Global X U.S. Cash Flow Kings 100 ETF

Q3 organic orders increased 9% and organic revenue increased 3% year over year. Adjusted operating income margin was 12.9%, up 160 basis points year over year. Adjusted free cash flow was $7 million in the quarter. Precision Solutions organic orders rose 19% and organic revenue rose 2%; Nutrition & Health organic orders were relatively flat and organic revenue rose 5%. For the full year, management now expects organic revenue to grow high single digits and operating margin to be approximately 12.5%, up 350 basis points versus 2020. For Q4, organic revenue is expected to be modestly lower year over year, completed acquisitions are expected to add 5% to top line, and operating margin is expected to be about 14.5%, up approximately 450 basis points year over year.

Marc Michael said Q3 reflected improving markets and execution of the company’s 80/20 strategy, with better mix, price realization, and structural cost actions driving record margins. He emphasized that revenue is shifting toward higher-quality categories, with grow-category revenue rising to 40% of sales from 36% at the start of the year, and said the company believes it is on pace to exceed its original three-year targets. His tone was confident and constructive, while acknowledging that supply-chain disruption and inflation still remain in the near term.

Jaime Easley framed Q3 as a quarter of operating leverage and improved mix, highlighting 12.9% adjusted operating margin, 9% order growth, 3% organic revenue growth, and $7 million of adjusted free cash flow. He said free cash flow was below the anticipated conversion rate because the company reinvested in working capital, including roughly a $10 million inventory build, and because of timing in the Nutrition & Health systems business. He also noted SG&A is expected to fall to around 23% for the full year from 25.5% last year, and that Q4 margin improvement should come from price realization, mix, and about 30 basis points of SG&A improvement.

Analysts focused on how SPX FLOW is still tracking toward its 2023 margin targets despite inflation and supply-chain pressure, and management pointed to stronger pricing, mix shift toward higher-margin categories, and improving factory productivity as the main offsets. Questions also centered on cash flow, where management explained the working-capital drag as inventory investment and systems-business timing, and on M&A during the strategic review, where Marc Michael said the company is still running its capital-deployment playbook and reviewing opportunities that fit its size and return criteria. Another key thread was China and CapEx: management said China remains healthy, especially in Nutrition & Health systems and selected Precision Solutions lines, and said higher CapEx is tied to productivity, capacity, and growth investments rather than a normalized run rate.