John Bean Technologies(JBT) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements of JBT Marel Corporation, including statements of income, comprehensive income, balance sheets, cash flows, and changes in stockholders' equity, along with detailed notes explaining the company's business, recent Marel acquisition, debt structure, pension changes, revenue recognition, and other financial details for the periods ended June 30, 2025 and 2024 Condensed Consolidated Statements of Income JBT Marel Corporation reported a net income of $3.4 million for the three months ended June 30, 2025, a significant decrease from $30.7 million in the prior year period, and a net loss of $169.6 million for the six months ended June 30, 2025, compared to a net income of $53.5 million in 2024, primarily due to increased operating expenses, pension expense, loss on investment, and interest expense, largely due to the Marel acquisition | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $934.8 | $402.3 | $1,788.9 | $794.6 | | Operating Income | $48.4 | $26.8 | $15.0 | $55.9 | | Net Income (Loss) | $3.4 | $30.7 | $(169.6) | $53.5 | | Basic EPS | $0.07 | $0.96 | $(3.27) | $1.67 | | Diluted EPS | $0.07 | $0.95 | $(3.27) | $1.66 | Condensed Consolidated Statements of Comprehensive Income The company's comprehensive income for the three months ended June 30, 2025, was $268.8 million, a substantial increase from $27.3 million in the prior year, primarily due to significant foreign currency translation adjustments, with the six-month period showing a similar trend | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (Loss) Income | $3.4 | $30.7 | $(169.6) | $53.5 | | Foreign Currency Translation Adjustments | $269.1 | $(2.7) | $422.6 | $(21.0) | | Pension and Other Postretirement Benefits Adjustments | $— | $1.0 | $112.1 | $1.6 | | Derivatives Designated as Hedges | $(3.7) | $(1.7) | $(23.3) | $(2.6) | | Other Comprehensive Income | $265.4 | $(3.4) | $511.4 | $(22.0) | | Comprehensive Income | $268.8 | $27.3 | $341.8 | $31.5 | Condensed Consolidated Balance Sheets As of June 30, 2025, JBT Marel's total assets significantly increased to $8,252.6 million from $3,413.8 million at December 31, 2024, primarily due to the Marel acquisition, which led to substantial increases in goodwill, intangible assets, and inventories, with total liabilities also rising considerably due to acquisition-related debt | Metric (in millions, except per share data and number of shares) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Total Assets | $8,252.6 | $3,413.8 | | Cash and Cash Equivalents | $111.8 | $1,228.4 | | Goodwill | $3,101.8 | $769.1 | | Intangible Assets, net | $2,571.0 | $340.9 | | Total Current Liabilities | $1,643.7 | $535.5 | | Long-term Debt | $1,511.3 | $1,252.1 | | Total Stockholders' Equity | $4,374.9 | $1,544.2 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash provided by continuing operating activities increased to $136.6 million from $32.0 million in the prior year, while cash required by investing activities significantly increased to $1,780.1 million due to the Marel acquisition, and cash provided by financing activities also saw a substantial increase to $543.4 million, driven by new debt to fund the acquisition | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Cash provided by continuing operating activities | $136.6 | $32.0 | | Cash required by continuing investing activities | $(1,780.1) | $(22.7) | | Cash provided (required) by continuing financing activities | $543.4 | $(16.4) | | Net decrease in cash, cash equivalents and restricted cash | $(1,098.4) | $(9.0) | | Cash, cash equivalents and restricted cash, end of period | $130.0 | $474.3 | Condensed Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity increased significantly to $4,374.9 million as of June 30, 2025, from $1,544.2 million at December 31, 2024, primarily driven by the issuance of common stock related to the Marel acquisition and positive foreign currency translation adjustments, despite a net loss for the six-month period | Metric (in millions) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :------------------- | :--------------------------- | :----------------------- | | Common Stock | $0.3 | $0.5 | | Additional Paid-In Capital | $234.3 | $2,731.3 | | Retained Earnings | $1,535.9 | $1,356.2 | | Accumulated Other Comprehensive Gain (Loss) | $(224.5) | $286.9 | | Total Equity | $1,544.2 | $4,374.9 | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The notes provide detailed explanations for the financial statements, covering the company's business description, the strategic acquisition of Marel, changes in goodwill and intangible assets, inventory composition, pension plan termination, debt structure, accumulated other comprehensive income, revenue recognition policies, earnings per share calculations, fair value measurements, derivative instruments, lease information, commitments and contingencies, business segment reporting, restructuring activities, and related party transactions NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION JBT Marel Corporation provides global technology solutions to the food and beverage industry, designing, producing, and servicing sophisticated products and systems, and now operates with two reportable segments, JBT and Marel, following the Marel acquisition on January 2, 2025 - JBT Marel provides global technology solutions to high-value segments of the food and beverage industry, including design, production, and service of sophisticated products and systems[19] - The company completed the acquisition of Marel hf. on January 2, 2025, which significantly expanded its operations[22] - Post-acquisition, the company has two reportable segments: JBT (legacy operations, food production value chain, automated guided vehicles) and Marel (advanced processing equipment, systems, software, and services for poultry, meat, fish, pet food, plant-based proteins, aqua feed)[23] NOTE 2. ACQUISITIONS On January 2, 2025, JBT Marel acquired 97.5% of Marel hf. for $4,182.3 million, aiming to create a leading global food and beverage technology solutions provider with complementary portfolios, funded by JBT shares, cash, and new debt facilities, with purchase accounting being provisional - JBT Marel acquired 97.5% of Marel hf. on January 2, 2025, for $4,182.3 million (net of cash acquired), to become a leading global food and beverage technology solutions provider[31] | Consideration Component (in millions) | Amount | | :---------------------------------- | :----- | | Value of JBT shares issued | $2,436.3 | | Cash consideration | $959.3 | | Settlement of Marel debt | $867.8 | | Settlement of Marel interest rate swaps | $3.3 | | Fair value of Marel stock options | $5.6 | | Total Purchase Consideration | $4,272.3 | - The acquisition resulted in $2,039.9 million in goodwill, driven by anticipated cost savings, revenue enhancement synergies, and acquired workforce[36] - On February 4, 2025, the company acquired the remaining 2.5% of Marel's equity interests for approximately $88.7 million, accounted for as an equity transaction[43] NOTE 3. GOODWILL AND INTANGIBLE ASSETS Goodwill significantly increased to $3,101.8 million as of June 30, 2025, from $769.1 million at December 31, 2024, primarily due to the Marel acquisition and currency translation, with intangible assets also seeing a substantial increase, amortized over estimated useful lives | Metric (in millions) | December 31, 2024 | June 30, 2025 | Change (Acquisitions + Currency) | | :------------------- | :---------------- | :------------ | :------------------------------- | | Goodwill | $769.1 | $3,101.8 | +$2,332.7 | | Customer relationship | $421.3 | $2,069.1 | +$1,647.8 | | Patents and acquired technology | $169.8 | $596.0 | +$426.2 | | Trademarks | $53.2 | $313.0 | +$259.8 | | Total Intangible Assets | $663.2 | $2,999.6 | +$2,336.4 | - Intangible asset amortization expense was $47.5 million for Q2 2025 (vs. $11.1 million in Q2 2024) and $86.8 million for H1 2025 (vs. $22.2 million in H1 2024)[44] NOTE 4. INVENTORIES Net inventories increased significantly to $661.1 million as of June 30, 2025, from $233.1 million at December 31, 2024, primarily due to the Marel acquisition | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Raw materials | $225.5 | $37.3 | | Work in process | $88.8 | $50.2 | | Finished goods | $373.6 | $164.9 | | Valuation adjustments | $(26.8) | $(19.3) | | Net Inventories | $661.1 | $233.1 | NOTE 5. PENSION Net periodic pension cost for the six months ended June 30, 2025, was $147.6 million, a substantial increase from $2.6 million in the prior year, primarily due to a $146.9 million pre-tax settlement charge recognized in Q1 2025 upon the termination of the U.S. qualified defined benefit pension plan | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Periodic Cost | $0.5 | $1.3 | $147.6 | $2.6 | - The company completed the termination of its U.S. qualified defined benefit pension plan on February 4, 2025, via an annuity purchase of $178.5 million, funded by plan assets[47] - A pre-tax settlement charge of $146.9 million was recognized in Pension expense, other than service cost, due to the plan termination[48] NOTE 6. DEBT Total debt, including the current portion, increased to $1,920.8 million as of June 30, 2025, from $1,252.1 million at December 31, 2024, primarily due to new borrowings from the Senior Secured Term Loan B and the revolving credit facility to fund the Marel acquisition, with the company subject to financial covenants | Debt Component (in millions) | Maturity Date | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :------------ | :---------------- | | Revolving credit facility | Jan 2, 2030 | $638.2 | $854.0 | | Senior Secured Term Loan B | Jan 2, 2032 | $897.8 | $— | | Convertible senior notes | May 15, 2026 | $402.5 | $402.5 | | Total Debt (net of issuance costs) | | $1,920.8 | $1,252.1 | - Interest expense increased by $27.7 million (QoQ) and $67.2 million (YoY) due to higher average debt balance and interest rates from Marel acquisition funding[135][151] - The Second A&R Credit Agreement provides for a $1.8 billion revolving credit facility and a $900.0 million Senior Secured Term Loan B, with specific leverage and interest coverage ratio covenants[32][53][54] NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (AOCI) shifted from a loss of $(224.5) million at December 31, 2024, to a gain of $286.9 million at June 30, 2025, primarily driven by large positive foreign currency translation adjustments and pension and other postretirement liability adjustments, partially offset by derivatives designated as hedges | Metric (in millions) | Dec 31, 2024 | June 30, 2025 | Change | | :------------------- | :----------- | :------------ | :----- | | Pension and Other Postretirement Benefits | $(113.5) | $(1.4) | +$112.1 | | Derivatives Designated as Hedges | $2.1 | $(21.2) | $(23.3) | | Foreign Currency Translation | $(113.1) | $309.5 | +$422.6 | | Total AOCI | $(224.5) | $286.9 | +$511.4 | NOTE 8. REVENUE RECOGNITION The company expects to recognize $1.4 billion in future revenue from remaining performance obligations, with 60-70% in 2025, and reported total revenue for the three months ended June 30, 2025, was $934.8 million, with Marel contributing $480.2 million, disaggregated by type and geographical region - $1.4 billion in revenue is expected from remaining performance obligations, with 60-70% recognized in 2025[72] | Revenue Type (in millions) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------- | :--------------------------- | :--------------------------- | | JBT Recurring | $236.4 | $459.2 | | Marel Recurring | $248.7 | $474.8 | | JBT Non-recurring | $218.2 | $404.2 | | Marel Non-recurring | $231.5 | $450.7 | | Total Revenue | $934.8 | $1,788.9 | | Contract Balances (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Contract Assets | $128.5 | $95.4 | | Contract Liabilities | $508.0 | $178.0 | NOTE 9. EARNINGS PER SHARE Basic and diluted EPS from continuing operations for the three months ended June 30, 2025, were $0.07, down from $0.96 and $0.95 respectively in 2024, and for the six months ended June 30, 2025, were $(3.27), a significant decrease from $1.67 and $1.66 in 2024, reflecting the net loss | Metric (in millions, except per share data) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income (Loss) | $3.4 | $30.7 | $(169.6) | $53.5 | | Weighted Average Shares Outstanding | 52.1 | 32.0 | 51.9 | 32.0 | | Basic EPS (Continuing Operations) | $0.07 | $0.96 | $(3.27) | $1.67 | | Diluted EPS (Continuing Operations) | $0.07 | $0.95 | $(3.27) | $1.66 | NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS The company categorizes financial assets and liabilities into Level 1, 2, or 3 based on valuation inputs, with total financial assets measured at fair value of $21.1 million and total financial liabilities of $136.2 million as of June 30, 2025, and the fair value of convertible senior notes (Level 2) was $400.1 million | Metric (in millions) | June 30, 2025 Total | Level 1 | Level 2 | Level 3 | December 31, 2024 Total | Level 1 | Level 2 | Level 3 | | :------------------- | :------------------ | :------ | :------ | :------ | :---------------------- | :------ | :------ | :------ | | Assets: Investments | $13.3 | $13.3 | $— | $— | $13.2 | $13.2 | $— | $— | | Assets: Derivatives | $7.8 | $— | $7.8 | $— | $6.8 | $— | $6.8 | $— | | Liabilities: Derivatives | $136.2 | $— | $136.2 | $— | $44.4 | $— | $44.4 | $— | - The fair value of the 0.25% Convertible Senior Notes due 2026 (Level 2 inputs) was $400.1 million as of June 30, 2025[83] NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT JBT Marel uses derivative financial instruments, primarily forward foreign exchange contracts, cross-currency swaps, and interest rate swaps, to manage exposure to foreign currency exchange rates and interest rate volatility, designating certain cross-currency swaps as fair value and net investment hedges - The company uses forward foreign exchange contracts (notional value $438.1 million at June 30, 2025) to manage foreign currency exchange rate risk, not designated as hedges[86] - Entered into cross-currency swap agreements in June 2025 ($578 million notional) to synthetically swap fixed-rate debt to Euro-denominated fixed-rate debt, designated as net investment hedges[89] - Entered into five cross-currency swaps in January 2025 ($698.3 million notional) related to Term Loan B, designated as fair value hedges, to swap SOFR to EURIBOR and hedge exchange rate variability[91] - Interest rate swaps with a combined notional amount of $250 million, designated as cash flow hedges, expired during Q2 2025[94] NOTE 12. LEASES The company reported operating lease revenue of $25.3 million for the three months ended June 30, 2025, and $50.1 million for the six months ended June 30, 2025, with sales-type lease revenue of $1.1 million and $2.1 million for the respective periods | Lease Revenue (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating Lease Revenue | $25.3 | $24.8 | $50.1 | $50.7 | | Sales-Type Lease Revenue | $1.1 | $0.7 | $2.1 | $1.6 | NOTE 13. COMMITMENTS AND CONTINGENCIES JBT Marel is subject to legal actions in the normal course of business, but management believes the outcomes will not have a material adverse effect on financial results, and the company issues standby letters of credit, performance bonds, and other guarantees totaling $79.5 million, and provides product warranties with a liability of $23.4 million as of June 30, 2025 - The company issues guarantees (standby letters of credit, performance bonds, surety bonds) totaling $79.5 million as of June 30, 2025[102] | Warranty Accrual (in millions) | June 30, 2025 | June 30, 2024 | | :----------------------------- | :------------ | :------------ | | Balance at end of period | $23.4 | $10.6 | NOTE 14. BUSINESS SEGMENT INFORMATION Following the Marel acquisition, JBT Marel has two reportable segments: JBT and Marel, with the Chief Executive Officer using segment Adjusted EBITDA to evaluate performance and allocate resources, reporting JBT segment Adjusted EBITDA of $81.7 million (18.0% margin) and Marel segment Adjusted EBITDA of $74.5 million (15.5% margin) for the three months ended June 30, 2025 - The company operates with two reportable segments: JBT (legacy operations) and Marel (acquired entity), with the CEO using segment Adjusted EBITDA for performance evaluation[105][107] | Segment Performance (3 Months Ended June 30, 2025, in millions) | JBT | Marel | Total | | :------------------------------------------------------------ | :---- | :---- | :------ | | Revenue | $454.6 | $480.2 | $934.8 | | Segment Adjusted EBITDA | $81.7 | $74.5 | $156.2 | | Segment Adjusted EBITDA Margin | 18.0% | 15.5% | 16.7% | | Segment Performance (6 Months Ended June 30, 2025, in millions) | JBT | Marel | Total | | :------------------------------------------------------------ | :---- | :---- | :------ | | Revenue | $863.4 | $925.5 | $1,788.9 | | Segment Adjusted EBITDA | $142.4 | $126.0 | $268.4 | | Segment Adjusted EBITDA Margin | 16.5% | 13.6% | 15.0% | NOTE 15. RESTRUCTURING The 2022/2023 restructuring plan was completed in Q1 2024, and in Q1 2025, the JBT Marel 2025 Integration restructuring plan was implemented to achieve synergy targets from the Marel acquisition, with an estimated cost of $25.0-$30.0 million, recognizing $16.7 million in charges and achieving $7.1 million in cumulative annualized savings as of June 30, 2025 - The 2022/2023 restructuring plan was completed as of March 31, 2024, with a total cost of $17.5 million[111] - The JBT Marel 2025 Integration restructuring plan was implemented in Q1 2025, with an estimated cost of $25.0-$30.0 million, to optimize the combined company's cost structure[112] | Restructuring Charges (JBT Marel 2025 Integration, in millions) | Cumulative Amount as of June 30, 2025 | | :------------------------------------------------------------ | :------------------------------------ | | Severance and related expense | $15.6 | | Inventory write-off | $0.3 | | Other | $0.8 | | Total Restructuring Charges, net | $16.7 | | Restructuring Savings (JBT Marel 2025 Integration, in millions) | Cumulative Amount As of June 30, 2025 | | :------------------------------------------------------------ | :------------------------------------ | | Cost of sales | $0.8 | | Selling, general and administrative | $6.3 | | Total Restructuring Savings | $7.1 | NOTE 16. RELATED PARTY TRANSACTIONS The company has operating lease agreements with entities owned by certain employees who were former owners of acquired businesses, with the related right-of-use asset and lease liability being $2.6 million and $2.7 million, respectively, as of June 30, 2025 - Operating lease right-of-use asset and lease liability related to agreements with related parties were $2.6 million and $2.7 million, respectively, as of June 30, 2025[115] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on JBT Marel's financial performance, condition, and future outlook, covering the strategic rationale for the Marel acquisition, business conditions, detailed consolidated results, reconciliation of non-GAAP measures, restructuring efforts, liquidity and capital resources, and critical accounting estimates, highlighting the significant impact of the Marel acquisition on revenue, expenses, and overall financial position Cautionary Note Regarding Forward-Looking Statements This section highlights that the report contains forward-looking statements based on current plans and expectations, which are subject to various risks and uncertainties, including integration challenges of JBT and Marel, economic conditions, currency fluctuations, and the ability to achieve anticipated synergies - The report contains forward-looking statements subject to risks, including the inability to successfully integrate JBT and Marel, fluctuations in financial results, changes to tariffs, and economic deterioration[116] Executive Overview JBT Marel Corporation is a leading global food and beverage technology solutions provider, formed by combining JBT and Marel to transform the future of food, with a strategy focusing on strengthening solutions, enhancing service, advanced digital capabilities, innovation, and leveraging scale to expand margins, while also emphasizing ESG principles - JBT Marel is a leading global food and beverage technology solutions provider, formed by the acquisition of Marel hf. on January 2, 2025[118][122] - The company's strategy is a five-pronged approach: strengthening solutions, enhancing service, advanced digital/software capabilities, focus on innovation, and leveraging scale to expand margins[120][123] - The company emphasizes ESG, focusing on employee well-being, resource efficiency, waste reduction, and customer sustainability objectives[121] Business Conditions and Outlook JBT Marel's Q2 2025 financial performance exceeded expectations, driven by strong recurring revenue, favorable foreign exchange, and operating leverage, with healthy orders across diverse end markets, though the company anticipates Q2 2025 performance will be impacted by evolving tariff costs and is taking proactive measures to mitigate these impacts - Q2 2025 financial performance exceeded expectations due to better recurring revenue, foreign exchange translation, and operating leverage[124] - Healthy orders were observed across diverse end markets, including poultry, meat, fruit and vegetables, beverages, and ready meals[124] - Anticipates Q2 2025 performance will be impacted by evolving tariff costs, with proactive measures including reshoring suppliers, vendor concessions, and pricing adjustments[125] CONSOLIDATED RESULTS OF OPERATIONS (Three Months Ended June 30, 2025 and 2024) For Q2 2025, total revenue increased by 132.4% to $934.8 million, largely due to the Marel acquisition, with gross profit margin slightly increasing to 35.8%, operating income rising by 80.6% to $48.4 million, but income from continuing operations decreasing by 88.9% to $3.4 million, primarily due to higher interest expense, loss on investment, and tax provision impacts, while Adjusted EBITDA increased by 145.2% to $156.2 million | Metric (in millions, except %) | 2025 | 2024 | Change | % Change | | :----------------------------- | :-------- | :-------- | :-------- | :------- | | Total Revenue | $934.8 | $402.3 | $532.5 | 132.4% | | Gross Profit Margin | 35.8% | 35.6% | 20 bps | | | Operating Income | $48.4 | $26.8 | $21.6 | 80.6% | | Income (Loss) from Continuing Operations | $3.4 | $30.7 | $(27.3) | (88.9)% | | Adjusted EBITDA from Continuing Operations | $156.2 | $63.7 | $92.5 | 145.2% | | JBT segment Adjusted EBITDA | $81.7 | $63.7 | $18.0 | 28.3% | | Marel segment Adjusted EBITDA | $74.5 | $— | $74.5 | n/a | - Revenue increase driven by Marel acquisition ($480.2 million) and JBT organic growth ($43.9 million)[128] - Selling, general and administrative expense increased $140.0 million due to Marel acquisition and integration costs, but decreased as a percentage of revenue by 60 bps to 26.8% due to operating leverage and restructuring savings[130] - Interest expense increased $27.7 million due to higher debt from Marel acquisition[135] CONSOLIDATED RESULTS OF OPERATIONS (Six Months Ended June 30, 2025 and 2024) For H1 2025, total revenue increased by 125.1% to $1,788.9 million, with Marel contributing $925.5 million, gross profit margin decreased by 70 bps to 35.0%, operating income decreased by 73.2% to $15.0 million, and the company reported a loss from continuing operations of $169.6 million, a significant decline from $53.4 million income in 2024, primarily due to higher pension expense, interest expense, and M&A related costs, while Adjusted EBITDA increased by 121.6% to $268.4 million | Metric (in millions, except %) | 2025 | 2024 | Change | % Change | | :----------------------------- | :---------- | :-------- | :---------- | :--------- | | Total Revenue | $1,788.9 | $794.6 | $994.3 | 125.1% | | Gross Profit Margin | 35.0% | 35.7% | -70 bps | | | Operating Income | $15.0 | $55.9 | $(40.9) | (73.2)% | | Income (Loss) from Continuing Operations | $(169.6) | $53.4 | $(223.0) | (417.6)% | | Adjusted EBITDA from Continuing Operations | $268.4 | $121.1 | $147.3 | 121.6% | | JBT segment Adjusted EBITDA | $142.4 | $121.1 | $21.3 | 17.6% | | Marel segment Adjusted EBITDA | $126.0 | $— | $126.0 | n/a | - Loss from continuing operations primarily due to $146.9 million pension settlement charge, increased interest expense, and M&A related costs[147][151][154] - Selling, general and administrative expense increased $318.0 million due to Marel acquisition and $74.7 million in M&A related costs[145] Reconciliation of Non-GAAP Measures The company presents non-GAAP financial measures like Adjusted EBITDA, Adjusted income from continuing operations, and Free cash flow to provide greater transparency into operating results, adjusting for items such as restructuring costs, M&A related costs, pension-related costs, and depreciation/amortization - Non-GAAP measures (Adjusted EBITDA, Adjusted income from continuing operations, Free cash flow) are used to provide transparency into operating results by adjusting for restructuring, M&A, pension, and depreciation/amortization costs[157][160] | Reconciliation (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income (loss) from continuing operations | $3.4 | $30.7 | $(169.6) | $53.4 | | Total Non-GAAP Adjustments | $152.8 | $33.0 | $401.4 | $68.0 | | Adjusted EBITDA from continuing operations | $156.2 | $63.7 | $268.4 | $121.1 | | Reconciliation (in millions, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income (loss) from continuing operations | $3.4 | $30.7 | $(169.6) | $53.4 | | Adjusted income from continuing operations | $77.7 | $42.1 | $127.8 | $77.9 | | Adjusted diluted EPS from continuing operations | $1.49 | $1.31 | $2.46 | $2.42 | | Free Cash Flow (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Cash provided by continuing operating activities | $136.6 | $32.0 | | Less: capital expenditures | $38.5 | $21.0 | | Plus: proceeds from sale of fixed assets | $4.5 | $0.9 | | Plus: pension contributions | $3.2 | $1.6 | | Free Cash Flow (FCF) | $105.8 | $13.5 | Restructuring The JBT Marel 2025 Integration restructuring plan, initiated in Q1 2025, aims to achieve $50.0-$60.0 million in cumulative cost savings by optimizing the combined company's cost structure post-Marel acquisition, with $16.7 million in charges recognized and $7.1 million in cumulative annualized savings achieved as of June 30, 2025 - The JBT Marel 2025 Integration restructuring plan, initiated in Q1 2025, targets $50.0-$60.0 million in cumulative cost savings[171][172] - As of June 30, 2025, $16.7 million in restructuring charges have been recognized, and $7.1 million in cumulative annualized savings have been achieved[171][172] Liquidity and Capital Resources Primary liquidity sources include operating cash flows, a $1.8 billion revolving credit facility, and cash on hand, with the Marel acquisition funded by $983.7 million cash consideration, $867.8 million debt repayment, and $111.4 million transaction expenses, utilizing new debt facilities, resulting in total liquidity of $1.3 billion as of June 30, 2025, and anticipated capital expenditures of $85-$95 million and integration costs of $45-$55 million for 2025 - Primary liquidity sources are operating cash flows, a $1.8 billion revolving credit facility, and cash on hand[174] - Marel acquisition funding included $983.7 million cash consideration, $867.8 million Marel debt repayment, and $111.4 million transaction expenses, financed by new debt facilities[175] - As of June 30, 2025, total liquidity (cash + borrowing ability) was $1.3 billion, with $111.8 million in cash and cash equivalents[176][179] - Anticipated capital expenditures for 2025 are $85-$95 million, and integration costs for Marel acquisition are $45-$55 million[177] | Cash Flows (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $136.6 | $32.0 | | Investing Activities | $(1,780.1) | $(22.7) | | Financing Activities | $543.4 | $(16.4) | CRITICAL ACCOUNTING ESTIMATES The company's critical accounting estimates include intangible asset valuation in business combinations, which relies on significant estimates and assumptions like forecasted revenue growth, EBITDA margins, discount rates, customer attrition, and royalty rates, where future changes could lead to impairment charges - Critical accounting estimates involve intangible asset valuation in business combinations, using methods like multi-period excess earnings and relief-from-royalty[192] - Key estimates include forecasted revenue growth, EBITDA margins, discount rates, customer attrition rates, and royalty rates, which are inherently uncertain and subject to change[192][193] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section details JBT Marel's exposure to market risks, specifically foreign currency exchange rate risk, which the company hedges using cross-currency swaps with significant notional amounts designated as fair value and net investment hedges, where a hypothetical adverse movement in exchange rates would result in substantial losses on these derivative instruments Foreign Currency Exchange Rate Risk JBT Marel is exposed to foreign currency exchange rate risk and uses cross-currency swaps to hedge this exposure, with notional amounts of $698.3 million (fair value hedges) and $578 million (net investment hedges) as of June 30, 2025, both in liability positions, where a hypothetical 10% adverse movement in exchange rates would result in significant losses on these swaps - The company uses cross-currency swaps to hedge foreign currency exchange rate risk, with notional amounts of $698.3 million (fair value hedges) and $578 million (net investment hedges) as of June 30, 2025[196][197] - A hypothetical 10% adverse movement in exchange rates would result in a $66.2 million loss on fair value hedges and a $58.6 million loss on net investment hedges[196][197] ITEM 4. CONTROLS AND PROCEDURES This section addresses the effectiveness of JBT Marel's disclosure controls and procedures, noting they were effective as of June 30, 2025, with the exception of the recently acquired Marel entity, and details the material weaknesses identified in Marel's internal control over financial reporting prior to the acquisition and the company's ongoing remediation efforts Evaluation of Disclosure Controls and Procedures As of June 30, 2025, the CEO and CFO concluded that disclosure controls and procedures were effective, however, Marel was excluded from this assessment due to its recent acquisition, representing approximately 17% of consolidated total assets and 52% of consolidated total revenues - Disclosure controls and procedures were deemed effective as of June 30, 2025[198] - Marel was excluded from the assessment of disclosure controls and procedures, representing approximately 17% of consolidated total assets and 52% of consolidated total revenues[199] Material Weaknesses Related to Marel hf. Prior to acquisition, Marel management identified two unremediated material weaknesses in its internal control over financial reporting as of June 30, 2025: ineffective information technology general controls and ineffective controls over journal entries, which, while not resulting in material misstatements, could lead to future material misstatements, and the company is actively remediating these issues - Marel had two unremediated material weaknesses in internal control over financial reporting as of June 30, 2025: ineffective IT general controls and ineffective controls over journal entries[201][208] - These weaknesses did not result in material misstatements but could lead to future material misstatements in financial statements[201][208] Changes in Internal Control Over Financial Reporting There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[203] PART II — OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - No current legal proceedings are expected to have a material adverse effect on the company's business, financial condition, or results of operations[205] ITEM 1A. RISK FACTORS The primary new risk factor highlighted is the material weaknesses identified in Marel's internal control over financial reporting, where failure to timely and effectively remediate these weaknesses or maintain an effective system of internal control could adversely affect financial reporting, liquidity, access to capital, and stock price - Material weaknesses in Marel's internal control over financial reporting pose a significant risk, potentially leading to material misstatements, increased costs, and adverse impacts on financial reporting, liquidity, and stock price[207][208] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds were reported[210] ITEM 3. DEFAULTS UPON SENIOR SECURITIES No defaults upon senior securities were reported - No defaults upon senior securities were reported[211] ITEM 4. MINE SAFETY DISCLOSURES Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[212] ITEM 5. OTHER INFORMATION No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[213] ITEM 6. EXHIBITS This section lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and the interactive data file - The exhibit index includes certifications (CEO, CFO), XBRL documents, and the cover page interactive data file[214]