Kadant Inc · NYSE:KAI
Kadant — Q2 2017 Earnings Presentation
26 slides from Kadant's earnings presentation, Aug 1, 2017
Slide 1: Second Quarter 2017 Business Review
Second Quarter 2017 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO
Slide 2: Forward-Looking Statements
Forward-Looking Statements The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation and our accompanying commentary contains forward-looking statements that involve a number of risks and uncertainties, including forward-looking
Slide 3: Use of Non-GAAP Financial Measures
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 tra
Slide 4: Business Review
BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q2 2017 Financial Highlights
Q2 2017 Financial Highlights ($ Millions, except per share amounts) Q2 2017 Q2 2016 % CHANGE2 EXCL. FX2 Bookings $120.3 $98.1 22.6% 26.1% Revenue $110.2 $111.8 -1.4% 1.0% Gross Margin 47.9% 44.9% n.m. n.m. Net Income $8.1 $8.3 -2.6% 6.5% Adjusted EBITDA1 $18.8 $17.9 5.3% 8.7% Adjusted EBITDA/Revenue
Slide 6: FX Translation and Acquisition Impact
FX Translation and Acquisition Impact Q2 2017, $ in millions except EPS Revenue Adjusted EPS4 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $110.2 $1.04 $120.3 $70.0 $68.2 Growth1 -1.4% 18.2% 22.6% 0.8% 5.5% Growth excluding FX2 1.0% 25.0% 26.1% 3.1% 8.1% Growth exclu
Slide 7: Bookings and Revenues
$0 $20 $40 $60 $80 $100 $120 $140 Bookings Booking Reversal Revenues Bookings and Revenues US$ (millions) 1 Reported Q415 bookings were $76 million, which included new orders of $92 million and a booking reversal of $16 million. 1 KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All righ
Slide 8: Parts and Consumables Bookings and Revenues
Parts and Consumables Bookings and Revenues KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 8 US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 9: North America Bookings and Revenues
North America Bookings and Revenues US$ (millions) KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 9 $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 10: Europe Bookings and Revenues
Europe Bookings and Revenues US$ (millions) KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 10 $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings Revenues
Slide 11: Asia Bookings and Revenues
-$10 -$5 $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings New Orders Revenues Asia Bookings and Revenues US$ (millions) 1 Reported Q415 Asia bookings were negative $6 million, which included new orders of $10 million and a booking reversal of $16 million. 1 KAI 2Q17 Business Review–August 1, 2017 | © 2017
Slide 12: Rest-of-World Bookings and Revenues
Rest-of-World Bookings and Revenues US$ (millions) KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 12 $0 $5 $10 $15 $20 Bookings Revenues
Slide 13: Guidance
Guidance • FY 2017 GAAP diluted EPS of $3.18 to $3.26 • FY 2017 adjusted diluted EPS of $3.99 to $4.07 • FY 2017 revenue of $488 to $494 million • Q3 2017 GAAP diluted EPS of $0.83 to $0.87 • Q3 2017 adjusted diluted EPS of $1.12 to $1.16 • Q3 2017 revenue of $139 to $142 million KAI 2Q17 Business R
Slide 14: Financial Review
FINANCIAL REVIEW Michael J. McKenney Senior Vice President & Chief Financial Officer
Slide 15: Quarterly Gross Margins
Quarterly Gross Margins KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 15 47.3% 48.6% 43.9% 43.9% 45.2% 43.0% 44.7% 44.7% 48.1% 46.5% 47.5% 43.1% 45.6% 44.9% 45.6% 46.0% 47.6% 47.9% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 16: Quarterly SG&A
Quarterly SG&A US$ (millions) KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 16 25% 30% 35% 40% 45% $0 $10 $20 $30 $40 SG&A SG&A as a % of Revenues
Slide 17: 2Q16 to 2Q17 Adjusted Diluted EPS
2Q16 to 2Q17 Adjusted Diluted EPS KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 17 $0.88 $0.18 $0.10 ($0.06) ($0.05) ($0.01) $1.04 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25
Slide 18: Cash Flow
Cash Flow US$ (millions) 2Q17 2Q16 Net Income $8.2 $8.4 Depreciation and Amortization 3.3 4.9 Stock-Based Compensation 1.4 1.3 Other Items 1.5 (0.5) Change in Current Assets & Liabilities (excl. acquisition) 9.3 (0.4) Cash Provided by Operating Activities $23.7 $13.7 KAI 2Q17 Business Review–August
Slide 19: Key Working Capital Metrics
Key Working Capital Metrics 2Q17 1Q17 2Q16 Days in Receivables 62 67 58 Days in Inventory 97 96 89 Days in Payables 45 42 45 KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 19 58 67 62 89 96 97 45 42 45 20 40 60 80 100 120 140 D A YS Days in Receivables Days in Inve
Slide 20: Working Capital and Cash Conversion Days
Working Capital and Cash Conversion Days 2Q17 1Q17 2Q16 Working Capital % LTM Revenues* 11.6% 14.1% 12.7% Cash Conversion Days** 113 days 120 days 102 days *Working Capital is defined as current assets less current liabilities, excluding cash and debt. ** Based on days in receivables plus days in in
Slide 21: Cash and Debt
Cash and Debt US$ (millions) 2Q17 1Q17 2Q16 Cash, cash equivalents, and restricted cash $88.0 $73.0 $54.9 Debt (60.7) (65.6) (64.3) Capital lease obligations (5.1) (4.9) (5.3) Net Cash (Debt) $22.2 $2.5 $(14.7) KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 21 U S$
Slide 22: Leverage Ratio
Leverage Ratio KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 22 *Calculated by adding or subtracting certain items from Adjusted EBITDA, as required by our Credit Facility. Effective March 2, 2017, our amended and restated Credit Facility defined total debt as deb
Slide 23: Guidance
Guidance • FY 2017 GAAP diluted EPS of $3.18 to $3.26 • FY 2017 adjusted diluted EPS of $3.99 to $4.07 • Gross margin approximately 45% • SG&A approximately 32% of revenue • Acquisition costs of $4.8 million or $0.36 per diluted share • Acquisition-related amortization expense of $7.0 million or $0.
Slide 24: Questions & Answers
Questions & Answers To ask a question, please call 888-326-8410 within the U.S. or +1 704-385-4884 outside the U.S. and reference 58 886 672. Please mute the audio on your computer. KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rights reserved. 24
Slide 25: Q2 2017 Key Take-Aways
Q2 2017 Key Take-Aways • Record adjusted EPS, adjusted EBITDA, and adjusted operating income • Record bookings • Completed NII FPG forest products business acquisition on July 5 • Raising full-year revenue and adjusted EPS guidance KAI 2Q17 Business Review–August 1, 2017 | © 2017 Kadant Inc. All rig
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