Slide 1: Fourth Quarter and FY 2021 Business Review
Fourth Quarter and FY 2021 Business Review February 17, 2022 Exhibit 99.2
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 U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including increases or decreases in revenue excluding the effect of acquisitions and foreign currency
Slide 4: Business Review
BUSINESS REVIEW Jeffrey L. Powell, President & CEO 4KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights • Solid execution by our businesses led to strong financial performance and record cash flow from operations in the fourth quarter and FY 2021 • Capital project activity and aftermarket parts demand remained strong in Q4 despite the Omicron variant and supply chain headwinds •
Slide 6: Q4 2021 Performance
Q4 2021 Performance 6 Q4 21 Q4 20 Change Revenue $218.5 $168.4 +29.7% Net Income $24.2 $16.2 +49.1% Adjusted EBITDA* $44.8 $32.1 +39.4% Adjusted EBITDA Margin* 20.5% 19.1% +140 bps Diluted EPS $2.07 $1.40 +47.9% Adjusted Diluted EPS* $2.31 $1.54 +50.0% Operating Cash Flow $61.0 $40.3 +51.5% Free Cas
Slide 7: FY 2021 Performance
FY 2021 Performance 7 FY 21 FY 20 Change Revenue $786.6 $635.0 +23.9% Net Income $84.0 $55.2 +52.3% Adjusted EBITDA* $159.4 $115.9 +37.5% Adjusted EBITDA Margin* 20.3% 18.3% +200 bps Diluted EPS $7.21 $4.77 +51.2% Adjusted Diluted EPS* $7.83 $5.00 +56.6% Operating Cash Flow $162.4 $92.9 +74.9% Free
Slide 8: Flow Control
$61.9 $76.0 $71.8 $76.7 $83.7 4Q20 1Q21 2Q21 3Q21 4Q21 Flow Control 8 $ in millions Q4 21 Q4 20 Change Revenue $78.0 $60.1 +29.8% Bookings $83.7 $61.9 +35.3% Adjusted EBITDA* $19.3 $15.7 +23.0% Adjusted EBITDA Margin* 24.8% 26.1% -130 bps HIGHLIGHTS • Strong aftermarket demand and capital project ac
Slide 9: Industrial Processing
$94.8 $86.6 $101.9 $118.9 $94.9 4Q20 1Q21 2Q21 3Q21 4Q21 Industrial Processing 9 $ in millions Q4 21 Q4 20 Change Revenue $95.3 $69.1 +37.9% Bookings $94.9 $94.8 +0.2% Adjusted EBITDA* $25.0 $16.2 +54.1% Adjusted EBITDA Margin* 26.2% 23.5% +270 bps HIGHLIGHTS • Record demand for wood processing equi
Slide 10: Material Handling
$39.9 $41.9 $39.4 $49.1 $52.2 4Q20 1Q21 2Q21 3Q21 4Q21 Material Handling 10 $ in millions Q4 21 Q4 20 Change Revenue $45.2 $39.2 +15.3% Bookings $52.2 $39.9 +30.8% Adjusted EBITDA* $9.3 $7.2 +29.2% Adjusted EBITDA Margin* 20.5% 18.3% +220 bps HIGHLIGHTS • Aftermarket parts demand was strong with rec
Slide 11: Business Outlook
Business Outlook • Demand expected to remain solid as the global economy recovers • Supply chain constraints and inflationary pressures expected to continue • Expecting to generate record earnings in fiscal 2022 11KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED.
Slide 12: Financial Review
FINANCIAL REVIEW Michael J. McKenney, EVP & CFO KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 12
Slide 13: Q4 2021 Financial Performance
Q4 2021 Financial Performance Q4 21 Q4 20 Gross Margin 42.4% 44.1% SG&A % of Revenue 26.4% 28.1% Operating Income $31.5 $22.0 Net Income $24.2 $16.2 Adjusted EBITDA* $44.8 $32.1 Diluted EPS $2.07 $1.40 Adjusted Diluted EPS* $2.31 $1.54 HIGHLIGHTS • Adjusted EBITDA margin* of 20.5% • Operating cash f
Slide 14: FY 2021 Financial Performance
FY 2021 Financial Performance FY 21 FY 20 Gross Margin 42.9% 43.7% SG&A % of Revenue 26.5% 28.6% Operating Income $116.7 $81.1 Net Income $84.0 $55.2 Adjusted EBITDA* $159.4 $115.9 Diluted EPS $7.21 $4.77 Adjusted Diluted EPS* $7.83 $5.00 HIGHLIGHTS • Adjusted EBITDA margin* of 20.3% • Operating cas
Slide 15: Adjusted EBITDA and Cash Flow Metrics
$38.1 $16.8 $42.3 $34.6 $55.9 4Q20 1Q21 2Q21 3Q21 4Q21 FREE CASH FLOW* OPERATING CASH FLOW 19.1% 18.0% 21.1% 20.5% 20.5% 4Q20 1Q21 2Q21 3Q21 4Q21 Adjusted EBITDA and Cash Flow Metrics CASH FLOW $37.9 $40.3 $44.4 ($ in millions) ADJUSTED EBITDA MARGIN* $19.1 KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | ©
Slide 16: 4Q20 to 4Q21 Adjusted Diluted EPS
$1.54 $0.91 $0.11 $0.04 ($0.13) ($0.08) ($0.05) ($0.02) ($0.01) $2.31 4Q20 to 4Q21 Adjusted Diluted EPS* KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 16 4Q20 ADJ EPS* 4Q21 ADJ EPS* REVENUE ACQUISTIONS INTEREST EXPENSE OPERATING EXPENSE GOV’T PROGRAMS CHANGE IN SHA
Slide 17: 2020 to 2021 Adjusted Diluted EPS
$5.00 $3.33 $0.23 $0.21 $0.12 $0.04 ($0.78) ($0.23) ($0.06) ($0.03) $7.83 2020 to 2021 Adjusted Diluted EPS* KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 17 FY20 ADJ EPS* FY21 ADJ EPS* REVENUE ACQUISTIONSINTEREST EXPENSE OPERATING EXPENSE GOV’T PROGRAMS CHANGE IN
Slide 18: Key Liquidity Metrics
Key Liquidity Metrics $ in millions Q4 21 Q3 21 Q4 20 Cash, cash equivalents, and restricted cash $94.2 $83.7 $66.6 Debt $264.6 $309.4 $228.0 Lease obligations $4.9 $5.1 $5.5 Net Debt $175.4 $230.8 $166.8 Leverage ratio1 1.34 1.69 1.61 Working capital % LTM revenue2 9.4% 13.5% 14.2% Cash conversion
Slide 19: Guidance for 2022
Guidance for 2022 19KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. • Q1 2022 revenue of $212 to $217 million • Q1 2022 adjusted diluted EPS of $2.00 to $2.10 • FY 2022 revenue of $870 to $890 million • FY 2022 adjusted diluted EPS of $8.55 to $8.75 • Gross margins 4
Slide 20: 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 956 9006. Please mute the audio on your computer. KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 20
Slide 21: 2022 Key Priorities
2022 Key Priorities 21 ACCELERATE SUSTAINABLE INDUSTRIAL PROCESSING DELIVER EXCEPTIONAL STAKEHOLDER VALUE MAINTAIN STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED.
Slide 22: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com February 17, 2022
Slide 23: Appendix
APPENDIX Fourth Quarter and FY 2021 Business Review KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 23
Slide 24: Revenue by Customer Location
Revenue by Customer Location $ in thousands Q4 21 Q4 20 Change Change Excl. Acquisitions and FX* North America $113,139 $90,154 $22,985 $14,192 Europe 62,297 48,646 12,651 6,338 Asia 31,764 21,276 10,488 6,515 Rest of World 12,316 8,355 3,961 3,410 TOTAL $218,516 $168,431 $50,085 $30,455 KAI 4Q21 BU
Slide 25: Quarterly Gross Margin and SG&A
28.1% 28.7% 25.2% 26.2% 26.4% 4Q20 1Q21 2Q21 3Q21 4Q21 44.1% 43.9% 43.6% 41.9% 42.4% 4Q20 1Q21 2Q21 3Q21 4Q21 Quarterly Gross Margin and SG&A KAI 4Q21 BUSINESS REVIEW–FEBRUARY 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 25 GROSS MARGIN SG&A (as a % of revenue)
Slide 26: Adjusted Diluted EPS Reconciliation
Adjusted Diluted EPS Reconciliation Q4 21 Q4 20 FY 21 FY 20 Diluted EPS, as reported $2.07 $1.40 $7.21 $4.77 Impairment and Restructuring Costs, Net of Tax 0.08 0.13 0.08 0.19 Gain on Sale, Net of Tax (0.03) - (0.03) - Acquisition Costs, Net of Tax 0.06 - 0.26 0.03 Acquired Backlog Amortization, Net
Slide 27: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) 2017 2018 2019 2020 2021 Operating Cash Flow, as reported $ 65.2 $ 63.0 $ 97.4 $ 92.9 $ 162.4 Capital Expenditures $ (17.3) $ (16.6) $ (9.9) $ (7.6) $ (12.8) Free Cash Flow* $ 47.9 $ 46.4 $ 87.5 $ 85.3 $ 149.6 Free cash flow is a non-GAAP financial measu
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA in a given period by revenue in the same period. $ in thousands Q4 21 Q4 20 FY 21 FY 20 Net Income Attributable to Kadant $24,15
Slide 29: Notes
Notes PRESENTATION NOTES • All references to EPS (earnings per share) are to our EPS as calculated on a diluted basis. • Percent change in slides 6-10 is calculated using actual numbers reported in our press release dated February 16, 2022. FOOTNOTES 1) Leverage ratio is calculated by dividing total