Kadant Inc. (NYSE: KAI) reported its financial results for the
second quarter ended July 3, 2021.
Second Quarter Financial Highlights with Records
Achieved in Each of the Following Metrics
- Bookings increased 60% to $213 million.
- Revenue increased 28% to $196 million.
- Operating cash flow increased 101% to $44 million.
- Free cash flow increased 100% to $42 million.
- Net income increased 97% to $23 million.
- GAAP diluted EPS increased 96% to $1.96.
- Adjusted diluted EPS increased 90% to $2.01.
- Adjusted EBITDA increased 56% to $41 million and represented
21.1% of revenue.
- Backlog was $242 million.
Note: Percent changes above are based on comparison to the prior
year period. Free cash flow, adjusted diluted EPS, adjusted EBITDA,
adjusted EBITDA margin, and changes in organic revenue are non-GAAP
financial measures that exclude certain items as detailed later in
this press release under the heading “Use of Non-GAAP Financial
Measures.”
Management Commentary“Our global workforce once
again executed extremely well in delivering significant value to
our customers and record results for our stockholders,” said
Jeffrey L. Powell, president and chief executive officer of Kadant
Inc. “The broadening economic recovery has provided us with
opportunities to grow our business and our results show that our
efforts are working. Record revenue and solid operational execution
led to strong adjusted EBITDA margin expansion across all our
operating segments and we are well positioned for the second half
of 2021.
“New order activity was driven by strong demand across all our
operating segments and was particularly strong for our Industrial
Processing segment. Our end markets continue to show signs of
building momentum as we enter the second half of the year. As the
economic recovery spreads to Europe and Asia, we are seeing
increased customer optimism and believe the second half of 2021
will finish strong despite headwinds from supply chain constraints
and inflationary pressure on material costs.”
Second Quarter 2021 compared to 2020Revenue
increased 28 percent to a record $195.8 million compared to $152.9
million in 2020. Organic revenue increased 21 percent, which
excludes a seven percent increase from the favorable effect of
foreign currency translation. Gross margin was 43.6 percent
compared to 43.5 percent in 2020.
GAAP diluted earnings per share (EPS) increased 96 percent to a
record $1.96 compared to $1.00 in 2020. Adjusted diluted EPS
increased 90 percent to a record $2.01 compared to $1.06 in 2020.
Adjusted diluted EPS excludes $0.05 of acquisition costs in 2021
and $0.03 of acquisition costs and $0.03 of restructuring costs in
2020. Net income increased 97 percent to $22.9 million compared to
$11.6 million in 2020. Adjusted EBITDA increased 56 percent to a
record $41.3 million and a record 21.1 percent of revenue compared
to $26.6 million and 17.4 percent of revenue in the prior year
quarter. Operating cash flow increased 101 percent to a record
$44.4 million compared to $22.0 million in 2020.
Bookings increased 60 percent to a record $213.2 million
compared to $133.0 million in 2020. Organic bookings increased 50
percent, which excludes a ten percent increase from the favorable
effect of foreign currency translation.
Summary and Outlook“As the U.S. continues its
robust growth and other regions begin to show increasing economic
momentum, we are well positioned to capitalize on opportunities
wherever they may come next,” Mr. Powell continued. “We remain
cautiously optimistic that our end market demand will continue to
show strength while recognizing the growing risk the COVID-19 Delta
variant and supply chain constraints present to near-term economic
growth. Our revenue expectation for the year has increased due to
our record bookings and backlog. Our acquisition of the Clouth
Group of Companies in the third quarter will further strengthen our
revenue performance for the year. Accordingly, we are increasing
our revenue expectation to $783 to $793 million for 2021 from our
previous range of $710 to $730 million.”
Conference Call Kadant will hold a webcast with
a slide presentation for investors on Wednesday, August 4, 2021, at
11:00 a.m. eastern time to discuss its second quarter performance,
as well as future expectations. To access the webcast, including
the slideshow and accompanying audio, go to www.kadant.com and
click on “Investors.” To listen to the webcast via teleconference,
call 888-326-8410 within the U.S., or +1-704-385-4884 outside the
U.S. and reference participant passcode 3083302. Prior to the call,
our earnings release and the slides used in the webcast
presentation will be filed with the Securities and Exchange
Commission and will be available at www.sec.gov. An archive of the
webcast presentation will be available on our website until
September 3, 2021.
Shortly after the webcast, Kadant will post its updated general
investor presentation incorporating the second quarter results on
its website at www.kadant.com under the “Investors”
section.
Use of Non-GAAP Financial MeasuresIn addition
to the financial measures prepared in accordance with generally
accepted accounting principles (GAAP), we use certain non-GAAP
financial measures, including increases or decreases in revenue
excluding the effect of acquisitions and foreign currency
translation (organic revenue), adjusted operating income, adjusted
net income, adjusted diluted EPS, earnings before interest, taxes,
depreciation, and amortization (EBITDA), adjusted EBITDA, adjusted
EBITDA margin, and free cash flow.
We believe these non-GAAP financial measures, when taken
together with the corresponding GAAP financial measures, provide
meaningful supplemental information regarding our performance by
excluding certain items that may not be indicative of our core
business, operating results, or future outlook. We believe that the
inclusion of such measures helps investors gain an understanding of
our underlying operating performance and future prospects,
consistent with how management measures and forecasts our
performance, especially when comparing such results to previous
periods or forecasts and to the performance of our competitors.
Such measures are also used by us in our financial and operating
decision-making and for compensation purposes. We also believe this
information is responsive to investors' requests and gives them an
additional measure of our performance.
The non-GAAP financial measures included in this press release
are not meant to be considered superior to or a substitute for the
results of operations prepared in accordance with GAAP. In
addition, the non-GAAP financial measures included in this press
release have limitations associated with their use as compared to
the most directly comparable GAAP measures, in that they may be
different from, and therefore not comparable to, similar measures
used by other companies.
Revenue in the second quarter of 2021 included a $11.6 million
favorable foreign currency translation effect. Revenue in the first
six months of 2021 included a $17.6 million favorable foreign
currency translation effect and $0.5 million from an acquisition.
We present increases or decreases in organic revenue, which
excludes the effect of acquisitions and foreign currency
translation, to provide investors insight into underlying revenue
trends.
Our non-GAAP financial measures exclude restructuring costs,
acquisition costs, and amortization expense related to acquired
backlog. Free cash flow presents cash flow from operations
excluding capital expenditures. These items are excluded as they
are not indicative of our core operating results and are not
comparable to other periods, which have differing levels of
incremental costs, or none at all.
Second Quarter
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax acquisition costs of $0.6 million in 2021 and $0.4
million in 2020.
- Pre-tax restructuring costs of $0.5 million in 2020.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax acquisition costs of $0.6 million in 2021 and $0.3
million ($0.4 million net of tax of $0.1 million) in 2020.
- After-tax restructuring costs of $0.3 million ($0.5
million net of tax of $0.2 million) in 2020.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $2.1 million in 2021 and $0.9 million
in 2020.
First Six Months
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax acquisition costs of $1.9 million in 2021 and $0.4
million in 2020.
- Pre-tax restructuring costs of $0.5 million in 2020.
- Pre-tax expense related to amortization of acquired backlog of
$0.1 million in 2021.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax acquisition costs of $1.7 million ($1.9 million net
of tax of $0.2 million) in 2021 and $0.3 million ($0.4 million net
of tax of $0.1 million) in 2020.
- After-tax restructuring costs of $0.3 million ($0.5 million net
of tax of $0.2 million) in 2020.
- After-tax expense related to amortization of acquired backlog
of $0.1 million in 2021.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $4.3 million in 2021 and $3.6 million
in 2020.
Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are set forth in this
press release.
Financial
Highlights (unaudited) |
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts and percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
Consolidated Statement of Income |
|
July 3,2021 |
|
June 27,2020 |
|
July 3,2021 |
|
June 27,2020 |
Revenue |
|
$ |
195,811 |
|
|
$ |
152,860 |
|
|
$ |
368,274 |
|
|
$ |
311,987 |
|
Costs and
Operating Expenses: |
|
|
|
|
|
|
|
|
|
Cost of
revenue |
110,493 |
|
|
86,412 |
|
|
207,241 |
|
|
177,216 |
|
|
Selling, general,
and administrative expenses |
49,267 |
|
|
45,073 |
|
|
98,698 |
|
|
90,665 |
|
|
Research and
development expenses |
3,041 |
|
|
2,798 |
|
|
5,898 |
|
|
5,874 |
|
|
Restructuring
costs |
— |
|
|
456 |
|
|
— |
|
|
456 |
|
|
|
|
162,801 |
|
|
134,739 |
|
|
311,837 |
|
|
274,211 |
|
Operating
Income |
|
33,010 |
|
|
18,121 |
|
|
56,437 |
|
|
37,776 |
|
Interest
Income |
|
56 |
|
|
37 |
|
|
121 |
|
|
88 |
|
Interest
Expense |
|
(1,066 |
) |
|
(1,931 |
) |
|
(2,177 |
) |
|
(4,390 |
) |
Other Expense,
Net |
|
(24 |
) |
|
(31 |
) |
|
(48 |
) |
|
(63 |
) |
Income Before Provision for Income Taxes |
|
31,976 |
|
|
16,196 |
|
|
54,333 |
|
|
33,411 |
|
Provision for
Income Taxes |
|
8,949 |
|
|
4,474 |
|
|
14,510 |
|
|
9,033 |
|
Net Income |
|
23,027 |
|
|
11,722 |
|
|
39,823 |
|
|
24,378 |
|
Net Income
Attributable to Noncontrolling Interest |
|
(163 |
) |
|
(115 |
) |
|
(398 |
) |
|
(240 |
) |
Net Income
Attributable to Kadant |
|
$ |
22,864 |
|
|
$ |
11,607 |
|
|
$ |
39,425 |
|
|
$ |
24,138 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share
Attributable to Kadant: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.97 |
|
|
$ |
1.01 |
|
|
$ |
3.41 |
|
|
$ |
2.11 |
|
|
|
Diluted |
|
$ |
1.96 |
|
|
$ |
1.00 |
|
|
$ |
3.39 |
|
|
$ |
2.09 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
11,579 |
|
|
11,482 |
|
|
11,566 |
|
|
11,457 |
|
|
|
Diluted |
|
11,650 |
|
|
11,552 |
|
|
11,631 |
|
|
11,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
Adjusted
Net Income and Adjusted Diluted EPS
(a) |
July 3,2021 |
|
July 3,2021 |
|
June 27,2020 |
|
June 27,2020 |
Net Income and Diluted EPS Attributable to Kadant, as Reported |
|
$ |
22,864 |
|
|
$ |
1.96 |
|
|
$ |
11,607 |
|
|
$ |
1.00 |
|
Adjustments for
the Following: |
|
|
|
|
|
|
|
|
|
Restructuring
Costs, Net of Tax |
|
— |
|
|
— |
|
|
332 |
|
|
0.03 |
|
|
Acquisition Costs,
Net of Tax (b) |
|
557 |
|
|
0.05 |
|
|
297 |
|
|
0.03 |
|
|
Amortization of
Acquired Backlog, Net of Tax (c) |
|
21 |
|
|
— |
|
|
20 |
|
|
— |
|
Adjusted Net
Income and Adjusted Diluted EPS (a) |
|
$ |
23,442 |
|
|
$ |
2.01 |
|
|
$ |
12,256 |
|
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Six Months Ended |
|
July 3,2021 |
|
July 3,2021 |
|
June 27,2020 |
|
June 27,2020 |
Net Income and Diluted EPS Attributable to Kadant, as Reported |
|
$ |
39,425 |
|
|
$ |
3.39 |
|
|
$ |
24,138 |
|
|
$ |
2.09 |
|
Adjustments for
the Following: |
|
|
|
|
|
|
|
|
|
Restructuring
Costs, Net of Tax |
|
— |
|
|
— |
|
|
332 |
|
|
0.03 |
|
|
Acquisition Costs,
Net of Tax (b) |
|
1,730 |
|
|
0.15 |
|
|
297 |
|
|
0.03 |
|
|
Amortization of
Acquired Backlog, Net of Tax (c) |
|
65 |
|
|
0.01 |
|
|
26 |
|
|
— |
|
Adjusted Net
Income and Adjusted Diluted EPS (a) |
|
$ |
41,220 |
|
|
$ |
3.54 |
|
|
$ |
24,793 |
|
|
$ |
2.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Increase Excluding FX (a,d) |
Revenue by
Segment |
|
July 3,2021 |
|
June 27,2020 |
|
Increase |
|
Flow
Control |
|
$ |
70,762 |
|
|
$ |
51,365 |
|
|
$ |
19,397 |
|
|
$ |
15,610 |
|
Industrial
Processing |
|
82,681 |
|
|
65,673 |
|
|
17,008 |
|
|
10,795 |
|
Material
Handling |
|
42,368 |
|
|
35,822 |
|
|
6,546 |
|
|
4,972 |
|
|
|
|
|
$ |
195,811 |
|
|
$ |
152,860 |
|
|
$ |
42,951 |
|
|
$ |
31,377 |
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Parts and Consumables Revenue |
|
64 |
% |
|
64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Increase |
|
Increase Excluding Acquisition and FX (a,d) |
|
|
July 3,2021 |
|
June 27,2020 |
|
|
Flow Control |
|
$ |
134,516 |
|
|
$ |
108,514 |
|
|
$ |
26,002 |
|
|
$ |
20,585 |
|
Industrial
Processing |
|
151,835 |
|
|
130,382 |
|
|
21,453 |
|
|
11,704 |
|
Material
Handling |
|
81,923 |
|
|
73,091 |
|
|
8,832 |
|
|
5,903 |
|
|
|
|
|
$ |
368,274 |
|
|
$ |
311,987 |
|
|
$ |
56,287 |
|
|
$ |
38,192 |
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Parts and Consumables Revenue |
|
66 |
% |
|
65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Increase |
|
Increase Excluding FX (d) |
Bookings
by Segment |
|
July 3,2021 |
|
June 27,2020 |
|
|
Flow
Control |
|
$ |
71,819 |
|
|
$ |
49,361 |
|
|
$ |
22,458 |
|
|
$ |
18,660 |
|
Industrial
Processing |
|
101,899 |
|
|
53,144 |
|
|
48,755 |
|
|
40,412 |
|
Material
Handling |
|
39,447 |
|
|
30,471 |
|
|
8,976 |
|
|
7,212 |
|
|
|
|
|
$ |
213,165 |
|
|
$ |
132,976 |
|
|
$ |
80,189 |
|
|
$ |
66,284 |
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Parts and Consumables Bookings |
|
60 |
% |
|
71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Increase |
|
Increase Excluding Acquisition and FX (d) |
|
|
July 3,2021 |
|
June 27,2020 |
|
|
Flow Control |
|
$ |
147,818 |
|
|
$ |
117,105 |
|
|
$ |
30,713 |
|
|
$ |
24,733 |
|
Industrial
Processing |
|
188,505 |
|
|
118,982 |
|
|
69,523 |
|
|
56,664 |
|
Material
Handling |
|
81,331 |
|
|
72,506 |
|
|
8,825 |
|
|
5,568 |
|
|
|
|
|
$ |
417,654 |
|
|
$ |
308,593 |
|
|
$ |
109,061 |
|
|
$ |
86,965 |
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Parts and Consumables Bookings |
|
62 |
% |
|
68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
Business
Segment Information |
|
July 3,2021 |
|
June 27,2020 |
|
July 3,2021 |
|
June 27,2020 |
Gross
Margin: |
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
52.8 |
% |
|
53.5 |
% |
|
53.0 |
% |
|
53.2 |
% |
|
|
Industrial Processing |
|
40.1 |
% |
|
40.9 |
% |
|
40.3 |
% |
|
39.7 |
% |
|
|
Material Handling |
|
34.9 |
% |
|
33.8 |
% |
|
34.8 |
% |
|
34.7 |
% |
|
|
|
|
43.6 |
% |
|
43.5 |
% |
|
43.7 |
% |
|
43.2 |
% |
Operating
Income: |
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
$ |
19,324 |
|
|
$ |
10,260 |
|
|
$ |
34,770 |
|
|
$ |
23,590 |
|
|
|
Industrial Processing |
|
17,301 |
|
|
10,639 |
|
|
28,434 |
|
|
20,075 |
|
|
|
Material Handling |
|
5,592 |
|
|
3,593 |
|
|
10,035 |
|
|
7,727 |
|
|
|
Corporate |
|
(9,207 |
) |
|
(6,371 |
) |
|
(16,802 |
) |
|
(13,616 |
) |
|
|
|
|
$ |
33,010 |
|
|
$ |
18,121 |
|
|
$ |
56,437 |
|
|
$ |
37,776 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (a,e): |
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
$ |
19,563 |
|
|
$ |
10,716 |
|
|
$ |
36,006 |
|
|
$ |
24,046 |
|
|
|
Industrial Processing |
|
17,301 |
|
|
11,074 |
|
|
28,494 |
|
|
20,510 |
|
|
|
Material Handling |
|
5,619 |
|
|
3,593 |
|
|
10,062 |
|
|
7,735 |
|
|
|
Corporate |
|
(8,843 |
) |
|
(6,371 |
) |
|
(16,137 |
) |
|
(13,616 |
) |
|
|
|
|
$ |
33,640 |
|
|
$ |
19,012 |
|
|
$ |
58,425 |
|
|
$ |
38,675 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures: |
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
$ |
368 |
|
|
$ |
337 |
|
|
$ |
702 |
|
|
$ |
1,158 |
|
|
|
Industrial Processing |
|
1,191 |
|
|
211 |
|
|
2,995 |
|
|
1,675 |
|
|
|
Material Handling |
|
495 |
|
|
283 |
|
|
616 |
|
|
681 |
|
|
|
Corporate |
|
5 |
|
|
80 |
|
|
5 |
|
|
83 |
|
|
|
|
|
$ |
2,059 |
|
|
$ |
911 |
|
|
$ |
4,318 |
|
|
$ |
3,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
Cash Flow
and Other Data |
|
July 3,2021 |
|
June 27,2020 |
|
July 3,2021 |
|
June 27,2020 |
Operating
Cash Flow |
|
$ |
44,386 |
|
|
$ |
22,039 |
|
|
$ |
63,478 |
|
|
$ |
28,208 |
|
Less: Capital
Expenditures |
|
(2,059 |
) |
|
(911 |
) |
|
(4,318 |
) |
|
(3,597 |
) |
Free Cash Flow
(a) |
|
$ |
42,327 |
|
|
$ |
21,128 |
|
|
$ |
59,160 |
|
|
$ |
24,611 |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization Expense |
|
$ |
7,716 |
|
|
$ |
7,576 |
|
|
$ |
15,402 |
|
|
$ |
15,174 |
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Data |
|
|
|
|
|
July 3,2021 |
|
January 2,2021 |
Assets |
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents, and Restricted Cash (f) |
|
|
|
|
|
$ |
158,144 |
|
|
$ |
66,640 |
|
Accounts
Receivable, net |
|
|
|
|
|
106,791 |
|
|
91,540 |
|
Inventories |
|
|
|
|
|
114,316 |
|
|
106,814 |
|
Unbilled
Revenue |
|
|
|
|
|
6,481 |
|
|
7,576 |
|
Property, Plant,
and Equipment, net |
|
|
|
|
|
81,757 |
|
|
84,642 |
|
Intangible
Assets |
|
|
|
|
|
151,582 |
|
|
160,965 |
|
Goodwill |
|
|
|
|
|
350,271 |
|
|
351,753 |
|
Other Assets |
|
|
|
|
|
60,134 |
|
|
57,641 |
|
|
|
|
|
|
|
|
|
$ |
1,029,476 |
|
|
$ |
927,571 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Accounts
Payable |
|
|
|
|
|
$ |
44,087 |
|
|
$ |
32,264 |
|
Debt
Obligations |
|
|
|
|
|
268,722 |
|
|
227,963 |
|
Other
Borrowings |
|
|
|
|
|
5,003 |
|
|
5,511 |
|
Other
Liabilities |
|
|
|
|
|
180,538 |
|
|
164,928 |
|
|
Total
Liabilities |
|
|
|
|
|
498,350 |
|
|
430,666 |
|
|
Stockholders'
Equity |
|
|
|
|
|
531,126 |
|
|
496,905 |
|
|
|
|
|
|
|
|
|
$ |
1,029,476 |
|
|
$ |
927,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
Adjusted
Operating Income and Adjusted EBITDA Reconciliation
(a) |
|
July 3,2021 |
|
June 27,2020 |
|
July 3,2021 |
|
June 27,2020 |
Consolidated |
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant |
|
$ |
22,864 |
|
|
$ |
11,607 |
|
|
$ |
39,425 |
|
|
$ |
24,138 |
|
|
|
Net Income Attributable to
Noncontrolling Interest |
|
163 |
|
|
115 |
|
|
398 |
|
|
240 |
|
|
|
Provision for Income
Taxes |
|
8,949 |
|
|
4,474 |
|
|
14,510 |
|
|
9,033 |
|
|
|
Interest Expense, Net |
|
1,010 |
|
|
1,894 |
|
|
2,056 |
|
|
4,302 |
|
|
|
Other Expense, Net |
|
24 |
|
|
31 |
|
|
48 |
|
|
63 |
|
|
|
Operating Income |
|
33,010 |
|
|
18,121 |
|
|
56,437 |
|
|
37,776 |
|
|
|
Restructuring Costs |
|
— |
|
|
456 |
|
|
— |
|
|
456 |
|
|
|
Acquisition Costs (b) |
|
603 |
|
|
407 |
|
|
1,901 |
|
|
407 |
|
|
|
Acquired Backlog Amortization
(c) |
|
27 |
|
|
28 |
|
|
87 |
|
|
36 |
|
|
|
Adjusted Operating Income
(a) |
|
33,640 |
|
|
19,012 |
|
|
58,425 |
|
|
38,675 |
|
|
|
Depreciation and
Amortization |
|
7,689 |
|
|
7,548 |
|
|
15,315 |
|
|
15,138 |
|
|
|
Adjusted EBITDA (a) |
|
$ |
41,329 |
|
|
$ |
26,560 |
|
|
$ |
73,740 |
|
|
$ |
53,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(a,g) |
|
21.1 |
% |
|
17.4 |
% |
|
20.0 |
% |
|
17.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
19,324 |
|
|
$ |
10,260 |
|
|
$ |
34,770 |
|
|
$ |
23,590 |
|
|
|
Acquisition Costs (b) |
|
239 |
|
|
— |
|
|
1,236 |
|
|
— |
|
|
|
Restructuring Costs |
|
— |
|
|
456 |
|
|
— |
|
|
456 |
|
|
|
Adjusted Operating Income
(a) |
|
19,563 |
|
|
10,716 |
|
|
36,006 |
|
|
24,046 |
|
|
|
Depreciation and
Amortization |
|
1,568 |
|
|
1,579 |
|
|
3,140 |
|
|
3,165 |
|
|
|
Adjusted EBITDA (a) |
|
$ |
21,131 |
|
|
$ |
12,295 |
|
|
$ |
39,146 |
|
|
$ |
27,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(a,g) |
|
29.9 |
% |
|
23.9 |
% |
|
29.1 |
% |
|
25.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Industrial
Processing |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
17,301 |
|
|
$ |
10,639 |
|
|
$ |
28,434 |
|
|
$ |
20,075 |
|
|
|
Acquisition Costs (b) |
|
— |
|
|
407 |
|
|
— |
|
|
407 |
|
|
|
Acquired Backlog Amortization
(c) |
|
— |
|
|
28 |
|
|
60 |
|
|
28 |
|
|
|
Adjusted Operating Income
(a) |
|
17,301 |
|
|
11,074 |
|
|
28,494 |
|
|
20,510 |
|
|
|
Depreciation and
Amortization |
|
3,403 |
|
|
3,126 |
|
|
6,741 |
|
|
6,287 |
|
|
|
Adjusted EBITDA (a) |
|
$ |
20,704 |
|
|
$ |
14,200 |
|
|
$ |
35,235 |
|
|
$ |
26,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(a,g) |
|
25.0 |
% |
|
21.6 |
% |
|
23.2 |
% |
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Material
Handling |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
5,592 |
|
|
$ |
3,593 |
|
|
$ |
10,035 |
|
|
$ |
7,727 |
|
|
|
Acquired Backlog Amortization
(c) |
|
27 |
|
|
— |
|
|
27 |
|
|
8 |
|
|
|
Adjusted Operating Income
(a) |
|
5,619 |
|
|
3,593 |
|
|
10,062 |
|
|
7,735 |
|
|
|
Depreciation and
Amortization |
|
2,682 |
|
|
2,795 |
|
|
5,368 |
|
|
5,592 |
|
|
|
Adjusted EBITDA (a) |
|
$ |
8,301 |
|
|
$ |
6,388 |
|
|
$ |
15,430 |
|
|
$ |
13,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(a,g) |
|
19.6 |
% |
|
17.8 |
% |
|
18.8 |
% |
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
$ |
(9,207 |
) |
|
$ |
(6,371 |
) |
|
$ |
(16,802 |
) |
|
$ |
(13,616 |
) |
|
|
Acquisition Costs (b) |
|
364 |
|
|
— |
|
|
665 |
|
|
— |
|
|
|
Adjusted Operating Loss
(a) |
|
(8,843 |
) |
|
(6,371 |
) |
|
(16,137 |
) |
|
(13,616 |
) |
|
|
Depreciation and
Amortization |
|
36 |
|
|
48 |
|
|
66 |
|
|
94 |
|
|
|
Adjusted EBITDA (a) |
|
$ |
(8,807 |
) |
|
$ |
(6,323 |
) |
|
$ |
(16,071 |
) |
|
$ |
(13,522 |
) |
|
|
|
|
|
|
|
|
|
|
(a) |
Represents a non-GAAP
financial measure. |
|
|
|
|
|
|
|
|
|
|
|
(b) |
Represents
transaction costs associated with our acquisitions. The results by
segment for the first quarter of 2021 have been recast to reflect
acquisition costs incurred. |
|
|
|
|
|
|
|
|
|
|
|
(c) |
Represents intangible
amortization expense associated with acquired backlog. |
|
|
|
|
|
|
|
|
|
|
|
(d) |
Represents the
increase (decrease) resulting from the exclusion of an acquisition
and from the conversion of current period amounts reported in local
currencies into U.S. dollars at the exchange rate of the prior
period compared to the U.S. dollar amount reported in the prior
period. |
|
|
(e) |
See reconciliation to
the most directly comparable GAAP financial measure under "Adjusted
Operating Income and Adjusted EBITDA Reconciliation." |
|
|
|
|
|
|
|
|
|
|
|
(f) |
Includes restricted
cash of $84.2 million at the end of the second quarter of 2021 used
to fund our third quarter acquisition of Clouth. |
|
|
(g) |
Calculated as
adjusted EBITDA divided by revenue in each period. |
About Kadant Kadant Inc. is a global supplier
of high-value, critical components and engineered systems used in
process industries worldwide. The Company’s products, technologies,
and services play an integral role in enhancing process efficiency,
optimizing energy utilization, and maximizing productivity in
resource-intensive industries. Kadant is based in Westford,
Massachusetts, with approximately 2,800 employees in 21 countries
worldwide. For more information, visit www.kadant.com.
Safe Harbor StatementThe following constitutes
a “Safe Harbor” statement under the Private Securities Litigation
Reform Act of 1995: This press release contains forward-looking
statements that involve a number of risks and uncertainties,
including forward-looking statements about our future financial and
operating performance, demand for our products, and economic and
industry outlook. These forward-looking statements represent our
expectations as of the date of this press release. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events, or
otherwise. These forward-looking statements are subject to known
and unknown risks and uncertainties that may cause our actual
results to differ materially from these forward-looking statements
as a result of various important factors, including those set forth
under the heading "Risk Factors" in Kadant’s annual report on Form
10-K for the fiscal year ended January 2, 2021 and subsequent
filings with the Securities and Exchange Commission. These include
risks and uncertainties relating to the impact of the COVID-19
pandemic on our operating and financial results; adverse changes in
global and local economic conditions; the variability and
difficulty in accurately predicting revenues from large capital
equipment and systems projects; health epidemics; our acquisition
strategy; levels of residential construction activity; reductions
by our wood processing customers of their capital spending or
production of oriented strand board; changes to the global timber
supply; development and use of digital media; cyclical economic
conditions affecting the global mining industry; demand for coal,
including economic and environmental risks associated with coal;
failure of our information systems or breaches of data security and
cybertheft; implementation of our internal growth strategy; price
increases or shortages of raw materials; competition; changes in
our tax provision or exposure to additional tax liabilities; our
ability to successfully manage our manufacturing operations;
disruption in production; future restructurings; loss of key
personnel and effective succession planning; protection of
intellectual property; climate change; adequacy of our insurance
coverage; global operations; policies of the Chinese government;
the variability and uncertainties in sales of capital equipment in
China; currency fluctuations; economic conditions and regulatory
changes caused by the United Kingdom’s exit from the European
Union; changes to government regulations and policies around the
world; compliance with government regulations and policies and
compliance with laws; environmental laws and regulations;
environmental, health and safety laws and regulations impacting the
mining industry; our debt obligations; restrictions in our credit
agreement and note purchase agreement; substitution of an
alternative index for LIBOR; soundness of financial institutions;
fluctuations in our share price; and anti-takeover provisions.
ContactsInvestor Contact Information:Michael
McKenney, 978-776-2000IR@kadant.com
or
Media Contact Information:Wes Martz,
269-278-1715media@kadant.com
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