Slide 1: Second Quarter 2015 Business Review
Second Quarter 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO
Slide 2: Forward-Looking Statements
2 KAI 2Q15 Business Review–August 6, 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 of
Slide 3: Use of Non-GAAP Financial Measures
3 KAI 2Q15 Business Review–August 6, 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 or d
Slide 4: Business Review
4 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q2 2015 Financial Highlights
5 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Q2 2015 Financial Highlights ($ Millions, except per share amounts) Q2 2015 Q2 2014 % CHANGE EXCL. FX Revenue $98.3 $104.8 -6.2% 1.9% Gross Margin 46.5% 43.0% n.m. n.m. Net Income1 $8.5 $7.9 7.7% 20.5% Adjusted EBITDA1
Slide 6: FX Translation and Acquisition Impact
6 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. FX Translation and Acquisition Impact Q2 2015, $ in millions except EPS Revenue Adjusted EPS4 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $98.3 $0.78 $93.7 $65.3 $62.4 Growth1 -6.2% 5.
Slide 7: Bookings and Revenues
7 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions) $0 $20 $40 $60 $80 $100 $120 Bookings Revenues
Slide 8: Parts and Consumables Bookings and Revenues
8 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 Bookings Revenues
Slide 9: Regional Performance
9 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 10: North America Bookings and Revenues
10 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 11: Europe Bookings and Revenues
11 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 Bookings Revenues
Slide 12: Asia Bookings and Revenues
12 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Asia Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 $35 Bookings Revenues Excludes the Middle East and Russia.
Slide 13: Rest-of-World Bookings and Revenues
13 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Rest-of-World Bookings and Revenues US$ (millions) $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Bookings Revenues
Slide 14: Guidance for Continuing Operations
14 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q3 2015 GAAP diluted EPS of $0.70 to $0.72 • Q3 2015 revenues of $95 to $97 million • FY 2015 GAAP diluted EPS of $3.05 to $3.11 • FY 2015 revenues of $395 to $400 million
Slide 15: Financial Review
15 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. FINANCIAL REVIEW Michael J. McKenney Senior Vice President & Chief Financial Officer
Slide 16: Quarterly Gross Margins
16 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Quarterly Gross Margins 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% 48.1% 46.5% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 17: Quarterly SG&A
17 KAI 2Q15 Business Review–August 6, 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 18: 2Q14 to 2Q15 Diluted EPS from Continuing Operations
18 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. 2Q14 to 2Q15 Diluted EPS from Continuing Operations 0.70 0.23 0.03 0.02 0.01 (0.23) 0.76 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25
Slide 19: Cash Flow
19 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 2Q15 2Q14 Income from Continuing Operations $8.5 $8.0 Depreciation and Amortization 2.8 2.8 Stock-Based Compensation 1.7 1.4 Other Items 0.1 0.1 Change in Current Assets & Liabilities 1.1 (3.3)
Slide 20: Key Working Capital Metrics
20 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Key Working Capital Metrics 2Q15 1Q15 2Q14 Days in Receivables 57 63 61 Days in Inventory 107 109 92 Days in Payables 49 50 44 61 63 57 92 109 107 44 50 49 20 40 60 80 100 120 Days in Receivables Days in Inventory Day
Slide 21: Working Capital and Cash Conversion Days
21 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 2Q15 1Q15 2Q14 Working Capital % LTM Revenues* 15.8% 15.4% 15.7% Cash Conversion Days** 115 days 122 days 109 days *Working Capital is defined as current assets less current li
Slide 22: Cash and Debt
22 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 2Q15 1Q15 2Q14 Cash, cash equivalents, and restricted cash $48.6 $43.2 $37.7 Debt (28.5) (30.7) (28.2) Net Cash $20.1 $12.5 $9.5 $40.0 $28.6 $30.7 $35.4 $30.9 $30.1 $41.5 $47.7 $51.8 $48.5 $
Slide 23: Leverage Ratio
23 KAI 2Q15 Business Review–August 6, 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 total debt is defined as debt
Slide 24: Questions & Answers
24 KAI 2Q15 Business Review–August 6, 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 25: Q2 2015 Key Take-Aways
25 KAI 2Q15 Business Review–August 6, 2015 © 2015 Kadant Inc. All rights reserved. Q2 2015 Key Take-Aways • Solid quarter in revenue, operating income, EPS • Parts and consumables revenue remains strong • 2015 expected to be an excellent year with record EPS
Slide 26: Second Quarter 2015 Business Review
Second Quarter 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO