Third Quarter Highlights from Continuing Operations:
(Comparisons are to the prior year period)
- Income from continuing operations of $31 million and
earnings per share of $0.95 both increased 19 percent
- Adjusted EBITDA from continuing operations of $66 million
increased 9 percent
- Adjusted earnings per share from continuing operations of
$1.11 increased 16 percent
- Backlog of $689 million and orders of $398 million increased
4 percent and 14 percent, respectively
- Completed the sale of AeroTech on August 1, 2023, realizing
a pre-tax book gain of $588 million
JBT Corporation (NYSE: JBT), a leading global
technology solutions provider to high-value segments of the food
& beverage industry, today reported results for the third
quarter of 2023.
"During the third quarter, we achieved strong margins and
double-digit, year-over-year growth in orders," said Brian Deck,
President and Chief Executive Officer. "The demand environment is
showing signs of improvement in Europe and Asia, and healthier
dynamics in the poultry end markets are expected to translate to
better order activity. Additionally, with the completion of the
AeroTech sale, we have a strong balance sheet and ample liquidity
to continue to execute on our Elevate 2.0 strategic
priorities."
Comparisons in this news release are to the comparable period of
the prior year, unless otherwise noted. An earnings presentation
with supplemental information is also available on the Company's
Investor Relations website at
https://ir.jbtc.com/events-and-presentations/.
Third Quarter 2023 Results
"We continued to deliver solid year-over-year improvement in
profitability as a result of our pricing actions, restructuring
program, and supply chain efforts," said Matt Meister, Executive
Vice President and Chief Financial Officer. "We achieved a
quarterly free cash flow conversion of greater than 100 percent,
and moving forward, we expect that conversion rate to be more
stable as a pure-play business."
AeroTech's financial results were transitioned to discontinued
operations beginning in the second quarter of 2023, and prior
period financial results have been recast accordingly. The below
paragraphs reflect JBT's results from continuing operations.
Third quarter 2023 revenue of $404 million increased 1 percent
year over year driven by 3 percent growth from acquisitions, which
was partially offset by a 2 percent decline in organic revenue.
Income from continuing operations of $31 million increased 19
percent. Adjusted EBITDA from continuing operations of $66 million
increased 9 percent, and the adjusted EBITDA margin of 16.4 percent
increased 120 basis points.
During the third quarter, JBT incurred $6 million of expense and
realized approximately $3.5 million in savings related to its
ongoing restructuring program. Diluted earnings per share (EPS)
from continuing operations of $0.95 increased 19 percent, and
adjusted EPS from continuing operations of $1.11 increased 16
percent. Included in the third quarter 2023 EPS was a $0.09
discrete tax benefit. Orders were $398 million, an increase of 14
percent, and backlog of $689 million increased 4 percent.
JBT generated year to date operating cash flow from continuing
operations of $96 million. Year to date free cash flow was $62
million. As a result of JBT's strong cash flow and the proceeds
from the sale of AeroTech, the leverage ratio at the end of the
quarter was 0.5x net debt to trailing twelve months adjusted EBITDA
from continuing operations.
2023 Outlook for Continuing Operations
JBT is updating and narrowing its guidance for full year 2023
based on the fourth quarter outlook and year-to-date
performance.
Guidance
Guidance
$ millions except EPS
Q4 2023
FY 2023
Revenue growth (year over year)
0 - 4%
4.5 - 5.5%
Income from continuing operations
$39 - $43
$113 - $117
Adjusted EBITDA(1)
$73 - $79
$265 - $271
Adjusted EBITDA margin
16.5 - 17.0%
16.0 - 16.25%
GAAP EPS
$1.20 - $1.35
$3.50 - $3.65
Adjusted EPS(1)
$1.25 - $1.40
$3.95 - $4.10
(1) Non-GAAP figure. Please see
supplemental schedules for adjustments and reconciliations.
For the fourth quarter of 2023, JBT expects to earn interest
income of approximately $2.5 million. Additionally, JBT expects to
incur approximately $1.5 million in restructuring costs, $1 million
in LIFO expense, and $0.5 million in M&A related costs. The tax
rate is expected to be 22 - 23 percent, which is prior to any
discrete items.
Third Quarter 2023 Earnings Conference Call
A conference call is scheduled for 10:00 a.m. ET on Wednesday,
October 25, 2023, to discuss third quarter 2023 results.
Participants may access the conference call through online
registration at https://conferencingportals.com/event/OCZuDEaG. A
simultaneous webcast and audio replay of the call will be available
on the Company’s Investor Relations website at
https://ir.jbtc.com/events-and-presentations/.
JBT Corporation (NYSE: JBT) is a leading global technology
solutions provider to high-value segments of the food &
beverage industry. JBT designs, produces and services sophisticated
products and systems for a broad range of end markets, generating
roughly one-half of its annual revenue from recurring parts,
service, rebuilds, and leasing operations. JBT employs
approximately 5,100 people worldwide and operates sales, service,
manufacturing and sourcing operations in more than 25 countries.
For more information, please visit www.jbtc.com.
This release contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are information of a non-historical
nature and are subject to risks and uncertainties that are beyond
JBT’s ability to control. These forward-looking statements include,
among others, statements relating to our business and our results
of operations, our strategic plans, our restructuring plans and
expected cost savings from those plans, our liquidity and our
covenant compliance. The factors that could cause our actual
results to differ materially from expectations include but are not
limited to the following factors: fluctuations in our financial
results; unanticipated delays or acceleration in our sales cycles;
deterioration of economic conditions; including impacts from supply
chain delays and reduced material or component availability;
inflationary pressures, including increases in energy, raw
material, freight, and labor costs; disruptions in the political,
regulatory, economic and social conditions of the countries in
which we conduct business; changes to trade regulation, quotas,
duties or tariffs; risks associated with acquisitions or strategic
investments; fluctuations in currency exchange rates; changes in
food consumption patterns; impacts of pandemic illnesses, food
borne illnesses and diseases to various agricultural products;
weather conditions and natural disasters; impact of climate change
and environmental protection initiatives; acts of terrorism or war,
including the ongoing conflicts in Ukraine and the Middle East;
termination or loss of major customer contracts and risks
associated with fixed-price contracts, particularly during periods
of high inflation; customer sourcing initiatives; competition and
innovation in our industries; our ability to develop and introduce
new or enhanced products and services and keep pace with
technological developments; difficulty in developing, preserving
and protecting our intellectual property or defending claims of
infringement; catastrophic loss at any of our facilities and
business continuity of our information systems; cyber-security
risks such as network intrusion or ransomware schemes; loss of key
management and other personnel; potential liability arising out of
the installation or use of our systems; our ability to comply with
U.S. and international laws governing our operations and
industries; increases in tax liabilities; work stoppages;
fluctuations in interest rates and returns on pension assets; a
systemic failure of the banking system in the United States or
globally impacting our customers' financial condition and their
demand for our goods and services; availability of and access to
financial and other resources; and other factors described under
the captions “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in JBT’s
most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission and in any subsequently filed Form 10-Q.
JBT cautions shareholders and prospective investors that actual
results may differ materially from those indicated by the
forward-looking statements. JBT undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future developments, subsequent
events or changes in circumstances or otherwise.
JBT provides non-GAAP financial measures in order to increase
transparency in our operating results and trends. These non-GAAP
measures eliminate certain costs or benefits from, or change the
calculation of, a measure as calculated under U.S. GAAP. By
eliminating these items, JBT provides a more meaningful comparison
of our ongoing operating results, consistent with how management
evaluates performance. Management uses these non-GAAP measures in
financial and operational evaluation, planning and forecasting.
These calculations may differ from similarly-titled measures
used by other companies. The non-GAAP financial measures disclosed
are not intended to be used as a substitute for, nor should they be
considered in isolation of, financial measures prepared in
accordance with U.S. GAAP.
JBT CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited and in millions,
except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenue
$
403.6
$
398.8
$
1,219.8
$
1,149.1
Cost of sales
259.7
263.3
797.6
765.1
Gross profit
143.9
135.5
422.2
384.0
Gross profit %
35.7
%
34.0
%
34.6
%
33.4
%
Selling, general and administrative
expense
101.5
99.2
305.6
291.3
Restructuring expense
6.4
1.5
9.7
2.9
Operating income
36.0
34.8
106.9
89.8
Operating income %
8.9
%
8.7
%
8.8
%
7.8
%
Pension expense, other than service
cost
0.2
0.1
0.6
0.1
Interest expense, net
0.9
3.2
14.5
7.1
Income from continuing operations before
income taxes
34.9
31.5
91.8
82.6
Income tax provision
4.3
5.8
17.1
11.3
Equity in net earnings of unconsolidated
affiliate
(0.1
)
—
(0.1
)
—
Income from continuing operations
30.5
25.7
74.6
71.3
Income from discontinued operations, net
of taxes
437.1
8.5
449.6
21.9
Net income
$
467.6
$
34.2
$
524.2
$
93.2
Basic earnings per share from:
Continuing operations
$
0.95
$
0.80
$
2.33
$
2.23
Discontinued operations
13.65
0.27
14.05
0.68
Net income
$
14.60
$
1.07
$
16.38
$
2.91
Diluted earnings per share from net income
from:
Continuing operations
$
0.95
$
0.80
$
2.32
$
2.22
Discontinued operations
13.59
0.27
14.00
0.68
Net income
$
14.54
$
1.07
$
16.32
$
2.90
Weighted average shares outstanding:
Basic
32.0
32.0
32.0
32.0
Diluted
32.2
32.1
32.1
32.1
Other business information from continuing
operations:
Inbound orders
$
398.0
$
348.5
$
1,249.4
$
1,155.9
Orders backlog
$
689.2
$
662.0
JBT CORPORATION
NON-GAAP FINANCIAL
MEASURES
RECONCILIATION OF DILUTED
EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE
(Unaudited and in millions,
except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Income from continuing operations
$
30.5
$
25.7
$
74.6
$
71.3
Non-GAAP adjustments
Restructuring related costs(1)
6.4
1.5
9.7
3.1
M&A related costs(2)
—
4.4
3.6
8.9
LIFO expense
0.9
1.1
2.7
1.7
Impact on tax provision from Non-GAAP
adjustments(3)
(1.9
)
(1.8
)
(4.2
)
(3.6
)
Adjusted income from continuing
operations
$
35.9
$
30.9
$
86.4
$
81.4
Income from continuing operations
$
30.5
$
25.7
$
74.6
$
71.3
Total shares and dilutive securities
32.2
32.1
32.1
32.1
Diluted earnings per share from continuing
operations
$
0.95
$
0.80
$
2.32
$
2.22
Adjusted income from continuing
operations
$
35.9
$
30.9
$
86.4
$
81.4
Total shares and dilutive securities
32.2
32.1
32.1
32.1
Adjusted diluted earnings per share from
continuing operations
$
1.11
$
0.96
$
2.69
$
2.54
(1) Includes restructuring
expense as well as any charges reported in cost of products for
restructuring related inventory write-offs.
(2) M&A related costs include
integration costs, amortization of inventory step-up from business
combinations, earn out adjustments to fair value, advisory and
transaction costs for both potential and completed M&A
transactions and strategy.
(3) Impact on tax provision was
calculated using the enacted rate for the relevant jurisdiction for
each period shown.
The above table reports adjusted
income from continuing operations and adjusted diluted earnings per
share from continuing operations, which are non-GAAP financial
measures. We use these measures internally to make operating
decisions and for the planning and forecasting of future periods,
and therefore provide this information to investors because we
believe it allows more meaningful period-to-period comparisons of
our ongoing operating results, without the fluctuations in the
amount of certain costs that do not reflect our underlying
operating results.
JBT CORPORATION
NON-GAAP FINANCIAL
MEASURES
RECONCILIATION OF INCOME FROM
CONTINUING OPERATIONS TO ADJUSTED EBITDA
(Unaudited and in
millions)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Income from continuing operations
$
30.5
$
27.7
$
16.4
$
29.7
$
25.7
Income tax provision
4.3
8.4
4.4
4.0
5.8
Interest expense, net
0.9
7.1
6.5
5.5
3.2
Depreciation and amortization
23.1
23.5
22.7
20.8
18.8
EBITDA from continuing operations
58.8
66.7
50.0
60.0
53.5
Restructuring related costs(1)
6.4
2.5
0.8
4.2
1.5
Pension expense, other than service
cost
0.2
0.2
0.2
(0.1
)
0.1
M&A related costs(2)
—
1.1
2.5
2.7
4.4
LIFO expense
0.9
0.9
0.9
1.9
1.1
Adjusted EBITDA from continuing
operations
$
66.3
$
71.4
$
54.4
$
68.7
$
60.6
Total revenue
$
403.6
$
427.7
$
388.5
$
441.2
$
398.8
Adjusted EBITDA %
16.4
%
16.7
%
14.0
%
15.6
%
15.2
%
(1) Includes restructuring
expense as well as any charges reported in cost of products for
restructuring related inventory write-offs.
(2) M&A related costs include
integration costs, amortization of inventory step-up from business
combinations, earn out adjustments to fair value, advisory and
transaction costs for both potential and completed M&A
transactions and strategy.
The above table reports EBITDA
and Adjusted EBITDA, which are non-GAAP financial measures. Given
the Company’s focus on growth through acquisitions, management
believes EBITDA facilitates an evaluation of business performance
while excluding the impact of amortization due to the step up in
value of intangible assets, and the depreciation of fixed assets.
We use Adjusted EBITDA internally to make operating decisions and
believe that adjusted EBITDA is useful to investors as a measure of
the Company’s operational performance and a way to evaluate and
compare operating performance against peers in the Company's
industry.
JBT CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited and in
millions)
September 30, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
401.7
$
71.7
Marketable securities
125.0
—
Trade receivables, net of allowances
259.9
265.6
Inventories
226.7
239.8
Other current assets
78.3
75.8
Current assets of discontinued
operations
—
216.1
Total current assets
1,091.6
869.0
Property, plant and equipment, net
245.1
245.4
Other assets
1,352.1
1,383.3
Non-current assets of discontinued
operations
—
85.8
Total assets
$
2,688.8
$
2,583.5
Liabilities and Stockholders'
Equity
Short-term debt
$
—
$
0.6
Accounts payable, trade and other
121.3
170.6
Advance and progress payments
169.8
173.7
Other current liabilities
293.2
157.8
Current liabilities of discontinued
operations
—
117.8
Total current liabilities
584.3
620.5
Long-term debt, less current portion
645.8
977.3
Accrued pension and other post-retirement
benefits, less current portion
18.3
32.0
Other liabilities
67.3
79.9
Non-current liabilities of discontinued
operations
—
11.1
Common stock and additional paid-in
capital
222.1
215.7
Retained earnings
1,365.6
851.3
Accumulated other comprehensive loss
(214.6
)
(204.3
)
Total stockholders' equity
1,373.1
862.7
Total liabilities and stockholders'
equity
$
2,688.8
$
2,583.5
JBT CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited and in
millions)
Nine Months Ended September
30,
2023
2022
Cash flows from continuing operating
activities
Income from continuing operations
$
74.6
$
71.3
Adjustments to reconcile income to cash
provided by operating activities
Depreciation and amortization
69.3
55.4
Stock-based compensation
7.1
6.4
Other
9.4
7.9
Changes in operating assets and
liabilities
Trade accounts receivable, net
2.3
(23.5
)
Inventories
7.9
(62.5
)
Accounts payable, trade and other
(43.6
)
19.6
Advance and progress payments
(0.2
)
17.1
Other - assets and liabilities, net
(31.2
)
(4.7
)
Cash provided by continuing operating
activities
95.6
87.0
Cash flows from continuing investing
activities
Proceeds from sale of AeroTech, net
793.2
—
Acquisitions, net of cash acquired
(0.1
)
(329.7
)
Capital expenditures
(46.2
)
(63.3
)
Purchase of Marketable Securities
(125.0
)
—
Other
(9.2
)
0.9
Cash provided by (required by) continuing
investing activities
612.7
(392.1
)
Cash flows from continuing financing
activities
Net payments for domestic credit
facilities
(340.1
)
312.4
Proceeds from settlement of cross currency
swaps
5.8
—
Dividends
(9.7
)
(9.8
)
Other
(1.7
)
(4.0
)
Cash (required by) provided by continuing
financing activities
(345.7
)
298.6
Net increase (decrease) in cash and cash
equivalents from continuing operations
362.6
(6.5
)
Net cash required by discontinued
operations
(31.4
)
(14.8
)
Effect of foreign exchange rate changes on
cash and cash equivalents
(2.6
)
(4.9
)
Net increase (decrease) in cash and cash
equivalents
328.6
(26.2
)
Cash and cash equivalents from continuing
operations, beginning of period
71.7
76.9
Add: Cash and cash equivalents from
discontinued operations, beginning of period
1.4
1.9
Add: Net increase (decrease) in cash and
cash equivalents
328.6
(26.2
)
Less: Cash and cash equivalents from
discontinued operations, end of period
—
(1.8
)
Cash and cash equivalents from continuing
operations, end of period
$
401.7
$
50.8
JBT CORPORATION
NON-GAAP FINANCIAL
MEASURES
FREE CASH FLOW
(Unaudited and in
millions)
Nine Months Ended September
30,
2023
2022
Cash provided by continuing operating
activities
$
95.6
$
87.0
Less: capital expenditures
46.2
63.3
Plus: proceeds from disposal of assets
1.2
0.9
Plus: pension contributions
11.2
2.9
Free cash flow (FCF)
$
61.8
$
27.5
The above table reports free cash flow,
which is a non-GAAP financial measure. We use free cash flow
internally as a key indicator of our liquidity and ability to
service debt, invest in business combinations, and return money to
shareholders and believe this information is useful to investors
because it provides an understanding of the cash available to fund
these initiatives. For free cash flow purposes, we consider
contributions to pension plans to be more comparable to payment of
debt, and therefore exclude these contributions from the
calculation of free cash flow.
JBT CORPORATION
NET DEBT CALCULATION
(Unaudited and in
millions)
As of Quarter Ended
Change From
Q3 2023
Q4 2022
Q3 2022
PYE
PY
Total debt
$
645.8
$
977.9
$
979.8
$
(332.1
)
$
(334.0
)
Cash and marketable securities(1)
(526.7
)
(71.7
)
(50.8
)
(455.0
)
(475.9
)
Net debt
$
119.1
$
906.2
$
929.0
$
(787.1
)
$
(809.9
)
JBT CORPORATION
BANK TOTAL NET LEVERAGE RATIO
CALCULATION
(Unaudited and in
millions)
Q3 2023
Total debt
$
645.8
Cash and marketable securities(1)
(526.7
)
Net debt
119.1
Other items considered debt under the
credit agreement
18.6
Consolidated total indebtedness(2)
$
137.7
Trailing twelve months Adjusted EBITDA
from continuing operations
260.8
Other adjustments net to earnings under
the credit agreement
(1.0
)
Consolidated EBITDA(2)
$
259.8
Bank total net leverage ratio
(Consolidated Total Indebtedness / Consolidated EBITDA)
0.5
Total net debt to trailing twelve months
Adjusted EBITDA from continuing operations
0.5
(1) As of Q3 2023, this balance
includes Cash of $401.7 million and Marketable securities of $125.0
million.
(2) As defined in the credit
agreement.
JBT CORPORATION
NON-GAAP FINANCIAL
MEASURES
RECONCILIATION OF DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
TO ADJUSTED DILUTED EARNINGS
PER SHARE GUIDANCE
(Unaudited and in
cents)
Guidance
Guidance
Q4 2023
Full Year 2023
Diluted earnings per share from continuing
operations
$1.20 - $1.35
$3.50 - $3.65
Non-GAAP adjustments
Restructuring related costs(1)
0.04
0.32
M&A related costs(2)
0.01
0.15
LIFO expense(3)
0.02
0.12
Impact on tax provision from Non-GAAP
adjustments(4)
(0.02)
(0.14)
Adjusted diluted earnings per share from
continuing operations
$1.25 - $1.40
$3.95 - $4.10
JBT CORPORATION
NON-GAAP FINANCIAL
MEASURES
RECONCILIATION OF INCOME FROM
CONTINUING OPERATIONS TO ADJUSTED EBITDA GUIDANCE
(Unaudited and in
millions)
Guidance
Guidance
Q4 2023
Full Year 2023
Income from continuing operations
$39.0 - $43.0
$113.0 - $117.0
Income tax provision(4)
11.5 - 12.5
29.0 - 30.0
Interest expense, net
~(2.5)
~12.0
Depreciation and amortization
~22.5
~92.0
EBITDA from continuing operations
70.5 - 75.5
246.0 - 251.0
Restructuring related costs(1)
~1.5
~11.0
Pension expense, other than service
cost
—
~1.0
M&A related costs(2)
~0.5
~4.0
LIFO expense(3)
~1.0
3.0 - 4.0
Adjusted EBITDA from continuing
operations
$73.0 - $79.0
$265.0 - $271.0
(1) Restructuring related costs is
estimated to be $1 to $2 million and approximately $11 million for
the fourth quarter and full year 2023, respectively. The mid-point
amount has been divided by our estimate of 32.2 million total
shares and dilutive securities to derive earnings per share.
(2) M&A related costs are estimated to
be $0 to $1 million and approximately $4 million for the fourth
quarter and full year 2023, respectively. The mid-point amount has
been divided by our estimate of 32.2 million total shares and
dilutive securities to derive earnings per share.
(3) LIFO expense is estimated to be
approximately $1 million and $3 to $4 million for the third quarter
2023 and full year 2023, respectively. The mid-point amount has
been divided by our estimate of 32.2 million total shares and
dilutive securities to derive earnings per share.
(4) Impact on tax provision was calculated
using the Company's effective tax rate of approximately 22 to
23%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231024900775/en/
Investors & Media:
Kedric Meredith (312) 861-6034 kedric.meredith@jbtc.com
Marlee Spangler (312) 861-5789 marlee.spangler@jbtc.com
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