Kadant Inc · NYSE:KAI
Kadant — Q1 2018 Earnings Presentation
29 slides from Kadant's earnings presentation, Apr 30, 2018
Slide 1: First Quarter 2018 Business Review
FIRST QUARTER 2018 BUSINESS REVIEW Jonathan W. Painter, President & CEO Michael J. McKenney, Executive 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 contains forward-looking statements that involve a number of risks and uncertainties, including forward-looking statements about our future fin
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 that exclude the effect of acquisitions and foreign currency
Slide 4: Business Review
BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q1 2018 Financial Highlights
Q1 2018 Financial Highlights ($ Millions, except per share amounts) Q1 2018 Q1 2017 % CHANGE2 Bookings $181.9 $118.9 53.1% Revenue $149.2 $102.9 45.0% Gross Margin 44.3% 47.7% n.m. Net Income $10.9 $9.0 21.3% Adjusted EBITDA1 $23.5 $15.8 48.7% Adjusted EBITDA Margin1 15.8% 15.4% n.m. Diluted EPS $0.
Slide 6: FX Translation and Acquisition Impact
FX Translation and Acquisition Impact Q1 2018, $ in millions except EPS Revenue Adjusted EPS4 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $149.2 $1.07 $181.9 $96.0 $103.0 Growth1 45.0% 30.5% 53.1% 36.3% 38.0% Growth excluding FX2 38.5% 23.2% 46.1% 30.7% 32.1% Growth
Slide 7: Bookings and Revenue
$0 $40 $80 $120 $160 $200 BOOKINGS BOOKINGS REVERSAL REVENUE Bookings and Revenue US$ (millions) 1 Reported Q415 bookings were $76 million, which included new orders of $92 million and a booking reversal of $16 million. 1 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved.
Slide 8: Parts and Consumables Bookings and Revenue
Parts and Consumables Bookings and Revenue KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 8 US$ (millions) $0 $20 $40 $60 $80 $100 $120 BOOKINGS REVENUE
Slide 9: North America Bookings and Revenue
North America Bookings and Revenue US$ (millions) KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 9 $0 $20 $40 $60 $80 $100 BOOKINGS REVENUE
Slide 10: Europe Bookings and Revenue
Europe Bookings and Revenue US$ (millions) KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 10 $0 $10 $20 $30 $40 $50 $60 BOOKINGS REVENUE
Slide 11: Asia Bookings and Revenue
-$10 $0 $10 $20 $30 $40 BOOKINGS NEW ORDERS REVENUE Asia Bookings and Revenue US$ (millions) 1 Reported Q415 Asia bookings were negative $6 million, which included new orders of $10 million and a booking reversal of $16 million. 1 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights
Slide 12: Rest-of-World Bookings and Revenue
Rest-of-World Bookings and Revenue US$ (millions) KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 12 $0 $2 $4 $6 $8 $10 $12 $14 $16 BOOKINGS REVENUE
Slide 13: Guidance
Guidance • FY 2018 GAAP diluted EPS of $4.98 to $5.08 • FY 2018 adjusted diluted EPS* of $5.15 to $5.25 • FY 2018 revenue of $625 to $635 million • FY 2018 adjusted EBITDA* of $116 to $118 million • Q2 2018 GAAP diluted EPS of $0.89 to $0.94 • Q2 2018 adjusted diluted EPS* of $0.95 to $1.00 • Q2 201
Slide 14: Financial Review
FINANCIAL REVIEW Michael J. McKenney Executive Vice President & CFO
Slide 15: Gross Margin
Gross Margin KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 15 45.2% 43.0% 44.7% 44.7% 48.1% 46.5% 47.5% 43.1% 45.6% 44.9% 45.6% 46.0% 47.7% 47.9% 42.3% 43.3% 44.3% 36% 38% 40% 42% 44% 46% 48% 50% All data for 2017 and 2018 is presented in conformity with the Financia
Slide 16: SG&A
SG&A US$ (millions) KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 16 20% 25% 30% 35% 40% 45% $0 $10 $20 $30 $40 $50 SG&A SG&A as a % of Revenue All data for 2017 and 2018 is presented in conformity with the Financial Accounting Standards Board’s Accounting Standards
Slide 17: 1Q17 to 1Q18 Adjusted Diluted EPS
1Q17 to 1Q18 Adjusted Diluted EPS* KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 17 * Adjusted diluted EPS is a non-GAAP financial measure that excludes certain items as detailed in our press release dated April 30, 2018. $0.82 $0.37 $0.33 $0.03 ($0.30) ($0.09) ($0.0
Slide 18: Full-Year Adjusted EBITDA
Full-Year Adjusted EBITDA* 18 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. $ (millions) * Adjusted EBITDA is a non-GAAP financial measure that excludes certain items as detailed in the Appendix on slides 28 and 29. Data for 2016, 2017 and 2018 is presented in confor
Slide 19: Cash Flow
Cash Flow US$ (millions) 1Q18 1Q17 Net Income $11.0 $9.1 Depreciation and Amortization 6.1 3.3 Stock-Based Compensation 1.5 1.3 Other Items (0.1) 0.2 Change in Current Assets & Liabilities (excl. acquisitions) (11.3) (12.2) Cash Provided by Operating Activities $7.2 $1.7 KAI Q118 Business Review–May
Slide 20: Key Working Capital Metrics
Key Working Capital Metrics 1Q18 4Q17 1Q17 Days in Receivables 57 56 67 Days in Inventory 98 93 96 Days in Payables 40 38 42 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 20 67 56 57 96 93 98 42 38 40 20 40 60 80 100 120 140 D ay s Days in Receivables Days in Invento
Slide 21: Working Capital and Cash Conversion Days
Working Capital and Cash Conversion Days 1Q18 4Q17 1Q17 Working Capital % LTM Revenues* 13.0% 11.2% 14.1% Cash Conversion Days** 115 days 111 days 120 days *Working Capital is defined as current assets less current liabilities, excluding cash and debt. ** Based on days in receivables plus days in in
Slide 22: Cash and Debt
Cash and Debt US$ (millions) 1Q18 4Q17 1Q17 Cash, cash equivalents, and restricted cash $73.7 $76.9 $73.0 Debt (235.8) (237.0) (65.6) Capital lease obligations (5.1) (5.1) (4.9) Net (Debt) Cash $(167.2) $(165.2) $2.5 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 22 U
Slide 23: Leverage Ratio
Leverage Ratio KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 23 *Calculated by adding or subtracting certain items from Adjusted EBITDA, as required by our Credit Facility. Effective March 2, 2017, our amended and restated Credit Facility defined total debt as debt l
Slide 24: Questions & Answers
Questions & Answers To ask a question, please call 888-326-8410 within the U.S. or +1 704-385-4884 outside the U.S. and reference 299 0429. Please mute the audio on your computer. KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 24
Slide 25: Key Take-Aways
Key Take-Aways • Record Q1 bookings • Record Q1 parts and consumables revenue and bookings • Expecting record revenue and diluted EPS in 2018 KAI Q118 Business Review–May 1, 2018 | © 2018 Kadant Inc. All rights reserved. 25
Slide 26: Slide 26
Slide 27: Appendix
APPENDIX KADANT
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation US$ (millions) 2013 2014 2015 2016 2017 Net Income Attributable to Kadant $ 23.4 $ 28.7 $ 34.4 $ 32.1 $ 31.1 Net Income Attributable to Noncontrolling Interest 0.2 0.4 0.3 0.4 0.5 (Income) Loss from Discontinued Operation, net of tax 0.1 - - - - Provision for Income Ta
Slide 29: Adjusted EBITDA Reconciliation – 2018 Guidance
Adjusted EBITDA Reconciliation – 2018 Guidance US$ (millions) High End Low End Net Income Attributable to Kadant $ 58.0 $ 56.9 Net Income Attributable to Noncontrolling Interest 0.5 0.5 Provision for Income Taxes 25.6 25.1 Interest Expense, net 6.5 6.5 Other Expense, net 0.9 0.9 Operating Income 91.