Kadant Inc · NYSE:KAI

Kadant — Q1 2024 Earnings Presentation

24 slides from Kadant's earnings presentation, Apr 30, 2024

  1. Slide 1: First Quarter 2024 Business Review

    First Quarter 2024 Business Review May 1, 2024 Exhibit 99.2

  2. Slide 2: Forward-Looking Statements

    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 risks and uncertainties, including forward-looking statements about our future fin

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

    Use of Non-GAAP Financial Measures In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including increases or decreases in revenue excluding the effect of acquisitions and foreign currency

  4. Slide 4: Business Review

    Business Review Jeffrey L. Powell, President & CEO 4 KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.

  5. Slide 5: Operational Highlights

    Operational Highlights 5 KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. . • Completed the integration of two acquisitions • Strong demand for aftermarket parts contributed to record revenue and a solid start to 2024 • Operational execution was very good and contributed

  6. Slide 6: Q1 2024 Performance

    Q1 2024 Performance 6 ($ in millions, except per share amounts) Q1 24 Q1 23 Change Revenue $249.0 $229.8 +8.4% Net Income $24.7 $28.1 -12.1% Adjusted EBITDA* $52.2 $48.6 +7.5% Adjusted EBITDA Margin* 21.0% 21.1% -10 bps EPS $2.10 $2.40 -12.5% Adjusted EPS* $2.38 $2.40 -0.8% Operating Cash Flow $22.8

  7. Slide 7: Flow Control

    $104.6 $88.3 $83.0 $85.4 $94.7 1Q23 2Q23 3Q23 4Q23 1Q24 7 ($ in millions) Q1 24 Q1 23 Change Revenue $86.7 $89.5 -3.2% Bookings $94.7 $104.6 -9.5% Adjusted EBITDA* $24.1 $26.5 -8.8% Adjusted EBITDA Margin* 27.8% 29.6% -180 bps HIGHLIGHTS • Strong aftermarket parts demand contributed to solid revenue

  8. Slide 8: Industrial Processing

    8 ($ in millions) Q1 24 Q1 23 Change Revenue $105.9 $83.5 +26.7% Bookings $89.9 $96.3 -6.6% Adjusted EBITDA* $27.0 $18.9 +42.3% Adjusted EBITDA Margin* 25.5% 22.7% +280 bps HIGHLIGHTS • Record revenue performance driven by all product lines • Improved operating leverage and recent acquisition contri

  9. Slide 9: Material Handling

    9 ($ in millions) Q1 24 Q1 23 Change Revenue $56.4 $56.7 -0.5% Bookings $63.9 $73.7 -13.3% Adjusted EBITDA* $11.4 $12.5 -8.2% Adjusted EBITDA Margin* 20.3% 22.0% -170 bps HIGHLIGHTS • Solid demand for aftermarket parts across all product lines • Customer-requested delays in shipments negatively impa

  10. Slide 10: Business Outlook

    Business Outlook • Industrial demand expected to strengthen in certain regions, remain stable in others • Economic uncertainty continues to impact the timing of capital orders • Our strong cash flow and healthy balance sheet position us well for growth 10KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 K

  11. Slide 11: Financial Review

    KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 11 Financial Review Michael J. McKenney, EVP & CFO

  12. Slide 12: Q1 2024 Financial Performance

    Q1 2024 Financial Performance ($ in millions, except per share amounts) Q1 24 Q1 23 Gross Margin 44.6% 44.4% SG&A % of Revenue 28.2% 25.5% Operating Income $36.9 $40.1 Net Income $24.7 $28.1 Adjusted EBITDA* $52.2 $48.6 EPS $2.10 $2.40 Adjusted EPS* $2.38 $2.40 HIGHLIGHTS • Adjusted gross margin* of

  13. Slide 13: Key Consolidated Financial Metrics

    Key Consolidated Financial Metrics KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 13 $36.9 $22.5 $47.0 $59.2 $22.8$32.4 $13.7 $38.1 $49.5 $16.6 FREE CASH FLOW* OPERATING CASH FLOW 1Q23 2Q23 3Q23 4Q23 1Q24 CASH FLOW ($ in millions) $48.6 $51.6 $52.7 $48.5 $52.2 $28.1 $29

  14. Slide 14: 1Q23 to 1Q24 Adjusted EPS

    2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 1Q23 to 1Q24 Adjusted EPS* 14 $2.40 $0.21 $0.18 $0.05 $(0.18) $(0.14) $(0.13) $(0.01) $2.38 1Q23 ADJ EPS* ACQUISITIONS GROSS MARGIN TAX PROVISION OPERATING EXPENSES REVENUE INTEREST EXPENSE CHANG

  15. Slide 15: Key Liquidity Metrics

    Key Liquidity Metrics KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 15 ($ in millions) Q1 24 Q4 23 Q1 23 Cash, cash equivalents, and restricted cash $82.6 $106.5 $85.5 Debt $308.0 $109.1 $180.1 Lease obligations $2.0 $1.8 $1.8 Net Debt $227.4 $4.4 $96.4 Leverage ratio1

  16. Slide 16: Guidance

    Guidance KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 16 • FY 2024 revenue of $1.040 to $1.065 billion • FY 2024 GAAP EPS of $9.39 to $9.69, revised from $9.55 to $9.85 • FY 2024 adjusted EPS* of $9.75 to $10.05 • Q2 2024 revenue of $258 to $266 million • Q2 2024 GAAP

  17. Slide 17: Questions & Answers

    Questions & Answers To participate in the live Q&A session, please go to investor.kadant.com and click on the Q&A session link to receive a dial-in number and unique PIN. Please mute the audio on your computer. KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 17

  18. Slide 18: 2024 Key Priorities

    2024 Key Priorities 18 ENABLE SUSTAINABLE INDUSTRIAL PROCESSING DELIVER EXCEPTIONAL STAKEHOLDER VALUE PROVIDE STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED.

  19. Slide 19: Investor Relations Contact

    INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com May 1, 2024

  20. Slide 20: Appendix

    First Quarter 2024 Business Review KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 20 Appendix

  21. Slide 21: Revenue by Customer Location

    Revenue by Customer Location ($ in thousands) Q1 24 Q1 23 Change Change Excluding Acquisitions and FX* North America $156,491 $132,453 $24,038 $15 Europe 55,787 54,157 1,630 400 Asia 22,554 27,770 (5,216) (4,616) Rest of World 14,143 15,378 (1,235) (1,773) Total $248,975 $229,758 $19,217 $(5,974) KA

  22. Slide 22: Adjusted EPS, Free Cash Flow and Gross Margin Reconciliation

    Adjusted EPS* Reconciliation Q1 24 Q1 23 EPS, as Reported $2.10 $2.40 Adjustments, Net of Tax Acquisition Costs 0.08 — Amortization of Acquired Profit in Inventory and Backlog 0.20 — Adjusted EPS* $2.38 $2.40 KAI 1Q24 BUSINESS REVIEW– MAY 2024 | © 2024 KADANT INC. ALL RIGHTS RESERVED. 22 ($ in thous

  23. Slide 23: Adjusted EBITDA Reconciliation

    Adjusted EBITDA* Reconciliation ($ in thousands) Q1 24 Q1 23 Net Income Attributable to Kadant $24,689 $28,075 Net Income Attributable to Noncontrolling Interests 296 184 Provision for Income Taxes 7,854 9,763 Interest Expense, Net 4,058 2,071 Other Expense, Net 30 21 Acquisition Costs 1,124 — Indem

  24. Slide 24: Notes

    Notes PRESENTATION NOTES • All references to EPS (earnings per share) are to our EPS as calculated on a diluted basis. • Percent change in slides 6-9 is calculated using actual numbers reported in our press release dated April 30, 2024. FOOTNOTES 1) Leverage ratio is calculated by dividing total deb

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