Kadant Inc · NYSE:KAI

Kadant — Q3 2012 Earnings Presentation

26 slides from Kadant's earnings presentation, Oct 29, 2012

1. Slide 1: Third Quarter 2012 Business Review

   Third Quarter 2012 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO

2. Slide 2: Forward-Looking Statements

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 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

3. Slide 3: Use of Non-GAAP Financial Measures

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 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

4. Slide 4: Business Review

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. BUSINESS REVIEW Jonathan W. Painter President & CEO

5. Slide 5: Q3 2012 Financial Highlights

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Q3 2012 Financial Highlights ($ Millions, except per share amounts) Q3 2012 Q3 2011 % CHANGE Revenue $86.6 $84.4 2.7% Gross Margin 43.4% 42.7% n.a. Diluted EPS $0.74 $0.70 5.7% Adjusted Diluted EPS1,2 $0.66 $0.47 40.

6. Slide 6: Revenue By Product Line: Q3 2012

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Revenue By Product Line: Q3 2012 $86.6 million, up 2.7% compared to Q3 2011 ($ Millions) Q3 2012 Q3 2011 % CHANGE EXCL. FX Stock-Preparation $34.5 $33.0 4.4% 8.2% Doctoring, Cleaning, & Filtration 27.1 24.6 10.4% 14.

7. Slide 7: Bookings By Product Line: Q3 2012

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Bookings By Product Line: Q3 2012 $69.3 million, down 27.2% compared to Q3 2011 Percent change calculated using actual numbers reported in our Q3 2012 earnings release dated October 29, 2012. ($ Millions) Q3 2012 Q3

8. Slide 8: Bookings and Revenues

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Bookings and Revenues US$ (millions)

9. Slide 9: Parts and Consumables Bookings and Revenues

   * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Parts and Consumables Bookings and Revenues US$ (millions)

10. Slide 10: Regional Performance

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. REGIONAL PERFORMANCE

11. Slide 11: North America Bookings and Revenues

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. North America Bookings and Revenues US$ (millions)

12. Slide 12: Europe Bookings and Revenues

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Europe Bookings and Revenues US$ (millions)

13. Slide 13: China Bookings and Revenues

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. China Bookings and Revenues US$ (millions)

14. Slide 14: Rest-of-World Bookings and Revenues

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Rest-of-World Bookings and Revenues US$ (millions)

15. Slide 15: Guidance for Continuing Operations

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Guidance for Continuing Operations Q4 2012 GAAP diluted EPS of $0.35 to $0.37 Q4 2012 revenues of $77 to $79 million FY 2012 GAAP diluted EPS of $2.18 to $2.20 FY 2012 revenues of $331 to $333 million

16. Slide 16: Financial Review

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. FINANCIAL REVIEW Thomas M. O’Brien Executive Vice President & Chief Financial Officer

17. Slide 17: Gross Margins

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Gross Margins 3Q12 2Q12 3Q11 Sequential ∆ Y-O-Y ∆ Papermaking Systems Segment 43.6% 43.4% 42.8% 0.2% 0.8% Fiber-based Products 30.4% 52.8% 36.5% -22.4% -6.1% TOTAL 43.4% 43.7% 42.7% -0.3% 0.7%

18. Slide 18: SG&A

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. SG&A ($ Millions) 3Q12 2Q12 3Q11 Sequential ∆ Y-O-Y ∆ SG&A $26.2 $25.5 $26.1 $0.7 $0.1 % Revenues 30.2% 30.7% 30.9% -0.5% -0.7%

19. Slide 19: 3Q11 to 3Q12 Diluted EPS from Continuing Operations

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. 3Q11 to 3Q12 Diluted EPS from Continuing Operations

20. Slide 20: Cash Flow

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Cash Flow ($ Millions) 3Q12 3Q11 3Q12 YTD 3Q11 YTD Income from Continuing Operations $7.7 $9.9 $21.4 $23.2 Depreciation and Amortization 2.1 2.1 6.4 5.9 Stock-Based Compensation 1.3 1.0 3.6 2.9 Other Items 0.3 (3.2)

21. Slide 21: Key Working Capital Metrics

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Key Working Capital Metrics 3Q12 2Q12 3Q11 Days in Receivables 70 74 62 Days in Inventory 85 97 111 Days in Payables 42 49 44

22. Slide 22: Working Capital and Cash Conversion Days

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Working Capital and Cash Conversion Days 3Q12 2Q12 3Q11 Working Capital % LTM Revenues* 13.4% 13.8% 10.8% Cash Conversion Days 113 days 122 days 129 days *Working Capital is defined as current assets less current lia

23. Slide 23: Cash and Debt

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Cash and Debt ($ Millions) 3Q12 2Q12 3Q11 Cash, cash equivalents, restricted cash $53.4 $42.1 $48.1 Debt (11.9) (12.0) (17.4) Net Cash $41.5 $30.1 $30.7

24. Slide 24: Leverage Ratio

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 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

25. Slide 25: Questions & Answers

    * KAI 3Q12 Business Review–October 30, 2012 © 2012 Kadant Inc. All rights reserved. Questions & Answers To ask a question, please call 866-804-6926 within the U.S. or +1-857-350-1672 outside the U.S. and reference 83375884. Please mute the audio on your computer.

26. Slide 26: Third Quarter 2012 Business Review

    Third Quarter 2012 Business Review Jonathan W. Painter, President & CEO Thomas M. O’Brien, Executive Vice President & CFO

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