CHICAGO, Aug. 3 /PRNewswire-FirstCall/ — JBT Corporation (NYSE: JBT), a leading global technology solutions provider to the food processing and air transportation industries, today reported second quarter 2009 results.
Second quarter 2009 revenue of $230.2 million declined 17 percent from second quarter 2008 or 11 percent in constant currencies. Segment operating profit was $22.5 million, down 10 percent from the prior-year quarter. During the quarter, the company incurred approximately $1.3 million in restructuring charges from cost reduction actions taken to respond to the continued economic slowdown. Excluding these charges, segment operating margin improved 130 basis points to 10.3 percent over the same period a year ago. Diluted earnings per share from continuing operations for the second quarter were $0.34, representing a 17 percent decline from $0.41 diluted earnings per share from continuing operations for the prior-year period (calculated on a pro forma basis to include comparable debt and interest expense) and a 28 percent decline from the prior-year second quarter GAAP diluted earnings per share of $0.47. Restructuring charges and negative translation impact from the stronger U.S. dollar accounted for $0.07 of the decline. Cash generated from operating activities totaled $21.8 million for the quarter. Debt, net of cash, was $132.4 million down from $143.1 million in the first quarter 2009.
"We posted strong quarterly results as our operations continue to perform well in spite of a challenging global economic environment," said Charlie Cannon, Chairman and Chief Executive Officer. "Our second quarter revenue and earnings were, as expected, seasonally stronger than the first quarter. While we are focused on serving our customers and managing costs to match demand, we continue to invest for the future. In May, we closed our second acquisition that expands our JBT FoodTech product offerings and positions us for future growth. Additionally, our continued strong cash flow generation allowed us to pay down debt and fund the Double D acquisition, our second quarter dividend, and an initial pension contribution. However, looking ahead, we expect the operating environment will remain difficult for the second half of 2009 and possibly into 2010. As a result, we are currently expecting a sequentially weaker third quarter, followed by a seasonally stronger fourth quarter."
JBT FoodTech's second quarter revenue of $145.5 million declined 8 percent from $158.5 million in the same period of 2008, primarily due to generally stronger U.S. dollar exchange rates than in the prior-year quarter. In constant currencies, revenue was up slightly reflecting delivery of two large orders, partially offset by continued weak demand in Europe and Latin America. JBT FoodTech's operating profit of $16.5 million was up 15 percent from $14.4 million in the prior-year quarter, driven by lower expenses resulting from aggressive cost reduction and improved margins, partially offset by restructuring charges. Excluding the restructuring charges, operating margin was 11.8 percent, up 270 basis points from the prior-year quarter margin of 9.1 percent. Inbound orders totaled $113.5 million for the quarter, a decline of 23 percent from the same period a year ago and 14 percent in constant currencies, reflecting continued weakness in Europe and Latin America. However, inbound orders were 14 percent higher than the first quarter of 2009. Backlog of $125.4 million was down 19 percent from $154.7 million in the prior-year quarter. In constant currencies, backlog declined 13 percent from the prior-year quarter.
JBT AeroTech's second quarter revenue of $83.7 million decreased 29 percent from $117.1 million in the same period of 2008, primarily driven by continued weak demand for ground support equipment as a result of lower passenger and freight traffic in the airline and airfreight industries. JBT AeroTech's operating profit of $6.0 million declined 43 percent from $10.6 million in the prior-year quarter due to lower revenue and restructuring charges, partially offset by lower expenses from cost reduction initiatives and a favorable product mix. Excluding the restructuring charges, operating margin of 7.9 percent declined 120 basis points from the prior-year quarter. Inbound orders totaled $68.8 million, down 30 percent from last year's second quarter, driven primarily by lower demand in ground support equipment. Inbound orders declined 22 percent from first quarter 2009, which included a $28 million Halvorsen order received in January 2009. Excluding the Halvorsen order, inbound orders improved 14 percent sequentially. Backlog of $142.6 million was down 24 percent from $187.6 million in the prior-year quarter.
Corporate expense in the quarter was $4.0 million, an increase of $1.0 million versus the prior-year quarter, reflecting higher stand-alone corporate costs that are representative of the company's current run rate.
Other expense, net, of $1.4 million was $1.3 million lower than the prior-year quarter. In 2008, the company reported $1.3 million in higher costs allocated from JBT's former parent company, FMC Technologies Inc.
Cash generated from operating activities in the quarter was $21.8 million. The company ended the quarter with debt, net of cash, of $132.4 million, reduced from $143.1 million in first quarter of 2009 reflecting repayment of a portion of outstanding borrowings under the company's revolving credit facility. During the quarter, cash was utilized to pay a quarterly dividend of $2.0 million, an initial pension contribution of $2.1 million and the previously announced Double D acquisition. Net interest expense was $2.3 million in the second quarter of 2009.
The effective tax rate from continuing operations for the quarter was 34.7 percent, reflecting half of a percentage point increase in the estimated annual rate due to an unfavorable mix of earnings from higher tax jurisdictions.
Year-to-date capital expenditures totaled $9.8 million and depreciation and amortization totaled $10.6 million.
Looking forward, the company expects a continued challenging economic environment in the second half of 2009 that will likely continue into 2010. The company expects 2009 diluted earnings per share to be in the range of $0.95-$1.15. The lower end of the range assumes no pickup in demand for either JBT AeroTech ground support equipment or JBT FoodTech European and Latin American markets. The upper end of the range assumes a modest seasonal recovery in demand for JBT AeroTech ground support equipment and improvement in the European market for JBT FoodTech product lines.
Second Quarter Earnings Conference Call
The company will hold a conference call at 9:00 AM EDT Tuesday, August 4, 2009, to discuss the second quarter 2009 results. The call can be accessed live by dialing (866) 394-6382 or (702) 696-4650 and using conference ID 14621196, or through the Investor Relations link on JBT Corporation's website at http://ir.jbtcorporation.com. A replay of the call will be available through August 11, 2009 and can be accessed by dialing (800) 642-1687 or (706) 645-9291 and referencing passcode 14621196. A rebroadcast also will available on the company's Investor Relations website.