the Nutrition and Health segment
and the Industrial segment. During the first quarter of 2021, the Company
renamed its former "Food and Beverage" segment to the "Nutrition and Health"
segment. Accordingly, all current and comparative period financial information
for the segment has been presented as the Nutrition and Health segment in this
MD&A. Other than the change in name, there were no changes to the segment and
there has been no change to prior period financial information of the segment.
Based in Charlotte, North Carolina , SPX FLOW innovates with customers to help
feed and enhance the world by designing, delivering and servicing high value
process solutions at the heart of growing and sustaining our diverse
communities. The product offering of the Company's continuing operations is
concentrated in process technologies that perform mixing, blending, fluid
handling, separation, thermal heat transfer and other activities that are
integral to processes performed across a wide variety of nutrition, health and
industrial markets. SPX FLOW had approximately $1.4 billion in 2020 annual
revenues, with approximately 36%, 37% and 27% from sales into the Americas , EMEA
and Asia Pacific regions, respectively, and has continuing operations in more
than 30 countries and sales in more than 140 countries.
Our product portfolio of pumps, valves, mixers, filters, air dryers, hydraulic
tools, homogenizers, separators and heat exchangers, along with the related
aftermarket parts and services, supports global industries, including nutrition
and health, chemical processing, compressed air and mining. From an end-market
perspective, in 2020, approximately 47% of our revenues were from sales into the
nutrition and health end markets and approximately 53% were from sales into the
industrial end markets. Our core strengths include expertise in rotating,
actuating and hydraulic equipment, a highly skilled workforce, global
capabilities, product breadth, and a deep application knowledge that enables us
to optimize configuration and create custom-engineered solutions for diverse
processes.
28
--------------------------------------------------------------------------------
The following summary describes the products and services offered by our
reportable segments:
Nutrition and Health: The Nutrition and Health reportable segment operates in a
regulated, global industry with customers who demand highly engineered, process
solutions. Key demand drivers include dairy consumption, emerging market
capacity expansion, sustainability and productivity initiatives, customer
product innovation and food safety. Key products for the segment include
homogenizers, pumps, valves, separators and heat exchangers. We also design and
assemble process systems that integrate many of these products for our
customers. Key brands include APV, Gerstenberg Schroeder, Seital and Waukesha
Cherry-Burrell . The segment's primary competitors are Alfa Laval AB, Fristam
Pumps, GEA Group AG, Krones AG, Südmo, Tetra Pak International S.A. and various
regional companies.
Industrial: The Industrial reportable segment primarily serves customers in the
chemical, air treatment, mining, pharmaceutical, marine, infrastructure
construction, general industrial and water treatment industries. Key demand
drivers of this segment are tied to macroeconomic conditions and growth in the
respective end markets we serve. Key products for the segment are air dryers,
filtration equipment, mixers, pumps, hydraulic technologies and heat exchangers.
Key brands include Airpel, APV, Bolting Systems, Bran+Luebbe, Deltech , Hankison,
Jamix, Jemaco, Johnson Pump , LIGHTNIN, POSI LOCK, Power Team, Stelzer, Stone and
Uutechnic. The segment's primary competitors are Alfa Laval AB, Chemineer Inc. ,
EKATO , Enerpac, IDEX Viking Pump, KSB AG, Lewa, Milton Roy , Parker Domnick
Hunter , Prominent and various regional companies.
Summary of Operating Results
Non-GAAP Measures - Throughout the following segment discussion, we use organic
revenue growth (decline) to facilitate explanation of the operating performance
of our segments. Organic revenue growth (decline) is a non-GAAP financial
measure, and is not a substitute for net revenue growth (decline). Refer to the
explanation of this measure and purpose of use by management under "Results of
Continuing Operations-Non-GAAP Measures."
The financial information discussed below and included in this Quarterly Report
on Form 10-Q may not necessarily reflect what our financial condition, results
of operations and cash flows may be in the future.
The following summary is intended to provide certain highlights of the
discussion and analysis that follows (all comparisons are to the related period
in the prior year):
Revenues - For the three months ended April 3, 2021 , revenues increased $74.3
(25.7%). The increase in revenue was due primarily to (i) an increase in organic
revenue and, to a lesser extent, (ii) the weakening of the U.S. dollar against
various foreign currencies during the period and (iii) revenues associated with
businesses acquired in the third quarter of 2020 and first quarter of 2021. The
increase in organic revenue was due primarily to higher volumes of revenue from
(i) Nutrition and Health segment systems projects, components and aftermarket
products, and (ii) broad-based strengthening across most short-cycle Industrial
segment product lines, attributable primarily to increased demand due to reduced
adverse effects of the COVID-19 pandemic.
Income before Income Taxes - Income before income taxes increased $28.3 in the
three months ended April 3, 2021 . The increase in pre-tax income for the three
months ended April 3, 2021 , compared to the respective 2020 period, included
primarily the effects of an increase in segment income and, to a lesser extent,
a gain on an investment in an equity security and reduced interest expense,
partially offset by the effects of an increase in restructuring and other
related charges
Cash Flows from Operations - For the three months ended April 3, 2021 , cash
flows from operations increased to $5.1 from $(32.7) primarily as a result of
increased cash flows from higher segment income and the effects of improvements
in working capital management realized during the 2021 period.
RESULTS OF OPERATIONS
The unaudited information included in this Quarterly Report on Form 10-Q should
be read in conjunction with our annual consolidated financial statements
included in our 2020 Annual Report on Form 10-K. Interim results are not
necessarily indicative of results for a full year. We establish actual interim
closing dates using a fiscal calendar, which requires our businesses to close
their books on the Saturday closest to the end of the first calendar quarter,
with the second and third quarters being 91 days in length. Our fourth quarter
ends on December 31 . The interim closing dates for the first, second and third
quarters of 2021 are April 3 , July 3 , and October 2 , compared to the respective
March 28 , June 27 , and September 26, 2020 dates. We had five more days in the
first quarter of 2021 and will have six fewer days in the fourth
29
--------------------------------------------------------------------------------
quarter of 2021 than in the respective 2020 periods. It is not practicable to
estimate the impact of the differential in number of days on our changes in
revenues on a quarter-over-quarter basis.
Cyclicality of End Markets, Seasonality and Competition - The financial results
of many of our businesses closely follow changes in the industries and end
markets they serve.
In our Nutrition and Health reportable segment, system revenues are highly
correlated to timing on capital projects, which may cause significant
fluctuations in our financial performance from period to period. Fluctuations in
dairy commodity prices and production of dairy related products, particularly
those aimed at serving the China market, can influence the timing of capital
spending by many end customers in our Nutrition and Health reportable segment.
Although our businesses operate in highly competitive markets, our competitive
position cannot be determined accurately in the aggregate or by segment since
our competitors do not offer all the same product lines or serve all the same
markets. In addition, specific reliable comparative figures are not available
for many of our competitors. In most product groups, competition comes from
numerous concerns, both large and small. The principal methods of competition
are service, product performance, technical innovation and price. These methods
vary with the type of product sold. We believe we compete effectively on the
basis of each of these factors. See "Executive Overview - Our Business" for a
discussion of our competitors.
Non-GAAP Measures - Organic revenue growth (decline) presented herein is defined
as revenue growth (decline) excluding the effects of foreign currency
fluctuations and business acquisitions which occurred in the third quarter of
2020 and first quarter of 2021. We believe this metric is a useful financial
measure for investors in evaluating our operating performance for the periods
presented as, when read in conjunction with our revenues, it presents a tool to
evaluate our ongoing operations and provides investors with a metric they can
use to evaluate our management of assets held from period to period. In
addition, organic revenue growth (decline) is one of the factors we use in
internal evaluations of the overall performance of our business. This metric,
however, is not a measure of financial performance under accounting principles
generally accepted in the United States ("GAAP"), should not be considered a
substitute for net revenue growth (decline) as determined in accordance with
GAAP and may not be comparable to similarly titled measures reported by other
companies.
30
--------------------------------------------------------------------------------
The following table provides selected financial information for the three months
ended
Three months ended
April 3, 2021 March 28, 2020 % Change
Revenues $ 363.8 $ 289.5 25.7
Gross profit 128.5 101.1 27.1
% of revenues 35.3 % 34.9 %
Selling, general and administrative 90.4 85.2 6.1
% of revenues 24.8 % 29.4 %
Intangible amortization 3.0 2.8 7.1
Asset impairment charges - 1.9 (100.0)
Restructuring and other related charges 9.2 2.6 253.8
Other income (expense), net 6.3 (1.5) 520.0
Interest expense, net (4.9) (8.1) 39.5Income (loss) from continuing operations before income taxes
27.3 (1.0) *
Income tax benefit (provision) (8.3) 0.9 *
Income (loss) from continuing operations 19.0 (0.1) *
Loss from discontinued operations, net of tax (0.3) (5.1) 94.1
Net income (loss) 18.7 (5.2) *
Less: Net income attributable to noncontrolling
interests 0.1 0.1 -
Net income (loss) attributable to SPX FLOW, Inc. 18.6 (5.3) *
Components of consolidated revenue growth:
Organic increase 18.5
Foreign currency 5.2
Business combinations 2.0
Net revenue increase 25.7*Not meaningful for comparison purposes
Revenues - For the three months endedApril 3, 2021 , the increase in revenues, compared to the respective 2020 period, was due primarily to (i) an increase in organic revenue and, to a lesser extent, (ii) the weakening of theU.S. dollar against various foreign currencies during the period and (iii) revenues associated with businesses acquired in the third quarter of 2020 and first quarter of 2021. The increase in organic revenue was due primarily to higher volumes of revenue from (i) Nutrition and Health segment systems projects, components and aftermarket products, and (ii) broad-based strengthening across most short-cycle Industrial segment product lines, attributable primarily to increased demand due to reduced adverse effects of the COVID-19 pandemic. See "Results of Reportable Segments" for additional details. Gross Profit - The increases in gross profit and margin for the three months endedApril 3, 2021 , compared to the respective 2020 period, were due primarily to the favorable impact on operating leverage of higher volumes of revenues as discussed above, as well as an improved mix of higher-quality revenue, in both of our reportable segments. See "Results of Reportable Segments" for additional details. Selling, General and Administrative ("SG&A") Expense - For the three months endedApril 3, 2021 , the increase in SG&A expense, compared to the respective 2020 period, was due primarily to the weakening of theU.S. dollar against various foreign currencies during the period and, to a lesser extent, an increase in variable incentive compensation. These increases in costs were partially offset by savings from reductions in discretionary spending. Asset Impairment Charges - Charges for the three months endedMarch 28, 2020 resulted from management's decision within the first quarter of 2020 to discontinue a product line within the Industrial reportable segment. Such charges related to certain machinery and equipment of the segment. 31 -------------------------------------------------------------------------------- Restructuring and Other Related Charges - Charges for the three months endedApril 3, 2021 related to a global cost productivity program initiated during the first quarter of 2021. Such charges related primarily to severance and other costs associated with commercial, engineering and certain operational employees across both segments and across each region in which our segments operate, as well as certain functional support employees across most of our corporate functions. See Note 6 to our condensed consolidated financial statements for further details of actions taken during the three months endedApril 3, 2021 andMarch 28, 2020 . Other Income (Expense), net - Other income, net, for the three months endedApril 3, 2021 was composed of investment-related gains of$5.4 , income from a transition services agreement entered into in connection with the sale of our former Power and Energy segment (the "TSA") of$1.0 , and net gains on asset sales and other of$0.1 , partially offset by foreign currency ("FX") losses of$0.1 and non-service-related pension and postretirement costs of$0.1 . The investment-related gains related to an increase in the net asset value of our investment in an equity security (see Note 15 to the condensed consolidated financial statements for additional details). See Note 3 for additional details regarding theTSA . Other expense, net, for the three months endedMarch 28, 2020 was composed of FX losses of$0.8 , net losses on asset sales and other of$0.5 , and non-service related pension and postretirement costs of$0.2 . Interest Expense, net - Interest expense, net, for the three months endedApril 3, 2021 andMarch 28, 2020 , was composed primarily of interest expense related to our senior notes and senior credit facilities and, to a lesser extent, finance lease obligations and miscellaneous lines of credit, partially offset by interest income on cash and cash equivalents. Interest expense, net, included interest expense of$5.9 and$9.1 , and interest income of$1.0 and$1.0 , respectively, during the three months endedApril 3, 2021 andMarch 28, 2020 . The decrease in interest expense in 2021, compared to 2020, was due primarily to the early redemption of our 5.625% senior notes inAugust 2020 . See Note 10 to our condensed consolidated financial statements for additional details on our third-party debt and Note 3 for additional details regarding our allocation of certain interest expense to discontinued operations. Income Tax Benefit (Provision) - During the three months endedApril 3, 2021 , we recorded an income tax provision of$8.3 on$27.3 of pre-tax income, resulting in an effective tax rate of 30.4%. This compares to an income tax benefit for the three months endedMarch 28, 2020 of$0.9 on$1.0 of pre-tax loss, resulting in an effective tax rate of 90.0%. The effective tax rate for the first quarter of 2021 was impacted by an income tax charge of$1.7 resulting from losses occurring in the quarter in certain jurisdictions where the benefit of those losses is not expected to be realized. The effective tax rate for the first quarter of 2020 was impacted by an income tax benefit of$1.2 resulting from tax return adjustments for certain of the Company's subsidiaries, which was partially offset by an income tax charge of$0.6 resulting from losses occurring in the quarter in certain jurisdictions where the tax benefit of those losses is not expected to be realized. Our future effective tax rate may vary, particularly during the first quarter of each year, based on tax charges or benefits that could result from potential future vestings of restricted stock shares and restricted stock units. Loss from Discontinued Operations, Net of Tax - For the three months endedApril 3, 2021 , the loss from discontinued operations, net of tax, of$0.3 , related to certain trailing costs incurred related to the sale of the Disposal Group For the three months endedMarch 28, 2020 , the loss from discontinued operations, net of tax, of$5.1 , was composed of an income tax benefit of$0.9 on a pre-tax loss of$6.0 . The pre-tax loss included a loss of$8.5 to reduce the carrying value of the net assets of theDisposal Group to our estimate of the net proceeds expected to be realized upon finalization of the purchase price with the Buyer. 32 --------------------------------------------------------------------------------
RESULTS OF REPORTABLE SEGMENTS The following information should be read in conjunction with our condensed consolidated financial statements and related notes. Nutrition and Health
As of and for the three months ended
April 3, 2021 March 28, 2020 % Change
Backlog $ 288.5 $ 251.5 14.7
Orders 172.8 125.2 38.0
Revenues 171.6 137.8 24.5
Income 28.6 19.4 47.4
% of revenues 16.7 % 14.1 %
Components of revenue growth:
Organic increase 19.1
Foreign currency 5.4
Net revenue growth 24.5
Revenues - For the three months ended April 3, 2021 , the increase in revenues,
compared to the respective 2020 period, was due primarily to an increase in
organic revenue and, to a lesser extent, a weakening of the U.S. dollar during
the period against various foreign currencies. The increase in organic revenue
was due to higher volumes of systems, components and aftermarket revenues,
partially attributable to reduced adverse effects of the COVID-19 pandemic.
Income - For the three months ended April 3, 2021 , income and margin increased,
compared to the respective 2020 period. The increases in income and margin were
due primarily to the favorable impact on operating leverage of higher volumes of
revenues as discussed above, as well as an improved mix of higher-quality
revenue.
Backlog - The segment had backlog of $288.5 and $251.5 as of April 3, 2021 and
March 28, 2020 , respectively. Of the $37.0 year-over-year increase in backlog,
$20.3 was attributable to the favorable impact of fluctuations in foreign
currencies relative to the U.S. dollar and $16.7 was attributable to organic
growth across systems, components and aftermarket product lines, partially due
to reduced adverse effects of the COVID-19 pandemic.
Industrial
As of and for the three months ended
April 3, 2021 March 28, 2020 % Change
Backlog $ 276.2 $ 265.5 4.0
Orders 198.7 191.8 3.6
Revenues 192.2 151.7 26.7
Income 21.4 9.4 127.7
% of revenues 11.1 % 6.2 %
Components of revenue growth:
Organic increase 17.9
Foreign currency 4.9
Business combinations 3.9
Net revenue growth 26.7
33-------------------------------------------------------------------------------- Revenues - For the three months endedApril 3, 2021 , the increase in revenues, compared to the respective 2020 period, was due primarily to (i) an increase in organic revenue and, to a lesser extent, (ii) a weakening of theU.S. dollar during the period against various foreign currencies and (iii) revenues associated with businesses acquired in the third quarter of 2020 and first quarter of 2021. The increase in organic revenue was due primarily to increased shipments across the majority of our short-cycle Industrial segment product lines and end markets, primarily associated with reduced adverse effects of the COVID-19 pandemic. Income - For the three months endedApril 3, 2021 , income and margin increased, compared to the respective 2020 period. The increases in income and margin were due primarily to the favorable impact on operating leverage of higher volumes of revenues as discussed above, as well as an improved mix of higher-quality revenue in our short-cycle product lines. Backlog - The segment had backlog of$276.2 and$265.5 as ofApril 3, 2021 andMarch 28, 2020 , respectively. The$10.7 year-over-year increase in backlog was attributable to a$17.3 favorable impact of fluctuations in foreign currencies relative to theU.S. Dollar and an$11.0 increase in backlog associated with acquired businesses, partially offset by a$17.6 decline in legacy operations. The decline associated with legacy operations was due primarily to the timing of large-order shipments over the prior twelve months as well as an overall decrease in the quantity of large orders received during the first quarter of 2021. CORPORATE EXPENSE AND PENSION AND POSTRETIREMENT SERVICE COSTS Three months ended April 3, 2021 March 28, 2020 % Change Total consolidated revenues$ 363.8 $ 289.5 25.7 Corporate expense 14.7 15.5 (5.2) % of revenues 4.0 % 5.4 % Pension and postretirement service costs 0.2 0.2 - Corporate Expense - Corporate expense generally relates to the cost of ourCharlotte, North Carolina corporate headquarters and ourAsia Pacific center inShanghai, China . Corporate expense also reflects stock-based compensation costs associated with corporate employees. The decrease in corporate expense for the three months endedApril 3, 2021 , compared to the respective 2020 period, was due primarily to actions taken to manage costs on a year-over-year basis, including reducing discretionary spending, in response to the ongoing effects of the COVID-19 pandemic. See Note 12 to our condensed consolidated financial statements for further details regarding our stock-based compensation awards. Pension and Postretirement Service Costs -SPX FLOW sponsors a number of defined benefit pension plans and a postretirement plan. For all of these plans, changes in the fair value of plan assets and actuarial gains and losses are recognized to earnings in the fourth quarter of each year as a component of net periodic benefit expense, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis. Non-service-related pension and postretirement costs are reported in "Other income (expense), net."
See Note 9 to our condensed consolidated financial statements for further details regarding our pension and postretirement plans.
34--------------------------------------------------------------------------------
© Edgar Online, source
