Q2 2024 John Bean Technologies Corp Earnings Call

Operator: Good morning, and welcome to JBT Corporation's second quarter 2024 earnings conference call. My name is Krista, and I will be your conference operator today. As a reminder, today's call is being recorded. At this time, all lines have been placed on mute to prevent any background noise.

Unknown Executive: Good morning and welcome to JBT Corporation's second quarter 2024 Earnings Conference Call.

Good morning, and welcome to JBT Corporation's second quarter 2024 earnings Conference call. My name is Christa and I will be your conference operator today.

Operator: My name is Krista, and I will be your conference operator today. As a reminder, today's call is being recorded. At this time, all lines have been placed on mute to prevent any background noise.

As a reminder, today's call is being recorded at this time all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you. I will now turn the call over to JBT's Vice President of Corporate Development and Investor Relations, Kedric Meredith, to begin today's conference.

Operator: After this speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you.

Kedric Meredith: And if you would like to withdraw that question again press Star one. Thank you I will now turn the call over to Jbt's, Vice President of corporate development and Investor Relations Kendrick Meredith to begin today's conference.

Kendrick Meredith: I will now turn the call over to JBT's Vice President of Corporate Development and Investor Relations, Kendrick Meredith, to begin today's conference. Thank you, Krista. Good morning, everyone, and welcome to our second quarter 2024 conference call.

Kedric Meredith: Thank you, Krista. Good morning, everyone, and welcome to our second quarter 2024 conference call. With me on the call is our Chief Executive Officer, Brian Deck, and Chief Financial Officer, Matt Meister. In today's call, we will use forward-looking statements that are subject to the Safe Harbor language in yesterday's press release and 8K filing. JBT's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available in the Investor Relations section of our website.

Kedric Meredith: Thank you Krista good morning, everyone and welcome to our second quarter 2024 conference call.

Kendrick Meredith: With me on the call is our Chief Executive Officer, Brian Deck, and Chief Financial Officer, Matt Meister. In today's call, we will use forward-looking statements that are subject to the safe harbor language and yesterday's press release in AK filing. JBT's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available in the Investor Relations section of our website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found in the Investor Relations section of our website.

Kedric Meredith: With me on the call is our Chief Executive Officer, Brian deck, and Chief Financial Officer, Matt Meister in today's call. We will use forward looking statements that are subject to the safe Harbor language in yesterday's press release and 8-K filings.

Jbt's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available in the Investor Relations section of our website.

Speaker Change: So our discussion today includes references to certain non-GAAP measures a reconciliation of these measures to the most comparable GAAP measure can be found in the Investor Relations section of our website now I'll turn the call over to Brian.

Brian Deck: Now I'll turn the call over to Brian. Thanks, Kendrick. Good morning, everyone.

Kedric Meredith: Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measure can be found in the Investor Relations section of our website. Now, I'll turn the call over to Brian.

Brian A. Deck: Thanks, Kedric, and good morning, everyone. Let me start with the good news. As we said on last quarter's call, we were optimistic that improving poultry industry economics and strong quote activity would begin to translate to higher orders. This played out in the second quarter, as JBT's strong orders included an initial recovery in equipment demand from North American poultry producers. Additionally, AGV, our automated material handling business, rebounded nicely in the second quarter, as expected.

Brian: Thanks, and good morning, everyone.

Brian Deck: Let me start with a good news. As we said on last quarter's call, we were optimistic that improving poultry industry economics and strong core activity would begin to translate to higher orders. This played out in the second quarter, as JBT's strong orders included an initial recovery and equipment demand from North American poultry producers. Additionally, AGV, our automated material handling business, rebounded nicely in the second quarter as expected. Overall, this translated to the second best quarter in terms of orders for our food technology history and at 13% sequential improvement. With that said, JBT's second quarter financial performance fell short of our expectations, essentially due to a revenue shortfall.

Brian: Let me start with the good news.

Brian: As we said on last quarter's call, we were optimistic that improving poultry industry economics, and strong quote activity will begin to translate to higher orders.

Brian: This played out in the second quarter as JBT strong orders included an initial recovery in equipment demand from North American poultry producers.

Brian: Additionally, a JV or automated material handling business rebounded nicely in the second quarter as expected.

Brian A. Deck: Overall, this translated to the second best quarter in terms of orders in our food technology history and a 13% sequential improvement. With that said, JBT's second quarter financial performance fell short of our expectations, essentially due to a revenue shortfall. With much of that expected to be recovered in the back half of the year, we have refined our guidance to reflect 3 to 5 percent top line growth for the full year. Now, I will turn the call over to Matt, who will provide more detail on our second quarter performance and expectations for the full year. Then I'll speak about market and geographic order trends, our latest ESG report, and provide updates on the combination with Morrell.

Brian A. Deck: Overall this translated to the second best quarter in terms of orders for our food technology is in our food technology history.

Brian A. Deck: On a 13% sequential improvement.

Brian A. Deck: With that said Jbt's second quarter financial performance fell short of our expectations essentially due to the revenue shortfall.

Brian Deck: With much of that expected to be recovered in the back half of the year, we have refined our guidance to reflect three to five percent top line growth for the full year.

Brian A. Deck: With much of that expected to be recovered in the back half of the year, we have refined our guidance to reflect 3% to 5% top line growth for the full year.

Matt Meister: Let me turn the call over to Matt, who will provide more detail on our second quarter performance and expectations for the full year.

Brian: Let me turn the call over to Matt, who will provide more detail on our second quarter performance and expectations for the full year.

Brian Deck: Then I'll speak about market and geographic order trends, our latest ESG report, and provide updates on the combination with Murat.

Matt: Then I'll speak about market and geographic order trends, our latest ESG report and provide updates on our combination with morale Matt.

Matt Meister: Matt. Thanks, Brian.

Brian: Matt.

Matthew J. Meister: Thanks, Brian. Good morning.

Matt: Thanks, Brian and good morning.

Matt Meister: Good morning. The second quarter of 2024 revenue of $402 million, which included a $4 million negative impact from foreign exchange translation, declined 6% year over year. That fell short of our expectations primarily from the performance of book and ship orders, customer delivery scheduling, and a now resolved system upgrade issue that temporarily delayed revenue recognized from that impacted site.

Matthew J. Meister: The second quarter of 2024, revenue of $402 million, which included a $4 million negative impact from foreign exchange translation, declined 6% year over year. That fell short of our expectations, primarily due to the performance of book and ship orders, customer delivery scheduling, and a now resolved system upgrade issue that temporarily delayed revenue recognized from that impacted site. We believe approximately $15 million of revenue shifted from the second quarter to the third quarter.

Matt: The second quarter of 2020 for revenue of $402 million, which included a $4 million negative impact from foreign exchange translation declined 6% year over year.

Matt: That fell short of our expectations, primarily from the performance of book and ship orders customer delivery scheduling and a now resolved system upgrade issue that temporarily delayed revenue recognized from that impacted site.

Matt Meister: We believe approximately $15 million of revenue shifted from the second quarter to the third quarter. On the margin side, we continue to realize the benefits from our restructuring actions and delivered better than expected cost savings from our supply chain initiatives. As a result, our second quarter gross profit margins of 35.6% improved 120 basis points year over year. Adjusted EBITDA of $64 million declined 11% year over year as the benefits from restructuring and supply chain initiatives were more than offset by the impact of lower volume. That said, we realized sequential improvement as adjusted EBITDA increased 11% and our adjusted EBITDA margin expanded 120 basis points. Second quarter adjusted EPS was a dollar five versus 97 cents in the prior year as results in the current year benefited from $9 million in net interest expense improvement. Year-to-date free cash below $14 million was lower than the prior year due to higher working capital. Our inventory increased partially due to AGV's growth profile and overall higher working progress associated with our backlog timing. For the full year, we remain confident in our ability to achieve a free cash flow conversion rate in excess of 100% as we convert our strong backlog to revenue and order demand continues to improve. Brian mentioned earlier we updated our full year organic revenue growth guidance to 3 to 5% to reflect our year-to-date performance, which is partially offset by additional contributions from AGV in the back half. Our updated guidance suggests a steeper quarterly progression in the back half than before. While our $700 million backlog is consistent with prior year, the scheduled conversion to revenue in the back half is approximately $90 million higher. This is the result of several long-term projects included in last year's backlog that is shipping in 2024. Included in the forecast, the backlog conversion is higher AGV revenue, which as we've discussed previously has been capacity constrained given the strong demand for warehouse automation. However, changes to our manufacturing process and product standardization have improved our efficiency and lead times. As a result, we expect AGV will now contribute 2% to JBT's total revenue growth for 2024, which is an increment of 1% from our previous guidance. All of this together provides confidence in our forecast of an approximately $90 million year-to-year increase in back half revenue. Which, along with comparable book and ship volume to the back half of last year, would put us at the midpoint of our 2024 guidance. Based on our update through revenue growth, we have narrowed our full year guidance for adjusted EBITDA and adjusted EPS. We now expect adjusted EBITDA of $295 million to $305 million, which maintains margin expectations at 17 to 17.5%. Adjusted EPS has also been updated to $5.5 to $5.35. With the back half of 2024 in terms of quarterly cadence, we expect double-digit year-over-year revenue growth in each quarter and margins to improve sequentially as we move through the remainder of the year. Lastly, we updated a four-year gap guidance to reflect our current expectation of $40 million in pre-closing M&A costs for the combination with morale.

Matt: We believe approximately $15 million of revenue shifted from the second quarter to the third quarter.

Matthew J. Meister: On the margin side, we continue to realize the benefits from our restructuring actions and deliver better than expected cost savings from our supply chain initiative. As a result, our second quarter gross profit margins of 35.6% improved 120 basis points year over year. However, adjusted EBITDA of $64 million declined 11% year-over-year as the benefits from restructuring and supply chain initiatives were more than offset by the impact of lower volume.

Matt: On the margin side, we continue to realize the benefits from our restructuring actions and delivered better than expected cost savings from our supply chain initiatives.

Matthew J. Meister: As a result, our second quarter gross profit margins of 35, 6% improved 120 basis points year over year.

Matthew J. Meister: Adjusted EBITDA of $64 million declined 11% year over year as the benefits from restructuring and supply chain initiatives were more than offset by the impact of lower volume.

Matthew J. Meister: That said, we realized sequential improvement as adjusted EBITDA increased 11% and our adjusted EBITDA margin expanded 120 basis points. Second quarter adjusted EPS was $1.05 versus $0.97 in the prior year, as a result, the current year benefited from $9 million in net interest expense improvement. However, year-to-date free cash flow of $14 million was lower than the prior year due to higher working capital.

Brian: That said, we realized sequential improvement as adjusted EBITDA increased 11% and our adjusted EBITDA margin expanded 120 basis points.

Matthew J. Meister: Second quarter, adjusted EPS was $1 five versus <unk> 97 in the prior year as a result in the current year benefited from $9 million and net interest expense improvement.

Matthew J. Meister: Year to date free cash flow of $14 million was lower than the prior year due to higher working capital.

Matthew J. Meister: Our inventory increased, partially due to AGV's growth profile and overall higher work in progress associated with our backlog timing. For the full year, we remain confident in our ability to achieve a free cash flow conversion rate in excess of 100% as we convert our strong backlog to revenue, and order demand continues to improve. As Brian mentioned earlier, we updated our full-year organic revenue growth guidance to 3-5% to reflect our year-to-date performance, which is partially offset by additional contributions from AGV in the back half.

Matthew J. Meister: Inventory increased.

Matthew J. Meister: Partially due to <unk> growth profile and overall higher work in progress associated with our backlog timing.

Matthew J. Meister: For the full year, we remain confident in our ability to achieve our free cash flow conversion rate in excess of 100% as we convert our strong backlog to revenue and order demand continues to improve.

Matthew J. Meister: Brian mentioned earlier, we updated our full year organic revenue growth guidance to 3% to 5% to reflect our year to date performance, which was partially offset by additional contributions from a JV in the back half.

Matthew J. Meister: Our updated guidance suggests a steeper quarterly progression in the back half than before. While our $700 million backlog is consistent with the prior year, the scheduled conversion to revenue in the back half is approximately $90 million higher. This is the result of several long-term projects included in last year's backlog that are shipping in 2024. Included in the forecasted backlog conversion is higher AGV revenue, which, as we've discussed previously, has been capacity constrained given the strong demand for warehouse automation. However, changes to our manufacturing process and product standardization have improved our efficiency and lead time.

Brian: Our updated guidance suggest a steeper quarterly progression in the back half than before.

Brian: Our $700 million backlog is consistent with prior year scheduled conversion to revenue in the back half is approximately $90 million higher.

Matthew J. Meister: This is the result of several long term projects included in last year's backlog that is shipping in 2024.

Matthew J. Meister: Included in the forecast and backlog conversion is higher HGV revenue, which as we've discussed previously.

Brian: Has been capacity constrained given the strong demand for warehouse automation.

Matthew J. Meister: However, changes to our manufacturing process and product standardization have improved our efficiency and lead times.

Brian A. Deck: As a result, we expect AGV will now contribute 2% to JVT's total revenue growth for 2024, which is an incremental 1% from our previous guidance. All of this together provides confidence in our forecast of an approximately $90 million year over year increase in back half revenue, which, along with comparable book and chip volume to the back half of last year, would put us at the midpoint of our 2024 guidance. Based on our updates to revenue growth, we have narrowed our full-year guidance for Adjusted EBITDA and Adjusted EPS.

Matthew J. Meister: As a result, we expect a JV will now contribute 2% to Jbt's total revenue growth for 2024.

Brian A. Deck: Which is an incremental 1% from our previous guidance.

Brian: All of this together provides confidence in our forecast of an approximately $90 million year over year increase in back half revenue.

Brian A. Deck: Which along with comparable book and ship volume to the back half of last year, which put us at the midpoint of our 2020 for guidance.

Brian A. Deck: Based on our updated revenue growth, we have narrowed our full year guidance for adjusted EBITDA and adjusted EPS. We now expect adjusted EBITDA of $295 million $305 million, which maintained margin expectations at 17% to 17, 5%.

Brian A. Deck: We now expect adjusted EBITDA of $295 million to $305 million, which maintains margin expectations at 17 to 17.5%. Adjusted EPS has also been updated to $5.05. $5.35. The back half of 2024, in terms of quarterly cadence, we expect double-digit year-over-year revenue growth in each quarter and margins to improve sequentially as we move through the remainder of the year. Lastly, we updated our four-year GAAP guidance to reflect our current expectation of $40 million in pre-closing M&A costs for the combination with Morrell. With that, I will turn the call back to Brian.

Brian A. Deck: Adjusted EPS has also been updated to $5 <unk>.

Brian: The $5 35.

Brian A. Deck: Since the back half of 'twenty 'twenty four in terms of quarterly cadence, we expect double digit year over year revenue growth in each quarter.

Brian A. Deck: And margins to improve sequentially as we move through the remainder of the year.

Brian A. Deck: Lastly, we updated our full year GAAP guidance to reflect our current expectation of $40 million and pre closing M&A costs for the combination with <unk>.

Brian Deck: Let me turn the call back to Brian. Thanks, ma'am. Let me start with order trends. As I said at the top of the call, second-quarter orders of $437 million represented our food technology second-best quarterly performance ever. We were pleased that the anticipated recovering orders from North American poultry producers has started to materialize. Moreover, it is still early, and we're not yet back to baseline demand levels. As such, we expect North American poultry industry orders to improve further in Q3. As for other areas of strength, we continue to enjoy robust demand at AGV, while fruit and vegetable demand was also quite strong in the quarter.

Brian A. Deck: With that let me turn the call back to Brian.

Brian A. Deck: Thanks, Matt. Let me start with order trends. As I said at the top of the call, second quarter orders of $437 million represented our food technology's second best quarterly performance ever. We were pleased that the anticipated recovery orders from North American poultry producers have started to materialize. Moreover, it is still early, and we're not yet back to baseline demand levels. As such, we expect North American Postal Industry orders to improve further in Q3.

Brian: Thanks, Matt.

Brian: Let me start with the order trends.

Brian A. Deck: As I said at the top of the cause second quarter orders of $437 million represented our food technology second best quarterly performance ever.

Brian A. Deck: We were pleased that the anticipated recovering orders from North American poultry producers has started to materialize.

Brian A. Deck: Moreover, it is still early and we're not yet back to baseline demand levels.

Brian A. Deck: As such we expect North American poultry industry orders to improve further in Q3.

Brian A. Deck: As for other areas of strength, we continue to enjoy robust demand at AGV, while fruit and vegetable demand was also quite strong in the quarter. On the other hand, the beverage industry did not meet our expectations as manufacturers adjust to current consumer buying patterns.

Brian A. Deck: As for other areas of strength, we continue to enjoy robust demand at HGV, while fruit and vegetable demand was also quite strong in the quarter.

Brian Deck: On the other hand, the beverage industry did not meet our expectations as manufacturers adjust the current consumer buying patterns, and in general, the high cost of capital remains ahead when particularly among our smaller customers. Geographically, Europe was stable, and demand in the Middle East remains strong. The Asia-Pacific region was disappointing as we continued to experience elongated order conversion cycles, while South America has a strong pipeline that appears promising for the foreseeable future. Putting it all together, the significant strength in the second quarter reflected JBT's diversified and market exposure, as well as initial recovery in North American poultry demand.

Brian A. Deck: On the other hand, the beverage industry did not meet our expectations as manufacturers adjust to current consumer buying patterns and in general the high cost of capital remains a headwind, particularly among our smaller customers.

Brian A. Deck: And in general, the high cost of capital remains a headwind, particularly among our smaller customers. Geographically, Europe was stable, and demand in the Middle East remains strong. The Asia-Pacific region was disappointing as we continued to experience elongated order conversion cycles, while South America has a strong pipeline that appears promising for the foreseeable future. Putting it all together, the significant strength in the second quarter reflected JVT's diversified end market exposure, as well as an initial recovery in North American poultry demand.

Brian A. Deck: Geographically.

Brian A. Deck: Europe was stable and demand in the middle East remains strong.

Brian A. Deck: The Asia Pacific region was disappointing as we continued to experience elongated order conversion cycles.

Brian A. Deck: While South America has a strong pipeline that appears promising for the foreseeable future.

Brian A. Deck: Putting it all together.

Brian A. Deck: Significant strength in the second quarter reflected.

Brian A. Deck: Jbt's diversified end market exposure as well as initial recovery in North American poultry demand.

Brian Deck: As such, we anticipate another strong quarter of total inbound order rates in the third quarter.

Brian A. Deck: As such, we anticipate another strong quarter of total inbound order rates in the third quarter. Switching gears, as you may have seen, we recently published JBT's fourth annual Environmental, Social, and Governance report focused on how we are fortifying the future of food to enable a more resilient, sustainable, and equitable food supply chain. Sustainability is becoming an ever-larger factor in our customers' purchasing decisions, and JBT's innovative portfolio solutions can improve our customers' environmental footprint and operational performance. Our products make better use of precious resources, such as energy and water, while also helping to reduce food and packaging waste with improved processes for yield and food safety.

Brian A. Deck: As such we anticipate another strong quarter of total inbound order rates in the third quarter.

Brian Deck: Switching gears, as you may have seen, we recently published JBT's fourth annual Environmental, Social, and Governance Report, focused on how we are fortifying the future of food to enable a more resilient, sustainable, and equitable food supply chain. Sustainability is becoming an ever larger factor in our customers' purchasing decisions, and JBT's innovative portfolio solutions can improve our customers' environmental footprint and operational performance. Our products make better use of precious resources, such as energy and water, will also help introduce food and packaging waste with improved processes for yield and food safety. As such, JBT's innovative innovation creates a competitive advantage as we help customers meet their sustainability objectives.

Brian A. Deck: Switching gears as you may have seen we recently published Jbt's fourth annual environmental social and governance report focused on how we are fortifying the future of food to enable a more resilient sustainable and equitable food supply chain.

Brian A. Deck: Sustainability is becoming an ever larger factor in our customers' purchasing decisions in jbt's innovative portfolio of solutions can improve our customers' environmental footprint and operational performance.

Brian A. Deck: Our products make better use of precious resources, such as energy and water, while also helping to reduce food and packaging waste with improved processes for yield and food safety.

Brian A. Deck: As such, JBT's innovation creates a competitive advantage as we help customers meet their sustainability objectives. We're also taking action to improve the environmental performance of JBT's internal operations. For example, we are calculating our scope 3 emissions according to the Greenhouse Gas Protocol to identify opportunities for reducing our carbon footprint and improving our supply chain sustainability.

Brian A. Deck: As such Jbt's innovative innovation creates a competitive advantage as we help customers meet their sustainability objectives.

Brian Deck: We are also taking action to improve the environmental performance of JBT's internal operations. We are calculating our scope three emissions according to the Greenhouse Gas Protocol to identify opportunities for reducing our carbon footprint and improving our supply chain sustainability.

Brian A. Deck: We're also taking action to improve the environmental performance of Jbt's internal operations, we are calculating our scope three emissions. According to the greenhouse gas protocol to identify opportunities for reducing our carbon footprint and improving our supply chain sustainability.

Brian A. Deck: Yes.

Brian Deck: Finally, let me provide updates on the proposed merger with Morale. On June 24, JBT launched the voluntary takeover offer to acquire all outstanding shares of Morale. Since then, we have held meetings with morale shareholders in Iceland and London and delivered proxy materials for a JBT shareholder vote to be held on August 8th. As we discussed in detail on the special JBT investor call on June 20th, we are increasingly confident in the industrial logic of the combination and the value creation opportunities for customers, shareholders, and other stakeholders. By the end of the third year post-close, we believe we can capture revenue synergies of more than $75 million and cost synergies of more than $125 million.

Brian A. Deck: Finally, let me up let me provide updates on the proposed merger with Morrell. On June 24, JBT launched the Voluntary Takeover offer to acquire all outstanding shares of Morrell. Since then, we have held meetings with Morrell shareholders in Iceland and London and delivered proxy materials for a JVT shareholder vote to be held on August 8. As we discussed in detail on the special JBT investor call on June 20, we're increasingly confident in the industrial logic of the combination and the value creation opportunities for customers, shareholders, and other stakeholders.

Speaker Change: Finally, let me let me provide updates on the proposed merger with morale.

Brian A. Deck: On June 24, JBT launched the voluntary takeover offer to acquire all outstanding shares of morale.

Brian A. Deck: Since then we have held meetings with morale shareholders in Iceland in London, and delivered proxy materials for JBT shareholder vote to be held on August eight.

Brian A. Deck: By the end of the third year post-close, we believe we can capture revenue synergies of more than $75 million and cost synergies of more than $125 million as we leverage our complementary products and services to enhance our value proposition with customers and benefit from our combined scale. Since the June investor call, we have received an indication from our Regulatory Council that the UK is not considering a formal antitrust investigation, and we're actively engaged with the remaining jurisdictions, including the EU.

Brian A. Deck: As we discussed in detail on the special JBT Investor call in June 20th we're increasingly confident in the industrial logic of the combination and the value creation opportunities for customers shareholders and other stakeholders.

Brian A. Deck: By the end of the third year post close we believe we can capture revenue synergies of more than $75 million in cost synergies of more than $125 million as we leverage our complementary products and services to enhance our value proposition with customers and.

Brian Deck: As we leverage our complimentary products and services to enhance our value proposition with customers and benefit from our combined scale. Since the June investor call, we have received an indication from our regulatory counsel that the UK is not considering a formal antitrust investigation, and we are actively engaged with the remaining jurisdictions, including the EU. Regarding the secondary listing on the Icelandic exchange, we expect to file imminently, and we continue to plan for year-end 2024 closing. Moving to transaction execution, our activity is now pivoted from a focus on legal and regulatory matters to planning for operational integration.

Brian A. Deck: And benefit from our combined scale.

Brian A. Deck: Since the June Investor call. We have received an indication from a regulatory counsel that the UK is not considering a formal antitrust investigation.

Brian A. Deck: And we are actively engaged with the remaining jurisdictions <unk>.

Brian A. Deck: Including the EU.

Brian A. Deck: Okay.

Brian A. Deck: Regarding the secondary listing on the Icelandic exchange, we expect to file for it imminently, and we continue to plan for a year-end 2024 closing. Moving to transaction execution, our activity is now pivoted from a focus on legal and regulatory matters to planning for operational integration. We are working with our advisors, Amaral, to ensure day one readiness and have named an integration team with members from both companies to guide the integration planning process, with work streams already underway.

Brian A. Deck: Regarding the secondary listing on the <unk> and the Icelandic exchange, we expect to file imminently.

Speaker Change: And we continue to plan for year end 2020 for closing.

Brian A. Deck: Moving to transaction execution, our activity is now pivoted from a focus on legal and regulatory matters to planning for operational integration.

Brian Deck: We are working with our advisors, Amaral, to ensure day one readiness and have named an integration team with members from both companies to guide the integration planning process, with work streams already underway. This includes planning teams for operations, finance, IT, digital, and procurement to name a few, and an overarching team to support overall org design and talent selection, and importantly, a team to support our cultural connectivity, purpose, and communications.

Brian A. Deck: We are working with our advisors amarelle to ensure day, one readiness and have named an integration team with members from both companies to guide to any gave accretion planning process with the work streams already underway.

Brian A. Deck: This includes planning teams for operations, finance, IT, digital, and procurement, to name a few, and an overarching team to support overall organizational design and talent selection. And importantly, a team to support our cultural connectivity, purpose, and communication. Before we take your questions, let me extend my appreciation to JBT teams around the world who are at the core of our success. And to the Morrell team, thank you for your collaboration as we envision an even stronger combined entity with greater global resources and comprehensive solutions for our food and beverage customers. Now, let's open up the call. Operator? Thank you. We will now begin the question-and-answer session.

Brian A. Deck: This includes planning teams for operations finance, it digital and procurement to name a few.

Brian A. Deck: And in an overarching team to support overall org design and talent selection and importantly, a team to support our cultural connectivity.

Speaker Change: <unk> and communications.

Brian Deck: Before we take your questions, let me extend my appreciation to DBT teams around the world, who are at the core of our success. And to the Amaral team, thank you for your collaboration as we envision an even stronger combined entity with greater global resources and comprehensive solutions for our food and beverage customers.

Brian A. Deck: Before we take your questions. Let me extend my appreciation to JBT teams around the world who are at the core of our success.

Brian A. Deck: And to the morale team. Thank you for your collaboration as we envision an even stronger combined entity with greater global resources and comprehensive solutions for our food and beverage customers.

Unknown Executive: Now let's open up the call. Operator? Thank you.

Brian A. Deck: Now, let's open up the call operator.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw that question, again, press star 1. Your first question comes from the line of Meg Dobre with RW Baird. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw that question, again, press star one.

Operator: And if you would like to withdraw that question again press star one.

Meg Dolbray: Your first question comes from the line of Meg Dolbray with our W Beard. Please go ahead. Thank you for taking the questions. Good morning, everyone. Good morning.

Operator: Your first question comes from the line of Meg debris with R. W. Baird. Please go ahead.

Mircea Dobre: Thank you for taking the questions. Good morning, everyone. Good morning. I guess my good morning.

Mircea Dobre: Thank you for taking the questions good morning, everyone.

Mircea Dobre: Good morning, I guess my good morning, My first question.

Brian A. Deck: My first question is really surrounding the system issues that you had in Q2. If I heard you correctly, you mentioned there was about 15 million dollars in revenue in terms of the impact. That still doesn't get us to where you initially guided Q2. Can you comment a little bit on the delta relative to your expectations? And what exactly is the pace of these revenues being recovered in the back half? Is this all a Q3 event, or does that stretch into Q4 as well?

Unknown Executive: I guess my good morning.

Meg Dolbray: My first question is really surrounding the system issues that you had in Q2. If I heard you correctly, you mentioned there was about 15 million of revenue in terms of the impact. Death still doesn't get us to where you initially guided Q2.

Speaker Change: Is it really surrounding these since the initiatives that you had in Q2.

Speaker Change: If I heard you correctly, you mentioned there was about $15 million of revenue.

Speaker Change: In terms of the impact.

Brian A. Deck: It still doesn't get us to where you initially guided Q Q2.

Brian Deck: Can you comment a little bit on the Delta relative to your expectations? And what exactly is the pace of these revenues being recovered in a back app? Is this over Q3 event or the best stretch into Q4 as well?

Brian A. Deck: Can you comment a little bit on the delta relative to your expectations and what.

Speaker Change: What exactly is the peso.

Speaker Change: These revenues being recovered in the back half is this all a Q3 event or does that stretch into Q4 as well.

Brian Deck: Sure. So, if you look at the overall guidance going from 4 to 6 down to 3 to 5, it's about a 15 million dollar reduction at the midpoint, and really that does represent, I would say, some weakness in specific and markets that we're seeing. And while we missed the quarter by about 30 million, as you suggest, we're going to regain about 15 million. Most, if not all, of that in the third quarter, and I'll have Matt talk a little about that in the cadence. We are seeing, despite some select and market weakness, we are actually seeing some nice pockets of strength as well.

Brian A. Deck: Sure.

Brian A. Deck: So, if you look at the overall guidance going from 4 to 6 down to 3 to 5, there's about a $15 million reduction at the midpoint. And really, that does represent, I would say, some weakness in specific end markets that we're seeing. And while we missed a quarter by about $30 million, as you suggest, we're going to regain about $15 million, most, if not all, of that in the third quarter. And I'll have Matt talk a little bit about that and the cadence for the rest of the quarter in a minute.

Speaker Change: So if you look at the overall guidance going from 4% to six down to three to five.

Brian A. Deck: It's about a $15 million reduction at the midpoint and.

Brian A. Deck: And really that does represent I would say some weakness in specific end markets that we're seeing.

Brian A. Deck: And while we missed the quarter by about $30 million as you suggest we're going regain about $15 million more.

Brian A. Deck: Most if not all of that in the third quarter and I'll have Matt talk a little bit about that and the cadence for the rest of the quarter in a minute but.

Brian A. Deck: But we are seeing, despite some, I'll say, select end market weakness, we are actually seeing some nice pockets of strength as well. I mentioned food and vegetables. AGV is very strong, and we actually increased our guidance as relates to that, which partially offsets some of the other impacts that we're seeing generally. And then, in terms of the cadence, I'll let Matt kind of address that and why we're confident in the strength of the cadence from here.

Speaker Change: We are seeing despite some select end market weakness, we are actually seeing some nice pockets of strength as well I mentioned in fruit and veg.

Matt Meister: I mentioned fruit and veg. AGV is very strong, and we actually increased our guidance as relates to that, which partially offsets some of the other impacts that we're seeing generally.

Matt: <unk> is very strong and we.

Brian A. Deck: We actually increased our guidance as it relates to that.

Brian A. Deck: Which partially offset some of the other impacts that we're seeing generally.

Matt Meister: But then, in terms of the cadence, I'll let Matt kind of address that and why we're confident on the strength of the cadence from here.

Matt: But then in terms of the cadence I'll, let mark kind of address.

Matt: And why we're confident on the strength.

Matt: The cadence from here.

Matthew J. Meister: Thanks, Brian. I think, as we mentioned in the prepared remarks, the $15 million that's shifting from Q2 to Q3, that was made up of a couple of things. About half of that was the systems upgrade issue that you referenced, Meg, and the other half some specific customer-related delays and timing of shorter cycle book and ship orders. That is what we expect to shift into Q3. Beyond that, again, as we talked about and provided information in the prepared remarks, this forecast is really based on a bottoms-up business unit by business unit detail, and we looked at a lot of the backlog timing, and that backlog timing is about $90 million – should deliver $90 million more in revenue than what we had last year at this time.

Matt Meister: Thanks, Brian. I think, as we mentioned in the prepared remarks, the 15 million dollars that's shifting from Q2 to Q3, that was made up of a couple of things. About half of that was the systems upgrade issue that you referenced, Meg, and the other half is some specific customer-related delays and timing of shorter cycle book-and-ship orders. That is what we expect to shift into Q3.

Matt: Yes, Thanks, Brian.

Matthew J. Meister: I think as we mentioned in the prepared remarks the <unk>.

Matthew J. Meister: $10 million, that's shifting from Q2 to Q3 that was made up of a couple of things about half of that was the systems upgrade issue that you referenced Meg and the other half is <unk>.

Matthew J. Meister: Some specific customer related delays and timing of shorter cycle book and ship orders that is what we expect to shift into Q3.

Matt Meister: Beyond that, again as we talked about and we provided information in the prepared remarks, this forecast is really based off of bottoms-up business units. And we looked at a lot of the backlog timing, and that backlog timing is about 90 million. Should deliver a 90 million dollars more in revenue than what we expected when we had last year at this time. Again, in order for us to hit the numbers for the back half, it assumes a similar book and ship demand that we saw the back half of last year. But that wasn't necessarily overly high book and ship demand.

Matthew J. Meister: Beyond that.

Matthew J. Meister: Again, as we talked about and we provided.

Matthew J. Meister: Information in the prepared remarks.

Matthew J. Meister: Yeah.

Matthew J. Meister: This forecast is really based off of a bottoms up business unit by business unit detail.

Matthew J. Meister: And we looked at a lot of the backlog timing and backlog timing is about $90 million it should deliver a $90 million more in revenue than what we expected when we had last year at this time.

Matthew J. Meister: Again, in order for us to hit the numbers for the back half, it assumes a similar book and ship demand that we saw in the back half of last year, but that wasn't necessarily overly high book and ship demand, so we're pretty confident that that can continue, especially with the recovery in the poultry markets in North America and the strength that we've seen in other markets. So it certainly is a big ramp and by no means a slam dunk, but it's the best forecast we have based on the information provided to us and the additional analysis we did on backlog and the book and ship assumptions at the business unit.

Speaker Change: Again in order for us to hit the numbers for the back half of it assumes a similar book and ship.

Matthew J. Meister: Demand that we saw at the back half of last year, but that wasn't necessarily.

Matthew J. Meister: Overly.

Matthew J. Meister: Hi, Pat book and ship demand. So we're pretty confident that that can continue, especially with the recovery in the poultry markets in North America, and the strength that we've seen in other markets. So it certainly is.

Brian Deck: So we're pretty confident that that can continue, especially with the recovery in the poultry markets in North America and the strength that we've seen in other markets. So it certainly is a big ramp, and by no means is slam dunk, but it's the best forecast we have based on the information provided to us and the additional analysis we did on backlog and the book and ship assumptions at the business units.

Matthew J. Meister: A big ramp and by no means a slam dunk, but it's the best forecast we have based on the information provided to us and the additional analysis, we did on backlog and a book and ship assumption to the business units.

Meg Dolbray: Okay. You mentioned that orders clearly are progressing pretty well in Q3, and you expected a strong quarter in that regard. Can you give us a little more color or context around this and, you know, look, if you're going to convert 90 million dollars more to more backlog than you did last year.

Brian A. Deck: Okay. You mentioned that orders are apparently progressing pretty well in Q3, and you expected a strong quarter in that regard. Can you give us a little more color or context around this? And, you know, look, if you're going to convert $90 million more backlog, how should investors think about your backlog progression through the year? Is it fair to say that we're bringing the backlog down? Or put differently, does that backlog burn become a headwind to 2025? Or do you think there is enough momentum that can build through the market for that not to be an issue?

Matthew J. Meister: Okay.

Speaker Change: You mentioned that.

Speaker Change: We are progressing pretty well in Q3.

Speaker Change: The strong core.

Speaker Change: In that regard.

Brian A. Deck: Can you give us a little more color or context around basin.

Brian A. Deck: If youre going to convert $90 million more.

Speaker Change: More backlog than you did last year.

Meg Dolbray: How should investors think about your backlog progression through the year? Is it fair to say that we're bringing backlog down so could differently?

Brian A. Deck: How should investors think about your backlog progression through the year.

Speaker Change: Fair to say that we are bringing backlog down local differently.

Brian Deck: Does that backlog burn become a headwind to 2025, or do you think there is enough momentum that can build through the market for that not to be an issue? Yeah, that's a very good question, and we look at this quite a bit. So when we start thinking about going outside of 2024 into 2025, certainly you're going to see, I'll say a little bit compared to last year at least more depletion of your backlog just given the high revenue. That said, we still expect some good orders here in the back half. So we'll see how that turns out, but I think more importantly, we think about 2025 and what's happening.

Speaker Change: <unk> backlog burn become a headwind to 2025 or do you think there is enough momentum that can build through the market for that not to be an issue.

Brian A. Deck: Yeah, that's a very good question, and we've looked at this quite a bit. So when we start thinking about going outside of 2024 into 2025, certainly you're going to see, I'll say, a little bit more, compared to last year at least, more depletion of your backlog, just given the high revenue. That said, we still expect some good orders here in the back half, so we'll see how that turns out. But I think more importantly, when you think about 2025 and what's happening, there are a couple of things.

Speaker Change: Yes, that's a very good question and we've looked at this quite a bit so when we start thinking about.

Clay: Clay outside of 2024 into 2025, Oh, certainly youre going to see I'll say, a little bit compared to last year at least.

Brian A. Deck: Depletion of your backlog just given the high revenue.

Brian A. Deck: That said, we still expect some good orders here in the back half. So we'll see how that turns out but I think more importantly, when you think about <unk>.

Speaker Change: <unk> 2025, and what's happening.

Brian Deck: Couple things. So just looking at some of the particular end markets. Obviously, we do believe we're going to we are very early in the recovery and the North American poultry market. We're nowhere near where they were back in post-COVID levels or even 2019 pre-COVID levels. So there's still quite a bit of room to run there. We're also also looking at a couple end markets are still showing signs of strength. Farma looks pretty good in the back half of the year. Food and veg looks very strong. There are some other areas of weakness like CPG and beverage kind of goes into that.

Brian A. Deck: Things so just looking at some of the particular end markets. Obviously, we do believe we're going to we are very early in the recovery in the North American poultry market, we're nowhere near where they were back in.

Brian A. Deck: So just looking at some of the particular end markets, obviously, we do believe we are very early in the recovery in the North American poultry market. We're nowhere near where they were back in post-COVID levels or even in 2019, pre-COVID levels. So there's still quite a bit of room to run there.

Brian A. Deck: Post COVID-19 levels, or even 2019 pre COVID-19 level, so there's still quite a bit of room to run there.

Brian A. Deck: We're also looking at a couple end markets that are still showing signs of strength. Pharma looks pretty good for the back half of the year. Fruit and vegetables look very strong. There are some other areas of weakness like CPG, and beverage kind of goes into that. But overall, if I look at our pipeline, which we measure, we look at kind of like the best view and kind of warm orders, if you will, like we'll have more likelihood of converting to orders. That is, it's actually the highest it's been in over a year, so we actually feel good about kind of where we sit as we kind of prepare ourselves or take orders for 2025.

Brian A. Deck: Also looking at a couple end markets are still showing signs of strength.

Brian A. Deck: Pharma looks pretty good in the back half of the year fruit and veg looks very strong.

Brian A. Deck: There are some other areas of weakness like CPG and.

Brian A. Deck: And beverage kind of goes into that but overall, if I look at our pipeline.

Brian Deck: But overall, if I look at our pipeline, which we measure, we look at kind of like best view and kind of warm orders, if you will, like we have more likelihood of converting to orders. That is, it's actually the highest it's been in over a year. So we actually feel good about kind of where we sit as we kind of prepare ourselves or take orders for 2025.

Brian A. Deck: Which we measure we look at kind of like best view and kind of warm orders. If you will like will have more likelihood of converting to orders.

Brian A. Deck: That is it.

Brian A. Deck: Actually the highest it's been in over a year.

Brian A. Deck: So we actually feel good about kind of where we sit as we kind of prepare ourselves or take orders for for 2025.

Brian Deck: So can I follow up on that comment where the poultry market currently is? Can you put a finer point on where you are volume-wise or dollar-wise relative to pre-COVID levels or whatever you would define as a normalized level for the industry. Yeah, we're certainly within, within North America specifically, we're still off 15% to 20% versus kind of where we otherwise would be.

Brian A. Deck: So, can I follow up on that comment about where the poultry market currently is? Can you put a finer point on where you are volume-wise or dollar-wise relative to pre-COVID levels or whatever you would define as a normalized level?

Speaker Change: So can I follow up on that comment of where the poultry market. Currently is can you can you put a finer point on where.

Speaker Change: Where you are volume wise or dollar wise relative to <unk>.

Brian A. Deck: Pre COVID-19 levels or whatever you would define as a normalized level for the industry.

Brian A. Deck: Yeah, we're certainly within, within North America, specifically, we're still off by 15-20% versus kind of where we otherwise would be. And as you know, that's one of our largest markets as a whole. So now we saw, again, good, decent progression, but quite a bit of ways to go.

Speaker Change: Yes, we're certainly within within North America, specifically, we're still off 15% 20%.

Brian A. Deck: Versus kind of where we otherwise would be and as you know thats one of our that is our largest end market as a whole so.

Meg Dolbray: And as you know, that's one of our, that is our largest and market as a whole. So now we saw again, good decent progression, but quite a bit of ways to go. Got it.

Brian A. Deck: Now we saw again, good decent progression, but quite a bit a ways to go.

Mircea Dobre: Got it. My final question is on margin. You talked about improvement sequentially. That all makes sense. But is it fair for us to expect margins to improve year over year as well in both quarters? And I'll leave it at that.

Speaker Change: Got it and my final question.

Meg Dolbray: My final question is on margin; you talked about improvements sequentially that that will make sense. Is it fair for us to expect margins to improve year over year as well in both quarters?

Speaker Change: Is that margin.

Speaker Change: You talked about improvements sequentially.

Speaker Change: That all makes sense is it fair for us to expect margins to improve year over year as well.

Speaker Change: In both quarters.

Matt Meister: And I'll leave it at that. Thank you. Yeah, Meg, I think that is absolutely what we should expect. It is a big increase, certainly, in margins. And a lot of that is driven by the incremental flow through on the higher volume. You know, we typically estimate in the range of high 20s, low 30%. I think with the volume increase, we should sort of be on the high end of that range. And then beyond that, there's some benefits from a mixed perspective with the recovery and poultry markets that tends to be some of our more profitable products, as well as the higher volume in AGV.

Speaker Change: I'll leave it at that thank you.

Matthew J. Meister: Yeah, Meg, I think that is absolutely what we should expect. It is a big increase, certainly in margins, and a lot of that is driven by the incremental flow-through on the higher volume. You know, we typically estimate in the range of high 20s to low 30 percent, and I think with the volume increase, we should sort of be on the high end of that range. And then, beyond that, there are some benefits from a mixed perspective with the recovery in poultry markets.

Mircea Dobre: Yes, Mig I think that is absolutely what we should expect it is a big increase certainly in margins.

Matthew J. Meister: And a lot of that is driven by the incremental flow through on the higher volume.

Matthew J. Meister: We typically estimate in the range of high <unk>, low, 30% and I think with the.

Matthew J. Meister: The volume increase we should sort of be on the high end of that range.

Matthew J. Meister: And then beyond that there is some benefits from a mix perspective with the recovery in poultry markets. It tends to be some of our more profitable products as well as the higher volume in Adv, they've done a really nice job in addressing their manufacturing efficiency in their margins.

Matthew J. Meister: These tend to be some of our more profitable products, as well as the higher volume in AGV. They've done a really nice job of addressing their manufacturing efficiency and their margins. So those together, along with improvements that we're expecting in aftermarket, especially on projects, that gives us a nice tail-end from a mixed perspective. And then we've honestly been very happy and seen a lot of success from the supply chain team and the effects they've had on costs, input costs, especially around materials.

Matt Meister: They've done a really nice job in addressing their manufacturing efficiency and their margins. So those together, along with improvements that we're expecting in aftermarket, especially on projects, that gives us a nice tail in from a mixed perspective. And then we've honestly been very happy and seen a lot of success from the supply chain team and the effects they've had on costs, input costs, especially on materials. So we expect that to continue back in the back half of the year. All that would support the higher margin rates we're expecting in the back half of the year.

Matthew J. Meister: Those together along with the improvements that we're expecting in aftermarket, especially on our projects.

Matthew J. Meister: That gives us a nice tailwind from a mix perspective, and then we.

Matthew J. Meister: Honestly been very happy and seen a lot of success from the supply chain team and the effects they've had.

Matthew J. Meister: On costs input costs, especially raw materials. So we expect that to continue in the back half of the year all of that.

Matthew J. Meister: So we expect that to continue in the back half of the year. All that would support the higher margin rates we're expecting in the back half of the year, and that will improve sequentially. So Q3 will be better, and then Q4 will be better than Q3.

Matthew J. Meister: Support the higher margin rates were expecting in the back half of the year and that will improve sequentially. So Q3 will be better and then Q4 will be better than Q3.

Meg Dolbray: And that will improve sequentially. So Q3 will be better, and then Q4 will be better than Q3. Got it.

Operator: Got it. Thanks for the call.

Speaker Change: Got it thanks for the call.

Unknown Executive: Thanks for the call. Thank you.

Speaker Change: Thank you.

Sam Carlovan: Your next question comes from the line of Ross Sparingbleek with William Blair. Please go ahead. Okay, good morning. This is Sam Carlovan for Ross. Thanks for taking my questions. Sure.

Operator: Your next question comes from the line of Ross Sparenbleek with William Blair. Please go ahead.

Speaker Change: Your next question comes from the line of Ross <unk> with William Blair. Please go ahead.

Sam Karlovan: Hey, good morning. This is Sam Karlovan for Ross.

Speaker Change: Hey, Good morning. This is Sam carload lots of Ross Thanks for taking my questions.

Brian A. Deck: Thanks for taking my question. Sure, thank you everyone. I guess I'll... So I guess I'll start. In the press release, you guys noted that you've submitted regulatory filings related to Morel within all relevant jurisdictions. Just to be clear, are these formal submissions or still just informal?

Unknown Executive: Thank you.

Sam Karlovan: Sure.

Brian Deck: I guess I'll start in the press release. You guys noted that you submitted regulatory filings related to morale within all relevant jurisdictions. Just to be clear, are these formal submissions still just informal? It depends on the jurisdiction because there are different processes in different jurisdictions. For example, the EU is there's a lot of, I'll say advocacy in back and forth before you actually formally submit. So at versus the US where you just kind of where you just submit it and then the QA comes afterwards. This is a little bit the opposite. So that's underway. But in most other jurisdictions, those are formal.

Sam Karlovan: Yes.

Brian A. Deck: Good morning, So I guess I'll start in the press release, you guys noted that you've submitted regulatory filings related to morale within all relevant jurisdictions just to be clear are these formal submissions are still just in total.

Brian A. Deck: It depends on the jurisdiction because there are different processes in different jurisdictions. For example, the EU is, there's a lot of, I'll say, advocacy and back and forth before you actually formally submit. Compared to the U.S., where you just kind of, where you just submit it and then the Q&A comes afterwards, this is a little bit the opposite, so that's underway, but in most other jurisdictions, those are

Speaker Change: It depends on the jurisdiction because there are different processes in different jurisdictions. For example, the EU is theres a lot of I'll say advocacy and back and forth.

Brian A. Deck: Before you actually formally submit so.

Brian A. Deck: The U S. We just kind of where you just submit it and then the Q&A comes afterwards this is a little bit the opposite so that's underway.

Brian A. Deck: In most other jurisdictions those are formal.

Sam Carlovan: Thank you. Got it. That's helpful.

Brian A. Deck: Got it. That's helpful. And then can you give us an update on your Investor Outreach Efforts with Morrell Investors, specifically related to that 10% retail investor base?

Speaker Change: Got it that's helpful. And then can you give us an update on your.

Sam Carlovan: And then can you give us an update on your investor outreach efforts with morale investors, specifically related to that 10% retail investor base? Yes. No, good question.

Speaker Change: Investor outreach efforts with gorilla investors, specifically related to that 10% retail investor base.

Brian A. Deck: Yes, good question. So we had a really great week back in, I guess this would have been late June, both in Iceland and in London. And we had a broadcast and webcast call, which was, in part, strongly geared towards retail investors. And that was very well received and watched within that market. So that really helped.

Brian A. Deck: Yes.

Brian Deck: So we had a really great week back in, I guess this would have and it had, we had a broadcast and webcast call, which was in part strongly geared towards retail investors. So that was, and that was a very well received and viewed within that market. So that really helped. There's also a very specific, I'll say, print campaign that happens in Iceland as well as part of that process. So it goes like newspaper ads, et cetera.

Brian A. Deck: Good question so we.

Brian A. Deck: We had a really.

Brian A. Deck: Great week back in I guess this would have been late June.

Brian A. Deck: Both in Iceland and in in London, and it had it.

Brian A. Deck: We had a a.

Brian A. Deck: Hey.

Brian A. Deck: A broadcast and webcast call, which was.

Brian A. Deck: In card strongly geared towards retail investors.

Brian A. Deck: So that was and that was very well received and viewed.

Brian A. Deck: Within the within that market. So that really up there is also a very specific I would say.

Brian A. Deck: Hey.

Brian A. Deck: There's also a very specific, I'll say, a print campaign that happens in Iceland as well as part of that process, so it goes like newspaper ads, etc., so there's a very strong process underneath, separately, aside from the conference that was attended live as well as was broadcast. We had one-on-ones with all of the major shareholders of Morrell, again, across both London and Iceland. And I think we hit something like, I think, 40 investors over the course of a week or so. So, really deep penetration and great to see the support. They, as a group, certainly understand and appreciate the opportunity here, the industrial logic. So, so far, so good in that regard.

Brian A. Deck: Print.

Brian A. Deck: Campaign that happens in Iceland, as well as part of that process. So close like newspaper ads et cetera. So there is a very strong process underneath.

Brian A. Deck: Got it. That's very helpful.

Sam Carlovan: So there's a very strong process underneath separately aside from the conference that was attended live as well as broadcast. We had one-on-ones with all of the major shareholders of Morale again across of London and Iceland. And I think we had something like, I think 40 investors over the course of a week or so. So really deep penetration and really great to see the support. They, they, as a group, certainly understand and appreciate the opportunity here, the industrial logic. So, so far so good in that regard. Got it. That's very helpful.

Brian A. Deck: Separately.

Speaker Change: Aside from the <unk>.

Brian A. Deck: Conference that was.

Brian A. Deck: Attended live as well as well as broadcast we had one on ones with all of the.

Brian A. Deck: Our major shareholders of morale again across both London and.

Brian A. Deck: In Iceland, and I think we had something like I think 40 investors over the course of a week or so so.

Brian A. Deck: Really deep penetration and.

Brian A. Deck: Really great to see the support.

Brian A. Deck: As a group certainly understand and appreciate the opportunity here the industrial logic. So.

Brian A. Deck: So far so good in that regard.

Brian A. Deck: And then just one last one. Can you give us a sense of how poultry orders progress through the quarter and kind of into July? And then can you comment on kind of what you're hearing from customers that gives you that level of visibility into the second half?

Speaker Change: Got it that's very helpful. And then just one last one can you give us a sense, how poultry orders progressed through the quarter and kind of into July and then can you comment on kind of what youre hearing from customers that kind of gives you that level of visibility into the second half.

Brian Deck: And then just one last one, can you give us a sense of how poultry orders progressed through the quarter and kind of in the July. And then can you comment on kind of what you're hearing from customers that kind of gives you that level of visibility into the second half. Right. So I would say orders progressed. It actually started the second quarter a little bit slow, frankly, but then did progress throughout the quarter.

Brian A. Deck: Right, so I would say orders progressed. It actually started the second quarter a little bit slow, frankly, but it did progress throughout the quarter. And I would just generally say that's our general expectation for the third quarter. I haven't seen the July numbers, in any case, but generally speaking, we do expect some momentum throughout the quarter. In terms of what we're hearing more generally from our customers, it's what you might expect. First of all, the fundamentals remain good.

Speaker Change: Right. So I would say orders progressed it actually started the second quarter, a little bit slow frankly, but then did progressed throughout the quarter.

Brian Deck: And I would just generally say that's our general expectation for the third quarter. I haven't seen the July numbers in any case, but generally speaking, we do see expects a momentum throughout the quarter in terms of kind of what we're hearing more generally from our customers. It's it's what you might expect. First of all, the fundamentals remain good. The poultry prices, the wholesale prices are remaining solid. They've kind of they've held. They haven't further increased versus this time last quarter as a whole. However, input costs have also remained stable. So the general, I'll say price cost dynamics for our customers have held.

Brian A. Deck: And I would just generally say with our general expectation for the third quarter I haven't seen the July numbers.

Brian A. Deck: In any case, but generally speaking we do see expect some momentum throughout the quarter.

Brian A. Deck: In terms of kind of what we're hearing more generally from our customers.

Brian A. Deck: It's what you might expect first of all the fundamentals remain good pull.

Brian A. Deck: The poultry prices, the wholesale prices, are remaining solid. They've held. They haven't further increased versus this time last quarter as a whole. However, input costs have also remained stable. So the general, I'll say, price-cost dynamics for our customers have held. We haven't seen some of the – I think some of the results are coming out later this week or next week on some of the big guys.

Brian A. Deck: <unk> prices the wholesale prices are remaining solid.

Brian A. Deck: They've kind of held they havent further increased versus this time last quarter as a whole.

Brian A. Deck: However input cost have also remained stable so the the general I'll say price cost dynamics for our customers have held.

Brian Deck: We haven't seen some of the; I think some of the results are coming out later this week or next week on some of the big guys. But, but as we understand it, they're doing well operationally. So we are. We're quoting on things like this for the third quarter; for the second quarter, it was more, I would say. Through the processing, kind of more end of line type activities are further down the line. We are starting to see some quotes and activity on some of the upfront stuff. So that bodes well. It just started to get deeper into further into the lines, which is good to see.

Brian A. Deck: We haven't seen some of the rigs I think some of the results are coming out later this week or next week on some of the big guys, but.

Brian A. Deck: But as we understand it, they're doing well operationally. So we are – we're quoting on things like – for the second quarter, it was more, I would say, further processing, kind of more end-of-line type activities or further down the line. We are starting to see some quotes and activity on some of the upfront stuff, so that bodes well. It's just starting to get deeper into – further into the lines, which is good to see. So overall, just good conversations. They're investing. We're seeing more releases of CapEx that they've told us about, and we continue to quote them.

Brian A. Deck: But as we understand it there.

Brian A. Deck: They are doing well operationally so we.

Brian A. Deck: We are.

Brian A. Deck: We are quoting on things like fifth third for the second quarter. It was more I would say.

Brian A. Deck: Further processing kind of more end of line type activities are further down the line, we are starting to see some quotes and activity on some of the upfront stuff. So that bodes well is just starting to get deeper into further into the lines, which is good to see so overall just good conversations theyre investing we're seeing more releases.

Sam Carlovan: So overall, just good conversations. They're investing. We're seeing more releases of catbacks that they've told us about, and we continue to quote. Got it. That's helpful.

Brian A. Deck: As of Capex.

Brian A. Deck: They've told us about and we continue to quote.

Brian A. Deck: Got it. That's helpful. I'll leave it there. Okay, thank you. And, as a reminder, if you'd like to,

Speaker Change: Got it that's helpful I'll leave it there.

Unknown Executive: I'll leave it there.

Unknown Executive: Okay. Thank you.

Speaker Change: Okay. Thank you.

Brian A. Deck: And as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. And that does conclude our question and answer session for today. I will now turn the conference over to Mr. Brian Deck for closing remarks.

Operator: You know, as a reminder, if you'd like to ask a question, please press star one on your telephone keypad.

Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Unknown Executive: And that does conclude our question and answer session for today.

Brian A. Deck: And that does conclude our question and answer session for today I will now turn the conference over to Mr. Brian deck for closing remarks.

Brian Deck: I will now turn the conference over to Mr. Brian Deck for closing remarks. Thank you all for joining us this morning. As always, Kendrick and Marley will be available if you have any follow-up questions.

Brian A. Deck: Thank you all for joining us this morning. As always, Kedric and Marlee will be available if you have any follow-up questions.

Brian A. Deck: Thank you all for joining us this morning, as always <unk> and Marley, we'll be available. If you have any follow up questions. Thank you.

Unknown Executive: Thank you.

Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect. Please wait; the next conference will begin shortly.

Unknown Executive: This concludes today's conference call. Thank you for your participation, and you may now disconnect. Please wait.

Brian A. Deck: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Operator: Please wait; the conference will begin shortly. Please wait; the conference will begin shortly.

Operator: Please wait the conference will begin shortly.

Unknown Executive: The conference will begin shortly. .

Operator: Okay.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: Sure.

Operator: Thanks.

Operator: [music].

Operator: Yes.

Operator: Okay.

Operator: Sure.

Operator: Okay.

Operator: Thanks.

Operator: [music].

Operator: No.

Operator: Okay.

Operator: Yes.