Q2 2025 JBT Marel Corp Earnings Call

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.

Operator: 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. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number 1 on your telephone keypad. I will now turn the call over to JBT Marel Senior Director of Investor Relations, Marlee Spangler, to begin today's conference.

If you would like to ask a question during that time simply press Star then the number one on your telephone keypad I will now turn the call over to J P. T morale senior director of Investor Relations Marley Spangler to begin today's conference.

Thank you Tiffany and good morning, everyone and thank you for joining our conference call with me on the call today is Chief Executive Officer, Brian deck, President Army, Sigurdson, and Chief Financial Officer, Matt Meister.

Marlee Spangler: Thank you, Tiffany. Good morning, everyone, and thank you for joining our conference call. With me on the call today is Chief Executive Officer Brian Deck, President Arni Sigurdsson, and Chief Financial Officer Matthew J. Meister. In today's call, we will use forward-looking statements that are subject to the safe harbor language in our press release and 8-K filing. JBT Marel'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 measures can be found in the investor relations section of our website. With that, I'll turn the call over to Brian.

In today's call. We will use forward looking statements that are subject to the safe Harbor language in our press release and 8-K filing.

Brian Deck: Combined JBT Marel Corp Tinna orders totaled $938 million, which included $22 million in favorable year-over-year foreign exchange translation. In particular, we experienced continued equipment investment from the poultry industry, our largest end market, and our pipeline for poultry-related projects is expected to provide support into next year. Beyond poultry, we saw good quarterly demand for meat, beverages, fruit and vegetables, and ready meals. For the quarter, pharma and pet food were softer, while seafood and material handling were neutral. Geographically speaking, the MAO was the strongest region. While North America was relatively soft in the period, the overall demand environment and pipeline is solid. Latin America was strong, while Asia-Pacific continues to be choppy. We entered the quarter with a backlog of $1.4 billion, which provides meaningful support for revenue conversion in the back half of the year.

JBT <unk> 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 measures can be found in the Investor Relations section of our website with that I'll turn the call over to Brian.

Welcome to jbt, morel's earnings conference call. For the second quarter of 2025. My name is Tiffany 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.

After the speaker's remarks, there will be a question and answer session.

Thanks Neely.

JBT posted a strong performance in the second quarter.

Brian Deck: Thanks, Marlee. JBT posted a strong performance in Q2, aided by a few factors including mix and foreign exchange that Matt will explain. Adjusted EBITDA margins and Adjusted EPS exceeded our expectations. We also generated excellent cash flow and made significant progress de-leveraging our balance sheet. As Arni will highlight, the integration process is on track as we work to execute on the tremendous commercial, operational, and financial benefits of the JBT Marel combination. In terms of the demand environment, we booked healthy orders even as we navigated a dynamic macroeconomic backdrop. While certain CPG companies, QSRs, and full-service restaurants have seen some pressure in connection with the consumer shifting to value-seeking trends, our extremely broad portfolio and end market exposures means that we can serve our customers regardless of changes in consumer food consumption patterns or channels.

Aided by a few factors, including mix and foreign exchange that Matt will explain.

If you would like to ask a question during that time, simply press star, then the number 1 on your telephone keypad,

Adjusted EBITDA margins and adjusted EPS exceeded our expectations.

We also generated excellent cash flow and made significant progress deleveraging our balance sheet.

I will now turn the call over to JBT Marel's Senior Director of Investor Relations, Marlee Spangler, to begin today's conference.

Moreover, as Ernie will highlight the integration process is on track as we work to execute on the tremendous commercial operational and financial benefits of the JBT combination.

Thank you, Tiffany. Good morning, everyone and thank you for joining our conference. Call with me on the call today is Chief Executive Officer, Brian deck.

Brian Deck: Further to the commercial front, as we progress with integration, we're looking to capitalize on the expanded portfolio of offerings and are excited about the ability to cross-sell the legacy JBT and Marel Corp Tinna solutions. Arni will provide color on the developing benefits of our combined offering. Regarding the tariff situation, we are taking steps to mitigate the impact on direct material costs, including negotiations with existing suppliers, some repositioning of where we source parts, and consideration for where we assemble equipment, as well as pricing actions. We are pleased with our first half performance. And given expectations for backlog conversion, synergy savings, and greater clarity around tariffs, especially regarding Europe, we are reestablishing full-year earnings guidance. Let me turn the call over to Matt to discuss our second quarter performance and outlook for the full year.

President Arney segurson and Chief Financial Officer. Matt Meister.

In terms of the demand environment, we booked healthy orders, even as we navigated a dynamic macroeconomic backdrop.

In today's call, we will use forward-looking statements that are subject to the safe harbor language in our press release and 8-K filing.

Moreover, while certain CPG companies <unk> and full service restaurants have seen some pressure in connection with the consumer shifting to value seeking trends are extremely broad portfolio and end market exposures.

Jbt marls, 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.

It means that we can serve our customers regardless of changes in consumer food consumption patterns or channels.

Also, our discussion today includes references to certain non-gaap measures.

Yes.

Combined JBT MRO orders totaled $938 million, which included $22 million and favorable year over year Foreign exchange translation.

Brian Deck: Combined JBT Marel orders total $938 million, which included $22 million in favorable year-over-year foreign exchange translation. In particular, we experienced continued equipment investment from the poultry industry, our largest end market, and our pipeline for poultry-related projects is expected to provide support into next year. Beyond poultry, we saw good quarterly demand for meat, beverages, fruit and vegetables, and ready meals. For the quarter, pharma and pet food were softer, while seafood and material handling were neutral. Geographically speaking, EMEA was the strongest region. While North America was relatively soft in the period, the overall demand environment and pipeline is solid. Latin America was strong, while Asia Pacific continues to be choppy. We ended the quarter with a backlog of $1.4 billion, which provides meaningful support for revenue conversion in H2 of the year.

A Reconciliation of these measures to the most comparable. Gaap measures can be found in the investor relations section of our website with that. I'll turn the call over to Brian.

Thanks Marlee.

In particular, we experienced continue equipment investment from the poultry industry, our largest end market and our pipeline for poultry related projects is expected to provide support into next year.

Jbt posted a strong performance in the second quarter.

Aided by a few factors, including mix and foreign exchange that Matt will explain.

Matt Meister: Thanks, Brian. For the second quarter of 2025, total revenue was $935 million and included approximately $21 million in favorable year-over-year foreign exchange translation impact. Revenue exceeded the midpoint of our guidance by about $35 million. The main drivers of the outperformance versus our expectations were approximately $25 million in higher than anticipated recurring revenue and $8 million of favorable FX. In the quarter, we realized year-over-year synergy savings of $5 million in operating expense and an additional $3 million in supply chain. The progress we have made on synergies puts us on track to achieve our expected in-year realized cost savings of $35 million to $40 million and expected annualized run rate savings of $80 million to $90 million exiting 2025. In the second quarter, we incurred approximately $9 million in gross tariff costs.

Adjust the debit de margins and adjusted EPS, exceeded our expectations.

Beyond poultry, we saw good quarterly demand for meat beverages, fruit and vegetables and ready meals.

We also generated excellent cash flow and made significant progress, deleveraging our balance sheet.

For the quarter.

Pharma and pet food were softer while seafood and material handling we're neutral.

Geographically speaking EMEA was the strongest region.

While North America was relatively soft in the period, the overall demand environment and pipeline is solid.

Moreover is Arie will highlight the integration process is on track as we work to execute on the tremendous commercial operational and financial benefits of the jbt RL combination.

Latin America was strong while Asia Pacific continues to be choppy.

In terms of the demand environment we booked healthy orders even as we navigated a dynamic macroeconomic backdrop.

Yes.

We ended the quarter with a backlog of $1 4 billion, which provides meaningful support for revenue conversion in the back half of the year.

moreover, while certain cpg companies qsrs and full service restaurants have seen some pressure in connection with the consumer shifting to Value seeking trends,

Further to the commercial front as we progress with integration, we're looking to capitalize.

Are extremely broad portfolio and and Market exposures.

Brian Deck: Further to the commercial front, as we progress with integration, we're looking to capitalize on the expanded portfolio of offerings and are excited about the ability to cross-sell the legacy JBT and Marel solutions. Arni will provide color on the developing benefits of our combined offering. Regarding the tariff situation, we are taking steps to mitigate the impact on direct material costs, including negotiations with existing suppliers, some repositioning of where we source parts, and consideration for where we assemble equipment, as well as pricing actions. We are pleased with our H1 performance. Given expectations for backlog conversion, synergy savings, and greater clarity around tariffs, especially regarding Europe, we are reestablishing full-year earnings guidance. Let me turn the call over to Matt to discuss our Q2 performance and outlook for the full year.

On the expanded portfolio of offerings and are excited about the ability to cross sell the legacy JBT and morale solutions.

means that we can serve our customers regardless of changes and consumer food consumption patterns or channels

R&D will provide color on the developing benefits of our combined offering.

Matt Meister: The net impact of tariffs in the quarter was essentially offset by the benefits of inventory on hand and mitigating actions. We are working with our supply base, as well as evaluating the potential for further pricing actions to mitigate the rising impact of tariffs on margins. Our second quarter adjusted EBITDA margin of 16.7% outperformed the midpoint of our guidance by about 180 basis points. As Brian mentioned, this is primarily due to a favorable mix of higher recurring revenue and higher margin equipment, as well as benefits from our focus on productivity improvements and cost controls. Second quarter GAAP EPS was $0.07 and adjusted EPS was $1.49. As a reminder, our adjusted EPS calculations exclude certain items such as acquisition-related amortization expense and restructuring costs.

Regarding the tariff situation, we are taking steps to mitigate the impact on direct material costs, including negotiations with existing suppliers. Some repositioning of where we source parts and consideration for for where we assemble equipment as well as pricing actions.

combined gbt morale orders to Total 938 million, which included 22 million, in favorable year-over-year, foreign exchange translation

In particular, we experience a continued equipment investment from the poultry industry, our largest and market and our pipeline for poultry related. Projects is expected to provide support into next year.

We are pleased with our first half performance.

Beyond poultry. We saw good. Quarterly demand for meat beverages, fruit and vegetables and ready meals.

And given expectations for backlog conversion synergy savings and greater clarity around tariffs, especially regarding Europe, we are reestablishing full year earnings guidance.

For the quarter.

Pharma and Pet Food were softer while seafood and material handling were neutral.

Geographically speaking and Maya was the strongest region.

Let me turn the call over to Matt to discuss our second quarter performance and outlook for the full year.

Thanks, Brian for the second quarter of 2025 total.

On North America was relatively soft in the period, the overall demand environment and pipeline is solid.

Total revenue was $935 million and included approximately $21 million and favorable year over year Foreign exchange translation impact.

Matthew J. Meister: Thanks, Brian. For Q2 2025, total revenue was $935 million and included approximately $21 million in favorable year-over-year foreign exchange translation impact. Revenue exceeded the midpoint of our guidance by about $35 million. The main drivers of the outperformance versus our expectations were approximately $25 million in higher than anticipated recurring revenue and $8 million of favorable FX. In the quarter, we realized year-over-year synergy savings of $5 million in operating expense and an additional $3 million in supply chain. The progress we have made on synergies puts us on track to achieve our expected in-year realized cost savings of $35 to 40 million and expected annualized run rate savings of $80 to 90 million exiting 2025. In Q2, we incurred approximately $9 million in gross tariff costs.

Latin America was strong while Asia Pacific continues to be choppy.

Matt Meister: In the second quarter, we also incurred an $11 million impairment charge on a joint venture investment, which we exited as a result of the JBT combination with Marel. On a segment basis, JBT second quarter revenue increased 13% year-over-year, or approximately 11% on a constant currency basis. JBT segment adjusted EBITDA of $82 million increased 28%, and the adjusted EBITDA margin improved 220 basis points with the prior year period to 18%. This was primarily due to the benefits of favorable recurring revenue mix and flow-through on the higher volume. Marel segment revenue in the second quarter was $480 million. Marel segment adjusted EBITDA was $75 million, representing a margin of 15.5%. Marel's strong profitability in the quarter was a result of savings from integration synergies and restructuring actions, favorable revenue mix, and better margins in the meat and fish businesses.

Revenue exceeded the midpoint of our guidance by about $35 million.

We enter the quarter with a backlog of 1.4 billion which provides meaningful support for Revenue conversion in the back, half of the year.

Main drivers of the outperformance versus our expectations for approximately $25 million and higher than anticipated recurring revenue.

Further to the commercial front as we progress with integration. We're looking to capitalize.

$8 million of favorable FX.

In the quarter, we realized year over year synergy savings of $5 million in operating expense.

on the expanded portfolio of offerings and are excited about the ability to cross-sell the Legacy jbt, in morale Solutions,

And an additional $3 million in supply chain.

Arnie will provide color on the developing benefits of our combined offering.

The progress we have made on synergies puts us on track to achieve our expected in year realized cost savings of $35 million to $40 million in expected annualized run rate savings of $80 million to $90 million exiting 2025.

Regarding the Tariff situation, we are taking steps to mitigate the impact on direct material costs, including negotiations, with existing suppliers.

In the second quarter, we incurred approximately $9 million in gross tariff costs.

Some repositioning of where we Source parts and consideration for we, for where we assemble equipment, as well as pricing actions.

We are pleased with our first half performance.

The net impact of tariffs in the quarter was essentially offset by the benefits of inventory on hand and mitigating actions.

Matthew J. Meister: The net impact of tariffs in the quarter was essentially offset by the benefits of inventory on hand and mitigating actions. We are working with our supply base, as well as evaluating the potential for further pricing actions to mitigate the rising impact of tariffs on margins. Our Q2 Adjusted EBITDA margin of 16.7% outperformed the midpoint of our guidance by about 180 basis points. As Brian mentioned, this is primarily due to a favorable mix of higher recurring revenue and higher margin equipment, as well as benefits from our focus on productivity improvements and cost controls. Q2 GAAP EPS was $0.07 and Adjusted EPS was $1.49. As a reminder, our Adjusted EPS calculations exclude certain items such as acquisition-related amortization expense and restructuring costs.

We are working with our supply base as well as evaluating the potential for further pricing actions to mitigate the rising impact of tariffs on margins.

And give an expectation for backlog conversion, synergy savings, and greater clarity around tariffs, especially regarding Europe. We are re-establishing full-year earnings guidance.

Matt Meister: Through the first half of 2025, we generated free cash flow of $106 million, including $88 million in the second quarter, which was supported by good working capital management and customer deposits. The quarterly improvement in free cash flow affirms our view of the solid cash flow model of the combined businesses. As a result of our strong cash flow generation, we were able to make significant progress deleveraging our balance sheet. At the end of the second quarter, leverage decreased to below 3.4 times compared to our leverage ratio of 3.8 times in the first quarter and 4 times at the close of the transaction. Our bank leverage ratio, which includes the benefit of certain run rate synergy savings, was 2.8 times as of June 30. This provides us significant liquidity of approximately $1.3 billion.

Let me turn the call over to Matt to discuss our second quarter performance and outlook for the full year.

Our second quarter adjusted EBITDA margin of 16, 7% outperformed the midpoint of our guidance by about 180 basis points as.

As Brian mentioned this is primarily due to a favorable mix of higher recurring revenue and higher margin equipment.

Thanks, Brian. For the second quarter of 2025, total revenue was $935 million and included approximately $21 million in favorable year-over-year foreign exchange translation impact.

As well as benefits from our focus on productivity improvements and cost controls.

Revenue, exceeded the midpoint of our guidance by about 35 million.

Yes.

Second quarter, GAAP EPS was <unk> <unk> and adjusted EPS was $1 49.

As a reminder, our adjusted EPS calculations exclude certain items, such as acquisition related amortization expense and restructuring costs.

The main drivers of the outperformance versus our expectations or approximately 25 million dollars in higher than anticipated, recurring Revenue in 8 million dollars of favorable FX.

In the quarter, we realized year-over-year Synergy savings at $5 million in operating expense.

In the second quarter, we also incurred an $11 million impairment charge and a.

And additional 3 million in supply chain.

Matthew J. Meister: In Q2, we also incurred an $11 million impairment charge on a joint venture investment, which we exited as a result of the JBT combination with Marel. On a segment basis, JBT's Q2 revenue increased 13% year over year or approximately 11% on a constant currency basis. JBT segment Adjusted EBITDA of $82 million increased 28%, and the Adjusted EBITDA margin improved 220 basis points from the prior year period to 18%. This was primarily due to the benefits of favorable recurring revenue mix and flow-through on the higher volume. Marel segment revenue in Q2 was $480 million. Marel segment Adjusted EBITDA was $75 million, representing a margin of 15.5%. Marel's strong profitability in the quarter was a result of savings from integration synergies and restructuring actions, favorable revenue mix, and better margins in the meat and fish businesses.

Joining venture investment, which we exited as a result of the JBT combination with morale.

The progress we have made on synergies, puts us on track to achieve our expected in-ear realized cost savings.

On a segment basis, Jbt's second quarter revenue increased 13% year over year or approximately 11% on a constant currency basis.

A 35 to 40 million and expected annualized, run rate Savings of 80 to 90 million exiting 2025.

Matt Meister: As Brian mentioned, we have reestablished full-year 2025 guidance, given greater clarity around the tariff environment, including a 15% rate on Europe, coupled with the strength of our backlog. For full-year 2025, we expect revenue to be $3.7 billion at the midpoint of our guidance. This includes approximately $70 million to $85 million in favorable foreign exchange translation benefit on a year-over-year basis. We are forecasting full-year adjusted EBITDA margin to be 15 and a quarter to 16% and adjusted EPS of $5.45 to $6.15. Adjusted EPS excludes certain one-time items and acquisition-related costs, which were outlined in yesterday's press release and investor presentation. In terms of the third quarter, we expect revenue to be flat sequentially, which includes a slightly favorable FX translation impact.

JBT segment, adjusted EBITDA of $82 million increased 28% and adjusted EBITDA margin improved 220 basis points from the prior year period to 18%.

In the second quarter, we incurred approximately $9 million in Gross, tariff costs.

The net impact of tariffs in the quarter was essentially offset by the benefits of inventory on hand, and mitigating actions.

This was primarily due to the benefits of favorable recurring revenue mix and flow through on the higher volume.

We are working with our supply base as well as evaluating the potential for further pricing actions to mitigate the rising impact of tariffs on margins.

<unk> segment revenue in the second quarter was $480 million.

<unk> segment, adjusted EBITDA was $75 million, representing a margin of 15, 5%.

Our second quarter, adjusted EPA margin of 16.7% outperformed, the midpoint of our guidance by about 180 basis points.

Morale strong profitability in the quarter was the result of savings from integration synergies and restructuring actions.

The favorable revenue mix and better margins in feet in the meat and fish businesses.

As Brian mentioned, this is primarily due to a favorable mix of higher recurring revenue and higher-margin equipment, as well as benefits from our focus on productivity improvements and cost controls.

Through the first half of 2025, we generated free cash flow of $106 million.

Matthew J. Meister: Through H1 2025, we generated free cash flow of $106 million, including $88 million in Q2, which was supported by good working capital management and customer deposits. The quarterly improvement in free cash flow affirms our view of the solid cash flow model of the combined businesses. As a result of our strong cash flow generation, we were able to make significant progress delevering our balance sheet. At the end of Q2, leverage decreased to below 3.4 times, compared to our leverage ratio of 3.8 times in Q1 and 4 times at the close of the transaction. Our bank leverage ratio, which includes the benefit of certain run rate synergy savings, was 2.8 times as of 30 June. This provides us significant liquidity of approximately $1.3 billion.

Second quarter, gaap EPS with 7 cents and adjusted EPS was 1.49.

Including $88 million in the second quarter.

Which was supported by good working capital management and customer deposits.

Matt Meister: We expect sequential margins to decline by approximately 100 basis points as a result of increased net tariff costs and less favorable mix, partially offset by synergy savings. With that, let me turn the call over to Arni, who will discuss the progress and specific benefits we are realizing as a result of the business combination and integration.

Restructuring costs.

The quarterly improvement in free cash flow affirms our view of the solid cash flow model of the combined businesses.

As a result of our strong cash flow generation, we were able to make significant progress delevering our balance sheet.

In the second quarter, we also incurred an 11 million impairment charge on a joint venture investment, which we exited as a result of the jbt combination with morel.

At the end of the second quarter leverage decreased to below three four times compared to a leverage ratio of three eight times in the first quarter and.

Arni Sigurdsson: Thanks, Matt. Since our call three months ago, there has been significant activity and progress on the integration front, and I'm really proud of what our JBT Marel Corp Tinna team has accomplished for our customers and broader stakeholders. One of the greatest benefits of the combination of JBT and Marel Corp Tinna lies in integrating our complementary portfolios to provide more holistic solutions, making us an even more valuable partner to our customers. Our customers are seeking a preferred partner who has the process know-how and product offering across the value chain. It simplifies installation, commissioning, and service as our customers have one accountable counterpart. It also allows them to optimize product flow and increase efficiency as modules are designed as a part of a full-line system with software to control the process and provide access to real-time data and actionable insights.

On a segment basis, jbt, second quarter Revenue, increased 13% year-over-year or approximately 11% on a constant currency basis.

And four times at the close of the transaction.

Our bank leverage ratio, which includes the benefit of certain run rate synergy savings was two eight times as of June 30.

Jbt segment, adjusted, Evita of 82 million increased 28% and the adjusted debit on margin improved, 220 basis points.

For the prior year period, the 18%.

This provides us significant liquidity of approximately $1 3 billion.

This is primarily due to the benefits of favorable, recurring Revenue, mix and flow through on the higher volume.

Yes.

As Brian mentioned, we have reestablished full year 2025 guidance.

Morale. Segment Revenue in the second quarter was 480 million.

Matthew J. Meister: As Brian mentioned, we have reestablished full-year 2025 guidance, given greater clarity around the tariff environment, including a 15% rate on Europe, coupled with the strength of our backlog. For full-year 2025, we expect revenue to be $3.7 billion at the midpoint of our guidance. This includes approximately $70 to $85 million in favorable foreign exchange translation benefit on a year-over-year basis. We are forecasting full-year Adjusted EBITDA margin to be 15.25% to 16% and Adjusted EPS of $5.45 to $6.15. Adjusted EPS excludes certain one-time items and acquisition-related costs, which were outlined in yesterday's press release and investor presentation. In terms of Q3, we expect revenue to be flat sequentially, which includes a slightly favorable FX translation impact. We expect sequential margins to decline by approximately 100 basis points as a result of increased net tariff costs and less favorable mix, partially offset by synergy savings.

Given greater clarity around the tariff environment, including a 15% rate on Europe, coupled with the strength of our backlog.

Morale segment adjusted Evita was 75 million. Representing a margin of 15.5%

For full year 2025, we expect revenue to be $3 $7 billion at the midpoint of our guidance.

Morale. Strong profitability. In the quarter was a result of savings from integration synergies and restructuring actions.

This includes approximately $70 million to $85 million and favorable foreign exchange translation benefit.

Favorable Revenue mix and better margins, and then fee, and the Meat and Fish businesses.

On a year over year basis.

Through the first half of 2025, we generated a free cash flow of 106 million.

We are forecasting full year adjusted EBITDA margin to be 15 in the quarter to 16%.

Including 88 million in the second quarter.

Which was supported by good working Capital Management and customer deposits.

Adjusted EPS of $5 45 to $6 15.

Adjusted EPS excludes certain onetime items and acquisition related costs, which were outlined in yesterday's press release and investor presentation.

The quarterly improvement in free cash flow affirms our view of the solid cash flow model of the combined businesses.

Arni Sigurdsson: This is the unique value proposition that JBT Marel Corp Tinna will continue to refine as we integrate our core technology, software and digital solutions, and service network. For example, in poultry, the primary process is designed to run at extremely high volume, up to 250 birds per minute, and it can include more than 20 critical process steps, making it tremendously valuable for our customers that each individual piece of equipment works seamlessly with the next. The optimal way to achieve this outcome is with a fully integrated line, which limits product losses and ensures seamless flow with fewer people, allowing the customer to improve yield, throughput, and quality. And as our customers' products move from primary processing to secondary and further down the line, they can capture the benefits of our software and digital solutions' full traceability and functionality to optimize production and uptime.

As a result of our strong cash flow generation, we were able to make significant progress, delivering our balance sheet.

In terms of the third quarter, we expect revenue to be flat sequentially, which includes a slightly favorable FX translation impact.

At the end of the second quarter, leverage decreased to below 3.4 times.

Compared to our leverage ratio of 3.8 times and the first quarter.

We would expect sequential margins to decline by approximately 100 basis points as a result of increased net tariff costs and less favorable mix.

And 4 times at the close of the transaction.

Partially offset by synergy savings.

Our bank leverage ratio, which includes the benefit of certain run rate. Synergy savings with 2.8 times as of June 30th.

With that let me turn the call over to <unk>, who will discuss the progress and specific benefits. We are realizing as a result of the business combination and integration.

This provides us significant liquidity of approximately 1.3 billion.

Matthew J. Meister: With that, let me turn the call over to Arni, who will discuss the progress and specific benefits we are realizing as a result of the business combination and integration.

Thanks, Matt.

As Brian mentioned, we have reestablished full year 2025 guidance.

Since our call three months ago, there has been significant activity and progress on the integration front.

Arni Sigurdsson: Thanks, Matt. Since our call 3 months ago, there has been significant activity and progress on the integration front, and I'm really proud of what our JBT Marel team has accomplished for our customers and broader stakeholders. One of the greatest benefits of the combination of JBT and Marel lies in integrating our complementary portfolios to provide more holistic solutions, making us an even more valuable partner to our customers. Our customers are seeking a preferred partner who has the process know-how and product offering across the value chain. It simplifies installation, commissioning, and service as our customers have one accountable counterpart. It also allows them to optimize product flow and increase efficiency as modules are designed as a part of a full-line system with software to control the process and provide access to real-time data and actionable insights.

Given greater clarity around the tariff environment, including a 15% rate on Europe, coupled with the backlog.

And I'm really proud of what our JBT model team has accomplished for our customers and broader stakeholders.

For full year 2025, we expect Revenue to be 3.7 billion dollars at the midpoint of our guidance.

One of the greatest benefits of the combination of JBT and modest lies and integrating our complementary portfolios to provide more holistic solutions, making us an even more valuable partner to our customers.

This includes approximately 70 to 85 million in favorable foreign exchange translation, benefit.

On a year-over-year basis.

Our customers are seeking a preferred partner, who has the process knowhow and product offering across the value chain.

We are forecasting full year, adjusted IBA margin to be 15 and a quarter to 16% and adjusted EPS of 5 dollars.

45 cents to 6.15 cents.

Arni Sigurdsson: For example, at one customer, our integrated line and software reduced trim weight by two-thirds while increasing throughput 20%. At JBT Marel Corp Tinna, we will continue on this journey and build systems that combine our key technologies and advanced process know-how. As an example, we are combining JBT's DSI water depth portioner with Marel Corp Tinna sensor X inspection, grading, and material handling technologies to create a high-value modular system within secondary poultry processing. This can automate what is traditionally a highly labor-intensive process. It also removes the burden on the customer's engineering and project management teams related to the design, installation, commissioning, and optimization of the system. And it allows JBT Marel Corp Tinna to transition further from unit sales to system sales, creating a deeper partnership and an opportunity to provide more consistent, robust, and effective service and parts delivery.

Adjusted EPS excludes certain, 1-time items and acquisition related costs.

It simplifies installation commissioning and service as our customers have one accountable counterpart.

Which are outlined in yesterday's, press release and investor presentation.

It also allows them to optimize product flow and increase efficiency as modules are designed as a part of our full line system.

Terms of the third quarter, we expect Revenue to be flat sequentially which includes a slightly favorable FX translation impact.

We expect sequential margins to decline by approximately 100 basis points.

The software to control the process and provide access to real time data and actionable insights.

As a result of increased net, tariff costs and less favorable mix.

Partially offset by Synergy savings.

This is the unique value proposition that TVT model, we will continue to refine as we integrate our core technology software and digital solutions and service network.

Arni Sigurdsson: This is the unique value proposition that JBT Marel will continue to refine as we integrate our core technology, software and digital solutions, and service network. For example, in poultry, the primary process is designed to run at extremely high volume, up to 250 birds per minute, and it can include more than 20 critical process steps, making it tremendously valuable for our customers that each individual piece of equipment works seamlessly with the next. The optimal way to achieve this outcome is with a fully integrated line which limits product losses and ensures seamless flow with fewer people, allowing the customer to improve yield, throughput, and quality. As our customers' products move from primary processing to secondary and further down the line, they can capture the benefits of our software and digital solutions, full traceability, and functionality to optimize production and uptime.

With that, let me turn the call over to Arie. Who will discuss the progress and specific benefits. We are realizing as a result of the business combination integration.

Thanks Matt.

Okay.

Yes.

For example in poultry. The primary process is designed to run at extremely high volume up to 250 birds per minute.

Since our call three months ago, there has been significant activity and progress on the integration front.

And I'm really proud of what our jbt model team has accomplished for our customers and broader stakeholders.

And it can include more than 20 critical process steps, making a tremendously valuable for our customers that each individual piece of equipment works seamlessly with the next.

1 of the greatest benefits of the combination of jbt and models lies in integrating. Our complimentary portfolios to provide more Holistic Solutions. Making us an even more valuable partner to our customers.

The optimal way to achieve this outcome is with a fully integrated line, which limits product losses, and ensures seamless flow with fewer people, allowing the customer to improve yield throughput and quality.

Arni Sigurdsson: While we are in the early stages of integrating the portfolio from a technology and software standpoint, we are already capturing benefits from cross-selling our respective product lines. This is the result of our broader portfolio and transition to an end-market-focused go-to-market strategy. We have an account manager for each customer who represents the entire JBT Marel Corp Tinna portfolio relevant to that customer. In poultry, where we are the furthest along, our combined pipeline of opportunities in North America has grown by approximately 15% in the last six months as we layer in our synergistic commercial opportunities. Overall, the depth of Marel Corp Tinna customer relationships in poultry, meat, and seafood has created opportunities to sell legacy JBT downstream equipment, such as freezers and DSI portioners. And JBT's diversified end markets allow for selling some of Marel Corp Tinna's more end-market-agnostic products.

Our customers are seeking a preferred partner, who has the process know-how and product offering across the value chain.

And as our customers products moved from primary processing to secondary and further down the line. They can capture the benefits of our software and digital solutions full traceability and functionality to optimize production and uptime.

It simplifies installation, commissioning, and service. As our customers have one account.

It also allows them to optimize product flow and increase efficiency as modules are designed as a part of a full-line system.

For example, at one customer our integrated line and softer reduce trim waste by two thirds, while increasing throughput of 20%.

With software to control the process and provide access to real-time data and actionable insights.

Arni Sigurdsson: For example, at one customer, our integrated line and software reduced trim waste by two-thirds while increasing throughput 20%. As JBT Marel, we will continue on this journey and build systems that combine our key technologies and advanced process know-how. As an example, we are combining JBT's DSI waterjet portioner with Marel's SensorX inspection, grading, and material handling technologies to create a high-value modular system within secondary poultry processing. This can automate what is traditionally a highly labor-intensive process. It also removes the burden on the customer's engineering and project management teams related to the design, installation, commissioning, and optimization of the system. It allows JBT Marel to transition further from unit sales to system sales, creating a deeper partnership and an opportunity to provide more consistent, robust, and effective service and parts delivery.

As JBT moderate we will continue on this journey and build systems that combine our key technologies and advanced process Knowhow.

this is the unique value proposition that jbt model will continue to to refine

As we integrate our core technology software, and digital Solutions and service network.

As an example, we are combining jbt's DSI waterjet portioner with modest sensor X inspection grading and material handling technologies to create a high value modular system within secondary poultry processing.

Designed to run at extremely high volume.

Up to 250 Birds per minute.

This can automate what is traditionally a high labor intensive process.

Arni Sigurdsson: Another key benefit of the combination is our expanded global service network. Given our combined scale, we have realigned our service organization from a centralized model to one connected to each business. We believe this will allow us to be more responsive to customer needs, improve customer satisfaction, and increase our wallet share. Beyond delivering value for customers, our global operating footprint and capacity provide advantages to our internal operating efficiency in the medium to long term. We have the flexibility to produce our products in the region where our customers are located, providing us with optionality as tariffs continue to evolve. Additionally, we are evaluating opportunities to optimize existing capacity utilization across our manufacturing facilities. We are also advancing our continuous improvement initiatives to elevate the performance of our meat and fish businesses.

and it can include more than 20 critical process steps, making it tremendously valuable for our customers that each individual piece of equipment works seamlessly with the next.

It also removes the burden on the customers' engineering and project management teams related to the design installation commissioning and optimization of the system.

And then allows JBT model to transition further from unit sales to system sales, creating a deeper partnership and an opportunity to provide more consistent robust and effective service and parts delivery.

The optimum way to achieve this outcome is with a fully integrated line with limits product losses, and ensures seamless flow with fewer. People allowing the customer to improve yield throughput and quality.

While we are in the early stages of integrating the portfolio from a technology and software standpoint, we are already capturing benefits from cross selling our respective product lines.

And as our customers products move from primary processing to secondary and further down the line, they can capture the benefits of our software and digital Solutions full traceability and functionality to optimize production and uptime.

Arni Sigurdsson: While we are in the early stages of integrating the portfolio from a technology and software standpoint, we are already capturing benefits from cross-selling our respective product lines. This is the result of our broader portfolio and transition to an end-market focus go-to-market strategy. We have an account manager for each customer who represents the entire JBT Marel portfolio relevant to that customer. In poultry, where we are the furthest along, our combined pipeline of opportunities in North America has grown by approximately 15% in the last 6 months as we layer in our synergistic commercial opportunities. Overall, the depth of Marel's customer relationships in poultry, meat, and seafood has created opportunities to sell legacy JBT downstream equipment, such as freezers and DSI portioners. JBT's diversified end markets allow for selling some of Marel's more end-market-agnostic products. Another key benefit of the combination is our expanded global service network.

This is the result of our broader portfolio and transition to an end market focus go to market strategy.

For example, at 1, customer our integrated line and software reduced trim waist by 2/3 while increasing throughput 20%.

We have an account manager for each customer who represents the entire JBT motto portfolio relevant to that customer.

As jbt models, we will continue on this journey and build systems that combine our key Technologies and advanced process know-how.

In poultry, where we are furthest along our combined pipeline of opportunities in North America has grown by approximately 15% in the last six months as we layer in our synergistic commercial opportunities.

Arni Sigurdsson: As an example, our 80/20 analysis of the fish business shows a high concentration of top customers and regions, which gives us the opportunity to focus our go-to-market strategy. Moreover, we have better insights into the performance of individual product lines, which is creating a clearer path for project selection, pricing decisions, and resource allocation. We are taking similar actions in our meat business as we focus on project selectivity, reduce engineering complexity through greater standardization, and improve service quality, which should improve our wallet share of recurring revenue. Taken together, these actions give us confidence as we progress toward our goal of mid-team margins in both the fish and meat business in 2027. With that, let me turn the call back to Brian.

As an example, we are combining jbts. DSi, water jet portioner with models sensor X inspection grading and material handling Technologies to create a high value modular system within secondary poultry processing.

Overall, the depth of modest customer relationships and poultry meat and seafood has created opportunities to sell legacy JBT downstream equipment, such as freezers and DSI portion of <unk>.

This can automate, what is traditionally? A highly labor intensive process.

It also removes the burden on the customer's engineering and project management. Teams related to the design installation commissioning and optimization of the system.

And Jbt's diversified end markets allow for selling some of modest more end market agnostic products.

Another key benefit of the combination is our expanded global service network.

And it allows jbt model to transition further from unit sales to system sales creating a deeper partnership and an opportunity to provide more consistent robust and effective service and parts delivery.

Given our combined scale, we have realigned our service organization from a centralized model to one connected to each business.

Arni Sigurdsson: Given our combined scale, we have realigned our service organization from a centralized model to one connected to each business. We believe this will allow us to be more responsive to customer needs, improve customer satisfaction, and increase our wallet share. Beyond delivering value for customers, our global operating footprint and capacity provide advantages to our internal operating efficiency in the medium to long term. We have the flexibility to produce our products in the region where our customers are located, providing us with optionality as tariffs continue to evolve. Additionally, we are evaluating opportunities to optimize existing capacity utilization across our manufacturing facilities. We are also advancing our continuous improvement initiatives to elevate the performance of our meat and fish businesses.

We believe this will allow us to be more responsive to customer needs improve customer satisfaction and increase our wallet share.

While we are in the early stages of integrating, the portfolio from a technology and software standpoint. We are already capturing benefits from crossing a respective product lines.

Brian Deck: Thanks, Arni. As I step back and look at the value created by the JBT Marel Corp Tinna combination, a few themes come to mind. We are already demonstrating that we are better together in terms of what we can deliver for customers and other stakeholders. As Arni addressed, the combination of our complementary portfolios makes us an even more important partner to customers with full-line solutions that enhance automation, yield, safety, and efficiency. Internally, our continuous improvement work is enabling us to optimize our operating efficiency. And as Matt detailed, our business model provides strong cash generation, which has enabled us to quickly deleverage our balance sheet and provide the liquidity to support our business strategy. I am proud of all the hard work our team has done as we capture the benefits of the businesses coming together.

This is the result of our broader portfolio and precision to an end Market, Focus, go to market strategy.

Beyond delivering value for customers, our global operating footprint and capacity provide advantages to our internal operating efficiency in the medium to long term.

we have an account manager, for each customer who represents the entire jbt model portfolio, relevant to that customer

We have the flexibility to produce our products in the region, where our customers are located providing us with optionality as tariffs continue to evolve.

Additionally.

In poultry where we are the furthest along our combined pipeline of opportunities in North America has grown by approximately 15% in the last 6 months, as we layer in our synergistic commercial opportunities.

Ali we are evaluating opportunities to optimize existing capacity utilization across our manufacturing facilities.

We are also advancing our continuous improvement initiatives to elevate the performance of our meat and fish businesses.

Overall the depth of models customer relationships and poultry Meats, and Seafood, has created opportunities to sell Legacy, jbt Downstream equipment, such as freezers, and DSi portion.

As an example, our 80 20 analysis of the <unk> business shows a high concentration of top customers and regions, which gives us the opportunity to focus our go to market strategy.

Arni Sigurdsson: As an example, our 80/20 analysis of the fish business shows a high concentration of top customers and regions, which gives us the opportunity to focus our go-to-market strategy. Moreover, we have better insights into the performance of individual product lines, which is creating a clearer path for project selection, pricing decisions, and resource allocation. We are taking similar actions in our meat business as we focus on project selectivity, reduce engineering complexity through greater standardization, and improve service quality, which should improve our wallet share of recurring revenue. Taken together, these actions give us confidence as we progress toward our goal of mid-teen margins in both the fish and meat business in 2027. With that, let me turn the call back to Brian.

And jbts diversified and markets allow for selling some of models more and Market agnostic products.

Another key benefit of the combination is our expanded global Service Network.

Moreover, we have better insights into the performance of individual product lines, which is creating a clear path for our project selection pricing decisions and resource allocation.

Brian Deck: Looking forward, we plan to build off the momentum for our integration initiatives, capturing cost and revenue synergies, and bringing even greater value as we transform the future of food. With that, let's open the call to questions. Operator?

Given our combined scale. We have realigned our service organization from a centralized model to 1 connected to each business.

We are taking similar actions in our meat business as we focus on project selectivity reduced engineering complexity through greater standardization and improved service quality, which should improve our wallet share of recurring revenue.

We believe this will allow us to be more responsive to customer needs, improve customer satisfaction, and increase our wallet share.

Tiffany: At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from Ross Ehrenblech with William Blair. Please go ahead.

Taken together these actions give us confidence as we progressed towards our goal of mid teen margins in both sufficient meat business in 2027.

Beyond delivering value for customers. Our Global operating footprint and capacity, provide advantages to our internal operating efficiency in the medium to long term.

With that let me turn the call back to Brian.

We have the flexibility to produce our products in the region, where our customers are located. Providing us with optionality as terrorists. Continue to evolve.

Thanks Ernie.

As I step back and look at the value created by the GBT Moreau combination.

Ross Ehrenblech: Hey, good morning, guys.

Brian Deck: Thanks, Arni. As I step back and look at the value created by the JBT Marel combination, a few themes come to mind. We are already demonstrating that we are better together in terms of what we can deliver for customers and other stakeholders. As Arni addressed, the combination of our complementary portfolios makes us an even more important partner to customers with full-line solutions that enhance automation, yield, safety, and efficiency. Internally, our continuous improvement work is enabling us to optimize our operating efficiency. As Matt Meister detailed, our business model provides strong cash generation, which has enabled us to quickly deleverage our balance sheet and provide the liquidity to support our business strategy. I am proud of all the hard work our team has done as we capture the benefits of the businesses coming together.

Brian Deck: Morning.

Ross Ehrenblech: Hey, it was nice to see the 2025 guidance come back. So yeah, definitely in the right of some confidence. Thinking through your comments on poultry, you guys have about a year of visibility left there, but it, you know, kind of read-throughs with customers seems pretty optimistic. So just anything you can provide me on customer conversations and just kind of give them where we are in the cycle, I mean, this should probably go on beyond 2026, I have to imagine, on reinvestment in poultry.

Few things a few themes come to mind.

Additionally, we are evaluating opportunities to optimize existing capacity utilization of our manufacturing facilities.

We are already demonstrating that we are better together in terms of what we can deliver for customers and other stakeholders.

We are also advancing our continuous improvement initiatives to elevate the performance of our Meat and Fish businesses.

As Ernie addressed the combination of our complementary portfolios makes us an even more important partner to customers with full line solutions that enhance automation yield.

Yield safety and efficiency.

As an example, our 8020 analysis of the fish. Business shows, a high concentration of top customers and regions which gives us the opportunity to focus, our go to market strategy.

Yes.

Brian Deck: Sure. It's a little too early to talk beyond the front half of 2026, and I would say we have good visibility into the front half of 2026. But what you've seen from some of the more recent earnings announcements, the poultry companies are making good money right now, and we're seeing a combination of investments in some greenfield facilities in areas where they think they can make more money, some on the value-added side as it relates to some of the downstream products. But we're also seeing a lot of investments that support automation and efficiency of operations, including yield enhancements. You know, a lot of these facilities over the years were built kind of added upon each other and not as completely as efficient as they should be.

Internally, our continuous improvement work is enabling us to optimize our operating efficiency.

And as Matt detailed our business model provides strong cash generation, which has enabled us to quickly deleverage our balance sheet and provide the liquidity to support our business strategy.

And resource, allocation.

Yes.

I am proud of all the hard work. Our team has done is we capture the benefits of the businesses coming together.

We are taking similar actions in our meat business. As we focus on product, selectivity reduce engineering complexity through greater standardization and improved service quality which should improve our wallet share of recurring Revenue.

Looking forward, we plan to build off the momentum for our integration initiatives of our integration initiatives, capturing cost and revenue synergies and bringing even greater value as we transform the future of food.

Brian Deck: Looking forward, we plan to build off the momentum of our integration initiatives, capturing cost and revenue synergies, and bringing even greater value as we transform the future of food. With that, let's open the call to questions. Operator?

Taken together these actions. Give us confidence as we progress toward our goal of mid-teen margins, in both deficits and meet business in 2027.

With that, let me turn the call back to Brian.

With that let's open the call for questions operator.

Thanks Arie.

At this time, if you would like to ask a question Press Star then the number one on your telephone keypad.

As I step back and look at the value created by the jbt Morrell combination.

Operator: At this time, if you would like to ask a question, press star, then the 1 on your telephone keypad. To withdraw your question, simply press star 1 again. We will pause for just a moment to compile the Q&A roster. Your first question comes from Ross Sparenblek with William Blair. Please go ahead.

A few things, a few themes come to mind.

Brian Deck: So now that they've got capital available, it does allow them to take a step back, look at their footprint, where they should do some brownfields or realignment of their lines, and get that efficiency and automation out of it. And then, but in other places, we are seeing greenfield investments, frankly, on both some of the primary and secondary side, as well as on the downstream side.

Withdraw your question simply press Star one again.

We will pause for just a moment to compile the Q&A roster.

We are already demonstrating that we are better together in terms of what we can deliver for customers and other stakeholders.

Your first question comes from Ross, Erin Black with William Blair. Please go ahead.

Hey, good morning, guys.

Good morning.

As Arie addressed, the combination of our complimentary portfolios makes us an even more important partner to customers with full-line solutions that enhance automation.

Yeah.

Ross Sparenblek: Hey, good morning, guys.

Hey.

Yield safety and efficiency.

Nice to see the 25 guidance come back so, yes definitely underwriting some confidence.

Brian Deck: Morning.

Arni Sigurdsson: Morning.

Ross Sparenblek: Hey, it was nice to see the 2025 guidance come back. Definitely underwriting some confidence. Taking through your comments on poultry, you guys have about a year of visibility left there, but kind of read through with customers seems pretty optimistic. Just anything you can provide on customer conversations and just kind of giving where we are in the cycle. I mean, this should probably go on beyond 2026, I have to imagine, on reinvestment in poultry.

Ross Ehrenblech: I think just to add, I think we're also excited about the opportunity kind of as kind of now there's ability to increase line speeds in the US. And we have developed a very good solution, which kind of helps our customers with that, where we have protection. So kind of a lot of encouraging conversation that should help us kind of over the next quarters and into 2026. No, that's great. On the line speeds, Arni, was there anything that passed on the regulations from the Biden administration that was previously holding that back? Have you guys found a workaround, or has that since changed? I know you missed it.

Thank you for your comments on poultry you guys know about a year of visibility a lot there but.

Internally our continuous improvement work is, enabling us to optimize our operating efficiency.

Kind of read throughs in customers is pretty optimistic.

So just anything you can provide me on that.

The conversations and just kind of given where we are in the cycle. I mean, this should probably go on beyond 2026, I can imagine.

And as Matt detailed, our business model provides strong cash generation, which is enabled us to quickly de-lever, our balance sheet and provide the liquidity to support our business strategy.

On reinvestment in poultry.

I am proud of all the hard work, our team has done as we capture the benefits of the businesses coming together.

Sure. It's a little too early to talk beyond the front half of 2026, and I would say we have good visibility into the front half of 2026, but what <unk> seen from some of the more recent earnings announcements.

Brian Deck: Sure. It's a little too early to talk beyond H1 2026, and I would say we have good visibility into H1 2026. What you've seen from some of the more recent earnings announcements, the poultry companies are making good money right now. We're seeing a combination of investments in some greenfield facilities in areas where they think they can make more money, some on the value-added side, as it relates to some of the downstream products. We're also seeing a lot of investments that support automation and efficiency of operations, including yield enhancements. A lot of these facilities over the years were built, kind of added upon each other and not as completely as efficient as they should be.

Looking forward. We plan to build off the momentum for our integration initiatives of our integration initiatives capturing cost and revenue synergies and bringing even greater value as we transform the future of food.

The poultry companies are making good money right now and we're seeing a combination of investments in some greenfield facilities in areas, where they think they can make more money.

Brian Deck: Yeah, so they're used to kind of the limit was 140 birds per minute with some vapors up to 175. But now we kind of the USDA has approved factories going up to 250 birds per minute. But you need a certain workaround for the inspection. So you basically have, you're able to kind of split the line to slow it down in certain areas where the inspector is. So now there's more flexibility for our customers in North America to implement that.

With that. Let's open and call the questions operator.

Time. If you would like to ask a question press star, then the number 1 on your telephone keypad,

On the value added side.

As it relates to some of the downstream products, but we're also seeing a lot of investments that support automation and efficiency of operations, including yield enhancements.

To withdraw your question, simply press star 1 again.

We will pause for just a moment to compile the Q&A roster.

A lot of these facilities over the over the years.

Your first question comes from Ross, sparin black with William Blair. Please go ahead.

Hey, good morning, guys.

Were built kind of added upon each other and as completely as efficient as they should be.

Morning.

Ross Ehrenblech: Okay. And then can you give us a sense on the orders what the benefit was from cross-selling, realizing that you guys had a pretty strong first quarter there as well?

Now that <unk> got capital available.

Hey, it was uh nice to see the uh, 2025 guidance. Come back. Uh so you know, definitely under writing some confidence. Uh,

Does allow them to take a step back look at their footprint, where they should do some.

Brian Deck: Now that they've got capital available, it does allow them to take a step back, look at their footprint, where they should do some brownfields or realignment of their lines, and get that efficiency and automation out of it. In other places, we are seeing greenfield investments, frankly, on both some of the primary and secondary side as well as on the downstream side.

Brian Deck: Yeah, I mean, we're very pleased with the progress, and we are already seeing some wins. And kind of in the second quarter, kind of just to give you a sense, it was going to be order of magnitude of 5 to 10 million. And the pipeline is very promising. And I think what we're really kind of pleased with is like this is one of the reasons for the deal. Kind of it is that improved value proposition of the broader portfolio and our ability to create integrated lines. So, and this is kind of just evidence that the customers are seeing the logic of the combination of the two businesses.

Brian Brownfields or realignment of their of their lines and get that efficiency and automation out of it and then but in other places we are seeing a greenfield investments.

Frankly on both some of the primary and secondary side as well as on the downstream side.

Thank you for your comments on poultry. You guys have got a year of visibility left there, but it, you know, kind of read through your customers. It was pretty optimistic. Uh, so just anything, you can provide me on customer conversations and just kind of give them where we are in the cycle. I mean, this should probably go on Beyond 2026. I have to imagine

on reinvestment poultry.

I think just to add I think we're also excited about the opportunity kind of as it kind of it now there's ability to increase its line speeds in the U S and we have developed a very.

Arni Sigurdsson: I think just to add, I think we're also excited about the opportunity as now there's ability to increase line speeds in the US, and we have developed a very good solution, which helps our customers with that, where we have protection. A lot of encouraging conversation that should help us over the next quarters and into 2026.

Sure. It's, it's a little too early to talk Beyond uh, the front half of 2026 and I would say, we have a good visibility in into the front, half of 2026. But what you've seen

Good solution.

We just kind of helps our customers with that with where we have protection. So can I have a lot of encouraging conversation that should help us kind of all.

Brian Deck: And like I kind of referred to in the prepared marks, I mean, kind of already kind of having a simpler, kind of easier buying process with one counterpart and just knowing also that we will take care and partner with our customers in the installation, commissioning, and service after we've kind of brought the line up to speed. I think that is something that our customers are valuing. And then further down, we'll integrate the equipment kind of more from a technology standpoint. But this is already very encouraging, I would say.

Over the next quarters.

Into 2026.

No that's great.

On the line, Steve <unk> was there anything that passed on the regulations from the bite administration that was previously holding that back under work around or is that guidance change I may have missed it.

Ross Sparenblek: No, that's great. On the line speeds, Arnie, was there anything that passed on the regulations from the Biden administration that was previously holding that back? Have you guys found a workaround, or has that since changed and I may have missed it?

So they're used to kind of the limit was 140 birds per minute with somebody where it's up to 175, but now we can have the USDA approved factories going up too.

Arni Sigurdsson: Yeah. The limit was 140 birds per minute, with some waivers up to 175. Now the USDA has approved factories going up to 250 birds per minute. You need a certain workaround for the inspection. You basically You're able to split the line to slow it down in certain areas where the inspector is. Now there's more flexibility for our customers in North America to implement that.

Ross Ehrenblech: That's great. All right, I'll hop back in queue. Thanks, guys.

Brian Deck: Thank you.

Going up to 250 <unk> per minute, but you need a certain work around for the inspection. So you basically have youre able to going to split the line too slowly down in certain areas, where the inspector is so now there is more flexibility for our customers in North America to implement that.

Tiffany: Your next question comes from the line of Meg Dobre with RW Baird. Please go ahead.

Mirc Dobre: Yeah, good morning. Thank you for the time. Arni, maybe we can talk a little bit about the margin performance at Marel. I mean, my records are not perfect here, but I was looking through going back a little bit, and this might be the strongest margin quarter we've seen there since maybe the second half of 2022. And I know that this is not just synergy. It can't be just numerically. So there's got to be something different going on versus say six months ago. Can you outline what's been going on with the fish business, the meat business? Basically, where is this margin improvement coming from?

From some of the more recent earnings announcements, uh, the the poultry companies are making good money right now. And we're seeing a combination of investments in some green fields facilities in, in, in areas where they think they can make more money, uh, some on on the value added side, uh, as it relates to, some of the downstream products. But we're also seeing a lot of Investments that support, uh, Automation and efficiency of operations, including yield enhancements. You know, a lot of these, uh, facilities over the over the years, uh, were built kind of, uh, added upon each other and, and not as completely as efficient as it they should be. So now that they've got Capital available, uh, it does allow them to take a step back, look at their footprint where they should do some, uh, brown brown fields or realignment of their of their lines, uh, and get that efficiency, uh, and automated

Okay, and then can you give us a sense on the orders what the.

Out of it. And then but in other places, we are seeing, uh, Greenfield Investments, uh, frankly on both, some of the primary and secondary side as well as on the downstream side.

Ross Sparenblek: Okay. Can you give us a sense on the orders, what the benefit was from cross-selling? Realizing that you guys had a pretty strong Q1 there as well.

And if it was from cross selling.

Realizing that you guys had a pretty strong first quarter there as well.

Yes, I mean, we're very pleased with the progress.

And we are already seeing some wins and kind of in in the second quarter kind of just to give you a sense. It was going to the order of magnitude of $5 million to $10 million.

Arni Sigurdsson: Yeah. We're very pleased with the progress. We are already seeing some wins and in the Q2, just to give you a sense, it was the order of magnitude of $5 to 10 million. The pipeline is very promising. What we're really pleased with is this is one of the reasons for the deal. It is that improved value proposition of the broader portfolio and our ability to create integrated lines. This is just evidence that the customers are seeing the logic of the combination of the two businesses. Like I referred to in the prepared remarks, already having a simpler, easier buying process with one counterpart and just knowing also that we will take care and partner with our customers in the installation, commissioning, and service, after we've brought the line up to speed.

Atlanta is very promising and I think well, but what we're really.

I think just to I think we're all so excited about the opportunity kind of as kind of that. Now, there's ability to increase line speeds in the US and we have developed a very uh, a good solution uh, which kind of helps our customers with that, with where we have protection. So going to have a lot of encouraging conversation that should help us kind of, uh, over the next quarters and and into 2026.

Pleased with is like this is one of the reasons for the deal kind of it is that improved volume proposition of the product portfolio and our ability to create integrated line. So and this is kind of just evidenced that the customers are seeing the logic of the combination of the two businesses and like I kind of referred to in the <unk>.

Matt Meister: Yeah, Meg, I'll start with Matt, and then I'll hand it over to Arni to provide a little more details around some of the improvements, especially in meat and fish. But you know, initially, I'd say the benefits, and it's closer to about 400 basis points improvement over what we estimate as the US GAAP adjusted EBITDA last year. So it's really good improvement, and we're really excited about the progress that we're seeing on the Marel Corp Tinna performance. That's primarily driven by some of the integration synergies savings as well as some of the restructuring efforts that the Marel Corp Tinna business initiated last year before the transaction closed. Additionally, we did see in the Marel Corp Tinna business a high mix of recurring revenue and aftermarket, which tends to have a more favorable margin profile.

Is that things change? And I may have missed it.

Fair remarks, I mean kind of already kind of having a simpler easier buying process with one counterpart and just knowing also that we will take care of and partner with our customers in the installation commissioning and service after we've kind of.

Brought the lineup to speed I think that is something that our customers are volume and then further down we'll integrate the equipment kind of more from a technology standpoint, but this is already very encouraging I would say.

Arni Sigurdsson: I think that is something that our customers are valuing. Further down, we'll integrate the equipment more from a technology standpoint. This is already very encouraging, I would say.

Yeah. So they're they're used to kind of the the limit was 140 Birds per minute with some way where it's up to 175. But now we can have the USD as approved factories going up to uh uh going up to 250 Birds per minute but you need a certain workaround for the uh, inspection. So you basically have uh you're able to kind of split the line to slow it down in certain areas where the inspector is. So now now there's uh, more flexibility for our customers in North America to to implement that.

That's great.

I'll hop back in queue. Thanks, guys.

Thank you.

Ross Sparenblek: That's great. All right. I'll hop back in queue. Thanks, guys.

Your next question comes from the line of Mig <unk> with R. W. Baird. Please go ahead.

Okay. And then can you give us a sense on the orders? What the uh benefit was from cross-selling realizing that you guys had a, you know, pretty strong first quarter there as well.

Brian Deck: Thank you.

Matt Meister: And then finally, you know, I think we just saw the benefits of the higher volume. And so that 400 basis point improvement is what we're seeing this year. And we're excited again about the improvement that we're seeing in meat and fish from the 80/20 work that the two businesses have put in place.

Operator: Your next question comes from the line of Mircea Dobre with R.W. Baird. Please go ahead.

Yes. Good morning, Thank you for the time.

Good morning.

Mircea Dobre: Yeah, good morning. Thank you for the time.

Sure.

Maybe we can talk a little bit about the margin performance.

Brian Deck: Morning.

Mircea Dobre: Arni, maybe we can talk a little bit about the margin performance at Marel. My records are not perfect here, but I was looking through, going back a little bit, and this might be the strongest margin quarter we've seen there since maybe H2 2022. I know that this is not just synergies. It can't be just numerically. There's got to be something different going on versus, say, six months ago. Can you outline what's been going on with the fish business, the meat business? Basically, where is this margin improvement coming from?

Morale.

I mean, my records are not perfect here, but I was looking through going back a little bit and this.

This might be the strongest margin quarter, we see there.

Brian Deck: Yeah, I mean, I think it's kind of sometimes it kind of all comes together, and there are a lot of things that kind of fall in place. And I think this is kind of one of those situations because, I mean, we've also kind of just kind of Matt covered this well, but I think it's also worth to mention that kind of orders have been kind of picking up over the last few quarters that can also help with planning on the manufacturing side, which helps kind of to increase the efficiency. And then on the pork side, kind of we are seeing gradual improvement, and we're past the bottom with healthy or kind of better orders in few quarters now.

Maybe the second half of 2022.

I know that this is not just synergies.

And B just numerically so theres got to be something different going on versus say six months ago and you can you outline.

Yeah, I mean we're we're very pleased with the progress. Uh uh and and and we are already seeing uh some wins and kind of in in the second quarter kind of just to give you a sense, it was going to be the order of magnitude of 5 to 10 million. Uh and the pipeline is very promising and I I think what but what we're really kind of pleased with is like this is 1 of the reasons uh for the deal kind of it is that improved value proposition of the broader portfolio and our ability to create uh integrated lines. So and this is kind of just evidence that the customers are seeing the logic of the combination of the 2 businesses and like I kind of prefer to and then prepare marks, I mean, kind of already kind of

What's been going on with.

The meat business, whereas with margin improvement.

And maybe I'll start, Matt and then I'll hand, it over to Arnie to provide a little more details around some of the improvements, especially in meat and fish, but.

Matthew J. Meister: Mig, I'll start with Matt, and then I'll hand it over to Arni to provide a little more details around some of the improvements, especially in meat and fish. Initially, I'd say the benefits, and it's closer to about 400 basis points improvement over what we estimate as the US GAAP Adjusted EBITDA last year. It's really good improvement, and we're really excited about the progress that we're seeing on the Marel performance. It's primarily driven by some of the integration synergies savings, as well as some of the restructuring efforts that the Marel business initiated last year before the transaction closed. Additionally, we did see, in the Marel business, a high mix of recurring revenue and aftermarket, which tend to have a more favorable margin profile.

Initially I would say the benefits and it's closer to about 400 basis points improvement over what we estimate as the U S. GAAP adjusted EBITDA last year.

Brian Deck: So I would just say that it's kind of kind of a few different things coming together, but it's very, I'm very glad and kind of to see just how kind of the progress, and we're seeing the results of the hard work that people have been putting in and the actions that have been taken. Yeah.

Having a a simpler kind of easier buying process with 1 counterpart. And just knowing also that we will take care of and partner with our customers in the installation commissioning and Service. Uh, a after we've kind of, uh, uh, brought the line up to speed. I think that is something that our customers are valuing. And then further down, we'll, we'll integrate the equipment kind of more from a technology standpoint, but these are, this is already very encouraging. I would say,

That's great. All right. I'll hop back in queue. Thanks guys.

So really good improvement and we're really excited about the progress that we're seeing on the morale performance is primarily driven by some of the integration synergies savings as well as some of the restructuring efforts that the marvell business initiated last year before the transaction closed.

Thank you.

Matt Meister: And I would just one final comment that some of the discipline on certain businesses on project selectivity and resource allocation is really important. And as Arni mentioned, with some incremental support from the mix of aftermarket as well as some of the businesses coming back from a volume perspective helps as well. But overall, we saw similar, overall, as Matt mentioned, the Marel Corp Tinna margins are up somewhere in the range of 400 basis points year over year, and meat and fish had similar type improvements individually.

Your next question comes from the line of Mick. Dobre with RW beard. Please go ahead.

Yeah, good morning. Uh, thank you for the time. Um, our uh, I

<unk>, we did see in the morale business a high mix of recurring revenue and aftermarket which tends to have a more favorable margin profile.

Maybe we can talk a little bit about the margin performance at Marel.

And then finally.

I think we just saw the benefits of.

I mean, my records are not perfect here but I was looking through uh, going back a little bit and this this might be the strongest margin uh quarter. We've seen their uh since uh maybe the second half of 2022.

Matthew J. Meister: Finally, I think we just saw the benefits of higher volume, and so that 400 basis point improvement is what we're seeing this year. We're excited, again, about the improvement that we're seeing in meat and fish from the 80/20 work that the two businesses have put in place.

The higher volume.

Sure.

And so that 400 basis point improvement.

And what we're seeing this year and we're excited about getting the improvement that we're seeing in meat and fish from the 80 20 worked at that the two businesses are put in place.

And I know that this is not just Synergy, um, if you can't be just numerically so there there's got to be something different going on versus uh, say 6 months ago. Can you can you outline

Mirc Dobre: And to follow up on this, I think I heard you saying that by 2027, you expect to get to mid-team margins in fish and in meat. Again, we're talking about Marel Corp Tinna. If you get there, is there maybe a way you can help us quantify a little bit in terms of what the EBITDA list would be simply from getting there within this business?

What's been going on with? Uh, the fish business, the meat business. Basically, where is this margin Improvement coming from?

Yes, I mean I think it's.

Sometimes it all comes together and there are a lot of a lot of things that kind of fall in place and I think this is going to one of those situations because I mean, we've also kind of just Matt covered as well, but I think it is also worth to mention that kind of orders have been picking up over the last few quarters that can also help.

Arni Sigurdsson: Yeah, I think it's sometimes it kind of all comes together and there are a lot of things that fall in place, and I think this is one of those situations. We've also just Matt covered this as well, but I think it's also worth to mention that orders have been picking up over the last few quarters. That can also help with planning on the manufacturing side, which helps to increase the efficiency. On the pork side, we are seeing gradual improvement and we're past the bottom with healthy or better orders in few quarters now. I would just say that it's a few different things coming together, but I'm very glad to see just the progress. We're seeing the results of the hard work that people have been putting in and the actions that have been taken.

Matt Meister: Right. So if you think about those businesses collectively, they're somewhere in the range of $500 million to $600 million of revenue. So that'll be, you know, you could do the math. But you're talking, you know, anywhere from, you know, five, really close to 1,000 basis points improvement on those businesses. So you can kind of do a little bit of the math there. Anywhere between 500 and 700. Sorry. Meat has a higher starting point than fish. So it's probably more the closer to the bottom end of that 500 to 1,000 basis point range, and fish would be a higher point of that range.

The planning on the manufacturing side would helps to increase the efficiency and then on the pork side kind of we are seeing gradual improvement and we're past the bottom with healthy or kind of better orders in a few quarters now so.

Would you say that it's kind of kind of a few different things coming together, but it is very I'm very glad and kind of to see just how kind of the progress and we're seeing the results of the hard work that people have been putting in the actions that have been taken yet.

And we got, I'll start with Matt and then I'll, I'll hand it over to our need to provide a little more, uh, details around some of the improvements, especially in, in meet and fish. But, you know, initially I'd say, the, the benefits and it's closer to about, uh, 400 basis points Improvement, uh, over what we estimate as the US, gaap adjusted, uh, IBA last year. Um, so it's really good Improvement and we're really excited about the progress that we're seeing on the, uh, the morale performance. That's primarily driven by uh, some of the integration synergies savings as well as some of the restructuring efforts that the morale business uh initiated last year uh before the the transaction closed. Uh additionally we did see uh in the morale business High mix of recurring revenue and aftermarket which tend to have a more favorable uh margin profile.

And I would just one final comment that.

uh, and then finally, um,

Some of the discipline.

Brian Deck: Yeah. I would just, one final comment, that some of the discipline on certain businesses, on project selectivity, and resource allocation is really important. As Arni mentioned, with some incremental support from the mix of aftermarket, as well as some of the businesses coming back from a volume perspective helps as well. Overall, as Matt mentioned, the Marel margins are up somewhere in the range of 400 basis points year over year. Meat and fish had similar type improvements individually.

On certain businesses on project selectivity.

you know, I think we just saw the benefits of um, higher volume and um,

And our resource allocation is really important and as already mentioned with some incremental support from the mix of aftermarket as well as.

and so that that that 400 basis point Improvement, um,

Mirc Dobre: That's very helpful. Maybe the last question for me, and I apologize for the I still kind of based question here, but as I was looking at your full-year guidance, I was looking at your Q3, trying to do some math on what that implies for Q4. And if my math is right, it implies somewhere just north of 160 million EBITDA at the midpoint. And I'm sort of curious in terms of the moving pieces and as far as what gets us there. It looks a little bit unusual relative to seasonality. Usually, the fourth quarter is where it's strongest. That's where you see the highest margins. And at least optically, it wouldn't appear to be the case this time around. So talk a little bit maybe about tariffs. I'm sure that that's part of it, about 12 million bucks.

Some of the business is coming back from.

From a volume perspective helps as well, but overall we saw similar.

It is what we're seeing this year. We're excited again about the improvement that we're observing in Meat and Fish from the 80/20 work that the two businesses have put in place.

Overall as Matt mentioned.

The marrero margins are somewhere in the range of 400 basis points.

Year over year.

Mean fish had similar type improvements.

Julie.

And to follow up on this I think I heard you, saying by 2027, you expect to get to mid teens margins.

Mircea Dobre: To follow up on this, I think I heard you saying that by 2027, you expect to get to mid-teens margins in fish and in meat. We're talking about Marel here. If you get there, is there maybe a way you can help us quantify a little bit in terms of what the bottom-line would be simply from getting there within this business?

And then again, we're talking about morale here.

If you get it.

Is there maybe.

Can help us quantify a little bit in terms of what the EBITDA would be.

Mirc Dobre: But is there anything else in here, or maybe you're just, I don't know, conservative in your approach at this point?

From from.

Getting there within this business.

Right. So if you think about those businesses collectively they're somewhere in the range of $5 million to $600 million of revenue.

Matt Meister: Yeah, I think on the EBITDA dollars, Meg, you're in the ballpark in terms of what the math would suggest. And you know, based on sort of our guidance and the midpoint of our guidance range, it is still the higher quarter from a margin perspective in the year. But Q2 was obviously a very good quarter from a margin perspective as well. And I think what we're seeing is some, you know, changes in seasonality than what you might have seen in the past for just JBT Legacy as the Marel Corp Tinna business has a little more weight in Europe, which creates a little bit of seasonality in the summer. But we're still confident in our ability to deliver sort of high, you know, 16, 17 percent margin in the fourth quarter, driven by the increase in equipment revenue, which tends to have a little bit lower margins.

Brian Deck: Right. If you think about those businesses collectively, they're somewhere in the range of $500 to 600 million of revenue. That'll be, you could do the math, but you're talking anywhere from 5, really close to 1,000 basis points improvement on those businesses. You can do a little bit of the math there. Anywhere between 500 and 700. Sorry. Meat has higher starting point than fish, so it's probably more of the closer to the bottom end of that 500 to 1,000 basis point range, and fish would be a higher point of that range.

Yes.

So that'll be you know you can do the math.

But youre talking.

Anywhere from.

Really close to a 1000 basis points improvement on.

On those businesses. So you can kind of do a little bit of the math there.

Anywhere between 500 700, sorry.

Sorry.

<unk>.

Higher starting point than fish, so it's probably more in the closer to the bottom end of that 502000 basis point range and fish would be higher point of that range.

So, um, I would just say that it's kind of uh, kind of a few different things coming together. But it's very, I'm very glad and kind of to see just how kind of the progress. And, and we're seeing the results of the hard work that people have been putting in and, and, and the actions that that have been taken. Yeah, I I and I would just 1 final comment that the sum of the discipline uh, on certain businesses on Project selectivity uh, and resource allocation is is really important. And as, as Arie mentioned with some incremental support from the mix of of aftermarket, as as well as uh uh some of the businesses coming back. Uh, from a volume perspective helps as well. Uh, but overall we saw a similar. Uh, overall, as Matt mentioned, uh, the morale margins are up somewhere in the range of 400 basis points.

Uh, year-over-year. And, uh, mean fish had similar type improvements, individually,

That's very helpful.

Maybe last question for me.

Mircea Dobre: That's very helpful. Maybe last question from me, and I apologize for the Excel kind of based question here, but as I was looking at your full year guidance, I was looking at sort of Q3, trying to do some math on what that implies for Q4. If my math is right, it implies somewhere just north of $160 million in EBITDA as a midpoint. I'm sort of curious in terms of the moving pieces and as far as what gets us there. It looks a little bit unusual relative to seasonality. Usually, the fourth quarter is your strongest. That's where you see the highest margins. At least optically, it wouldn't appear to be the case this time around. Talk a little bit maybe about tariffs. I'm sure that that's part of it, about $12 million.

I apologize.

So kind of question here, but.

Looking at your full year guidance, so looking at Q3.

And to follow up on this, uh, I think I heard you saying that by 2027, you expect to get to mid-teens margins in in fish. And in meet again, we're talking about morale here.

Trying to do some math on what that implies for Q4.

um,

Matt Meister: As well as we talked about in the prepared remarks, the impact of tariffs, we do see that continuing to be a pretty significant headwind on a quarterly basis. So those are kind of the headwinds from a margin perspective is the higher non-recurring revenue and the continued tariff impact that we're seeing in the back half of the year.

if, if you get

And if my math is right it implies somewhere just north of $160 million EBITDA at the midpoint.

And I'm sort of curious in terms of.

Is there maybe something that you can help us quantify a little bit in terms of what the list would be, simply from getting there within this business?

The moving pieces.

As far as what gets us there.

It looks a little bit unusual relative to seasonality usually the fourth quarter is stronger that we see.

Highest margin.

Brian Deck: Right, right. But in any case, it will still be our seasonally strongest quote from a revenue and margin perspective, but just maybe not the range that you would normally see. In part, if you think about the Marel Corp Tinna business, there's a lot of projects coming through, so it's a little bit, I'll say, muted relative to, I would say, the traditional JBT markets.

And at least optically it wouldn't appear to be the case this time around so.

Talk a little bit maybe about tariffs I'm sure that that's part of it all 12 million box or is there anything else.

Or maybe you're just.

Mircea Dobre: Is there anything else in here or maybe you're just, I don't know, conservative in your approach at this point?

Conservative in your approach at this point.

Yes, I think on the EBITDA dollars Meg Youre in the ballpark in terms of what the math would suggest.

Matthew J. Meister: Yeah, I think on the EBITDA dollars, Mig, you're in the ballpark in terms of what the math would suggest. Based on sort of our guidance and the midpoint of our guidance range, it is still the higher quarter from a margin perspective in the year. Q2 was obviously a very good quarter from a margin perspective as well. I think what we're seeing is some changes in seasonality than what you might have seen in the past for just JBT legacy, as the Marel business has a little more weight in Europe, which creates a little bit of seasonality in the summer. We're still confident in our ability to deliver sort of high 16%, 17% margin in Q4, driven by the increase in equipment revenue, which tends to have a little bit lower margins.

Mirc Dobre: All right. Got it. Thank you.

Based on sort of our.

Tiffany: Your next question comes from the line of Sari Boroditsky with Jefferies. Please go ahead.

Guidance and the midpoint of our guidance range. It is still the higher quarter from a margin perspective.

Right. So, if you think about those businesses collectively, they're somewhere in the range of 5 to 600 million dollars of of Revenue, uh, uh, so that'll be, you know, you could do the math, uh, but you're talking, you know, anywhere from, you know, 5 really close to a thousand basis points Improvement, uh, on those businesses. So, you can, uh, kind of do a little bit bit of the math there. Uh, anywhere between 500 and 700. Sorry, uh, meet is has higher starting points in fish. So, uh, it's more probably more the closer to the bottom end of that, 500 to 2,000 basis point range and, and, and fish would be a higher point of that range.

Saree Boroditsky: Hi. Thanks for taking the questions. Maybe just quickly building on the last commentary on the guidance. You know, I believe Marel Corp Tinna stepped down sequentially in three Q under normal seasonality. So just simplify the JBT stepping up first two Q levels or just how you're thinking about growth by segment for the remainder of the year.

In the year.

But Q2 was obviously a very good quarter from a margin perspective, as well and I think what we're seeing is some.

That's that's very helpful.

Changes in seasonality than what you might have seen in the past for just JBT legacy is the MRO business has.

maybe last question for me and I I apologize for the Excel, kind of basic question here, but as I as I was looking at your full year guys and I was looking at for Q3

A little more weight in Europe, which creates a little bit of seasonality in the summer.

Matt Meister: Yeah, we would see likely a decrease on both from Q2 to Q3. Again, thinking about the mix in revenue for both segments being a little bit more weighted towards equipment and non-recurring revenue, which has a lower margin profile than recurring revenue. So both will experience that, and as well as both will have the impact from the tariff environment that we're seeing. So I'd say you'd see a decrease on both segments running in from Q2 to Q3. And then as volume picks up in the fourth quarter, probably a reversion back to higher margins in the fourth quarter for both segments. So it's kind of a cadence that looks similar to that, a dip and then back up in Q4.

But it's we're still.

Confident in our ability to deliver sort of high.

Um, trying to do some math on what that implies for Q4. And if my math is right, it implies somewhere just north of 160 million vivaa at the midpoint.

16, 17% margin in the fourth quarter.

Driven by.

And I'm sort of curious in terms of um the moving pieces and uh, as far as what gets us there.

The increase in.

Equipment revenue, which tends to have a little bit.

Lower margins.

As well as we've talked about in the prepared remarks.

It looks a little bit unusual relative to seasonality. Usually the fourth quarter is your strongest. That's where you see the highest margins. Um, and at least optically it wouldn't appear to be the case this time around. So,

Marks the impact of tariffs, we do see that continuing to be a pretty significant headwind on a quarterly basis. So those are kind of the <unk>.

Matthew J. Meister: As well as we talked about in the prepared remarks, the impact of tariffs, we do see that continuing to be a pretty significant headwind on a quarterly basis. Those are kind of the headwinds from a margin perspective, is the higher non-recurring revenue and the continued tariff impact that we're seeing in the back half of the year.

Headwinds from.

Talk a little bit, maybe about paragraphs. I'm sure that that's part of it about 12 million bucks. But is there anything else in here or maybe you're just? I don't know, conservative in your Approach at this point.

Our margin perspective is the higher nonrecurring revenue and a continued.

Tariff impact that we're seeing in the back half of the year.

Okay, great, but any indication that will still be our seasonally it will still be our seasonally strongest both from a revenue and margin perspective, just maybe not.

Yeah, I think, uh, on the IBA dollars, maybe you're in the ballpark in terms of what the math would suggest. And, uh, you know, based on sort of our...

Brian Deck: Right. In any case, it'll still be our seasonally strongest, both from a revenue and margin perspective. Just maybe not the range that you would normally see. In part, if you think about the Marel's business, there's a lot of projects coming through, so it's a little bit, I'll say, muted relative to, I would say, the traditional JBT mix.

Saree Boroditsky: I appreciate all the color on the tariffs and the great slide that you have in the deck. You know, you talked about the 100 basis point headwind in three Q, which is the net tariff cost. Just expectations for that in four Q related to tariffs and how you expect to enter 2026 based on the current tariff environment. Thank you.

The range that you would normally see in part if you think about the <unk> business.

It's.

There's a lot of projects coming through so it's a little bit.

Muted relative to I would say the traditional JBT.

Thanks.

Matt Meister: Sure. Yeah. So we are expecting somewhere in the range of that $10 million to $15 million net impact per quarter, probably closer to the $10 million range in Q3 and closer to the $15 million range in Q4. And during the course of the rest of this year, we are implementing supply chain actions to offset things. So we are moving some of our parts sourcing from Europe to the US and even considering some of our own assembly operations where we can in that short term. But I do think there will be some bleed over into the front half of 2026. We also consistently look at our pricing environment. But I do think it is incumbent on us as a good supplier to our customers that we should do everything we can to offset the cost of tariffs before we think about price increases.

All right got it thank you.

Your next question comes from the line of Saree <unk> with Jefferies. Please go ahead.

Mircea Dobre: All right, got it. Thank you.

Guidance in the midpoint of our guidance range, it it is still the higher quarter from a margin perspective um in the year. Um, but Q2 was obviously a very good quarter from a margin perspective as well. And I think what we're seeing is some, you know, changes in seasonality than what you might have seen in the past for just jbt. Legacy is the Marl business has a a a little more weight in Europe, which creates a little bit of seasonality in the summer.

Operator: Your next question comes from the line of Sari Boroditsky with Jefferies. Please go ahead.

Hi, Thanks for taking the questions maybe just quickly on the last commentary on the guidance I believe morale steps down sequentially into Q and our normal seasonality okay.

Um, but it's it's we're still, um, confident in our ability to deliver sort of high.

Sari Boroditsky: Hi, thanks for taking the questions. Maybe just quickly building on the last commentary on the guidance. I believe Marel stepped down sequentially in Q3 under normal seasonality. Just supply the JBT stepping up for Q2 levels or just how you're thinking about growth by segment for the remainder of the year?

The GBP stepping up for CTG levels, or just how you're thinking about growth by segment for the remainder of the year.

Yes, we would see likes.

Likely a decrease on both from Q2 to Q3 again.

Matthew J. Meister: Yeah. We would see likely a decrease on both from Q2 to Q3. Again, thinking about the mix in revenue for both segments being a little bit more of weighted towards equipment and non-recurring revenue, which has a lower margin profile than recurring revenue. Both will experience that and as well as both will have the impact from the tariff environment that we're seeing. I'd say you'd see a decrease on both segments running in from Q2 to Q3, and then as volume picks up in Q4, probably a reversion back to higher margins in Q4 for both segments. It's kind of a cadence that looks similar to that, a dip and then back up in Q4.

Thinking about the mix in revenue.

For both segments being a little bit more of.

Weighted towards equipment, and nonrecurring revenue, which has a lower margin profile than recurring revenue. So both all experienced that and as well as both will have.

You know, 1617 margin in the fourth quarter, um, driven by, um, the the, the increase in, uh, equipment Revenue, which tends to have a little bit, um, lower margins. Um, as well as we talked about in the, uh, prepared remarks, the impact of tariffs, we do see that continuing to be a pretty significant headwind, uh, on a quarterly basis. So those are kind of the the, the headwinds from my um, a margin perspective is the higher, non-recurring revenue and and the continued uh, tariff impact that we're seeing uh, in the back half of the year.

The impact from the tariff environment that we're seeing so I'd say you'd see a decrease on both segments running in from Q2 to Q3, and then as volume picks up in the fourth quarter probably the.

Matt Meister: That said, we will consider them where appropriate. And we have done some of that here in this. We did do some of that in the second quarter here. So it's an all-in strategy on offsetting those tariff impacts. We gave you the numbers specifically for Q4, but then some slight impact in the front half of Q1, the front half of next year.

Reversion back to higher margins in the fourth quarter for both segments. So it's kind of a cadence that looks similar to that.

It's uh, there's a lot of projects coming through so it's a little bit. I'll say a muted relative to, I would say the traditional jbt, uh,

A dip and then backup into Q4.

All right, got it. Thank you.

I appreciate all the color on the tariff side that you have in the deck, you and I talked about the 100 basis point headwind in <unk>, which is the net tariff costs just expectations for that in <unk> related to tariffs and how you expect to enter 2026 based on the current tariff environment. Thank you.

Saree Boroditsky: I appreciate that.

Matt Meister: But the intention, sorry, and just one last comment. But the intention here would be to get the price cost neutral as soon as we can. And our expectation would be expectation would be somewhere in that first quarter, maybe second quarter of next year.

Your next question comes from the line of sorry burditt with Jeffrey's. Please go ahead.

Sari Boroditsky: I appreciate all the color on the tariffs and the great slide that you have in the deck. You talked about the 100 basis point headwind in Q3, which is the net tariff cost. Just expectations for that in Q4 related to tariffs and how you expect to enter 2026 based on the current tariff environment. Thank you.

Sure, Yes, so we are expecting somewhere in the range of that.

Hi. Thanks for taking the questions. Maybe just quickly building on the last commentary on the guidance. You know, I believe Morrell steps down sequentially in Q3 under normal seasonality. So just simply the JBT stepping up first, 2 key levels or just how you're thinking about growth by segments for the remainder of the year.

Brian Deck: Sure. Yeah. We are expecting somewhere in the range of that $10 to $15 million net impact per quarter. Probably closer to the $10 million range in Q3 and closer to the $15 million range in Q4. During the course of the rest of this year, we are implementing supply chain actions to offset things. We are moving some of our parts sourcing from Europe to the US, and even considering some of our own assembly operations where we can in that short term. I do think there will be some bleed over into the front half of 2026. We also consistently look at our pricing environment. I do think it is incumbent on us as a good supplier to our customers that we should do everything we can to offset the cost of tariffs before we think about price increases.

Tiffany: Your next question comes from Justin Ages with CJS Securities. Please go ahead.

$10 million to $15 million.

Net impact per quarter, probably closer to the $10 million range in Q3 and closer to the $15 million range in Q4.

Justin Ages: Hi. Morning, all. You know, I appreciate the color on the tariffs. You know, I had a question now that we have more clarity there. Have you had any conversations with any of your customers about potential delays in orders or anything that might, you know, give pause to their business?

And during the course of the rest of this year.

We are implementing supply chain actions to offset things. So we are moving some of our parts.

Sourcing from Europe to the U S.

Even considering some of our own assembly operations, where we can in that short term.

Matt Meister: We have seen some, yes. Episodic, not system-wide by any means. We have seen a handful of orders where customers are making assessments, more so for folks that are looking to import food into the US. Just to give you an example, we had a coconut water vendor, or sorry, customer that now that the tariffs on Thailand are very high, they took a pause on that project. I'm aware of one or two other projects, but it is very episodic, very kind of customer-specific. And we have seen literally zero, best that I can tell, on the protein side, which is more than half of our business. So protein seems fairly, I'll say, I don't want to say immune, but this doesn't seem to be impacted in a meaningful way at all. So I would say it's very episodic.

But I do think there will be some bleed over into the front half of 2026, we also consistently look at our pricing environment, but.

But I do think it is incumbent on us as a good supplier to our customers that we should do everything we can to offset the cost of tariffs before we think about price increases.

Um, yeah, we we would see, um, likely a decrease on both from Q2 to Q3 again, um, thinking about the mix in Revenue, um, for both, uh, segments, being a little bit more of a weighted towards equipment and non-recurring revenue, which has a lower margin profile than recurring Revenue, so both will experience that and as well as both will have the, uh, impact from the Tariff environment that we're seeing. So I'd say you'd see a a decrease on both segments running in from Q2 to Q3. And then um as volume picks up in the in the fourth quarter, probably a a reversion back to higher margins in the fourth quarter for for both segments. So it's kind of a a Cadence that looks similar.

Um, a dip and then back up in the Q4.

That said.

We will consider them where appropriate.

Brian Deck: That said, we will consider them where appropriate. We did do some of that in Q2 here. It's an all-in strategy on offsetting those tariff impacts. We gave you the numbers specifically for Q4, but then some slight impact in H1 of next year.

And we have done some of that here and we did do some of that in the second quarter here. So it's an all in above all in strategy on offsetting those tariff impacts.

I appreciate all the color on the tariffs and the great slide that you have in the deck. You know, you talked about the 1003 Q, which is the net tariff cost. Just expectations for that in Q4, C related to tariffs, and how you expect to enter 2026 based on the current tariff environment. Thank you.

We gave you the numbers specifically for Q4, but then some slight impact in the front half of Q.

Q1 first half of next year.

Uh, sure, yes. So, uh, we are expecting somewhere in the range of $10 to $15 million.

But the intention sorry, and just one last but the intention here would you get the price cost neutral as soon as we can.

Sari Boroditsky: Appreciate the color.

Brian Deck: Sorry, and just one last comment. The intention here would to get to price cost neutral as soon as we can. Our expectation would be somewhere in that Q1, maybe Q2 of next year.

And our expectation would be expecting expectation would be.

uh, net impact per quarter. Uh, probably closer to the 10 million dollar range in Q3 and closer to the 15 million dollar range in Q4, uh, and during the course of the rest of this year.

Justin Ages: All right. That's very helpful. And then on the mitigation effort, you mentioned last quarter and then this quarter about, you know, potentially moving equipment or facilities. Can you give us an update on where we are? Are you still looking at identifying the best locations, jurisdictions, or have we moved, you know, a step beyond that?

Somewhere in that first quarter, maybe second quarter next year.

Uh, we are implementing uh, supply chain actions to offset things. So we are moving some of our parts.

Your next question comes from Justin <unk> with C. J S Securities. Please go ahead.

Operator: Your next question comes from Justin Ages with CJS Securities. Please go ahead.

Hi, good morning, all.

Good morning.

Justin Ages: Hi. Morning all.

I appreciate the color on the tariffs.

Matt Meister: No, we haven't moved a step beyond that yet because we obviously just got clarity on tariffs here in the last 30 days or so. So I would say we are still in that assessment phase, looking at our overall footprint. So by the end of the year, we should have a well-developed plan of what our operational strategy will be for the next year or two.

Matthew J. Meister: Morning.

Justin Ages: Appreciate the color on the tariffs. Had a question now that we have more clarity there. Have you had any conversations with any of your customers about potential delays in orders or anything that might give pause to their business?

Had a question now that we have more clarity there have you had any conversations with any of your customers about potential.

Delays in orders or anything that might give pause to their business.

We have seen some yes.

Uh sourcing from Europe to the US. Uh and even considering some of our own assembly operations where we can in that short term, uh, but I do think there will be some bleed over into the front half of 2026. We also consistently look at our pricing environment, uh, but I do think it is incumbent on us as a good supplier to our customers. That we should do, everything we can to offset the cost of terrorists before we think about price increases. Uh, that said, uh uh we we will consider them. We're we're a

Episodic not system wide by any means we see we have seen a handful of orders where customers are making assessments more sofa.

Arni Sigurdsson: Just one color on that, though, is we do have, for example, in our kind of primary and cut-up and T-bone business in poultry, we already have kind of a dual plant, US and Europe, where we can kind of often, like when you're moving production, it's around drawing, it's around systems, it's around engineering. So if you have some of those, that infrastructure in place, you can often move a bit faster. And that's an area where we are kind of looking and what we have historically also kind of flexed in the past. So that's where we can probably move a little bit faster, just to kind of mention one example.

Brian Deck: We have seen some, yes, episodic, not system-wide by any means. We have seen a handful of orders where customers are making assessments, more so for folks that are looking to import food into the US. Just to give you an example, we had a coconut water customer that now that the tariffs on Thailand are very high, they took a pause on that project. I'm aware of one or two other projects, but it is very episodic, very customer-specific. We have seen literally zero, best I can tell, on the protein side, which is more than half of our business. Protein seems fairly, I don't want to say immune, but just doesn't seem being impacted in a meaningful way at all. I would say it's very episodic.

For folks that are looking to import food into the U S. Just.

Just to give you. An example, we had.

Appropriate and, uh, and we have done some of that here in in this, we did do some of that in the second quarter here, so it's an all-in above all-in strategy, on offsetting those tariffs and impacts, uh, uh, we give you the number specifically for Q4, but then, um, some slight impact on the front half of Q.

Our coconut water vendor sorry customer that now that the tariffs on Thailand are very high there.

A front half of next year.

They took a pause on that project.

I am aware of one or two other projects, but it is very episodic very kind of.

Customer specific.

But the intention sorry and just 1 last call. But the intention here would to get the price cost neutral uh as soon as we can. Uh and and our expectation would be expection expectation would be uh somewhere in that first quarter uh maybe second quarter of next year.

And we have seen literally zero best and I can tell on the protein side, which is more than more than half of our business. So protein seems fairly.

Justin Ages: All right. That's helpful. I appreciate you taking the question.

Your next question.

Matt Meister: Thank you.

Tiffany: Your next question comes from the line of Walter Lipseck with Seaport Research. Please go ahead.

Ages with CJs Securities, please go ahead.

I will say I don't want say immune but.

Hi, morning off.

Doesn't seem to.

Being impacted.

Brian Deck: Hi. Thanks. Good morning. Good quarter, guys. Good morning. One to ask about just starting with the sector trends, and you guys called out that the meat part of the business had good orders. I wonder if you could help us understand that a little bit by understanding some of the meat is under a little bit more margin pressure. You know, where are you seeing those orders? And you know, is that something that's sustainable?

In a meaningful way at all so I would say, it's very episodic.

Alright, that's very helpful. And then on the mitigation effort you mentioned last quarter and then this quarter about potentially moving equipment.

Justin Ages: All right. That's very helpful. On the mitigation effort, you mentioned last quarter and then this quarter about potentially moving equipment or facilities. Can you give us an update on where we are? Are you still looking at identifying the best locations, jurisdictions, or have we moved a step beyond that?

Facilities can you give us an update on where we are you still looking at identifying the best locations jurisdictions or have we moved a step beyond that.

Um, you know, I appreciate the color, uh, on the tariffs. You know, I had a question now that we have more clarity there. Have you had any conversations with any of your customers about potential delays in orders or anything that might, you know, give pause to their business?

No we haven't moved to step beyond that because we obviously just got clarity on tariffs here in the last 30 days or so so I would say we are still in that assessment phase looking at our overall <unk>.

Matt Meister: Sure. What we are seeing is some improvement on the pork side. We're starting to see some investments in both the US and Europe. And as we increase and improve our value proposition overall, we think we're well positioned for that. So it really is on the pork side. The beef side is weak and expected to remain weak for at least for the foreseeable future. There's really, it takes a long time to grow cattle, and the cattle inventory, if you will, or the herd is quite small right now. So there's no real reason to be investing on the beef side. But on the pork side, the price-cost dynamics for our customers are in pretty decent shape, and the demand profiles are improving. So overall, we do see some investments there.

Brian Deck: No, we haven't moved a step beyond that yet because we obviously just got clarity on tariffs here in the last 30 days or so. I would say we are still in that assessment phase, looking at our overall footprint. By the end of the year, we should have a well-developed plan of what our operational strategy will be for the next year or 2.

Foot print.

So by the end of the year, we should have a well developed plan of what our operational.

Strategy will be for the next year or two.

Just one color on that though is we do have for example in our.

Arni Sigurdsson: One color on that, though, is we do have, for example, in our kind of primary and cut-up and deboned business in poultry, we already have kind of a dual plant, US and Europe, where we can. Often, like when you're moving production, it's around drawing, it's around systems, it's around engineering. If you have some of that infrastructure in place, you can often move a bit faster, and that's an area where we are kind of looking and what we have historically also kind of flexed in the past. That's where we can probably move a little bit faster, just to kind of mention one example.

Primary and cut up and depot business in poultry, we already have kind of a dual plans U S and Europe, where we can kind of often like when you're moving.

Production, it's around drawing is surround systems, it's a lot around engineering. So if you have some of those that infrastructure in place you can often move a bit faster and that's an area, where we are kind of looking and we'll be have historically also kind of flex in the past. So so that's where we can probably move a little bit faster.

Um, customer specific. Uh, and we have seen literally zero best. I can tell on the protein side, which is, you know, more than more than half of our business. So protein seems, uh, fairly, uh,

Arni Sigurdsson: Also, I think it's worth mentioning that if you look at the meat business in general, there is a big opportunity on automation there. Like in poultry, there is much higher automation, but in meat, especially when you are in kind of, you look at kind of the cut-up and deboning rooms like that, that's where you have a lot of labor-intensive processes. And so as the business, kind of the fundamentals have, I mean, they're coming off a very kind of a very difficult environment. Like our customers were losing money. Now they're making money, but it's kind of, and it's been like that for a few quarters. So that's also why there's been some stability for a few quarters. There is a kind of, they haven't been investing for a while, so the equipment kind of ages, and then there's the automation opportunity that we see.

Uh, I'll say I don't want to say immune but uh this doesn't seem to be being impacted, uh, in a meaningful way at all. So I would say it's very episodic

Just mentioned one example.

Alright, that's helpful. I appreciate you taking the questions.

Justin Ages: All right. That's helpful. I appreciate you taking the question.

Thank you.

Your next question comes from the line of Walter Liptak with Seaport Research. Please go ahead.

Brian Deck: Thank you.

Operator: Your next question comes from the line of Walter Liptak with Seaport Research. Please go ahead.

All right. That that's very helpful. And then on the mitigation effort you mentioned last quarter. And then this quarter about, you know, potentially moving equipment or facilities, can you give us an update on where we are? Are you still looking at identifying the best locations jurisdictions or have we moved? You know, a step beyond that.

Hi, Thanks, good morning, good quarter guys.

Good morning wanted to ask about.

Walter Liptak: Hi, thanks. Good morning. Good quarter, guys.

Just starting with the sector trend and you guys called out that.

Brian Deck: Good morning.

Walter Liptak: Wanted to ask about just starting with the sector trends, and you guys called out that the meat part of the business had good orders. I wonder if you could help us understand that a little bit. My understanding is some of the meat is under a little bit more margin pressure. Where are you seeing those orders, and is that something that's sustainable?

Part of the business had good orders I Wonder if you could help us understand that a little bit by understanding some of the meat.

Under a little bit more.

Margin pressure, where are you seeing those orders in.

No, we haven't moved a Step Beyond that yet, because we obviously just got Clarity on tariffs here in the last 30 days or so. So I would say, we are still in that assessment phase looking at our overall, uh, footprint. Uh, so by the end of the year, we should have a well-developed plan of what our operational. Uh, strategy will be for the next year or 2

Is that something Thats sustainable.

Sure.

Arni Sigurdsson: So it's very encouraging to have now a few quarters where the demand has improved, but we'll see how that kind of shapes out over the next few quarters.

We are seeing is some improvement on the pork side, we're starting to see some investments.

Brian Deck: Sure. What we are seeing is some improvement on the pork side. We're starting to see some investments in both the US and Europe. As we increase and improve our value proposition overall, we think we're well-positioned for that. It really is on the pork side. The beef side is weak and expected to remain weak at least for the foreseeable future. It takes a long time to grow cattle, and the cattle inventory, if you will, or the herd is quite small right now, so there's no really reason to be investing on the beef side. On the pork side, the price-cost dynamics for our customer is in pretty decent shape, and the demand profiles is improving overall. We do see some investments there.

In both the U S and Europe.

Brian Deck: Okay. Yeah. Thank you for that. That sounds great. And yeah, it's kind of exciting with the future automation and systems. You know, kind of switching gears to the discussion about selling prices and volumes and understanding you're trying to do everything you can for your customers to take care of these tariffs. Can you surcharge, or are you surcharging in the second quarter and for the orders that are coming in? Or, you know, and you know, if you didn't take up prices, how much do you take up prices? How did volumes look versus prices in the second quarter?

And as we increase and improve our value proposition overall, we think we're well positioned for that so it really is on the pork side.

Beef side.

As weak and expected to remain weak.

For at least for the foreseeable future. There is really it takes a long time to grow cattle in the cattle.

Inventory, if you will or the herd is quite small right now so there's no really reason to be investing on the beef side, but on the pork side.

Just 1 caller on that though is, is we do have, for example, in our kind of primary and cut up in deep on business and poultry we already have kind of a, a dual plant us and Europe where we can kind of often, like, when you're moving, uh, uh, production. It's around drawing, it's around systems. It's a lot around engineering. So if you have some of those that infrastructure in place, you can often move a bit faster. And and that's an area where we are kind of looking. And what we have historically, also kind of flexed in the past so so that's where we can probably move a little bit faster. Uh um, just to kind of mention 1 example.

The cost the price cost dynamics for our customers in pretty decent shape and the demand profiles is improving overall, so we do see some investments there.

All right, that's helpful. I appreciate you taking the questions.

Thank you.

Your next question comes from the line of

alter lip Tech.

Matt Meister: Right. So in the second quarter, so we had about, if you look at the combined basis, it was about 10% year-over-year growth. About half of that was on the volume side, and then the rest was split between price and FX. But more broadly speaking, so we did take price increases on parts during the course of the second quarter. And then obviously on all open quotes for new equipment, we did look to reprice those quotes. And then for equipment in the backlog, it is case by case where we have the ability to add a surcharge or change or have the customers, depending on the shipping terms, pay the tariffs themselves. So it is very much case by case. So you will have some leakage here, which we mentioned in our guidance in the second and the third and fourth quarter.

Please go ahead.

So I think it's worth mentioning that if you look at the meat business in general there is a big opportunity on automation there like in poultry there is much higher automation, but in meat, especially when you are in kind of if you look at kind of the.

Hi, thanks. Uh, good morning. Good quarter guys.

Arni Sigurdsson: Also, I think it's worth mentioning that if you look at the meat business in general, there is a big opportunity on automation there. Like in poultry, there is much higher automation. In meat, especially when you look at the cut up and deboning rooms, like that's where you have a lot of labor-intensive processes. As the business, I mean, they're coming off a very difficult environment. Our customers were losing money. Now they're making money. It's been like that for a few quarters, so that's also why there's been some stability for a few quarters. They haven't been investing for a while, so the equipment kind of ages, and then there's the automation opportunity that we see.

<unk>.

Cut up in deep owning rooms, like Thats, where you have a lot of it.

Labor intensive processes, and so as that business kind of the fundamentals have they're coming up a very kind of a very difficult environment like our customers were losing money now theyre, making money.

I want to ask about, uh, just starting with the sector trends. You guys called out that the meat part of the business had good orders. I wonder if you could help us understand that a little bit, especially considering some of the meat is under a little bit more, um, margin pressure. You know, where you've seen those orders? And, you know, is that something that's sustainable?

Sure. We are. What we are seeing is some improvement on the pork side. Uh, we're starting to see some Investments uh, in both the US, uh, and Europe.

But it is going to and it's been like that for a few quarters. So thats also why there's been some stability for a few quarters. There is a kind of they haven't been investing for a while so the equipment kind of ages and then there's the automation.

Opportunity that we see so it's very encouraging to have now a.

A few quarters, where the demand has improved but we'll see how that kind of shapes out over the next few quarters.

Arni Sigurdsson: It's very encouraging to have now a few quarters where the demand has improved, but we'll see how that kind of shapes out over the next few quarters.

Matt Meister: However, as that pricing dynamics builds into the new orders, that would be, that's where how we get to price cost neutral here over the next few quarters.

Okay, yes, thank you for that that sounds great and it's kind of exciting with the future automation systems.

Walter Liptak: Okay. Yeah, thank you for that. That sounds great. Yeah, it's kind of exciting with the future automation and systems. Kind of switching gears to the discussion about selling prices and volumes, and understanding that you're trying to do everything you can for your customers to take care of these tariffs. Can you surcharge or are you surcharging in Q2 and for the orders that are coming in? If you didn't take up prices, how much did you take up prices? How did volumes look versus prices in Q2?

Kind of switching gears to <unk>.

Brian Deck: Okay. Great. Are there order delays because of the tariffs? You know, where they're waiting to see where the tariffs shake? Where they were shaking?

Discussion about.

Selling prices and volumes.

I understand that Youre trying to do everything you can for your customers to take care of these tariffs.

Matt Meister: A handful. A handful. Yes. But it's not, it's very episodic. It is not systematic by any means. It's a handful.

Can you surcharge are you surcharges in the second quarter and for the.

The orders that are coming in.

Brian Deck: Okay. Is the backlog pricing done now? Are you going through that, or is there, are there?

Or.

If you did take up prices how much did you take up prices, how did volumes looked versus prices in.

And as we increase, improve our value proposition overall. We we think we're well positioned for that. So really is on the pork side. Uh, the beef side, uh, is weak and expected to remain weak, uh, for at least for the foreseeable future. There's really it takes a long time to grow cattle and the cattle, uh, inventory. If you will, or the herd is quite small right now, so there's no real reason to be investing on on the B side. But on the pork side, uh, the cost price, the price cost Dynamics for our customers in pretty decent shape, uh, and the demand profiles, uh, is improving. So overall, so we do see some Investments there. Oh, also I think it's worth mentioning that if you look at the meat business in, in general, there is uh, a big opportunity on automation there, like, in poultry, there is much higher automation. But in meat, especially when you, uh, are in kind of, if you look at kind of the the, uh,

Matt Meister: That's a continuing negotiation ongoing. It always depends on the customers and whatnot. So no, I would not say we are completely done with it.

In the second quarter.

Right. So in the second quarter splits. So we had about if you look at the combined basis. It was about 10% year over year growth.

Brian Deck: Right. In Q2, if you look at the combined basis, it was about 10% year-over-year growth. About half of that was on the volume side, and then the rest was split between price and FX. More broadly speaking, we did take price increases on parts during the course of Q2. Obviously on all open quotes for new equipment, we did look to reprice those quotes. For equipment in the backlog, it is case by case where we have the ability to add a surcharge or have the customers, depending on the shipping terms, pay the tariffs themselves. It is very much case by case. You will have some leakage here, which we mentioned in our guidance in Q3 and Q4.

Brian Deck: Okay. Great. Okay.

Matt Meister: Because some of the numbers have been moving. I mean, the tariffs just got settled here in the last, you know, two weeks or so. So now that we have better visibility, it helps us to continue our conversations with our customers.

<unk>.

About half of that was on the volume side and then the rest was split between price and FX.

But more broadly speaking so we did take price increases on parts.

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

During the course of the second quarter.

And then obviously on all open quotes for new equipment.

Ross Ehrenblech: Hey, guys. Sticking on the price topic, can you just give us a sense of what the benefit was of the backlog in the quarter? It looks like the implied was roughly sequentially flat, but there was probably an 80 million step-up with some FX as well.

Did look to reprice those quotes and then for equipment in the backlog. It is case by case, where we have the ability to.

It cut up and and deep owning rooms like that. That's where you have a lot of uh labor intensive processes. And so as the business kind of the fundamentals have, I mean, they're coming off a very kind of a very difficult environment. Like our customers were losing money. Now they're making money. Uh, um, but it's going to and it's been like that for a few quarters. So that's also why there's been some stability for a few quarters. There is a pen, kind of there, haven't been investing for a while so the the equipment kind of hes and then there's the automation, uh, uh, um, opportunity that we see. So it's very encouraging to have. Now, a few quarters, where did the demand has improved? But we'll see how that kind of shapes out over the next few quarters.

Added surcharge.

Or or change.

Matt Meister: Most of the step-up in the backlog dollars was because of FX, right? You would have seen the pricing be embedded into the new orders, right? But in terms of there's always an adjustment for the end of the quarter FX, and that was somewhere in the range of $70 million in the backlog.

Okay, yeah, thank you for that. That sounds great. And yeah, it's kind of exciting with the uh, future Automation and systems.

The customers depending on the the shipping terms pay the tariffs themselves. So it is very much case by case.

um,

So you will have some leakage here, which we mentioned in our guidance in the second and.

Third and fourth quarter.

You know kind of Switching gears to uh the discussion about um about uh selling prices and volumes. Um, and understanding that you're trying to do everything you can for your customers to to take care of these tariffs.

However, as that.

Pricing dynamics builds into the new orders that would be.

Brian Deck: However, as that pricing dynamics builds into the new orders, that's how we get to price cost neutral here over the next few quarters.

Ross Ehrenblech: Okay. Well, and then just on the parts, can you maybe just elaborate on the strength in the quarter? Confidence in kind of the go-forward run rate and then your ability to pass through price as of May without, yeah, losing any volume offset?

That's where how we get the price cost neutral here over the next few quarters.

Okay great.

Their order delays.

The, uh, the orders that are coming in, uh, or you know, and, you know, if you didn't pick up prices, how much do you take a price is, how did volumes look versus prices in the second quarter?

Because of the tariffs.

Walter Liptak: Okay, great. Are there order delays because of the tariffs? Where they're waiting to see where the tariffs were shaking out?

They are waiting to see where the tariff shake.

Matt Meister: Sure. Yeah. The recurring revenue was tremendous in the second quarter. And by the way, it wasn't just parts. It was also on refurbishment. So we've seen a lot of activity on refurbs in the quarter, which is always good news because those are nice margins as well. I would say we do expect some reversion, as Matt said in the Q3 guidance, some reversion as we go sequentially from Q2 to Q3. However, generally speaking, we do see a very good demand environment out there for parts and service and refurbishments. And we do have the ability on the parts side to be more proactive and reactive to the environment because typically we can announce price increases kind of, again, we can do it region by region and sometimes business by business, but we can look at our cost environment and respond relatively quickly, typically within 30 days.

Handful of handful yes.

But it's not it's very episodic it is not systematic by any means it's a handful.

Brian Deck: A handful. Yes. It's very episodic. It is not systematic by any means. It's a handful.

Okay.

Is the backlog pricing done now.

Right? So, uh, in the second quarter. So we had about, if you look at the combined basis, it was about 10% year-over-year growth about, uh, about half of that was on the volume side. And then the rest was split between, uh, price and uh, and FX.

Walter Liptak: Okay. Is the backlog pricing done now? Are you through that?

And through that or is there are there.

China, continuing negotiation ongoing always depends on the customers and whatnot. So no I would not say we are completely done with it.

Brian Deck: That's a continuing negotiation ongoing. It always depends on the customers and whatnot. No, I would not say we are completely done with it.

Okay, great. Okay, because some of the numbers have been moving I mean tariffs just got settled here in the last two weeks or so so.

Walter Liptak: Okay, great. Okay.

Brian Deck: Because some of the numbers have been moving. The tariffs just got settled here in the last two weeks or so. Now that we have better visibility, it helps us to continue our conversations with our customers.

Now that we have better visibility it helps us too.

Continue our conversations with our customers.

Your next question comes from the line of Ross Baron Black with William Blair. Please go ahead.

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

Hey, guys.

Sticking on the price topic can you just give us a sense of what the benefit was the backlog in the quarter.

Ross Sparenblek: Hey, guys. Sticking on the price topic, can you just give us a sense of what the benefit was of backlog in the quarter? It looks like the implied was roughly sequentially flat, but there was probably an $80 million step-up with some FX as well.

Um, but more broadly speaking. So, we did take price increases on Parts uh, during the course of the second quarter. Uh, and then on obviously, on all open quotes for new equipment, uh, we did look to reprice those quotes. And then for equipment in the backlog, it is a case by case, where we have the ability to, uh, add a search charge, uh, or, uh, or change, uh, or, or have the customers depending on the, um, the shipping terms pay the, the tariffs themselves. So, uh, it is very much Case by case. Uh, so you will have some leakage here, which we mentioned in our guidance, and the SEC, and the third, or fourth quarter,

It looks like the implied was roughly sequentially flat, but there was no apply 80 million step up with some FX as well.

Matt Meister: However, we did do a price increase at the beginning of May. So as we get into the back half of the year, we'll continue to look at what's appropriate from the price side, but obviously really, really heavy focus on the cost side is what we're trying to mitigate for the better.

Most of the step up.

In the backlog dollars was because of FX right you would have seen the pricing be embedded into the new orders right, but in terms of there's always an adjustment for the end of the quarter FX and that was somewhere in the range of $70 million in the backlog.

Brian Deck: Most of the step-up in the backlog dollars was because of FX. Right?

Ross Sparenblek: Okay.

Brian Deck: You would have seen the pricing be embedded into the new orders. Right? In terms of, there's always an adjustment for the end of the quarter FX, and that was somewhere in the range of $70 million in the backlog.

Ross Ehrenblech: Okay. And then is there, I mean, seasonality on the parts? I mean, presumably, they're still, you know, operating facilities even in August in Europe. So maybe it's just a pull forward of refurbishment.

Okay, well then some parts can you maybe just elaborate on the strength in the quarter.

Matt Meister: There is some, yes. There is. Q3 is lighter, just particularly in Europe because of the European vacation cycle. So you see less activity generally. So there is some seasonality kind of, I think Sari asked the question generally. So we do see seasonality on aftermarket. That also affects equipment delivery as well. And then just as an aside, from a recurring revenue perspective, our orange juice lease business is seasonality is weak. The crop is weaker in Q3 and then picks up in Q4. So that's another component to our seasonality.

Ross Sparenblek: Okay. Well, some of the parts, can you maybe just elaborate on the strength in the quarter, confidence in the go forward run rate, your ability to pass through price as of May without?

Confidence in kind of the go forward run rate and then your ability to pass through price as of May without yeah, sure I mean volume offset.

Yes, the recurring revenue is tremendous in this second quarter and by the way. It wasn't just parts. It was also on refurbishment. So we saw a lot of activity.

Brian Deck: Sure

Ross Sparenblek: losing any volume offset?

Brian Deck: Yeah, the recurring revenue was tremendous in Q2. By the way, it wasn't just parts, it was also on refurbishment. We saw a lot of activity on refurbs in the quarter, which is always good news because those are nice margins as well. I would say we do expect some reversion, as Matt said in the Q3 guidance, some reversion as we go sequentially from Q2 to Q3. However, generally speaking, we do see a very good demand environment out there for parts and service and refurbishments. We do have the ability on the parts side to be more proactive and reactive to the environment, because typically we can announce price increases. Again, we can do it region by region and sometimes business by business. We can look at our cost environment and respond relatively quickly, typically within 30 days.

<unk> and <unk> in the quarter, which is which is always good news because those are nice margins as well.

I would say, we do expect some reversion as Matt said in the Q3 guidance. Some reversion as we go sequentially from Q2 to Q3. However.

However, generally speaking.

Ross Ehrenblech: Okay. And then just one more here, just thinking through the margin exit in the year. Third quarter, the implied synergy capture, I know it's a fourth quarter, kind of a hockey stick, but any update there? And then also, is R&D, is that fully, you know, like-to-like on the definitional basis now? I mean, that was a tad bit lower versus our estimates.

Do see a very good demand environment out there for for parts and service and Refurbishments.

We do have the ability on the parts side to be.

More proactive and reactive to the environment because typically we can.

Announced price increases kind of again.

We can do it region by region and sometimes business by business.

Matt Meister: Rock, certainly, we'll see a continued increase in synergy sequentially from Q2 to Q3. That's just a function of actions being taken in the quarter, kind of getting embedded in Q3 and Q4. We're expecting the benefit of synergies to be a positive to margins by about 75 basis points sequentially. That's obviously offset by the headwinds from mix and tariffs to get to that 100 basis point drop sequentially. But that is a nice tailwind from synergies. And what was, I can't remember the second part of your question.

But we can look at our cost environment and respond relatively quickly typically within 30 days. However.

However, we did do.

Our price increase.

Brian Deck: However, we did do a price increase at the beginning of May. As we get into the H2 of the year, we'll continue to look at what's appropriate from the price side, but obviously really heavy focus on the cost side is what we're trying to mitigate for the better.

At the beginning of May so as we get into the back half of the year, we'll continue to look at whats appropriate from the price side, but obviously really really heavy focus on the cost side is what we're trying to mitigate for the better.

Okay, and then is there any seasonality in the parts.

Ross Sparenblek: Okay. Is there any seasonality on the parts? Presumably they're still operating facilities even in August in Europe. Maybe it's just a pull forward of refurbishment.

Equally there's still operating facilities even in August in Europe.

It is just a pull forward of refurbishment there is some yes.

There is Q3 is lighter just particularly in Europe, because the European vacation cycle. So you see less lesser.

Brian Deck: There is some, yes. There is. Q3 is lighter, particularly in Europe because the European vacation cycle, you see less activity generally. There is some seasonality. I think Sarah asked the question generally. We do see seasonality on aftermarket that also affects equipment delivery as well. Just as an aside from a recurring revenue perspective, our orange juice lease business seasonality is weak. The crop is weaker in Q3 and picks up in Q4. That's another component to our seasonality.

Ross Ehrenblech: Sorry. Definitional on R&D. I believe that was the last line item that had to be, you know, converted.

This activity generally so there is some seasonality kind of.

<unk>. The question generally so we do see seasonality on aftermarket that also affects equipment delivery.

Matt Meister: Yeah, I think we are still in the process. I wouldn't say it's 100% completed, but there has been, we've been moving more of the towards the sort of standard definition that we have had historically at JBT for the Marel Corp Tinna business, but it's still a work in process.

As well and then just.

As an aside from a recurring revenue perspective.

Our orange juice lease business has seasonality as wheat crop is weaker in Q3, and then picks up in Q4. So that's another component to our seasonality.

Ross Ehrenblech: That's terrific. All right. Last quarter, guys. Thank you.

Brian Deck: Thank you.

Tiffany: Your final question comes from the line of Meg Dobre with RW Baird. Please go ahead.

Okay, and then just one more here just thinking through the margin accident year.

Ross Sparenblek: Okay. Just one more here. Just thinking through the margin X in the year. Q3, the implied synergy capture, I know it's a Q4 kind of a hockey stick, but any updates there? Then also, is R&D, that fully like to like on the definitional basis now? That was a tad bit lower versus our estimates.

Third quarter, the implied synergy capture I know, it's a fourth quarter kind of a hockey stick, but any update there and then also.

Mirc Dobre: Wow. Thanks for taking my follow-up. This is a longer call than I'm used to. Just a couple of small questions here. The first one is on FX. I just want to make sure that I have it clear in terms of what's embedded for the full year in your outlook. And you know, maybe a quick reminder here. FX, what sort of margin does this line item typically carry? Like, what's the contribution margin from FX? Is it dilutive? Is it in line with the company average? How should we think about it?

R&D is that fully.

Like for like on the definitional basis, now I mean that was a tad bit lower.

That's our estimate.

Certainly we will see a continued increase in synergies sequentially from Q2 to Q3, that's just a function of actions being taken in the quarter.

Matthew J. Meister: Ross, certainly we'll see a continued increase in synergies sequentially from Q2 to Q3. That's just a function of actions being taken in the quarter, kind of getting embedded in Q3 and Q4. We're expecting the benefit of synergies to be a positive to margins by about 75 basis points sequentially. That's obviously offset by the headwinds from mix and tariffs to get to that 100 basis point drop sequentially. That is a nice tailwind from synergies. I can't remember the second part of your question.

And are getting embedded in Q3 and Q4, we're expecting the benefit of synergies to be.

Matt Meister: Think about it more in line with the company average. You see the FX impacting both the top line and the costs. You might see actually a little bit of headwind from FX because you might produce it in one jurisdiction and sell it in another and get some headwind from that as well. So, but I would use about the average.

A positive to margins by about.

75 basis points sequentially, that's obviously offset by.

The headwinds from mix and tariffs to get to that 100 basis point.

Mirc Dobre: Yeah, that 15%. And what's the magnitude for the year?

Sequentially.

Matt Meister: We're expecting, I think it's 70 to 85 million for the year.

But that is a nice tailwind from synergies.

And what was.

Mirc Dobre: Tailwind. Okay. And then last question. You mentioned here that the pipeline has gone up 15% in North America, and that from the combination of JBT and Marel, maybe you can talk a little bit about that. And you know, when you talk about the pipeline, what exactly does that mean? Is that, you know, quotations or customers, or you know, how what does that number really tell us?

I can't remember the second part of your question.

Initial on R&D I believe.

Ross Sparenblek: Sorry. Definitional on R&D. I believe that was the last line item that had to be converted.

Line item that would be.

<unk> converted.

Yes, I think there we are still in the process I wouldn't say, it's a 100% completed but.

Matthew J. Meister: Yeah, I think we are still in the process. I wouldn't say it's 100% completed, but we've been moving more towards the sort of standard definition that we have had historically at JBT for the Marel business, but it's still a work in process.

But there has been we've been moving more of the towards the sort of standard definition that we have had historically at JBT for the morale business, but it's still work in process.

Sure. Thanks, nice quarter guys. Thank you.

Matt Meister: Right. So it's specific to poultry in North America, as I'll say as a sample, if you will, because again, that's where we're furthest along and on the integration, if you will. So basically, what we did was we looked at our order book immediately prior to the JBT Marel Corp Tinna combination, looked at the individual opportunities, and then we said, then we looked at it now inclusive of some of the things that we're quoting that we otherwise probably would not have quoted as independent companies. And when you kind of add that up, there is some noise in there because of, you know, the market is, you know, a little bit different now than it was six months ago, but it was fairly robust then, and it's fairly robust now. So there's a little bit of noise.

Thank you.

Ross Sparenblek: That's perfect. All right. Well, nice quarter, guys. Thank you.

Your final question comes from the line of Mig <unk> with R. W. Baird. Please go ahead.

Brian Deck: Thank you.

Operator: Your final question comes from the line of Mircea Dobre with R.W. Baird. Please go ahead.

Thanks for taking my follow up this is just a longer call than I'm used to.

Mircea Dobre: Thanks for taking my follow-up. This is a longer call than I'm used to. Just a couple of small questions here. The first one is on FX. I just want to make sure that I have it clear in terms of what's embedded for the full year in your outlook. Maybe a quick reminder here, FX, what sort of margin does this line item typically carry? What's the contribution margin from FX? Is it dilutive? Is it in line with the company average? How should we think about it?

The.

Just a couple of small questions here. The first one is on the FX.

I just want to make sure that I have a clear in terms of what's embedded for the full year in your in your outlook.

Maybe a quick reminder, here.

What's the.

Sort of margin.

Margin.

This line item typically carry like what's the contribution margin from FX is it dilutive.

In line with the company average.

Thank God.

I think about it more in line with the company average as you see the FX impacting both the topline and the costs you might see actually a little bit of headwind from FX, because you might produce it in in one jurisdiction and sell it to another and get some headwind from that as well, so but I would use about the average.

Matthew J. Meister: I'd think about it more in line with the company average, as you see the FX impacting both the top line and the costs. You might see actually a little bit of headwind from FX because you might produce it in one jurisdiction and sell it in another and get some headwind from that as well. I would use about the average, yeah, that 15%.

Matt Meister: But what I could tell you is just when you start to roll in all these additional opportunities, it does appear that the pipeline is about 15% higher. Now, what it does mean, now that hasn't converted to orders at this point, all we're saying is that at least in terms of within our salesforce application, the gross number of opportunities is now larger than it otherwise would have been. So really kind of incumbent upon us to convert those opportunities into orders and obviously sell the value proposition that having more under one vendor base like JBT Marel is beneficial to the customers and getting into those system sales and integrated sales as opposed to the component sales.

Yes.

And what's the magnitude for the year.

We're expecting.

Mircea Dobre: What's the magnitude for the year?

I think at $70 million to $85 million for the year.

Matthew J. Meister: We're expecting, I think it's $70 to 85 million for the year.

Okay and then last question you mentioned here that the pipeline has gone up 15%.

Mircea Dobre: Telling. Okay. Then last question. You mentioned here that the pipeline has gone up 15% in North America, and that's from the combination of JBT and Marel. Maybe you can talk a little bit about that and when you talk about the pipeline, what exactly does that mean? Is that for patients or customers or what does that number really tell us?

In North America and debt.

Combination.

<unk>, maybe you can talk a little bit about that.

No.

When you talk about the pipeline what exactly does that mean is that.

No.

Our patients our customers or.

What does that number really tell it right. So so it's specific to poultry in North America.

Mirc Dobre: Great. Thank you for the time.

Brian Deck: Right. It's specific to poultry in North America. I'll say as a sample, if you will, because again, that's where we're furthest along on the integration, if you will. Basically what we did was we looked at our order book immediately prior to the JBT Marel combination, looked at the individual opportunities, and then we looked at it now inclusive of some of the things that we're quoting that we otherwise probably would not have quoted as independent companies. When you add that up, there is some noise in there because of the market is a little bit different now than it was six months ago, but it was fairly robust then, it's fairly robust now.

Matt Meister: Sure.

As.

Tiffany: That concludes our question and answer session. I will now turn the call back over to Brian Deck for closing remarks.

I will say as.

As a sample if you will because again, that's where we're furthest along in.

Matt Meister: Thanks, everyone, for joining us this morning. As always, our IR team will be available if you have any questions. Thank you.

On the integration if you will so basically what we did was we looked at we looked at our order book.

Immediately prior to the morale at GBT Moreau combination.

Tiffany: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

I looked at the individual.

Opportunities.

And then we said when we looked at it now inclusive of some of the things that we're quoting that we otherwise probably would not have quoted.

As independent companies.

And when you kind of add that up there is some noise in there.

Because of the market is a little bit different now than it was six months ago, but it was fairly robust then is fairly robust now so there's a little bit of noise, but what I can tell you just when you start to roll in all of these additional opportunities. It does appear that the pipeline is about 15% higher now what it does mean that that hasnt converted to orders at this point.

Brian Deck: There's a little bit of noise, but what I could tell you, just when you start to roll in all these additional opportunities, it does appear that the pipeline is about 15% higher. What it does mean, now that hasn't converted to orders at this point. All we're saying is that at least in terms of within our sales force application, the gross number of opportunities is now larger than it otherwise would have been. Really incumbent upon us to convert those opportunities into orders and obviously sell the value proposition that having more under one vendor base like JBT Marel is beneficial to the customers and getting into those system sales and integrated sales as opposed to the component sales.

All we're saying is that.

At least in terms of within our sales force.

Application the gross number of opportunities is now larger than otherwise would have been so really kind of.

Incumbent upon us to convert.

Those opportunities into orders.

And obviously sell the value proposition that having more.

Under one vendor base like JBT morale is beneficial to the customers.

Getting into our system sales and integrated sales as opposed to the component sales.

Great. Thank you for the time.

Sure.

That concludes our question and answer session I will now turn the call back over to Brian deck for closing remarks.

Mircea Dobre: Great. Thank you for the time.

Brian Deck: Sure.

Operator: That concludes our question and answer session. I will now turn the call back over to Brian Deck for closing remarks.

Thanks, Thanks, everyone for joining us this morning as always our IR team will be available. If you have any questions. Thank you.

Brian Deck: Thanks, everyone, for joining us this morning. As always, our IR team will be available if you have any questions. Thank you.

Ladies and gentlemen, this concludes today's call. Thank you all for joining you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.