JBT Corporation Reports Third Quarter 2021 Results

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and in millions, except per share data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Revenue

$

477.4

$

419.2

$

1,370.7

$

1,288.4

Cost of sales

334.9

292.0

945.1

888.0

Gross profit

142.5

127.2

425.6

400.4

Gross profit %

29.8

%

30.3

%

31.0

%

31.1

%

Selling, general and administrative expense

100.9

91.8

296.9

269.6

Restructuring expense

1.1

7.1

3.1

11.2

Operating income

40.5

28.3

125.6

119.6

Operating income %

8.5

%

6.8

%

9.2

%

9.3

%

Pension expense, other than service cost

0.1

1.1

0.1

3.1

Net interest expense

2.1

2.9

6.3

11.2

Income from continuing operations before income taxes

38.3

24.3

119.2

105.3

Provision for income taxes

9.0

7.1

32.4

26.6

Income from continuing operations

29.3

17.2

86.8

78.7

Net income

$

29.3

$

17.2

$

86.8

$

78.7

Basic earnings per share:

Income from continuing operations

$

0.91

$

0.54

$

2.71

$

2.46

Net income

$

0.91

$

0.54

$

2.71

$

2.46

Diluted earnings per share:

Income from continuing operations

$

0.91

$

0.54

$

2.71

$

2.45

Net income

$

0.91

$

0.54

$

2.71

$

2.45

Weighted average shares outstanding

Basic

32.0

32.0

32.0

32.0

Diluted

32.1

32.1

32.1

32.1

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
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Income from continuing operations as reported

$

29.3

$

17.2

$

86.8

$

78.7

Non-GAAP adjustments:

Restructuring related costs

Restructuring expense

1.1

7.1

3.1

11.2

Inventory impairment due to restructuring

—

1.9

—

1.9

M&A related cost⁽¹⁾

3.6

0.9

8.5

4.4

Management succession costs⁽²⁾

—

3.5

—

3.5

Impact on tax provision from Non-GAAP adjustments⁽³⁾

(1.1)

(4.0)

(2.8)

(5.9)

Impact on tax provision from remeasurement of deferred taxes from
material tax rate changes

—

—

4.4

—

Adjusted income from continuing operations

$

32.9

$

26.6

$

100.0

$

93.8

Income from continuing operations as reported

$

29.3

$

17.2

$

86.8

$

78.7

Total shares and dilutive securities

32.1

32.1

32.1

32.1

Diluted earnings per share from continuing operations

$

0.91

$

0.54

$

2.71

$

2.45

Adjusted income from continuing operations

$

32.9

$

26.6

$

100.0

$

93.8

Total shares and dilutive securities

32.1

32.1

32.1

32.1

Adjusted diluted earnings per share from continuing operations

$

1.02

$

0.83

$

3.12

$

2.92

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair
value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) In the third quarter of 2020, we adjusted certain of our non-GAAP financial measures for management succession costs relating to severance
paid to our former CEO, net of the reversal of stock based compensation expense for forfeited equity awards and costs related to filling
executive positions.

(3) Impact on income tax provision was calculated using our annual effective tax rate of 24.2% and 24.7% for the quarters ended September 30,
2021 and 2020, respectively.

The above table reports adjusted income from continuing operations and adjusted diluted earnings per share from continuing operations, which
are non-GAAP financial measures. We use these measures internally to make operating decisions and for the planning and forecasting of future
periods, and therefore provide this information to investors because we believe it allows more meaningful period-to-period comparisons of our
ongoing operating results, without the fluctuations in the amount of certain costs that do not reflect our underlying operating results.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited and in millions)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Net income

$

29.3

$

17.2

$

86.8

$

78.7

Income from continuing operations as reported

29.3

17.2

86.8

78.7

Income tax provision

9.0

7.1

32.4

26.6

Interest expense, net

2.1

2.9

6.3

11.2

Depreciation and amortization

20.0

18.0

56.6

53.2

EBITDA

60.4

45.2

182.1

169.7

Restructuring related costs

Restructuring expense

1.1

7.1

3.1

11.2

Inventory impairment due to restructuring

—

1.9

—

1.9

Pension expense, other than service cost

0.1

1.1

0.1

3.1

M&A related cost⁽¹⁾

3.6

0.9

8.5

4.4

Management succession costs⁽²⁾

—

3.5

—

3.5

Adjusted EBITDA

$

65.2

$

59.7

$

193.8

$

193.8

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) In the third quarter of 2020, we adjusted certain of our non-GAAP financial measures for management succession costs relating to severance paid to our former CEO, net of the reversal of stock based compensation expense for forfeited equity awards and costs related to filling executive positions.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth through acquisitions, management believes EBITDA facilitates an evaluation of 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.

