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JB

John Bean Technologies CORP (JBT)·Q3 2024 Earnings Summary

Executive Summary

  • Record quarter: revenue $453.8M (+12% YoY), adjusted EBITDA $81.7M (+23% YoY; 18.0% margin), adjusted EPS $1.50 (+35% YoY); orders $439.6M (+10% YoY) and backlog $698.1M .
  • Guidance: Revenue, adjusted EBITDA, and adjusted EPS reiterated; GAAP EPS and income from continuing operations lowered to reflect a planned non-cash pension settlement charge in Q4 ($28–$32M pre-tax), with adjusted EPS unchanged .
  • Operational drivers: Sequential recovery from Q2 shortfall via backlog conversion, restructuring and supply chain savings, and net interest income; continued poultry demand recovery; strong AGV momentum with above-company margins .
  • Marel combination: Financing commitments secured (7-year $900M TLB at SOFR+225 bps, step-down to +200 bps <3.25x leverage; 5-year $1.8B revolver), EC filing imminent with 25-day review; close expected around end of 2024 .

What Went Well and What Went Wrong

What Went Well

  • Record revenue, adjusted EBITDA, and adjusted EPS from continuing operations, driven by backlog conversion, cost savings (restructuring and supply chain), and lower net interest expense .
  • Orders strength and demand recovery in global poultry; order pickup across Asia and solid quarter in Europe; diversified end-market exposure supported momentum .
  • AGV business scaling with R&D-led product standardization, subscription software model (recurring revenue), improved lead times; targeting >20% margins and >30% revenue growth in 2024, above company average .

Management quotes:

  • “Record quarterly revenue, adjusted EBITDA, and adjusted EPS” (CEO Brian Deck) .
  • “Adjusted EBITDA margin of 18% increased 160 bps” (CFO Matt Meister) .
  • “Secular demand for facility automation… remains robust” (CEO Brian Deck on AGV) .

What Went Wrong

  • GAAP EPS and income from continuing ops guidance cut due to planned non-cash pension settlement; additional non-cash charge expected in Q1’25 for remaining obligations (estimated ~$145M) .
  • Earlier Q2 revenue shortfall from book-and-ship performance and temporary systems upgrade impacts on overtime projects and aftermarket parts; required catch-up in H2 .
  • Pockets of weakness in certain CPG areas like beverages; North America poultry still below historical strength though improving .

Financial Results

MetricQ3 2023Q1 2024Q2 2024Q3 2024
Revenue ($USD Millions)$403.6 $392.3 $402.3 $453.8
Gross Profit Margin %35.9% 35.8% 35.6% 36.1%
Operating Income Margin %9.1% 7.4% 6.7% 10.3%
Diluted EPS – Continuing Ops ($)$0.97 $0.71 $0.95 $1.18
Adjusted EPS ($)$1.11 $0.85 $1.05 $1.50
Adjusted EBITDA ($USD Millions)$66.3 $57.4 $63.7 $81.7
Adjusted EBITDA Margin %16.4% 14.6% 15.8% 18.0%
Orders & Backlog ($USD Millions)Q3 2023Q1 2024Q2 2024Q3 2024
Inbound Orders$398.0 $388.5 $437.1 $439.6
Orders Backlog$689.2 $663.6 $697.2 $698.1
Cash Flow & Leverage9M 20239M 2024
Cash from Operations ($USD Millions)$95.6 $103.9
Free Cash Flow ($USD Millions)$61.8 $79.2
Net Debt ($USD Millions)$119.1 (Q3’23) $113.8 (Q3’24)
Net Debt / TTM Adjusted EBITDA (x)0.4–0.6 illustrative: 0.4 at Q3’24; 0.6 at Q2’24

Non-GAAP details:

  • Adjusted EPS reconciliation includes M&A costs, bridge fee amortization, restructuring, tax impacts, and deferred tax benefit .
  • Adjusted EBITDA reconciliation excludes restructuring, pension expense (non-service), and M&A costs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2024$1.715–$1.750 $1.715–$1.750 Maintained
Income from Continuing Ops ($USD Millions)FY 2024$137–$146 $116–$125 Lowered; due to $28–$32M non-cash pension settlement charge in Q4
GAAP EPS ($)FY 2024$4.25–$4.55 $3.60–$3.90 Lowered; pension settlement impact
Adjusted EBITDA ($USD Millions)FY 2024$295–$305 $295–$305 Maintained
Adjusted EBITDA Margin %FY 202417.0–17.5% 17.0–17.5% Maintained
Adjusted EPS ($)FY 2024$5.05–$5.35 $5.05–$5.35 Maintained
Net Interest (Income), $FY 2024$(5)–$(7) $(6)–$(8) Raised (more income)
Restructuring Costs ($)FY 2024~$1M ~$1M Maintained
M&A Costs ($)FY 2024~$40M ~$40M Maintained
Bridge Financing Fees ($)FY 2024$3–$4M $3–$4M Maintained
Tax Rate AssumptionFY 2024~22–23% core ~22–23% core; pension-related items at 25.6% Clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2024)Trend
Poultry end-marketQ1: softness but improving fundamentals; pipeline expected to translate to Q2 orders . Q2: initial recovery in North American equipment demand .Continued recovery globally; North America incremental orders +$10–$15M QoQ with Asia and Europe also improving .Improving
AGV / Warehouse automationQ1: timing of orders; pipeline improving . Q2: continued strength; orders near record .Record sales trajectory; subscription software model; >30% growth in 2024; margins >20%, above company avg .Accelerating
Cost actions (restructuring and supply chain)Q1: margin improvement, $4M quarterly restructuring savings; run-rate to ~$18M by Q2 exit . Q2: ~$3M restructuring savings; run-rate ~$17M .Margin expansion driven by volume flow-through and savings from restructuring and supply chain initiatives .Sustained
Marel combination/regulatoryQ1: definitive agreement; plan to close by YE’24 . Q2: VTO issued; HSR expired; regulator engagement ongoing .EC notification imminent; 25-day review; Australia finalizing; expected close around end 2024; financing secured .Progressing
Geographic demandQ2: NA poultry stabilizing; warehouse automation strength .Orders pickup in Asia, good Europe, improving North America .Mixed-to-positive
AftermarketNot highlighted in prior releases.Consistent mid-single-digit growth; focus on parts delivery, OmniBlu digital, service network; Marel to enhance distribution/service .Stable

Management Commentary

  • “We posted double-digit year-over-year revenue growth and captured meaningful margin expansion… recovery in demand from the global poultry end market.” (CEO) .
  • “Adjusted EBITDA of $82M increased 23% YoY and margin of 18% increased 160 bps… driven by higher volume and cost savings.” (CFO) .
  • “AGV boasts a differentiated product… subscription model with multi-year software contracts; expect recurring revenue to grow meaningfully.” (CEO) .
  • “We secured commitments for financing the Marel merger… $900M Term Loan B at SOFR+225 bps, upsized, with leverage-based step-down.” (CFO) .
  • “We are reiterating full-year guidance for revenue, adjusted EBITDA, and adjusted EPS; updating GAAP EPS for pension settlement.” (CFO) .

Q&A Highlights

  • AGV scale and profitability: >$150M revenue in 2024, >30% growth; margins above 17–17.5% guidance, “striving for 20%+” .
  • Poultry recovery sustainability: Brownfield, refurbishments, primary-side orders emerging; visibility 18–24 months; profitability supportive; slow-but-steady recovery into 2025/2026 .
  • Macro/regulatory labor risk: Potential tighter immigration could accelerate automation adoption in poultry (moving from manual to automated cut-up lines) .
  • Marel regulatory timeline: EC 25-business-day review; Australia final steps; approvals expected by end-November; VTO extension to allow tendering .
  • Synergies: Management confident in $125M run-rate cost synergies post-close; margin uplift expected from poultry volume recovery at Marel .
  • Regional poultry orders: NA incremental +$10–$15M QoQ; improving in Asia and Europe .

Estimates Context

  • S&P Global consensus data could not be retrieved due to a missing CIQ mapping for JBT; therefore, quantitative comparisons versus Wall Street consensus are unavailable at this time. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” “EBITDA Consensus Mean,” and related metrics, but the mapping error prevented access. If required, we can update once mapping is available.

Guidance Details and Non-GAAP Adjustments

  • Adjusted EPS guidance reconciliation includes: restructuring ($0.03), M&A ($1.24), bridge fees ($0.11), pension settlement ($0.90), tax impacts ($(0.56)), deferred tax benefit ($(0.27)); resulting adjusted EPS $5.05–$5.35 .
  • Adjusted EBITDA guidance reconciliation: income from continuing ops $116–$125M; tax $20–$23M; net interest income $(6)–$(8)M; D&A ~ $90M; plus adjustments (restructuring ~$1M, pension other than service ~$34M, M&A ~$40M) to arrive at $295–$305M .

Other Q3 2024 Press Releases

  • No additional press releases were found in our document catalog for JBT within 2024-09-01 to 2024-12-31 beyond the 8-K 2.02 earnings release [ListDocuments returned none].

Key Takeaways for Investors

  • Strong execution with record revenue and margin expansion; sequential rebound from Q2 shortfall and YoY growth across revenue, adjusted EBITDA, and adjusted EPS .
  • Guidance intact for core adjusted metrics; GAAP EPS reduced solely for a non-cash pension settlement; adjusted EPS unchanged, preserving underlying performance trajectory .
  • Orders/backlog support H2 and 2025 visibility; poultry recovery broadening geographically; diversified end markets mitigate pockets of CPG weakness .
  • AGV is a high-growth, higher-margin vector with recurring software revenue potential; expect continued performance tailwinds from standardization and subscription model .
  • Marel combination on track with financing secured and regulatory process progressing; potential synergy realization ($125M run-rate) and expanded aftermarket/service footprint post-close .
  • Free cash flow conversion >100% targeted for FY; leverage low (net debt ~$113.8M; 0.4x net debt/TTM adj EBITDA), providing financial flexibility .
  • Watch near-term catalysts: EC Phase 1 outcome and offer timeline updates; Q4 pension settlement accounting; order momentum in NA poultry and AGV .

Appendices

KPIs and Operational Metrics

KPIQ3 2023Q3 2024
Gross Profit ($USD Millions)$144.8 $163.6
SG&A ($USD Millions)$101.5 $117.0
Operating Income ($USD Millions)$36.9 $46.8
Net Interest (Income)/Expense ($USD Millions)$0.9 $(1.8)
Tax Provision ($USD Millions)$4.6 $9.5

Non-GAAP adjustments (Q3):

  • M&A costs: $12.9M; restructuring: $(0.2)M; tax impact: $(3.6)M; adjusted EPS $1.50 .
  • Pension (non-service) expense: $1.0M .

Prior Quarter Context (Q2’24)

  • Revenue $402.3M (-6% YoY), adjusted EBITDA $63.7M (15.8% margin), adjusted EPS $1.05; shortfall due to book-and-ship performance and systems upgrade timing; anticipated recovery in H2 .

Disclaimers

  • All figures are from company filings and earnings call materials; non-GAAP reconciliations are provided in exhibits .
  • Consensus estimates from S&P Global were unavailable due to a mapping error; comparisons vs. Wall Street consensus are not presented.