Kadant Inc. (NYSE:KAI) reported its financial results for the second
quarter ended June 29, 2013.
Second Quarter 2013 Highlights
-
GAAP diluted earnings per share (EPS) from continuing operations was
$0.51 in the second quarter of 2013, compared to $0.56 in the second
quarter of 2012.
-
Adjusted diluted EPS was $0.51 in the second quarter of 2013,
excluding a gain of $0.12 on the sale of assets and
acquisition-related restructuring costs of $0.12, compared to our
adjusted diluted EPS guidance of $0.43 to $0.45, which excluded an
estimated gain of $0.10 on the sale of assets.
-
Bookings were $87 million in the second quarter of 2013, including $7
million from acquisitions, compared to $77 million in the second
quarter of 2012.
-
Revenues were $82 million in the second quarter of 2013, including $6
million from acquisitions, compared to $83 million in the second
quarter of 2012. Our revenue guidance was $79 to $82 million, which
included anticipated revenues from CBTI. Adjusting for revenues from
Noss that were not included in the guidance, our adjusted revenue
guidance was $81 to $84 million, which compares to our actual revenues
of $82 million.
-
Gross profit margins were a record 48.6% in the second quarter of
2013, up 490 basis points from the second quarter of 2012.
-
Cash flows from continuing operations were $11 million in the second
quarter of 2013, an increase of 30% compared to $9 million in the
second quarter of 2012.
-
The acquisitions of Companhia Brasileira de Tecnologia Industrial
(CBTI) and certain assets of the Noss Group (Noss) were completed.
-
Net cash was $48 million at the end of the second quarter.
-
Cash returned to shareholders through a dividend payment and common
stock repurchases was $2.8 million in the second quarter of 2013.
Adjusted diluted EPS, adjusted diluted EPS guidance, and adjusted
revenue guidance are non-GAAP measures that exclude certain items as
detailed later in this press release under the heading “Use of Non-GAAP
Financial Measures” and in the reconciliation tables below.
Management Commentary
“We were pleased we exceeded our diluted EPS guidance on an adjusted
basis,” said Jonathan W. Painter, president and chief executive officer
of Kadant. “We also had excellent gross margins and cash flows in the
second quarter of 2013. Gross profit margins in the second quarter of
2013 were a record 48.6 percent. Operating cash flows from continuing
operations were $11.1 million in the second quarter of 2013, increasing
30 percent over the second quarter of 2012. We ended the quarter with
net cash (cash less debt) of $48.5 million, an increase of 61 percent
over $30.1 million in the second quarter of 2012. Significantly, our
operating cash flows from continuing operations over the last twelve
months were $44.0 million, reflecting the strength of our business.
“Consolidated bookings increased to $87.1 million in the second quarter
compared to $77.4 million in the second quarter of 2012, including a
$7.4 million increase from acquisitions and a 54 percent increase in
China bookings. We ended the quarter with a strong backlog of $106.3
million, including $9.0 million from acquisitions. After the quarter
closed, we booked orders for paper drying and fabric cleaning systems in
Europe with a combined value of $4.4 million.”
Second Quarter 2013
Kadant reported revenues of $82.2 million in the second quarter of 2013,
a decrease of $0.8 million, or one percent, compared with $83.0 million
in the second quarter of 2012. Revenues in the second quarter of 2013
included $6.1 million from acquisitions and a $0.6 million increase from
foreign currency translation compared to the second quarter of 2012.
Operating income from continuing operations was $8.4 million in the
second quarter of 2013, including a $1.7 million gain on the sale of
assets and a $1.9 million acquisition-related restructuring charge,
compared to $9.4 million in the second quarter of 2012.
Net income from continuing operations was $5.8 million in the second
quarter of 2013, or $0.51 per diluted share, compared to $6.5 million,
or $0.56 per diluted share, in the second quarter of 2012. Net income
from continuing operations in the second quarter of 2013 included a $1.3
million, or $0.12 per diluted share, after-tax gain on the sale of
assets and a $1.3 million, or $0.12 per diluted share, after-tax
restructuring charge. Adjusted net income, a non-GAAP measure, was $5.8
million, or $0.51 per diluted share, in the second quarter of 2013
compared to $6.5 million, or $0.56 per diluted share, in the second
quarter of 2012.
Adjusted Net Income and Adjusted Diluted EPS Reconciliation
(non-GAAP)
|
|
|
Three Months Ended June 29, 2013
|
|
|
Three Months Ended June 30, 2012
|
|
|
($ in millions)
|
|
|
Diluted EPS
|
|
|
($ in millions)
|
|
|
Diluted EPS
|
Income and Diluted EPS from Continuing Operations Attributable to
Kadant, as reported
|
|
|
$
|
5.8
|
|
|
|
$
|
0.51
|
|
|
|
$
|
6.5
|
|
|
$
|
0.56
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on the sale of assets
|
|
|
|
(1.3
|
)
|
|
|
|
(0.12
|
)
|
|
|
|
-
|
|
|
|
-
|
Restructuring costs
|
|
|
|
1.3
|
|
|
|
|
0.12
|
|
|
|
|
-
|
|
|
|
-
|
Adjusted Net Income and Adjusted Diluted EPS
|
|
|
$
|
5.8
|
|
|
|
$
|
0.51
|
|
|
|
$
|
6.5
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance
“We expect to achieve GAAP diluted EPS from continuing operations of
$0.47 to $0.49 in the third quarter of 2013 on revenues of $88 to $90
million,” Mr. Painter continued. “Our third quarter of 2013 guidance
includes estimated restructuring costs of $0.01. For the full year, we
now expect revenues of $340 to $345 million, revised from our previous
guidance of $336 to $343 million. We expect to achieve GAAP diluted EPS
from continuing operations of $2.02 to $2.07, which includes a gain of
$0.12 on the sale of assets and acquisition-related restructuring costs
of $0.13. This compares to our previous GAAP diluted EPS guidance of
$2.00 to $2.10, which included an estimated gain of $0.10 on the sale of
assets. On an adjusted diluted EPS basis, excluding the restructuring
costs and gain on sale, we are raising our guidance to $2.03 to $2.08
from our previous guidance of $1.90 to $2.00.”
Conference Call
Kadant will hold a webcast with a slide presentation for investors on
Tuesday, July 30, 2013, at 11 a.m. eastern time to discuss its second
quarter performance, as well as future expectations. To access the
webcast, including the slideshow and accompanying audio, go to www.kadant.com
and click on 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 August 30, 2013.
Shortly after the webcast, Kadant will post its updated general investor
presentation incorporating the second 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 acquisitions and foreign currency translation,
adjusted revenue guidance, adjusted operating income, adjusted net
income, adjusted diluted EPS, adjusted diluted EPS guidance, earnings
before interest, taxes, depreciation, and amortization (EBITDA), and
adjusted EBITDA.
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.
We present increases or decreases in revenues excluding the effect of
acquisitions and foreign currency translation to provide investors
insight into underlying revenue trends.
Adjusted revenue guidance for the second quarter of 2013 includes $2
million of revenues from the Noss acquisition.
Adjusted operating income and adjusted EBITDA exclude pre-tax
restructuring costs of $1.9 million and a pre-tax gain on the sale of
assets of $1.7 million in the three-month and six-month periods ended
June 29, 2013. These items are excluded as they are not indicative of
our core operating results and not comparable to other periods, which
have differing levels of incremental costs or other income or none at
all.
Adjusted net income and adjusted diluted EPS exclude after-tax
restructuring costs of $1.3 million ($1.9 million net of tax of $0.6
million) and an after-tax gain on the sale of assets of $1.3 million
($1.7 million gain net of tax of $0.4 million) in the three-month and
six-month periods ended June 29, 2013.
Adjusted diluted EPS in the three-month periods ended June 29, 2013 and
June 30, 2012 was calculated using the reported weighted average diluted
shares for each period.
Adjusted diluted EPS guidance for the second quarter of 2013 excludes a
gain on the sale of assets of $0.10 and for the full-year 2013 excludes
restructuring costs of $0.13 and a gain on the sale of assets of $0.12.
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.
|
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|
|
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Financial Highlights (unaudited)
|
(In thousands, except per share amounts and percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
Consolidated Statement of Income
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
82,165
|
|
|
|
$
|
82,982
|
|
|
|
$
|
158,369
|
|
|
|
$
|
167,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Costs and Operating Expenses:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
42,225
|
|
|
|
|
46,684
|
|
|
|
|
82,403
|
|
|
|
|
92,425
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
29,445
|
|
|
|
|
25,490
|
|
|
|
|
56,395
|
|
|
|
|
51,633
|
|
|
|
|
|
Research and development expenses
|
|
|
|
1,852
|
|
|
|
|
1,393
|
|
|
|
|
3,556
|
|
|
|
|
2,925
|
|
|
|
|
|
Restructuring costs and other (income) expense, net (a)(g)
|
|
|
|
218
|
|
|
|
|
-
|
|
|
|
|
218
|
|
|
|
|
307
|
|
|
|
|
|
|
|
|
|
|
73,740
|
|
|
|
|
73,567
|
|
|
|
|
142,572
|
|
|
|
|
147,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
8,425
|
|
|
|
|
9,415
|
|
|
|
|
15,797
|
|
|
|
|
19,805
|
|
|
|
|
Interest Income
|
|
|
|
142
|
|
|
|
|
74
|
|
|
|
|
251
|
|
|
|
|
168
|
|
|
|
|
Interest Expense
|
|
|
|
(231
|
)
|
|
|
|
(196
|
)
|
|
|
|
(396
|
)
|
|
|
|
(405
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Income from Continuing Operations before Provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for Income Taxes
|
|
|
|
8,336
|
|
|
|
|
9,293
|
|
|
|
|
15,652
|
|
|
|
|
19,568
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
2,492
|
|
|
|
|
2,705
|
|
|
|
|
4,459
|
|
|
|
|
5,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Income from Continuing Operations
|
|
|
|
5,844
|
|
|
|
|
6,588
|
|
|
|
|
11,193
|
|
|
|
|
13,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Discontinued Operation, Net of Tax
|
|
|
|
(12
|
)
|
|
|
|
(3
|
)
|
|
|
|
(41
|
)
|
|
|
|
(64
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
5,832
|
|
|
|
|
6,585
|
|
|
|
|
11,152
|
|
|
|
|
13,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Noncontrolling Interest
|
|
|
|
(72
|
)
|
|
|
|
(42
|
)
|
|
|
|
(108
|
)
|
|
|
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant
|
|
|
$
|
5,760
|
|
|
|
$
|
6,543
|
|
|
|
$
|
11,044
|
|
|
|
$
|
13,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Amounts Attributable to Kadant:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
$
|
5,772
|
|
|
|
$
|
6,546
|
|
|
|
$
|
11,085
|
|
|
|
$
|
13,660
|
|
|
|
|
|
|
Loss from Discontinued Operation, Net of Tax
|
|
|
|
(12
|
)
|
|
|
|
(3
|
)
|
|
|
|
(41
|
)
|
|
|
|
(64
|
)
|
|
|
|
|
|
Net Income Attributable to Kadant
|
|
|
$
|
5,760
|
|
|
|
$
|
6,543
|
|
|
|
$
|
11,044
|
|
|
|
$
|
13,596
|
|
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|
|
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Earnings per Share from Continuing Operations
|
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Attributable to Kadant:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Basic
|
|
|
$
|
0.52
|
|
|
|
$
|
0.57
|
|
|
|
$
|
0.99
|
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Diluted
|
|
|
$
|
0.51
|
|
|
|
$
|
0.56
|
|
|
|
$
|
0.98
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share Attributable to Kadant:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.52
|
|
|
|
$
|
0.57
|
|
|
|
$
|
0.99
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
$
|
0.51
|
|
|
|
$
|
0.56
|
|
|
|
$
|
0.98
|
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
11,178
|
|
|
|
|
11,575
|
|
|
|
|
11,170
|
|
|
|
|
11,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
11,331
|
|
|
|
|
11,679
|
|
|
|
|
11,299
|
|
|
|
|
11,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
Revenues by Product Line
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Preparation
|
|
|
$
|
28,493
|
|
|
|
$
|
28,674
|
|
|
|
$
|
(181
|
)
|
|
|
$
|
(453
|
)
|
|
|
|
Doctoring, Cleaning, & Filtration (d)
|
|
|
|
27,666
|
|
|
|
|
27,546
|
|
|
|
|
120
|
|
|
|
|
(164
|
)
|
|
|
|
Fluid-Handling
|
|
|
|
23,094
|
|
|
|
|
23,741
|
|
|
|
|
(647
|
)
|
|
|
|
(715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems Segment
|
|
|
|
79,253
|
|
|
|
|
79,961
|
|
|
|
|
(708
|
)
|
|
|
|
(1,332
|
)
|
|
|
|
Fiber-based Products
|
|
|
|
2,912
|
|
|
|
|
3,021
|
|
|
|
|
(109
|
)
|
|
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,165
|
|
|
|
$
|
82,982
|
|
|
|
$
|
(817
|
)
|
|
|
$
|
(1,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
|
|
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Preparation
|
|
|
$
|
51,495
|
|
|
|
$
|
61,391
|
|
|
|
$
|
(9,896
|
)
|
|
|
$
|
(10,267
|
)
|
|
|
|
Doctoring, Cleaning, & Filtration (d)
|
|
|
|
53,528
|
|
|
|
|
52,611
|
|
|
|
|
917
|
|
|
|
|
384
|
|
|
|
|
Fluid-Handling
|
|
|
|
46,627
|
|
|
|
|
46,109
|
|
|
|
|
518
|
|
|
|
|
531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems Segment
|
|
|
|
151,650
|
|
|
|
|
160,111
|
|
|
|
|
(8,461
|
)
|
|
|
|
(9,352
|
)
|
|
|
|
Fiber-based Products
|
|
|
|
6,719
|
|
|
|
|
6,984
|
|
|
|
|
(265
|
)
|
|
|
|
(265
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
158,369
|
|
|
|
$
|
167,095
|
|
|
|
$
|
(8,726
|
)
|
|
|
$
|
(9,617
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
Sequential Revenues by Product Line
|
|
|
June 29, 2013
|
|
|
March 30, 2013
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Preparation
|
|
|
$
|
28,493
|
|
|
|
$
|
23,002
|
|
|
|
$
|
5,491
|
|
|
|
$
|
5,465
|
|
|
|
|
Doctoring, Cleaning, & Filtration (d)
|
|
|
|
27,666
|
|
|
|
|
25,862
|
|
|
|
|
1,804
|
|
|
|
|
1,904
|
|
|
|
|
Fluid-Handling
|
|
|
|
23,094
|
|
|
|
|
23,533
|
|
|
|
|
(439
|
)
|
|
|
|
(278
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems Segment
|
|
|
|
79,253
|
|
|
|
|
72,397
|
|
|
|
|
6,856
|
|
|
|
|
7,091
|
|
|
|
|
Fiber-based Products
|
|
|
|
2,912
|
|
|
|
|
3,807
|
|
|
|
|
(895
|
)
|
|
|
|
(895
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,165
|
|
|
|
$
|
76,204
|
|
|
|
$
|
5,961
|
|
|
|
$
|
6,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
Revenues by Geography (e)
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
40,350
|
|
|
|
$
|
40,730
|
|
|
|
$
|
(380
|
)
|
|
|
$
|
(580
|
)
|
|
|
|
Europe
|
|
|
|
16,594
|
|
|
|
|
18,861
|
|
|
|
|
(2,267
|
)
|
|
|
|
(2,473
|
)
|
|
|
|
China
|
|
|
|
12,353
|
|
|
|
|
11,151
|
|
|
|
|
1,202
|
|
|
|
|
941
|
|
|
|
|
South America
|
|
|
|
7,801
|
|
|
|
|
5,714
|
|
|
|
|
2,087
|
|
|
|
|
2,131
|
|
|
|
|
Other
|
|
|
|
5,067
|
|
|
|
|
6,526
|
|
|
|
|
(1,459
|
)
|
|
|
|
(1,460
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,165
|
|
|
|
$
|
82,982
|
|
|
|
$
|
(817
|
)
|
|
|
$
|
(1,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
|
|
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
79,228
|
|
|
|
$
|
80,429
|
|
|
|
$
|
(1,201
|
)
|
|
|
$
|
(1,450
|
)
|
|
|
|
Europe
|
|
|
|
34,167
|
|
|
|
|
37,901
|
|
|
|
|
(3,734
|
)
|
|
|
|
(4,145
|
)
|
|
|
|
China
|
|
|
|
23,581
|
|
|
|
|
23,044
|
|
|
|
|
537
|
|
|
|
|
118
|
|
|
|
|
South America
|
|
|
|
11,992
|
|
|
|
|
11,508
|
|
|
|
|
484
|
|
|
|
|
673
|
|
|
|
|
Other
|
|
|
|
9,401
|
|
|
|
|
14,213
|
|
|
|
|
(4,812
|
)
|
|
|
|
(4,813
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
158,369
|
|
|
|
$
|
167,095
|
|
|
|
$
|
(8,726
|
)
|
|
|
$
|
(9,617
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Effect
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Increase
|
|
|
of Currency
|
|
|
|
Sequential Revenues by Geography
|
|
|
June 29, 2013
|
|
|
March 30, 2013
|
|
|
(Decrease)
|
|
|
Translation (b,c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
40,350
|
|
|
|
$
|
38,878
|
|
|
|
$
|
1,472
|
|
|
|
$
|
1,461
|
|
|
|
|
Europe
|
|
|
|
16,594
|
|
|
|
|
17,573
|
|
|
|
|
(979
|
)
|
|
|
|
(768
|
)
|
|
|
|
China
|
|
|
|
12,353
|
|
|
|
|
11,228
|
|
|
|
|
1,125
|
|
|
|
|
1,030
|
|
|
|
|
South America
|
|
|
|
7,801
|
|
|
|
|
4,191
|
|
|
|
|
3,610
|
|
|
|
|
3,666
|
|
|
|
|
Other
|
|
|
|
5,067
|
|
|
|
|
4,334
|
|
|
|
|
733
|
|
|
|
|
807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,165
|
|
|
|
$
|
76,204
|
|
|
|
$
|
5,961
|
|
|
|
$
|
6,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
Business Segment Information
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
|
48.7
|
%
|
|
|
|
43.4
|
%
|
|
|
|
47.8
|
%
|
|
|
|
44.2
|
%
|
|
|
|
|
|
Fiber-based Products
|
|
|
|
47.1
|
%
|
|
|
|
52.8
|
%
|
|
|
|
51.4
|
%
|
|
|
|
54.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48.6
|
%
|
|
|
|
43.7
|
%
|
|
|
|
48.0
|
%
|
|
|
|
44.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
11,821
|
|
|
|
$
|
11,772
|
|
|
|
$
|
21,765
|
|
|
|
$
|
23,876
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
(3,396
|
)
|
|
|
|
(2,357
|
)
|
|
|
|
(5,968
|
)
|
|
|
|
(4,071
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,425
|
|
|
|
$
|
9,415
|
|
|
|
$
|
15,797
|
|
|
|
$
|
19,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (c,f):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
12,039
|
|
|
|
$
|
11,772
|
|
|
|
$
|
21,983
|
|
|
|
$
|
23,876
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
(3,396
|
)
|
|
|
|
(2,357
|
)
|
|
|
|
(5,968
|
)
|
|
|
|
(4,071
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,643
|
|
|
|
$
|
9,415
|
|
|
|
$
|
16,015
|
|
|
|
$
|
19,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
84,857
|
|
|
|
$
|
74,794
|
|
|
|
$
|
170,485
|
|
|
|
$
|
149,012
|
|
|
|
|
|
|
Fiber-based Products
|
|
|
|
2,271
|
|
|
|
|
2,617
|
|
|
|
|
6,925
|
|
|
|
|
5,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
87,128
|
|
|
|
$
|
77,411
|
|
|
|
$
|
177,410
|
|
|
|
$
|
155,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
$
|
1,226
|
|
|
|
$
|
503
|
|
|
|
$
|
2,398
|
|
|
|
$
|
761
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
168
|
|
|
|
|
80
|
|
|
|
|
174
|
|
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,394
|
|
|
|
$
|
583
|
|
|
|
$
|
2,572
|
|
|
|
$
|
841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
Months Ended
|
Cash Flow and Other Data from Continuing Operations
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
June 29, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by Operations
|
|
|
$
|
11,091
|
|
|
|
$
|
8,558
|
|
|
|
$
|
18,072
|
|
|
|
$
|
4,532
|
|
|
|
$
|
43,996
|
Depreciation and Amortization Expense
|
|
|
|
2,475
|
|
|
|
|
2,029
|
|
|
|
|
4,428
|
|
|
|
|
4,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
June 29, 2013
|
|
|
Dec. 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash Equivalents, and Restricted Cash
|
|
|
|
|
|
|
|
|
$
|
64,487
|
|
|
|
$
|
54,553
|
|
|
|
|
Accounts Receivable, net
|
|
|
|
|
|
|
|
|
|
63,025
|
|
|
|
|
59,359
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
54,052
|
|
|
|
|
42,077
|
|
|
|
|
Unbilled Contract Costs and Fees
|
|
|
|
|
|
|
|
|
|
1,087
|
|
|
|
|
2,800
|
|
|
|
|
Other Current Assets
|
|
|
|
|
|
|
|
|
|
19,749
|
|
|
|
|
16,804
|
|
|
|
|
Property, Plant and Equipment, net
|
|
|
|
|
|
|
|
|
|
41,476
|
|
|
|
|
39,168
|
|
|
|
|
Intangible Assets
|
|
|
|
|
|
|
|
|
|
25,995
|
|
|
|
|
26,095
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
|
|
|
108,381
|
|
|
|
|
107,947
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
10,642
|
|
|
|
|
10,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
388,894
|
|
|
|
$
|
358,948
|
|
|
|
|
Liabilities and Shareholders' Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
|
|
|
|
|
|
$
|
26,050
|
|
|
|
$
|
23,124
|
|
|
|
|
Short- and Long-term Debt
|
|
|
|
|
|
|
|
|
|
16,025
|
|
|
|
|
6,875
|
|
|
|
|
Other Liabilities
|
|
|
|
|
|
|
|
|
|
92,437
|
|
|
|
|
78,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
|
|
|
|
|
|
|
134,512
|
|
|
|
|
108,981
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
254,382
|
|
|
|
|
249,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
388,894
|
|
|
|
$
|
358,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income and Adjusted EBITDA
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
Reconciliation
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Kadant
|
|
|
$
|
5,760
|
|
|
|
$
|
6,543
|
|
|
|
$
|
11,044
|
|
|
|
$
|
13,596
|
|
|
|
|
|
|
Net Income Attributable to Noncontrolling Interest
|
|
|
|
72
|
|
|
|
|
42
|
|
|
|
|
108
|
|
|
|
|
65
|
|
|
|
|
|
|
Loss from Discontinued Operation, Net of Tax
|
|
|
|
12
|
|
|
|
|
3
|
|
|
|
|
41
|
|
|
|
|
64
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
2,492
|
|
|
|
|
2,705
|
|
|
|
|
4,459
|
|
|
|
|
5,843
|
|
|
|
|
|
|
Interest Expense, net
|
|
|
|
89
|
|
|
|
|
122
|
|
|
|
|
145
|
|
|
|
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
8,425
|
|
|
|
|
9,415
|
|
|
|
|
15,797
|
|
|
|
|
19,805
|
|
|
|
|
|
|
Restructuring costs and other income, net (a)
|
|
|
|
218
|
|
|
|
|
-
|
|
|
|
|
218
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (c)
|
|
|
|
8,643
|
|
|
|
|
9,415
|
|
|
|
|
16,015
|
|
|
|
|
19,805
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
2,475
|
|
|
|
|
2,029
|
|
|
|
|
4,428
|
|
|
|
|
4,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (c)
|
|
|
$
|
11,118
|
|
|
|
$
|
11,444
|
|
|
|
$
|
20,443
|
|
|
|
$
|
24,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Papermaking Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
$
|
11,821
|
|
|
|
$
|
11,772
|
|
|
|
$
|
21,765
|
|
|
|
$
|
23,876
|
|
|
|
|
|
|
Restructuring costs and other income, net (a)
|
|
|
|
218
|
|
|
|
|
-
|
|
|
|
|
218
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (c)
|
|
|
|
12,039
|
|
|
|
|
11,772
|
|
|
|
|
21,983
|
|
|
|
|
23,876
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
2,356
|
|
|
|
|
1,909
|
|
|
|
|
4,191
|
|
|
|
|
4,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (c)
|
|
|
$
|
14,395
|
|
|
|
$
|
13,681
|
|
|
|
$
|
26,174
|
|
|
|
$
|
27,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Fiber-based Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
$
|
(3,396
|
)
|
|
|
$
|
(2,357
|
)
|
|
|
$
|
(5,968
|
)
|
|
|
$
|
(4,071
|
)
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
119
|
|
|
|
|
120
|
|
|
|
|
237
|
|
|
|
|
239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (c)
|
|
|
$
|
(3,277
|
)
|
|
|
$
|
(2,237
|
)
|
|
|
$
|
(5,731
|
)
|
|
|
$
|
(3,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes restructuring costs of $1,958, net of a gain of $1,740 on
the sale of assets, in the three-month and six-month periods ended June
29, 2013.
(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.
(f) See reconciliation to the most directly comparable GAAP financial
measure under "Adjusted Operating Income and Adjusted EBITDA
Reconciliation."
(g) Includes accelerated depreciation of $307 in the six-month period
ended June 30, 2012 associated with the disposal of equipment in China
related to a facility consolidation.
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, and
economic and industry outlook. 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 quarterly report on Form 10-Q for the period ended March 30,
2013. 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.
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