Kadant Inc. (NYSE: KAI) reported its financial results for the
third quarter ended September 26, 2020.
Third Quarter 2020 Financial Highlights
- Operating cash flow was $24 million and free cash flow was $23
million.
- Bookings decreased 16% to $143 million.
- Revenue decreased 11% to $155 million.
- GAAP diluted EPS decreased 9% to $1.28.
- Adjusted diluted EPS decreased 5% to $1.31.
- Net income decreased 8% to $15 million.
- Adjusted EBITDA decreased 7% to $30 million and represented
19.4% of revenue.
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“Despite pandemic-related
challenges, our revenue increased sequentially to $155 million in
the third quarter and was stronger than expected driven by
increased demand in our Industrial Processing and Flow Control
segments," said Jeffrey L. Powell, president and chief executive
officer of Kadant. "We had our highest quarterly adjusted diluted
EPS for the year of $1.31, up 24 percent sequentially, due to
excellent operational execution and contributions from government
employee retention programs. We were particularly pleased with our
cash flow from operations of $24 million and free cash flow of $23
million. We paid down $26 million in debt in the quarter, which
combined with our adjusted EBITDA helped drive a reduction in our
leverage ratio to 1.88.
“Our parts and consumables revenue increased six percent
sequentially to $103 million in the third quarter, representing 66
percent of our third quarter revenue. We have seen an increase in
demand for our parts and consumables following the curtailment in
spending by our customers in the first half of the year.”
Third Quarter 2020 compared to 2019Revenue
decreased 11 percent to $154.6 million compared to $173.5 million
in 2019. Organic revenue was down 12 percent, which excludes an
acquisition and an increase from the favorable effect of foreign
currency translation. Gross margin was 44.2 percent compared to
42.8 percent in 2019.
GAAP diluted earnings per share (EPS) decreased nine percent to
$1.28 compared to $1.41 in 2019. Adjusted diluted EPS decreased
five percent to $1.31 compared to $1.38 in 2019. Adjusted diluted
EPS in 2020 excludes $0.03 of restructuring costs, a $0.03 discrete
tax benefit, $0.02 of acquired backlog amortization and $0.01 of
acquisition costs. Adjusted diluted EPS in 2019 excludes a $0.02
discrete tax benefit. Adjusted EBITDA decreased seven percent to
$30.0 million compared to $32.3 million in 2019. Cash flow from
operations decreased five percent to $24.4 million compared to
$25.7 million in 2019.
Bookings decreased 16 percent to $143.3 million compared to
$170.9 million in 2019. Organic bookings were down 17 percent,
which excludes an acquisition and an increase from the favorable
effect of foreign currency translation.
Summary and Outlook“Capital projects are
showing signs of increasing activity and we expect a solid
sequential improvement in our capital bookings in the fourth
quarter," Mr. Powell continued. "We also expect demand for our
parts and consumables to remain stable as our customers perform
year-end maintenance on their equipment. As our business continues
to strengthen, we anticipate the benefits we receive from
government employee retention programs, primarily in Canada and
China, will be lower in the fourth quarter. Our global footprint
and the diversity of our product offerings have provided stability
as the timing of the market recovery has shown to vary by region
and industry. While we have seen a recent strengthening in consumer
demand, there is still uncertainty surrounding the timing of the
recovery in markets around the world and as a result, we will not
be providing guidance at this time.”
Conference Call Kadant will hold a webcast with
a slide presentation for investors on Wednesday, October 28, 2020,
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
2649708. 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 November 27, 2020.
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 2020 included a $0.6 million
favorable foreign currency translation effect and $0.8 million from
an acquisition. Revenue in the first nine months of 2020 included a
$5.9 million unfavorable foreign currency translation effect and
$1.0 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, 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 none at all.
Third QuarterAdjusted operating income, adjusted EBITDA, and
adjusted EBITDA margin exclude:
- Pre-tax acquisition costs of $0.1 million in 2020.
- Pre-tax restructuring costs of $0.5 million in 2020.
- Pre-tax expense related to acquired backlog amortization of
$0.3 million in 2020.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax acquisition costs 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 acquired backlog amortization of
$0.2 million ($0.3 million net of tax of $0.1 million) in
2020.
- A discrete tax benefit of $0.3 million in both 2020 and
2019.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $1.8 million in 2020 and $2.1 million
in 2019.
First Nine MonthsAdjusted operating income, adjusted EBITDA, and
adjusted EBITDA margin exclude:
- Pre-tax acquisition costs of $0.5 million in 2020 and $0.8
million in 2019.
- Pre-tax restructuring costs of $0.9 million in 2020.
- Pre-tax expense related to acquired backlog amortization of
$0.4 million in 2020 and $1.3 million in 2019.
- Pre-tax expense related to amortization of acquired profit in
inventory of $3.5 million in 2019.
Adjusted net income and adjusted diluted EPS exclude:
- After-tax acquisition costs of $0.4 million ($0.5 million net
of tax of $0.1 million) in 2020 and $0.7 million ($0.8 million net
of tax of $0.1 million) in 2019.
- After-tax restructuring costs of $0.7 million ($0.9 million net
of tax of $0.2 million) in 2020.
- After-tax expense related to acquired backlog amortization of
$0.3 ($0.4 million net of tax of $0.1 million) in 2020 and $1.0
million ($1.3 million net of tax of $0.3 million) in 2019.
- After-tax expense related to amortization of acquired profit in
inventory of $2.7 million ($3.5 million net of tax of $0.8 million)
in 2019.
- A discrete tax benefit of $0.3 million in 2020 and $1.5 million
in 2019.
Free cash flow is calculated as cash flow from operations
less:
- Capital expenditures of $5.4 million in 2020 and $6.2 million
in 2019.
Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are set forth in this
press release.
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Financial Highlights
(unaudited) |
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(In thousands, except per
share amounts and percentages) |
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Three Months Ended |
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Nine Months Ended |
Consolidated Statement
of Income |
Sept. 26,2020 |
|
Sept. 28,2019 |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
Revenue |
$ |
154,610 |
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$ |
173,504 |
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$ |
466,597 |
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$ |
521,985 |
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Costs and Operating
Expenses: |
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Cost of revenue |
86,294 |
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99,257 |
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263,510 |
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|
302,852 |
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Selling, general, and administrative expenses |
43,853 |
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47,097 |
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134,518 |
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144,883 |
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Research and development expenses |
2,658 |
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2,597 |
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8,532 |
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|
7,980 |
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Restructuring costs |
470 |
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— |
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|
926 |
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— |
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|
133,275 |
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148,951 |
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407,486 |
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455,715 |
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Operating Income |
21,335 |
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24,553 |
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59,111 |
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66,270 |
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Interest Income |
52 |
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43 |
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|
140 |
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|
158 |
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Interest Expense |
(1,670 |
) |
|
(3,066 |
) |
|
(6,060 |
) |
|
(10,143 |
) |
Other Expense, Net |
(32 |
) |
|
(98 |
) |
|
(95 |
) |
|
(296 |
) |
Income Before Provision for
Income Taxes |
19,685 |
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21,432 |
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53,096 |
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55,989 |
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Provision for Income
Taxes |
4,705 |
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5,219 |
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13,738 |
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|
12,310 |
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Net Income |
14,980 |
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|
16,213 |
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|
39,358 |
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43,679 |
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Net Income Attributable to
Noncontrolling Interest |
(129 |
) |
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(98 |
) |
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(369 |
) |
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(360 |
) |
Net Income Attributable to
Kadant |
$ |
14,851 |
