JBT MAREL Corp 10-Q for FY2020 Q2

JBT MAREL Corp (JBTM)

10-Q 2020-07-29 For: 2020-06-30

Added on April 07, 2026

About this 10-Q

JBT MAREL Corp filed this 10-Q on July 29, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $411.5M; down 16.6% from $493.3M a year earlier
Net income: $32.5M; down 3.6% from net income of $33.7M a year earlier
Diluted EPS: $1.01; down 3.8% from $1.05 a year earlier

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John Bean Technologies Corporation
(Exact name of registrant as specified in its charter)


Delaware			91-1650317
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

70 West Madison Street,		Suite 4400
	Chicago,	Illinois	60602
(Address of principal executive offices)			(Zip code)



Securities registered pursuant to section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered

Common Stock, par value $0.01 per share	JBT	New York Stock Exchange



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐



Class		Outstanding at July 22, 2020
Common Stock, par value $0.01 per share		31,728,451



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2020		2019		2020		2019
Revenue:
Product revenue	$	362.2	$	428.0	$	762.3	$	789.1
Service revenue	49.3		65.3		106.9		121.7
Total revenue	411.5		493.3		869.2		910.8
Operating expenses:
Cost of products	245.2		291.6		518.4		539.8
Cost of services	36.1		46.7		77.6		88.4
Selling, general and administrative expense	80.5		103.7		177.8		195.4
Restructuring expense	2.1		4.3		4.1		10.2
Operating income	47.6		47.0		91.3		77.0
Pension expense, other than service cost	1.0		0.5		2.0		1.0
Interest expense, net	3.5		4.2		8.3		7.5
Income from continuing operations before income taxes	43.1		42.3		81.0		68.5
Income tax provision	10.6		8.3		19.5		14.8
Income from continuing operations	32.5		34.0		61.5		53.7
Loss from discontinued operations, net of taxes	—		0.3		—		0.3
Net income	$	32.5	$	33.7	$	61.5	$	53.4

Basic earnings per share:
Income from continuing operations	$	1.02	$	1.07	$	1.92	$	1.69
Loss from discontinued operations, net of taxes	—		0.01		—		0.01
Net income	$	1.02	$	1.06	$	1.92	$	1.68
Diluted earnings per share:
Income from continuing operations	$	1.01	$	1.06	$	1.92	$	1.68
Loss from discontinued operations, net of taxes	—		0.01		—		0.01
Net income	$	1.01	$	1.05	$	1.92	$	1.67



☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from ______ to ______



	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2020			2019			2020			2019
Net income	$	32.5		$	33.7		$	61.5		$	53.4
Other comprehensive (loss) income, net of income taxes
Foreign currency translation adjustments	(0.1		)	(2.9		)	(25.3		)	(3.6		)
Pension and other postretirement benefits adjustments	1.3			1.1			2.8			2.8
Derivatives designated as hedges	(2.0		)	(0.9		)	(4.4		)	(1.6		)
Other comprehensive (loss) income	(0.8		)	(2.7		)	(26.9		)	(2.4		)
Comprehensive income	$	31.7		$	31.0		$	34.6		$	51.0



	June 30, 2020			December 31, 2019
(In millions, except per share data and number of shares)	(Unaudited)
Assets:
Current Assets:
Cash and cash equivalents	$	58.0		$	39.5
Trade receivables, net of allowances	226.2			288.9
Contract assets	76.4			74.4
Inventories	229.1			245.0
Other current assets	50.5			60.4
Total current assets	640.2			708.2
Property, plant and equipment, net of accumulated depreciation of $314.7 and $308.2, respectively	262.2			265.6
Goodwill	524.2			528.9
Intangible assets, net	303.8			325.9
Other assets	90.6			86.3
Total Assets	$	1,821.0		$	1,914.9

Liabilities and Stockholders' Equity:
Current Liabilities:
Short-term debt and current portion of long-term debt	$	0.1		$	0.9
Accounts payable, trade and other	150.4			198.6
Advance and progress payments	101.9			107.0
Accrued payroll	30.8			54.0
Other current liabilities	129.1			114.0
Total current liabilities	412.3			474.5
Long-term debt, less current portion	647.6			698.3
Accrued pension and other postretirement benefits, less current portion	72.3			73.9
Other liabilities	92.2			98.7
Commitments and contingencies (Note 12)
Stockholders' Equity:
Preferred stock, $0.01 par value; 20,000,000 shares authorized; no shares issued in 2020 or 2019	—			—
Common stock, $0.01 par value; 120,000,000 shares authorized; June 30, 2020: 31,741,607 issued and 31,728,225 outstanding and December 31, 2019: 31,741,607 issued and 31,666,654 outstanding	0.3			0.3
Common stock held in treasury, at cost June 30, 2020: 13,382 shares and December 31, 2019: 74,953 shares	(7.0		)	(12.6		)
Additional paid-in capital	236.1			241.8
Retained earnings	586.9			532.8
Accumulated other comprehensive loss	(219.7		)	(192.8		)
Total stockholders' equity	596.6			569.5
Total Liabilities and Stockholders' Equity	$	1,821.0		$	1,914.9



	Three months ended June 30, 2020
(In millions)	Common Stock		Common Stock Held in Treasury			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at March 31, 2020	$	0.3	$	(12.6	)	$	244.3		$	557.6		$	(218.9	)	$	570.7
Net income	—		—			—			32.5			—			32.5
Issuance of treasury stock	—		5.6			(5.6		)	—			—			—
Common stock cash dividends, $0.10 per share	—		—			—			(3.2		)	—			(3.2		)
Foreign currency translation adjustments, net of income taxes of $0.6	—		—			—			—			(0.1		)	(0.1		)
Derivatives designated as hedges, net of income taxes of ($0.5)	—		—			—			—			(2.0		)	(2.0		)
Pension and other postretirement liability adjustments, net of income taxes of $0.4	—		—			—			—			1.3			1.3
Stock-based compensation expense	—		—			(0.4		)	—			—			(0.4		)
Taxes withheld on issuance of stock-based awards	—		—			(2.2		)	—			—			(2.2		)
Balance at June 30, 2020	$	0.3	$	(7.0	)	$	236.1		$	586.9		$	(219.7	)	$	596.6



	For the six months ended June 30, 2020
(In millions)	Common Stock		Common Stock Held in Treasury			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at December 31, 2019	$	0.3	$	(12.6	)	$	241.8		$	532.8		$	(192.8	)	$	569.5
Net income	—		—			—			61.5			—			61.5
Issuance of treasury stock	—		5.6			(5.6		)	—			—			—
Common stock cash dividends, $0.20 per share	—		—			—			(6.4		)	—			(6.4		)
Foreign currency translation adjustments, net of income taxes of ($1.0)	—		—			—			—			(25.3		)	(25.3		)
Derivatives designated as hedges, net of income taxes of ($1.1)	—		—			—			—			(4.4		)	(4.4		)
Pension and other postretirement liability adjustments, net of income taxes of $0.9	—		—			—			—			2.8			2.8
Stock-based compensation expense	—		—			2.1			—			—			2.1
Taxes withheld on issuance of stock-based awards	—		—			(2.2		)	—			—			(2.2		)
Adoption of ASC 326	—		—			—			(1.0		)	—			(1.0		)
Balance at June 30, 2020	$	0.3	$	(7.0	)	$	236.1		$	586.9		$	(219.7	)	$	596.6



	Three months ended June 30, 2019
(In millions)	Common Stock		Common Stock Held in Treasury			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at March 31, 2019	$	0.3	$	(19.3	)	$	248.5		$	433.1		$	(186.2	)	$	476.4
Net income	—		—			—			33.7			—			33.7
Issuance of treasury stock	—		4.9			(4.9		)	—			—			—
Common stock cash dividends, $0.10 per share	—		—			—			(3.1		)	—			(3.1		)
Foreign currency translation adjustments, net of income taxes of $0.2	—		—			—			—			(2.9		)	(2.9		)
Derivatives designated as hedges, net of income taxes of ($0.5)	—		—			—			—			(0.9		)	(0.9		)
Pension and other postretirement liability adjustments, net of income taxes of $0.4	—		—			—			—			1.1			1.1
Stock-based compensation expense	—		—			2.1			—			—			2.1
Taxes withheld on issuance of stock-based awards	—		—			(6.4		)	—			—			(6.4		)
Balance at June 30, 2019	$	0.3	$	(14.4	)	$	239.3		$	463.7		$	(188.9	)	$	500.0



	For the six months ended June 30, 2019
(In millions)	Common Stock		Common Stock Held in Treasury			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at December 31, 2018	$	0.3	$	(19.3	)	$	245.9		$	416.5		$	(186.5	)	$	456.9
Net income	—		—			—			53.4			—			53.4
Issuance of treasury stock	—		4.9			(4.9		)	—			—			—
Common stock cash dividends, $0.20 per share	—		—			—			(6.2		)	—			(6.2		)
Foreign currency translation adjustments, net of income taxes of ($0.6)	—		—			—			—			(3.6		)	(3.6		)
Derivatives designated as hedges, net of income taxes of ($0.6)	—		—			—			—			(1.6		)	(1.6		)
Pension and other postretirement liability adjustments, net of income taxes of $1.0	—		—			—			—			2.8			2.8
Stock-based compensation expense	—		—			4.7			—			—			4.7
Taxes withheld on issuance of stock-based awards	—		—			(6.4		)	—			—			(6.4		)
Balance at June 30, 2019	$	0.3	$	(14.4	)	$	239.3		$	463.7		$	(188.9	)	$	500.0



Date	Type	Company/Product Line	Location (Near)	Segment

May 31, 2019	Stock	Proseal UK Limited	Adlington, UK	JBT FoodTech

A leading provider of tray sealing technology for the fresh produce, ready meals, proteins, sandwiches, and snack industries.

