Kadant Inc. (NYSE: KAI) reported its financial results for the
second quarter ended June 29, 2024.
Second Quarter Financial Highlights
- Revenue increased 12% to a record $275 million
- Gross margin was 44.4%
- Operating cash flow increased 25% to $28 million
- Free cash flow increased 69% to $23 million
- Net income increased 5% to $31 million
- GAAP EPS increased 5% to $2.66
- Adjusted EPS increased 11% to a record $2.81
- Adjusted EBITDA was a record $62 million and represented a
record 22.5% of revenue
- Bookings increased 17% to $252 million
Note: Percent changes above are based on comparison to the prior
year period. All references to earnings per share (EPS) are to our
EPS as calculated on a diluted basis. Free cash flow, adjusted 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“We had another
well-executed quarter with record revenue, record adjusted EBITDA,
and record adjusted EPS performance,” said Jeffrey L. Powell,
president and chief executive officer of Kadant Inc. “Record
aftermarket demand combined with strong capital business helped to
deliver these outstanding results.
“The acquisitions we made in the first half of the year are
progressing well and contributed to our record revenue performance.
Solid execution on our strategic growth initiatives continue to
create value for our stakeholders.”
Second Quarter 2024 Compared to 2023Revenue
increased 12 percent to a record $274.8 million compared to $245.1
million in 2023. Organic revenue increased two percent, which
excludes an 11 percent increase from acquisitions and a one percent
decrease from the unfavorable effect of foreign currency
translation. Gross margin was 44.4 percent compared to 43.5 percent
in 2023.
Net income was $31.3 million, increasing five percent compared
to $29.7 million in 2023. GAAP EPS increased five percent to $2.66
compared to $2.54 in 2023. Adjusted EPS increased 11 percent to a
record $2.81 compared to $2.54 in 2023. Adjusted EPS in 2024
excludes $0.15 of acquisition-related costs. Adjusted EBITDA
increased 20 percent to a record $61.8 million and represented a
record 22.5 percent of revenue compared to $51.6 million and 21.0
percent of revenue in the prior year. Operating cash flow increased
25 percent to $28.1 million compared to $22.5 million in 2023. Free
cash flow increased 69 percent to $23.1 million compared to $13.7
million in 2023.
Bookings increased 17 percent to $251.7 million compared to
$215.2 million in 2023. Organic bookings increased five percent,
which excludes a 13 percent increase from acquisitions and a one
percent decrease from the unfavorable effect of foreign currency
translation.
Summary and Outlook“With our excellent start to
the year and ability to generate strong cash flows, we are well
positioned to capitalize on new opportunities that may emerge in
the second half of 2024,” Mr. Powell continued. “We expect
industrial demand in the second half of the year to be similar to
the first half of the year, despite persistent economic headwinds
in certain regions. We are raising the low end of our revenue and
adjusted EPS guidance for the full year and now expect revenue of
$1.045 to $1.065 billion in 2024, revised from our previous
guidance of $1.040 to $1.065 billion. Our adjusted EPS guidance for
2024 is now $9.80 to $10.05, revised from our previous guidance of
$9.75 to $10.05. The 2024 adjusted EPS guidance excludes $0.60 of
acquisition-related costs, revised from $0.36 of
acquisition-related costs in our previous guidance. We now expect
GAAP EPS of $9.20 to $9.45 in 2024, revised from our previous GAAP
EPS guidance of $9.39 to $9.69. For the third quarter of 2024, we
expect revenue of $257 to $269 million, GAAP EPS of $2.27 to $2.39
and, after excluding $0.09 of acquisition-related costs, adjusted
EPS of $2.36 to $2.48.”
Conference Call Kadant will hold a webcast with
a slide presentation for investors on Wednesday, July 31, 2024, at
11:00 a.m. eastern time to discuss its second quarter financial
performance, as well as future expectations. To listen to the call
live and view the webcast, go to the “Investors” section of the
Company’s website at www.kadant.com. Participants interested in
joining the call’s live question and answer session are required to
register by clicking here or selecting the Q&A link on our
website to receive a dial-in number and unique PIN. It is
recommended that you join the call 10 minutes prior to the start of
the event. A replay of the webcast presentation will be available
on our website through August 30, 2024.
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. 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 EPS, earnings before interest, taxes,
depreciation, and amortization (EBITDA), adjusted EBITDA, adjusted
EBITDA margin, and free cash flow.
We use organic revenue to understand our trends and to forecast
and evaluate our financial performance and compare revenue to prior
periods. Organic revenue excludes revenue from acquisitions for the
four quarterly reporting periods following the date of the
acquisition and the effect of foreign currency translation. Revenue
in the second quarter of 2024 included $27.4 million from
acquisitions and an unfavorable foreign currency translation effect
of $2.3 million compared to the second quarter of 2023. Revenue in
the first six months of 2024 included $51.8 million from
acquisitions and an unfavorable foreign currency translation effect
of $1.5 million compared to the first six months of 2023. Our other
non-GAAP financial measures exclude amortization expense related to
acquired profit in inventory and backlog, acquisition costs, and
other income or expense, as indicated. Collectively, 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, expenditures or income, or
none at all. Additionally, we use free cash flow in order to
provide insight on our ability to generate cash for acquisitions
and debt repayments, as well as for other investing and financing
activities.
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 or cash flows 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.
Second Quarter
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax amortization of acquired profit in inventory and
backlog of $1.2 million in 2024.
- Pre-tax acquisition costs of $0.9 million in 2024.
- Pre-tax indemnification asset provision of $0.1 million in 2024
and pre-tax indemnification asset reversal of $0.2 million in
2023.
- Pre-tax relocation costs of $0.1 million in 2023.
Adjusted net income and adjusted EPS exclude:
- After-tax amortization of acquired profit in inventory and
backlog of $0.9 million ($1.2 million net of tax of $0.3 million)
in 2024.
- After-tax acquisition costs of $0.8 million ($0.9 million net
of tax of $0.1 million) in 2024.
- After-tax relocation costs of $0.1 million in 2023.
Free cash flow is calculated as operating cash flow less:
- Capital expenditures of $5.0 million in 2024 and $8.8 million
in 2023.
First Six Months
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA
margin exclude:
- Pre-tax amortization of acquired profit in inventory and
backlog of $4.4 million in 2024.
- Pre-tax acquisition costs of $2.1 million in 2024.
- Pre-tax indemnification asset reversals of $0.2 million in
2023.
- Pre-tax relocation costs of $0.1 million in 2023.
Adjusted net income and adjusted EPS exclude:
- After-tax amortization of acquired profit in inventory and
backlog of $3.3 million ($4.4 million net of tax of $1.1 million)
in 2024.
- After-tax acquisition costs of $1.7 million ($2.1 million net
of tax of $0.4 million) in 2024.
- After-tax relocation costs of $0.1 million in 2023.
Free cash flow is calculated as operating cash flow less:
- Capital expenditures of $11.2 million in 2024 and $13.2 million
in 2023.
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 |
June 29,2024 |
|
July 1,2023 |
|
June 29,2024 |
|
July 1,2023 |
| Revenue |
$ |
274,765 |
|
|
$ |
245,053 |
|
|
$ |
523,740 |
|
|
$ |
474,811 |
|
| Costs and
Operating Expenses: |
|
|
|
|
|
|
|
| |
Cost of
revenue |
|
152,878 |
|
|
|
138,503 |
|
|
|
290,891 |
|
|
|
266,215 |
|
| |
Selling, general,
and administrative expenses |
|
70,004 |
|
|
|
59,990 |
|
|
|
140,309 |
|
|
|
118,552 |
|
| |
Research and
development expenses |
|
3,482 |
|
|
|
3,408 |
|
|
|
7,212 |
|
|
|
6,778 |
|
| |
Other costs |
|
— |
|
|
|
74 |
|
|
|
— |
|
|
|
74 |
|
| |
|
|
226,364 |
|
|
|
201,975 |
|
|
|
438,412 |
|
|
|
391,619 |
|
| Operating
Income |
|
48,401 |
|
|
|
43,078 |
|
|
|
85,328 |
|
|
|
83,192 |
|
| Interest
Income |
|
368 |
|
|
|
316 |
|
|
|
979 |
|
|
|
615 |
|
| Interest
Expense |
|
(5,201 |
) |
|
|
(2,245 |
) |
|
|
(9,870 |
) |
|
|
(4,615 |
) |
| Other Expense,
Net |
|
(2 |
) |
|
|
(21 |
) |
|
|
(32 |
) |
|
|
(42 |
) |
| Income Before
Provision for Income Taxes |
|
43,566 |
|
|
|
41,128 |
|
|
|
76,405 |
|
|
|
79,150 |
|
| Provision for
Income Taxes |
|
11,992 |
|
|
|
11,182 |
|
|
|
19,846 |
|
|
|
20,945 |
|
| Net Income |
|
31,574 |
|
|
|
29,946 |
|
|
|
56,559 |
|
|
|
58,205 |
|
| Net Income
Attributable to Noncontrolling Interests |
|
(283 |
) |
|
|
(212 |
) |
|
|
(579 |
) |
|
|
(396 |
) |
| Net Income
Attributable to Kadant |
$ |
31,291 |
|
|
$ |
29,734 |
|
|
$ |
55,980 |
|
|
$ |
57,809 |
|
| |
|
|
|
|
|
|
|
|
|
| Earnings per Share
Attributable to Kadant: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
2.66 |
|
|
$ |
2.54 |
|
|
$ |
4.77 |
|
|
$ |
4.94 |
|
| |
|
Diluted |
$ |
2.66 |
|
|
$ |
2.54 |
|
|
$ |
4.76 |
|
|
$ |
4.94 |
|
| |
|
|
|
|
|
|
|
|
|
| Weighted Average
Shares: |
|
|
|
|
|
|
|
| |
|
Basic |
|
11,743 |
|
|
|
11,704 |
|
|
|
11,734 |
|
|
|
11,693 |
|
| |
|
Diluted |
|
11,766 |
|
|
|
11,723 |
|
|
|
11,755 |
|
|
|
11,709 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
Three Months Ended |
| Adjusted
Net Income and Adjusted Diluted EPS (a) |
June 29,2024 |
|
June 29,2024 |
|
July 1,2023 |
|
July 1,2023 |
| Net Income
and Diluted EPS Attributable to Kadant, as Reported |
|
$ |
31,291 |
|
$ |
2.66 |
|
$ |
29,734 |
|
$ |
2.54 |
| Adjustments, Net
of Tax: |
|
|
|
|
|
|
|
|
|
|
Acquired Profit in Inventory and Backlog Amortization |
|
|
929 |
|
|
0.08 |
|
|
— |
|
|
— |
| |
Acquisition Costs |
|
|
798 |
|
|
0.07 |
|
|
— |
|
|
— |
| |
Other Costs |
|
|
— |
|
|
— |
|
|
56 |
|
|
— |
| Adjusted Net
Income and Adjusted Diluted EPS (a) |
|
$ |
33,018 |
|
$ |
2.81 |
|
$ |
29,790 |
|
$ |
2.54 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
Six Months Ended |
|
Six Months Ended |
| |
|
|
June 29,2024 |
|
June 29,2024 |
|
July 1,2023 |
|
July 1,2023 |
| Net Income and
Diluted EPS Attributable to Kadant, as Reported |
|
$ |
55,980 |
|
$ |
4.76 |
|
$ |
57,809 |
|
$ |
4.94 |
| Adjustments, Net
of Tax: |
|
|
|
|
|
|
|
|
| |
Acquired Profit in Inventory
and Backlog Amortization |
|
|
3,298 |
|
|
0.28 |
|
|
— |
|
|
— |
| |
Acquisition Costs |
|
|
1,728 |
|
|
0.15 |
|
|
— |
|
|
— |
| |
Other Costs |
|
|
— |
|
|
— |
|
|
56 |
|
|
— |
| Adjusted Net
Income and Adjusted Diluted EPS (a) |
|
$ |
61,006 |
|
$ |
5.19 |
|
$ |
57,865 |
|
$ |
4.94 |
| |
Three Months Ended |
|
|
|
|
Increase(Decrease)Excluding |
|
|
Revenue by Segment |
June 29,2024 |
|
July 1,2023 |
|
Increase(Decrease) |
|
|
Acquisitionsand FX (a,b) |
|
|
Flow Control |
$ |
92,290 |
|
|
$ |
95,729 |
|
|
$ |
(3,439 |
) |
|
$ |
(4,201 |
) |
| Industrial Processing |
|
114,753 |
|
|
|
89,967 |
|
|
|
24,786 |
|
|
|
11,407 |
|
| Material Handling |
|
67,722 |
|
|
|
59,357 |
|
|
|
8,365 |
|
|
|
(2,560 |
) |
| |
$ |
274,765 |
|
|
$ |
245,053 |
|
|
$ |
29,712 |
|
|
$ |
4,646 |
|
| |
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Revenue |
|
63 |
% |
|
|
62 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Six Months Ended |
|
Increase(Decrease) |
|
|
Increase(Decrease)Excluding |
|
| |
June 29,2024 |
|
July 1,2023 |
|
|
|
Acquisitionsand FX (a,b) |
|
| Flow Control |
$ |
178,972 |
|
|
$ |
185,250 |
|
|
$ |
(6,278 |
) |
|
$ |
(7,774 |
) |
| Industrial Processing |
|
220,614 |
|
|
|
173,509 |
|
|
|
47,105 |
|
|
|
17,232 |
|
| Material Handling |
|
124,154 |
|
|
|
116,052 |
|
|
|
8,102 |
|
|
|
(10,786 |
) |
| |
$ |
523,740 |
|
|
$ |
474,811 |
|
|
$ |
48,929 |
|
|
$ |
(1,328 |
) |
| |
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Revenue |
|
66 |
% |
|
|
64 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Increase |
|
IncreaseExcludingAcquisitionsand FX (b) |
|
Bookings by Segment |
June 29,2024 |
|
July 1,2023 |
|
|
| Flow Control |
$ |
94,098 |
|
|
$ |
88,301 |
|
|
$ |
5,797 |
|
|
$ |
4,343 |
|
| Industrial Processing |
|
96,714 |
|
|
|
79,291 |
|
|
|
17,423 |
|
|
|
4,171 |
|
| Material Handling |
|
60,910 |
|
|
|
47,635 |
|
|
|
13,275 |
|
|
|
2,683 |
|
| |
$ |
251,722 |
|
|
$ |
215,227 |
|
|
$ |
36,495 |
|
|
$ |
11,197 |
|
| |
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Bookings |
|
71 |
% |
|
|
69 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Six Months Ended |
|
Increase(Decrease) |
|
DecreaseExcludingAcquisitionsand FX (b) |
| |
June 29,2024 |
|
July 1,2023 |
|
|
| Flow Control |
$ |
188,768 |
|
|
$ |
192,857 |
|
|
$ |
(4,089 |
) |
|
$ |
(6,138 |
) |
| Industrial Processing |
|
186,591 |
|
|
|
175,565 |
|
|
|
11,026 |
|
|
|
(17,730 |
) |
| Material Handling |
|
124,793 |
|
|
|
121,324 |
|
|
|
3,469 |
|
|
|
(15,235 |
) |
| |
$ |
500,152 |
|
|
$ |
489,746 |
|
|
$ |
10,406 |
|
|
$ |
(39,103 |
) |
| |
|
|
|
|
|
|
|
| Percentage of Parts and
Consumables Bookings |
|
70 |
% |
|
|
64 |
% |
|
|
|
|
| |
|
|
Three Months Ended |
|
Six Months Ended |
|
Additional Segment Information |
June 29,2024 |
|
July 1,2023 |
|
June 29,2024 |
|
July 1,2023 |
| Gross Margin: |
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
53.0 |
% |
|
|
51.4 |
% |
|
|
53.4 |
% |
|
|
52.3 |
% |
| |
|
Industrial Processing |
|
41.3 |
% |
|
|
39.5 |
% |
|
|
41.5 |
% |
|
|
40.0 |
% |
| |
|
Material Handling |
|
37.8 |
% |
|
|
36.8 |
% |
|
|
36.8 |
% |
|
|
36.4 |
% |
| |
|
Consolidated |
|
44.4 |
% |
|
|
43.5 |
% |
|
|
44.5 |
% |
|
|
43.9 |
% |
| |
|
|
|
|
|
|
|
|
|
| Operating
Income: |
|
|
|
|
|
|
|
| |
|
Flow Control |
$ |
23,530 |
|
|
$ |
25,821 |
|
|
$ |
45,240 |
|
|
$ |
50,010 |
|
| |
|
Industrial Processing |
|
24,092 |
|
|
|
16,978 |
|
|
|
44,091 |
|
|
|
32,945 |
|
| |
|
Material Handling |
|
11,188 |
|
|
|
10,374 |
|
|
|
16,729 |
|
|
|
19,661 |
|
| |
|
Corporate |
|
(10,409 |
) |
|
|
(10,095 |
) |
|
|
(20,732 |
) |
|
|
(19,424 |
) |
| |
|
|
$ |
48,401 |
|
|
$ |
43,078 |
|
|
$ |
85,328 |
|
|
$ |
83,192 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted Operating
Income (a,c): |
|
|
|
|
|
|
|
| |
|
Flow Control |
$ |
24,563 |
|
|
$ |
25,821 |
|
|
$ |
46,475 |
|
|
$ |
50,010 |
|
| |
|
Industrial Processing |
|
24,443 |
|
|
|
17,052 |
|
|
|
46,237 |
|
|
|
33,019 |
|
| |
|
Material Handling |
|
11,902 |
|
|
|
10,551 |
|
|
|
19,790 |
|
|
|
19,838 |
|
| |
|
Corporate |
|
(10,409 |
) |
|
|
(10,095 |
) |
|
|
(20,732 |
) |
|
|
(19,424 |
) |
| |
|
|
$ |
50,499 |
|
|
$ |
43,329 |
|
|
$ |
91,770 |
|
|
$ |
83,443 |
|
| |
|
|
|
|
|
|
|
|
|
| Capital
Expenditures: |
|
|
|
|
|
|
|
| |
|
Flow Control |
$ |
1,961 |
|
|
$ |
1,290 |
|
|
$ |
3,835 |
|
|
$ |
2,694 |
|
| |
|
Industrial Processing |
|
1,851 |
|
|
|
6,129 |
|
|
|
4,734 |
|
|
|
8,708 |
|
| |
|
Material Handling |
|
1,157 |
|
|
|
1,358 |
|
|
|
2,663 |
|
|
|
1,820 |
|
| |
|
Corporate |
|
5 |
|
|
|
— |
|
|
|
13 |
|
|
|
24 |
|
| |
|
|
$ |
4,974 |
|
|
$ |
8,777 |
|
|
$ |
11,245 |
|
|
$ |
13,246 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
Six Months Ended |
|
Cash Flow and Other Data |
June 29,2024 |
|
July 1,2023 |
|
June 29,2024 |
|
July 1,2023 |
| Operating Cash
Flow |
$ |
28,066 |
|
|
$ |
22,478 |
|
|
$ |
50,897 |
|
|
$ |
59,344 |
|
| Capital
Expenditures |
|
(4,974 |
) |
|
|
(8,777 |
) |
|
|
(11,245 |
) |
|
|
(13,246 |
) |
| Free Cash Flow
(a) |
$ |
23,092 |
|
|
$ |
13,701 |
|
|
$ |
39,652 |
|
|
$ |
46,098 |
|
| |
|
|
|
|
|
|
|
|
|
| Depreciation and
Amortization Expense |
$ |
11,991 |
|
|
$ |
8,237 |
|
|
$ |
23,730 |
|
|
$ |
16,683 |
|
|
Balance Sheet Data |
June 29,2024 |
|
December 30,2023 |
|
Assets |
|
|
|
| Cash, Cash
Equivalents, and Restricted Cash |
$ |
75,178 |
|
$ |
106,453 |
| Accounts
Receivable, net |
|
149,689 |
|
|
133,929 |
| Inventories |
|
173,513 |
|
|
152,677 |
| Contract
Assets |
|
15,144 |
|
|
8,366 |
| Property, Plant,
and Equipment, net |
|
174,182 |
|
|
140,504 |
| Intangible
Assets |
|
289,695 |
|
|
159,286 |
| Goodwill |
|
478,035 |
|
|
392,084 |
| Other Assets |
|
100,596 |
|
|
82,366 |
|
|
|
$ |
1,456,032 |
|
$ |
1,175,665 |
|
Liabilities and Stockholders' Equity |
|
|
|
| Accounts
Payable |
$ |
54,415 |
|
$ |
42,104 |
| Debt
Obligations |
|
343,314 |
|
|
109,086 |
| Other
Borrowings |
|
1,954 |
|
|
1,789 |
| Other
Liabilities |
|
237,963 |
|
|
246,446 |
| |
Total
Liabilities |
|
637,646 |
|
|
399,425 |
| |
Stockholders'
Equity |
|
818,386 |
|
|
776,240 |
| |
|
$ |
1,456,032 |
|
$ |
1,175,665 |
| |
Three Months Ended |
|
Six Months Ended |
|
Adjusted Operating Income and Adjusted EBITDA
Reconciliation (a) |
June 29,2024 |
|
July 1,2023 |
|
June 29,2024 |
|
July 1,2023 |
| Consolidated |
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant |
$ |
31,291 |
|
|
$ |
29,734 |
|
|
$ |
55,980 |
|
|
$ |
57,809 |
|
| |
|
Net Income Attributable to
Noncontrolling Interests |
|
283 |
|
|
|
212 |
|
|
|
579 |
|
|
|
396 |
|
| |
|
Provision for Income
Taxes |
|
11,992 |
|
|
|
11,182 |
|
|
|
19,846 |
|
|
|
20,945 |
|
| |
|
Interest Expense, Net |
|
4,833 |
|
|
|
1,929 |
|
|
|
8,891 |
|
|
|
4,000 |
|
| |
|
Other Expense, Net |
|
2 |
|
|
|
21 |
|
|
|
32 |
|
|
|
42 |
|
| |
|
Operating Income |
|
48,401 |
|
|
|
43,078 |
|
|
|
85,328 |
|
|
|
83,192 |
|
| |
|
Acquired Profit in Inventory
Amortization (d) |
|
529 |
|
|
|
— |
|
|
|
2,860 |
|
|
|
— |
|
| |
|
Acquired Backlog Amortization
(e) |
|
695 |
|
|
|
— |
|
|
|
1,494 |
|
|
|
— |
|
| |
|
Acquisition Costs |
|
940 |
|
|
|
— |
|
|
|
2,064 |
|
|
|
— |
|
| |
|
Indemnification Asset
(Provision) Reversal, Net (f) |
|
(66 |
) |
|
|
177 |
|
|
|
24 |
|
|
|
177 |
|
| |
|
Other Costs |
|
— |
|
|
|
74 |
|
|
|
— |
|
|
|
74 |
|
| |
|
Adjusted Operating Income
(a) |
|
50,499 |
|
|
|
43,329 |
|
|
|
91,770 |
|
|
|
83,443 |
|
| |
|
Depreciation and
Amortization |
|
11,296 |
|
|
|
8,237 |
|
|
|
22,236 |
|
|
|
16,683 |
|
| |
|
Adjusted EBITDA (a) |
$ |
61,795 |
|
|
$ |
51,566 |
|
|
$ |
114,006 |
|
|
$ |
100,126 |
|
| |
|
Adjusted EBITDA Margin
(a,g) |
|
22.5 |
% |
|
|
21.0 |
% |
|
|
21.8 |
% |
|
|
21.1 |
% |
| |
|
|
|
|
|
|
|
|
|
| Flow Control |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
23,530 |
|
|
$ |
25,821 |
|
|
$ |
45,240 |
|
|
$ |
50,010 |
|
| |
|
Acquired Profit in Inventory
Amortization (d) |
|
235 |
|
|
|
— |
|
|
|
235 |
|
|
|
— |
|
| |
|
Acquired Backlog Amortization
(e) |
|
253 |
|
|
|
— |
|
|
|
253 |
|
|
|
— |
|
| |
|
Acquisition Costs |
|
566 |
|
|
|
— |
|
|
|
566 |
|
|
|
— |
|
| |
|
Indemnification Asset
(Provision) Reversal, Net (f) |
|
(21 |
) |
|
|
— |
|
|
|
181 |
|
|
|
— |
|
| |
|
Adjusted Operating Income
(a) |
|
24,563 |
|
|
|
25,821 |
|
|
|
46,475 |
|
|
|
50,010 |
|
| |
|
Depreciation and
Amortization |
|
2,359 |
|
|
|
2,229 |
|
|
|
4,580 |
|
|
|
4,508 |
|
| |
|
Adjusted EBITDA (a) |
$ |
26,922 |
|
|
$ |
28,050 |
|
|
$ |
51,055 |
|
|
$ |
54,518 |
|
| |
|
Adjusted EBITDA Margin
(a,g) |
|
29.2 |
% |
|
|
29.3 |
% |
|
|
28.5 |
% |
|
|
29.4 |
% |
| |
|
|
|
|
|
|
|
|
|
| Industrial
Processing |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
24,092 |
|
|
$ |
16,978 |
|
|
$ |
44,091 |
|
|
$ |
32,945 |
|
| |
|
Acquired Profit in Inventory
Amortization (d) |
|
294 |
|
|
|
— |
|
|
|
1,585 |
|
|
|
— |
|
| |
|
Acquisition Costs |
|
89 |
|
|
|
— |
|
|
|
688 |
|
|
|
— |
|
| |
|
Indemnification Asset
Provision (f) |
|
(32 |
) |
|
|
— |
|
|
|
(127 |
) |
|
|
— |
|
| |
|
Other Costs |
|
— |
|
|
|
74 |
|
|
|
— |
|
|
|
74 |
|
| |
|
Adjusted Operating Income
(a) |
|
24,443 |
|
|
|
17,052 |
|
|
|
46,237 |
|
|
|
33,019 |
|
| |
|
Depreciation and
Amortization |
|
5,095 |
|
|
|
2,945 |
|
|
|
10,254 |
|
|
|
5,917 |
|
| |
|
Adjusted EBITDA (a) |
$ |
29,538 |
|
|
$ |
19,997 |
|
|
$ |
56,491 |
|
|
$ |
38,936 |
|
| |
|
Adjusted EBITDA Margin
(a,g) |
|
25.7 |
% |
|
|
22.2 |
% |
|
|
25.6 |
% |
|
|
22.4 |
% |
| |
|
|
|
|
|
|
|
|
|
| Material
Handling |
|
|
|
|
|
|
|
| |
|
Operating Income |
$ |
11,188 |
|
|
$ |
10,374 |
|
|
$ |
16,729 |
|
|
$ |
19,661 |
|
| |
|
Acquired Profit in Inventory
Amortization (d) |
|
— |
|
|
|
— |
|
|
|
1,040 |
|
|
|
— |
|
| |
|
Acquired Backlog Amortization
(e) |
|
442 |
|
|
|
— |
|
|
|
1,241 |
|
|
|
— |
|
| |
|
Acquisition Costs |
|
285 |
|
|
|
— |
|
|
|
810 |
|
|
|
— |
|
| |
|
Indemnification Asset
(Provision) Reversal, Net (f) |
|
(13 |
) |
|
|
177 |
|
|
|
(30 |
) |
|
|
177 |
|
| |
|
Adjusted Operating Income
(a) |
|
11,902 |
|
|
|
10,551 |
|
|
|
19,790 |
|
|
|
19,838 |
|
| |
|
Depreciation and
Amortization |
|
3,830 |
|
|
|
3,044 |
|
|
|
7,378 |
|
|
|
6,220 |
|
| |
|
Adjusted EBITDA (a) |
$ |
15,732 |
|
|
$ |
13,595 |
|
|
$ |
27,168 |
|
|
$ |
26,058 |
|
| |
|
Adjusted EBITDA Margin
(a,g) |
|
23.2 |
% |
|
|
22.9 |
% |
|
|
21.9 |
% |
|
|
22.5 |
% |
| |
|
|
|
|
|
|
|
|
|
| Corporate |
|
|
|
|
|
|
|
| |
|
Operating Loss |
$ |
(10,409 |
) |
|
$ |
(10,095 |
) |
|
$ |
(20,732 |
) |
|
$ |
(19,424 |
) |
| |
|
Depreciation and
Amortization |
|
12 |
|
|
|
19 |
|
|
|
24 |
|
|
|
38 |
|
| |
|
EBITDA (a) |
$ |
(10,397 |
) |
|
$ |
(10,076 |
) |
|
$ |
(20,708 |
) |
|
$ |
(19,386 |
) |
| |
|
|
|
|
|
|
|
|
|
| (a) |
Represents a
non-GAAP financial measure. |
| |
|
|
|
|
|
|
|
|
|
| (b) |
Represents the
increase (decrease) 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. |
| |
|
|
|
|
|
|
|
|
|
| (c) |
See reconciliation
to the most directly comparable GAAP financial measure under
"Adjusted Operating Income and Adjusted EBITDA
Reconciliation." |
| |
|
|
|
|
|
|
|
|
|
| (d) |
Represents
amortization expense within cost of revenue associated with
acquired profit in inventory. |
| |
|
|
|
|
|
|
|
|
|
| (e) |
Represents
intangible amortization expense associated with acquired
backlog. |
| |
|
|
|
|
|
|
|
|
|
| (f) |
Represents the
provision for or reversal of indemnification assets related to the
establishment or release of tax reserves associated with uncertain
tax positions. |
| |
|
|
|
|
|
|
|
|
|
| (g) |
Calculated as
adjusted EBITDA divided by revenue in each period. |
| |
|
|
|
|
|
|
|
|
|
About Kadant Kadant Inc. is a global supplier
of technologies and engineered systems that drive Sustainable
Industrial Processing. The Company’s products and services play an
integral role in enhancing efficiency, optimizing energy
utilization, and maximizing productivity in process industries.
Kadant is based in Westford, Massachusetts, with approximately
3,500 employees in 20 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 December 30, 2023 and subsequent
filings with the Securities and Exchange Commission. These include
risks and uncertainties relating to adverse changes in global and
local economic conditions; the variability and difficulty in
accurately predicting revenues from large capital equipment and
systems projects; 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; supply chain constraints, inflationary
pressure, price increases and shortages in raw materials;
competition; changes to tax laws and regulations; 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; 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; soundness of financial
institutions; fluctuations in our share price; and anti-takeover
provisions.
ContactsInvestor Contact Information:Michael
McKenney, 978-776-2000IR@kadant.com orMedia Contact
Information:Wes Martz, 269-278-1715media@kadant.com
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