Kadant Inc. (NYSE: KAI) reported its financial results for the
third quarter ended October 2, 2021.
Third Quarter Financial Highlights
- Bookings increased 71% to a record $245 million.
- Revenue increased 29% to a record $200 million.
- Operating cash flow increased 56% to $38 million.
- Free cash flow increased 53% to $35 million.
- Net income increased 38% to $20 million.
- GAAP diluted EPS increased 37% to $1.75.
- Adjusted diluted EPS increased 50% to $1.97.
- Adjusted EBITDA increased 36% to $41 million and represented
20.5% of revenue.
- Backlog was a record $299 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“Record revenue combined
with excellent execution by our operations teams led to another
quarter of strong performance,” said Jeffrey L. Powell, president
and chief executive officer of Kadant Inc. “End-market demand was
exceptional in the third quarter with record parts demand and
robust capital order activity, particularly in our Industrial
Processing segment. These results contributed to solid margin
performance and improved operating leverage across all our
segments.
“Despite an increasingly challenging operating environment
resulting from supply chain constraints and inflationary pressures,
our global workforce performed extremely well in fulfilling our
customer commitments and delivering value. Our end markets continue
to show signs of strength as we enter the final quarter of the year
and we are well positioned for a strong finish to 2021.”
Third Quarter 2021 compared to 2020Revenue
increased 29 percent to a record $199.8 million compared to $154.6
million in 2020. Organic revenue increased 18 percent, which
excludes an eight percent increase from acquisitions and a three
percent increase from the favorable effect of foreign currency
translation. Gross margin was 41.9 percent, which included a
negative 110 basis point impact from the amortization of acquired
profit in inventory, compared to 44.2 percent in 2020, which
included a positive 110 basis point impact from the receipt of
government assistance benefits related to the pandemic.
GAAP diluted earnings per share (EPS) increased 37 percent to a
$1.75 compared to $1.28 in 2020. Adjusted diluted EPS increased 50
percent to $1.97 compared to $1.31 in 2020. Adjusted diluted EPS
excludes $0.17 of amortization expense from acquired profit in
inventory and backlog and $0.05 of acquisition costs in 2021 and
$0.03 of restructuring costs, $0.03 of acquisition-related costs,
and a $0.03 discrete tax benefit in 2020. Net income increased 38
percent to $20.5 million compared to $14.9 million in 2020.
Adjusted EBITDA increased 36 percent to $40.9 million and 20.5
percent of revenue compared to $30.0 million and 19.4 percent of
revenue in the prior year quarter. Operating cash flow increased 56
percent to $37.9 million compared to $24.4 million in 2020.
Bookings increased 71 percent to a record $244.7 million
compared to $143.3 million in 2020. Organic bookings increased 57
percent, which excludes a ten percent increase from acquisitions
and a four percent increase from the favorable effect of foreign
currency translation.
Summary and Outlook“The strong momentum built
up during the first three quarters of 2021 has led to record
backlog, and we expect a solid finish to the year," Mr. Powell
continued. “While we continue to see strong demand for our
products, supply chain constraints, delays in shipments, and the
timing of capital orders are moderating our outlook for the fourth
quarter. As a result, we are decreasing our revenue expectation to
$778 to $783 million for 2021 from our previous range of $783 to
$793 million.”
Conference Call Kadant will hold a webcast with
a slide presentation for investors on Wednesday, November 3, 2021,
at 11:00 a.m. eastern time to discuss its third 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
9476904. 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 December 3, 2021.
Shortly after the webcast, Kadant will post its updated general
investor presentation incorporating the third 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 third quarter of 2021 included $12.8 million from
acquisitions and a $4.6 million favorable foreign currency
translation effect. Revenue in the first nine months of 2021
included a $22.2 million favorable foreign currency translation
effect and $13.3 million from acquisitions. 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, amortization expense related to acquired profit
in inventory and backlog, and discrete tax items. 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 income, or none at all. Free cash
flow presents cash flow from operations excluding capital
expenditures.
Third Quarter
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax expense related to amortization of acquired profit in
inventory of $2.2 million in 2021.
- Pre-tax acquisition costs of $0.7 million in 2021 and $0.1
million in 2020.
- Pre-tax expense related to amortization of acquired backlog of
$0.6 million in 2021 and $0.3 million in 2020.
- Pre-tax restructuring costs of $0.5 million in 2020.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax expense related to amortization of acquired profit in
inventory of $1.5 million ($2.2 million net of tax of $0.7 million)
in 2021.
- After-tax acquisition costs of $0.6 million in 2021 ($0.7
million net of tax of $0.1 million) in 2021 and $0.1 million in
2020.
- After-tax expense related to amortization of acquired backlog
of $0.4 million ($0.6 million net of tax of $0.2 million) in 2021
and $0.2 million ($0.3 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.
- A discrete tax benefit of $0.3 million in 2020.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $3.4 million in 2021 and $1.8 million
in 2020.
First Nine Months
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax acquisition costs of $2.6 million in 2021 and $0.5
million in 2020.
- Pre-tax expense related to acquired profit in inventory of $2.2
million in 2021.
- Pre-tax expense related to amortization of acquired backlog of
$0.7 million in 2021 and $0.4 million in 2020.
- Pre-tax restructuring costs of $0.9 million in 2020.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax acquisition costs of $2.3 million ($2.6 million net
of tax of $0.3 million) in 2021 and $0.4 million ($0.5 million net
of tax of $0.1 million) in 2020.
- After-tax expense related to acquired profit in inventory of
$1.5 million ($2.2 million net of tax of $0.7 million) in
2021.
- After-tax expense related to acquired backlog of $0.5 million
($0.7 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 $0.7 million ($0.9 million net
of tax of $0.2 million) in 2020.
- A discrete tax benefit of $0.3 million in 2020.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $7.7 million in 2021 and $5.4 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 |
|
Nine Months Ended |
| Consolidated Statement
of Income |
October 2, 2021 |
|
September 26, 2020 |
|
October 2, 2021 |
|
September 26, 2020 |
|
Revenue |
$ |
199,789 |
|
|
|
$ |
154,610 |
|
|
|
$ |
568,063 |
|
|
|
$ |
466,597 |
|
|
| Costs and Operating
Expenses: |
|
|
|
|
|
|
|
|
Cost of revenue |
116,096 |
|
|
|
86,294 |
|
|
|
323,337 |
|
|
|
263,510 |
|
|
|
Selling, general, and administrative expenses |
52,316 |
|
|
|
43,853 |
|
|
|
151,014 |
|
|
|
134,518 |
|
|
|
Research and development expenses |
2,649 |
|
|
|
2,658 |
|
|
|
8,547 |
|
|
|
8,532 |
|
|
|
Restructuring costs |
— |
|
|
|
470 |
|
|
|
— |
|
|
|
926 |
|
|
| |
171,061 |
|
|
|
133,275 |
|
|
|
482,898 |
|
|
|
407,486 |
|
|
| Operating Income |
28,728 |
|
|
|
21,335 |
|
|
|
85,165 |
|
|
|
59,111 |
|
|
| Interest Income |
55 |
|
|
|
52 |
|
|
|
176 |
|
|
|
140 |
|
|
| Interest Expense |
(1,320 |
) |
|
|
(1,670 |
) |
|
|
(3,497 |
) |
|
|
(6,060 |
) |
|
| Other Expense, Net |
(23 |
) |
|
|
(32 |
) |
|
|
(71 |
) |
|
|
(95 |
) |
|
| Income Before Provision for
Income Taxes |
27,440 |
|
|
|
19,685 |
|
|
|
81,773 |
|
|
|
53,096 |
|
|
| Provision for Income
Taxes |
6,742 |
|
|
|
4,705 |
|
|
|
21,252 |
|
|
|
13,738 |
|
|
| Net Income |
20,698 |
|
|
|
14,980 |
|
|
|
60,521 |
|
|
|
39,358 |
|
|
| Net Income Attributable to
Noncontrolling Interest |
(237 |
) |
|
|
(129 |
) |
|
|
(635 |
) |
|
|
(369 |
) |
|
| Net Income Attributable to
Kadant |
$ |
20,461 |
|
|
|
$ |
14,851 |
|
|
|
$ |
59,886 |
|
|
|
$ |
38,989 |
|
|
| |
|
|
|
|
|
|
|
| Earnings per Share
Attributable to Kadant: |
|
|
|
|
|
|
|
|
Basic |
$ |
1.77 |
|
|
|
$ |
1.29 |
|
|
|
$ |
5.18 |
|
|
|
$ |
3.40 |
|
|
|
Diluted |
$ |
1.75 |
|
|
|
$ |
1.28 |
|
|
|
$ |
5.14 |
|
|
|
$ |
3.38 |
|
|
| |
|
|
|
|
|
|
|
| Weighted Average Shares: |
|
|
|
|
|
|
|
|
Basic |
11,580 |
|
|
|
11,504 |
|
|
|
11,571 |
|
|
|
11,472 |
|
|
|
Diluted |
11,668 |
|
|
|
11,589 |
|
|
|
11,644 |
|
|
|
11,550 |
|
|
| |
Three Months Ended |
|
Three Months Ended |
| Adjusted Net Income
and Adjusted Diluted EPS (a) |
October 2, 2021 |
|
October 2, 2021 |
|
September 26, 2020 |
|
September 26, 2020 |
|
Net Income and Diluted EPS Attributable to Kadant, as Reported |
$ |
20,461 |
|
|
$ |
1.75 |
|
|
$ |
14,851 |
|
|
|
$ |
1.28 |
|
|
| Adjustments for the
Following: |
|
|
|
|
|
|
|
|
Restructuring Costs, Net of Tax |
— |
|
|
— |
|
|
335 |
|
|
|
0.03 |
|
|
|
Acquisition Costs, Net of Tax (b) |
595 |
|
|
0.05 |
|
|
58 |
|
|
|
0.01 |
|
|
|
Acquired Backlog Amortization, Net of Tax (c) |
429 |
|
|
0.04 |
|
|
249 |
|
|
|
0.02 |
|
|
|
Acquired Profit in Inventory, Net of Tax (d) |
1,549 |
|
|
0.13 |
|
|
— |
|
|
|
— |
|
|
|
Discrete Tax Items |
— |
|
|
— |
|
|
(338 |
) |
|
|
(0.03 |
) |
|
| Adjusted Net Income and
Adjusted Diluted EPS (a) |
$ |
23,034 |
|
|
$ |
1.97 |
|
|
$ |
15,155 |
|
|
|
$ |
1.31 |
|
|
| |
|
|
|
|
|
|
|
| |
Nine Months Ended |
|
Nine Months Ended |
| |
October 2,2021 |
|
October 2,2021 |
|
September 26,2020 |
|
September 26,2020 |
|
Net Income and Diluted EPS Attributable to Kadant, as Reported |
$ |
59,886 |
|
|
$ |
5.14 |
|
|
$ |
38,989 |
|
|
|
$ |
3.38 |
|
|
| Adjustments for the
Following: |
|
|
|
|
|
|
|
|
Restructuring Costs, Net of Tax |
— |
|
|
— |
|
|
667 |
|
|
|
0.06 |
|
|
|
Acquisition Costs, Net of Tax (b) |
2,325 |
|
|
0.20 |
|
|
355 |
|
|
|
0.03 |
|
|
|
Acquired Backlog Amortization, Net of Tax (c) |
494 |
|
|
0.04 |
|
|
275 |
|
|
|
0.02 |
|
|
|
Acquired Profit in Inventory, Net of Tax (d) |
1,549 |
|
|
0.13 |
|
|
— |
|
|
|
— |
|
|
|
Discrete Tax Items |
— |
|
|
— |
|
|
(338 |
) |
|
|
(0.03 |
) |
|
| Adjusted Net Income and
Adjusted Diluted EPS (a) |
$ |
64,254 |
|
|
$ |
5.52 |
|
|
$ |
39,948 |
|
|
|
$ |
3.46 |
|
|
| |
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
|
Increase Excluding Acquisitions and FX (a,e) |
| Revenue by
Segment |
|
October 2, 2021 |
|
September 26, 2020 |
|
Increase |
|
|
Flow Control |
|
$ |
76,253 |
|
|
$ |
56,815 |
|
|
$ |
19,438 |
|
|
$ |
8,193 |
|
| Industrial Processing |
|
81,620 |
|
|
62,086 |
|
|
19,534 |
|
|
16,687 |
|
| Material Handling |
|
41,916 |
|
|
35,709 |
|
|
6,207 |
|
|
2,943 |
|
| |
|
$ |
199,789 |
|
|
$ |
154,610 |
|
|
$ |
45,179 |
|
|
$ |
27,823 |
|
| |
|
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Revenue |
|
66 |
% |
|
66 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended |
|
Increase |
|
Increase Excluding Acquisitions and FX (a,e) |
| |
|
October 2, 2021 |
|
September 26, 2020 |
|
|
| Flow Control |
|
$ |
210,769 |
|
|
$ |
165,329 |
|
|
$ |
45,440 |
|
|
$ |
28,778 |
|
| Industrial Processing |
|
233,455 |
|
|
192,468 |
|
|
40,987 |
|
|
28,391 |
|
| Material Handling |
|
123,839 |
|
|
108,800 |
|
|
15,039 |
|
|
8,846 |
|
| |
|
$ |
568,063 |
|
|
$ |
466,597 |
|
|
$ |
101,466 |
|
|
$ |
66,015 |
|
| |
|
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Revenue |
|
66 |
% |
|
65 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Increase |
|
Increase Excluding Acquisitions and FX (e) |
| Bookings by
Segment |
|
October 2, 2021 |
|
September 26, 2020 |
|
|
|
Flow Control |
|
$ |
76,661 |
|
|
$ |
49,608 |
|
|
$ |
27,053 |
|
|
$ |
15,721 |
|
| Industrial Processing |
|
118,896 |
|
|
59,903 |
|
|
58,993 |
|
|
55,681 |
|
| Material Handling |
|
49,137 |
|
|
33,838 |
|
|
15,299 |
|
|
9,793 |
|
| |
|
$ |
244,694 |
|
|
$ |
143,349 |
|
|
$ |
101,345 |
|
|
$ |
81,195 |
|
| |
|
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Bookings |
|
53 |
% |
|
67 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended |
|
Increase |
|
Increase Excluding Acquisitions and FX (e) |
| |
|
October 2, 2021 |
|
September 26, 2020 |
|
|
| Flow Control |
|
$ |
224,479 |
|
|
$ |
166,713 |
|
|
$ |
57,766 |
|
|
$ |
40,454 |
|
| Industrial Processing |
|
307,401 |
|
|
178,885 |
|
|
128,516 |
|
|
112,345 |
|
| Material Handling |
|
130,468 |
|
|
106,344 |
|
|
24,124 |
|
|
15,361 |
|
| |
|
$ |
662,348 |
|
|
$ |
451,942 |
|
|
$ |
210,406 |
|
|
$ |
168,160 |
|
| |
|
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Bookings |
|
59 |
% |
|
67 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Nine Months Ended |
| Business Segment
Information |
October 2, 2021 |
|
September 26, 2020 |
|
October 2, 2021 |
|
September 26, 2020 |
|
Gross Margin: |
|
|
|
|
|
|
|
|
Flow Control |
49.7 |
% |
|
52.9 |
% |
|
51.8 |
% |
|
53.1 |
% |
|
Industrial Processing |
39.7 |
% |
|
43.7 |
% |
|
40.1 |
% |
|
41.0 |
% |
|
Material Handling |
31.9 |
% |
|
31.1 |
% |
|
33.8 |
% |
|
33.5 |
% |
| |
41.9 |
% |
|
44.2 |
% |
|
43.1 |
% |
|
43.5 |
% |
| Operating Income: |
|
|
|
|
|
|
|
|
Flow Control |
$ |
17,129 |
|
|
$ |
13,770 |
|
|
$ |
51,899 |
|
|
$ |
37,360 |
|
|
Industrial Processing |
16,095 |
|
|
12,072 |
|
|
44,449 |
|
|
32,147 |
|
|
Material Handling |
3,491 |
|
|
2,614 |
|
|
12,941 |
|
|
10,341 |
|
|
Corporate |
(7,987 |
) |
|
(7,121 |
) |
|
(24,124 |
) |
|
(20,737 |
) |
| |
$ |
28,728 |
|
|
$ |
21,335 |
|
|
$ |
85,165 |
|
|
$ |
59,111 |
|
| |
|
|
|
|
|
|
|
| Adjusted Operating Income
(a,f): |
|
|
|
|
|
|
|
|
Flow Control |
$ |
19,835 |
|
|
$ |
14,035 |
|
|
$ |
55,841 |
|
|
$ |
38,081 |
|
|
Industrial Processing |
16,128 |
|
|
12,438 |
|
|
44,622 |
|
|
32,948 |
|
|
Material Handling |
4,290 |
|
|
2,862 |
|
|
14,352 |
|
|
10,597 |
|
|
Corporate |
(7,987 |
) |
|
(7,121 |
) |
|
(24,124 |
) |
|
(20,737 |
) |
| |
$ |
32,266 |
|
|
$ |
22,214 |
|
|
$ |
90,691 |
|
|
$ |
60,889 |
|
| |
|
|
|
|
|
|
|
| Capital Expenditures: |
|
|
|
|
|
|
|
|
Flow Control |
$ |
1,128 |
|
|
$ |
509 |
|
|
$ |
1,830 |
|
|
$ |
1,667 |
|
|
Industrial Processing |
1,725 |
|
|
785 |
|
|
4,720 |
|
|
2,460 |
|
|
Material Handling |
505 |
|
|
486 |
|
|
1,121 |
|
|
1,167 |
|
|
Corporate |
12 |
|
|
42 |
|
|
17 |
|
|
125 |
|
| |
$ |
3,370 |
|
|
$ |
1,822 |
|
|
$ |
7,688 |
|
|
$ |
5,419 |
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Nine Months Ended |
| Cash Flow and Other
Data |
October 2,2021 |
|
September 26,2020 |
|
October 2,2021 |
|
September 26,2020 |
|
Operating Cash Flow |
$ |
37,932 |
|
|
$ |
24,393 |
|
|
$ |
101,410 |
|
|
$ |
52,601 |
|
| Less: Capital
Expenditures |
(3,370 |
) |
|
(1,822 |
) |
|
(7,688 |
) |
|
(5,419 |
) |
| Free Cash Flow (a) |
$ |
34,562 |
|
|
$ |
22,571 |
|
|
$ |
93,722 |
|
|
$ |
47,182 |
|
| |
|
|
|
|
|
|
|
| Depreciation and Amortization
Expense |
$ |
9,195 |
|
|
$ |
8,086 |
|
|
$ |
24,597 |
|
|
$ |
23,260 |
|
| |
|
|
|
|
|
|
|
| Balance Sheet
Data |
October 2,2021 |
|
January 2,2021 |
|
Assets |
|
|
|
|
Cash, Cash Equivalents, and Restricted Cash |
$ |
83,664 |
|
|
$ |
66,640 |
|
| Accounts Receivable, net |
120,496 |
|
|
91,540 |
|
| Inventories |
135,476 |
|
|
106,814 |
|
| Unbilled Revenue |
7,915 |
|
|
7,576 |
|
| Property, Plant, and
Equipment, net |
110,088 |
|
|
84,642 |
|
| Intangible Assets |
205,328 |
|
|
160,965 |
|
| Goodwill |
398,907 |
|
|
351,753 |
|
| Other Assets |
71,254 |
|
|
57,641 |
|
| |
$ |
1,133,128 |
|
|
$ |
927,571 |
|
| Liabilities and
Stockholders' Equity |
|
|
|
| Accounts Payable |
$ |
53,476 |
|
|
$ |
32,264 |
|
| Debt Obligations |
309,389 |
|
|
227,963 |
|
| Other Borrowings |
5,107 |
|
|
5,511 |
|
| Other Liabilities |
221,770 |
|
|
164,928 |
|
|
Total Liabilities |
589,742 |
|
|
430,666 |
|
|
Stockholders' Equity |
543,386 |
|
|
496,905 |
|
| |
$ |
1,133,128 |
|
|
$ |
927,571 |
|
| |
|
|
|
| |
Three Months Ended |
|
Nine Months Ended |
| Adjusted
Operating Income and Adjusted EBITDA Reconciliation
(a) |
October 2, 2021 |
|
September 26, 2020 |
|
October 2, 2021 |
|
September 26, 2020 |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant |
$ |
20,461 |
|
|
|
$ |
14,851 |
|
|
|
$ |
59,886 |
|
|
|
$ |
38,989 |
|
|
| |
|
Net Income Attributable to
Noncontrolling Interest |
237 |
|
|
|
129 |
|
|
|
635 |
|
|
|
369 |
|
|
| |
|
Provision for Income
Taxes |
6,742 |
|
|
|
4,705 |
|
|
|
21,252 |
|
|
|
13,738 |
|
|
| |
|
Interest Expense, Net |
1,265 |
|
|
|
1,618 |
|
|
|
3,321 |
|
|
|
5,920 |
|
|
| |
|
Other Expense, Net |
23 |
|
|
|
32 |
|
|
|
71 |
|
|
|
95 |
|
|
| |
|
Operating Income |
28,728 |
|
|
|
21,335 |
|
|
|
85,165 |
|
|
|
59,111 |
|
|
| |
|
Restructuring Costs |
— |
|
|
|
470 |
|
|
|
— |
|
|
|
926 |
|
|
| |
|
Acquisition Costs (b) |
718 |
|
|
|
78 |
|
|
|
2,619 |
|
|
|
485 |
|
|
| |
|
Acquired Backlog Amortization
(c) |
604 |
|
|
|
331 |
|
|
|
691 |
|
|
|
367 |
|
|
| |
|
Acquired Profit in Inventory
(d) |
2,216 |
|
|
|
— |
|
|
|
2,216 |
|
|
|
— |
|
|
| |
|
Adjusted Operating Income
(a) |
32,266 |
|
|
|
22,214 |
|
|
|
90,691 |
|
|
|
60,889 |
|
|
| |
|
Depreciation and
Amortization |
8,591 |
|
|
|
7,755 |
|
|
|
23,906 |
|
|
|
22,893 |
|
|
| |
|
Adjusted EBITDA (a) |
$ |
40,857 |
|
|
|
$ |
29,969 |
|
|
|
$ |
114,597 |
|
|
|
$ |
83,782 |
|
|
| |
|
Adjusted EBITDA Margin
(a,g) |
20.5 |
|
% |
|
19.4 |
|
% |
|
20.2 |
|
% |
|
18.0 |
|
% |
| |
|
|
|
|
|
|
|
|
|
| Flow Control |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
17,129 |
|
|
|
$ |
13,770 |
|
|
|
$ |
51,899 |
|
|
|
$ |
37,360 |
|
|
| |
|
Restructuring Costs |
— |
|
|
|
265 |
|
|
|
— |
|
|
|
721 |
|
|
| |
|
Acquisition Costs (b) |
507 |
|
|
|
— |
|
|
|
1,743 |
|
|
|
— |
|
|
| |
|
Acquired Backlog Amortization
(c) |
353 |
|
|
|
— |
|
|
|
353 |
|
|
|
— |
|
|
| |
|
Acquired Profit in Inventory
(d) |
1,846 |
|
|
|
— |
|
|
|
1,846 |
|
|
|
— |
|
|
| |
|
Adjusted Operating Income
(a) |
19,835 |
|
|
|
14,035 |
|
|
|
55,841 |
|
|
|
38,081 |
|
|
| |
|
Depreciation and
Amortization |
2,333 |
|
|
|
1,564 |
|
|
|
5,473 |
|
|
|
4,729 |
|
|
| |
|
Adjusted EBITDA (a) |
$ |
22,168 |
|
|
|
$ |
15,599 |
|
|
|
$ |
61,314 |
|
|
|
$ |
42,810 |
|
|
| |
|
Adjusted EBITDA Margin
(a,g) |
29.1 |
|
% |
|
27.5 |
|
% |
|
29.1 |
|
% |
|
25.9 |
|
% |
| |
|
|
|
|
|
|
|
|
|
| Industrial
Processing |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
16,095 |
|
|
|
$ |
12,072 |
|
|
|
$ |
44,449 |
|
|
|
$ |
32,147 |
|
|
| |
|
Restructuring Costs |
— |
|
|
|
205 |
|
|
|
— |
|
|
|
205 |
|
|
| |
|
Acquisition Costs (b) |
33 |
|
|
|
78 |
|
|
|
113 |
|
|
|
485 |
|
|
| |
|
Acquired Backlog Amortization
(c) |
— |
|
|
|
83 |
|
|
|
60 |
|
|
|
111 |
|
|
| |
|
Adjusted Operating Income
(a) |
16,128 |
|
|
|
12,438 |
|
|
|
44,622 |
|
|
|
32,948 |
|
|
| |
|
Depreciation and
Amortization |
3,341 |
|
|
|
3,311 |
|
|
|
10,082 |
|
|
|
9,598 |
|
|
| |
|
Adjusted EBITDA (a) |
$ |
19,469 |
|
|
|
$ |
15,749 |
|
|
|
$ |
54,704 |
|
|
|
$ |
42,546 |
|
|
| |
|
Adjusted EBITDA Margin
(a,g) |
23.9 |
|
% |
|
25.4 |
|
% |
|
23.4 |
|
% |
|
22.1 |
|
% |
| |
|
|
|
|
|
|
|
|
|
| Material
Handling |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
3,491 |
|
|
|
$ |
2,614 |
|
|
|
$ |
12,941 |
|
|
|
$ |
10,341 |
|
|
| |
|
Acquisition Costs (b) |
178 |
|
|
|
— |
|
|
|
763 |
|
|
|
— |
|
|
| |
|
Acquired Backlog Amortization
(c) |
251 |
|
|
|
248 |
|
|
|
278 |
|
|
|
256 |
|
|
| |
|
Acquired Profit in Inventory
(d) |
370 |
|
|
|
— |
|
|
|
370 |
|
|
|
— |
|
|
| |
|
Adjusted Operating Income
(a) |
4,290 |
|
|
|
2,862 |
|
|
|
14,352 |
|
|
|
10,597 |
|
|
| |
|
Depreciation and
Amortization |
2,885 |
|
|
|
2,824 |
|
|
|
8,253 |
|
|
|
8,416 |
|
|
| |
|
Adjusted EBITDA (a) |
$ |
7,175 |
|
|
|
$ |
5,686 |
|
|
|
$ |
22,605 |
|
|
|
$ |
19,013 |
|
|
| |
|
Adjusted EBITDA Margin
(a,g) |
17.1 |
|
% |
|
15.9 |
|
% |
|
18.3 |
|
% |
|
17.5 |
|
% |
| |
|
|
|
|
|
|
|
|
|
| Corporate |
|
|
|
|
|
|
|
| |
|
Operating Loss |
$ |
(7,987 |
) |
|
|
$ |
(7,121 |
) |
|
|
$ |
(24,124 |
) |
|
|
$ |
(20,737 |
) |
|
| |
|
Depreciation and
Amortization |
32 |
|
|
|
56 |
|
|
|
98 |
|
|
|
150 |
|
|
| |
|
EBITDA (a) |
$ |
(7,955 |
) |
|
|
$ |
(7,065 |
) |
|
|
$ |
(24,026 |
) |
|
|
$ |
(20,587 |
) |
|
| |
|
|
|
|
|
|
|
|
|
(a) |
Represents a non-GAAP financial measure. |
|
|
|
| (b) |
Represents transaction costs
associated with our acquisitions. Operating income by segment has
been recast in the first six months of 2021 to include acquisition
costs of $585 and $80 in our Material Handling and Industrial
Processing segments, respectively, which were previously included
in Corporate. |
| |
|
| (c) |
Represents intangible
amortization expense associated with acquired backlog. |
| |
|
| (d) |
Represents expense within the
cost of revenue associated with amortization of acquired profit in
inventory. |
| |
|
| (e) |
Represents the increase resulting
from the exclusion of acquisitions 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. |
| |
|
| (f) |
See reconciliation to the most
directly comparable GAAP financial measure under "Adjusted
Operating Income and Adjusted EBITDA Reconciliation." |
| |
|
| (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 2,900 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.comorMedia Contact Information:Wes
Martz, 269-278-1715media@kadant.com
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