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SPX's CEO Discusses Q1 2012 Results - Earnings Call Transcript

With ClydeUnion, we now have a foundation to build out the power and energy platform within our Flow Technology segment. The integration is well underway and continue to be very encouraged by its growth potential. Later on the call, Jeremy will provide details on ClydeUnion's Q1 performance and the status of the integration.

In Q1, we also acquired Seital, a leading global supplier of separation technology for a purchase price of $28 million. Separation technology is an important component in food and beverage processing that we had previously outsourced. With the acquisition of Seital, we now have in-house capability to integrate separators into our system designs. This acquisition also enables us to participate in the aftermarket for this product. Additionally, we believe our global flow resources and capabilities significantly enhance Seital's growth opportunities.

Our Power Transformer business is on track to ship the first unit out of its expanded large power facility in the second quarter. We expect to see production at this facility ramp up as the year progresses. Our joint venture with Shanghai Electric is off to a good start. It booked its first order in Q1, and we're seeing very strong quoting activity in Q2 for dry cooling systems in China.

The sale of Service Solutions is pending regulatory approval. We expect this transaction to be completed near the end of Q2 or in the third quarter, and we've reclassified the business to discontinued operations in Q1.

From a capital allocation perspective, we completed the first phase of our share repurchase program and anticipate executing the remainder of the program in 2012 after the sale of Service Solutions is completed. The strategic actions we're executing this year are directed at narrowing our focus, improving our earnings potential and strengthening our financial position. By the end of this year, we're projecting to have over $1.4 billion of liquidity that will provide us with significant flexibility to generate shareholder value.

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