JBT Corporation Reports First-Quarter 2018 Results

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and in millions, except per share data)

Three Months Ended

March 31,

2018

2017

Revenue

$

409.2

$

344.5

Cost of sales

305.6

246.9

          Gross profit

103.6

97.6

          Gross profit %

25.3

%

28.3

%

Selling, general and administrative expense

76.9

70.8

Research and development expense

7.9

6.3

Restructuring expense

12.7

0.4

Other expense (income), net

0.2

(0.1)

          Operating income

5.9

20.2

          Operating income %

1.4

%

5.9

%

Other (expense) income, net

(0.2)

0.3

Net interest expense

(3.7)

(3.4)

Income from continuing operations before income taxes

2.0

17.1

Income tax provision (benefit)

0.4

(0.5)

Income from continuing operations

1.6

17.6

Loss from discontinued operations, net of taxes

(0.4)

(0.2)

          Net income

$

1.2

$

17.4

Basic earnings per share:

          Income from continuing operations

$

0.05

$

0.59

          Loss from discontinued operations

(0.01)

(0.01)

          Net income

$

0.04

$

0.58

Diluted earnings per share:

          Income from continuing operations

$

0.05

$

0.58

          Loss from discontinued operations

(0.01)

(0.01)

          Net income

$

0.04

$

0.57

Weighted average shares outstanding

          Basic

31.9

30.0

          Diluted

32.4

30.4

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

March 31,

2018

2017

Income from continuing operations as reported

$

1.6

$

17.6

Non-GAAP adjustments:

          Restructuring expense

12.7

0.4

Impact on tax provision from Non-GAAP adjustments⁽¹⁾

(3.2)

(0.1)

Adjusted income from continuing operations

$

11.1

$

17.9

Income from continuing operations as reported

$

1.6

$

17.6

Total shares and dilutive securities

32.4

30.4

Diluted earnings per share from continuing operations

$

0.05

$

0.58

Adjusted income from continuing operations

$

11.1

$

17.9

Total shares and dilutive securities

32.4

30.4

Adjusted diluted earnings per share from continuing operations

$

0.34

$

0.59

(1)  Impact on tax provision was calculated using the Company's annual effective tax rate of 25.02% and 30.78%, for 2018 and 2017, respectively.

The above table contains adjusted income from continuing operations and adjusted diluted earnings per share from continuing operations, which are non-GAAP financial measures, and are intended to provide an indication of our underlying ongoing operating results and to enhance investors' overall understanding of our financial performance by eliminating the effects of certain items that are not comparable from one period to the next. In addition, this information is used as a basis for evaluating our performance and for the planning and forecasting of future periods. This information is not intended to nor should it be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited and in millions)

Three Months Ended

March 31,

2018

2017

Net income

$

1.2

$

17.4

Loss from discontinued operations, net of taxes

(0.4)

(0.2)

Income from continuing operations as reported

1.6

17.6

Income tax provision (benefit)

0.4

(0.5)

Net interest expense

3.7

3.4

Depreciation and amortization

13.7

12.2

EBITDA

19.4

32.7

      Restructuring expense

12.7

0.4

Adjusted EBITDA

$

32.1

$

33.1

The above table provides net income as adjusted by income taxes, net interest expense and depreciation and amortization expense recorded during the period to arrive at EBITDA. Further, we add back to EBITDA significant expenses that are not indicative of our ongoing operations to calculate an Adjusted EBITDA for the periods reported. Given the Company's focus on growth through strategic acquisitions, management considers Adjusted EBITDA to be an important non-GAAP financial measure. This measure allows us to monitor 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 this information is helpful to investors because it allows more meaningful period-to-period comparisons of our ongoing operating results.  This information is not intended to nor should it be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF DILUTED EARNINGS PER SHARE GUIDANCE TO ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE

(Unaudited and in cents)

Guidance

Guidance

Q2 2018

Full Year 2018

Diluted earnings per share from continuing operations

$0.80- $0.87

$2.80- $3.00

Non-GAAP adjustments:

      Restructuring expense ⁽¹⁾

0.28

1.55

Impact on tax provision from Non-GAAP adjustments⁽²⁾

(0.08)

(0.40)

Adjusted diluted earnings per share from continuing operations

$1.00 - $1.07

$3.95 - $4.15

(1) Restructuring expense is estimated to be approximately $9.0 million and $50.0 million for second quarter and full year of 2018, respectively.  We have used the mid-point of the full year estimate in the table above.  These amounts have been divided by our estimate of 32.4 million total shares and dilutive securities to derive the earnings per share value.

(2) Impact on tax provision was calculated using the Company's expected tax rate to be incurred on these restructuring costs of 26.5%.

JBT CORPORATION

BUSINESS SEGMENT DATA

(Unaudited and in millions)

Three Months Ended

March 31,

2018

2017

Revenue

JBT FoodTech

$

303.6

$

241.6

JBT AeroTech

105.6

102.9

Total revenue

$

409.2

$

344.5

Income before income taxes

Segment operating profit⁽¹⁾

JBT FoodTech

$

21.5

$

20.5

JBT FoodTech segment operating profit %

7.1

%

8.5

%

JBT AeroTech

7.9

9.6

JBT AeroTech segment operating profit %

7.5

%

9.3

%

Total segment operating profit⁽²⁾

29.4

30.1

Total segment operating profit %

7.2

%

8.7

%

Corporate expense⁽¹⁾

(10.8)

(9.5)

Restructuring expense

(12.7)

(0.4)

Operating income

$

5.9

$

20.2

Operating income %

1.4

%

5.9

%

Other business segment information

Inbound Orders

JBT FoodTech

$

320.7

$

317.9

JBT AeroTech

121.3

86.3

Intercompany eliminations/other

—

0.1

Total inbound orders

$

442.0

$

404.3

As of March 31,

2018

2017

Order Backlog

JBT FoodTech

$

426.5

$

413.4

JBT AeroTech

270.1

214.4

Total order backlog

$

696.6

$

627.8

(1) Segment operating profit is defined as total segment revenue less segment operating expenses.  Corporate expense, restructuring expense, interest income and expense and income taxes are not allocated to the segments.  Corporate expense generally includes corporate staff-related expense, stock-based compensation, pension and other postretirement benefit expenses not related to service, LIFO adjustments, certain foreign currency related gains and losses, and the impact of unusual or strategic events not representative of segment operations.

(2) Total segment operating profit, as presented elsewhere in this release, is a non-GAAP measure.  The table above includes a reconciliation of total segment operating profit to operating income.  We believe that this measure provides to investors a more comprehensive understanding of the information used by management in evaluating the performance of its segment operations.  It is not intended to nor shall be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.

JBT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in millions)

March 31,

December 31,

2018

2017

Cash and cash equivalents

$

30.6

$

34.0

Trade receivables, net

287.6

316.4

Inventories

305.4

190.2

Other current assets

55.0

48.0

Total current assets

678.6

588.6

Property, plant and equipment, net

242.9

233.0

Other assets

576.5

569.8

Total assets

$

1,498.0

$

1,391.4

Short-term debt and current portion of long-term debt

$

8.9

$

10.5

Accounts payable, trade and other

156.8

157.1

Advance and progress payments

245.3

127.6

Other current liabilities

132.7

146.2

Total current liabilities

543.7

441.4

Long-term debt, less current portion

407.4

372.7

Accrued pension and other postretirement benefits, less current portion

82.7

85.9

Other liabilities

45.2

49.5

Common stock and additional paid-in capital

250.9

248.5

Retained earnings

303.4

333.7

Accumulated other comprehensive loss

(135.3)

(140.3)

Total stockholders' equity

419.0

441.9

Total liabilities and stockholders' equity

$

1,498.0

$

1,391.4

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in millions)

Three Months Ended

March 31,

2018

2017

Cash flows from operating activities:

Income from continuing operations

$

1.6

$

17.6

Adjustments to reconcile income to cash provided by operating activities:

Depreciation and amortization

13.7

12.2

Other

3.3

1.5

Changes in operating assets and liabilities:

Trade accounts receivable, net

(0.3)

18.5

Inventories

(1.4)

(22.8)

Accounts payable, trade and other

(0.1)

(2.6)

Advance and progress payments

1.6

20.5

Other - assets and liabilities, net

(22.5)

(20.9)

Cash (required) provided by continuing operating activities

(4.1)

24.0

Cash required by discontinued operating activities

(0.6)

(0.2)

Cash (required) provided by operating activities

(4.7)

23.8

Cash flows required by investing activities:

Acquisitions, net of cash acquired

(18.8)

(61.0)

Capital expenditures

(10.4)

(7.9)

Other

0.2

0.5

Cash required by investing activities

(29.0)

(68.4)

Cash flows provided by financing activities:

Net proceeds (payments) on credit facilities

33.1

(118.4)

Dividends

(3.2)

(3.2)

Proceeds from stock issuance, net of stock issuance costs

—

184.6

Other

—

(9.5)

Cash provided by financing activities

29.9

53.5

Effect of foreign exchange rate changes on cash and cash equivalents

0.5

0.8

(Decrease) increase in cash and cash equivalents

(3.3)

9.7

Cash and cash equivalents, beginning of period

34.0

33.2

Cash and cash equivalents, end of period

$

30.7

$

42.9