JBT CORPORATION

BUSINESS SEGMENT DATA

(Unaudited and in millions)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Revenue

JBT FoodTech

$

359.1

$

301.0

$

1,031.6

$

913.5

JBT AeroTech

118.3

118.2

339.1

374.9

Total revenue

$

477.4

$

419.2

$

1,370.7

$

1,288.4

Income before income taxes

Segment operating profit⁽¹⁾⁽²⁾:

JBT FoodTech

$

48.9

$

37.9

$

141.9

$

127.6

JBT FoodTech segment operating profit %

13.6%

12.6%

13.8%

14.0%

JBT AeroTech

7.0

11.4

29.0

40.2

JBT AeroTech segment operating profit %

5.9%

9.6%

8.6%

10.7%

Total segment operating profit

55.9

49.3

170.9

167.8

Total segment operating profit %

11.7%

11.8%

12.5%

13.0%

Corporate expense

14.3

13.9

42.2

37.0

Restructuring expense

1.1

7.1

3.1

11.2

Operating income

$

40.5

$

28.3

$

125.6

$

119.6

Operating income %

8.5%

6.8%

9.2%

9.3%

Other business segment information

Three Months Ended
September 30,

Nine Months Ended
September 30,

Inbound orders

2021

2020

2021

2020

JBT FoodTech

$

382.0

$

310.4

$

1,165.3

$

888.6

JBT AeroTech

138.7

110.8

421.6

347.3

Total inbound orders

$

520.7

$

421.2

$

1,586.9

$

1,235.9

As of September 30,

2021

2020

Order Backlog

JBT FoodTech

$

544.7

$

376.8

JBT AeroTech

369.3

276.4

Total order backlog

$

914.0

$

653.2

(1) Segment operating profit is defined as total segment revenue less segment operating expenses.  Corporate expense, restructuring expense, interest income and expense, pension expense other than service, and income taxes are not allocated to the segments.  Corporate expense generally includes corporate staff-related expense, stock-based compensation, LIFO adjustments, certain foreign currency related gains and losses, and the impact of unusual or strategic events not representative of segment operations.

(2) Total segment operating profit, as presented elsewhere in this release, is a non-GAAP measure.  The table above includes a reconciliation of total segment operating profit to operating income.  We believe that this measure provides to investors a more comprehensive understanding of the information used by management in evaluating the performance of its segment operations.  It is not intended to nor shall be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

(Unaudited and in millions)

Three Months Ended September 30, 2021

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$

48.9

$

7.0

$

(15.4)

$

40.5

Restructuring expense

—

—

1.1

1.1

M&A related cost⁽¹⁾

0.3

—

3.3

3.6

Adjusted operating profit

49.2

7.0

(11.0)

45.2

Depreciation and amortization

17.9

1.2

0.9

20.0

Adjusted EBITDA

$

67.1

$

8.2

$

(10.1)

$

65.2

Total revenue

$

359.1

$

118.3

$

—

$

477.4

Operating profit %

13.6

%

5.9

%

8.5

%

Adjusted operating profit %

13.7

%

5.9

%

9.5

%

Adjusted EBITDA %

18.7

%

6.9

%

13.7

%

Nine Months Ended September 30, 2021

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$

141.9

$

29.0

$

(45.3)

$

125.6

Restructuring expense

—

—

3.1

3.1

M&A related cost⁽¹⁾

1.1

—

7.4

8.5

Adjusted operating profit

143.0

29.0

(34.8)

137.2

Depreciation and amortization

51.1

3.2

2.3

56.6

Adjusted EBITDA

$

194.1

$

32.2

$

(32.5)

$

193.8

Total revenue

$

1,031.6

$

339.1

$

—

$

1,370.7

Operating profit %

13.8

%

8.6

%

9.2

%

Adjusted operating profit %

13.9

%

8.6

%

10.0

%

Adjusted EBITDA %

18.8

%

9.5

%

14.1

%

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair
value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth
through acquisitions, management believes EBITDA facilitates an evaluation of 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.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

(Unaudited and in millions)

Three Months Ended September 30, 2020

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

37.9

11.4

(21.0)

28.3

Restructuring related costs

Restructuring expense

—

—

7.1

7.1

Inventory impairment due to restructuring

—

1.9

—

1.9

M&A related cost⁽¹⁾

0.7

—

0.2

0.9

Management succession costs⁽²⁾

—

—

3.5

3.5

Adjusted operating profit

38.6

13.3

(10.2)

41.7

Depreciation and amortization

16.0

1.3

0.7

18.0

Adjusted EBITDA

$

54.6

$

14.6

$

(9.5)

$

59.7

Total revenue

$

301.0

$

118.2

$

—

$

419.2

Operating profit %

12.6

%

9.6

%

6.8

%

Adjusted operating profit %

12.8

%

11.3

%

9.9

%

Adjusted EBITDA %

18.1

%

12.4

%

14.2

%

Nine Months Ended September 30, 2020

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$

127.6

$

40.2

$

(48.2)

$

119.6

Restructuring related costs

Restructuring expense

—

—

11.2

11.2

Inventory impairment due to restructuring

—

1.9

—

1.9

M&A related cost⁽¹⁾

1.0

—

3.4

4.4

Management succession costs⁽²⁾

—

—

3.5

3.5

Adjusted operating profit

128.6

42.1

(30.1)

140.6

Depreciation and amortization

47.2

4.0

2.0

53.2

Adjusted EBITDA

$

175.8

$

46.1

$

(28.1)

$

193.8

Total revenue

$

913.5

$

374.9

$

—

$

1,288.4

Operating profit %

14.0

%

10.7

%

9.3

%

Adjusted operating profit %

14.1

%

11.2

%

10.9

%

Adjusted EBITDA %

19.2

%

12.3

%

15.0

%

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) In the third quarter of 2020, we adjusted certain of our non-GAAP financial measures for management succession costs relating to severance paid to our former CEO, net of the reversal of stock based compensation expense for forfeited equity awards and costs related to filling executive positions.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth through acquisitions, management believes EBITDA facilitates an evaluation of 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.

JBT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in millions)

September 30,

December 31,

2021

2020

Cash and cash equivalents

$

58.2

$

47.5

Trade receivables, net of allowances

319.7

304.4

Inventories

217.9

197.3

Other current assets

68.6

66.9

Total current assets

664.4

616.1

Property, plant and equipment, net

268.3

268.0

Other assets

1,105.8

921.8

Total assets

$

2,038.5

$

1,805.9

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

$

0.3

$

2.4

Accounts payable, trade and other

183.4

140.7

Advance and progress payments

157.1

137.5

Other current liabilities

162.0

176.9

Total current liabilities

502.8

457.5

Long-term debt, less current portion

652.9

522.5

Accrued pension and other post-retirement benefits, less current portion

74.1

94.1

Other liabilities

101.4

94.7

Common stock and additional paid-in capital

214.6

229.2

Retained earnings

705.0

627.8

Accumulated other comprehensive loss

(212.3)

(219.9)

Total stockholders equity

707.3

637.1

Total Liabilities and Stockholders Equity

$

2,038.5

$

1,805.9

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in millions)

Nine Months Ended September 30,

2021

2020

Cash flows from operating activities:

Income from continuing operations

$

86.8

$

78.7

Adjustments to reconcile income to cash provided by operating activities:

Depreciation and amortization

56.6

53.2

Other

9.5

9.1

Changes in operating assets and liabilities:

Trade accounts receivable, net

(16.1)

54.5

Inventories

(26.6)

14.4

Accounts payable, trade and other

40.0

(46.6)

Advance and progress payments

22.7

4.2

Other - assets and liabilities, net

(9.6)

(6.4)

Cash provided by continuing operating activities

163.3

161.1

Cash provided by operating activities

163.3

161.1

Cash flows from investing activities:

Acquisitions, net of cash acquired

(185.3)

(4.5)

Capital expenditures

(33.9)

(22.7)

Other

2.0

1.2

Cash required by investing activities

(217.2)

(26.0)

Cash flows from financing activities:

Net payments on credit facilities

(260.8)

(109.6)

Proceeds from issuance of 2026 convertible senior notes, net of issuance costs

391.5

—

Purchase of convertible bond hedge

(65.6)

—

Proceeds from sale of warrants

29.5

—

Dividends

(9.5)

(9.5)

Payment of acquisition date earnout liability

(16.1)

—

Other

(2.1)

(2.2)

Cash provided (required) by financing activities

66.9

(121.3)

Effect of foreign exchange rate changes on cash and cash equivalents

(2.3)

(2.7)

Increase in cash and cash equivalents

10.7

11.1

Cash and cash equivalents, beginning of period

47.5

39.5

Cash and cash equivalents, end of period

$

58.2

$

50.6

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

FREE CASH FLOW

(Unaudited and in millions)

Nine Months Ended September 30,

2021

2020

Cash provided by continuing operating activities

$

163.3

$

161.1

Less: capital expenditures

33.9

22.7

Plus: proceeds from sale of fixed assets

2.0

1.2

Plus: pension contributions

12.3

0.6

Free cash flow (FCF)

$

143.7

$

140.2

The above table reports Free cash flow, which is a non-GAAP financial measure. We use Free cash flow internally as a key indicator of our liquidity and ability to service debt, invest in business combinations, and return money to shareholders and believe this information is useful to investors because it provides an understanding of the cash available to fund these initiatives. For Free cash flow purposes we consider contributions to pension plans to be more comparable to payment of debt, and therefore exclude these contributions from the calculation of Free cash flow.

JBT CORPORATION

NET DEBT CALCULATION

(Unaudited and in millions)

September 30,

December 31,

September 30,

Change from

Change from

2021

2020

2020

Prior Year-End

Prior Year

Total debt

$

653.2

$

524.9

$

598.2

$

128.3

$

55.0

Cash and cash equivalents

(58.2)

(47.5)

(50.6)

(10.7)

(7.6)

Net debt

$

595.0

$

477.4

$

547.6

$

117.6

$

47.4

JBT CORPORATION

BANK LEVERAGE RATIO CALCULATION

(Unaudited and in millions)

Four Quarters Ended

September 30, 2021

Total debt

$

653.2

Cash and cash equivalents

(58.2)

Other items considered debt under the credit agreement

28.2

Consolidated total indebtedness⁽¹⁾

$

623.2

Last four quarters Adjusted EBITDA

$

259.5

Other adjustments net to earnings under the credit agreement

(10.8)

Consolidated EBITDA⁽¹⁾

$

248.7

Bank leverage ratio (Consolidated Total Indebtedness / Consolidated EBITDA)

2.5

(1) As defined in the credit agreement

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF DILUTED EARNINGS PER SHARE GUIDANCE TO ADJUSTED DILUTED

EARNINGS PER SHARE GUIDANCE

(Unaudited and in cents)

Guidance

Guidance

Full Year 2021

Diluted earnings per share from continuing operations

$1.00 - $1.10

$3.70 - $3.80

Non-GAAP adjustments:

Restructuring expense⁽¹⁾

0.03

0.12

M&A related costs⁽²⁾

0.04

0.28

Impact on tax provision from Non-GAAP adjustments⁽³⁾

(0.02)

(0.09)

Impact on tax provision from remeasurement of deferred taxes from material tax rate
changes

—

0.14

Adjusted diluted earnings per share from continuing operations

$1.05 - $1.15

$4.15 - $4.25

(1) Restructuring expense is estimated to be approximately $1 million and $4 million for the fourth quarter 2021 and full year 2021, respectively.
The mid-point amount has been divided by our estimate of 32.1 million total shares and dilutive securities to derive earnings per share.

(2) M&A related costs are estimated to be approximately $1-2 million and $9 million for the fourth quarter 2021 and full year 2021, respectively.
The mid-point amount has been divided by our estimate of 32.1 million total shares and dilutive securities to derive earnings per share.

(3) Impact on tax provision was calculated using the Company's effective tax rate of approximately 24.5%.