JBT - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to JBT Corporation Second Quarter 2020 Earnings Conference Call. My name is Amy, and I will be your conference operator today. At this time, all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to JBT’s Vice President of Investor Relations, Megan Rattigan to begin today’s conference. ahead. go Please

Megan Rattigan

Good quarter Amy. call and to and welcome Brian Thank conference morning, call. second CFO. Officer Executive XXXX Interim the With our Deck, you, Chief everyone me is on

have risk Paul by Protein. on in periodic results. release are that and Also, yesterday’s GAAP comparable FoodTech, call, factors subject documents the today these joined the from today’s information references be filings These also Investor today Sternlieb, release where website. Vice measure. press Please to also Harbor President yesterday, discussion of In an statements President forward-looking measures use JBT’s press Safe our sure we XK SEC our Executive to impact contain our reconciliations we’ll are to to non-GAAP filing. of and measures. a Relations’ that available section our regarding may reference and includes We’re of language provide

the Now, I’d turn to like to call Brian. over

Brian Deck

everyone. morning, Good Megan. Thanks,

serving management he his interim me and since JBT As the while on And be he smooth from continuing received focuses I’ve wanted Interim announced leave appreciation confidence and have in gratitude transition, team convey recovery. to for period. to our a Tom our as during well has and Board in Giacomini team to he execute you on and colleagues a management his hard wishes the our when this all priorities. health remain Tom we and commitment June, expresses of and of this you many make broader we communication, medical I my been his he their end for taking of I’m the will of assistance, and grateful as that know, as absence. worked Directors CEO to

the FoodTech AeroTech, Despite performance. a expanded In segment revenue what across due to has marketplace, massive sudden a and management. JBT’s has and disruption lower Now in word, of face resilient. been effective global cost the in JBT to turning been margins

outstanding free strong focus stability our Our laser profitability. its a on while And generation. our business managing remained service of customer challenges, of been given accessing flow the cash stream revenue not source recurring without has and reflected an is difficulties in sites, liquidity side

and JBT and actions structure with demand align as While commitment our the maintained to customer will savings has we have to the as swift health our well development, – of an talk of investment Paul particularly sustained taken meaningful have relates safety care in about with we it cost automation. that to more this environment, labor as Moreover, for demand our product shortly. employees. our accelerated unrelenting customers,

sequential gears expected performance most decline mix Gross our versus and our down strong recurring FoodTech a down a outsized and X%. business, expected to recent refurbishment our X% of than about further. cost FoodTech parts performance basis, margin for control. margins juice and better me break Let an On from margins expectations due is revenue projects. bit revenue outperformed second of outperformed volume, on switch quarter extractor

costs SG&A period. FoodTech than of than in travel better $X was side, cost driven about management the by and expenses the On controllable million healthcare and expected, expected lower

adjusted XXX expectations more and EBITDA with by result, of exceeded of adjusted basis margins margins margins by EBITDA XX.X% and a $X operating As approximately FoodTech than segment million points, XX.X%.

declined Revenue AeroTech. XX% Turning to sequentially.

Sequential million $X.XX. controls its of orders basis XX% customers generated deposits of was With compensation EBITDA board XX% better $XX [XXX] on due AeroTech. somewhat on per impact the the FoodTech’s the result a expected we contraction weaker lower JBT of at free margin of on across not a we’re quarter, million. provided of we $X.XX [ph] on as All that, expected, same slightly debt our to businesses points, as strength than did continuing EPS in the accrual to of despite the net cash an while diluted receivable, than than or FoodTech in operations well outstanding cost of came flow to performance incentive With the to earnings able At long-term benefit revenue. adjusted to told, orders. from focused keeping contracted an at meaningful, earnings. the posted managing expenses million job than operations and mainly declined quarter, last pandemic did pandemic segments’ Corporate lower time, due daily adjusted accounts a adjustment a deplete $X decline $XXX the the impact. However, as from million share as $XXX limit again, little color better expected, running. customer from

our at total liquidity at While $XXX end quarter. the the second stood million of

us color a Our in us bank X.X protein today, in the significant Paul? leverage the Paul ratio position QX. some I’ll Liquid the around asked I have Then which was and market healthy the Foods next join quarter. AeroTech speak our keeps debt times, given in to to provide to disruptions covenants. relative and

Paul Sternlieb

second market conditions Thanks, the Brian we side and experienced good on Protein challenging business. morning. quarter, In of the the

hit of access widely COVID-XX, slowdowns terms and mind been both share, As and never and our has as visits trying It’s protocols they press, new safety overwhelmingly been physical to customers, industry harder in maintain processing the has the causing consumed production. in with been to hard shutdowns. were meat by covered particularly plant

along and said has to Liquid it of access that, was travel JBT’s population, team in with augmented new been technology where virtual utilized the limited regarding to relates As the exception. and our most customers, service aftermarket keep we contact extensive projects, for Protein, ability obviously Foods no reality to Having support of and customers made our and training, use businesses with technologies. AeroTech have

customer the affect access JBT plans by will the to the of and are were for levels, Department year’s although plants continue installations JBT’s fact is XX% improve, to third US that We to production in operating quarter. according at in Agriculture, it June, service meat last encouraged ability to of starting

the of as Poultry been as a plants our JBT Robots, production XVision for hard opportunity and Loading and Waterjet so reasons other Tipper One and Packaging Automation Equipment, Automated such to of automation and timely and creates Systems, Automated Harvesting significant the Trimming many automation relatively Proseal. Portioning Equipment production. of X-ray compared our is that Protein End-of-Line Systems, and the food DSI solutions, Tie Protein in low has But Prime Sorting hit FlexScan Solutions with types Protein Inspection DSI Unloading level

reliance efficiency business JBT’s to are packed characterized that with costs Robotic Vehicles weeks, to COVID AGV states a for has outbreak, iOPS automation In reduce Our on and also an solutions severe industry considering suddenly tightly distancing labor Systems conditions that a and all from past few customers. other similar increase elements means equipment of imperative. rules, to labor by on-site the and reducing states automation our just vulnerability In being facilities actions. two social have measures issued gone labor a mandating key workplace

labor processing difficult without greater facilities, density be to extremely meat of Given it automation. maintain will the production levels

to orders of quality translate about have conversations protein coming encouraging Over months, the customers quarters. scope in the enterprise The and major to discussions lead level into with JBT’s are expect of automation us accelerated. and solutions the past engagement this couple

reinforces well completed solutions automation to our is invest view help. the Voice research customers the with to in that Our that recently protein Customer of positioned JBT plan and confirms customers globe across

and Finally, let solutions complements the With Mars the during the Processing small, iOPS that, our processing Mars’ efficiency acquired equipment and back participation solutions turn quarter, while proprietary Brian. me and primary call the of assets existing managing to plants Solutions, processing. Food monitoring JBT poultry for JBT’s in advances of poultry

Brian Deck

you well such very them retail Thanks, than refurbishments activity the customers the as also extremely a weaker served strong equipment, COVID staples Protein Customers maintenance. Paul. either running parts disruptions. And albeit our end Foods somewhat less as as to for a juice, level automation, vulnerable better retail of employ upgrades have side our of The capacity engaging saw demand. a side. Foods new JBT producing high or foods Generally, Liquid – are and ready quarter, hard by Liquid activity order higher canned equipment as these in and business and the making experienced via know, meals regarding need markets

to mind the orders. However, the have timelines to for distractions facilities access pipeline converting extended share reduced customer and

On the AeroTech side, our prospects vary by end widely market.

of XX% R&D cargo direct maintain orders true the JBT made held But year. remainder continue airlines ground The growth our to and that products in are market the about sales need. and AeroTech defense handlers whatever represent strong are AeroTech support favorable. sales. by and for dynamics and dialogue for we convert well, none remainder investments in to expect business interests service are markets electrification with to of said we more As of quarter. The The last engage many the time, the military starting in JBT. provide that for we to in that orders. generating opportunities and do held relationships represented quarter, we customer of have up from airlines to That XX% second represent long-term outlined At strong virtually has not they equipment AeroTech’s

military rates expand to in for to shipments orders double-digit forecasted fact, in are XXXX. In XXXX

