Slide 1: Third Quarter 2014 Business Review
Third Quarter 2014 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO
Slide 2: Forward-Looking Statements
2 KAI 3Q14 Business Review–October 28, 2014 © 2014 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 3Q14 Business Review–October 28, 2014 © 2014 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 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO
Slide 5: Q3 2014 Financial Highlights
5 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Q3 2014 Financial Highlights ($ Millions, except per share amounts) Q3 2014 Q3 2013 % CHANGE Revenue $98.7 $91.3 8.1% Gross Margin 44.7% 43.9% n.m. Net Income1 $6.7 $6.5 2.9% Adjusted EBITDA1 $13.4 $12.3 9.1% Diluted
Slide 6: Bookings and Revenues
6 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions) $0 $20 $40 $60 $80 $100 $120 Bookings Revenues
Slide 7: Parts and Consumables Bookings and Revenues
7 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 Bookings Revenues
Slide 8: Regional Performance
8 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE
Slide 9: North America Bookings and Revenues
9 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions) $0 $10 $20 $30 $40 $50 $60 $70 $80 Bookings Revenues
Slide 10: Europe Bookings and Revenues
10 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 Bookings Revenues
Slide 11: China Bookings and Revenues
11 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions) $0 $5 $10 $15 $20 $25 $30 $35 $40 Bookings Revenues
Slide 12: South America Bookings and Revenues
12 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. South America Bookings and Revenues US$ (millions) $0 $2 $4 $6 $8 $10 $12 $14 $16 Bookings Revenues
Slide 13: Guidance for Continuing Operations
13 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Guidance for Continuing Operations • Q4 2014 GAAP diluted EPS of $0.72 to $0.74 • Q4 2014 revenues of $104 to $106 million • FY 2014 GAAP diluted EPS of $2.47 to $2.49 • FY 2014 revenues of $401 to $403 million
Slide 14: Financial Review
14 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer
Slide 15: Quarterly Gross Margins
15 KAI 3Q14 Business Review–October 28, 2014 © 2014 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% 36% 38% 40% 42% 44% 46% 48% 50%
Slide 16: Quarterly SG&A
16 KAI 3Q14 Business Review–October 28, 2014 © 2014 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 17: 3Q13 to 3Q14 Diluted EPS from Continuing Operations
17 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. 3Q13 to 3Q14 Diluted EPS from Continuing Operations $0.57 $0.06 $0.14 $0.01 ($0.10) ($0.03) ($0.03) ($0.02) $0.60 $0.00 $0.25 $0.50 $0.75 $1.00
Slide 18: Cash Flow
18 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 3Q14 3Q13 Income from Continuing Operations $6.7 $6.5 Depreciation and Amortization 2.7 2.3 Stock-Based Compensation 1.4 1.2 Other Items 0.2 0.1 Change in Current Assets & Liabilities (excl. a
Slide 19: Key Working Capital Metrics
19 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Key Working Capital Metrics 3Q14 2Q14 3Q13 Days in Receivables 66 61 64 Days in Inventory 97 92 92 Days in Payables 46 44 46 92 92 97 64 61 66 46 44 46 20 40 60 80 100 120 Days in Inventory Days in Receivables Days
Slide 20: Working Capital and Cash Conversion Days
20 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 3Q14 2Q14 3Q13 Working Capital % LTM Revenues* 14.0% 15.7% 14.4% Cash Conversion Days** 117 days 109 days 110 days *Working Capital is defined as current assets less current
Slide 21: Cash and Debt
21 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 3Q14 2Q14 3Q13 Cash, cash equivalents, and restricted cash $41.7 $37.7 $73.2 Debt (23.0) (28.2) (14.5) Net Cash $18.7 $9.5 $58.7 $20.5 $24.2 $26.6 $39.1 $40.0 $28.6 $30.7 $35.4 $30.9 $30.1
Slide 22: Leverage Ratio
22 KAI 3Q14 Business Review–October 28, 2014 © 2014 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 deb
Slide 23: Questions & Answers
23 KAI 3Q14 Business Review–October 28, 2014 © 2014 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 24: Q3 2014 Key Take-Aways
24 KAI 3Q14 Business Review–October 28, 2014 © 2014 Kadant Inc. All rights reserved. Q3 2014 Key Take-Aways • Solid quarter with excellent cash flow and gross margin • Parts and consumables revenues set a new record and represented 64% of total revenues • Strong business activity in North America, l
Slide 25: Third Quarter 2014 Business Review
Third Quarter 2014 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO