JBT Marel Corp (JBTM) 2009 Q4 法說會逐字稿

Good morning, ladies and gentlemen.

My name is Tina and I will be your conference operator today.

At this time I would like to welcome everyone to the JBT Corporation's fourth quarter 2009 earnings conference call.

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 instructions).

I would now like to turn the call over to Ms.

Cindy Shiao, Director of Investor Relations.

Ma'am, you may begin.

Good morning, everyone, and thank you for joining us to review JBT Corporation's fourth quarter 2009 financial results.

With me on the call are Charlie Cannon, Chairman and CEO; and Ron Mambu, Vice President and CFO.

During our call any comments or references to 2008 earnings per share are to pro forma earnings per share, reflecting our spin-off from FMC Technologies effective July 31, 2008.

Reconciliation to GAAP earnings per share may be found in the attachment of the earnings release issued yesterday.

Before we begin, I want to remind everyone that this call may contain certain forward-looking statements that are subject to the Safe Harbor language in yesterday's press release and 8-K filing.

Both documents are available on our investor relations website.

I also refer you to our disclosures regarding risk factors in our annual report on Form 10-K filed with the Securities and Exchange Commission.

Now I will turn the call over to Charlie.

I will begin with a review of our 2009 performance followed by an update on market conditions for our two segments.

Ron will then discuss our financial results for the fourth quarter and full year.

As we look back, 2009 was undoubtedly one of the most challenging business environments we've faced in decades.

I'm very proud of how we performed over this difficult period.

We responded quickly to the lower demand for some of our product lines brought on by the global recession.

We implemented cost reduction initiatives across the Company, including business units not impacted as severely by the downturn.

We remained focused on providing outstanding service to our customers and, at the same time, improving operating efficiency.

Our large installed base continued to provide a steady revenue stream.

Traditional aftermarket volume was down only slightly on a constant currency basis versus '08.

Total recurring revenue accounted for 42% of 2009 revenue, up from 36% in 2008.

As a result of the higher proportion of recurring revenue and cost reduction actions, EBIT margin equaled 2008 despite 18% lower sales.

Diluted earnings per share from continuing ops for the year were $1.15, at the very top of our guidance range.

Consistent with the recovery of the global economy, many of our markets are beginning to improve.

However, projects are smaller.

To put this in perspective, 14% of FoodTech inbound orders were from project sizes of $4 million or higher in 2008.

In 2009 we booked only one project in that category, representing just under 1% of total inbound.

We also saw smaller orders for our ground support equipment product line.

Additionally, credit continues to be tight for some of our smaller customers, and orders are taking longer to inbound.

Now let me provide some commentary on each of our segments; first, JBT FoodTech.

Customer activity for our freezing and protein processing product lines improved across all regions in the fourth quarter.

Activity in Western Europe is picking up, especially in the UK, Germany and Spain.

North America is also improving, as evidenced by fourth-quarter inbound orders, which were the highest since the third quarter of 2008.

We are encouraged by the initial signs of improvement in the poultry segment, although demand is still well below our historical average.

Demand in Eastern Europe and the Middle East remained healthy.

Asia-Pacific continues to be steady.

And as you saw, we recently announced a $6 million freezer order in Vietnam, our largest FoodTech order in over a year.

On the other hand, Latin America is still very weak.

In addition to the merger of the two largest poultry processors in Brazil, there is excess capacity from the global slowdown which will take time for the industry to absorb.

We do not expect the Latin America market to recover until at least early 2011.

Turning to the fruit processing product line, the most recent USDA citrus report is projecting a 21% decline in the size of the Florida orange crop from last season.

Although the January freeze was not as bad as the industry first feared, the year-over-year decline is primarily caused by the effects of 2009 drought conditions.

The lower Florida crop will affect our business in 2010 by as much as $0.04 to $0.05 a share.

But, market share gains and increased project activity for fruit-based beverages should partially offset this unfavorable impact.