notable or safe procurement side historical funding, time, pipeline supply. improve of to Over meaningful strong with due the country of business to our environment. roughly and flexibility to steps chain We the support through local any of our performed backlog to shortages regional supply we at and surety has risk based solid utilize did XX% the remains not fixed airport experience strategy. on contractors of but related As on in to our sourcing to expect for we all consolidated projects sales of XXXX. quarter, we our low-cost equipment robust business businesses, a a JBT infrastructure, taken Operationally, associated for more the margins, a not authorities remain and working in well. Across have the reliance expect infrastructure

employees production, are said, some particularly yet had of we within operations the outside have at experience to our to Florida environment, enabling stopped it COVID, has employees provide to customers. that continuous work impacted service risks breakout and we our to of our and aware pandemic Brazil. our While JBT to facilities a – our by relates have That as

with communicate and to on internal risks. external frequently continue employees We protocols our

on may opportunities as years, operational As as process manage relates JBT to also you restructuring evaluated and focused footprint. efficiencies, to business. utilization AeroTech improvements existing already those the operations, initiatives decisions in quarter we well has planning two to monitor enhances facility the past crisis manufacturing downsize We’ve in third the operations modest-sized we’re moves consolidate XXXX, compelling. of our the And into These to that In plan more it underway. we’re Spain. operating manufacturing few our system but know, the as significantly even the manufacturing of ability over looking at engaged plants JBT the our our the FoodTech considering, current represent

quarter, pickup Looking and to more and equipment sequential demand third engaged. as replacement we orders in for customers a the maintenance become anticipate increases

perspective, quarter and However, order P&L dampened, from given the higher the expected quarter environment second a will challenging the levels. third in be expense

the the the last contribution expect be approximately to We to quarter are margins XX% in Operating expected down margin to in on FoodTech sales. revenue with contract sequentially. lower sequentially third XX% connection

expense quarter. is return value cost Additionally, points third XXX Adjusted increase margin the EBITDA XXXX an engagement the increase in a result maintaining X% million strategic $X margins expect depreciation expect $X we the with These with increasing mentioned. are basis million backlog totaling amortization controls. contribution cross expense revenue third sales, to such basis quarter at of absence season. million also to second to related while around spending in levels we or of quarter the benefits due total, sequentially we the million in previously of we on deicer long-term All to margins XX%, margins million the increased customer AeroTech, and to XXXX, rationalizations to FoodTech exit expected the to around we generate in maintaining points XX% on a expected investments of from XXXX. as X% R&D, $X EBITDA charges the manufacturing moderate of to in and in the accrual about expected existing adjusted compensation to as take are expected sequentially to as margins. operating of approximately restructuring impact annually run are other adjustment we enter connection third fixed FoodTech sequential of $X.X one-time anticipate Corporate sequentially, sourcing the items $X or quarter. expect and expected that rate of million actions quarter XX to $X told, In reductions higher the and and first seasonality to given $X increased million engineering. to as incentive In part to based in At improve

On with our UK to for XX%. in million $X.X is base $X.XX the of tax tax we connection XX% discrete the quarter expect new quarter This a tax or in to incremental UK estimate to incur the the laws. during charge per – rate line, share – third with

Before call With and JBT. have questions. the the conditions I’d our we I’d customers like weathered environment commitment to to a outstanding continue to challenging we’ll to a across in deliver heartfelt extraordinary open world. I’m and critical and services. the to grateful open done products it made like that questions, the customers to JBT my and to demonstrate very call our employees also recognize extend work for thanks they’ve that, Operator? the they’ve to their

Operator

[Operator Fargo. Poliniak line your proceed question comes with first of Wells Your question. with Instructions] the from today Please Allison

Allison Poliniak

morning. good Hi,

Brian Deck

Good morning.

Allison Poliniak

First would to at of talk notice as or products one, you’re looking guess say? types are any could Is I seeing. I mix an of forward product that, FoodTech noticeable one I’ll difference differences terms or drive there at of in and demand or verticals the regional any like inquiries people just go we odd some

Brian Deck

level it Yeah, speak color America North in you here you that America Geographically to the to Paul behind Brazil. did outbreak geographies quarter, having is as some can on the within And I – the products, mention starting bit that speaking, Asia be of are enterprise seem with in presence And of materialize discussions going America, of the bigger in particular, thought little a and some like but in little to the Europe North of our and ahead especially slower. along is said, America. further the Latin a know, certainly we our Frankly, That bit little America some I’ll bit bit was given, Paul our in can and third with Asia probably that little Protein. second Latin tell North farthest the give the customers. with a a seems quarter. second does we’re

