Slide 1: Second Quarter 2024 Business Review
Second Quarter 2024 Business Review July 31, 2024 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 4 KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights 5 KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. . • Record demand for aftermarket parts and strong capital business contributed to record revenue in Q2 • Operational execution was excellent and contributed to record adjusted EBITDA*and record ad
Slide 6: Q2 2024 Performance
Q2 2024 Performance 6 ($ in millions, except per share amounts) Q2 24 Q2 23 Change Revenue $274.8 $245.1 +12.1% Net Income $31.3 $29.7 +5.2% Adjusted EBITDA* $61.8 $51.6 +19.8% Adjusted EBITDA Margin* 22.5% 21.0% +150 bps EPS $2.66 $2.54 +4.7% Adjusted EPS* $2.81 $2.54 +10.6% Operating Cash Flow $28
Slide 7: Flow Control
$88.3 $83.0 $85.4 $94.7 $94.1 2Q23 3Q23 4Q23 1Q24 2Q24 7 ($ in millions) Q2 24 Q2 23 Change Revenue $92.3 $95.7 -3.6% Bookings $94.1 $88.3 +6.6% Adjusted EBITDA* $26.9 $28.1 -4.0% Adjusted EBITDA Margin* 29.2% 29.3% -10 bps HIGHLIGHTS • Revenue performance was affected by sluggish industrial activit
Slide 8: Industrial Processing
8 ($ in millions) Q2 24 Q2 23 Change Revenue $114.8 $90.0 +27.6% Bookings $96.7 $79.3 +22.0% Adjusted EBITDA* $29.5 $20.0 +47.7% Adjusted EBITDA Margin* 25.7% 22.2% +350 bps HIGHLIGHTS • Record revenue performance achieved in the second quarter • Strong operating leverage led to excellent adjusted E
Slide 9: Material Handling
9 ($ in millions) Q2 24 Q2 23 Change Revenue $67.7 $59.4 +14.1% Bookings $60.9 $47.6 +27.9% Adjusted EBITDA* $15.7 $13.6 +15.7% Adjusted EBITDA Margin* 23.2% 22.9% +30 bps HIGHLIGHTS • Record revenue performance benefited from our acquisition • Strong demand led to new order activity increasing 28%
Slide 10: Business Outlook
Business Outlook • Industrial demand expected to remain stable in second half • Business activity remains strong; economic uncertainty could impact the timing of capital orders • Our strong cash flow and healthy balance sheet position us well for growth 10KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024
Slide 11: Financial Review
KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 11 Financial Review Michael J. McKenney, EVP & CFO
Slide 12: Q2 2024 Financial Performance
Q2 2024 Financial Performance ($ in millions, except per share amounts) Q2 24 Q2 23 Revenue $274.8 $245.1 Gross Margin 44.4% 43.5% SG&A % of Revenue 25.5% 24.5% Operating Income $48.4 $43.1 Net Income $31.3 $29.7 Adjusted EBITDA* $61.8 $51.6 EPS $2.66 $2.54 Adjusted EPS* $2.81 $2.54 Operating Cash F
Slide 13: Key Financial Metrics
Key Financial Metrics KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 13 $22.5 $47.0 $59.2 $22.8 $28.1 $13.7 $38.1 $49.5 $16.6 $23.1 FREE CASH FLOW* OPERATING CASH FLOW 2Q23 3Q23 4Q23 1Q24 2Q24 $51.6 $52.7 $48.5 $52.2 $61.8 $29.7 $30.9 $27.4 $24.7 $31.3 21.0% 21.6% 20.3
Slide 14: 2Q23 to 2Q24 Adjusted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 2Q23 to 2Q24 Adjusted EPS* 14 $2.54 $0.20 $0.20 $0.06 $(0.18) $(0.01) $2.81 2Q23 ADJ EPS* GROSS MARGIN ACQUISITIONS REVENUE INTEREST EXPENSE OPERATING EXPENSES 2Q24 ADJ EPS*
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 15 ($ in millions) Q2 24 Q1 24 Q2 23 Cash, cash equivalents, and restricted cash $75.2 $82.6 $70.2 Debt $343.3 $308.0 $155.1 Lease obligations $2.0 $2.0 $1.8 Net Debt $270.1 $227.4 $86.7 Leverage rati
Slide 16: Guidance
Guidance KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 16 • FY 2024 revenue of $1.045 to $1.065 billion, revised from $1.040 to $1.065 billion • FY 2024 GAAP EPS of $9.20 to $9.45, revised from $9.39 to $9.69 • FY 2024 adjusted EPS* of $9.80 to $10.05, revised from $9
Slide 17: Questions & Answers
Questions & Answers To participate in the live Q&A session, please go to investor.kadant.com and click on the Q&A session link to receive a dial-in number and unique PIN. Please mute the audio on your computer. KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 17
Slide 18: 2024 Key Priorities
2024 Key Priorities 18 ENABLE SUSTAINABLE INDUSTRIAL PROCESSING DELIVER EXCEPTIONAL STAKEHOLDER VALUE PROVIDE STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.
Slide 19: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com 19
Slide 20: Appendix
Second Quarter 2024 Business Review KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 20 Appendix July 31, 2024
Slide 21: Revenue by Customer Location
Revenue by Customer Location ($ in thousands) Q2 24 Q2 23 Change Change Excluding Acquisitions and FX* North America $172,543 $135,385 $37,158 $11,529 Europe 63,193 60,625 2,568 2,614 Asia 24,970 32,867 (7,897) (7,433) Rest of World 14,059 16,176 (2,117) (2,064) Total $274,765 $245,053 $29,712 $4,64
Slide 22: Adjusted EPS and Free Cash Flow Reconciliation
Adjusted EPS* Reconciliation Q2 24 Q2 23 EPS, as Reported $2.66 $2.54 Adjustments, Net of Tax Acquired Profit in Inventory and Backlog Amortization 0.08 — Acquisition Costs 0.07 — Adjusted EPS* $2.81 $2.54 KAI 2Q24 BUSINESS REVIEW– JULY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 22 ($ in thousan
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA* Reconciliation ($ in thousands) Q2 24 Q2 23 Net Income Attributable to Kadant $31,291 $29,734 Net Income Attributable to Noncontrolling Interests 283 212 Provision for Income Taxes 11,992 11,182 Interest Expense, Net 4,833 1,929 Other Expense, Net 2 21 Acquired Profit in Inventory A
Slide 24: 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 6-9 is calculated using actual numbers reported in our press release dated July 30, 2024. FOOTNOTES 1) Leverage ratio is calculated by dividing total debt