Slide 1: Fourth Quarter and Full-Year 2013 Business Review
Fourth Quarter and Full-Year 2013 Business Review Jonathan W. Painter, President & CEOThomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
* KAI 4Q13 Business Review–February 20, 2014© 2014 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 o
Slide 3: Use of Non-GAAP Financial Measures
* KAI 4Q13 Business Review–February 20, 2014© 2014 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
Slide 4: Business Review
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. PainterPresident & CEO
Slide 5: Q4 2013 Financial Highlights
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Q4 2013 Financial Highlights ($ Millions, except per share amounts) Q4 2013 Q4 2012 % CHANGE Revenue $94.8 $78.1 21.5% Gross Margin 43.9% 43.0% n.m. Operating Income $7.6 $6.7 12.9% Adjusted Operating Income1,2 $9.3
Slide 6: 2013 Financial Highlights
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. 2013 Financial Highlights ($ Millions, except per share amounts) 2013 2012 % CHANGE Revenue $344.5 $331.8 3.8% Gross Margin 45.8% 43.9% n.m. Diluted EPS1 $2.07 $2.66 -22.2% Adjusted Diluted EPS1,2 $2.07 $2.29 -9.6% A
Slide 7: Q4 2013 Revenue By Product Line
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Q4 2013 Revenue By Product Line ($ Millions) Q4 2013 Q4 2012 % CHANGE EXCL. FX Stock-Preparation $32.4 $28.1 15.4% 12.2% Doctoring, Cleaning, & Filtration 30.3 24.8 22.1% 21.1% Fluid-Handling 24.9 22.8 9.2% 8.0% Wood
Slide 8: Q4 2013 Bookings By Product Line
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Q4 2013 Bookings By Product Line Percent change calculated using actual numbers reported in our Q4 2013 earnings release dated February 19, 2014. ($ Millions) Q4 2013 Q4 2012 % CHANGE EXCL. FX Stock-Preparation $22.6
Slide 9: Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions)
Slide 10: Parts and Consumables Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions)
Slide 11: Regional Performance
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 12: North America Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions)
Slide 13: Europe Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions)
Slide 14: China Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions) $36.2
Slide 15: South America Bookings and Revenues
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. South America Bookings and Revenues US$ (millions)
Slide 16: Guidance for Continuing Operations
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Guidance for Continuing Operations FY 2014 GAAP diluted EPS of $2.60 to $2.70FY 2014 revenues of $405 to $415 millionQ1 2014 GAAP diluted EPS of $0.38 to $0.40 Q1 2014 revenues of $94 to $96 million
Slide 17: Financial Review
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’BrienExecutive Vice President & Chief Financial Officer
Slide 18: Quarterly Gross Margins
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Quarterly Gross Margins
Slide 19: Full-Year Gross Margins
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Full-Year Gross Margins
Slide 20: Quarterly SG&A
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Quarterly SG&A
Slide 21: Full-Year SG&A
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Full-Year SG&A
Slide 22: Quarterly Adjusted Diluted EPS
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Quarterly Adjusted Diluted EPS Q4 2013 Q4 2013 Q4 2012 Q4 2012 $ in millions Diluted EPS $ in millions Diluted EPS Net Income and Diluted EPS from Continuing Operations, as reported $5.9 $0.52 $9.6 $0.84 Restructurin
Slide 23: 4Q12 to 4Q13 Adjusted Diluted EPS from Continuing Operations
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. 4Q12 to 4Q13 Adjusted Diluted EPS from Continuing Operations
Slide 24: Full-Year Adjusted Diluted EPS
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Full-Year Adjusted Diluted EPS 2013 2013 2012 2012 $ in millions Diluted EPS $ in millions Diluted EPS Net Income and Diluted EPS from Continuing Operations, as reported $23.5 $2.07 $30.9 $2.66 Other Expense - - 0.3
Slide 25: Adjusted Diluted EPS from Continuing Operations
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Adjusted Diluted EPS from Continuing Operations
Slide 26: Cash Flow
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 4Q13 4Q12 YTD4Q13 YTD4Q12 Income from Continuing Operations $6.0 $9.7 $23.7 $31.1 Depreciation and Amortization 3.0 2.0 9.8 8.4 Stock-Based Compensation 1.4 1.2 5.2 4.8 Other Items (0.6) (5.3)
Slide 27: Free Cash Flow
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Free Cash Flow Free cash flow is defined as cash flows from continuing operations less purchases of property, plant, and equipment.
Slide 28: Stock Repurchases and Dividends
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Stock Repurchases and Dividends ($ in Millions, except per share amounts) 2013 2012 2011 Common Stock Repurchases $5.4 $14.5 $16.1 Average Price per Share $30.67 $22.87 $21.52 Cash Dividends $4.2 - - Total Stock Repu
Slide 29: Key Working Capital Metrics
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Key Working Capital Metrics 4Q13 3Q13 4Q12 Days in Receivables 70 64 72 Days in Inventory 96 92 87 Days in Payables 48 46 47
Slide 30: Working Capital and Cash Conversion Days
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 4Q13 3Q13 4Q12 Working Capital % LTM Revenues* 16.6% 14.4% 13.9% Cash Conversion Days** 118 days 110 days 112 days *Working Capital is defined as current assets less current l
Slide 31: Cash and Debt
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 4Q13 3Q13 4Q12 Cash, cash equivalents, and restricted cash $50.2 $73.2 $54.6 Debt (38.6) (14.5) (6.9) Net Cash $11.6 $58.7 $47.7
Slide 32: Leverage Ratio
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Leverage Ratio * Calculated by adding or subtracting certain items, as required by our Credit Facility, from Adjusted EBITDA. Under our new Credit Facility entered into on August 3, 2012 and as amended on November 1,
Slide 33: Guidance for Continuing Operations
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Guidance for Continuing Operations Q1 2014 GAAP diluted EPS of $0.38 to $0.40 FY 2014 GAAP diluted EPS of $2.60 to $2.70CAPEX of $9 to $10 millionDepreciation & Amortization Expense of $11 million
Slide 34: Questions & Answers
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Questions & Answers To ask a question, please call 877-703-6107 within the U.S. or +1-857-244-7306 outside the U.S. and reference 83375884. Please mute the audio on your computer.
Slide 35: Key Take-Aways
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Key Take-Aways Solid financial performance in 2013Record gross margin, near-record adjusted EBITDA in 2013 Cash flow remains healthyParts and Consumables business strong and growing2014 is expected to be a solid year
Slide 36: Fourth Quarter and Full-Year 2013 Business Review
Fourth Quarter and Full-Year 2013 Business Review Jonathan W. Painter, President & CEOThomas M. O’Brien, Executive Vice President & CFO
Slide 37: Appendix
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. APPENDIX Investor Contact: Thomas M. O’Brien, 978-776-2000
Slide 38: Appendix: Revenue
* KAI 4Q13 Business Review–February 20, 2014© 2014 Kadant Inc. All rights reserved. Appendix: Revenue 2013 2012 ($ Millions) 2013 2012 % Change Parts & Consumables $214.7 $189.9 13% Capital $129.8 $141.9 -9% Total $344.5 $331.8 4%