So seeing promising we’re that that’s a the over weeks. thing last several

Paul Sternlieb

you focused the the are, product, our more yeah, for, on I on morning, the add continuing for key Automated obviously would to terms Guided Vehicle and looking also point operational also I way, session are and kind seriously the on the around say, know, you and the point it would day of made customers you And AGV customers of important of is, mean, many implementing in remarks quarter. things efficiencies, globe. discussions would I good safety, and mix our look But They’re to customers. with Brian, the sort in to conference business. automation, depending which are of the the that intense of very those remain course, comments increasingly Yeah, Allison. beginning at every and by about those which increasing I varies yield technologies. our I would conversations food here of the our we or

fully have many and decision to manual are who customers operations fork move exit making looking We essentially enterprise solutions. really the automated at to truck

around customers the are of our So globe. those to with traction technologies continuing gain sort

Allison Poliniak

terms on very know, AeroTech. mindful Great, here? some defense still here turning different the any the know piece versus thanks. you equipment. you of commercial and those you of in issues noticed to obviously Is mix And verticals going of then the I orders that’s just weak know forward, there fixed say side

Brian Deck

the the bit ground versus better. bit airports the the But sorry, infrastructure Right, more military support little equipments infrastructure the versus on on a ground margins military side. and – other fairly just little the beneficial the a are similar, better

Allison Poliniak

for thanks pass the Great, along. color. it I’ll

Operator

question. Your the with with Lawrence your next proceed comes William from of Maria question Please line Blair. De

Lawrence De Maria

morning, Thanks. Good everybody.

Brian Deck

Good morning.

Paul Sternlieb

morning. Good

Lawrence De Maria

Brian. Hey,

expecting to best recovering. this obviously, obviously know you the any timing guys have you hear or Tom, of at all, to we possibility return And glad preliminary his still on of him point? First are comments that return? Do he’s

Brian Deck

Yeah, said, not on very given that. color, whole to health lot a clear quiet a we’re was issue, That interim that an know, the you this additional Larry. be it’s that assignment. was board Obviously, going of pretty

at in And so I’m that’s communication where we’re point. with this sitting Tom.

So we is do appropriately but talk he as the necessary, so. disengaged business from

So appropriate as pass we’ll we know more, the along at time.

Lawrence De Maria

also let’s And or that gets that say half second impediment in it are Okay. to thinking an pushed point? conducting at we M&A, out is this just the

Brian Deck

we strategy aligned No, – a got give impediment just M&A, different well-developed tell on I of broadly as really to We all, some spot. is continued could first potential don’t were ago, particularly you the you M&A. banking quite an I we a it’s the the the color, us. markets quarter as more you cash here the well know markets leverage know, a on a of, sat debt the that targets. the flow, or as more of in things to were We’ve with EBITDA, and M&A. great engagement regarding have uncertainty think little with – bit in not capital And terms board

markets at improved about Over leverage liquidity at our quarter, X sitting times, banking back cash million. markets side are shape. were in JBT we’ve pretty good at totally our flows, have the $XXX over last not returned, our The the capital a the on significantly

of targets, otherwise if or opportunities wouldn’t would be well valuations. I in planning So, that have see frankly positioned terms acquisition customers, we succession say we’re maybe really sorry,

that all X X could has next see to to our potentially our keep our quarter look leverage leverage, experience current recurring well see manage us to times you I core liquidity or ratio our so, the that our leverage strategy if it doing said, I ability revenue. some in within over X ratio acquisitions manage our we’re would over and within the structure. year if given last a we served and I to particularly times of X the EBITDA tell of times the given some But demonstrated improved orders. like our on liquidity to costs, capital think our times I demonstrated at well, and our could would So clarity positioned. you resiliency

flexibility it strategy, some does that good X So I leverage overall think to times is X us here. ratio and allow times targeting from

Lawrence De Maria

Right. sneak quick two And in I if ones here. just can

orders AGV couple I that preparing growth of think now negative XXXX around expectations more in times, mentioned around the of to Is And the but business, business shape. through even you you have $XXX about know, And a it pretty orders from is you million. on be in you it – AeroTech of business, where assume it you some obviously, some on with there’ll or likely the be used you’d Can stand lot about for reasonable that the based for have it to based size a talked that you and know us? be you secondly, evaporated, you trajectory XXXX. know your comments good or I the to guidance, actually in don’t is organic First, ordered that from into just but be ‘XX? here

Paul Sternlieb

Paul, address your is I this can on first question AGV. Larry, Right,

consistent total the and But You business particularly of we it’s company and still heavily excited invest continue in about remains know, business we about we that X% it’s a today. very to that the I think roughly R&D. be said it’s

the of excited that all remain we trends so because in customer and space, very about So that. the needs

Brian Deck

it a to break to little bit. position particular relates a it on bit But and it’s AeroTech, a too giving Right down little XXXX. to just early

XXXX is a – On to good it’s for going business. record be the like side, that it looks year infrastructure

in But of we expect really pipeline activity, were the aggregate that how would say what in airline we be XXXX, do it’s the the well ground all too another opposed And terms so to on suggesting light year’s growing market. out growth And strength cargo the is still year, tell. and just based as flattish military going as of XXXX early on expect XXXX. support to of we solid in of side. it’s growth the more this But I but shakes industry, and some as don’t to in to

Lawrence De Maria

the for there. color nice thanks Okay, job. luck, Good

Brian Deck

Thank you.

Operator

Liptak question with question. today line Your Walter your the Seaport. comes next with Please from of proceed

Walter Liptak

Good guys. thanks. Hi, morning,

Brian Deck

Good morning.

Paul Sternlieb

Good morning.

Walter Liptak

through a about the talk July, trends I you incremental of terms you of on saw especially wondering bit you confidence if have detail, that some second any know, maybe little orders? ordering some in better wonder and of the in if that us could FoodTech walk monthly may in for I’m you the given a was ordering, to half side more there

Brian Deck

Right.

a fairly orders, down orders you considering would you that week, lumpy, seen lumpy regard with to general. well especially a tell So particularly consistent we been in I pattern know, week, up we haven’t have, generally it’s a

year. the our does how the confidence come of the it engagement over from the comes back not of and unfolding trends, with and So the amount rest of quarter the we and from half the that see into pipeline the customers

Walter Liptak

great. you’re talking Okay, think do discussions on side, these this that and customers that with the – your trend having And safety they’re automation towards the with about? you that FoodTech sheet? investing if think in they automation? of ready Do a Do event XXXX more do year? balance this Do they have you start it they have becomes for the the capital

Brian Deck

requests for of base. that color a strength the balance as the more to we’ve smaller guys. more range as Yeah, than going have capital to again, big I I’m a seen the capital big Protein. the a terms guys, more bit some you Certainly bandwidth little give of would looking more ask it’s some to guys wide the within a get I’ll for extended amongst then I’ll be give – local perhaps challenge and guys, into regional our or you sheet. color, Paul we got we’re and customer and have some well some That’s confident tell you bouncing enough structures available

Paul Sternlieb

a comments a about in interesting And could Voice Customer points the share Right, I our research. few yeah. few that. just would make of points I referenced from maybe I

than to this got and that challenging more. year And research a is capacity, new equipments. two-thirds respondents are You response looking bullish efficiency is higher of know, of that overall and did research I customers look becoming are more the positioned XX the respond are it the Systems about the last automate they them of Protein-specific, that as other two-thirds survey a investment nearly significantly our reduce a see, and certainly than for through indicated our percentage to that efficient to to I’d over availability that, new to half also And energy savings ago. indicated that cost the plans that has way, over add next reliance the more indicated clear processing customers Re-Use Water months in well well point with based are years. labor guess survey production water that we’ve go they that Prime increase space be the research through more particularly our availability, over in of the as on we their our need previous levels rate for last have by seems on to energy we is I customers make labor purchases. done, equipment desire to to of going labor. our and by seen year. And their equipment, forward would And equipment changed increased and same new way, that they’ve we responding

that’s encouraged as by by the positioned ranked than finding. percentage of better also encouraged And to I’m I’m research customers competitors significantly needs. JBT increased our meet their the year-over-year. So that

news overall research relatively So, us, the promising know, of is pieces you telling here.

Walter Liptak

know, automate of payback what you customer automation doubt have great. in payback that ROI? your put of talk equipment. way guys there’s a a right have or you terms you there or a customers a all rule they would Yeah, about you how long If thumb is in Okay, period? like some no Do the DSI if period great is the that’s get can machine,

Brian Deck

of in vary as widely, long does XX – of it’s speaking, timeframe. but kind X-year months But general it years. as say, the – of and Yeah, generally as quick is rule generally kind X thumb I’d as that

Walter Liptak

Thank you. Okay, great.

Operator

comes of Baird. your question line next from Your proceed Please Dobre question. the Mig with with

Brian Deck

Mig. Hey,

Mig Dobre

morning, of that, listening you you. prepared what remarks, everyone. of kind wish business has on And you strong. Liquids question were the way side FoodTech. on to Based we the I’m Thank is Thomas, first if I the this, you’re well. saying guess Good remained my interpreting your

You’re expecting better as wondering Is to orders by, get sort it’s improvement versus purchases OE the pure you that better that’s at to such business just Protein in it And bounce? QX. Liquids up QX know, that starting really sequential versus of you that maintenance driven this infer are driving Or see fair I’m if well? incremental and catch is point?

Brian Deck

met was stronger year Right, than was still ago. it you what it but – still a I than was it it expectations, while and our would tell on Liquid Foods FoodTech, is, weaker

it stronger hard us it’s strong, say to it for was but than Protein. just was So right,

come would As from second QX, expect of given to to Protein we they in quarter. division, the weakness more QX I from convert the the increase saw the

that Foods expect a automated the and do to because as and Protein. Liquid Foods that environment, I different than bit Foods going is it mentioned, more is I Protein, – little versus So already it’s the Liquid a Liquid

staple the that just invest have Liquid capacity and and maintenance acquisition and see well the we’re certain of goods, seeing particularly So are expanding spots, what in quarter have as and more increases, packaged increases in in for seeing increases areas items they care to strong Foods the areas – packaged performed other then well refurbishments extraordinarily existing. demand. now general right, some right really, confidence of our Proseal in, the And as side that is we’re some now. capacity more, in – on was and the That

more strength Paul on the side, increases, the given food retail Protein focused and we’re frozen lot a in spots capacity automation, that the seeing as bit a said, On area. little certain on in activity where side, of it’s including freezing

Mig Dobre

sequential at and that get setup the here. fourth trying obviously, I think into an and in see. to case, I I’m end wondering this going of uptick enough XQ of generate about I’m that’s know, trying how backlog if from the a markets footprint point. for tougher. in to segment this question of the because through sort you right a And, guess, and kind normal sort action the orders XXXX end if, XXXX? that at quarter And standpoint, here we you once Yeah, tough considerably point in order contemplating you start size answer setup sort the progression that do gets the to the momentum this year? fiscal have you’ve at we’re expect But of as maybe you is what then year the into of really to to perspective not comparison in again, the cost seen to XQ the think I’m in additional Should from

Brian Deck

in underlying and even so back Right, year half retail, demand the of the those really better questions is that that, some do and orders or based second that on we the But improvement than been food The do we conversion the consumer specifically, the service because bit environment, answer, remains year depending into in quarter, fourth demand. in. is and the the increased I to the right front this it’s customers of half, back because expect that of to that on window and benefit engagement, at we the different in. really increased half the it the of see perhaps in need of But question see little the those operating that’s the that in should orders, QSR just difficult come is would ultimately is the what rates say patterns which we answer challenge we’re the which do again, your a typical XXXX the drive a open opportunities more quarter. see when environment orders certainly, orders And out seasonal that was right. the some

we enter what into significant of develop engagement. about trying demand, focus noise do wholesome knowing a that in underlying So the again, getting just a that more backlog it’s on really it, here XXXX. support XXXX there’s as consumer that amount but in We customer is we’re have to

Mig Dobre

you may, in me. X. Is you’re about and way you I of again, to early or point guidance of based seems book-to-bill if production quarter pretty or on close the about to we being book-to-bill And think orders enough it your for on that know, that. to know, as FoodTech to you’re how a kind the stabilize provided one your that sequentially in trying close going close improve be sales, last direction and target into if appreciate fair I business, here, like you’ve And backlog think the to you’re about XXXX? X fourth that’s FoodTech, managing

Brian Deck

well. as a QX. point. to and build backlog we like Yeah, greater kind go of activity, that’s additional at thinking a would to positioned that this That – of about increased to it. customers to see would expense we in QX see changed, would on at said, know we’re incremental do bit level actions. don’t – which our bit point, spending the to that the things, need are suggest as of say little conditions you we And way Maybe to if do I see need have we’re this where given we based engagement a side, decent little X on book-to-bill that because X But that a we from forecasted obviously, more going in X. than I we And

mentioned, footprint FoodTech X side, and the locations. On we the AeroTech X

longer-term appropriate our go think kind we not be footprint, evaluate to we’ll about hit would would of on business right more way always and short-term the how we’re It the we and JBT entire for be next that’s it we be doing here. that forward orders did the if more continue thinking as quarter, that for of a a in couple from because basis I We the just reactionary for setup consider should years. what’s

Mig Dobre

Great, thanks color. the for guys. Good luck

Brian Deck

Sure. Thank you.

Operator

Please Morgan. your proceed line question. question Patrick with with Your the comes from next of JP Baumann

Patrick Baumann

Hi, Thanks guys. for good morning, my taking questions.

Paul Sternlieb

morning. Good

Patrick Baumann

morning. Yeah, good

You mentioned the in call. strength early

business the could into you. know You versus curious means year-over-year expectations. FoodTech why drove stronger remind or business Extractor I first versus supporting Juice and it? I’m that mentioned you strength Is then in Juice in the sequentially revenue quarter for you us the overall assume And right margins lease what that that profitability also what the segment? Extractor your that’s just have this

Brian Deck

you first Right, you right. meant think the quarter, said quarter, I second

better during the bit really Extractor rolls got strength. was in Yeah, sometimes course third juice, a what So business it was the there the was, squeezed oranges into strength all absolute quarter. in the of the country on there of the happened the Juice increased was Basically a because than expected. consumer it quarter, –basically orange little demand

really makes quarter. in little some of to business a strength that more than the you the as the costs, certain volume volume that second base lease cost do otherwise lucrative, have fairly we little revenue model decline when packed So get into the components it bit from up, it’s a in QX and then quarter. QX been second and And variable would that’s given and the the in a is saw that second because quarter, the have was We which benefit fixed increases. pronounced bit that for contracts, variable of what goes

Patrick Baumann

okay. Understood, just what total included an aftermarket much, is that how segment curious – revenue, assume aftermarket lease the – revenue business I for that’s The

Brian Deck

leases – up recurring a Yes. Yes, the recurring so It’s aftermarket recurring and revenue. revenue. makes

Patrick Baumann

missed might – I say was have growth to quarter? you I no, Yeah, the is ask recurring what the earlier? that going revenue the what in are Did that.

Brian Deck

the quarter in expectation a total don’t XX% which an saw. quarter, of percentage the of in we in year-over-year, we – it accessories And about came the good X%, in that considering pretty – Yeah, the it is the all as revenue XX% least first at at in quarter, versus quarter. XX% mentioned think the and I things it declined

Patrick Baumann

it, go – sorry And actually was and Juice to or back business Extractor to but within that up the

Brian Deck

– it Yes,

Patrick Baumann

was wasn’t? – It up Or

Brian Deck

higher then and was the couple there. to a of reason that, were did, part on of little that expectation a and mix – XX% is It part why XX% the of going from bit yeah here other items

Patrick Baumann

just Got a you given on that that wasn’t case decline why of or quarter? and advances it. you would be in Can case I wouldn’t maybe why have cash the in discuss both the saw And the expected be the drag, kind then orders sequentially. year-over-year flow. to

Brian Deck

cases, did widely. it quarter, very cash, does our we in the And of orders on credit focus on just every deposit It in only balance on was orders and and a and was deposits. is, particular to how just I a in million, on turned vary $X And out, the tell percent, every bigger you as it X not it It’s for order, some – magic this get focus our a pleasant surprise really in of many it support quarter. the declined letters like that we them. overall. the every we much than And other you as it’s deposits we well. good better getting really decline for given that’s dollar What that of – on orders folks had, had could given get job cash there deposits linear we customer know focusing that of really we not were no some large the – for get focused really an got

