John Bean Technologies CORP
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
JBTM$128.35+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001433660-24-000020
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001433660-24-000035
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 140 current paragraphs.
90 unchanged; 22 reworded; 19 added; 4 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Our orders were strong in the second quarter driven by an initial recovery in equipment demand from North American poultry customers along with continued strength for demand in warehouse automation and fruit and vegetable processing. Second quarter results were impacted by a shortfall in revenue, resulting in part from the performance of shorter cycle orders and a system upgrade that temporarily delayed our ability to make progress on overtime projects and process aftermarket parts orders. With the system implementation now stabilized and our backlog conversion, we are expecting double-digit sequential growth in the third quarter of 2024.
Current report
For the full year, we expect to deliver year over year revenue growth driven by our strong backlog, continued recovery in equipment demand in the North American poultry market, and our organic growth initiatives. Our margins are also expected to improve year over year as we realize benefits from our strategic sourcing initiatives, continuous improvement initiatives, and higher volume flow through.
Current report
Total revenue for the three months ended June 30, 2024 decreased $25.4 million or 5.9% compared to the same period in 2023. Organic revenue decreased $21.2 million and foreign currency translation was unfavorable by $4.2 million in the period compared to the prior year. The decrease in organic revenue was primarily due to the performance of shorter cycle orders and a system upgrade that temporarily delayed our ability to make progress on overtime projects and process aftermarket parts orders. This resulted in a lower volume for both recurring and non-recurring revenue compared to the prior year.
Current report
Selling, general and administrative expense increased $15.8 million from prior year, and as a percent of revenue increased by 540 bps to 28.9% compared to 23.5% in the same period last year. This increase is primarily the result of an increase in M&A related costs for the Marel Transaction and in long term incentive compensation expense accruals, partially offset by savings from our restructuring program.
Current report
Pension expense, other than service cost increased $0.8 million compared to the same period in the prior year. This increase was primarily due to lower expected return on pension assets in 2024 compared to prior year.
Current report
Interest expense decreased $4.1 million compared to same period last year. This decrease is due to the Company having a lower average debt balance and lower weighted average interest rate, including the impacts of the interest rate swaps, during the quarter compared to the same period in 2023.
Current report
Income tax (benefit) provision
Current report
CONSOLIDATED RESULTS OF OPERATIONS
Current report
SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Current report
Revenue
Current report
Total revenue for the six months ended June 30, 2024 decreased $21.6 million or 2.6% compared to the same period in 2023. Organic revenue decreased $17.2 million and foreign currency translation was unfavorable by $4.5 million in the period compared to the prior year. The decrease in organic revenue was primarily due to the performance of shorter cycle orders and a system upgrade that temporarily delayed our ability to make progress on overtime projects and process aftermarket parts orders. This resulted in a lower volume for both recurring and non-recurring revenue compared to the prior year.
Current report
Selling, general and administrative expense
Current report
Pension expense, other than service cost increased $1.6 million compared to the same period in the prior year. This increase was primarily due to lower expected return on pension assets in 2024 compared to prior year.
Current report
Interest income
Current report
Interest expense
Current report
Income tax (benefit) provision
Current report
The Company's tax rate from continuing operations was 8.2% for the six months ended June 30, 2024 compared to 22.5% in the same period in 2023. The tax rate for the six months ended June 30, 2024 was favorably impacted by discrete items totaling $8.2 million, primarily driven by a non-recurring deferred tax benefit related to an internal reorganization. There were no significant discrete items recorded for the six months ended June 30, 2023.
Current report
Income from discontinued operations
Current report
In connection with the Marel Transaction, on May 17, 2024, we entered into an amendment (the "Second Amendment") to our existing revolving credit facility under the Amended and Restated Credit Agreement, dated as of December 14, 2021. The Second Amendment, among other things, (1) expressly permits the Offer and the transactions contemplated thereby, (2) increases the maximum Secured Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) for the first 12 months after the closing of the Offer to 5.00 to 1.00, stepping down to 4.00 to 1.00 at 12 months after the closing of the Offer and further stepping down to 3.50 to 1.00 at 18 months after the closing of the Offer and (3) amends certain of the other negative and financial covenants. This increase in maximum Secured Net Leverage ratio will provide us with sufficient capacity to incur indebtedness in excess of our expected requirements upon completion of the Marel Transaction.
