Slide 1: Third Quarter 2015 Business Review
Third Quarter 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO
Slide 2: Forward-Looking Statements
2 KAI 3Q15 Business Review–November 5, 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 o
Slide 3: Use of Non-GAAP Financial Measures
3 KAI 3Q15 Business Review–November 5, 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
Slide 4: Business Review
4 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q3 2015 Financial Highlights
5 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Q3 2015 Financial Highlights ($ Millions, except per share amounts) Q3 2015 Q3 2014 % CHANGE EXCL. FX Revenue $91.9 $98.7 -6.9% 1.8% Gross Margin 47.5% 44.7% n.m. n.m. Net Income1 $8.6 $6.7 30.0% 47.9% Adjusted EBITD
Slide 6: FX Translation and Acquisition Impact
6 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. FX Translation and Acquisition Impact Q3 2015, $ in millions except EPS Revenue Adjusted EPS4 Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $91.9 $0.78 $98.8 $63.1 $60.8 Growth1 -6.9%
Slide 7: Bookings and Revenues
7 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions) $0 $20 $40 $60 $80 $100 $120 Bookings Revenues
Slide 8: Parts and Consumables Bookings and Revenues
8 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 9: Regional Performance
9 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 10: North America Bookings and Revenues
10 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 11: Europe Bookings and Revenues
11 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 Bookings Revenues
Slide 12: Asia Bookings and Revenues
12 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Asia Bookings and Revenues US$ (millions) Excludes the Middle East and Russia. $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings Revenues
Slide 13: Rest-of-World Bookings and Revenues
13 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Rest-of-World Bookings and Revenues US$ (millions) $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Bookings Revenues
Slide 14: Guidance for Continuing Operations
14 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q4 2015 GAAP diluted EPS of $0.79 to $0.82 • Q4 2015 revenues of $105 to $107 million • FY 2015 GAAP diluted EPS of $2.95 to $2.98 • FY 2015 revenues of $388 to $390 million
Slide 15: Financial Review
15 KAI 3Q15 Business Review–November 5, 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 3Q15 Business Review–November 5, 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% 47.5% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 17: Quarterly SG&A
17 KAI 3Q15 Business Review–November 5, 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: Adjusted Operating Income
18 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Adjusted Operating Income 0% 2% 4% 6% 8% 10% 12% 14% $0 $2 $4 $6 $8 $10 $12 $14 Adjusted Operating Income Adjusted Operating Income as a % of Revenues
Slide 19: 3Q14 to 3Q15 Diluted EPS from Continuing Operations
19 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. 3Q14 to 3Q15 Diluted EPS from Continuing Operations 0.60 0.18 0.17 0.03 0.03 0.02 (0.25) 0.78 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25
Slide 20: Cash Flow
20 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 3Q15 3Q14 Income from Continuing Operations $8.7 $6.7 Depreciation and Amortization 2.6 2.7 Stock-Based Compensation 1.2 1.4 Other Items - 0.2 Change in Current Assets & Liabilities 3.4 4.2 Ca
Slide 21: Key Working Capital Metrics
21 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Key Working Capital Metrics 3Q15 2Q15 3Q14 Days in Receivables 63 57 66 Days in Inventory 123 107 97 Days in Payables 51 49 46 66 57 63 97 107 123 46 49 51 20 40 60 80 100 120 140 Days in Receivables Days in Invento
Slide 22: Working Capital and Cash Conversion Days
22 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 3Q15 2Q15 3Q14 Working Capital % LTM Revenues* 14.7% 15.8% 14.0% Cash Conversion Days** 135 days 115 days 117 days *Working Capital is defined as current assets less current
Slide 23: Cash and Debt
23 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 3Q15 2Q15 3Q14 Cash, cash equivalents, and restricted cash $56.9 $48.6 $41.7 Debt (29.4) (28.5) (23.0) Net Cash $27.5 $20.1 $18.7 $40.0 $28.6 $30.7 $35.4 $30.9 $30.1 $41.5 $47.7 $51.8 $48.
Slide 24: Questions & Answers
24 KAI 3Q15 Business Review–November 5, 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: Q3 2015 Key Take-Aways
25 KAI 3Q15 Business Review–November 5, 2015 © 2015 Kadant Inc. All rights reserved. Q3 2015 Key Take-Aways • Strong quarter with 30% EPS growth • Parts and consumables revenue up 9% excluding FX • 2015 expected to be an excellent year with record EPS
Slide 26: Third Quarter 2015 Business Review
Third Quarter 2015 Business Review Jonathan W. Painter, President & CEO Michael J. McKenney, Senior Vice President & CFO