JBT Corporation (NYSE: JBT) is a leading global technology solutions provider to high-value segments of the food and beverage industry. The company designs, produces, and services sophisticated products and systems for a broad range of end markets, generating roughly one-half of its annual revenue from recurring parts, service, rebuilds, and leasing operations.
In the fiscal year 2023, JBT reported annual revenue of $1,664.4 million and net income of $582.6 million. The company's annual operating cash flow was $74.2 million, while its annual free cash flow stood at $19.1 million.
During the first quarter of 2024, JBT's revenue remained flat year-over-year at $392.3 million, in line with analysts' expectations. The company's gross profit margin increased by 160 basis points to 35.8%, driven primarily by the cost-saving benefits of restructuring actions and continued progress on its supply chain initiatives. Adjusted EBITDA for the quarter increased by 6% year-over-year to $57.4 million, with the adjusted EBITDA margin expanding by 60 basis points to 14.6%.
JBT's first-quarter performance was in line with the company's expectations, with the seasonally slowest period of the year playing out as anticipated. The company's organic revenue grew by $3.9 million in the period compared to the prior year, with higher pricing and an increase in volume for non-recurring revenue partially offsetting a decrease in volume for recurring revenue. Foreign currency translation had an immaterial impact on revenue.
Geographically, while orders softened year-over-year in North America, inbound remained solid in Europe and the Middle East, with the latter posting a record quarter. In terms of end markets, JBT enjoyed particular strength in fruit juice processing and convenience meals.
The company's selling, general, and administrative expenses increased by $6.4 million compared to the same period in the prior year, primarily due to an increase in M&A-related costs and incentive compensation expense accruals. This was partially offset by savings from JBT's restructuring program and a decrease in expenses related to the OmniBlu™ platform.
JBT's income from continuing operations for the first quarter of 2024 increased to $22.7 million, compared to $17.1 million for the same period in 2023, representing an increase of $5.6 million. Adjusted EBITDA for the quarter was $57.4 million, up from $54.4 million during the same period in 2023, driven by higher gross profit partially offset by higher selling, general, and administrative expenses.
The company's income from discontinued operations, net of taxes, was $0.1 million in the first quarter of 2024, compared to $10.1 million in the same period of 2023. The discontinued operations consist of the results of operations of the AeroTech business, the sale of which was completed during the third quarter of 2023.
Looking ahead, JBT is reiterating its guidance for adjusted EBITDA of $295 million to $310 million and adjusted EPS of $5.05 to $5.45 for the full year 2024, which at the midpoint represents 11% and 28% year-over-year growth, respectively. The company continues to expect organic revenue growth of 4% to 6%, with the total revenue range adjusted to account for current expectations for foreign exchange translation.
JBT's management is optimistic about the recovery in the poultry industry in North America, with the improved economics of the market expected to translate into orders during the second quarter of 2024. The company is seeing increased quote activity, particularly for midstream and downstream equipment, as producers look to increase output and efficiency of their value-added processes.
In addition to the organic growth opportunities, JBT is making significant progress on the proposed merger with Marel hf., a leading global provider of advanced food processing equipment and systems. The execution of the definitive transaction agreement was a major milestone in combining the two companies, and JBT is confident in the compelling industrial logic of the transaction, including meaningful value creation opportunities.
The company expects substantial revenue synergies from the Marel transaction, such as cross-selling, enhanced service, and an improved overall value proposition. JBT also anticipates annual run-rate cost synergies of more than $125 million within three years of the transaction's close, with approximately 45% of the savings coming from cost of goods sold and 55% from operating expenses.
JBT's liquidity as of March 31, 2024, which includes cash plus borrowing ability under its revolving credit facilities, was $1.2 billion. The company's cash flows generated from continuing operations and borrowings are expected to be sufficient to satisfy its principal cash requirements, including working capital needs, new product development, restructuring expenses, capital expenditures, income taxes, debt repayments, dividends, periodic pension contributions, and other financing arrangements.
In conclusion, JBT Corporation is navigating the challenges and seizing the opportunities in the food and beverage industry. The company's focus on innovation, operational efficiency, and strategic partnerships, such as the proposed merger with Marel, positions it well to drive sustainable growth and create value for its shareholders.