For our in-container sterilization product line, demand rate remains steady.

Lastly, as I mentioned earlier, our FoodTech aftermarket volume remains stable.

In summary, we expect the FoodTech top line to grow modestly and earnings to improve from 2009, primarily due to the improved market conditions in Europe and North America for our freezing and protein processing product lines.

Moving to JBT AeroTech, we are encouraged by the early signs of stabilization in our ground support equipment product line.

Many of our airline and air freight customers are reporting better-than-expected results and, more importantly, improved market conditions.

Although we do not anticipate higher capital spending by our customers in the near-term, we believe we have hit bottom.

We expect a gradual recovery in demand for this product line over the next 12 to 18 months.

As a result, we are projecting a modest top-line improvement but significantly better bottom-line performance in 2010, given the benefit of the cost reduction initiatives implemented throughout last year.

Turning to gate equipment, order activity continues to be strong.

We recently announced two wins, a 12-unit passenger boarding bridge contract awarded by the general contractor at the Hartsfield-Jackson Atlanta international Airport and a $21 million order from the U.S.

Navy for land-based air-conditioning units, which the Navy terms LBAC.

We have a number of active bids outstanding.

However, project lead times and gate equipment are generally longer.

As for airport services, we are pursuing several new opportunities as the airlines and airport authorities continue to outsource maintenance to reduce costs.

In 2009 AeroTech traditional aftermarket volume was down 12% from 2008, largely due to deferred maintenance spending by customers.

We are forecasting a modest increase as the economy improves.

Now I would like to spend a few minutes on our Halvorsen program.

The U.S.

Air Force previously identified a requirement for 581 units and has funded only 443 units.

Our current production order is scheduled to lapse in the second quarter of 2010.

We are working to obtain funding from other branches of the US military as well as pursuing sales to several foreign governments, including Canada, Saudi Arabia and Qatar, who have identified requirements for military loaders.

We are hopeful that we will be able to secure funding to continue this program.

To summarize for JBT AeroTech, we expect ground support equipment to deliver improved results in 2010 with only modest revenue growth.

Volume for Halvorsen loaders will be lower with the level depending on the outcome of bid activity.

As for the balance of JBT AeroTech's product lines, we are anticipating volume to be flat to slightly up relative to 2009.

To recap, we expect market conditions for many of our product lines to improve in 2010.

However, smaller projects and stretched-out sales cycles are limiting our 2010 visibility.

Given this, it is extremely difficult to provide guidance for the year.

Overall, we anticipate full-year earnings to improve from 2009, but the first half of this year looks very much like the first half of 2009.

Our inbound order rates in the next few months will give us better insight into the sustainability of the market recovery, so we have decided, just as we did last year, to defer providing guidance until our next earnings call in early May.

I will now turn it over to Ron Mambu.

Thanks, Charlie.

As Charlie mentioned, we are pleased with our performance in 2009.

Our fourth-quarter revenue of $246 million increased 5% from the fourth quarter of 2008.

During the quarter we recognized a $1.4 million loss reserve related to product liability litigation in Tunisia and $400,000 of restructuring charges.

We also reported lower tax expense in the quarter due to international withholding tax credits and deferred tax assets amounting to $1.1 million associated with a foreign subsidiary.

The combined net impact of these items on net income was not material.

Diluted earnings per share for the quarter of $0.37 matched the level achieved in the same period last year.

Additionally, we had another quarter of strong cash flow.

We generated $21 million from operating activities.

Our net debt at year end was $118 million, a reduction of $15 million from the level at September 30.

I will now turn to our operating segment performance.

First, FoodTech revenue of $161 million was the largest quarter in the year and was up 21% or $29 million versus the fourth quarter of last year.

In constant currencies, FoodTech revenue was up 13%, primarily due to strong demand for freezing equipment in Asia and a shipment of equipment for two large food preservation projects received in late 2008.

FoodTech's operating profit was $16 million, and operating profit as a percent of revenue was 9.9%, well below the record margin set in the prior-year quarter.

FoodTech recorded a $1.4 million loss reserve for product liability litigation, which accounted for 90 basis points of the margin decline.

Additionally, competitive pricing pressure and a higher proportion of new equipment also impacted our margin for the quarter.

Food tax full-year operating margin was 9.8%.

Excluding the $1.4 million loss reserve, FoodTech's operating margin would have been 10.1% compared to 10.3% in 2008.

As Charlie mentioned, order sizes have become smaller.

Inbound orders for the quarter were behind the prior-year level by 5%.

Inbound orders improved slightly from the third quarter of 2009 due to increased activity in Western Europe.

FoodTech backlog was 35% lower than the fourth quarter of 2008, again reflecting the absence of large projects.

The 2008 year-end backlog included six large projects which accounted for 43% or $65 million of the total backlog.

There were no similarly sized orders in the 2009 year-end backlog.

Moving to our AeroTech segment, revenue declined 18% or $18 million from the fourth quarter of 2008, reflecting continued soft demand for ground support equipment and lower shipments of gate equipment.

AeroTech operating profit of $8 million increased 10% from the fourth quarter of 2008.

Cost savings from restructuring initiatives improved project margins in our gate equipment, and favorable mix of higher-margin projects more than offset the impact of lower volume.

As a result, AeroTech's operating margin for the quarter improved 230 basis points to 9.4% from the prior-year quarter.

On a full-year basis, AeroTech operating margin was 7.8%, down 80 basis points from prior year, while revenue declined 28%.

Turning to inbound, orders were down 9% from the fourth quarter of 2008, primarily due to order delays for gate equipment.

Recently, however, we received a $21 million order from the Navy for 130 air conditioning units and support equipment.

Inbound orders for both ground support equipment and automated guided vehicle product lines also improved compared to the fourth quarter of 2008.

Now, regarding corporate items, our full-year effective tax rate for 2009 was 32.9%, down from the September year-to-date rate of 33.9%.

As I mentioned earlier, this was primarily due to recognition of international tax credits and some deferred tax assets associated with one of our foreign subs.

For 2010 we believe the effective rate will be in the range of 33% to 35%.

Total corporate expenses excluding interest were favorable compared to the prior-year period, primarily driven by the absence of unrealized foreign exchange losses recorded in the fourth quarter of 2008.

For 2010 we expect corporate staff to be up 4% to 6%, primarily due to increased acquisition-related efforts.

Other income and expense is anticipated to be in the $4 million to $6 million range, assuming no significant foreign exchange movement.

Full-year capital spending and depreciation and amortization were $19.8 million and $22.6 million, respectively.

In 2010 we are evaluating alternatives for our 1940 vintage citrus facility in Florida, which may require additional capital spending above our historical average level.

Lastly, cash flow from operating activities totaled $54 million for the year.

Net debt was $118 million, a reduction of $24 million from the December 2008 year-end level.

We believe we have more than adequate liquidity with $14 million in cash on hand and about $138 million in available and undrawn credit lines.

Additionally, we believe we will generate sufficient free cash flow this year to meet all of our anticipated operating needs.

As I mentioned in the third-quarter call, we froze our US defined benefit plans at the end of 2009.

We are now estimating $6 million in net pre-tax savings versus 2009, and most of this will appear in segment earnings.

Finally, we plan to file our 10-K tomorrow, so there will be more detailed information available for your review.

In summary, we are pleased with our fourth-quarter performance.

We are now seeing improved market conditions, and we continue to produce positive cash flow from operations.

With that, we would like to take your questions.

Operator, please open the call for questions.

(Operator instructions) Jason Ursaner, CJS Securities.

Congratulations on the solid full-year results.

First, the loss reserves in FoodTech -- you said that was $1.4 million?

That's correct.

And the pension freeze -- that's going to be a $6 million pre-tax savings?

Yes.

That turned out to be better than we had anticipated last fall.

We were anticipating $2 million after-tax or $3 million pre-tax, but improved pension results and then some of the accounting that got finalized in how things are recognized are going to result in a higher year-over-year savings for us in 2010 versus 2009.

So the number now, net of increased contributions to the 401(k) plan, is estimated to be $6 million year-over-year.

Okay, great.

And then, Charlie, you gave some details on the Florida orange market and you mentioned the January freeze not as bad as first thought.

I thought there was a USDA report, that was kind of a supplemental report, that mentioned damage from the early and mid-season oranges worse than first expected.

Well, having lived through lots of freezes, the press reporting normally is driven by the growers.

And they are not objective in the sense that it's in their interest to say the crop is smaller.

I was with customers a couple of weeks ago, and I had one good customer in Florida kind of wink at me about the USDA number.

He thought his early mids might actually be stronger than their estimate.

So it's still kind of a guess.

But the point of my comments were that the drought conditions early in the year affected the bloom, which was the major driver of why the crop is down, and then the freeze knocked another 4% or 5% off the crop.

If you are interested in more detail, the other good news is, this cold weather has forced a very strong bloom on the trees for next season.

So they are already -- you've got to get through the hurricane season, obviously, but next year's crop looks like it's going to rebound nicely, potentially, back to the 160.

The Valencia crop, by the way, is the one that starts harvesting pretty much right now, and I don't think the damage was as bad as the early mids.

But I guess just staying with that, even before the crop freeze, it was down, you mentioned, fairly significantly.

So how should we think about this in terms of the overlap of the two seasons?

Is it going to be a more muted seasonality?

Well, as you know, the Florida crop season, as you know, goes from like the fall into -- through June.

So the bigger impact for the '09-'10 crop, the biggest impact is in '10.

And the '10-'11 crop, the biggest impact is in '11.

So I tried to give you some -- size it by telling you $0.04 to $0.05 a share is the impact of the lower crop in Florida.

And then just in AeroTech, what percentage of the revenue is from the Halvorsen loader?

Let me have Cindy check on that.

It's like 7% or 8% of our new equipment sales, is what's in our investor deck.

So with it not in the budget request, how do we begin to think about its contribution after mid-2010?

Is this going to be offset more or less by the Navy order?

Well, right now we've got orders that will carry us into the second quarter.

And we are not in the current FY '10 budget.

Now, in the '11 budget there is a line item called Halvorsen, but it's got zero dollars assigned.

I didn't put this in my remarks, but we are still working with our elected representatives from Florida and elsewhere to try to get some funding to keep this line alive from an Air Force perspective.

We do have a lot of international potential.

The problem gets to be, the international order sales cycle is kind of long.

In the near-term, I think we think that the Navy might order as many as 10 here that we would still ship for this year.

So I'm going to be down year-over-year.

I think probably in the worst-case we'd be off 50%.

In addition to the new Halvorsen's, we also have engineering support contracts and our annual maintenance contracts and spare parts.

So it just depends on how many international orders we can bag.

And then of course, we've got to work on funding for 2011.

I should also mention that, assuming that we go out of production sometime in the next year or two for the Air Force, that there is a follow-on logistics tail which will be to rebuild all of these.

The oldest Halvorsens are now getting past 10 years old.

So that will probably be an FY '12 -- FY '11 or '12 kind of proposal, and that's yet to be determined who or how that will happen.

But since we own the data package, we are in a very strong position to participate in the eight- or nine-year rebuilding program.

Okay, great.

And then, just regards to the longer lead times you mentioned, I know last quarter you had joked around that if I needed a deicer you could get it to me in a week.

So is there a divide by product line, or is it kind of across the board longer lead times?

I would say right now across the board we have shorter lead times.

I was noodling around with some math this week, looking at my third-quarter ending backlog versus the previous year and then my fourth-quarter backlog.

And I looked at my sales, for example, in FoodTech that were significantly up.

And they told me the amount of small ball we were playing, i.e., we were inbounding orders in the quarter and shipping them in the quarter.

And in fact, the general manager of our food solutions division North America -- he's got his team calling it 2010 is going to be a year of small ball.

We're going to win by playing small ball.

So I think the good news -- and we are -- how do I say?

We don't like to see our backlogs low in both segments year-over-year.

The good news is, our inbound to date, this year, is healthy and we feel good about it.

So the issue is, because of the small ball, I can't see as far out into the year.

So I want to see a few more months of this good inbound before I can get more confident with our forecast.

And the small orders, it's a lack of credit, or it's just a lack of expansionary interest?

You know, this would be just a guess on my part.

I'm guessing just a general uncertainty in the global economy is causing people to be cautious about large capital expenditures.

And I think, by my definition of large, we think anything over about $4 million is a large project.

More specifically on GSE, as these orders, I guess, continue to be deferred, are they lost for the year, or do you think it's building up a pent-up demand in the industry?

When was the last maybe major industry-wide fleet buy?

Well, the answer is, it is being deferred, and some day the piper will have to be paid.

The equipment is really aging.

When I say small orders in GSE, what I'm talking about is in late '07 we had an eight-digit, million-dollar order with Air France, which was an annual big buy, a contract like that.

That's the kind of orders we're not seeing.

And my major freight customers normally give me an annual big number.

And so, instead, what we are having to do is forecast a single deicer, two loaders here, three loaders to the Middle East, one to Australia.

So it's all one-sie, two-sie kind of orders, and my lead times have definitely shrunk.

So ground support equipment inbound was slightly ahead of inbound in '08, which is the signal we've bounced off bottom.

And the developments in the electric loaders -- is that going to create demand?

Is there an ROI from that, or is that more of a government mandate that drives that?

I think government mandate is what's driving it.

The carbon footprint at the airports is becoming a big political deal, and I think if you want to fly into Heathrow now you've got to show you're carbon neutral.

And we think ground support equipment is going to be a piece of many pieces to the solution of that issue.

We're still waiting to see sales take off there.

We've sold a few here and there.

There's a lot of interest.

We had an all-electric day at Orlando, and we have people demoing product right now as we speak, both in Europe and the United States.

So that may be a nice little retrofit kit program for us as well as new products.

We have the ability to go in and retrofit a Commander 15 loader with a -- take out the diesel and electrify it.

Thanks a lot for the details.

Congratulations on the results.

Gary Farber, CL King.

Just a couple of questions, one on Latin America.

Can you quantify what percentage of revenue that area -- in total, the FoodTech Latin America as totally revenue, what percentage it is?

Cindy will look it up, but it's tiny.

It's a certainly off, 2009 versus 2008, with a lesser buy in Brazil.

Cindy will look it up; it's single digit.

And then just one other question on the cost side -- is it possible you'll take out more costs from the Company in the current environment?

Yes, there is.

The cost-cutting gets to be tougher now because -- I don't want to say low hanging fruit, but we did all the obvious things.

And if -- we've got each division with contingency challenges in their budget as they watch this small ball inbound.

If we hiccup for a couple of months, we're going to take further cost reduction action.

Right, and can you just go back to -- I missed your comments.

You were saying, are you going to add staff or something like that in some areas, did you say earlier in the call; or no?

Well, we said that our corporate staff spending would be up 4% to 6%, and some of that higher spending is related to our efforts at increasing -- increasing efforts in acquisition, building the pipeline and going after --

Because of the downturn after we spun out and the global recession, we were loath to add any resource.

But we were way under-gunned on trying to get our acquisition pipeline rebuilt.

So we've hired a couple of resources with strategy consulting and M&A transaction background, and we have also retained some outside banker help for Asia, in particular.

So we've added a little bit of resource because we continue to generate cash.

And if there's one area I'm disappointed in, the acquisition pipeline is not as robust as I wish it were.

And is that because people are just reluctant to sell in a weak environment, or something else?

Well, some of it's that; we're still seeing that.

But some of it's just -- it takes resources to go build your pipeline, and we were sort of under-gunned.

By the way, the FoodTech sales in Latin America in '09 were 10%, a little bit higher than I thought.

Okay.

And, on the cost side, you quantified what the pension change is.

Is there anyway you can give us any kind of way to think about the magnitude of -- you've done all these restructuring actions in fiscal '09.

How much benefit will it provide this year, do you think?

Well, the way I'm looking at the year, obviously some of the savings I got in '09 already.

And then, of course, we'll have further cost improvement this year.

The way I'm looking at the year, if this is helpful, is we've got some headwinds as we come in the year.

One I mentioned in my remarks was the Halvorsen will definitely be down; it's a very profitable product line.

Another is the citrus crops will be down, another very profitable product line.

And then another headwind -- and this is anybody's guess -- which is currency, if the dollar starts to get stronger again, I have a translation hit.

And you can get a sense of that from -- what was it for the year, Ron?

Well, for the year, with the stronger dollar, if you look at the dollar year-over-year, '09 versus '08, the strengthening cost us about $0.04 a share.

But, against those headwinds, I think the significant cost-cutting we've done in ground support equipment where we literally have -- 50% of the people we had two years ago, on relatively modest or hardly any revenue improvement, we will have, we hope, significant bottom-line improvement, which will help offset Halvorsen.

Against the citrus crop, we've got what looks like a small ball recovery market for freezers and food solutions division.

And then we've also got, as you point out, cost savings year-over-year.

So I'm thinking we've got positives to offset all of our headwinds.

And as I said before, I'm really encouraged year-to-date.

It's early in the year, two months, but really encouraged by the inbound year-to-date.

Alexander Vecchio, Morgan Stanley.

Good morning, everybody; it's actually Rob Wertheimer.

So I guess I have three questions.

The first is just -- and I jumped on a minute late, so I apologize -- but, the gross margin was a little bit softer, revenues were good.

And I know you've had a trend of more parts and service after market.

So is that what happened on the gross margin line?

A couple of things happened that impacted the gross margin line in the quarter.

One was this loss reserve we took on a product liability litigation that sprung out of Tunisia, which was a $1.4 million charge.

That was about 130 basis points.

And then also, quarter to quarter, the mark to market adjustments also were similarly about 130 basis points.

Those are the major two items in the quarter that impacted gross margin from the third quarter.

Perfect.

The second question is, I think, Charlie, you mentioned credit tightening a bit.

Can you talk about whether you're seeing credit tighten sequentially for your customers, and if you could characterize whether it's banking institutions or finance specialists that you are seeing it in?

(multiple speakers) I know it's not your company, but --

The main area we are seeing is just the smaller customers.

Obviously, Unilever and Campbell Soup and -- the big food companies don't have any problem with credit, so it's the smaller companies.

So maybe, for example, a small ground handler that buys deicers that has trouble getting access to credit, or maybe a Latin American customer that's small that would buy a small frying line.

So it's the smaller customers in some but not all of our product lines.

And how does that mix with the small ball and the smaller orders and the lower dollar amount orders coming in?

In other words, are those big guys ordering small or --

Yes, it's the big guys ordering small.

The projects are smaller.

But I don't see that as being a contradiction; I'm just saying, I guess that's another little headwind from smaller customers.

I was just curious; is it the big guys going small.

And I'm not sure what your time frame in between when you start talking to customers and when you get the actual order is, but you guys sound fairly cautious, really, on the order side.

Your conversations pre-order, quote-unquote, are they also somewhat subdued at this point?

Well, no.

I think the activity level is definitely up from a year ago, and the number of conversations is up.

And so we are excited by that.

What is happening is, the sales cycle -- the number of conversations you have and planning before you actually get a purchase order -- it seems to be lengthening.

Some of it -- I looked at -- we had the $21 million LBAC order from the Navy.

We were forecasting that was going to be inbounded by the end of November.

Now, maybe that's more government bureaucracy than it is economic cycle.

But it seems like a lot of our orders are slipping out beyond where we are forecasting to get them.

It's just taking longer.

We had one customer in FoodTech with a couple-million-dollar order, million-dollar order, that we won in the fall.

And we said, okay, where's the purchase order?

And he said, we're not ready to order.

We said, will didn't we win?

He said yes, you won.

And we said, well, what's the story?

They said, we're just going to wait a little bit.

And so, what do you want us to do?

And they said, well, come back and see us in March.

The other comment I will make -- and this is anecdotal, so you have to discount it because it's anecdotal, is I was at the Poultry Show in January, and as compared to January '08 Poultry Show in Atlanta, you could have shot a bazooka down the aisle and not hit a single customer.

The energy level at the show was up.

And just reading my sales force body language, even despite the lack of big orders, it was much, much more positive.

So we're hopeful that that will start to recover.

(Operator instructions) Liam Burke, Janney Montgomery Scott.

On the backlog for AeroTech, you are down about 17%, but you do have a fair amount of revenue tied into the outsourcing services contract.

What percent of the backlog, or however you want to think about it, is not in that?

Or, how much of that services revenue is not in the backlog?

Well, we only enter orders for our multi-year service contracts, as you know, quarter by quarter.

I don't think we've ever publicly stated the total size of that backlog, because it's multi-year.

No; I think what we've said is the services business is around a $60 million business, and we enter a quarter of that in backlog.

Okay, so in a sense, some of that backlog is understated?

It is, but we just think it's misleading to put a multi-year backlog in backlog.

Sure, okay.

And the cash flows should be pretty strong in 2010.

You did talk about acquisitions.

But if they don't materialize, would you continue to just pay down debt?

Or, do you think you would want to accumulate a rainy day fund for acquisitions?

I think we'll just continue to pay down debt, if we -- to the extent our cash flow continues to be greater than what we're spending.

And then we'll pay down the debt, and then if we do find a very good opportunity, we've got plenty -- as Ron said, plenty of access to our credit lines.

And so we have dry powder in the form of our debt financing, which stretches out to 2013-2015.

Dick Ryan, Dougherty.

Ron, what would be a CapEx estimate for 2010?

Usually, when you look at it historically, we've been in the mid-20s; obviously down last year, although a large proportion of our investment last year was for revenue-producing equipment.

But traditionally, over the years, it has probably ranged in the mid-20s, I'd say.

Okay.

And D&A?

D&A has actually, over the term, been a little less, maybe about $2 million less than our CapEx.

Okay.

Charlie, you mentioned a couple of times, you're glad to see the inbound orders year-to-date.

Is that on both the AeroTech and FoodTech side, or one favors the other?

No, it's in both.

And with seeing global improvement in cargo shipments, are your freight customers, are they kind of giving you a look see what they might be expecting a little bit longer-term, or are those conversations not at that point yet?

They are not at that point yet.

The freight guys' fiscal year -- we normally get into those conversations probably in the next month or two.

But we don't anticipate them pulling the trigger on major capital spend until -- we are last in line after buying airplanes, basically.

So to the degree they start freeing up capital spending, they will go back to their airframe replacement program.

And we are guessing it's going to be another probably year before we see significant improvement.

Jason Ursaner, CJS Securities.

Just a quick follow-up.

You got asked about the debt, and I think there was a $25 million swap that rolled off?

That's correct.

It rolled off at the end of January 2010.

And then there's another $25 million that rolls off next year?

That's correct, Jason.

(Operator instructions).

And, we have no additional questions at this time.

This concludes our fourth-quarter conference call.

If you have any further questions, please give me a call.

A replay of our call will be available via phone or in our website later this morning.

Thank you for joining us today.

Ladies and gentlemen, this does conclude today's JBT Corporation fourth-quarter 2009 earnings conference call.

You may now disconnect.