Slide 1: Second Quarter 2012 Business Review
Second Quarter 2012 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Forward-Looking Statements The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements that involve a number of r
Slide 3: Use of Non-GAAP Financial Measures
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. 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 de
Slide 4: Business Review
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q2 2012 Financial Highlights
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Q2 2012 Q2 2011 Revenue $83.0 million $82.5 million Gross Margin 43.7% 45.7% Operating Income 1 $9.4 million $10.5 million Net Income 1 $6.5 million $7.3 million Diluted EPS 1 $0.56 $0.59 EBITDA 2 $11.4 million $12.5 mi
Slide 6: Revenue By Product Line: Q2 2012
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) Q2 2012 Q2 2011 % CHANGE EXCL. FX Stock-Preparation $28.7 $32.3 -11.3% -8.7% Fluid-Handling 23.7 24.5 -3.0% 2.4% Doctoring 14.0 13.7 2.1% 6.6% Water-Management 13.1 8.5 53.2% 60.8% Fiber-based Products 3.0
Slide 7: Bookings By Product Line: Q2 2012
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) Q2 2012 Q2 2011 % CHANGE EXCL. FX Stock-Preparation $28.0 $30.8 -9.1% -5.3% Fluid-Handling 24.2 28.4 -15.1% -10.2% Doctoring 14.8 14.5 2.3% 6.8% Water-Management 7.3 11.1 -34.0% -31.8% Fiber-based Products
Slide 8: Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions)
Slide 9: Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions)
Slide 10: Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions)
Slide 11: Parts and Consumables Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions)
Slide 12: Regional Performance
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 13: North America Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions)
Slide 14: Europe Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions)
Slide 15: China Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions)
Slide 16: South America Bookings and Revenues
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. South America Bookings and Revenues US$ (millions)
Slide 17: Revenues from Emerging and Developed Economies
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Revenues from Emerging and Developed Economies Geographic data is attributed to countries based on customer location. Revenues are for the trailing 12 months ending June 30, 2012. ● Emerging Regions (40%) ● Developed Re
Slide 18: Guidance for Continuing Operations
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Guidance for Continuing Operations • FY 2012 GAAP diluted EPS of $2.05 to $2.10 • FY 2012 revenues of $325 to $330 million • Q3 2012 GAAP diluted EPS of $0.49 to $0.51 • Q3 2012 revenues of $80 to $82 million
Slide 19: Financial Review
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer
Slide 20: Gross Margins
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. 2Q12 1Q12 2Q11 Sequential ∆ Y-O-Y ∆ Papermaking Systems Segment 43.4% 45.1% 45.3% -1.7% -1.9% Fiber-based Products 52.8% 56.3% 56.6% -3.5% -3.8% TOTAL 43.7% 45.6% 45.7% -1.9% -2.0% Gross Margins
Slide 21: SG&A
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 2Q12 1Q12 2Q11 Sequential ∆ Y-O-Y ∆ SG&A $25.5 $26.1 $25.8 $(0.6) $(0.3) % Revenues 30.7% 31.1% 31.3% -0.4% -0.6% SG&A
Slide 22: 2Q11 to 2Q12 Diluted EPS from Continuing Operations
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. 2Q11 to 2Q12 Diluted EPS from Continuing Operations
Slide 23: Cash Flow
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 2Q12 2Q11 2Q12 YTD 2Q11 YTD Income from Continuing Operations $6.6 $7.4 $13.7 $13.3 Depreciation and Amortization 2.0 2.0 4.3 3.8 Stock-Based Compensation 1.2 1.1 2.3 1.9 Other Items 0.3 - (0.1) 0.5 Change
Slide 24: Key Working Capital Metrics
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. 2Q12 1Q12 2Q11 Days in Receivables 74 73 63 Days in Payables 49 57 54 Days in Inventory 97 101 113 Key Working Capital Metrics
Slide 25: Working Capital
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. 2Q12 1Q12 2Q11 Working Capital % LTM Revenues* 13.8% 13.7% 13.4% Working Capital *Working Capital is defined as current assets less current liabilities, excluding cash, debt, and the discontinued operation.
Slide 26: Cash and Debt
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 2Q12 1Q12 2Q11 Cash, cash equivalents, restricted cash $42.1 $43.0 $46.1 Debt (12.0) (12.1) (17.5) NET CASH $30.1 $30.9 $28.6 Cash and Debt
Slide 27: Leverage Ratio
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Leverage Ratio * Calculated by adding or subtracting certain items, as required by our Credit Facility, from Adjusted EBITDA.
Slide 28: Questions & Answers
* KAI 2Q12 Business Review-July 31, 2012 © 2012 Kadant Inc. All rights reserved. Questions & Answers To ask a question, please call 866-804-6926 within the U.S. or +1-857-350-1672 outside the U.S. and reference 83375884. Please mute the audio on your computer.
Slide 29: Second Quarter 2012 Business Review
Second Quarter 2012 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO