Slide 1: Fourth Quarter 2011 Business Review
Fourth Quarter 2011 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
* KAI 4Q11 Business Review-February 23, 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
Slide 3: Use of Non-GAAP Financial Measures
* KAI 4Q11 Business Review-February 23, 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 o
Slide 4: Financial Classifications
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Financial Classifications All geographic revenues and bookings data are attributed to regions based on selling locations. For North America and China, this usually approximates revenues and bookings based on where t
Slide 5: Business Review
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 6: Q4 2011 Financial Highlights
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Q4 2011 Q4 2010 Revenue $97.0 million $73.3 million Diluted EPS 1 $0.90 $0.41 Adjusted Diluted EPS 2 $0.59 $0.42 Adjusted EBITDA 2 $11.5 million $8.7 million Adjusted EBITDA 2 /Sales 11.9% 11.9% Q4 2011 Financial Hi
Slide 7: Other Highlights from Q4 2011
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Other Highlights from Q4 2011 • Adjusted operating income 1 up 41% • Cash flow from operations was $14.9 million • Repurchased $6.6 million of common stock • Net cash position of $35.4 million • Spares bookings up 7
Slide 8: 2011 Financial Highlights
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. 2011 2010 Revenues $335.5 million $270.0 million Diluted EPS 1 $2.74 $1.48 Adjusted Diluted EPS 2 $2.10 $1.41 Adjusted EBITDA 2 $44.8 million $31.2 million Adjusted EBITDA 2 /Sales 13.3% 11.5% Return on Total Capita
Slide 9: Revenue By Product Line: Q4 2011
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) Q4 2011 Q4 2010 % CHANGE EXCL. FX Stock-Preparation $ 43.2 $ 28.9 49% 47% Fluid-Handling 28.2 21.6 31% 31% Doctoring 13.5 13.8 -2% -1% Water-Management 9.2 6.6 40% 41% Fiber-based Products 2.2 1.8 22% 2
Slide 10: Bookings By Product Line: Q4 2011
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) Q4 2011 Q4 2010 % CHANGE EXCL. FX Stock-Preparation $ 27.8 $ 53.0 -47% -48% Fluid-Handling 22.6 21.9 3% 3% Doctoring 12.6 14.0 -10% -9% Water-Management 11.6 7.5 53% 53% Fiber-based Products 3.5 2.8 25%
Slide 11: Bookings and Revenues Trends
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Bookings and Revenues Trends US$ (millions)
Slide 12: Parts and Consumables Bookings and Revenues
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions)
Slide 13: Regional Performance
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 14: North America Bookings and Revenues
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions)
Slide 15: Europe Bookings and Revenues
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions)
Slide 16: China Bookings and Revenues
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions)
Slide 17: Guidance for Continuing Operations
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q1 2012 revenues of $82 to $84 million • Q1 2012 GAAP diluted EPS of $0.41 to $0.43 • FY 2012 revenues of $330 to $340 million • FY 2012 GAAP diluted EPS of $1.95 to $2.05
Slide 18: Financial Review
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer
Slide 19: Gross Margins
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. 4Q11 3Q11 4Q10 Sequential ∆ Y-O-Y ∆ Papermaking Systems Segment 38.3% 42.8% 42.4% -4.5% -4.1% Fiber-based Products 49.9% 36.5% 41.8% +13.4% +8.1% TOTAL 38.6% 42.7% 42.4% -4.1% -3.8% Gross Margins
Slide 20: SG&A
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 4Q11 3Q11 4Q10 Sequential ∆ Y-O-Y ∆ SG&A $26.3 $26.1 $22.9 $0.2 $3.4 % Revenues 27.1% 30.9% 31.3% -3.8% -4.2% SG&A
Slide 21: 4Q10 to 4Q11 Diluted EPS from Continuing Operations
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. 4Q10 to 4Q11 Diluted EPS from Continuing Operations
Slide 22: Cash Flow
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 4Q11 4Q10 2011 2010 Income from Continuing Operations 10.7 5.2 33.9 18.7 Depreciation and Amortization 2.0 1.9 7.9 7.2 Stock-Based Compensation 1.0 0.7 3.9 2.8 Other Items 0.1 1.3 (2.6) (0.4) Change in
Slide 23: Key Working Capital Metrics
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. 4Q11 3Q11 4Q10 Days in Receivables 58 62 62 Days in Payables 43 44 51 Days in Inventory 82 111 90 Working Capital % LTM Revenues* 9.9% 10.8% 9.1% Key Working Capital Metrics *Working Capital is defined as current as
Slide 24: Cash and Debt
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 4Q11 3Q11 4Q10 Cash, cash equivalents, restricted cash 47.7 48.1 61.8 Debt (12.3) (17.4) (22.7) NET CASH $ 35.4 $ 30.7 $ 39.1 Cash and Debt
Slide 25: Leverage Ratio
* KAI 4Q11 Business Review-February 23, 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 26: Questions & Answers
* KAI 4Q11 Business Review-February 23, 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 27: Fourth Quarter 2011 Business Review
Fourth Quarter 2011 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 28: Appendix
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. APPENDIX Investor Contact: Thomas M. O’Brien, 978-776-2000 Media Contact: Wes Martz, 269-278-1715
Slide 29: Appendix: Revenue
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 2011 2010 % Change Parts & Consumables $182.9 $165.2 11% Capital $152.6 $104.8 46% Total $335.5 $270.0 24% Appendix: Revenue
Slide 30: Appendix: Gross Margins
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. 2011 2010 2009 2010 ∆ 2009 ∆ Papermaking Systems Segment 43.1% 43.8% 40.4% -0.7% +2.7% Fiber-based Products 50.2% 45.8% 35.0% +4.4% +15.2% TOTAL 43.3% 43.9% 40.3% -0.6% +3.0% Appendix: Gross Margins
Slide 31: Appendix: SG&A
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. ($ Millions) 2011 2010 2009 2010 ∆ 2009 ∆ SG&A $102.7 $89.2 $81.2 $13.5 $21.5 % Revenues 30.6% 33.0% 36.0% -2.4% -5.4% Appendix: SG&A
Slide 32: Appendix: Diluted EPS from Continuing Operations
* KAI 4Q11 Business Review-February 23, 2012 © 2012 Kadant Inc. All rights reserved. Appendix: Diluted EPS from Continuing Operations