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$ |
16,115 |
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$ |
38,989 |
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$ |
43,319 |
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Earnings per Share
Attributable to Kadant: |
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Basic |
$ |
1.29 |
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$ |
1.43 |
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$ |
3.40 |
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$ |
3.87 |
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Diluted |
$ |
1.28 |
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$ |
1.41 |
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$ |
3.38 |
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$ |
3.79 |
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Weighted Average Shares: |
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Basic |
11,504 |
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11,267 |
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11,472 |
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11,198 |
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Diluted |
11,589 |
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11,469 |
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11,550 |
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11,434 |
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Three Months Ended |
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Three Months Ended |
Adjusted Net Income and Adjusted Diluted EPS
(a) |
Sept. 26,2020 |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
|
Sept. 28,2019 |
Net Income and Diluted EPS
Attributable to Kadant, as Reported |
$ |
14,851 |
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$ |
1.28 |
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$ |
16,115 |
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$ |
1.41 |
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Adjustments for the
Following: |
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Restructuring Costs, Net of Tax |
335 |
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0.03 |
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— |
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— |
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Acquisition Costs, Net of Tax |
58 |
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0.01 |
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— |
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— |
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Amortization of Acquired Backlog, Net of Tax (e) |
249 |
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0.02 |
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16 |
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— |
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Discrete Tax Items |
(338 |
) |
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(0.03 |
) |
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(264 |
) |
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(0.02 |
) |
Adjusted Net Income and
Adjusted Diluted EPS (a) |
$ |
15,155 |
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$ |
1.31 |
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$ |
15,867 |
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$ |
1.38 |
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Nine Months Ended |
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Nine Months Ended |
Adjusted Net Income
and Adjusted Diluted EPS (a) |
Sept. 26,2020 |
|
Sept. 26,2020 |
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Sept. 28,2019 |
|
Sept. 28,2019 |
Net Income and Diluted EPS Attributable to Kadant, as Reported |
$ |
38,989 |
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$ |
3.38 |
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$ |
43,319 |
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$ |
3.79 |
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Adjustments for the
Following: |
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Restructuring Costs, Net of Tax |
667 |
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0.06 |
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— |
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— |
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Acquisition Costs, Net of Tax |
355 |
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0.03 |
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|
699 |
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0.06 |
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Amortization of Acquired Profit in Inventory and Backlog, Net of
Tax (e,f) |
275 |
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0.02 |
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3,687 |
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0.32 |
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Discrete Tax Items |
(338 |
) |
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(0.03 |
) |
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(1,499 |
) |
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(0.13 |
) |
Adjusted Net Income and
Adjusted Diluted EPS (a) |
$ |
39,948 |
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$ |
3.46 |
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$ |
46,206 |
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$ |
4.04 |
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Three Months Ended |
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DecreaseExcluding |
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Revenue by Segment
(b) |
Sept. 26,2020 |
|
Sept. 28,2019 |
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Decrease |
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Acquisitionand FX (a,c) |
Flow Control |
$ |
56,815 |
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$ |
62,375 |
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$ |
(5,560 |
) |
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$ |
(5,300 |
) |
Industrial Processing |
62,086 |
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74,229 |
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(12,143 |
) |
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(13,306 |
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Material Handling |
35,709 |
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36,900 |
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(1,191 |
) |
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(1,689 |
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$ |
154,610 |
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$ |
173,504 |
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$ |
(18,894 |
) |
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$ |
(20,295 |
) |
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Percentage of Parts and
Consumables Revenue |
66 |
% |
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61 |
% |
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Nine Months Ended |
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DecreaseExcluding |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
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Decrease |
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Acquisitionand FX (a,c) |
Flow Control |
$ |
165,329 |
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$ |
188,792 |
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$ |
(23,463 |
) |
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$ |
(19,769 |
) |
Industrial Processing |
192,468 |
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|
222,899 |
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(30,431 |
) |
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(29,375 |
) |
Material Handling |
108,800 |
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|
110,294 |
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(1,494 |
) |
|
(1,316 |
) |
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$ |
466,597 |
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$ |
521,985 |
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$ |
(55,388 |
) |
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$ |
(50,460 |
) |
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Percentage of Parts and
Consumables Revenue |
65 |
% |
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63 |
% |
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Three Months Ended |
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DecreaseExcluding |
Bookings by Segment
(b) |
Sept. 26,2020 |
|
Sept. 28,2019 |
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Decrease |
|
Acquisitionand FX (c) |
Flow Control |
$ |
49,608 |
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$ |
58,817 |
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$ |
(9,209 |
) |
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$ |
(8,757 |
) |
Industrial Processing |
59,903 |
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74,928 |
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(15,025 |
) |
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(15,713 |
) |
Material Handling |
33,838 |
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|
37,185 |
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(3,347 |
) |
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(4,057 |
) |
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$ |
143,349 |
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$ |
170,930 |
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$ |
(27,581 |
) |
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$ |
(28,527 |
) |
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Percentage of Parts and
Consumables Bookings |
67 |
% |
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59 |
% |
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Nine Months Ended |
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DecreaseExcluding |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
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Decrease |
|
Acquisitionand FX (c) |
Flow Control |
$ |
166,713 |
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$ |
184,246 |
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$ |
(17,533 |
) |
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$ |
(13,516 |
) |
Industrial Processing |
178,885 |
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|
229,007 |
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(50,122 |
) |
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(48,790 |
) |
Material Handling |
106,344 |
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|
115,249 |
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|
(8,905 |
) |
|
(9,005 |
) |
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$ |
451,942 |
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$ |
528,502 |
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$ |
(76,560 |
) |
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$ |
(71,311 |
) |
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Percentage of Parts and
Consumables Bookings |
67 |
% |
|
63 |
% |
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Three Months Ended |
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Nine Months Ended |
Business Segment
Information (b) |
Sept. 26,2020 |
|
Sept. 28,2019 |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
Gross Margin: |
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|
Flow Control |
52.9 |
% |
|
52.9 |
% |
|
53.1 |
% |
|
51.7 |
% |
Industrial Processing |
43.7 |
% |
|
38.7 |
% |
|
41.0 |
% |
|
39.0 |
% |
Material Handling |
31.1 |
% |
|
34.0 |
% |
|
33.5 |
% |
|
31.4 |
% |
|
44.2 |
% |
|
42.8 |
% |
|
43.5 |
% |
|
42.0 |
% |
Operating
Income: |
|
|
|
|
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|
|
Flow Control |
$ |
13,770 |
|
|
$ |
15,103 |
|
|
$ |
37,360 |
|
|
$ |
43,220 |
|
Industrial Processing |
12,072 |
|
|
13,107 |
|
|
32,147 |
|
|
38,830 |
|
Material Handling |
2,614 |
|
|
3,525 |
|
|
10,341 |
|
|
5,515 |
|
Corporate |
(7,121 |
) |
|
(7,182 |
) |
|
(20,737 |
) |
|
(21,295 |
) |
|
$ |
21,335 |
|
|
$ |
24,553 |
|
|
$ |
59,111 |
|
|
$ |
66,270 |
|
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|
|
|
|
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|
Adjusted Operating
Income (a,d): |
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|
Flow Control |
$ |
14,035 |
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$ |
15,103 |
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$ |
38,081 |
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$ |
43,220 |
|
Industrial Processing |
12,438 |
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|
13,107 |
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|
32,948 |
|
|
38,830 |
|
Material Handling |
2,862 |
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|
3,546 |
|
|
10,597 |
|
|
11,210 |
|
Corporate |
(7,121 |
) |
|
(7,182 |
) |
|
(20,737 |
) |
|
(21,295 |
) |
|
$ |
22,214 |
|
|
$ |
24,574 |
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|
$ |
60,889 |
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$ |
71,965 |
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Capital
Expenditures: |
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|
Flow Control |
$ |
509 |
|
|
$ |
636 |
|
|
$ |
1,667 |
|
|
$ |
1,814 |
|
Industrial Processing |
785 |
|
|
1,053 |
|
|
2,460 |
|
|
3,223 |
|
Material Handling |
486 |
|
|
397 |
|
|
1,167 |
|
|
1,145 |
|
Corporate |
42 |
|
|
7 |
|
|
125 |
|
|
54 |
|
|
$ |
1,822 |
|
|
$ |
2,093 |
|
|
$ |
5,419 |
|
|
$ |
6,236 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
Cash Flow
and Other Data |
Sept. 26,2020 |
|
Sept. 28,2019 |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
Cash
Provided by Operations |
$ |
24,393 |
|
|
$ |
25,678 |
|
|
$ |
52,601 |
|
|
$ |
58,166 |
|
Less: Capital
Expenditures |
(1,822 |
) |
|
(2,093 |
) |
|
(5,419 |
) |
|
(6,236 |
) |
Free Cash Flow
(a) |
$ |
22,571 |
|
|
$ |
23,585 |
|
|
$ |
47,182 |
|
|
$ |
51,930 |
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization Expense |
$ |
8,086 |
|
|
$ |
7,763 |
|
|
$ |
23,260 |
|
|
$ |
24,304 |
|
|
|
|
|
|
|
|
|
Balance
Sheet Data |
|
|
|
|
Sept. 26,2020 |
|
Dec. 28,2019 |
Assets |
|
|
|
|
|
|
|
Cash, Cash
Equivalents, and Restricted Cash |
|
|
|
|
$ |
56,204 |
|
|
$ |
68,273 |
|
Accounts
Receivable, net |
|
|
|
|
94,145 |
|
|
95,740 |
|
Inventories |
|
|
|
|
108,715 |
|
|
102,715 |
|
Unbilled
Revenue |
|
|
|
|
9,095 |
|
|
13,162 |
|
Property, Plant,
and Equipment, net |
|
|
|
|
82,427 |
|
|
86,032 |
|
Intangible
Assets |
|
|
|
|
164,359 |
|
|
173,896 |
|
Goodwill |
|
|
|
|
342,999 |
|
|
336,032 |
|
Other Assets |
|
|
|
|
55,947 |
|
|
63,537 |
|
|
|
|
|
|
$ |
913,891 |
|
|
$ |
939,387 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
Accounts
Payable |
|
|
|
|
$ |
32,588 |
|
|
$ |
45,852 |
|
Debt
Obligations |
|
|
|
|
255,010 |
|
|
294,717 |
|
Other
Borrowings |
|
|
|
|
5,577 |
|
|
6,308 |
|
Other
Liabilities |
|
|
|
|
158,471 |
|
|
165,431 |
|
Total Liabilities |
|
|
|
|
451,646 |
|
|
512,308 |
|
Stockholders' Equity |
|
|
|
|
462,245 |
|
|
427,079 |
|
|
|
|
|
|
$ |
913,891 |
|
|
$ |
939,387 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
Adjusted
Operating Income and Adjusted EBITDA Reconciliation
(a,b) |
Sept. 26,2020 |
|
Sept. 28,2019 |
|
Sept. 26,2020 |
|
Sept. 28,2019 |
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant |
$ |
14,851 |
|
|
$ |
16,115 |
|
|
$ |
38,989 |
|
|
$ |
43,319 |
|
Net Income Attributable to Noncontrolling Interest |
129 |
|
|
98 |
|
|
369 |
|
|
360 |
|
Provision for Income Taxes |
4,705 |
|
|
5,219 |
|
|
13,738 |
|
|
12,310 |
|
Interest Expense, Net |
1,618 |
|
|
3,023 |
|
|
5,920 |
|
|
9,985 |
|
Other Expense, Net |
32 |
|
|
98 |
|
|
95 |
|
|
296 |
|
Operating Income |
21,335 |
|
|
24,553 |
|
|
59,111 |
|
|
66,270 |
|
Restructuring Costs |
470 |
|
|
— |
|
|
926 |
|
|
— |
|
Acquisition Costs |
78 |
|
|
— |
|
|
485 |
|
|
843 |
|
Acquired Backlog Amortization (e) |
331 |
|
|
21 |
|
|
367 |
|
|
1,303 |
|
Acquired Profit in Inventory (f) |
— |
|
|
— |
|
|
— |
|
|
3,549 |
|
Adjusted Operating Income (a) |
22,214 |
|
|
24,574 |
|
|
60,889 |
|
|
71,965 |
|
Depreciation and Amortization |
7,755 |
|
|
7,742 |
|
|
22,893 |
|
|
23,001 |
|
Adjusted EBITDA (a) |
$ |
29,969 |
|
|
$ |
32,316 |
|
|
$ |
83,782 |
|
|
$ |
94,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin (a,g) |
19.4 |
% |
|
18.6 |
% |
|
18.0 |
% |
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Flow Control |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
13,770 |
|
|
$ |
15,103 |
|
|
$ |
37,360 |
|
|
$ |
43,220 |
|
Restructuring Costs |
265 |
|
|
— |
|
|
721 |
|
|
— |
|
Adjusted Operating Income (a) |
14,035 |
|
|
15,103 |
|
|
38,081 |
|
|
43,220 |
|
Depreciation and Amortization |
1,564 |
|
|
1,629 |
|
|
4,729 |
|
|
4,823 |
|
Adjusted EBITDA (a) |
$ |
15,599 |
|
|
$ |
16,732 |
|
|
$ |
42,810 |
|
|
$ |
48,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin (a,g) |
27.5 |
% |
|
26.8 |
% |
|
25.9 |
% |
|
25.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Processing |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
12,072 |
|
|
$ |
13,107 |
|
|
$ |
32,147 |
|
|
$ |
38,830 |
|
Restructuring Costs |
205 |
|
|
— |
|
|
205 |
|
|
— |
|
Acquisition Costs |
78 |
|
|
— |
|
|
485 |
|
|
— |
|
Acquired Backlog Amortization (e) |
83 |
|
|
— |
|
|
111 |
|
|
— |
|
Adjusted Operating Income (a) |
12,438 |
|
|
13,107 |
|
|
32,948 |
|
|
38,830 |
|
Depreciation and Amortization |
3,311 |
|
|
3,249 |
|
|
9,598 |
|
|
9,731 |
|
Adjusted EBITDA (a) |
$ |
15,749 |
|
|
$ |
16,356 |
|
|
$ |
42,546 |
|
|
$ |
48,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin (a,g) |
25.4 |
% |
|
22.0 |
% |
|
22.1 |
% |
|
21.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Material
Handling |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
2,614 |
|
|
$ |
3,525 |
|
|
$ |
10,341 |
|
|
$ |
5,515 |
|
Acquisition Costs |
— |
|
|
— |
|
|
— |
|
|
843 |
|
Acquired Backlog Amortization (e) |
248 |
|
|
21 |
|
|
256 |
|
|
1,303 |
|
Acquired Profit in Inventory (f) |
— |
|
|
— |
|
|
— |
|
|
3,549 |
|
Adjusted Operating Income (a) |
2,862 |
|
|
3,546 |
|
|
10,597 |
|
|
11,210 |
|
Depreciation and Amortization |
2,824 |
|
|
2,801 |
|
|
8,416 |
|
|
8,259 |
|
Adjusted EBITDA (a) |
$ |
5,686 |
|
|
$ |
6,347 |
|
|
$ |
19,013 |
|
|
$ |
19,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin (a,g) |
15.9 |
% |
|
17.2 |
% |
|
17.5 |
% |
|
17.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
$ |
(7,121 |
) |
|
$ |
(7,182 |
) |
|
$ |
(20,737 |
) |
|
$ |
(21,295 |
) |
Depreciation and Amortization |
56 |
|
|
63 |
|
|
150 |
|
|
188 |
|
EBITDA (a) |
$ |
(7,065 |
) |
|
$ |
(7,119 |
) |
|
$ |
(20,587 |
) |
|
$ |
(21,107 |
) |
(a) |
Represents a non-GAAP financial measure. |
|
(b) |
Reflects our new
reportable operating segments announced on April 22, 2020. Prior
period information has been recast to conform to the current period
presentation. |
|
(c) |
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. |
|
(d) |
See reconciliation to
the most directly comparable GAAP financial measure under "Adjusted
Operating Income and Adjusted EBITDA Reconciliation." |
|
(e) |
Represents intangible
amortization expense associated with acquired backlog. |
|
(f) |
Represents expense
within cost of revenues associated with amortization of acquired
profit in inventory. |
|
(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 2,700 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 year ended December 28, 2019 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; our customers’ ability to obtain financing for
capital equipment projects; international sales and operations;
health epidemics; changes to government regulations and policies
around the world; policies of the Chinese government; the
variability and uncertainties in sales of capital equipment in
China; 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; cyclical economic conditions affecting the global mining
industry; development and use of digital media; currency
fluctuations; demand for coal, including economic and environmental
risks associated with coal; price increases or shortages of raw
materials; dependence on certain suppliers; our acquisition
strategy; failure of our information systems or breaches of data
security and cybertheft; compliance with government regulations and
policies and compliance with laws; implementation of our internal
growth strategy; competition; soundness of suppliers and customers;
changes in our tax provision or exposure to additional tax
liabilities; our ability to successfully manage our manufacturing
operations; disruption in production; future restructurings;
economic conditions and regulatory changes caused by the United
Kingdom’s exit from the European Union; our debt obligations;
restrictions in our credit agreement and note purchase agreement;
substitution of an alternative index for LIBOR; loss of key
personnel and effective succession planning; protection of
intellectual property; fluctuations in our share price; soundness
of financial institutions; environmental laws and regulations;
climate change; environmental, health and safety laws and
regulations; adequacy of our insurance coverage; anti-takeover
provisions; and reliance on third-party research.
ContactsInvestor Contact Information:Michael
McKenney, 978-776-2000IR@kadant.comorMedia Contact Information:Wes
Martz, 269-278-1715media@kadant.com
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