Kadant Inc. (NYSE:KAI) reported its financial results for the first
quarter ended March 30, 2013.
First Quarter 2013 Financial Highlights
-
GAAP diluted earnings per share (EPS) from continuing operations was
$0.47 in the first quarter of 2013, compared to $0.61 in the first
quarter of 2012. Guidance was $0.32 to $0.34.
-
Bookings were $90 million in the first quarter of 2013, increasing 19%
sequentially and 16% compared to the first quarter of 2012. The
book-to-bill ratio was 1.18.
-
Revenues were $76 million in the quarter, compared to $84 million in
the first quarter of 2012. Guidance was $71 to $73 million.
-
Gross profit margins were the second highest ever achieved at 47.3% in
the first quarter of 2013, compared to 45.6% in the first quarter of
2012.
-
Cash flows from continuing operations were $7 million in the first
quarter of 2013, increasing significantly from negative cash flows of
$4 million in the first quarter of 2012.
-
Repurchases of common stock were $1.3 million in the first quarter of
2013.
-
First quarterly dividend of $0.125 per share declared in February 2013
to be paid in May 2013.
Management Commentary
“We are off to a better start in 2013 than we had expected,” said
Jonathan W. Painter, president and chief executive officer of Kadant.
“Diluted EPS from continuing operations was $0.47 in the first quarter
of 2013, including $0.03 of acquisition costs, and exceeded our guidance
of $0.32 to $0.34. This strong performance was driven by a number of
factors, including higher revenues in our Fluid-Handling and our
Doctoring, Cleaning, & Filtration product lines, as well as excellent
gross profit margins.
“Operating income was $7.4 million, or 9.7 percent of revenues, compared
to $10.4 million, or 12.4 percent of revenues, in the first quarter of
2012. We were pleased to see operating cash flows from continuing
operations of $7.0 million in the first quarter, which is often a weak
quarter for cash flows. We ended the quarter in a net cash position,
cash less debt, of $51.8 million, up $4.1 million from the end of 2012.
We also purchased 50,000 shares of our common stock for $1.3 million in
the quarter.
“Bookings were strong in the first quarter of 2013 at $90.3 million, up
16 percent from the first quarter of 2012 and 19 percent sequentially.
This increase was due to an excellent performance in our
Stock-Preparation product line, particularly in Europe. Our parts and
consumables bookings of $55 million in the first quarter of 2013 were
the highest level achieved since the first quarter of 2008, increasing
10 percent from the first quarter of 2012 and 17 percent sequentially.
“We have also been working on two small but strategic acquisitions
during the quarter. As we announced earlier this month, we completed the
acquisition of Companhia Brasileira de Tecnologia Industrial (CBTI), our
licensee in Brazil, in April. The addition of CBTI enhances our strategy
of expanding our presence in the important South American market. After
quarter-end, we also signed an asset purchase agreement with the Noss
Group, a leading Sweden-based developer and supplier of high-efficiency
cleaners and approach flow systems used in stock preparation in the pulp
and paper industry. The Noss products will expand the product offerings
of our Stock-Preparation product line, particularly for virgin pulping
applications. In addition, the Noss product line will make a significant
contribution to our parts and consumables business. We expect to close
this acquisition in the second quarter.”
First Quarter 2013
Kadant reported revenues of $76.2 million in the first quarter of 2013,
a decrease of $7.9 million, or nine percent, compared with $84.1 million
in the first quarter of 2012. Revenues for the first quarter of 2013
included a $0.3 million increase from foreign currency translation
compared to the first quarter of 2012. Operating income from continuing
operations was $7.4 million in the first quarter of 2013 compared to
$10.4 million in the first quarter of 2012. Net income from continuing
operations was $5.3 million in the first quarter of 2013, or $0.47 per
diluted share, compared to $7.1 million, or $0.61 per diluted share, in
the first quarter of 2012.
Guidance
“During the second quarter, we expect to realize a gain of approximately
$0.10 per diluted share from the sale of a building in China,” Mr.
Painter continued. “Also for the second quarter and full year, we expect
a modest amount of accretion from the operating results of CBTI.
Including these items, we expect to achieve GAAP diluted EPS from
continuing operations of $0.53 to $0.55 in the second quarter of 2013 on
revenues of $79 to $82 million. For the full year, we are increasing our
guidance and now expect to achieve GAAP diluted EPS from continuing
operations of $2.00 to $2.10 on revenues of $336 to $343 million,
revised from our previous guidance of $1.80 to $1.90 on revenues of $320
to $330 million. This guidance does not include any potential
restructuring costs from the recent acquisition or the results of the
pending Noss acquisition.”
Conference Call
Kadant will hold a webcast with a slide presentation for investors on
Tuesday, April 30, 2013, at 11 a.m. eastern time to discuss its first
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 the “Investors” tab. To listen to the webcast via
teleconference, call 877-703-6107 within the U.S., or +1-857-244-7306
outside the U.S. and reference participant passcode 83375884. 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 Web site
until May 31, 2013.
Shortly after the webcast, Kadant will post its updated general investor
presentation incorporating the first quarter results on its Web site at www.kadant.com
under the “Investors” tab.
Use of Non-GAAP Financial Measures
In 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 revenues
excluding the effect of foreign currency translation and earnings before
interest, taxes, depreciation, and amortization (EBITDA).
We present increases or decreases in revenues excluding the effect of
foreign currency translation to provide investors insight into
underlying revenue trends.
We believe that 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 to 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.
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)
|
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Three Months Ended
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Consolidated Statement of Income
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March 30, 2013
|
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March 31, 2012
|
|
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|
|
|
|
|
|
|
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|
|
|
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Revenues
|
|
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$
|
76,204
|
|
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|
$
|
84,113
|
|
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|
|
|
|
|
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Costs and Operating Expenses:
|
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|
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Cost of revenues
|
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40,178
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45,741
|
|
|
|
|
|
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Selling, general, and administrative expenses
|
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26,950
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26,143
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|
|
|
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Research and development expenses
|
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1,704
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1,532
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Other expense (a)
|
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-
|
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307
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68,832
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73,723
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Operating Income
|
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7,372
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10,390
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Interest Income
|
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109
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94
|
|
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Interest Expense
|
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(165
|
)
|
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|
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(209
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)
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Income from Continuing Operations Before Provision for Income Taxes
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7,316
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10,275
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Provision for Income Taxes
|
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1,967
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3,138
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|
|
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Income from Continuing Operations
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5,349
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7,137
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Loss from Discontinued Operation, Net of Tax
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(29
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)
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(61
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)
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Net Income
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5,320
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7,076
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Net Income Attributable to Noncontrolling Interest
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(36
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)
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(23
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)
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Net Income Attributable to Kadant
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$
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5,284
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$
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7,053
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Amounts Attributable to Kadant:
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Income from Continuing Operations
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$
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5,313
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$
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7,114
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Loss from Discontinued Operation, Net of Tax
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(29
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)
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(61
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)
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Net Income Attributable to Kadant
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$
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5,284
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$
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7,053
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Earnings per Share from Continuing Operations
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Attributable to Kadant:
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Basic
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$
|
0.48
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$
|
0.61
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Diluted
|
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$
|
0.47
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$
|
0.61
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Earnings per Share Attributable to Kadant:
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Basic
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$
|
0.47
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$
|
0.61
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|
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|
|
|
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Diluted
|
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$
|
0.47
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$
|
0.60
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Weighted Average Shares:
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Basic
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11,163
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11,653
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Diluted
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11,267
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11,729
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Increase
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(Decrease)
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Excluding Effect
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Three Months Ended
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|
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Increase
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of Currency
|
Revenues by Product Line
|
|
|
March 30, 2013
|
|
|
March 31, 2012
|
|
|
(Decrease)
|
|
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Translation (b,c)
|
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Doctoring, Cleaning, & Filtration (d)
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$
|
25,862
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$
|
25,065
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$
|
797
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$
|
548
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|
Fluid-Handling
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23,533
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22,368
|
|
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|
|
1,165
|
|
|
|
|
1,246
|
|
Stock-Preparation
|
|
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|
23,002
|
|
|
|
|
32,717
|
|
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|
|
(9,715
|
)
|
|
|
|
(9,814
|
)
|
|
|
|
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|
|
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|
|
|
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Papermaking Systems Segment
|
|
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72,397
|
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|
80,150
|
|
|
|
|
(7,753
|
)
|
|
|
|
(8,020
|
)
|
Fiber-based Products
|
|
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|
3,807
|
|
|
|
|
3,963
|
|
|
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(156
|
)
|
|
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(156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,204
|
|
|
|
$
|
84,113
|
|
|
|
$
|
(7,909
|
)
|
|
|
$
|
(8,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
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(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
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|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
Sequential Revenues by Product Line
|
|
|
March 30, 2013
|
|
|
Dec. 29, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doctoring, Cleaning, & Filtration
|
|
|
$
|
25,862
|
|
|
|
$
|
24,787
|
|
|
|
$
|
1,075
|
|
|
|
$
|
1,030
|
|
Fluid-Handling
|
|
|
|
23,533
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|
|
|
|
22,848
|
|
|
|
|
685
|
|
|
|
|
488
|
|
Stock-Preparation
|
|
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|
23,002
|
|
|
|
|
28,069
|
|
|
|
|
(5,067
|
)
|
|
|
|
(5,235
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems Segment
|
|
|
|
72,397
|
|
|
|
|
75,704
|
|
|
|
|
(3,307
|
)
|
|
|
|
(3,717
|
)
|
Fiber-based Products
|
|
|
|
3,807
|
|
|
|
|
2,351
|
|
|
|
|
1,456
|
|
|
|
|
1,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,204
|
|
|
|
$
|
78,055
|
|
|
|
$
|
(1,851
|
)
|
|
|
$
|
(2,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
Three Months Ended
|
|
|
|
|
|
of Currency
|
Revenues by Geography (e)
|
|
|
March 30, 2013
|
|
|
March 31, 2012
|
|
|
Decrease
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
38,878
|
|
|
|
$
|
39,699
|
|
|
|
$
|
(821
|
)
|
|
|
$
|
(870
|
)
|
Europe
|
|
|
|
17,573
|
|
|
|
|
19,040
|
|
|
|
|
(1,467
|
)
|
|
|
|
(1,672
|
)
|
China
|
|
|
|
11,228
|
|
|
|
|
11,893
|
|
|
|
|
(665
|
)
|
|
|
|
(823
|
)
|
South America
|
|
|
|
4,191
|
|
|
|
|
5,794
|
|
|
|
|
(1,603
|
)
|
|
|
|
(1,458
|
)
|
Other
|
|
|
|
4,334
|
|
|
|
|
7,687
|
|
|
|
|
(3,353
|
)
|
|
|
|
(3,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,204
|
|
|
|
$
|
84,113
|
|
|
|
$
|
(7,909
|
)
|
|
|
$
|
(8,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
Sequential Revenues by Geography (e)
|
|
|
March 30, 2013
|
|
|
Dec. 29, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
38,878
|
|
|
|
$
|
37,287
|
|
|
|
$
|
1,591
|
|
|
|
$
|
1,604
|
|
Europe
|
|
|
|
17,573
|
|
|
|
|
15,978
|
|
|
|
|
1,595
|
|
|
|
|
1,353
|
|
China
|
|
|
|
11,228
|
|
|
|
|
12,521
|
|
|
|
|
(1,293
|
)
|
|
|
|
(1,396
|
)
|
South America
|
|
|
|
4,191
|
|
|
|
|
8,987
|
|
|
|
|
(4,796
|
)
|
|
|
|
(4,874
|
)
|
Other
|
|
|
|
4,334
|
|
|
|
|
3,282
|
|
|
|
|
1,052
|
|
|
|
|
1,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,204
|
|
|
|
$
|
78,055
|
|
|
|
$
|
(1,851
|
)
|
|
|
$
|
(2,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Business Segment Information
|
|
|
March 30, 2013
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
|
46.9
|
%
|
|
|
|
45.1
|
%
|
|
|
|
|
|
|
Fiber-based Products
|
|
|
|
54.7
|
%
|
|
|
|
56.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47.3
|
%
|
|
|
|
45.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
9,944
|
|
|
|
$
|
12,104
|
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
(2,572
|
)
|
|
|
|
(1,714
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,372
|
|
|
|
$
|
10,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
85,628
|
|
|
|
$
|
74,218
|
|
|
|
|
|
|
|
Fiber-based Products
|
|
|
|
4,654
|
|
|
|
|
3,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
90,282
|
|
|
|
$
|
77,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
1,172
|
|
|
|
$
|
258
|
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
6
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,178
|
|
|
|
$
|
258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Cash Flow and Other Data from Continuing Operations
|
|
|
March 30, 2013
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by (Used In) Operations
|
|
|
$
|
6,981
|
|
|
|
$
|
(4,026
|
)
|
|
|
|
|
|
|
Depreciation and Amortization Expense
|
|
|
|
1,953
|
|
|
|
|
2,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
|
|
|
March 30, 2013
|
|
|
Dec. 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
|
$
|
58,402
|
|
|
|
$
|
54,553
|
|
|
|
|
|
|
|
Accounts Receivable, net
|
|
|
|
57,902
|
|
|
|
|
59,359
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
42,349
|
|
|
|
|
42,077
|
|
|
|
|
|
|
|
Unbilled Contract Costs and Fees
|
|
|
|
3,382
|
|
|
|
|
2,800
|
|
|
|
|
|
|
|
Other Current Assets
|
|
|
|
20,378
|
|
|
|
|
16,804
|
|
|
|
|
|
|
|
Property, Plant and Equipment, net
|
|
|
|
37,711
|
|
|
|
|
39,168
|
|
|
|
|
|
|
|
Intangible Assets
|
|
|
|
25,150
|
|
|
|
|
26,095
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
106,153
|
|
|
|
|
107,947
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
9,831
|
|
|
|
|
10,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
361,258
|
|
|
|
$
|
358,948
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
$
|
22,883
|
|
|
|
$
|
23,124
|
|
|
|
|
|
|
|
Short- and Long-term Debt
|
|
|
|
6,625
|
|
|
|
|
6,875
|
|
|
|
|
|
|
|
Other Liabilities
|
|
|
|
81,555
|
|
|
|
|
78,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
|
111,063
|
|
|
|
|
108,981
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
250,195
|
|
|
|
|
249,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
361,258
|
|
|
|
$
|
358,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
EBITDA Reconciliation
|
|
|
March 30, 2013
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant
|
|
|
$
|
5,284
|
|
|
|
$
|
7,053
|
|
|
|
|
|
|
|
Net Income Attributable to Noncontrolling Interest
|
|
|
|
36
|
|
|
|
|
23
|
|
|
|
|
|
|
|
Loss from Discontinued Operation, Net of Tax
|
|
|
|
29
|
|
|
|
|
61
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
1,967
|
|
|
|
|
3,138
|
|
|
|
|
|
|
|
Interest Expense, net
|
|
|
|
56
|
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
7,372
|
|
|
|
|
10,390
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
1,953
|
|
|
|
|
2,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (c)
|
|
|
$
|
9,325
|
|
|
|
$
|
12,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
$
|
9,944
|
|
|
|
$
|
12,104
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
1,835
|
|
|
|
|
2,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (c)
|
|
|
$
|
11,779
|
|
|
|
$
|
14,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
$
|
(2,572
|
)
|
|
|
$
|
(1,714
|
)
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
118
|
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (c)
|
|
|
$
|
(2,454
|
)
|
|
|
$
|
(1,595
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents accelerated depreciation in the three-month period ended
March 31, 2012 associated with the disposal of equipment in China
related to a facility consolidation.
(b) Represents the increase (decrease) resulting 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) Represents a non-GAAP financial measure.
(d) This product line was formerly presented separately as doctoring,
water-management, and other product lines. Prior period amounts have
been recast to conform to the current presentation.
(e) Geographic revenues are attributed to regions based on customer
location.
About Kadant
Kadant Inc. is a leading supplier to the global pulp and paper industry.
Our stock-preparation; fluid-handling; and doctoring, cleaning, and
filtration products are designed to increase efficiency and improve
quality in pulp and paper production. Many of our products, particularly
in our Fluid-Handling product line, are also used to optimize production
in other process industries. In addition, we produce granules from
papermaking byproducts for agricultural and lawn and garden
applications. Kadant is based in Westford, Massachusetts, with revenues
of $332 million in 2012 and 1,600 employees in 17 countries worldwide.
For more information, visit www.kadant.com.
The 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 expected
future financial and operating performance, demand for our products,
economic and industry outlook, and anticipated transactions. The pending
building sale in China and the acquisition of the assets of the Noss
Group are subject to the satisfaction of certain conditions and there
can be no assurance that we will complete these transactions or that we
will complete either of these transactions in the timeframe or based on
the terms indicated in the agreements. Our actual results may 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 29, 2012. These include risks and uncertainties relating to our
dependence on the pulp and paper industry; significance of sales and
operation of manufacturing facilities in China; commodity and component
price increases or shortages; international sales and operations;
fluctuations in our exchange rates; competition; soundness of suppliers
and customers; our effective tax rate; future restructurings; soundness
of financial institutions; our debt obligations; restrictions in our
credit agreement; our acquisition strategy; protection of patents and
proprietary rights; failure of our information systems or breaches of
data security; fluctuations in our share price; and anti-takeover
provisions. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise.