Slide 1: Fourth Quarter and Fiscal Year 2015 Business Review
Fourth Quarter and Fiscal Year 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO
Slide 2: Forward-Looking Statements
2 KAI 4Q15 Business Review–February 25, 2016 © 2016 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
Slide 3: Use of Non-GAAP Financial Measures
3 KAI 4Q15 Business Review–February 25, 2016 © 2016 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 o
Slide 4: Business Review
4 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q4 2015 Financial Highlights
5 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Q4 2015 Financial Highlights ($ Millions, except per share amounts) Q4 2015 Q4 2014 % CHANGE EXCL. FX Revenue $107.6 $105.2 2.3% 10.3% Gross Margin 43.1% 44.7% n.m. n.m. Net Income1 $10.4 $9.1 13.8% 26.1% Adjusted E
Slide 6: 2015 Financial Highlights
6 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. 2015 Financial Highlights ($ Millions, except per share amounts) 2015 2014 % CHANGE EXCL. FX Revenue $390.1 $402.1 -3.0% 5.0% Gross Margin 46.2% 44.4% n.m. n.m. Operating Income $50.1 $42.1 19.1% 31.0% Diluted EPS1
Slide 7: FX and Acquisition Impact
7 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. FX and Acquisition Impact Q4 2015, $ in millions except EPS Revenue Adjusted EPS3 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $107.6 $0.95 $75.5 $58.2 $61.1 Growth1 2.3% 17.3% -26.7
Slide 8: Bookings and Revenues
8 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions) $0 $20 $40 $60 $80 $100 $120 Booking Reversal Bookings Revenues
Slide 9: Parts and Consumables Bookings and Revenues
9 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 10: Kadant Revenue Source by Market
10 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Packaging 45% Tissue 10% Printing & Writing 9% Newsprint 3% OSB 9% Other Non- Paper 15% Other Paper 9% Kadant Revenue Source by Market Percentage estimated by Company using 2015 and 2014 revenues. 2015 2014 Packagi
Slide 11: Adjusted Diluted EPS Reconciliation
11 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Adjusted Diluted EPS Reconciliation 2010 2011 2012 2013 2014 2015 Diluted EPS, as reported $ 1.48 $ 2.74 $ 2.73 $ 2.07 $ 2.56 $ 3.10 Income from Discontinued Operation, net of tax $ - $ - $ (0.07) $ - $ - $ (0.01)
Slide 12: Revenue and Adjusted Diluted EPS Performance
12 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Revenue and Adjusted Diluted EPS Performance US$ ( m ill ions ) $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 2010 2011 2012 2013 2014 2015 Revenue Adjusted Diluted
Slide 13: Regional Highlights
13 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. REGIONAL HIGHLIGHTS
Slide 14: North America Bookings and Revenues
14 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 15: Europe Bookings and Revenues
15 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 Bookings Revenues
Slide 16: Asia Bookings and Revenues
16 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Asia Bookings and Revenues US$ (millions) -$10 -$5 $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings New Orders Revenues
Slide 17: Rest-of-World Bookings and Revenues
17 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Rest-of-World Bookings and Revenues US$ (millions) $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Bookings Revenues
Slide 18: Guidance for Continuing Operations
18 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Guidance for Continuing Operations • FY 2016 GAAP diluted EPS of $2.80 to $2.90 • FY 2016 revenue of $370 to $380 million • Q1 2016 GAAP diluted EPS of $0.55 to $0.58 • Q1 2016 revenue of $89 to $91 million
Slide 19: Financial Review
19 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. FINANCIAL REVIEW Michael J. McKenney Senior Vice President & Chief Financial Officer
Slide 20: Quarterly Gross Margins
20 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Quarterly Gross Margins 47.6% 45.7% 42.7% 38.6% 45.6% 43.7% 43.4% 43.0% 47.3% 48.6% 43.9% 43.9% 45.2% 43.0% 44.7% 44.7% 48.1% 46.5% 47.5% 43.1% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 21: Full-Year Gross Margins
21 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Full-Year Gross Margins 41.3% 40.3% 43.9% 43.3% 43.9% 45.8% 44.4% 46.2% 35% 37% 39% 41% 43% 45% 47% 2008 2009 2010 2011 2012 2013 2014 2015
Slide 22: Quarterly SG&A
22 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Quarterly SG&A 25% 30% 35% 40% 45% $0 $10 $20 $30 $40 SG&A SG&A as a % of Revenues
Slide 23: Full-Year SG&A
23 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Full-Year SG&A 25% 30% 35% 40% 45% $50 $70 $90 $110 $130 2008 2009 2010 2011 2012 2013 2014 2015 SG&A SG&A as a % of Revenues
Slide 24: Quarterly Adjusted Operating Income %
24 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Quarterly Adjusted Operating Income 0% 2% 4% 6% 8% 10% 12% 14% 16% $0 $2 $4 $6 $8 $10 $12 $14 $16 Adjusted Operating Income Adjusted Operating Income as a % of Revenues
Slide 25: Full-Year Adjusted Operating Income %
25 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Full-Year Adjusted Operating Income 0% 2% 4% 6% 8% 10% 12% 14% $0 $10 $20 $30 $40 $50 $60 2008 2009 2010 2011 2012 2013 2014 2015 Adjusted Operating Income Adjusted Operating Income as a % of Revenues
Slide 26: 4Q14 to 4Q15 Adjusted Diluted EPS from Continuing Operations
26 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. 4Q14 to 4Q15 Adjusted Diluted EPS from Continuing Operations $0.81 $0.20 $0.07 $0.01 ($0.11) ($0.03) $0.95 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25
Slide 27: 2014 to 2015 Adjusted Diluted EPS from Continuing Operations
27 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. 2014 to 2015 Adjusted Diluted EPS from Continuing Operations $2.78 $0.43 $0.18 $0.06 $0.03 ($0.34) ($0.01) $3.13 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00
Slide 28: Cash Flow
28 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 4Q15 4Q14 2015 2014 Income from Continuing Operations $10.4 $9.2 $34.6 $29.1 Depreciation and Amortization 2.6 2.6 10.8 11.2 Stock-Based Compensation 1.2 1.6 5.7 5.8 Other Items (2.0) 2.7 (3.
Slide 29: Free Cash Flow
29 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Free Cash Flow Free cash flow is defined as cash flows from continuing operations less purchases of property, plant, and equipment. 13.2 40.3 24.9 26.3 26.2 33.7 42.1 32.4 0 5 10 15 20 25 30 35 40 45 2008 2009 2010
Slide 30: Stock Repurchases and Dividends
30 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Stock Repurchases and Dividends ($ in Millions, except per share amounts) 2015 2014 2013 2012 2011 Common Stock Repurchases $9.9 $15.1 $5.4 $14.5 $16.1 Average Price per Share $43.12 $37.36 $30.67 $22.87 $21.52 Cas
Slide 31: Key Working Capital Metrics
31 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Key Working Capital Metrics 4Q15 3Q15 4Q14 Days in Receivables 59 63 55 Days in Inventory 91 123 87 Days in Payables 36 51 42 55 63 59 87 123 91 42 51 36 20 40 60 80 100 120 140 Days in Receivables Days in Inventor
Slide 32: Working Capital and Cash Conversion Days
32 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 4Q15 3Q15 4Q14 Working Capital % LTM Revenues* 12.0% 14.7% 12.8% Cash Conversion Days** 114 days 135 days 100 days *Working Capital is defined as current assets less current
Slide 33: Cash and Debt
33 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 4Q15 3Q15 4Q14 Cash, cash equivalents, and restricted cash $66.9 $56.9 $45.8 Debt (31.2) (29.4) (25.9) Net Cash $35.7 $27.5 $19.9 $40.0 $28.6 $30.7 $35.4 $30.9 $30.1 $41.5 $47.7 $51.8 $48
Slide 34: Guidance for Continuing Operations
34 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q1 2016 GAAP diluted EPS of $0.55 to $0.58 • FY 2016 GAAP diluted EPS of $2.80 to $2.90 • CAPEX of $7 to $8 million • Depreciation & Amortization Expense of $10 million
Slide 35: Questions & Answers
35 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Questions & Answers To ask a question, please call 877-703-6107 within the U.S. or +1-857-244-7306 outside the U.S. and reference 83375884. Please mute the audio on your computer.
Slide 36: Key Take-Aways
36 KAI 4Q15 Business Review–February 25, 2016 © 2016 Kadant Inc. All rights reserved. Key Take-Aways • Record gross margin, operating income, adjusted EBITDA, and diluted EPS performance in fiscal 2015 • 2016 expected to be another solid year
Slide 37: Fourth Quarter and Fiscal Year 2015 Business Review
Fourth Quarter and Fiscal Year 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO