Slide 1: Third Quarter 2011 Business Review
Third Quarter 2011 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
* KAI 3Q11 Business Review-October 27, 2011 © 2011 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 3Q11 Business Review-October 27, 2011 © 2011 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: Financial Classifications
* KAI 3Q11 Business Review-October 27, 2011 © 2011 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 th
Slide 5: Business Review
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 6: Financial Highlights
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Q3 2011 Q3 2010 Revenue $84.4 million $66.5 million Gross Margin 42.7% 44.1% Diluted EPS 1 $0.80 $0.36 Adjusted Diluted EPS 2 $0.47 $0.30 Adjusted EBITDA 2 $10.6 million $7.4 million Adjusted EBITDA/Sales 12.6% 11.2%
Slide 7: Other Highlights from Q3 2011
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Other Highlights from Q3 2011 • Strong bookings of $95 million • Record backlog of $128 million • Cash flow from operations was $12.3 million • Repurchased 430,000 shares for $9.4 million • Composites class action se
Slide 8: Q3 Revenue Performance
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. ($ Millions) Q3 2011 Q3 2010 % CHANGE EXCL. FX Stock-Preparation $ 33.0 $ 23.9 38% 32% Fluid-Handling 25.3 21.6 17% 10% Doctoring 14.0 12.3 14% 10% Water-Management 10.0 6.9 44% 40% Fiber-based Products 1.5 1.2 18% 1
Slide 9: Q3 Booking Performance
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. ($ Millions) Q3 2011 Q3 2010 % CHANGE EXCL. FX Stock-Preparation $ 45.3 $ 18.2 149% 141% Fluid-Handling 25.3 20.2 25% 18% Doctoring 13.1 11.7 11% 6% Water-Management 9.7 6.2 57% 53% Fiber-based Products 1.3 1.5 (11%)
Slide 10: Bookings and Revenues Trends
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Bookings and Revenues Trends
Slide 11: Parts and Consumables Bookings and Revenues
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues
Slide 12: Record Backlog in Q3 2011
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Record Backlog in Q3 2011
Slide 13: Regional Performance
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 14: North America Bookings and Revenues
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. North America Bookings and Revenues
Slide 15: Europe Bookings and Revenues
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Europe Bookings and Revenues
Slide 16: China Bookings and Revenues
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. China Bookings and Revenues
Slide 17: Guidance for Continuing Operations
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q4 2011 revenues of $92 to $94 million • Q4 2011 GAAP diluted EPS of $0.56 to $0.58 • FY 2011 revenues of $330 to $332 million • FY 2011 GAAP diluted EPS of $2.42 to $2.44 • FY 20
Slide 18: Financial Review
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer
Slide 19: Gross Margins
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. 3Q11 2Q11 3Q10 Sequential ∆ Y-O-Y ∆ Papermaking Systems Segment 42.8% 45.3% 44.4% -2.50% -1.60% Fiber-based Products 36.5% 56.6% 28.3% -20.10% +8.20% TOTAL 42.7% 45.7% 44.1% -3.00% -1.40% Gross Margins
Slide 20: SG&A
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. ($ Millions) 3Q11 2Q11 3Q10 Sequential ∆ Y-O-Y ∆ SG&A $26.1 $25.8 $22.5 $0.3 $3.6 % Revenues 30.9% 31.3% 33.8% -0.40% -2.90% SG&A
Slide 21: 3Q10 to 3Q11 Diluted EPS from Continuing Operations
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. 3Q10 to 3Q11 Diluted EPS from Continuing Operations
Slide 22: Cash Flow
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. ($ Millions) 3Q11 3Q10 Income from Continuing Operations 9.9 4.6 Depreciation and Amortization 2.1 1.9 Stock-Based Compensation 1.0 0.7 Other Items (3.2) (0.6) Change in Current Assets & Liabilities (excluding acquis
Slide 23: Key Working Capital Metrics
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. 3Q11 2Q11 3Q10 Days in Receivables 62 63 65 Days in Payables 44 54 51 Days in Inventory 111 113 101 Working Capital % LTM Revenues* 10.8% 13.4% 11.5% Key Working Capital Metrics *Working Capital is defined as current
Slide 24: Cash and Debt
* KAI 3Q11 Business Review-October 27, 2011 © 2011 Kadant Inc. All rights reserved. ($ Millions) 3Q11 2Q11 3Q10 Cash, cash equivalents, restricted cash 48.1 46.1 49.5 Debt (17.4) (17.5) (22.9) NET CASH $ 30.7 $ 28.6 $ 26.6 Cash and Debt
Slide 25: Leverage Ratio
* KAI 3Q11 Business Review-October 27, 2011 © 2011 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 3Q11 Business Review-October 27, 2011 © 2011 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: Third Quarter 2011 Business Review
Third Quarter 2011 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO