JBT Corporation Reports Full-Year 2017 Results

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and in millions, except per share data)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Revenue

$

483.7

$

405.0

$

1,635.1

$

1,350.5

Cost of sales

346.9

291.0

1,164.4

969.8

               Gross profit

136.8

114.0

470.7

380.7

               Gross profit %

28.3

%

28.1

%

28.8

%

28.2

%

Selling, general and administrative expense

73.2

68.3

294.4

236.7

Research and development expense

9.1

5.9

28.7

23.6

Restructuring expense

0.4

2.9

1.7

12.3

Other expense, net

0.7

2.6

0.1

4.7

               Operating income

53.4

34.3

145.8

103.4

               Operating income %

11.0

%

8.5

%

8.9

%

7.7

%

Net interest expense

3.3

2.4

13.6

9.4

Income from continuing operations before income taxes

50.1

31.9

132.2

94.0

Provision for income taxes

30.3

8.5

50.1

26.0

Income from continuing operations

19.8

23.4

82.1

68.0

Loss from discontinued operations, net of taxes

0.4

0.3

1.6

0.4

               Net income

$

19.4

$

23.1

$

80.5

$

67.6

Basic earnings per share:

               Income from continuing operations

$

0.62

$

0.79

$

2.61

$

2.31

               Loss from discontinued operations

(0.01)

(0.01)

(0.05)

(0.01)

               Net income

$

0.61

$

0.78

$

2.56

$

2.30

Diluted earnings per share:

               Income from continuing operations

$

0.61

$

0.78

$

2.58

$

2.28

               Loss from discontinued operations

(0.01)

(0.01)

(0.05)

(0.01)

               Net income

$

0.60

$

0.77

$

2.53

$

2.27

Weighted average shares outstanding

               Basic

31.9

29.4

31.4

29.4

               Diluted

32.3

29.9

31.9

29.8

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

Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Income from continuing operations as reported

$

19.8

$

23.4

$

82.1

$

68.0

Non-GAAP adjustments:

Restructuring expense

0.4

2.9

1.7

12.3

Impact on tax provision from restructuring expense⁽¹⁾

(0.1)

(0.9)

(0.5)

(3.9)

Impact on tax provision from mandatory repatriation tax

7.7

—

7.7

—

Impact on tax provision from tax law changes to deferred taxes

7.8

—

7.8

—

Adjusted income from continuing operations

$

35.6

$

25.4

$

98.8

$

76.4

Income from continuing operations as reported

$

19.8

$

23.4

$

82.1

$

68.0

Total shares and dilutive securities

32.3

29.9

31.9

29.8

Diluted earnings per share from continuing operations

$

0.61

$

0.78

$

2.58

$

2.28

Adjusted income from continuing operations

$

35.6

$

25.4

$

98.8

$

76.4

Total shares and dilutive securities

32.3

29.9

31.9

29.8

Adjusted diluted earnings per share from continuing operations

$

1.10

$

0.85

$

3.10

$

2.56

(1)           Impact on tax provision was calculated using the actual rate for the relevant jurisdiction for the years ended December 31, 2017

                and 2016.

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 U.S. GAAP.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited and in millions)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Net income

$

19.4

$

23.1

$

80.5

$

67.6

Loss from discontinued operations, net of taxes

0.4

0.3

1.6

0.4

Income from continuing operations as reported

19.8

23.4

82.1

68.0

Provision for income taxes

30.3

8.5

50.1

26.0

Net interest expense

3.3

2.4

13.6

9.4

Depreciation and amortization

13.8

11.3

51.7

38.5

EBITDA

67.2

45.6

197.5

141.9

      Restructuring expense

0.4

2.9

1.7

12.3

Adjusted EBITDA

$

67.6

$

48.5

$

199.2

$

154.2

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

BUSINESS SEGMENT DATA

(Unaudited and in millions)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Revenue

JBT FoodTech

$

355.3

$

285.8

$

1,171.9

$

928.0

JBT AeroTech

128.2

119.2

463.0

422.5

Other revenue and intercompany eliminations

0.2

—

0.2

—

Total revenue

$

483.7

$

405.0

$

1,635.1

$

1,350.5

Income before income taxes

Segment operating profit⁽¹⁾

JBT FoodTech

$

49.7

$

35.2

$

139.1

$

113.2

JBT FoodTech segment operating profit %

14.0

%

12.3

%

11.9

%

12.2

%

JBT AeroTech

14.9

13.2

50.7

45.1

JBT AeroTech segment operating profit %

11.6

%

11.1

%

11.0

%

10.7

%

Total segment operating profit⁽²⁾

64.6

48.4

189.8

158.3

Total segment operating profit %

13.4

%

12.0

%

11.6

%

11.7

%

Corporate expense⁽¹⁾

10.8

11.2

42.3

42.6

Restructuring expense

0.4

2.9

1.7

12.3

Operating income

$

53.4

$

34.3

$

145.8

$

103.4

Operating income %

11.0

%

8.5

%

8.9

%

7.7

%

Other business segment information

Inbound Orders

JBT FoodTech

$

287.1

$

250.6

$

1,184.4

$

915.6

JBT AeroTech

116.4

108.8

481.7

442.0

Total inbound orders

$

403.5

$

359.4

$

1,666.1

$

1,357.6

As of December 31,

2017

2016

Order Backlog

JBT FoodTech

$

371.2

$

325.5

JBT AeroTech

254.0

231.5

Total order backlog

$

625.2

$

557.0

(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)

December 31,

December 31,

2017

2016

Cash and cash equivalents

$

34.0

$

33.2

Trade receivables, net

316.4

260.5

Inventories

190.2

139.6

Other current assets

48.0

51.7

Total current assets

588.6

485.0

Property, plant and equipment, net

233.0

210.2

Other assets

569.8

492.2

Total assets

$

1,391.4

$

1,187.4

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

$

10.5

$

7.1

Accounts payable, trade and other

157.1

135.7

Advance and progress payments

127.6

110.5

Other current liabilities

146.2

139.7

Total current liabilities

441.4

393.0

Long-term debt, less current portion

372.7

491.6

Accrued pension and other postretirement benefits, less current portion

85.9

86.1

Other liabilities

49.5

36.8

Common stock and additional paid-in capital

248.5

70.3

Retained earnings

333.7

266.6

Accumulated other comprehensive loss

(140.3)

(157.0)

Total stockholders' equity

441.9

179.9

Total liabilities and stockholders' equity

$

1,391.4

$

1,187.4

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in millions)

Twelve Months Ended

December 31,

2017

2016

Cash flows from operating activities:

Income from continuing operations

$

82.1

$

68.0

Adjustments to reconcile income to cash provided by operating activities:

Depreciation and amortization

51.7

38.5

Other

26.7

8.1

Changes in operating assets and liabilities:

Trade accounts receivable, net

(35.8)

(29.0)

Inventories

(23.7)

(2.9)

Accounts payable, trade and other

8.5

16.1

Advance and progress payments

3.4

(17.0)

Other - assets and liabilities, net

(6.6)

(13.9)

Cash provided by continuing operating activities

106.3

67.9

Cash required by discontinued operating activities

(1.7)

(0.5)

Cash provided by operating activities

104.6

67.4

Cash flows required by investing activities:

Acquisitions, net of cash acquired

(104.2)

(232.0)

Capital expenditures

(37.9)

(37.1)

Other

2.2

2.3

Cash required by investing activities

(139.9)

(266.8)

Cash flows provided by financing activities:

Net proceeds (payments) on credit facilities

(115.9)

215.1

Dividends

(12.7)

(11.8)

Purchase of treasury stock

(5.0)

(4.3)

Proceeds from stock issuance, net of stock issuance costs

184.1

—

Other

(15.8)

(4.1)

Cash provided by financing activities

34.7

194.9

Effect of foreign exchange rate changes on cash and cash equivalents

1.4

0.5

Increase in cash and cash equivalents

0.8

(4.0)

Cash and cash equivalents, beginning of period

33.2

37.2

Cash and cash equivalents, end of period

$

34.0

$

33.2