John Bean Technologies Management Discusses Q4 2013 Results - Earnings Call Transcript

Mar. 5.14 | About: John Bean (JBT)

John Bean Technologies (NYSE:JBT)

Q4 2013 Earnings Call

March 05, 2014 10:00 am ET

Executives

Debarshi Sengupta

Thomas W. Giacomini - Chief Executive Officer, President and Director

Brian A. Deck - Chief Financial Officer and Vice President

Ronald D. Mambu - Vice President of Corporate Finance

Analysts

Gary Farber - CL King & Associates, Inc., Research Division

Jason Ursaner - CJS Securities, Inc.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

Operator

Good morning, and welcome to JBT Corporation Fourth Quarter 2013 Earnings Conference Call. My name is Victoria, and I will be your conference operator today. [Operator Instructions] I will now turn the call over to JBT's Director of Investor Relations, Mr. Debarshi Sengupta, to begin today's conference.

Debarshi Sengupta

Thank you, Victoria. Good morning, everyone, and welcome to our Fourth Quarter 2013 Earnings Conference Call. With me on the call are our President and CEO, Tom Giacomini; our Vice President and CFO, Brian Deck; and former CFO, Ron Mambu.

Before we begin, I would like to remind everyone that forward-looking statements in today's call are subject to the Safe Harbor language in yesterday's press release and the 8-K filing. Our 2012 Form 10-K also contained information regarding certain risk factors that may have an impact on our results. These documents are available on our Investor Relations website.

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

Thomas W. Giacomini

Thanks, Debarshi, and good morning, everyone. Let me start today's call with a few comments on finalizing our management succession plans. As part of that plan, Ron Mambu retired when Brian Deck was hired effective February 3. Ron has agreed to remain with us through the end of March to ensure a smooth transition for JBT and the closing of 2013 financials. I know many of you worked with Ron since our 2008 spinoff. On behalf of the JBT team and our stakeholders, I wanted to personally thank you, Ron, for your 40 years of dedicated service and keen financial management. Without your many accomplishments, JBT would not be what it is today. I am very pleased to introduce to you to the newest member of JBT's executive team, Brian Deck. Brian brings with him 20-plus years of comprehensive financial experience. His skill set and management approach are a strong fit with JBT. Before I turn the call over to Brian, who will provide details on our financial performance and plan restructuring initiatives, I'd like to take a minute to talk about JBT's promising outlook.

As I talked about last quarter, JBT's 2 segments, FoodTech and AeroTech, both have leading positions in their markets. Moreover, both are positioned to capitalize on improving global trends. But the company's recent performance has fallen short of our expectations and, as a whole, I believe we can do more to leverage the potential of our businesses.

With the new management team in place, we recognize a need to make changes and are implementing initiatives that will accelerate our growth and enhance profitability.

With that, I will hand it over to Brian.

Brian A. Deck

Thank you, Tom, and good morning, everyone. I'm excited to join JBT and look forward to playing a key leadership role. I also look forward to meeting all of you in person. With that, let's turn to our full year 2013 financial results.

FoodTech achieved record performance, and we made good progress on our strategic initiatives to grow margins. AeroTech performance was down and corporate expense was higher. Revenue for the full year of $934 million increased 2%. FoodTech sales of new equipment and revenue from aftermarket parts and services across the company grew by 6.6 -- 6.7% and 3.6%, respectively. However, JBT's revenue for the full year fell somewhat short of our expectations largely because of lower fourth quarter volume in AeroTech ground support equipment and shipment delays of FoodTech Europe.

Operating income for the full year of $53 million decreased by $8 million. Total segment operating profit increased by $4 million or 4%. Corporate and restructuring expenses were approximately $11 million higher, driven largely by $5.3 million of costs related to management succession and actions taken by new management.

For 2014, we expect corporate expenses to be in the range of $26 million to $28 million. This estimated range excludes $3.7 million of management succession costs, about $2 million of continuing consulting costs in connection with our initiatives, as well as restructuring charges.

Income tax for 2013 reflected a tax rate of 29% compared to 31% in 2012. The lower rate reflects $2.1 million of additional R&D credits claimed, much of which we do not expect to repeat. The company's 2014 tax rate is expected to be in the range of 31% to 33%.

Full year diluted EPS from continuing operations was $1.15. Adjusting for the $5.3 million of costs previously mentioned, diluted EPS from continuing operations was $1.26, flat compared to 2012.

Turning to segment results. FoodTech full year revenue and operating profit grew by 4% and 10%, respectively. Operating profit margin expanded by 60 basis points. Both operating profit and margin were record highs. Although the overall business was strong, we did have 2 headwinds: earnings were impacted by a smaller U.S. citrus crop and higher execution costs, particularly in Europe.

Turning to AeroTech. Full year revenue was flat, while operating profit decreased by 7%. Gate equipment sales, particularly of Jetway aviation support equipment or JASE, and aftermarket revenue increased. These were offset by lower revenue in ground support equipment military loaders and in Airport Services. Operating profit margin contracted by 60 basis points, driven by an unfavorable product mix as a result of the lower military equipment sales.

Looking at order activity for the company in the fourth quarter. Inbound orders were $298 million, driven primarily by large orders for gate equipment and continued demand for freezing and processing equipment in Asia. As a result, year-end backlog increased 33% over the prior year. As a reminder, our backlog predominately consists of new equipment orders, which represent approximately 1/2 of our revenue.

Next, I would like to provide guidance for the first quarter 2014, which is our seasonally slowest quarter. We expect to see positive order trends continuing and anticipate inbound orders in the first quarter 2014 to be slightly higher than in 2013. We expect revenue to increase by approximately 10% over the first quarter of 2013, driven by growth in FoodTech. However, we expect total segment operating profit to decrease slightly, primarily due to headwinds in ground support equipment in AeroTech and higher sales of lower margin equipment in FoodTech. We expect corporate expense to be approximately $3 million higher than a year ago, driven by management succession costs and continuing consulting costs. As a result, we expect diluted EPS from continuing operation, excluding restructuring charges, to be slightly above breakeven. We anticipate recording $10 million to $14 million of restructuring charges in the first quarter in support of our operational improvement initiatives. We have identified opportunities to improve results in Europe, ground support equipment, as well as simplify our organizational structure and associated back office support worldwide. The restructuring is projected to deliver between $9 million and $12 million of annualized run rate savings. We will be in a better position to report on specific economics around the costs and related savings as part of our first quarter 2014 earnings release.

Overall, I'm encouraged by the opportunities and we have identified to increase the performance of JBT, and I very much look forward to implementing them with the team.

With that, I hand it off to Tom.

Thomas W. Giacomini

Thanks, Brian. For our FoodTech segment, with higher protein prices and lower feed costs in North America, poultry customers are looking to increase their capacity and efficiency. This bodes well for our freezing and protein processing business. In Asia, particularly in China, an increase in consumption of processed foods and expansion of quick-service restaurants are driving sales of our equipment. For example, our freezer sales in China tripled last year. Though it's off a small base, we made good progress and plan to invest further in the region to drive continued growth.

We also enjoyed increased demand for canned dairy products in Asia and the Middle East. Local food processors are investing to significantly increase capacity in the regions. European food processors are also investing to meet the regional supply shortfall. Both developments have benefited our in-container sterilization business. As Brian mentioned, we are concerned with recent developments in the U.S. citrus market. The USDA reduced this season's Florida citrus crop forecast by 14%, primarily the result of citrus greening. However, we are encouraged the industry is taking action. The Coca-Cola Company has committed $2 billion to Florida's citrus groves over the next 20 years. In addition, the Congress recently approved $125 million in citrus research over the next 5 years.

Looking further out, we see a rapidly expanding global market of liquid food products driven by our food and beverage customers. We are taking action to leverage our leadership in juice processing to capture this growing market.

Moving to AeroTech. Industry profitability is expected to increase significantly and eclipse previous records. We are also seeing significant investments in the Middle East and Asia as existing airports are expanding and new hubs are being built. These positive industry trends are supporting JBT's solid gate equipment order activity. Our new JASE products, in particular, are enjoying strong demand. However, we face a headwind in our ground support equipment business. Sales remained significantly lower than pre-recessionary levels. While we believe a replacement cycle is long overdue, it has not yet materialized. While we remain positive about the business, we have taken corrective actions to adjust costs.

Regarding our 3 operational excellence initiatives, first, we initiated a pricing study across JBT. The study is on track, and we expect to realize initial benefits in the back half of the year. Second, we are focusing on the company-wide productivity improvements. Last, we are taking action to improve our lead times and product quality. These value-enhancing actions are being implemented by strong internal resources, along with some outside expertise. I've tasked David Burdakin, our new Vice President and Division Manager of AeroTech, to spearhead this across JBT. Dave brings over 25 years of leadership experience in industrials and a very successful track record of leading these projects.

Turning to our 2014 outlook. We entered the year with a higher percentage of the year booked relative to prior year, and as Brian mentioned, we expect to see positive order trends continuing. While the backlog represents only a portion of our business, it provides some visibility into the remainder of the year. For the full year, we anticipate single -- mid-single-digit revenue growth. We expect total segment operating margin in 2014 to remain flat relative to 2013, excluding potential benefits from operational excellence initiatives and restructuring actions. Continued margin gains in FoodTech are anticipated to be offset by the previously mentioned headwinds in AeroTech. Operational excellence and restructure-related costs will have an impact on 2014 earnings. But we are confident the actions will drive margin expansion and significant earnings growth in 2015 and beyond. Finally, we will be holding our first JBT Investor Day on May 22 in New York. We look forward to sharing details of our vision and strategy and hope you will join us.

With that, Victoria, would you please open the call up to questions?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Gary Farber with CL King.

Gary Farber - CL King & Associates, Inc., Research Division

Just a couple of questions. One, can you just speak about the -- you're making the changes you discussed on the pricing, but any other changes you're making in your sales efforts to close sales or anything like that?

Thomas W. Giacomini

Thank you, Gary. I'd like to highlight a few areas for you. Certainly, we really have been encouraged by the inbound and booking rates as we ended the year and believe that's going to -- it has been continuing into this quarter. So certainly, the sales activity and associated bookings have been positive for us. But as we look forward, we're looking to sell more around the value of our products. When you think of our customers, important elements like yield, productivity, energy savings are all elements we're trying to highlight in JBT's highly engineered product's that to drive real value for our customers beyond the initial sales price and trying to get them to think about total cost of ownership and the return on the investment they get for JBT's exceptional products.

Gary Farber - CL King & Associates, Inc., Research Division

Right. And do you see reason that R&D needs to change as well as far as how much you're spending now?

Thomas W. Giacomini

No, I believe we are spending an appropriate amount, and we have been working on our strategy, Gary, and that's providing a roadmap for us on the products that we really need to provide for earnings growth and sales growth in the future. So from my perspective, I believe that the appropriate spending is occurring. But going forward, we'll probably have a more targeted roadmap around filling gaps in our product line and addressing new customer needs, maybe more than just a little bit of, historically, a bias towards maybe incrementally improving our products.

Gary Farber - CL King & Associates, Inc., Research Division

Right. And you also shifted, it looks like, your automated systems business into a different area. I'm wondering if you could elaborate on where you see the growth opportunities for that.

Thomas W. Giacomini

That's correct. We see meaningful opportunities with our automated business inside of FoodTech. Many of our customers on the food side of the business, where we have very deep and long-lasting relationships, where we've brought productivity benefits in terms of our food processing equipment, they have significant material handling challenges. And we think bringing this business under the FoodTech portfolio will allow us to address further value creation for our customers by automating their material handling, and we've already had some nice wins in the last few years. And we think that by bringing it in there and having the sales force working that lever, we're going to see improvement in the automated systems business.

Gary Farber - CL King & Associates, Inc., Research Division

And then just one last one, can you speak -- I know you've only been there a few months, but just the acquisitions, any update on the pipeline or anything like that?

Brian A. Deck

Sure, this is Brian. So I would say we will be active [ph] on M&A and we have allocated -- adequate internal resources and we have a nice pipeline, and obviously, we have a strong balance sheet. So we are going to continue the process. Tom and I bring excellent outside resources that the company didn't have before, and we're going to look at everything that is strategic and provides an adequate ROIC. So we'll just remain active.

Thomas W. Giacomini

Yes, and just to put a little more color around Brian's thoughts. From my perspective, I would really like to point out the food business where it's a very large industry with significant fragmentation. And if you look at the meaningful place that we have in food, there's a number of areas where we can do good, value-adding, synergistic acquisitions for JBT. And we certainly plan to give a much more detailed view of that in our May meeting, where we can really start with the strategy of how we create value for our customers and bring that around from new products and M&A and kind of put it all together in a comprehensive view for all of you. But as Brian mentioned, we are encouraged and do see opportunities here, in particular like the food business in that area of acquisitions.

Operator

Your next question comes from the line of Jason Ursaner with CJS Securities.

Jason Ursaner - CJS Securities, Inc.

Just a couple of questions on the guidance for fiscal year '14. On the revenue, backlog's up over 30% year-to-year. You mentioned that bookings remain strong, and one of the nice parts about your business is a significant portion is recurring sales and aftermarket. So it just seems like a decent part of the year is kind of already in hand at a pretty high growth rate. So I'm trying to understand the full year mid-single-digit range a little better.

Thomas W. Giacomini

Thanks, Jason, for the question. I'll put some color around it, then maybe ask Brian to step in and give you a little further distillation. But we certainly are encouraged by the inbound we enjoyed in the fourth quarter and the backlog position, and we've seen the order book developing in the first quarter as we expected. So the visibility that we have ending this year -- excuse me, ending 2013 going into 2014 is improved over 2012 versus '13. That said, we've talked about a few of the moving pieces in the business and where we're at in terms of some activity in AeroTech where we have some -- a bit of a headwind around the ground support equipment and the citrus situation. And we felt that mid-single digits was the right position as we look into the year today. But we certainly plan to have a further refinement of that in May as we do that. And it's unusual for us to provide this type of outlook for the year this early, but given the promising inbound and backlog, we felt that it was something we could reasonably do. But as we go into May, I think you get a better feel. Brian, would you like to add anything else around that?

Brian A. Deck

Yes, the one thing I would probably add is when you look at our backlog, which is up about 30% over -- year-over-year, it doesn't include any of the aftermarket and the recurring revenue items. So it really is focused on equipment, which is about half of our business. So we do expect a higher growth in the equipment side growth relative to some of the aftermarket and revenue side, which blends into that mid-single-digit number. And as a reminder, as we mentioned, the 33% growth in backlog, only 80% of it or so is projected for 2014.

Jason Ursaner - CJS Securities, Inc.

Okay. And aftermarket, the release mentions both segments seeing growth. Just, I guess, what type of growth are you seeing in aftermarket across the company?

Thomas W. Giacomini

Yes, it's certainly been a trend. As you know, we've been focused on it in our strategy, Jason. I would give you a directional number of right around 4%, and we can continue to focus on it and hope to continue to build that franchise giving -- going forward given JBT's exceptional base we have of installed equipment out in the marketplace.

Jason Ursaner - CJS Securities, Inc.

And the ground support equipment -- can you hear me okay? I just hear a lot of feedback.

Thomas W. Giacomini

You're coming through loud and clear to us.

Jason Ursaner - CJS Securities, Inc.

Okay. The ground support equipment piece of AeroTech, I guess, can you maybe talk about what the challenge is? It should seem like this would be your -- or maybe you would have seen that type of demand given the winter weather we've had, airline profitability continuing to -- appear to remain very strong. Why wouldn't it be a better year for that business?

Thomas W. Giacomini

Good question, and I appreciate you asking it. That's a multipart question so let me walk it through in parts for you. First part, as it relates to winter, obviously, as you know, based on your question, we do have a nice play in the de-icing equipment. Our history, Jason, is that typically the order activity will not materialize in the current period. In other words, if you're having a strong winter, you won't see the pickup during the winter for the de-icing equipment. It will follow later in the year. So certainly, we are planning for that and expect some relative strength in the de-icing business. But answering the larger macro question as to why the ground support equipment hasn't developed in step with the return of profitability in the airline industry, as we look at it, the airlines so far have been primarily focused on replacing their aircraft fleet to drive fuel economy and have been delaying or putting off investments in the ground support equipment. We do expect that to improve. We just haven't seen those trends improve yet relative to our order books. So it is coming. It's just a matter of when they get through some of those aircraft upgrades and start focusing on the equipment they need to support those aircraft. And as a side note, some of the new airframes actually require slightly different designs to that ground support equipment, so that's certainly going to come to be. In addition, I would highlight that Europe has been a particularly tough market for the ground support equipment. We have a number of private competitors over there that have been really scrambling for some collective share between themselves, and quite frankly, we've consciously chosen not to accept some orders given the economics that we see in Europe. So we had a little bit of a self-enforced discipline around making sure we're good stewards of the capital and not chasing orders that don't have good returns on them in Europe.

Jason Ursaner - CJS Securities, Inc.

Right. And just then last question for me, the guidance on corporate expense, how much higher is the accrual going to be for health care year-over-year? And then does it also include all of, I guess, what was previously classified as other income?

Brian A. Deck

Well, I would say the accrual on health care, we did have the unusual hits in the fourth quarter of last year. And we do -- those were certainly some unusual circumstances. And we are expecting some higher numbers for 2014 but not to the range that we saw last year.

Ronald D. Mambu

Yes, Jason. This is Ron. What I would add is we went into the fourth quarter feeling like our self-insured reserves were appropriate and were what we needed. And what we saw in December was a few large instances of individual large claims, and so we had to top that off with $1.7 million, almost $2 million. And our reserves are back where they need to be. And based upon everything we've seen and analyzed and talked to that these were unusual, we don't expect them to recur in 2014. However, it's something we're monitoring on an ongoing basis and we continue, like everybody else, to take actions to manage and mitigate health care cost increases and I'm sure that we'll be on that again in '14.

Jason Ursaner - CJS Securities, Inc.

But from a GAAP basis, could you get some type of actuarial assessment where you have to put in a higher reserve that might reverse later in the year but there would be a hit from a P&L perspective earlier in the year?

Ronald D. Mambu

Yes, well, that's what happened in the fourth quarter.

Jason Ursaner - CJS Securities, Inc.

So that includes the accrual?

Ronald D. Mambu

Yes, it does.

Operator

Your next question comes from the line of Walter Liptak with GHS.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

I wanted to ask about the -- I -- maybe I should ask one just kind of overall. I mean, now that you've been there, we know what some of the strengths are of JBT, I wonder if you could comment a little bit about what really needs to be get done here, where are the weaknesses and then maybe relate that to the charge that we're taking in the first quarter. And was it easy to identify these obvious changes that need to be made and then what really needs to happen long term?

Thomas W. Giacomini

Right. Very good, Walt. I've been here now about 6 months, and I'm very much encouraged by where we're heading with JBT. And let me just give you an idea. It's becoming very clear to me how we unlock the value and let's talk about the 4 elements for you and all the people on the call. The first one is, certainly, the new management team. I believe we've assembled a team that really has the right skills and experiences to maximize the value creation for JBT and we've talked about that in the releases and I commented a little bit about Dave and Brian on this call. But in addition, there's been a few changes underneath them, and if you think about it, of the 4 operational leadership roles, we've now got 3 new people at JBT that are very clearly marching to the agenda and we have a lot of focus around that. Second, there are some people in key operational roles underneath there that we've made changes that I believe equip JBT for success in the future the challenges in Europe. We've made a significant leadership change there to drive that. And then in Asia, we've really created a much more compelling opportunity by combining the JBT food and aero businesses under one JBT leadership to drive forward the important growth in China. And then in the Jetway business, we've appointed a new leader who was in the business for a number of years but was really fundamental to developing and growing that JASE business that we're proud of today, and he's going to bring that experience to the overall gate equipment business. So some real positive leadership changes. Next, I take you to operational excellence. As you can see, we're well underway in terms of our customer value, our pricing activity. We're focused on productivity in our operations that includes the shop floor and the offices. That's going to deliver significant benefit to us as we look to expand our margins in the future, and we're being very, very disciplined in terms of how we manage and track that activity with the core dated activity out of JBT under mine and Brian's leadership where we have excellent visibility into that. And certainly, the pricing and customer value, you heard me talk about how we create value for our customers. On an earlier question around productivity yield, we're going to sell the value of JBT and make sure we capture that in our economics for our customers. So it's a win-win situation. So driving the operational excellence, we would certainly plan to have lead times improve, which creates significant advantage for us in the marketplace. First to deliver is an important benefit, it's one that I have used in the past to a strategic advantage. And we know that once a customer makes a decision to invest in some new technology or new equipment, their desire is to getting that investment in place once it's been improved through their management chain. So you think about operational excellence as a way to improve costs. I also think about it as a way to create operational excellence. As we work our way down that continuum, certainly, restructuring. And I would like you to think about it more in terms of improving our business model. And how we approach our customers and how we run our operations and streamlining that and identifying those opportunities and bringing those to bear, certainly, creates opportunity for us not just to lower cost but also to redeploy resources where they're appropriate. We're pivoting more to Asia, we're pivoting more to the emerging markets. We need to change our structure and our approach to the market so we can get the resources where they have the greatest gain. Last, certainly encouraged by the progress we're making on our strategy and the framework that results from that, and I'm looking forward to our Investor Day in May where we're going to communicate those elements to all of you. I think you'll find it very encouraging. And from my perspective, to have this all coming together gives me a lot more clarity into how we drive the improvements to JBT and how we start to really meaningfully unlock the value. So very much encouraged with where we find ourselves today and the progress we've made in a relatively short time in this transformation. So maybe I'll turn it over to Brian just to give you a little more color about the second part of your question about the restructuring activity and what that means to JBT.

Brian A. Deck

Sure. It's Brian. So as it relates to the restructuring, the $10 million to $14 million, so it's a range at this point. We're going to firm that up over the next 30 days or so. But what I can tell you is that, in my short time here, I've got decent visibility. We have decent visibility on where the opportunities lie. And as I mentioned, Europe definitely has opportunities, GSE -- sorry, ground support equipment and our org simplification in the associated back office. For the size of the company we are, we are relatively complex. So there's certainly going to be some opportunities and we're going to keep working on that. So there is good visibility on those items. We'll provide more color in May and -- including the annualized savings associated with it, which is, right now, estimated at $9 million to $12 million.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

Okay, that sounds good. And I forgot to mention I wanted the answer in 2 minutes or less, so -- just kidding.

Thomas W. Giacomini

I'm sorry, we're a little bit enthusiastic about where we find ourselves on this journey, so maybe a little color on that.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

Okay. So the -- I wanted to ask about the -- what we're going to get in May. Are you going to do like a 2018 aspirations where you'll show us the path that you think that you'll be able to take and the margin and return metrics?

Thomas W. Giacomini

Yes, Walt, let me comment on May. You'll get our strategy, which will tell us which markets we're focused on, how we move the business forward. You'll get some vision around where were want to take the business and what's important to us. And then last, you'll get a framework and we'll communicate some of the financial parameters around the business. And last, it's certainly going to be an opportunity for all of you to meet our management. I do plan to have Dave and Steve with us also. So you'll get an opportunity to see another layer of management at JBT and what they think about the business.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

Okay, great. And just to make sure I'm clear on the special charges for the first quarter. These are -- are you taking the charge in the first quarter, the expenses though would run through the year? And for example, like the consulting fees, that should be it for the year, right? Or are we going to have more charges for consulting as the year goes on?

Brian A. Deck

Well, so just to clarify, so we will take the charge, the restructuring charges in the first quarter and then the cash from that will go out over the course of the year and deplete the reserve. The consulting charges are really separate from that, and those will be concentrated on the first half of the year but will be throughout the year.

Walter S. Liptak - Global Hunter Securities, LLC, Research Division

Okay, great. And then the pricing strategy that you talked about, which is part of the consulting fees, that's not been implemented yet, that you get benefits from that in the back half. Is that correct?

Thomas W. Giacomini

Right. Walt, we're sequencing ourselves through the business units, so we have started to affect some of the pricing. But it is complex. There's a lot of elements to it and we're focused on the long term here. But we will start to see some benefits in the back half year, but the overwhelming majority of the benefits will accrue to us in '15.

Operator

[Operator Instructions] And I will now turn the call back over to Mr. Tom Giacomini for any closing remarks.

Thomas W. Giacomini

Thank you, Victoria. In closing, I would like to highlight some key points. Overall, our business outlook is healthy. For the full year, we anticipate a mid-single-digit revenue increase. At the same time, we've taken several steps for long-term value creation beyond 2014. We have new management in place, we're accelerating the implementation of our operational excellence programs and we are restructuring the business to drive efficiency and margin expansion. While the cost will impact 2014 earnings, we are confident the actions will drive significant earnings growth in 2015 and beyond. Thank you for joining us this morning and for your continuing support.

Operator

Again, thank you for your participation. This concludes today's conference. You may now disconnect.

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JBT Corp (JBT): Q4 EPS of $0.54 misses by $0.03. Revenue of $288.1M (-1.6% Y/Y) misses by $14.2M.