CHICAGO, Feb. 25, 2019 /PRNewswire/ --
Fourth Quarter 2018 Highlights:
- Revenue of $537 million, up 11 percent from the fourth quarter of 2017
- Operating income of $59 million, including $14 million of restructuring expense
- Total segment operating profit of $83 million, a gain of 28 percent from the fourth quarter of 2017
- Diluted earnings per share from continuing operations of $1.34 versus $0.61; Adjusted diluted earnings per share of $1.65 versus $1.10 in the fourth quarter of 2017
- Inbound orders of $476 million, ahead 18 percent; backlog up 14 percent from the fourth quarter of 2017
2019 Outlook:
- Expects 2019 revenue of $1.9 billion
- Anticipates FoodTech operating margins of 13.25 – 14.0 percent; AeroTech operating margins of 12.5 – 13.0 percent
- Projects 2019 earnings per share of $3.90 – $4.10 or $4.20 – $4.40 on an adjusted basis
JBT Corporation (NYSE: JBT), a leading global technology solutions provider to high-value segments of the food & beverage industry, today reported results for the fourth quarter and full-year 2018.
"We ended 2018 on a strong note, with margins, cash flow, and order rates that exceeded our expectations," said Tom Giacomini, Chairman, President, and Chief Executive Officer. "With a favorable long-term outlook for our end markets, we expect growth to continue in 2019. Operationally, improvements underway enhance our competitive position and support significant margin expansion in 2019 and 2020."
Fourth quarter 2018 revenue increased 11.1 percent from the year-ago period, comprised of 4.6 percent organic growth, 3.2 percent growth from acquisitions, and a 5.6 percent benefit from the new ASC 606 revenue recognition standard, offset by a 2.3 percent unfavorable foreign exchange translation impact. Operating income was $59.1 million in the fourth quarter of 2018, including restructuring expense of $14.2 million. Segment operating profit increased 28 percent year over year with a 200 basis point margin expansion to 15.4 percent.
Diluted earnings per share from continuing operations was $1.34 for the fourth quarter of 2018 compared with $0.61 in the fourth quarter of 2017. Adjusted earnings per share, excluding restructuring expense and charges associated with passage of the "Tax Cuts and Jobs Act", was $1.65 compared with $1.10 in the year-ago period. Fourth quarter 2018 earnings per share also included a $0.07 benefit from the transition to ASC 606 and a $0.10 benefit from lower tax rates.
Full-Year 2018
Revenue of $1.9 billion increased 17.4 percent from 2017, with gains of 6.5 percent organically, 3.1 percent from acquisitions, and 7.8 percent from ASC 606. Operating income – which included restructuring expense of $47.0 million in 2018 and $1.7 million in 2017 – was unchanged year-over-year at $143.8 million. Total segment operating profit increased 23 percent.
Diluted earnings per share from continuing operations was $3.24 for 2018 compared to $2.58 for 2017. Adjusted diluted earnings per share from continuing operations, excluding restructuring expense and charges associated with passage of the "Tax Cuts and Jobs Act", was $4.28 for 2018 compared with $3.10 for 2017. Earnings per share in 2018 also included a $0.64 benefit from ASC 606 and a $0.23 benefit from lower tax rates, partially offset by a $0.10 negative impact from foreign exchange translation.
Orders and Backlog
Fourth quarter 2018 orders increased 18 percent from the year-ago period, with a gain of 20 percent at FoodTech and 12 percent at AeroTech. For 2018, inbound orders of $1.9 billion increased 14 percent from 2017, reflecting gains of 10 percent at FoodTech and 24 percent at AeroTech. Backlog expanded 14 percent from December 31, 2017.
Restructuring Programs
"We have made excellent progress on the restructuring program we announced in 2018, capturing benefits ahead of schedule with savings of $7 million for the year," stated Brian Deck, Executive Vice President and Chief Financial Officer.
In addition to the $47 million restructuring expense booked in 2018, the Company plans to incur additional restructuring expense totaling $10 – $15 million in 2019. As a result of the restructuring activities taken in 2018 and 2019, the Company expects to achieve incremental benefits of $20 million in 2019 and $28 million in 2020 bringing total expected savings to $55 million.
Acquisitions
In February 2019, JBT completed the acquisition of LEKTRO, Inc., a manufacturer of electric aviation ground support equipment. "The addition of LEKTRO adds a complementary line of tractors and improves our competitive position in the rapidly growing market for emission-free equipment," said Tom Giacomini.
2019 Outlook
For 2019, the Company anticipates organic growth of 4 percent, growth from completed acquisitions of 2 – 3 percent, partially offset by a 1 percent headwind from foreign exchange translation, adding to 5 – 6 percent growth. However, GAAP revenue is expected to be flat year over year, reflecting the $127 million of ASC 606 benefit from previously recognized revenue included in 2018 results.
JBT forecasts FoodTech operating margins of 13.25 – 14.0 percent, AeroTech operating margins of 12.5 – 13.0 percent, and diluted earnings per share from continuing operations in the range of $3.90 – $4.10 in 2019, or an adjusted $4.20 – $4.40.
For the first quarter of 2019, JBT anticipates revenue of $375 million – $395 million and diluted earnings per share from continuing operations of $0.30 – $0.34, or an adjusted $0.44 – $0.48.
2018 Earnings Conference Call
A conference call is scheduled for 10:00 a.m. ET on Tuesday, February 26, 2019 to discuss 2018 financial results. Participants may access the conference call by dialing (833) 238-7952 in the U.S. and Canada or (647) 689-4200 for international callers and using conference ID 4523989, or through the Investor Relations link on our website at http://ir.jbtcorporation.com. An online audio replay of the call will be available on the Company's Investor Relations website at approximately 1:30 p.m. ET on February 26, 2019.
JBT Corporation (NYSE: JBT) is a leading global technology solutions provider to high-value segments of the food & beverage industry with focus on proteins, liquid foods and automated system solutions. JBT designs, produces and services sophisticated products and systems for multi-national and regional customers through its FoodTech segment. JBT also sells critical equipment and services to domestic and international air transportation customers through its AeroTech segment. JBT Corporation employs approximately 5,900 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 the Company's ability to control. These risks and uncertainties are described under the caption "Risk Factors" in the Company's most recent Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission that may be accessed on the Company's website. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.
Investors & Media: Megan Rattigan +1 312 861 6048
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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 537.3 | $ | 483.7 | $ | 1,919.7 | $ | 1,635.1 | |||||||
Cost of sales | 378.7 | 346.9 | 1,382.1 | 1,164.4 | |||||||||||
Gross profit | 158.6 | 136.8 | 537.6 | 470.7 | |||||||||||
Gross profit % | 29.5 | % | 28.3 | % | 28.0 | % | 28.8 | % | |||||||
Selling, general and administrative expense | 85.3 | 84.1 | 346.8 | 325.2 | |||||||||||
Restructuring expense | 14.2 | 0.4 | 47.0 | 1.7 | |||||||||||
Operating income | 59.1 | 52.3 | 143.8 | 143.8 | |||||||||||
Operating income % | 11.0 | % | 10.8 | % | 7.5 | % | 8.8 | % | |||||||
Pension expense (income), other than service cost | 0.3 | (1.1) | 0.9 | (2.0) | |||||||||||
Net interest expense | 3.4 | 3.3 | 13.9 | 13.6 | |||||||||||
Income from continuing operations before income taxes | 55.4 | 50.1 | 129.0 | 132.2 | |||||||||||
Provision for income taxes | 12.5 | 30.3 | 24.6 | 50.1 | |||||||||||
Income from continuing operations | 42.9 | 19.8 | 104.4 | 82.1 | |||||||||||
Loss from discontinued operations, net of taxes | — | 0.4 | 0.3 | 1.6 | |||||||||||
Net income | $ | 42.9 | $ | 19.4 | $ | 104.1 | $ | 80.5 | |||||||
Basic earnings per share: | |||||||||||||||
Income from continuing operations | $ | 1.35 | $ | 0.62 | $ | 3.27 | $ | 2.61 | |||||||
Loss from discontinued operations | — | (0.01) | (0.01) | (0.05) | |||||||||||
Net income | $ | 1.35 | $ | 0.61 | $ | 3.26 | $ | 2.56 | |||||||
Diluted earnings per share: | |||||||||||||||
Income from continuing operations | $ | 1.34 | $ | 0.61 | $ | 3.24 | $ | 2.58 | |||||||
Loss from discontinued operations | — | (0.01) | (0.01) | (0.05) | |||||||||||
Net income | $ | 1.34 | $ | 0.60 | $ | 3.23 | $ | 2.53 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 31.8 | 31.9 | 31.9 | 31.4 | |||||||||||
Diluted | 32.1 | 32.3 | 32.2 | 31.9 |
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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income from continuing operations as reported | $ | 42.9 | $ | 19.8 | $ | 104.4 | $ | 82.1 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Restructuring expense | 14.2 | 0.4 | 47.0 | 1.7 | |||||||||||
Impact on tax provision from restructuring expense(1) | (4.0) | (0.1) | (12.4) | (0.5) | |||||||||||
Impact on tax provision from mandatory repatriation tax | (0.2) | 7.7 | 0.4 | 7.7 | |||||||||||
Impact on tax provision from tax law changes to deferred taxes | — | 7.8 | (1.5) | 7.8 | |||||||||||
Adjusted income from continuing operations | $ | 52.9 | $ | 35.6 | $ | 137.9 | $ | 98.8 | |||||||
Income from continuing operations as reported | $ | 42.9 | $ | 19.8 | $ | 104.4 | $ | 82.1 | |||||||
Total shares and dilutive securities | 32.1 | 32.3 | 32.2 | 31.9 | |||||||||||
Diluted earnings per share from continuing operations | $ | 1.34 | $ | 0.61 | $ | 3.24 | $ | 2.58 | |||||||
Adjusted income from continuing operations | $ | 52.9 | $ | 35.6 | $ | 137.9 | $ | 98.8 | |||||||
Total shares and dilutive securities | 32.1 | 32.3 | 32.2 | 31.9 | |||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.65 | $ | 1.10 | $ | 4.28 | $ | 3.10 | |||||||
(1) Impact on tax provision was calculated using the actual rate for the relevant jurisdiction for the years ended December 31, 2018 and 2017. | |||||||||||||||
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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 42.9 | $ | 19.4 | $ | 104.1 | $ | 80.5 | |||||||
Loss from discontinued operations, net of taxes | — | 0.4 | 0.3 | 1.6 | |||||||||||
Income from continuing operations as reported | 42.9 | 19.8 | 104.4 | 82.1 | |||||||||||
Provision for income taxes | 12.5 | 30.3 | 24.6 | 50.1 | |||||||||||
Net interest expense | 3.4 | 3.3 | 13.9 | 13.6 | |||||||||||
Depreciation and amortization | 14.6 | 13.8 | 57.7 | 51.7 | |||||||||||
EBITDA | 73.4 | 67.2 | 200.6 | 197.5 | |||||||||||
Restructuring expense | 14.2 | 0.4 | 47.0 | 1.7 | |||||||||||
Adjusted EBITDA | $ | 87.6 | $ | 67.6 | $ | 247.6 | $ | 199.2 | |||||||
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 intende
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