JBT Corporation (NYSE:JBT) Q3 2019 Earnings Conference Call - Final Transcript

Oct 29, 2019 • 10:00 am ET


JBT Corporation (NYSE:JBT) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the JBT Corporation's Third Quarter 2019 Earnings Conference Call. My name is Lisa, and I'll be your conference operator today. [Operator Instructions].

I will now turn the call over to JBT's VP of Investor Relations, Megan Rattigan, to begin today's conference. Please go ahead.

Megan Rattigan

Thank you, Lisa. Good morning, everyone, and welcome to our third quarter 2019 conference call. With me on the call are our Chairman, President and CEO, Tom Giacomini; and our Executive Vice President and CFO, Brian Deck.

In today's call, we'll use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8-K filing. Please be advised, we issued an amended 8-K. JBT's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available in the Investor Relations section of our website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found in the Investor Relations section of our website.

Now I would like to turn the call over to Tom.

Thomas W. Giacomini

Thanks, Megan, and good morning. As you saw in the release, JBT outperformed earnings guidance in the third quarter on lower-than-expected revenues. Margins exceeded on the strength of our aftermarket business and a better-than-anticipated contribution from our two recent acquisitions.

In addition, we continued to enhance our internal operating efficiencies with ongoing benefits from our restructuring program and management through the JBT operating system. We have not seen material improvement in demand at FoodTech, as business uncertainty continues to impact our ability to convert healthy commercial activity into order commitments. However, trends remain strong at AeroTech.

Additionally, organic recurring revenue increased 6% in the quarter and represented 42% of total revenue, compared with 38% in the year ago period. The investment we've made to build our aftermarket franchise is paying dividends, creating a more resilient JBT with greater stability and higher profitability.

I'll turn the call over to Brian to provide more detail on the quarter and our expectations for the year. And afterward, I'll talk more about what we are hearing from our customers, our aftermarket business and the actions we are taking to optimize performance in the current environment.

Brian A. Deck

Thanks, Tom, and good morning, everyone. Revenue of $489 million in the third quarter of 2019 increased to 2% from the year ago period. Acquisition growth of 10% was offset by a 3% decline organically, a 2% foreign exchange headwind and a 4% decline attributable to the absence of the ASC 606 transition benefit recorded in the third quarter of 2018.

On a reported basis, FoodTech revenue was up 1%, a 12% gain from acquisitions was offset by a 4% decline organically, a 2% FX headwind and a 5% decline, reflecting the absence of ASC 606 transition benefit a year ago. Through the first nine months of 2019, FoodTech organic revenue was up 4%, while FoodTech's segment margins were about flat