Kadant Inc · NYSE:KAI
Kadant — Shareholder Meeting (May 2013)
37 slides from Kadant's shareholder meeting presentation, May 22, 2013
Slide 1: Annual Meeting of Stockholders May 22, 2013
Annual Meeting of Stockholders May 22, 2013 Westford, Massachusetts © 2013 Kadant Inc. All rights reserved.
Slide 2: Annual Meeting of Stockholders
ANNUAL MEETING OF STOCKHOLDERS William A. Rainville Chairman of the Board * © 2013 Kadant Inc. All rights reserved.
Slide 3: Items of Business
ITEMS OF BUSINESS Sandra L. Lambert Vice President, General Counsel, and Secretary * © 2013 Kadant Inc. All rights reserved.
Slide 4: Safe Harbor and Disclaimers
Safe Harbor and Disclaimers The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: Our presentation today and these slides contain forward-looking statements that involve a number of risks and uncertainties, including forward-looking statement
Slide 5: Items of Business: Elect Two Directors
Items of Business PROPOSAL 1 Elect two directors constituting the entire class of directors to be elected for a three-year term expiring in May 2016 Mr. Jonathan W. Painter Mr. William A. Rainville * © 2013 Kadant Inc. All rights reserved.
Slide 6: Items of Business: Advisory Vote on Executive Compensation
Items of Business (cont.) PROPOSAL 2 Non-binding advisory vote on executive compensation Resolved, that the compensation paid to our company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation di
Slide 7: Items of Business: Ratify KPMG LLP
Items of Business (cont.) PROPOSAL 3 Ratify the selection of KPMG LLP as our independent registered public accounting firm for FY 2013 * © 2013 Kadant Inc. All rights reserved.
Slide 8: Business Review
BUSINESS REVIEW Jonathan W. Painter President & CEO * © 2013 Kadant Inc. All rights reserved.
Slide 9: About Kadant
About Kadant NYSE ticker symbol KAI 2012 revenue $332 million Market capitalization1 $334 million Enterprise value2 $282 million Shares outstanding3 11.2 million Worldwide employees 1,600 Primary industry served Pulp & Paper 1 Data provided by Yahoo! Finance, May 21, 2013. Market capitalization is c
Slide 10: Revenues and Adjusted Diluted EPS
Revenues and Adjusted Diluted EPS US$ (millions) *Adjusted Diluted EPS is a non-GAAP financial measure that excludes certain items as detailed on the following slide. * © 2013 Kadant Inc. All rights reserved.
Slide 11: Adjusted Diluted EPS
Adjusted Diluted EPS 2007 2008 2009 2010 2011 2012 Diluted EPS, as reported $ 1.59 $ (1.67) $ (0.48) $ 1.48 $ 2.74 $ 2.73 Loss (Income) from Discontinued Operation, net of tax $ 0.19 $ - $ - $ - $ - $ (0.07) Diluted EPS from Continuing Operations $ 1.78 $ (1.67) $ (0.48) $ 1.48 $ 2.74 $ 2.66 Loss on
Slide 12: 2012 Financial Summary
2012 Financial Summary ($ in Millions, except per share amounts and %) FY 2012 FY 2011 Revenues $331.8 $335.5 Gross Profit Margin 43.9% 43.3% Adjusted Operating Income $36.4 $36.8 Adjusted Operating Income/Sales 11.0% 11.0% Diluted EPS2 $2.66 $2.74 Adjusted Diluted EPS1,2 $2.29 $2.10 Adjusted EBITDA
Slide 13: First Quarter 2013 Financial Summary
First Quarter 2013 Financial Summary ($ in Millions, except per share amounts and %) Q1 2013 Q1 2013 Q1 2012 Revenues $76.2 $76.2 $84.1 Gross Profit Margin 47.3% 47.3% 45.6% Operating Expenses: Operating Expenses: Operating Expenses: Operating Expenses: Selling, general, and administrative expenses
Slide 14: First Quarter 2013 Balance Sheet Data
First Quarter 2013 Balance Sheet Data ($ in Millions) Q1 2013 Q1 2012 Cash, Cash Equivalents, Restricted Cash $58.4 $43.1 Accounts Receivable, net 57.9 59.9 Inventories 42.3 51.9 Property, Plant, and Equipment, net 37.7 39.2 Intangible Assets 25.2 28.6 Goodwill 106.2 107.6 Other Assets 33.6 31.7 Tot
Slide 15: Strong Cash Flows
Strong Cash Flows US$ (millions) Trailing 12 Months Cash Flows from Continuing Operations * © 2013 Kadant Inc. All rights reserved.
Slide 16: Five Year Financial Goals
FIVE YEAR FINANCIAL GOALS * © 2013 Kadant Inc. All rights reserved.
Slide 17: Four Drivers of Stockholder Value
Four Drivers of Stockholder Value Internal Growth Numerous internal growth programs Goal 4% to 6% internal revenue growth Acquisitions Supplement internal growth Could add additional 4% to 6% of revenue growth Stock repurchases Repurchased shares equal to 50% of net income over last two years Divide
Slide 18: Financial Targets for 2017
Financial Targets for 2017 Acquisitions Revenues Internal Growth Initiatives Revenues Base Business ($ in Millions, except per share amounts) Revenues $500-$550 EBITDA $60-$80 Diluted EPS $4.00-$5.00 * © 2013 Kadant Inc. All rights reserved. 2017 Revenue Components
Slide 19: Internal Growth
INTERNAL GROWTH * © 2013 Kadant Inc. All rights reserved.
Slide 20: World Paper and Board Capacity: All Grades
World Paper and Board Capacity: All Grades Tons (millions) Source: RISI World Pulp & Recovered Paper Forecast, April 2013 CAGR = 2.3% * © 2013 Kadant Inc. All rights reserved.
Slide 21: World Paper and Board Capacity Less Newsprint and Printing & Writing
World Paper and Board Capacity Less Newsprint and Printing & Writing Papers Tons (millions) Source: RISI World Pulp & Recovered Paper Forecast, April 2013 CAGR = 3.6% * © 2013 Kadant Inc. All rights reserved.
Slide 22: Internal Growth Initiatives
Internal Growth Initiatives Increase presence in emerging markets Grow parts and consumables revenues Focus on higher growth containerboard and tissue grades Introduce technology to new markets Increase market share in low share regions Expand virgin pulp offerings globally * © 2013 Kadant Inc. All
Slide 23: Increase Presence in Emerging Markets
Increase Presence in Emerging Markets Establish direct sales offices in Russia and Southeast Asia Continue to use strong position in fluid-handling to sell doctoring, cleaning, and filtration products in China Utilize new communications technology Acquisitions support this goal ● Emerging Regions (4
Slide 24: Grow Parts and Consumables Revenue: China Service Program
Grow Parts and Consumables Revenue SERVICE / REBUILD PROGRAM IN CHINA Entered into two-year program with a large containerboard producer Rebuild key components to return to factory condition Perform system audits to keep equipment operating optimally China Parts and Consumables Revenues US$ (million
Slide 25: Grow Parts and Consumables Revenue: Screen Cylinders
Grow Parts and Consumables Revenue SCREEN CYLINDER SALES GROWTH FibreWall® screen cylinders feature a revolutionary wedge wire design Designed for tough contaminants found with recycled furnish Compounded annual sales growth of 18% from 2009 to 2012 Excellent market penetration, particularly in Chin
Slide 26: Focus On Higher Growth Paper Grades
Focus On Higher Growth Paper Grades NANOTECHNOLOGY ENHANCED DOCTOR BLADES Increase parts business and exposure to higher growth grades Patented technology Solves problems of different wear rates of resin and fabric Reduces delamination caused by stickies commonly found with recycled furnish in conta
Slide 27: Introduce Technology to New Markets
Introduce Technology to New Markets DOCTORING TECHNOLOGY APPLIED TO CARBON FIBER MARKET More than 200 Kadant doctor systems sold to date Carbon fiber composites used in smartphones, wind turbines, medical devices and prosthetics, commercial aircraft, and automotive industry Estimated total market op
Slide 28: Acquisitions
ACQUISITIONS * © 2013 Kadant Inc. All rights reserved.
Slide 29: Acquisition Characteristics
Acquisition Characteristics Focus on premium products with some technology differentiator High aftermarket potential Well-positioned company Adjacent or similar markets Opportunities for synergies Entry into new regions Target investment hurdle: 20% ROTI after three to five years * © 2013 Kadant Inc
Slide 30: Acquisition of CBTI
Acquisition of CBTI Acquired Brazilian licensee CBTI in April 2013 Average annual revenues over last five years were approximately $17 million* Key element of our strategy to increase our presence in emerging markets Creates a larger footprint in Brazil and opportunity for growth Operational synergi
Slide 31: Acquisition of Noss Group
Acquisition of Noss Group Acquired assets of Noss Group in May 2013 Average annual revenues over last five years were approximately $14 million* Highly regarded supplier of stock cleaning equipment Large installed base and aftermarket business Opportunity to leverage our low-cost manufacturing and g
Slide 32: Stock Repurchases
STOCK REPURCHASES * © 2013 Kadant Inc. All rights reserved.
Slide 33: Cumulative Stock Repurchases 2004-2012
Cumulative Stock Repurchases 2004-2012 US$ (millions) * © 2013 Kadant Inc. All rights reserved. Represents aggregate dollar amount expended by Kadant pursuant to repurchase programs since 2004.
Slide 34: Dividends
Dividends Quarterly dividend of 12.5 cents per share paid in May 2013 Important component of value to stockholders Goal is to have a meaningful dividend * © 2013 Kadant Inc. All rights reserved.
Slide 35: Financial Targets for 2017
Financial Targets for 2017 ($ in Millions, except per share amounts) ($ in Millions, except per share amounts) Revenues $500-$550 EBITDA $60-$80 Diluted EPS $4.00-$5.00 Operating Cash Flow $45-$60 Acquisitions Internal Growth Initiatives Base Business Stock Repurchases 2017 Diluted EPS Average reven
Slide 36: Questions & Answers
Questions & Answers To ask a question, please call 866-515-2913 within the U.S. or +1-617-399-5127 outside the U.S. and reference 83375884. Please mute the audio on your computer. * © 2013 Kadant Inc. All rights reserved.
Slide 37: Annual Meeting of Stockholders May 22, 2013
Annual Meeting of Stockholders May 22, 2013 Westford, Massachusetts