Removed paragraphs (4)
Previous report
•difficulty in implementing our pure play food and beverage strategy, including our ability to execute on strategic investments, merger or acquisition opportunities;
Previous report
During the first quarter, we experienced typical seasonal declines in revenue and earnings from fourth quarter of 2023. Demand was healthy for ready meals, convenience foods, and fruit and vegetables applications with select softness in North America, including timing of warehouse automation orders and continuation of the slower investment profile in the poultry market. Looking ahead, we continue to expect to deliver top line growth in 2024 driven by our organic growth initiatives and an expected improvement in North American poultry investments Our margins are expected to increase during 2024 as we realize benefits from our strategic sourcing initiatives, restructuring program savings, and continuous improvement efforts.
Previous report
Total revenue for the three months ended March 31, 2024 increased $3.8 million or 1.0% compared to the same period in 2023. Organic revenue grew $3.9 million in the period compared to the prior year. Growth from organic revenue was the result of higher pricing as well as an increase in volume for non-recurring revenue, partially offset by a decrease in volume for recurring revenue. Foreign currency translation had an immaterial impact on revenue.
Previous report
Income tax provision
Reworded paragraphs (22)
Previous wording
•the expected timing and likelihood of completion of the proposed transaction with Marel, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the offer that could reduce anticipated benefits or cause the parties to abandon the transaction;
Current wording
•the expected timing and likelihood of completion of the proposed transaction with Marel, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the Offer that could reduce anticipated benefits or cause the parties to abandon the transaction;
Previous wording
•the risk that Marel and/or JBT may not be able to satisfy the conditions to the proposed offer in a timely manner or at all;
Current wording
•the risk that Marel and/or JBT may not be able to satisfy the conditions to the Offer in a timely manner or at all;
Previous wording
•the risk that the proposed offer and its announcement could have an adverse effect on the ability of JBT and Marel to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally;
Current wording
•the risk that the Offer and its announcement could have an adverse effect on the ability of JBT and Marel to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers, and on their operating results and businesses generally;
Previous wording
In early 2022, we announced our Elevate 2.0 strategy that capitalizes on favorable trends, as well as our leadership position, in the food and beverage processing industry. This strategy is based on a four-pronged approach to deliver continued growth and margin expansion.
Current wording
Our Elevate 2.0 strategy capitalizes on favorable trends, as well as our leadership position in the food and beverage processing industry. This strategy is based on a four-pronged approach to deliver continued growth and margin expansion.
Previous wording
Interest income increased $4.7 million compared to the same period in 2023. This increase was due to higher interest income on cash on hand from the sale proceeds of AeroTech.
Current wording
Interest income increased $4.6 million compared to the same period in 2023. This increase was due to interest income on cash on hand from the proceeds from the sale of the AeroTech business which was completed during the third quarter of 2023.
Previous wording
The Company's tax rate from continuing operations was 26.2% for the three months ended March 31, 2024 compared to 21.2% in the same period in 2023. The tax rate for the three months ended March 31, 2024 was unfavorably impacted by discrete items totaling $1.0 million, primarily driven by expenses related to stock compensation and a valuation allowance increase. There were no significant discrete items recorded for the three months ended March 31, 2023.
Current wording
The Company's tax rate from continuing operations was (12.0)% for the three months ended June 30, 2024 compared to 23.2% in the same period in 2023. The tax rate for the three months ended June 30, 2024 was favorably impacted by discrete items totaling $9.2 million, primarily driven by a non-recurring deferred tax benefit related to an internal reorganization. There were no significant discrete items recorded for the three months ended June 30, 2023.
Previous wording
Gross profit margin increased 160 bps to 35.8% compared to 34.2% in the same period last year. This increase was driven primarily by higher volume and pricing as well as savings from our restructuring plan and sourcing initiatives. This was partially offset by a stronger mix of non-recurring revenue compared to prior year, which tends to have lower margins than recurring revenue.
Current wording
Gross profit margin increased 140 bps to 35.7% compared to 34.3% in the same period last year. This increase was driven primarily by higher volume and pricing as well as savings from our restructuring plan and sourcing initiatives. This was partially offset by input cost inflation and a stronger mix of non-recurring revenue compared to prior year, which tends to have lower margins than recurring revenue.
Previous wording
Selling, general and administrative expense increased $6.4 million compared to the same period in the prior year. Selling, general and administrative expense as a percentage of revenue increased 140 bps to 28.1% compared to 26.7% in the same period last year. This increase is the result of an increase in M&A related costs and incentive compensation expense accruals. This was partially offset by savings from our restructuring program as well as a decrease in expenses related to the OmniBlu TMplatform year-over-year.
Current wording
Selling, general and administrative expense increased $22.2 million compared to the same period in the prior year. Selling, general and administrative expense as a percentage of revenue increased 350 bps to 28.5% compared to 25.0% in the same period last year. This increase is primarily the result of an increase in M&A related costs for the Marel Transaction as well as long term incentive compensation expense accruals. This increase was partially offset by savings from our restructuring program as well as a decrease in expenses related to the OmniBlu TMplatform year-over-year.
Previous wording
Interest expense decreased $4.6 million compared to same period last year. This decrease was due to the Company having a lower average debt balance in the first quarter of 2024 compared to the same period in 2023.
Current wording
Interest expense decreased $8.7 million compared to same period last year. This decrease was due to the Company having a lower average debt balance and lower weighted average interest rate, including the impacts of the interest rate swaps, in the first half of 2024 compared to the same period in 2023.
Previous wording
Income from continuing operations for the three months ended March 31, 2024 increased to $22.7 million compared to $17.1 million for the same period in 2023, representing an increase of $5.6 million. Adjusted EBITDA was $57.4 million for the three months ended March 31, 2024 compared to $54.4 million during the same period in 2023, representing an increase of $3.0 million. The increase in Adjusted EBITDA was primarily driven by a higher gross profit partially offset by a higher selling, general and administrative expense, excluding the impacts of our depreciation, amortization, and acquisition, and integration costs.
Current wording
Income from continuing operations for the six months ended June 30, 2024 was $53.4 million compared to $45.5 million for the same period in 2023, representing an increase of $7.9 million. Adjusted EBITDA was $121.1 million for the six months ended June 30, 2024 compared to $125.8 million during the same period in 2023, representing a decrease of $4.7 million. The decrease in Adjusted EBITDA was primarily driven by higher selling, general and administrative expense, excluding the impacts of our depreciation, amortization, and acquisition and integration costs, partially offset by a higher gross profit.
Previous wording
For the three months ended March 31, 2024 and 2023, we recognized income from discontinued operations, net of income taxes, of $0.1 million and $10.1 million, respectively. Discontinued operations consists of the results of operations of the AeroTech business, the sale of which was completed during the third quarter of 2023.
Current wording
For the six months ended June 30, 2024 and 2023, we recognized income from discontinued operations, net of income taxes, of $0.1 million and $14.4 million, respectively. Discontinued operations consists of the results of operations of the AeroTech business, the sale of which was completed during the third quarter of 2023.
Previous wording
•Adjusted income from continuing operations and Adjusted diluted earnings per share from continuing operations: We adjust earnings for restructuring expense, M&A related costs, which include integration costs and the amortization of inventory step-up from business combinations, advisory and transaction costs for both potential and completed M&A transactions and strategy (“M&A related costs”), and impact on tax provision from remeasurement of deferred taxes for material tax rate changes.
Current wording
•Adjusted income from continuing operations and Adjusted diluted earnings per share from continuing operations: We adjust earnings for restructuring expense, M&A related costs, which include integration costs and the amortization of inventory step-up from business combinations, advisory and transaction costs for both potential and completed M&A transactions and strategy (“M&A related costs”), amortization of debt issuance costs related to bridge financing for potential M&A transactions, and impact on tax provision from remeasurement of deferred taxes for material tax rate changes and internal reorganizations.
Previous wording
In the third quarter of 2022, the Company implemented a restructuring plan (the "2022/2023 restructuring plan") to optimize the overall cost structure for the Company on a global basis. The initiatives under this plan include streamlining operations and enhancing our general and administrative infrastructure. The Company recognized restructuring charges of $17.9 million, net of a cumulative release of the related liability of $7.2 million, with no addition actions expected as of March 31, 2024.
Current wording
In the third quarter of 2022, the Company implemented a restructuring plan (the "2022/2023 restructuring plan") to optimize the overall cost structure for the Company on a global basis. The initiatives under this plan included streamlining operations and enhancing our general and administrative infrastructure. The Company recognized restructuring charges of $18.1 million, net of a cumulative release of the related liability of $7.2 million. The 2022/2023 restructuring plan was completed as of March 31, 2024.
Previous wording
Cumulative savings for the 2022/2023 restructuring plan is in the range of $18.0 million to $20.0 million. Savings expected to be realized during the remainder of 2024 are in the range of $4.0 million to $5.0 million.
Current wording
Cumulative savings for the 2022/2023 restructuring plan is in the range of $19.0 million to $20.0 million. Savings expected to be realized during the remainder of 2024 are in the range of $2.0 million to $3.0 million.
Previous wording
For the three months ended March 31, 2024, we had operating cash flows from continuing operations of $10.4 million. For full year 2024, we expect to generate positive cash flows. Our liquidity as of March 31, 2024, or cash plus borrowing ability under our revolving credit facilities, was $1.2 billion.
Current wording
For the six months ended June 30, 2024, we had operating cash flows from continuing operations of $32.0 million. For full year 2024, we expect to generate positive cash flows. Our liquidity as of June 30, 2024, or cash plus borrowing ability under our revolving credit facilities, was $1.2 billion.
Previous wording
We expect to use our cash for the Marel Transaction and any related transaction and debt financing costs as well as our other stated capital allocation priorities. The Bridge Credit Agreement entered into in connection with the Marel Transaction is expected to result in approximately $7.5 million adverse impact to our cash from financing activities in 2024. In addition, we currently anticipate pre-close transaction costs related to the Marel Transaction in the range of $30 million to $35 million to adversely impact our cash from continuing operations in 2024. We expect to incur additional financing and transaction costs in the event the Marel Transaction closes.
Current wording
We expect to use the cash on our balance sheet for our stated capital allocation priorities, as well as partially fund the Marel transaction and pay any related debt financing costs and anticipated pre-close transaction costs of approximately $40 million expected to be incurred in 2024. We expect to incur additional financing and transaction costs in the event the Marel Transaction closes.
Previous wording
Based on our current capital allocation objectives, during 2024, we anticipate capital expenditures to be between $45 million and $55 million. Our level of capital expenditures varies from time to time as a result of actual and anticipated business conditions.
Current wording
Based on our current capital allocation objectives, during 2024, we anticipate capital expenditures to be between $40 million and $50 million. Our level of capital expenditures varies from time to time as a result of actual and anticipated business conditions.
Previous wording
As of March 31, 2024, we had $479.0 million of cash and cash equivalents, $38.3 million of which was held by our foreign subsidiaries. Although certain funds are considered permanently invested in our foreign subsidiaries, we are not presently aware of any restriction on the repatriation of these funds. We maintain significant operations outside of the U.S., and many of our uses of cash for working capital, capital expenditures and business acquisitions arise in these foreign jurisdictions. If these funds were needed to fund our operations or satisfy obligations in the U.S., they could be repatriated and their repatriation into the U.S. could cause us to incur additional U.S. income tax and foreign withholding taxes. The foreign withholding taxes on these repatriations to the U.S. would potentially be partially offset by U.S. foreign tax credits.
Current wording
As of June 30, 2024, we had $474.3 million of cash and cash equivalents, $34.0 million of which was held by our foreign subsidiaries. Although certain funds are considered permanently invested in our foreign subsidiaries, we are not presently aware of any restriction on the repatriation of these funds. We maintain significant operations outside of the U.S., and many of our uses of cash for working capital, capital expenditures and business acquisitions arise in these foreign jurisdictions. If these funds were needed to fund our operations or satisfy obligations in the U.S., they could be repatriated and their repatriation into the U.S. could cause us to incur additional U.S. income tax and foreign withholding taxes. The foreign withholding taxes on these repatriations to the U.S. would potentially be partially offset by U.S. foreign tax credits.
Previous wording
Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Cash flows for the six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Cash provided by continuing operating activities during the three months ended March 31, 2024 was $10.4 million, representing a $1.0 million decrease compared to the same period in 2023. This decrease was driven primarily by lower customer collections of advanced payments and trade receivables, partially offset by lower accounts payable payments.
Current wording
Cash provided by continuing operating activities during the six months ended June 30, 2024 was $32.0 million, representing a $30.6 million decrease compared to the same period in 2023. This decrease was driven primarily by lower customer collections of advanced payments and trade receivables and higher inventory purchases during the period, partially offset by lower payments made on our accounts payable.
Previous wording
Cash required by investing activities during the three months ended March 31, 2024 was $7.2 million, a decrease of $10.1 million compared to the same period in 2023. The decrease is primarily driven by lower spending on capital expenditures for our OmniBlu TMplatform development as we completed the initial development and deployment in 2023.
Current wording
Cash required by investing activities during the six months ended June 30, 2024 was $22.7 million, a decrease of $12.2 million compared to the same period in 2023. The decrease is primarily driven by lower spending on capital expenditures for our OmniBlu TMplatform development as we completed the initial development and deployment in 2023.
Previous wording
Cash required by financing activities was $6.1 million during the three months ended March 31, 2024, representing a decrease in cash outflows of $23.9 million compared to same period in 2023. This decrease in cash outflows year over year was primarily driven by lower debt repayments for our revolving credit facility, partially offset by a higher payment of taxes withheld on stock-based compensation awards in the current period compared to the same period in 2023.
Current wording
Cash required by financing activities was $16.4 million during the six months ended June 30, 2024, compared to cash required of $40.8 million during the same period in 2023. The cash outflow in the period was driven by the payment of debt issuance costs related to the Bridge Credit Agreement entered into in Q2 2024, as well as taxes withheld on stock-based compensation awards which were higher in the current period compared to the same period in 2023. The prior year cash required included debt repayments for our revolving credit facility that did not recur in 2024.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Gross profit margin increased 120 bps to 35.6% compared to 34.4% in the same period last year. This increase was driven primarily by higher pricing as well as savings from our restructuring plan and sourcing initiatives. This was partially offset by material cost inflation, lower volume, input cost inflation, and a stronger mix of non-recurring revenue compared to prior year, which tends to have lower margins than recurring revenue.
Current report — wording carried from elsewhere
Pension expense, other than service cost
Current report — wording carried from elsewhere
Income from continuing operations for the three months ended June 30, 2024 increased to $30.7 million compared to $28.4 million for the same period in 2023, representing an increase of $2.3 million. Adjusted EBITDA was $63.7 million for the three months ended June 30, 2024 compared to $71.4 million during the same period in 2023, representing a decrease of $7.7 million. The decrease in Adjusted EBITDA was primarily driven by lower gross profit and higher selling, general and administrative expense, excluding the impacts of our depreciation, amortization, and acquisition, and integration costs.
Current report — wording carried from elsewhere
There was no income from discontinued operations for the three months ended June 30, 2024. For the three months ended June 30, 2023, we recognized income from discontinued operations, net of income taxes, of $4.3 million, which consisted of the results of operations of the AeroTech business.
Current report — wording carried from elsewhere
(1) The key measures reviewed by the CODM to evaluate our performance are most notably Adjusted EBITDA from continuing operations and Adjusted EBITDA % from continuing operations. For additional information, refer to the 'Reconciliation of Non-GAAP Measures' section below.
Current report — wording carried from elsewhere
Gross profit and Gross profit margin
Current report — wording carried from elsewhere
Pension expense, other than service cost
Current report — wording carried from elsewhere
Interest income increased $9.3 million compared to the same period in 2023. This increase was due to interest income on cash on hand from the proceeds from the sale of the AeroTech business, which was completed during the third quarter of 2023.
Current report — wording carried from elsewhere
Income from continuing operations and Adjusted EBITDA