x
|
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
|
Delaware
|
91-1650317
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
200 East Randolph Drive, Chicago, Illinois
|
60601
|
(Address of principal executive offices)
|
(Zip code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
Class
|
Outstanding at November 1, 2010
|
|
Common Stock, par value $0.01 per share
|
28,238,271
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue
|
$ | 216.5 | $ | 196.4 | $ | 593.8 | $ | 595.6 | ||||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales
|
160.3 | 142.4 | 436.3 | 435.7 | ||||||||||||
Selling, general and administrative expense
|
36.0 | 36.4 | 106.6 | 109.2 | ||||||||||||
Research and development expense
|
4.5 | 3.9 | 13.1 | 12.4 | ||||||||||||
Total costs and expenses
|
200.8 | 182.7 | 556.0 | 557.3 | ||||||||||||
Other income, net
|
0.8 | 1.0 | 1.0 | 1.9 | ||||||||||||
Net interest expense
|
(2.0 | ) | (2.1 | ) | (5.9 | ) | (6.6 | ) | ||||||||
Income from continuing operations before income taxes
|
14.5 | 12.6 | 32.9 | 33.6 | ||||||||||||
Provision for income taxes
|
5.1 | 4.2 | 11.4 | 11.4 | ||||||||||||
Income from continuing operations
|
9.4 | 8.4 | 21.5 | 22.2 | ||||||||||||
Loss from discontinued operations, net of taxes
|
- | (0.1 | ) | - | (0.1 | ) | ||||||||||
Net income
|
$ | 9.4 | $ | 8.3 | $ | 21.5 | $ | 22.1 | ||||||||
Basic earnings per share
|
||||||||||||||||
Income from continuing operations
|
$ | 0.33 | $ | 0.30 | $ | 0.76 | $ | 0.80 | ||||||||
Income from discontinued operations
|
- | - | - | - | ||||||||||||
Basic earnings per share
|
$ | 0.33 | $ | 0.30 | $ | 0.76 | $ | 0.80 | ||||||||
Diluted earnings per share
|
||||||||||||||||
Income from continuing operations
|
$ | 0.32 | $ | 0.29 | $ | 0.74 | $ | 0.78 | ||||||||
Income from discontinued operations
|
- | - | - | - | ||||||||||||
Diluted earnings per share
|
$ | 0.32 | $ | 0.29 | $ | 0.74 | $ | 0.78 | ||||||||
Cash dividends per share
|
$ | 0.07 | $ | 0.07 | $ | 0.21 | $ | 0.21 | ||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
28.3 | 27.7 | 28.2 | 27.6 | ||||||||||||
Diluted
|
29.2 | 28.7 | 29.1 | 28.5 |
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
Assets:
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 12.5 | $ | 14.4 | ||||
Trade receivables, net of allowances of $3.8 and $5.1, respectively
|
166.7 | 149.3 | ||||||
Inventories
|
131.6 | 107.0 | ||||||
Other current assets
|
43.3 | 32.7 | ||||||
Total current assets
|
354.1 | 303.4 | ||||||
Property, plant and equipment, net of accumulated depreciation of $225.3 and $218.1,
|
||||||||
respectively
|
121.9 | 126.5 | ||||||
Other assets
|
94.6 | 103.2 | ||||||
Total Assets
|
$ | 570.6 | $ | 533.1 | ||||
Liabilities and Stockholders' Equity:
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable, trade and other
|
$ | 78.8 | $ | 65.9 | ||||
Advance and progress payments
|
78.7 | 69.5 | ||||||
Other current liabilities
|
92.4 | 98.2 | ||||||
Total current liabilities
|
249.9 | 233.6 | ||||||
Long-term debt, less current portion
|
143.7 | 131.8 | ||||||
Accrued pension and other postretirement benefits, less current portion
|
63.2 | 77.1 | ||||||
Other liabilities
|
31.0 | 28.8 | ||||||
Stockholders' Equity:
|
||||||||
Preferred stock, $0.01 par value; 20,000,000 shares authorized; no shares issued
|
- | - | ||||||
Common stock, $0.01 par value; 120,000,000 shares authorized;
|
||||||||
2010: 28,238,271 issued and 28,186,129 outstanding;
2009: 27,663,335 issued and 27,611,193 outstanding
|
0.3 | 0.3 | ||||||
Common stock held in treasury, at cost;
|
||||||||
2010: 52,142 shares;
2009: 52,142 shares
|
(0.7 | ) | (0.7 | ) | ||||
Additional paid-in capital
|
57.2 | 53.5 | ||||||
Retained earnings
|
59.8 | 44.7 | ||||||
Accumulated other comprehensive loss
|
(33.8 | ) | (36.0 | ) | ||||
Total stockholders' equity
|
82.8 | 61.8 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 570.6 | $ | 533.1 |
Nine Months Ended
|
|||||||||
September 30,
|
|||||||||
2010
|
2009
|
||||||||
Cash Flows From Operating Activities:
|
|||||||||
Net income
|
$ | 21.5 | $ | 22.1 | |||||
Loss from discontinued operations, net of income taxes
|
- | 0.1 | |||||||
Income from continuing operations
|
21.5 | 22.2 | |||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
|||||||||
Depreciation and amortization
|
17.1 | 16.5 | |||||||
Stock-based compensation
|
5.4 | 5.9 | |||||||
Other
|
(3.9 | ) | 7.0 | ||||||
Changes in operating assets and liabilities:
|
|||||||||
Trade receivables, net
|
(12.2 | ) | 40.1 | ||||||
Inventories
|
(23.5 | ) | (12.0 | ) | |||||
Accounts payable, trade and other
|
12.9 | (4.9 | ) | ||||||
Advance payments and progress billings
|
5.1 | (10.2 | ) | ||||||
Accrued pension and other postretirement benefits, net
|
(13.1 | ) | (17.3 | ) | |||||
Other assets and liabilities, net
|
(6.9 | ) | (14.1 | ) | |||||
Cash provided by continuing operating activities
|
2.4 | 33.2 | |||||||
Net cash required by discontinued operating activities
|
(0.1 | ) | - | ||||||
Cash provided by operating activities
|
2.3 | 33.2 | |||||||
Cash Flows From Investing Activities:
|
|||||||||
Acquisitions
|
(0.4 | ) | (6.7 | ) | |||||
Capital expenditures
|
(13.4 | ) | (14.5 | ) | |||||
Proceeds from disposal of assets
|
0.9 | 1.2 | |||||||
Cash required by investing activities
|
(12.9 | ) | (20.0 | ) | |||||
Cash Flows From Financing Activities:
|
|||||||||
Net increase (decrease) in short-term debt
|
0.1 | (0.1 | ) | ||||||
Net proceeds (payments) on credit facilities
|
9.7 | (40.0 | ) | ||||||
Issuance of long-term debt
|
2.9 | - | |||||||
Dividends
|
(6.2 | ) | (5.8 | ) | |||||
Other
|
1.9 | 0.2 | |||||||
Cash provided (required) by financing activities
|
8.4 | (45.7 | ) | ||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
0.3 | 1.6 | |||||||
Decrease in cash and cash equivalents
|
(1.9 | ) | (30.9 | ) | |||||
Cash and cash equivalents, beginning of period
|
14.4 | 43.6 | |||||||
Cash and cash equivalents, end of period
|
$ | 12.5 | $ | 12.7 |
(In millions)
|
September 30, 2010
|
December 31, 2009
|
||||||
Raw materials
|
$ | 72.1 | $ | 61.7 | ||||
Work in process
|
43.5 | 28.5 | ||||||
Finished goods
|
76.9 | 74.6 | ||||||
Gross inventories before LIFO reserves and valuation adjustments
|
192.5 | 164.8 | ||||||
LIFO reserves and valuation adjustments
|
(60.9 | ) | (57.8 | ) | ||||
Net inventories
|
$ | 131.6 | $ | 107.0 |
Pension Benefits
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Service cost
|
$ | 0.4 | $ | 2.1 | $ | 1.2 | $ | 6.3 | ||||||||
Interest cost
|
3.5 | 3.7 | 10.6 | 11.2 | ||||||||||||
Expected return on assets
|
(4.6 | ) | (4.4 | ) | (13.8 | ) | (13.1 | ) | ||||||||
Amortization of prior service benefit
|
- | - | - | (0.1 | ) | |||||||||||
Amortization of actuarial losses, net
|
0.2 | 0.6 | 0.5 | 1.8 | ||||||||||||
Curtailment gain
|
- | (0.8 | ) | - | (0.8 | ) | ||||||||||
Settlement cost
|
- | 0.1 | 0.3 | 0.5 | ||||||||||||
Net periodic benefit (income) cost
|
$ | (0.5 | ) | $ | 1.3 | $ | (1.2 | ) | $ | 5.8 | ||||||
Other Postretirement Benefits
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010 | 2009 | 2010 | 2009 | ||||||||||||
Service cost
|
$ | - | $ | - | $ | 0.1 | $ | 0.1 | ||||||||
Interest cost
|
0.1 | 0.1 | 0.3 | 0.3 | ||||||||||||
Amortization of prior service benefit
|
(0.2 | ) | (0.1 | ) | (0.7 | ) | (0.6 | ) | ||||||||
Net periodic benefit income
|
$ | (0.1 | ) | $ | - | $ | (0.3 | ) | $ | (0.2 | ) |
Weighted Average
|
||||||||
Shares
|
Grant Date Fair Value
|
|||||||
Time-based
|
273,213 | |||||||
Performance-based
|
91,371 | * | ||||||
Granted during the nine months ended September 30, 2010
|
364,584 | $ | 16.75 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Net income
|
$ | 9.4 | $ | 8.3 | $ | 21.5 | $ | 22.1 | ||||||||
Foreign currency translation adjustments
|
11.8 | 5.8 | 2.2 | 12.5 | ||||||||||||
Derivatives designated as hedges, net of tax of $(0.1) for the three months
ended September 30, 2010 and 2009, and $0.6 for the nine months ended September 30, 2009
|
(0.2 | ) | (0.2 | ) | - | 1.0 | ||||||||||
Pension and other postretirement liability adjustments, net of tax of $0.1 and
$9.8 for the three months ended September 30, 2010 and 2009, respectively,
and $0.1 and $10.0 for the nine months ended September 30, 2010 and
2009, repectively.
|
- | 15.0 | - | 15.7 | ||||||||||||
Comprehensive income
|
$ | 21.0 | $ | 28.9 | $ | 23.7 | $ | 51.3 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions, except per share data)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Basic earnings per share:
|
||||||||||||||||
Income from continuing operations
|
$ | 9.4 | $ | 8.4 | $ | 21.5 | $ | 22.2 | ||||||||
Weighted average number of shares outstanding
|
28.3 | 27.7 | 28.2 | 27.6 | ||||||||||||
Basic earnings per share from continuing operations
|
$ | 0.33 | $ | 0.30 | $ | 0.76 | $ | 0.80 | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Income from continuing operations
|
$ | 9.4 | $ | 8.4 | $ | 21.5 | $ | 22.2 | ||||||||
Weighted average number of shares outstanding
|
28.3 | 27.7 | 28.2 | 27.6 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Options on common stock
|
0.1 | - | 0.1 | 0.1 | ||||||||||||
Restricted stock
|
0.8 | 1.0 | 0.8 | 0.8 | ||||||||||||
Total shares and dilutive securities
|
29.2 | 28.7 | 29.1 | 28.5 | ||||||||||||
Diluted earnings per share from continuing operations
|
$ | 0.32 | $ | 0.29 | $ | 0.74 | $ | 0.78 |
As of September 30, 2010
|
As of December 31, 2009
|
|||||||||||||||
(In millions)
|
Asset Derivatives (1)
|
Liability Derivatives (2)
|
Asset Derivatives (1)
|
Liability Derivatives (2)
|
||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Interest rate swap contract
|
$ | - | $ | 0.4 | $ | - | $ | 1.2 | ||||||||
Foreign exchange contracts
|
- | 0.5 | 0.1 | - | ||||||||||||
Total derivatives designated as hedging instruments
|
- | 0.9 | 0.1 | 1.2 | ||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Foreign exchange contracts
|
13.3 | 10.1 | 5.4 | 7.7 | ||||||||||||
Total derivatives not designated as hedging instruments
|
$ | 13.3 | $ | 10.1 | $ | 5.4 | $ | 7.7 |
|
(1)
|
Included in other current assets and other assets on our Condensed Consolidated Balance Sheets.
|
|
(2)
|
Included in other current liabilities and other liabilities on our Condensed Consolidated Balance Sheets.
|
Derivatives designated as cash flow hedges
|
Amount of Gain (Loss) Recognized in OCI on Derivatives (1)
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (1)
|
||||||||||||||||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||||||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||||||||
Interest rate swap contract
|
$ | (0.1 | ) | $ | (0.3 | ) | $ | (0.1 | ) | $ | (0.6 | ) |
Net interest expense
|
$ | (0.2 | ) | $ | (0.4 | ) | $ | (0.7 | ) | $ | (0.9 | ) | ||||||||
Foreign exchange contracts
|
(0.4 | ) | (0.4 | ) | (0.6 | ) | 0.2 |
Revenue
|
- | - | - | (1.1 | ) | ||||||||||||||||||||
Total
|
$ | (0.5 | ) | $ | (0.7 | ) | $ | (0.7 | ) | $ | (0.4 | ) | $ | (0.2 | ) | $ | (0.4 | ) | $ | (0.7 | ) | $ | (2.0 | ) |
|
(1)
|
For the three and nine months ended September 30, 2010 and 2009, we recorded in other income, net an immaterial amount of ineffectiveness from cash flow hedges.
|
Derivatives not designated as hedging instruments
|
Location of Gain (Loss) Recognized in Income on Derivatives
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||||
Foreign exchange contracts
|
Revenue
|
$ | 7.4 | $ | 6.2 | $ | 8.3 | $ | 7.0 | |||||||||
Foreign exchange contracts
|
Cost of sales
|
(0.6 | ) | (0.4 | ) | (0.7 | ) | (0.8 | ) | |||||||||
Foreign exchange contracts
|
Other income, net
|
(0.1 | ) | - | 0.1 | 0.3 | ||||||||||||
Total
|
$ | 6.7 | $ | 5.8 | $ | 7.7 | $ | 6.5 |
|
•
|
Level 1
: Unadjusted quoted prices in active markets for identical assets and liabilities.
|
|
•
|
Level 2
: Observable inputs other than those included in Level 1. 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 September 30, 2010
|
As of December 31, 2009
|
|||||||||||||||||||||||||||||||
(In millions)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||
Investments
|
$ | 9.2 | $ | 9.2 | $ | - | $ | - | $ | 10.9 | $ | 10.9 | $ | - | $ | - | ||||||||||||||||
Derivatives
|
13.3 | - | 13.3 | - | 5.5 | - | 5.5 | - | ||||||||||||||||||||||||
Total assets
|
$ | 22.5 | $ | 9.2 | $ | 13.3 | $ | - | $ | 16.4 | $ | 10.9 | $ | 5.5 | $ | - | ||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||
Derivatives
|
$ | 11.0 | $ | - | $ | 11.0 | $ | - | $ | 8.9 | $ | - | $ | 8.9 | $ | - |
As of September 30, 2010
|
As of December 31, 2009
|
|||||||||||||||
(In millions) |
Carrying Value
|
Estimated Fair Value
|
Carrying Value
|
Estimated Fair Value
|
||||||||||||
6.66% senior unsecured notes due July 31, 2015
|
$ | 75.0 | $ | 86.3 | $ | 75.0 | $ | 83.8 | ||||||||
Revolving credit facility, due 2013
|
66.5 | 66.5 | 56.8 | 56.8 | ||||||||||||
4.5% Brazilian Real loan due December 31, 2012
|
3.1 | 2.8 | - | - | ||||||||||||
Other
|
0.5 | 0.5 | 0.4 | 0.4 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Balance at beginning of period
|
$ | 6.9 | $ | 7.4 | $ | 7.3 | $ | 9.8 | ||||||||
Expense for new warranties
|
1.6 | 1.9 | 4.6 | 6.4 | ||||||||||||
Adjustments to existing accruals
|
0.2 | 0.2 | - | (0.3 | ) | |||||||||||
Claims paid
|
(1.5 | ) | (2.8 | ) | (4.7 | ) | (9.2 | ) | ||||||||
Balance at end of period
|
$ | 7.2 | $ | 6.7 | $ | 7.2 | $ | 6.7 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Revenue
|
||||||||||||||||
JBT FoodTech
|
$ | 124.8 | $ | 114.0 | $ | 361.9 | $ | 354.4 | ||||||||
JBT AeroTech
|
86.9 | 78.6 | 226.3 | 235.9 | ||||||||||||
Other revenue (1) and intercompany eliminations
|
4.8 | 3.8 | 5.6 | 5.3 | ||||||||||||
Total revenue
|
$ | 216.5 | $ | 196.4 | $ | 593.8 | $ | 595.6 | ||||||||
Income before income taxes
|
||||||||||||||||
Segment operating profit:
|
||||||||||||||||
JBT FoodTech
|
$ | 11.9 | $ | 10.4 | $ | 34.8 | $ | 34.7 | ||||||||
JBT AeroTech
|
6.1 | 5.5 | 14.8 | 17.0 | ||||||||||||
Total segment operating profit
|
18.0 | 15.9 | 49.6 | 51.7 | ||||||||||||
Corporate items:
|
||||||||||||||||
Corporate expense (2)
|
(4.3 | ) | (4.0 | ) | (12.0 | ) | (11.0 | ) | ||||||||
Other income (expense), net (1)
|
2.8 | 2.8 | 1.2 | (0.5 | ) | |||||||||||
Net interest expense
|
(2.0 | ) | (2.1 | ) | (5.9 | ) | (6.6 | ) | ||||||||
Total corporate items
|
(3.5 | ) | (3.3 | ) | (16.7 | ) | (18.1 | ) | ||||||||
Income from continuing operations before income taxes
|
$ | 14.5 | $ | 12.6 | $ | 32.9 | $ | 33.6 |
(1)
|
Other revenue comprises certain gains and losses on derivatives related to foreign exchange exposure. Other income (expense), net, generally includes stock-based compensation, residual expenses associated with other employee benefits, LIFO adjustments, foreign exchange gains and losses, and the impact of unusual or strategic transactions not representative of segment operations.
|
(2)
|
Corporate expense primarily includes corporate staff expenses.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
freezer solutions for the freezing and chilling of meat, seafood, poultry, ready-to-eat meals, fruits, vegetables and bakery products;
|
||
•
|
protein processing solutions that portion, coat and cook poultry, meat, seafood, vegetable and bakery products;
|
||
•
|
in-container processing solutions for fruits, vegetables, soups, sauces, dairy and pet food products as well as ready-to-eat meals in a wide variety of modern packages; and
|
||
|
•
|
fruit processing solutions that extract, concentrate and aseptically process citrus, tomato and other fruits.
|
•
|
ground support equipment for cargo loading, aircraft deicing and aircraft towing;
|
||
|
•
|
gate equipment for passenger boarding, on the ground aircraft power and cooling;
|
|
|
•
|
airport services for maintenance of airport equipment, systems and facilities;
|
|
|
•
|
military equipment for cargo loading, aircraft towing and on the ground aircraft cooling; and
|
|
•
|
automatic guided vehicles for material handling in the automotive, printing, warehouse, and hospital industries.
|
Three Months Ended
|
||||||||||||||||
September 30,
|
Favorable / (Unfavorable)
|
|||||||||||||||
(In millions, except %)
|
2010
|
2009
|
$ | % | ||||||||||||
Revenue
|
$ | 216.5 | $ | 196.4 | $ | 20.1 | 10.2 | |||||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales
|
160.3 | 142.4 | (17.9 | ) | (12.6 | ) | ||||||||||
Selling, general and administrative expense
|
36.0 | 36.4 | 0.4 | 1.1 | ||||||||||||
Research and development expense
|
4.5 | 3.9 | (0.6 | ) | (15.4 | ) | ||||||||||
Total costs and expenses
|
200.8 | 182.7 | (18.1 | ) | (9.9 | ) | ||||||||||
Other income, net
|
0.8 | 1.0 | (0.2 | ) | (20.0 | ) | ||||||||||
Net interest expense
|
(2.0 | ) | (2.1 | ) | 0.1 | 4.8 | ||||||||||
Income from continuing operations before income taxes
|
14.5 | 12.6 | 1.9 | 15.1 | ||||||||||||
Provision for income taxes
|
5.1 | 4.2 | (0.9 | ) | (21.4 | ) | ||||||||||
Income from continuing operations
|
9.4 | 8.4 | 1.0 | 11.9 | ||||||||||||
Loss from discontinued operations, net of taxes
|
- | (0.1 | ) | 0.1 | 100.0 | |||||||||||
Net income
|
$ | 9.4 | $ | 8.3 | $ | 1.1 | 13.3 |
Three Months Ended
|
||||||||||||||||
September 30,
|
Favorable / (Unfavorable)
|
|||||||||||||||
(In millions, except %)
|
2010
|
2009
|
$ | % | ||||||||||||
Revenue
|
||||||||||||||||
JBT FoodTech
|
$ | 124.8 | $ | 114.0 | $ | 10.8 | 9.5 | |||||||||
JBT AeroTech
|
86.9 | 78.6 | 8.3 | 10.6 | ||||||||||||
Other revenue (1) and intercompany eliminations
|
4.8 | 3.8 | 1.0 | 26.3 | ||||||||||||
Total revenue
|
$ | 216.5 | $ | 196.4 | $ | 20.1 | 10.2 | |||||||||
Income before income taxes
|
||||||||||||||||
Segment operating profit:
|
||||||||||||||||
JBT FoodTech
|
$ | 11.9 | $ | 10.4 | $ | 1.5 | 14.4 | |||||||||
JBT AeroTech
|
6.1 | 5.5 | 0.6 | 10.9 | ||||||||||||
Total segment operating profit
|
18.0 | 15.9 | 2.1 | 13.2 | ||||||||||||
Corporate items:
|
||||||||||||||||
Corporate expense (2)
|
(4.3 | ) | (4.0 | ) | (0.3 | ) | (7.5 | ) | ||||||||
Other income, net (1)
|
2.8 | 2.8 | - | - | ||||||||||||
Net interest expense
|
(2.0 | ) | (2.1 | ) | 0.1 | 4.8 | ||||||||||
Total corporate items
|
(3.5 | ) | (3.3 | ) | (0.2 | ) | (6.1 | ) | ||||||||
Income from continuing operations before income taxes
|
$ | 14.5 | $ | 12.6 | $ | 1.9 | 15.1 |
(1)
|
Other revenue comprises certain gains and losses on derivatives related to foreign exchange exposure. Other income, net, generally includes stock-based compensation, residual expenses associated with other employee benefits, LIFO adjustments, foreign exchange gains and losses, and the impact of unusual or strategic transactions not representative of segment operations.
|
(2)
|
Corporate expense primarily includes corporate staff expenses.
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
Favorable / (Unfavorable)
|
|||||||||||||||
(In millions, except %)
|
2010
|
2009
|
$ | % | ||||||||||||
Revenue
|
$ | 593.8 | $ | 595.6 | $ | (1.8 | ) | (0.3 | ) | |||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales
|
436.3 | 435.7 | (0.6 | ) | (0.1 | ) | ||||||||||
Selling, general and administrative expense
|
106.6 | 109.2 | 2.6 | 2.4 | ||||||||||||
Research and development expense
|
13.1 | 12.4 | (0.7 | ) | (5.6 | ) | ||||||||||
Total costs and expenses
|
556.0 | 557.3 | 1.3 | 0.2 | ||||||||||||
Other income, net
|
1.0 | 1.9 | (0.9 | ) | (47.4 | ) | ||||||||||
Net interest expense
|
(5.9 | ) | (6.6 | ) | 0.7 | 10.6 | ||||||||||
Income before income taxes
|
32.9 | 33.6 | (0.7 | ) | (2.1 | ) | ||||||||||
Provision for income taxes
|
11.4 | 11.4 | - | - | ||||||||||||
Income from continuing operations
|
21.5 | 22.2 | (0.7 | ) | (3.2 | ) | ||||||||||
Loss from discontinued operations, net of taxes
|
- | (0.1 | ) | 0.1 | (100.0 | ) | ||||||||||
Net income
|
$ | 21.5 | $ | 22.1 | $ | (0.6 | ) | (2.7 | ) |
Nine Months Ended
|
||||||||||||||||
September 30,
|
Favorable / (Unfavorable)
|
|||||||||||||||
(In millions, except %)
|
2010
|
2009
|
$ | % | ||||||||||||
Revenue
|
||||||||||||||||
JBT FoodTech
|
$ | 361.9 | $ | 354.4 | $ | 7.5 | 2.1 | % | ||||||||
JBT AeroTech
|
226.3 | 235.9 | (9.6 | ) | (4.1 | ) | ||||||||||
Other revenue (1) and intercompany eliminations
|
5.6 | 5.3 | 0.3 | 5.7 | ||||||||||||
Total revenue
|
$ | 593.8 | $ | 595.6 | $ | (1.8 | ) | (0.3 | ) % | |||||||
Income before income taxes
|
||||||||||||||||
Segment operating profit:
|
||||||||||||||||
JBT FoodTech
|
$ | 34.8 | $ | 34.7 | $ | 0.1 | 0.3 | % | ||||||||
JBT AeroTech
|
14.8 | 17.0 | (2.2 | ) | (12.9 | ) | ||||||||||
Total segment operating profit
|
49.6 | 51.7 | (2.1 | ) | (4.1 | ) | ||||||||||
Corporate items:
|
||||||||||||||||
Corporate expense (2)
|
(12.0 | ) | (11.0 | ) | (1.0 | ) | (9.1 | ) | ||||||||
Other income (expense), net (1)
|
1.2 | (0.5 | ) | 1.7 | * | |||||||||||
Net interest expense
|
(5.9 | ) | (6.6 | ) | 0.7 | 10.6 | ||||||||||
Total corporate items
|
(16.7 | ) | (18.1 | ) | 1.4 | 7.7 | ||||||||||
Income from continuing operations before income taxes
|
$ | 32.9 | $ | 33.6 | $ | (0.7 | ) | (2.1 | ) % |
*
|
Not meaningful.
|
(1)
|
Other revenue comprises certain gains and losses on derivatives related to foreign exchange exposure. Other income (expense), net, generally includes stock-based compensation, residual expenses associated with other employee benefits, LIFO adjustments, foreign exchange gains and losses, and the impact of unusual or strategic transactions not representative of segment operations.
|
(2)
|
Corporate expense primarily includes corporate staff expenses.
|
Inbound Orders
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
JBT FoodTech
|
$ | 127.1 | $ | 125.2 | $ | 382.1 | $ | 335.6 | ||||||||
JBT AeroTech
|
107.6 | 73.0 | 337.0 | 230.8 | ||||||||||||
Other and intercompany eliminations
|
4.8 | 3.9 | 5.8 | 5.9 | ||||||||||||
Total inbound orders
|
$ | 239.5 | $ | 202.1 | $ | 724.9 | $ | 572.3 |
Order Backlog
|
||||||||||||
(In millions)
|
September 30, 2010
|
December 31, 2009
|
September 30, 2009
|
|||||||||
JBT FoodTech
|
$ | 116.9 | $ | 96.7 | $ | 130.2 | ||||||
JBT AeroTech
|
225.4 | 114.7 | 132.4 | |||||||||
Intercompany eliminations
|
- | (0.2 | ) | (0.4 | ) | |||||||
Total order backlog
|
$ | 342.3 | $ | 211.2 | $ | 262.2 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In millions)
|
2010
|
2009
|
||||||
Cash provided by continuing operating activities
|
$ | 2.4 | $ | 33.2 | ||||
Cash required by investing activities
|
(12.9 | ) | (20.0 | ) | ||||
Cash provided (required) by financing activities
|
8.4 | (45.7 | ) | |||||
Net cash required by discontinued operations
|
(0.1 | ) | - | |||||
Effect of exchange rate changes on cash and cash equivalents
|
0.3 | 1.6 | ||||||
Decrease in cash and cash equivalents
|
$ | (1.9 | ) | $ | (30.9 | ) |
Debt Instrument / Covenant
|
Measurement
|
Result as of
September 30, 2010
|
||||
Revolving credit facility
|
||||||
Interest coverage ratio (1)
|
Not less than 3.5
|
10.3
|
||||
Leverage ratio (2)
|
Not greater than 3.0
|
1.8
|
||||
Capital expenditures (3)
|
Not greater than $33 million
|
$13.4 million
|
||||
Dividends paid
|
Not greater than $20 million
|
$6.2 million
|
||||
6.66% senior unsecured notes
|
||||||
Interest coverage ratio (1)
|
Not less than 2.75
|
10.3
|
||||
Leverage ratio (2)
|
Not greater than 3.25
|
1.8
|
(1)
|
Interest coverage ratio is a comparison of the trailing twelve months Consolidated EBITDA, defined as net income plus interest expense plus income tax expense plus depreciation and amortization plus non-cash expenses and extraordinary, unusual and non-recurring items, to trailing twelve months interest expense.
|
(2)
|
Leverage ratio is a comparison of the total indebtedness, defined as total debt plus guarantees of indebtedness of others plus obligations under financial letters of credit issued against the credit facility, to the trailing twelve month Consolidated EBITDA, as defined above.
|
(3)
|
Capital expenditures are limited to $30 million plus 50 percent of the unutilized amount from prior year.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
i)
|
effective in ensuring that information required to be disclosed is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms; and
|
|
ii)
|
effective in ensuring that information required to be disclosed is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
OTHER INFORMATION
|
ITEM 5.
|
EXHIBITS
|
Number in
Exhibit Table
|
Description
|
|
2.1A
|
Amendment to Separation and Distribution Agreement between FMC Technologies, Inc. and John Bean Technologies Corporation
|
|
15
|
Letter re: Unaudited interim financial information.
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a).
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) /15d-14(a).
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
John Bean Technologies Corporation
|
|
(Registrant)
|
|
/s/ Megan J. Donnelly
|
|
Megan J. Donnelly
|
|
Chief Accounting Officer, and
duly authorized officer
|
|
Date: November 4, 2010
|
Number in
Exhibit Table
|
Description
|
|
2.1A
|
Amendment to Separation and Distribution Agreement between FMC Technologies, Inc. and John Bean Technologies Corporation
|
|
15
|
Letter re: Unaudited interim financial information.
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) /15d-14(a).
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) /15d-14(a).
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
1.
|
By FMC’s payment to JBT in the amount of $719,576.00 on June 12, 2009 (the “June Payment”), and except as specifically provided herein and in the Agreement, FMC and JBT have resolved the financial issues each has notified the other of as of the date hereof. The financial issues resolved between the parties include, but are not limited to, the following: the true up to the Final Dividend Amount pertaining to the Brazilian pension plan under Section 2.7(c)(ii) of the Agreement; a claim relating to foreign exchange related charges arising from cash collections in Venezuela; the Bumblebee withholding tax claim; and warranty claims associated with the Fire Apparatus Business. The parties agree to meet as needed to resolve any financial issues that may arise in the future.
|
2.
|
FMC and JBT have agreed to extend certain transition service agreements related to non-US operations as provided for in the Agreement and the annexes related to those agreements for those non-US operations.
|
3.
|
FMC and JBT executed the U.S. Government Contract Novation Agreement, the Legal Opinions of internal counsel related to such Novation Agreement, and the Amendment to the Transition Services Agreement attached as
Exhibit B
and
Exhibit C
to this Amendment. JBT represents and warrants that FMC, by execution of these documents, will not assume any ongoing or future responsibility as a government contractor and will not be subject to any regulatory or other requirements arising under, related to, or that may arise related to such contracts with the U.S. Government including, but not limited to, any reporting or compliance obligations that may arise under or relate to Federal Acquisition Regulations. JBT has provided FMC with the Arnold and Porter Memorandum confirming this understanding and supporting this representation and warranty and, therefore, acknowledges that FMC executed these documents based on this representation and warranty. Furthermore, JBT will defend, indemnify and hold harmless FMC from any and all costs, fees, claims, charges, fines, penalties and any other liability or expense whatsoever related to, associated with or arising from these agreements, the subject matter of these agreements, or the business operations related thereto.
|
4.
|
FMC and JBT executed the Insurance Assumption Agreement attached as
Exhibit D
to this Amendment and JBT agrees to reimburse FMC for any and all claims paid and costs incurred by or charged to FMC for JBT-related insurance matters arising prior to the execution of the Insurance Assumption Agreement, and FMC agrees to reimburse JBT for any and all claims paid and costs incurred by or charged to JBT for any FMC-related insurance matters arising prior to the execution of the Insurance Assumption Agreement. Both parties agree that any such reimbursement claims arising under this paragraph, together with any other amounts that they assert as being owed by the other party are included on
Schedule 1
to this Amendment and are to be settled by payment within ten (10) days of the execution of this Amendment. FMC and JBT have agreed to settle a disagreement regarding their respective obligations to satisfy a claim made by Travelers Insurance against FTI for payment of certain outstanding administrative fees (the “TPA Fee”), as well as each party’s respective obligations under an insurance adjustment (the “AIG Retro”). The settlements related to the TPA Fee and the AIG Retro are reflected on Schedule 1 hereto which represents the collective payment obligations of the parties to one another under the Agreement as amended by this Amendment.
|
5.
|
FMC and JBT executed the Assignment of Deed of Trust and Other Loan Documents related to Riverside, California attached as
Exhibit E
to this Amendment, and JBT agreed to defend, indemnify and hold harmless FMC from any and all costs, fees, claims, charges, fines, penalties and any other liability or expense whatsoever related to, associated with, or arising from that agreement, the subject matter of that agreement, or the business operations conducted at the facility that is the subject of that agreement.
|
6.
|
FMC and JBT agree to execute the Quitclaim Deed related to the Jetway Systems facility located in Weber County Utah attached as
Exhibit F
to this Amendment.
|
7.
|
FMC agrees that it will provide its written consent to a direct Assignment of Open-End Mortgage and Other Loan Documents (Franklin County) related to a facility leased to Q3 Stamped Metal, Inc. from FMC Corp to JBT in a form acceptable to FMC if JBT makes a written request and provides reasonable documentation of its need for the same to establish or support its title to such mortgage.
|
8.
|
JBT represents and warrants that it has fully complied with Section 5.3 of the Agreement, that it has not expanded, extended or increased the amount of, and covenants that it will not extend, expand, or increase the amount of, any Guarantee or enter into any new Guarantee except to the extent that any of the obligations disclosed in
Schedule 5.3(1)
to this Amendment are inconsistent with the foregoing. JBT will defend, indemnify and hold harmless FMC from any and all costs, claims, charges and any other liability whatsoever related to, associated with, or arising from these Guarantees. Furthermore, FMC and JBT agree that Section 5.3 of the Agreement is hereby amended to provide for an additional subsection as follows:
|
9.
|
Except to the extent listed on
Schedule 1
to this Amendment or as may be payable pursuant to the terms of the Tax Sharing Agreement, on the date of the execution of this Amendment, neither Party has knowledge of any other outstanding claim for reimbursement of costs, expenses or other liabilities for which it seeks indemnification or reimbursement from the other party pursuant to the terms of the Agreement or this Amendment.
|
10.
|
Schedule 1.1(d)(2) of the Agreement is hereby amended to include the following under the subsection “
Discontinued and Closed Businesses -- Spinco Liabilities
”:
|
11.
|
Except with respect to notices received from the US Air Force with respect to certain military contracts of which FTI has previously been advised, JBT represents, warrants and covenants that it has fully complied with, has received no notice of any breach, non-compliance or any form of claim related to, and will continue to to fully comply with all material terms of any contract to be assigned to JBT under the Agreement but for which an assignment to JBT and full release of any FMC obligation has not been obtained.
|
12.
|
The provisions of this Amendment are intended to supplement and clarify the Agreement, and as such are in addition to any obligation or right arising under the Agreement that is not hereby amended or clarified. All other terms and conditions of the Agreement shall remain in full force and effect and FMC and the JBT ratify and reaffirm their intent to be mutally bound by the Agreement, as amended hereby. Within fifteen (15) business days after the date on which this Amendment is executed by both parties, FMC will execute and deliver to JBT the Quitclaim Deed.
|
FOR FMC TECHNOLOGIES, INC.:
|
||
By: | /s/ Jeffrey W. Carr | |
Name: | Jeffrey W. Carr | |
Title: | Senior Vice President, General Counsel and Secretary | |
FOR JOHN BEAN TECHNOLOGIES CORPORATION:
|
||
By: | /s/ Kenneth C. Dunn | |
Name: | Kenneth C. Dunn | |
Title: | Vice President and General Counsel | |
1.
|
I have reviewed this quarterly report on Form 10-Q of John Bean Technologies Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 4, 2010
|
|
/s/ Charles H. Cannon, Jr.
|
|
Charles H. Cannon, Jr.
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of John Bean Technologies Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 4, 2010
|
|
/s/ Ronald D. Mambu
|
|
Ronald D. Mambu
|
|
Vice President and Chief Financial Officer
(Principal Financial Officer)
|
(a)
|
the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2010, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 4, 2010
|
|
/s/ Charles H. Cannon, Jr.
|
|
Charles H. Cannon, Jr.
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
(a)
|
the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2010, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 4, 2010
|
|
/s/ Ronald D. Mambu
|
|
Ronald D. Mambu
|
|
Vice President and Chief Financial Officer
(Principal Financial Officer)
|