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Kadant Inc. (KAI)

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114.73-2.60 (-2.22%)
At close: 4:00PM EDT

114.73 0.00 (0.00%)
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Neutralpattern detected
Previous Close117.33
Open116.68
Bid114.72 x 1000
Ask115.28 x 1000
Day's Range114.12 - 117.45
52 Week Range52.71 - 127.16
Volume75,895
Avg. Volume47,350
Market Cap1.319B
Beta (5Y Monthly)1.40
PE Ratio (TTM)26.99
EPS (TTM)4.25
Earnings DateOct 28, 2020
Forward Dividend & Yield0.96 (0.82%)
Ex-Dividend DateOct 14, 2020
1y Target Est103.50
  • Kadant (KAI) Tops Q3 Earnings and Revenue Estimates
    Zacks

    Kadant (KAI) Tops Q3 Earnings and Revenue Estimates

    Kadant (KAI) delivered earnings and revenue surprises of 32.32% and 8.34%, respectively, for the quarter ended September 2020. Do the numbers hold clues to what lies ahead for the stock?

  • Kadant Reports Third Quarter 2020 Results
    GlobeNewswire

    Kadant Reports Third Quarter 2020 Results

    WESTFORD, Mass., Oct. 27, 2020 (GLOBE NEWSWIRE) -- 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 2019 Revenue 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 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 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 Quarter Adjusted 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 Months Adjusted 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.             Financial Highlights (unaudited)            (In thousands, except per share amounts and percentages)                          Three Months Ended  Nine Months Ended Consolidated Statement of IncomeSept. 26, 2020 Sept. 28, 2019 Sept. 26, 2020 Sept. 28, 2019 Revenue$154,610  $173,504  $466,597  $521,985  Costs and Operating Expenses:            Cost of revenue86,294  99,257  263,510  302,852  Selling, general, and administrative expenses43,853  47,097  134,518  144,883  Research and development expenses2,658  2,597  8,532  7,980  Restructuring costs470  —  926  —   133,275  148,951  407,486  455,715  Operating Income21,335  24,553  59,111  66,270  Interest Income52  43  140  158  Interest Expense(1,670) (3,066) (6,060) (10,143) Other Expense, Net(32) (98) (95) (296) Income Before Provision for Income Taxes19,685  21,432  53,096  55,989  Provision for Income Taxes4,705  5,219  13,738  12,310  Net Income14,980  16,213  39,358  43,679  Net Income Attributable to Noncontrolling Interest(129) (98) (369) (360) Net Income Attributable to Kadant$14,851  $16,115  $38,989  $43,319               Earnings per Share Attributable to Kadant:            Basic$1.29  $1.43  $3.40  $3.87  Diluted$1.28  $1.41  $3.38  $3.79               Weighted Average Shares:            Basic11,504  11,267  11,472  11,198  Diluted11,589  11,469  11,550  11,434                Three Months Ended  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  $1.28  $16,115  $1.41  Adjustments for the Following:            Restructuring Costs, Net of Tax335  0.03  —  —  Acquisition Costs, Net of Tax58  0.01  —  —  Amortization of Acquired Backlog, Net of Tax (e)249  0.02  16  —  Discrete Tax Items(338) (0.03) (264) (0.02) Adjusted Net Income and Adjusted Diluted EPS (a)$15,155  $1.31  $15,867  $1.38                Nine Months Ended  Nine 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$38,989  $3.38  $43,319  $3.79  Adjustments for the Following:            Restructuring Costs, Net of Tax667  0.06  —  —  Acquisition Costs, Net of Tax355  0.03  699  0.06  Amortization of Acquired Profit in Inventory and Backlog, Net of Tax (e,f)275  0.02  3,687  0.32  Discrete Tax Items(338) (0.03) (1,499) (0.13) Adjusted Net Income and Adjusted Diluted EPS (a)$39,948  $3.46  $46,206  $4.04                Three Months Ended       Decrease Excluding  Revenue by Segment (b)Sept. 26, 2020 Sept. 28, 2019 Decrease Acquisition and FX (a,c) Flow Control$56,815  $62,375  $(5,560) $(5,300) Industrial Processing62,086  74,229  (12,143) (13,306) Material Handling35,709  36,900  (1,191) (1,689)  $154,610  $173,504  $(18,894) $(20,295)              Percentage of Parts and Consumables Revenue66% 61%                     Nine Months Ended     Decrease Excluding  Sept. 26, 2020 Sept. 28, 2019 Decrease Acquisition and FX (a,c) Flow Control$165,329  $188,792  $(23,463) $(19,769) Industrial Processing192,468  222,899  (30,431) (29,375) Material Handling108,800  110,294  (1,494) (1,316)  $466,597  $521,985  $(55,388) $(50,460)              Percentage of Parts and Consumables Revenue65% 63%                     Three Months Ended     Decrease Excluding Bookings by Segment (b)Sept. 26, 2020 Sept. 28, 2019 Decrease Acquisition and FX (c) Flow Control$49,608  $58,817  $(9,209) $(8,757) Industrial Processing59,903  74,928  (15,025) (15,713) Material Handling33,838  37,185  (3,347) (4,057)  $143,349  $170,930  $(27,581) $(28,527)              Percentage of Parts and Consumables Bookings67% 59%                     Nine Months Ended    Decrease Excluding  Sept. 26, 2020 Sept. 28, 2019 Decrease Acquisition and FX (c) Flow Control$166,713  $184,246  $(17,533) $(13,516) Industrial Processing178,885  229,007  (50,122) (48,790) Material Handling106,344  115,249  (8,905) (9,005)  $451,942  $528,502  $(76,560) $(71,311)              Percentage of Parts and Consumables Bookings67% 63%                     Three Months Ended  Nine Months Ended Business Segment Information (b)Sept. 26, 2020 Sept. 28, 2019 Sept. 26, 2020 Sept. 28, 2019 Gross Margin:            Flow Control52.9% 52.9% 53.1% 51.7% Industrial Processing43.7% 38.7% 41.0% 39.0% Material Handling31.1% 34.0% 33.5% 31.4%  44.2% 42.8% 43.5% 42.0% Operating Income:        Flow Control$13,770  $15,103  $37,360  $43,220  Industrial Processing12,072  13,107  32,147  38,830  Material Handling2,614  3,525  10,341  5,515  Corporate(7,121) (7,182) (20,737) (21,295)  $21,335  $24,553  $59,111  $66,270           Adjusted Operating Income (a,d):        Flow Control$14,035  $15,103  $38,081  $43,220  Industrial Processing12,438  13,107  32,948  38,830  Material Handling2,862  3,546  10,597  11,210  Corporate(7,121) (7,182) (20,737) (21,295)  $22,214  $24,574  $60,889  $71,965           Capital Expenditures:        Flow Control$509  $636  $1,667  $1,814  Industrial Processing785  1,053  2,460  3,223  Material Handling486  397  1,167  1,145  Corporate42  7  125  54   $1,822  $2,093  $5,419  $6,236            Three Months Ended Nine Months Ended Cash Flow and Other DataSept. 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 Interest129  98  369  360  Provision for Income Taxes4,705  5,219  13,738  12,310  Interest Expense, Net1,618  3,023  5,920  9,985  Other Expense, Net32  98  95  296  Operating Income21,335  24,553  59,111  66,270  Restructuring Costs470  —  926  —  Acquisition Costs78  —  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 Amortization7,755  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 Costs265  —  721  —  Adjusted Operating Income (a)14,035  15,103  38,081  43,220  Depreciation and Amortization1,564  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 Costs205  —  205  —  Acquisition Costs78  —  485  —  Acquired Backlog Amortization (e)83  —  111  —  Adjusted Operating Income (a)12,438  13,107  32,948  38,830  Depreciation and Amortization3,311  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 Amortization2,824  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) $(21,295) Depreciation and Amortization56  63  150  188  EBITDA (a)$(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 Statement 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 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.Contacts Investor Contact Information: Michael McKenney, 978-776-2000 IR@kadant.com or Media Contact Information: Wes Martz, 269-278-1715 media@kadant.com

  • ACCESSWIRE

    Kadant, Inc. to Host Earnings Call

    NEW YORK, NY / ACCESSWIRE / October 28, 2020/ Kadant, Inc.