Slide 1: Third Quarter 2024 Business Review
Third Quarter 2024 Business Review October 30, 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 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights 5 KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. . • Strong demand in North America drove record aftermarket parts revenue • Operational execution was excellent and contributed to record adjusted EBITDA*, adjusted EBITDA margin*, and adjusted
Slide 6: Q3 2024 Performance
Q3 2024 Performance 6 ($ in millions, except per share amounts) Q3 24 Q3 23 Change Revenue $271.6 $244.2 +11.2% Net Income $31.6 $30.9 +2.3% Adjusted EBITDA* $63.3 $52.7 +20.0% Adjusted EBITDA Margin* 23.3 % 21.6% +170 bps EPS $2.68 $2.63 +1.9% Adjusted EPS* $2.84 $2.69 +5.6% Operating Cash Flow $52
Slide 7: Flow Control
$83.0 $85.4 $94.7 $94.1 $89.0 3Q23 4Q23 1Q24 2Q24 3Q24 7 ($ in millions) Q3 24 Q3 23 Change Revenue $97.5 $90.8 +7.4% Bookings $89.0 $83.0 +7.2% Adjusted EBITDA* $28.7 $27.0 +6.3% Adjusted EBITDA Margin* 29.4 % 29.7% -30 bps HIGHLIGHTS • Strong aftermarket parts demand contributed to solid bookings
Slide 8: Industrial Processing
8 ($ in millions) Q3 24 Q3 23 Change Revenue $110.7 $94.2 +17.5% Bookings $89.3 $70.4 +26.8% Adjusted EBITDA* $31.7 $22.5 +41.3% Adjusted EBITDA Margin* 28.7 % 23.8% +490 bps HIGHLIGHTS • Record aftermarket parts revenue performance achieved in Q3 • Strong operating leverage led to record adjusted E
Slide 9: Material Handling
9 ($ in millions) Q3 24 Q3 23 Change Revenue $63.4 $59.2 +7.2% Bookings $62.0 $56.2 +10.4% Adjusted EBITDA* $12.9 $13.3 -3.1% Adjusted EBITDA Margin* 20.4 % 22.5% -210 bps HIGHLIGHTS • Q3 revenue and bookings benefited from our recent acquisitions • High performance baler product line led new order
Slide 10: Business Outlook
Business Outlook • Business activity remains relatively strong in the Americas and softer in Europe and Asia; economic uncertainty continues to impact the timing of capital orders • Our strong cash flow and healthy balance sheet position us well for growth • We expect to deliver record financial res
Slide 11: Financial Review
KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 11 Financial Review Michael J. McKenney, EVP & CFO
Slide 12: Q3 2024 Financial Performance
Q3 2024 Financial Performance ($ in millions, except per share amounts) Q3 24 Q3 23 Revenue $271.6 $244.2 Gross Margin 44.7% 43.3% SG&A % of Revenue 25.4% 23.7% Operating Income $49.0 $43.5 Net Income $31.6 $30.9 Adjusted EBITDA* $63.3 $52.7 EPS $2.68 $2.63 Adjusted EPS* $2.84 $2.69 Operating Cash F
Slide 13: Key Financial Metrics
Key Financial Metrics KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 13 $47.0 $59.2 $22.8 $28.1 $52.5 $38.1 $49.5 $16.6 $23.1 $48.3 FREE CASH FLOW* OPERATING CASH FLOW 3Q23 4Q23 1Q24 2Q24 3Q24 $52.7 $48.5 $52.2 $61.8 $63.3 $30.9 $27.4 $24.7 $31.3 $31.6 21.6% 20.3% 2
Slide 14: 3Q23 to 3Q24 Adjusted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 3Q23 to 3Q24 Adjusted EPS* 14 $2.69 $0.32 $0.21 $(0.22) $(0.08) $(0.04) $(0.03) $(0.01) $2.84 3Q23 ADJ EPS* GROSS MARGIN ACQUISITIONS INTEREST EXPENSE REVENUE TAX PROVISION OPERATING EXPENSES
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 15 ($ in millions) Q3 24 Q2 24 Q3 23 Cash, cash equivalents, and restricted cash $89.7 $75.2 $79.1 Debt $324.5 $343.3 $127.5 Lease obligations $1.9 $2.0 $1.7 Net Debt $236.7 $270.1 $50.2 Leverage r
Slide 16: Guidance
Guidance KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 16 • FY 2024 revenue of $1.047 to $1.055 billion, revised from $1.045 to $1.065 billion • FY 2024 GAAP EPS of $9.25 to $9.45, revised from $9.20 to $9.45 • FY 2024 adjusted EPS* of $9.93 to $10.13, revised from
Slide 17: Questions & Answers
Questions & Answers To participate in the live Q&A session, please go to investor.kadant.com and click on the Q&A session link to receive a dial-in number and unique PIN. Please mute the audio on your computer. KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 17
Slide 18: 2024 Key Priorities
2024 Key Priorities 18 ENABLE SUSTAINABLE INDUSTRIAL PROCESSING® DELIVER EXCEPTIONAL STAKEHOLDER VALUE PROVIDE STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.
Slide 19: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com 19
Slide 20: Appendix
Third Quarter 2024 Business Review KAI 3Q24 BUSINESS REVIEW– OCTOBER 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 20 Appendix October 30, 2024
Slide 21: Revenue by Customer Location
Revenue by Customer Location ($ in thousands) Q3 24 Q3 23 Change Change Excluding Acquisitions and FX* North America $172,186 $133,780 $38,406 $10,554 Europe 57,309 66,491 (9,182) (10,966) Asia 26,724 27,393 (669) (1,049) Rest of World 15,395 16,518 (1,123) (742) Total $271,614 $244,182 $27,432 $(2,
Slide 22: Adjusted EPS and Free Cash Flow Reconciliation
Adjusted EPS* Reconciliation Q3 24 Q3 23 EPS, as Reported $2.68 $2.63 Adjustments, Net of Tax Acquired Profit in Inventory and Backlog Amortization 0.12 — Acquisition Costs 0.03 — Relocation Costs — 0.03 Restructuring and Impairment Costs — 0.03 Adjusted EPS* $2.84 $2.69 KAI 3Q24 BUSINESS REVIEW– OC
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA* Reconciliation ($ in thousands) Q3 24 Q3 23 Net Income Attributable to Kadant $31,586 $30,864 Net Income Attributable to Noncontrolling Interests 312 175 Provision for Income Taxes 11,964 10,816 Interest Expense, Net 5,109 1,669 Other Expense, Net 16 20 Acquired Profit in Inventory
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 October 29, 2024. FOOTNOTES 1) Leverage ratio is calculated by dividing total d