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Operator
Good morning and welcome to JBT Corporation's third quarter 2013 earnings conference call. My name is Victoria and I will be your conference operator today. (Operator Instructions) I will now turn the call over to JBT's Director of Investor Relations, Mr. Debarshi Sengupta, to begin today's conference.
Debarshi Sengupta - Director
Thank you, Victoria. Good morning, everyone, and welcome to our third quarter 2013 earnings conference call. With me on the call are Executive Chairman, Charlie Cannon; our President and CEO, Tom Giacomini; and our Vice President and CFO, Ron Mambu. Before we begin, I would like to remind everyone the forward-looking statements in today's call are subject to the Safe Harbor language in yesterday's press release and 8-K filing. Our 2012 Form 10-K also contained information regarding certain risk factors that may have an impact on our results. These documents are available on our Investor Relations website.
Now, I would like to turn the call over to Charlie.
Charlie Cannon - Executive Chairman
Thanks, Debarshi, and good morning, everyone. On August 26, we announced implementation of our management succession plan by naming Tom Giacomini, our new President and CEO. I couldn't be more pleased to be passing the baton to Tom. He's an extremely experienced and well-seasoned executive who brings broad strategic and operational expertise to JBT. I will remain with the Company as Executive Chairman through our next Annual Meeting to assist Tom as needed with this leadership transition. I want to thank all of you for your support for JBT and for me personally. I am proud to have been affiliated with JBT and the track record of success JBT employees have established. I am confident that under Tom's leadership, the Company will continue to improve.
With that, I'll turn it over to Tom.
Tom Giacomini - President & CEO
Thanks, Charlie, and good morning, everyone on this call. Since joining JBT, I have met with some of our customers, our management leadership team, and also visited majority of our domestic and international facility. The Company has strong technology and market positions, a large installed base, global reach, and excellent growth and [productivity] improvement prospects. These meetings and visits have reaffirmed my initial assessment of JBT. As a result, I am very excited about our future. We greatly appreciate Charlie's many contributions during his 30-plus years of service and his leadership of JBT since it became an independent public company in 2008. The Company has made significant strides on its 4G value creation strategy.
Working together with the leadership team and the Company's talented and dedicated professionals around the world, I am confident we will continue to create value for our shareholders and customers. Over the next few months, the leadership team and I will continue to review our strategic initiatives. We have already started exploring margin expansion projects primarily around pricing and identifying productivity improvement. As we continue to develop these initiatives and our strategy, I anticipate sharing further details with you in the first half of 2014.
As part of the management succession plan, we also announced Ron Mambu's intent to retire as CFO upon the identification of his successor. Ron and I are heading the effort with the aid of a leading search firm and the process is well underway. With that, I will provide some commentary on the business environment for our two segments. I will also discuss our business outlook and Ron will cover our third quarter 2013 financial results before we open up the call to questions.
Starting with FoodTech. Freezing and protein processing in North America continues to stay on track to deliver record performance in 2013. Equipment demand this year has been largely driven by non-poultry food category; primarily meat, bakery, and ready meals. This trend slowed in the third quarter. With corn prices down nearly 40% year-over-year, the economics have improved for poultry processors so we anticipate increased demand from poultry customers over the next year. In Asia, I am pleased with our strong backlog position for freezing and protein processing, up nearly 25% over last year. This reflects the success we have achieved with our locally designed and manufactured freezers in China. We anticipate entering 2014 with a strong backlog position aided by our large projects expected to be received before year-end.
Performance in Europe, however, has been disappointing. After-market volume has been light. While equipment quote activity coming out of the summer vacation month has been healthy, our inbound orders were not in line with our expectation. The resulting impact of lower volume coupled with higher anticipated execution costs are driving lower fourth quarter earnings expectations for the region. However, order quote activity in October has been encouraging and we continue to closely monitor the development. Moving to the in-container product line, inbound order rates have been strong throughout the year driving significantly higher year-over-year backlog levels. As a result, this business is well positioned for a record year in 2013. We see a healthy prospect list attributable to strong market tailwinds and we anticipate the business will enter 2014 with a continued favorable backlog position.
Last, the fruit and juice processing business is on track to achieve solid results this year. Earlier this year, we entered into lease contracts with several new customers and renewed a contract with a major customer. Although the USDA's preliminary forecast for Florida's 2013 to 2014 crop is down relative to last year, our actions are expected to more than offset any unfavorable impact of lower forecasted box count. For FoodTech overall, we continue this trend with the earlier guidance of mid-to-high single-digit percentage revenue growth in 2013. We expect full-year FoodTech operating income margin to be almost 11%, representing more than 100 basis points improvement over last year's margins. FoodTech continues to be on track to deliver record profit performance in 2013.
Turning to AeroTech. Demand for deicers and ground support equipment has been significantly higher than last year. We expect to sell over 50% more units this year than last year. Partially offsetting this increase, demand for loaders out of Europe has recently been weaker than expected. We attribute this to challenging macro conditions and increased competitive pressures in the region. However, the fourth quarter in ground support equipment overall is shaping up to be yet another seasonally strong quarter. Moving to gate equipment, I'm pleased to report that inbound orders in the quarter nearly doubled sequentially and were up over 70% year-over-year. This was in line with our expectations with project delivery scheduled for 2014 and beyond. As we close out the year, we have limited order risk and remain focused on execution.
Last, turning to the automated systems business unit, recent order activity has been very strong. We ended the third quarter with a backlog nearly double that of last year. There's good momentum in the business with demand coming in from new market segments and we anticipate entering 2014 with backlog significantly higher than last year. Overall for AeroTech, we started off the year slowly, but order activity picked up substantially in the second and third quarters. We have a seasonally strong fourth quarter ahead of us and we remain focused on execution. We continue to project AeroTech segment revenue to grow at a low single-digit percentage in 2013 and segment operating income margin to be roughly 8.5% for the full year. Lastly, we expect AeroTech backlog heading into 2014 will be up relative to the prior year.
In summary for the full-year of 2013, we are projecting segment operating results in line with prior guidance. However, we are revising our projected diluted EPS from continuing operations to be in the range of $1.26 to $1.32. This includes the impact of incremental management succession plan expenses and foreign currency impact. Excluding all management succession related expenses for the full-year of 2013, the guidance range for adjusted EPS from continuing operations would be $1.32 to $1.38.
Now, I will turn it over to Ron to provide more details on our third quarter results.
Ron Mambu - VP, CFO & Controller
Thank you, Tom. Our third quarter performance came in ahead of our expectations. Revenue of $234 million increased $28 million or 14% year-over-year while operating income of $12 million increased by 13%. These increases were driven by strong new equipment sales and higher recurring revenue of approximately $21 million and $7 million respectively. The higher sales volume offset the margin impact of an unfavorable product mix across both FoodTech and AeroTech during the quarter and higher corporate items. Third quarter diluted earnings per share from continuing ops was $0.25, an increase of 19% over the prior year. Adjusting for the $1 million in expenses related to the Company's announced management succession plan, diluted earnings per share from continuing ops was $0.27, an increase of 29%.
Now turning to segment results. FoodTech third quarter revenue of $138 million increased $21 million or 18% year-over-year while operating profit increased 38%. Higher equipment sales and aftermarket revenue contributed approximately $15 million and $7 million respectively in increased revenue. A higher proportion of revenue from lower margin product lines resulted in lower gross profit margin. However, segment operating margin expanded by approximately 120 basis points to 9% as a result of the overall increase in sales. The segment ended the third quarter with a solid backlog position of $185 million, up 7% year-over-year.
Moving to AeroTech. Third quarter revenue of $97 million increased $9 million or 10% year-over-year. Higher equipment sales and aftermarket revenue contributed approximately $9 million and $2 million respectively in increased revenue. Growth in the quarter largely resulted from strong sales of ground support equipment and automated systems. Lower airport service sales of $2 million partially offset the revenue increases. AeroTech segment operating profit margin contracted approximately 50 basis points year-over-year. Margin expansion from a strong sales pickup in the quarter was more than offset by unfavorable gate equipment product mix. During our last earnings call, we forecasted AeroTech orders to pickup in the back half. Third quarter inbound orders of $121 million increased 17% sequentially meeting our expectation. Segment backlog of $182 million increased 6% from the prior year.
Corporate items in the quarter were $11 million, an increase of $2 million from the prior year. We incurred $1 million in expenses related to management succession. We also recognized $1.6 million net loss on foreign currency positions. For the full year, the Company expects corporate items excluding net interest expense and any future foreign currency impacts to approximate $32 million. The increase from prior guidance is largely a result of expenses related to management succession. Cash generated by operating activities during the third quarter was $18 million driving debt net of cash to a new record low of $73 million. Income tax expense in the third quarter of 2013 reflected a full year estimated effective income tax rate of 34%, in line with our prior guidance.
In the third quarter, we recognized $600,000 in favorable discrete adjustments reflecting a lower tax liability for fiscal year 2012. Capital expenditures for the quarter totaled $7 million, roughly flat relative to the prior year period. For the full year, capital expenditures are projected to be about $30 million, slightly lower than our earlier estimate. Year-over-year increase in capital expenditures this year has been driven by the replacement of our Lakeland, Florida manufacturing facility. As Tom mentioned earlier, we are projecting segment operating results in line with prior guidance. However, we are revising our projected diluted earnings per share from continuing ops to be in the range of $1.26 to $1.32.
Versus our prior guidance, our new guidance includes an incremental $0.04 impact resulting from the management succession plan. In addition, we incurred a $0.03 charge in the third quarter related to foreign currency positions. Excluding all expenses associated with the management succession plan for the full-year 2013, the range for adjusted diluted earnings per share from continuing ops would be $1.32 to $1.38. It's also noteworthy that we expect incremental costs associated with our management succession plan to have an impact of approximately $0.05 per share in 2014. We plan to file our 10-Q tomorrow so there will be more detailed information readily available for your review.
With that, we'd like to take your questions. Operator, please open the call for questions.
Operator
(Operator Instructions) Jason Nacca, Sidoti.
Jason Nacca - Analyst
The first question I have has to do with the strong sales in deicers this quarter. Now is that more a function of weather patterns or is this (inaudible) for example in China kind of picking up momentum?
Charlie Cannon - Executive Chairman
Well, I'll chime in here. Our deicer sales this year substantially up over last year and we've seen that certainly in the third quarter and expect that will be up for the full year well over the last year. And when we to tried to correlate that in the past, it's been difficult to do. It's more a function of weather patterns and buying patterns than anything else. Our operations in China are moving forward, but they haven't materially moved the inbound levels yet.
Jason Nacca - Analyst
Okay. And then secondly, Tom, now that you had some time to initially overview some of the operations; in your viewpoint so far, could you kind of outline some of your initial thoughts on how to increase margins now both in FoodTech and AeroTech?
Tom Giacomini - President & CEO
Sure, thanks for the question. I was just reflecting it's been 38 days since I joined JBT, it's been a busy 38 days. As I look at the businesses, we have fundamentally strong positions and I think the thing that probably impressed me the most is the way that we engage with customers and the value we create for them beyond the initial sale. And as we're starting to look inside the margins, for me there's really two primary levers we are going to work on. The first one is pricing and we already have an activity underway inside our business to look at pricing and how we maximize that. And then secondly, it's around productivity or operational excellence and we're also putting measures and programs in place to further that process.
Jason Nacca - Analyst
Okay. Now on the pricing, would you say that you're more balanced and more looking for the FoodTech segment or on the AeroTech, would you say pricing would more imminent?
Tom Giacomini - President & CEO
I would say there are opportunities in both businesses and we've got some preliminary work we've already looked at so we'll be pursuing prices in both segments.
Jason Nacca - Analyst
Okay. That's it. Thanks, guys.
Operator
Jason Ursaner, CJS Securities.
Jason Ursaner - Analyst
I thought you mentioned that you expect next year to be entering with backlog significantly higher than last year. So I mean just on the surface it seems a bit challenging given the heavy deliveries in Q4 and relatively strong FoodTech quarters last year. So I was just wondering if maybe you can walk through some more detail by market in terms of your inbound expectations for how you get there?
Tom Giacomini - President & CEO
I'll cover it from an overall level and then I'll ask Ron to give you any other detail you may like. The way we see it is we will exit 2013 with an improved backlog position over prior year based on our expected order rates in the fourth quarter. We also are encouraged by the fact that as we look into our backlog, year-over-year we have more visibility into orders into 2014 and more backlog in orders for the subsequent years than we did in 2013 as we exited 2012. So there's two positive factors there as we look at how we'll end the year.
Ron Mambu - VP, CFO & Controller
Jason, I think Tom commented in his remarks that we expect to be up in backlog going into the year 2014. But in-container has been strong for us and we've also seen our backlog positions in Asia move up. So, we're expecting to enter 2014 in better shape than we entered 2013.
Jason Ursaner - Analyst
Okay. And Tom, you had a lot of success at Dover in terms of M&A. So with JBT rendering of business, it's a leader in relatively fragmented market. Just wondering if maybe you could talk about your views and criteria for acquisition and how you see it playing into the long-term growth strategy?
Tom Giacomini - President & CEO
Certainly. As I came over to JBT, I was certainly encouraged by the promise. And as we've looked at our markets, we do serve substantially good sized markets that have a lot of fragmentation in terms of the players in them. So I would expect as we look at growth and we look at the market segments we play in that have strong tailwinds or sustainable growth, we'll look to put more of our resources behind those and there'll be an organic element and there'll also be hopefully a strong M&A piece. And my thinking is as we sit here today, our balance sheet is in a good condition and gives us lots of optionality around what that M&A program may look like.
Jason Ursaner - Analyst
Okay. Great, appreciate the details.
Operator
(Operator Instructions) There are currently no further phone questions. I would like to turn the call back over to Mr. Debarshi Sengupta for any closing remarks.
Debarshi Sengupta - Director
Thank you, everyone, for joining us this morning. A replay of our call will be available on our IR website early this afternoon. If you have any further questions, please give us a call. Have a good day.
Operator
Thank you for your participation in today's call. This concludes today's conference. You may now disconnect.