May 31, 2019	Stock	Prime Equipment Group, LLC	Columbus, Ohio	JBT FoodTech

A manufacturer of turnkey primary and water re–use solutions for the poultry industry.

February 1, 2019	Stock	LEKTRO, Inc.	Warrenton, Oregon	JBT AeroTech

A manufacturer of commercial aviation ground support equipment, including electric towbarless aircraft pushback tractors for narrow body and smaller aircrafts.

May 29, 2020	Asset	MARS Food Processing Solutions, LLC	Denver, North Carolina	JBT FoodTech

A provider of solutions for monitoring and managing the efficiency of poultry processing plants.



	Proseal⁽¹⁾			Prime⁽¹⁾			LEKTRO⁽²⁾			Total
(In millions)
Financial assets	$	46.4		$	12.9		$	4.2		$	63.5
Inventories	24.8			11.6			7.0			43.4
Property, plant and equipment	22.2			1.5			0.3			24.0
Other intangible assets ⁽³⁾	91.5			28.4			19.4			139.3
Deferred taxes	(19.2		)	—			(4.9		)	(24.1		)
Financial liabilities	(35.3		)	(21.0		)	(4.6		)	(60.9		)
Total identifiable net assets	$	130.4		$	33.4		$	21.4		$	185.2

Cash consideration paid	$	264.5		$	60.6		$	48.3		$	373.4
Contingent consideration ⁽⁴⁾	14.7			1.3			—			16.0
Holdback payment due to seller	—			0.9			—			0.9
Total consideration	279.2			62.8			48.3			390.3
Cash acquired	4.3			1.4			1.7			7.4
Net consideration	$	274.9		$	61.4		$	46.6		$	382.9

Goodwill ⁽⁵⁾	$	148.8		$	29.4		$	26.9		$	205.1




FORM	10-Q


(2)	The purchase accounting for LEKTRO was final as of December 31, 2019.


(5)	The Company expects goodwill of $58.9 million from these acquisitions to be deductible for income tax purposes.



	June 30, 2020				December 31, 2019
(In millions)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Customer relationship	$	249.5	$	71.5	$	251.3	$	61.9
Patents and acquired technology	142.4		54.2		138.7		48.5
Trademarks	37.2		15.5		38.0		11.6
Non-amortizing intangible assets	15.5		—		15.6		—
Other	9.5		9.1		16.7		12.4
Total intangible assets	$	454.1	$	150.3	$	460.3	$	134.4


(1)	The purchase accounting for Proseal and Prime was complete as of March 31, 2020. During the quarter ended March 31, 2020, there were no significant measurement period adjustments.


(4)	Proseal and Prime purchase agreements include contingent payments due to the sellers to the extent Proseal and Prime achieve certain earnings targets.



	Pension and Other Postretirement Benefits ⁽¹⁾			Derivatives Designated as Hedges ⁽¹⁾			Foreign Currency Translation ⁽¹⁾			Total ⁽¹⁾
(In millions)
Beginning balance, March 31, 2020	$	(145.5	)	$	(2.3	)	$	(71.1	)	$	(218.9	)
Other comprehensive income (loss) before reclassification	—			(2.3		)	0.5			(1.8		)
Amounts reclassified from accumulated other comprehensive income	1.3			0.3			(0.6		)	1.0
Ending balance, June 30, 2020	$	(144.2	)	$	(4.3	)	$	(71.2	)	$	(219.7	)



	Pension and Other Postretirement Benefits ⁽¹⁾			Derivatives Designated as Hedges ⁽¹⁾			Foreign Currency Translation			Total ⁽¹⁾
(In millions)
Beginning balance, March 31, 2019	$	(138.7	)	$	1.3		$	(48.8	)	$	(186.2	)
Other comprehensive income (loss) before reclassification	—			(0.6		)	(2.3		)	(2.9		)
Amounts reclassified from accumulated other comprehensive income	1.1			(0.3		)	(0.6		)	0.2
Ending balance, June 30, 2019	$	(137.6	)	$	0.4		$	(51.7	)	$	(188.9	)


•	Contracts that have an original expected duration of one year or less; and


•	Performance obligations related to revenue recognized over time using the as-invoiced practical expedient.



	Three Months Ended				Six Months Ended
	June 30, 2020				June 30, 2020
(In millions)	JBT FoodTech		JBT AeroTech		JBT FoodTech		JBT AeroTech
Type of Good or Service
Recurring ⁽¹⁾	$	147.7	$	32.9	$	301.4	$	78.6
Non-recurring ⁽¹⁾	155.1		75.8		311.1		178.1
Total	302.8		108.7		612.5		256.7

Geographical Region ⁽²⁾
North America	167.1		94.8		321.2		225.2
Europe, Middle East and Africa	88.2		7.5		187.8		18.1
Asia Pacific	32.0		5.8		67.4		11.5
Latin America	15.5		0.6		36.1		1.9
Total	302.8		108.7		612.5		256.7

Timing of Recognition
Point in Time	141.7		47.5		290.1		124.6
Over Time	161.1		61.2		322.4		132.1
Total	302.8		108.7		612.5		256.7



	Three Months Ended				Six Months Ended
	June 30, 2019				June 30, 2019
(In millions)	JBT FoodTech		JBT AeroTech		JBT FoodTech		JBT AeroTech
Type of Good or Service
Recurring ⁽¹⁾	$	145.4	$	51.9	$	278.7	$	102.8
Non-recurring ⁽¹⁾	197.9		98.0		359.2		170.0
Total	343.3		149.9		637.9		272.8

Geographical Region⁽²⁾
North America	179.6		125.0		335.7		219.9
Europe, Middle East and Africa	91.6		20.1		171.0		43.5
Asia Pacific	44.0		4.0		81.7		8.1
Latin America	28.1		0.8		49.5		1.3
Total	343.3		149.9		637.9		272.8

Timing of Recognition
Point in Time	160.0		86.5		306.0		155.1
Over Time	183.3		63.4		331.9		117.7
Total	343.3		149.9		637.9		272.8



	Balances as of
(In millions)	June 30, 2020		December 31, 2019
Contract assets	$	76.4	$	74.4
Contract liabilities	90.9		92.5

	June 30, 2019		December 31, 2018
Contract assets	83.6		70.3
Contract liabilities	101.7		124.5


•	Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities that the Company can assess at the measurement date.


•	Level 2: Observable inputs other than those included in Level 1 that are observable for the asset or liability, either directly or indirectly. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.


•	Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.



	As of June 30, 2020								As of December 31, 2019
(In millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Investments	$	13.9	$	13.9	$	—	$	—	$	14.3	$	14.3	$	—	$	—
Derivatives	16.5		—		16.5		—		12.0		—		12.0		—
Total assets	$	30.4	$	13.9	$	16.5	$	—	$	26.3	$	14.3	$	12.0	$	—
Liabilities:
Derivatives	$	14.1	$	—	$	14.1	$	—	$	2.8	$	—	$	2.8	$	—
Contingent consideration	16.1		—		—		16.1		17.4		—		—		17.4
Total liabilities	$	30.2	$	—	$	14.1	$	16.1	$	20.2	$	—	$	2.8	$	17.4



	Six months ended
	June 30, 2020
Beginning balance	$	17.4
Acquisitions	—
Measurement adjustments recorded to earnings	(0.1		)
Foreign currency translation adjustment	(1.2		)
Ending balance	$	16.1



(In millions)	As of June 30, 2020
Offsetting of Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Presented in the Consolidated Balance Sheet		Amount Subject to Master Netting Agreement			Net Amount
Derivatives	$	16.1	$	—	$	16.1	$	(3.6	)	$	12.5



(In millions)	As of June 30, 2020
Offsetting of Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Presented in the Consolidated Balance Sheet		Amount Subject to Master Netting Agreement			Net Amount
Derivatives	$	13.3	$	—	$	13.3	$	(3.6	)	$	9.7



Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of (Loss) Gain Recognized in Income
		Three Months Ended June 30,						Six Months Ended June 30,
(In millions)		2020			2019			2020			2019
Foreign exchange contracts	Revenue	$	2.3		$	(1.0	)	$	(2.3	)	$	(3.1	)
Foreign exchange contracts	Cost of sales	(2.9		)	0.4			(0.1		)	1.2
Foreign exchange contracts	Selling, general and administrative expense	0.9			(1.7		)	1.3			(1.7		)
Total		0.3			(2.3		)	(1.1		)	(3.6		)
Remeasurement of assets and liabilities in foreign currencies		(1.2		)	1.3			1.8			1.6
Net gain (loss) on foreign currency transactions		$	(0.9	)	$	(1.0	)	$	0.7		$	(2.0	)


•	JBT FoodTech—provides comprehensive solutions throughout the food production value chain extending from primary processing through packaging systems for a large variety of food and beverage groups, including poultry, beef, pork, seafood, ready-to-eat meals, fruits, vegetables, dairy, bakery, pet foods, soups, sauces, and juices.


•	JBT AeroTech— supplies customized solutions and services used for applications in the air transportation industry, including airport authorities, airlines, airfreight, ground handling companies, militaries and defense contractors.


(1)	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.