Patrick Baumann

last you. month sticking on then from orders the from UK. just Got And

US increased if in of that of I the piece you percentage US. said FoodTech then the could would interests just you you you’re is think I want said? the kind us segment? non-recurring be Protein is in in automation big remind mainly Protein And clear, seeing a of as to how

Brian Deck

world so fruit Protein opportunities in areas world. that there processing, we automation, a vegetable we decent Liquid within Liquid fairly Foods particular, Right, in Foods the ripe have in That more also for automation said, area. processing, see are fresh that are than business do

because be happens the just mix in Liquid that terms Foods business. bigger here. And has to versus Foods, from lease type is opportunities closer still bit of little in the on materially, their are definitely less, there But versus range it’s XX% Liquid in recurring world So a Liquid not Protein to XX%. revenue automation side it’s to the slightly XX% of Foods there

Paul Sternlieb

say market then you given given Latin mean, Paul. condition globe. Asia it’s with I would the they’re obviously you more we’re just customers with an conversations extent customers conversations some could the and very here, to Pat, US I I color geography. the some that automation in COVID we’ve automation. of in but of America as know, pronounced know, Europe and meaningful on in add also different And about had, severity the just on probably well the across the are having

Patrick Baumann

you. helpful That’s Thank it. ask else let question. I’ll Got color. someone

Brian Deck

Thank you.

Paul Sternlieb

Thank you.

Operator

proceed question of next question. with comes line of from Your Andrew Obin Please with America. Instructions] the your [Operator Bank

David Ridley-Lane

give to Ridley-Lane not Sounds benefit planned actions? in on us you some Could going around like of [technical the be It’s your of timing just David Andrew. a restructuring there’s to idea for difficulty] XXXX, check? lot wanted but

Brian Deck

and year the be run million $X starting $X in and million I expect there’ll full bit you rate in that about to to then million, $X the of little Right, a quarter XXXX would about would XXXX. in million half fourth of $X tell I

David Ridley-Lane

of FoodTech into quarter benefit what the mix then margins? was the And equipment shift Right. to second the services in versus

Brian Deck

ago, is to or expectations question. guess I The to a the year benefit relative relative

David Ridley-Lane

Year-over-year, if you have it.

Brian Deck

by basis contribution margin. side on the to obviously back equipment then due going benefit of its to XXX it’s about get the be the point Yeah, loss of that, but offset

David Ridley-Lane

Got it. is the me. coming one And here commentary temporary some is how in was last of But know What you cost from third? back give I the then back. for can maybe in that of some savings second benefit the And slowing on if kind quarter? much

Brian Deck

Sure.

the I incentive the cool had that about the a because of at It we compensation. of year-over-year couple So million. where One, things. million $XX mentioned on about expected ended long-term on savings adjustment of up $XX

expected people second away areas, go one, as a in third were go mainly than reverse. our we doctors reasons. – non-COVID So because that’ll particular, quarter. overachieved healthcare in – that saw into we’re better we the $XXX,XXX FoodTech, of couple the Also, activity saw the we visiting about of as expenses quarter, seeing second quarter for the to starting And trend last end

that also, then actually in orders. as start accrue the travel we on think during we level for comes going money So that the of level saw back, that some about And expense commission we quarter the more relatively we $XXX,XXX million we overall quarter for book about and are of accrual customers. second $X our to JBT in low we a as spending more FoodTech engage orders additionally given

to told, - givebacks we of and some of the and $XX quarter. million all the in based furloughs, the on spending of had expect and the expectations $XX intentional go travel third cetera savings I million at customer engagement that or So $XX et return versus would new on our million the

David Ridley-Lane

Perfect. Thank much. very you

Brian Deck

thank you. Okay,

Paul Sternlieb

Thank you.

Operator

at queue any time. closing for in questions further back to turn this I’d remarks. no are there Deck And the call Mr.

Brian Deck

Thank – today. thank you us all for joining you for

Thank will Megan follow-up have questions. you. you be always, available if As

Operator

concludes you today’s your for this conference call. Thank participation. And

You disconnect. may now

JBT Marel (JBTM) 28 Jul 202020 Q2 Earnings call transcript