Slide 1: Fourth Quarter and Fiscal Year 2014 Business Review
Fourth Quarter and Fiscal Year 2014 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
2 KAI 4Q14 Business Review–February 26, 2015 © 2015 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
3 KAI 4Q14 Business Review–February 26, 2015 © 2015 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: Business Review
4 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q4 2014 Financial Highlights
5 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Q4 2014 Financial Highlights ($ Millions, except per share amounts) Q4 2014 Q4 2013 % CHANGE EXCL. FX Revenue $105.2 $94.8 11.0% 16.0% Gross Margin 44.7% 43.9% n.m. n.m. Net Income1 $9.1 $5.9 53.4% 62.9% Adjusted EB
Slide 6: 2014 Financial Highlights
6 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. 2014 Financial Highlights ($ Millions, except per share amounts) 2014 2013 % CHANGE EXCL. FX Revenue $402.1 $344.5 16.7% 17.6% Gross Margin 44.4% 45.8% n.m. n.m. Operating Income $42.1 $33.3 26.4% 28.1% Diluted EPS1
Slide 7: FX and Acquisition Impact
7 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. FX and Acquisition Impact Q4 2014, $ in millions except EPS Revenue Adjusted EPS3 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $105.2 $0.81 $103.0 $62.4 $67.1 Growth1 11.0% 28.6% 22.
Slide 8: Bookings and Revenues
8 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions) $0 $20 $40 $60 $80 $100 $120 Bookings Revenues
Slide 9: Parts and Consumables Bookings and Revenues
9 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 Bookings Revenues
Slide 10: Regional Performance
10 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 11: North America Bookings and Revenues
11 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 12: Europe Bookings and Revenues
12 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 Bookings Revenues
Slide 13: China Bookings and Revenues
13 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings Revenues
Slide 14: South America Bookings and Revenues
14 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. South America Bookings and Revenues US$ (millions) $0 $2 $4 $6 $8 $10 $12 $14 $16 Bookings Revenues
Slide 15: Guidance for Continuing Operations
15 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q1 2015 GAAP diluted EPS of $0.57 to $0.59 • Q1 2015 revenues of $94 to $96 million • FY 2015 GAAP diluted EPS of $3.05 to $3.15 • FY 2015 revenues of $413 to $423 million
Slide 16: Financial Review
16 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer
Slide 17: Quarterly Gross Margins
17 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Quarterly Gross Margins 44.0% 45.1% 44.1% 42.4% 47.6% 45.7% 42.7% 38.6% 45.6% 43.7% 43.4% 43.0% 47.3% 48.6% 43.9% 43.9% 45.2% 43.0% 44.7% 44.7% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 18: Full-Year Gross Margins
18 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Full-Year Gross Margins 37.9% 41.3% 40.3% 43.9% 43.3% 43.9% 45.8% 44.4% 35% 37% 39% 41% 43% 45% 47% 2007 2008 2009 2010 2011 2012 2013 2014
Slide 19: Quarterly SG&A
19 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Quarterly SG&A 25% 30% 35% 40% 45% $0 $10 $20 $30 $40 SG&A SG&A as a % of Revenues
Slide 20: Full-Year SG&A
20 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Full-Year SG&A 25% 30% 35% 40% $50 $70 $90 $110 $130 2007 2008 2009 2010 2011 2012 2013 2014 SG&A SG&A as a % of Revenues
Slide 21: 4Q13 to 4Q14 Diluted EPS from Continuing Operations
21 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. 4Q13 to 4Q14 Diluted EPS from Continuing Operations $0.52 $0.30 $0.07 $0.02 ($0.05) ($0.03) ($0.01) $0.82 $0.00 $0.25 $0.50 $0.75 $1.00
Slide 22: 2013 to 2014 Diluted EPS from Continuing Operations
22 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. 2013 to 2014 Diluted EPS from Continuing Operations $2.07 $0.57 $0.38 $0.03 ($0.17) ($0.12) ($0.12) ($0.05) ($0.02) ($0.01) $2.56 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50
Slide 23: Cash Flow
23 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 4Q14 4Q13 2014 2013 Income from Continuing Operations $9.2 $6.0 $29.1 $23.7 Depreciation and Amortization 2.6 3.0 11.2 9.8 Stock-Based Compensation 1.6 1.4 5.8 5.2 Other Items 2.7 0.2 2.5 (2.
Slide 24: Free Cash Flow
24 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Free Cash Flow Free cash flow is defined as cash flows from continuing operations less purchases of property, plant, and equipment. 10.7 15.8 8.2 28.6 13.2 40.3 24.9 26.3 26.2 33.7 42.1 0 10 20 30 40 2004 2005 2006
Slide 25: Stock Repurchases and Dividends
25 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Stock Repurchases and Dividends ($ in Millions, except per share amounts) 2014 2013 2012 2011 Common Stock Repurchases $15.1 $5.4 $14.5 $16.1 Average Price per Share $37.36 $30.67 $22.87 $21.52 Cash Dividends $6.4
Slide 26: Key Working Capital Metrics
26 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Key Working Capital Metrics 4Q14 3Q14 4Q13 Days in Receivables 55 66 70 Days in Inventory 87 97 96 Days in Payables 42 46 48 70 66 55 96 97 87 48 46 42 20 40 60 80 100 120 Days in Receivables Days in Inventory Days
Slide 27: Working Capital and Cash Conversion Days
27 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 4Q14 3Q14 4Q13 Working Capital % LTM Revenues* 12.8% 14.0% 16.6% Cash Conversion Days** 100 days 117 days 118 days *Working Capital is defined as current assets less current
Slide 28: Cash and Debt
28 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 4Q14 3Q14 4Q13 Cash, cash equivalents, and restricted cash $45.8 $41.7 $50.2 Debt (25.9) (23.0) (38.6) Net Cash $19.9 $18.7 $11.6 $20.5 $24.2 $26.6 $39.1 $40.0 $28.6 $30.7 $35.4 $30.9 $30
Slide 29: Leverage Ratio
29 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Leverage Ratio * Calculated by adding or subtracting certain items, as required by our Credit Facility, from Adjusted EBITDA. Under our new Credit Facility entered into on August 3, 2012 and as amended on November
Slide 30: Guidance for Continuing Operations
30 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q1 2015 GAAP diluted EPS of $0.57 to $0.59 • FY 2015 GAAP diluted EPS of $3.05 to $3.15 • Effective tax rate of 33% to 34% • CAPEX of $7 to $8 million • Depreciation & Amortizat
Slide 31: Questions & Answers
31 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Questions & Answers To ask a question, please call 877-703-6107 within the U.S. or +1-857-244-7306 outside the U.S. and reference 83375884. Please mute the audio on your computer.
Slide 32: Key Take-Aways
32 KAI 4Q14 Business Review–February 26, 2015 © 2015 Kadant Inc. All rights reserved. Key Take-Aways • Record financial and operational performance in Q-4 and FY 2014 • Cash flow remains healthy • Parts and Consumables business strong and growing • 2015 expected to be a solid year with improved oper
Slide 33: Fourth Quarter and Fiscal Year 2014 Business Review
Fourth Quarter and Fiscal Year 2014 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO