Kadant Inc · NYSE:KAI
Kadant — Q4 2024 Earnings Presentation
29 slides from Kadant's earnings presentation, Feb 12, 2025
Slide 1: Fourth Quarter 2024 and FY 2024 Business Review
Fourth Quarter 2024 and FY 2024 Business Review February 13, 2025 Exhibit 99.2
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
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
Slide 4: Business Review
Business Review Jeffrey L. Powell, President & CEO 4
Slide 5: Operational Highlights
Operational Highlights 5 KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. • Stable demand led to a solid finish to a record-setting year • Solid margin performance and strong cash flow • Named by Newsweek as one of America's Most Responsible Companies for the fifth c
Slide 6: Q4 2024 Performance
Q4 2024 Performance 6 ($ in millions, except per share amounts) Q4 24 Q4 23 Change Revenue $258.0 $238.7 +8.1% Net Income $24.0 $27.4 -12.3% Adjusted EBITDA* $52.4 $48.5 +8.1% Adjusted EBITDA Margin* 20.3 % 20.3% — bps EPS $2.04 $2.33 -12.4% Adjusted EPS* $2.25 $2.41 -6.6% Operating Cash Flow $51.9
Slide 7: FY 2024 Performance
FY 2024 Performance 7 ($ in millions, except per share amounts) FY 24 FY 23 Change Revenue $1,053.4 $957.7 +10.0% Net Income $111.6 $116.1 -3.9% Adjusted EBITDA* $229.7 $201.3 +14.1% Adjusted EBITDA Margin* 21.8 % 21.0 % +80 bps EPS $9.48 $9.90 -4.2% Adjusted EPS* $10.28 $10.04 +2.4% Operating Cash
Slide 8: Flow Control
$85.4 $94.7 $94.1 $89.0 $87.4 4Q23 1Q24 2Q24 3Q24 4Q24 8 ($ in millions) Q4 24 Q4 23 Change Revenue $94.7 $87.4 +8.3% Bookings $87.4 $85.4 +2.4% Adjusted EBITDA* $27.2 $23.6 +15.5% Adjusted EBITDA Margin* 28.7 % 27.0% +170 bps HIGHLIGHTS • Stronger performance in North America offset softness in Eur
Slide 9: Industrial Processing
9 ($ in millions) Q4 24 Q4 23 Change Revenue $101.4 $87.0 +16.6% Bookings $103.6 $84.1 +23.2% Adjusted EBITDA* $22.6 $20.7 +9.1% Adjusted EBITDA Margin* 22.3 % 23.8% -150 bps HIGHLIGHTS • Strong demand for aftermarket parts in Q4 fueled bookings increase • Aftermarket parts revenue represented 67% o
Slide 10: Material Handling
10 ($ in millions) Q4 24 Q4 23 Change Revenue $61.9 $64.3 -3.7% Bookings $49.6 $48.5 +2.2% Adjusted EBITDA* $12.9 $14.2 -9.0% Adjusted EBITDA Margin* 20.8 % 22.1% -130 bps HIGHLIGHTS • Aftermarket parts revenue was strong and represented 61% of total revenue in Q4 • Lower capital revenue resulted in
Slide 11: Business Outlook
Business Outlook • Project activity expected to be more favorable although timing remains uncertain • Foreign currency translation likely to temper financial results • Our strong cash flow and healthy balance sheet position us well to capitalize on new opportunities 11 KAI 4Q24 BUSINESS REVIEW– FEBR
Slide 12: Financial Review
12 Financial Review Michael J. McKenney, EVP & CFO
Slide 13: Q4 2024 Financial Performance
Q4 2024 Financial Performance ($ in millions, except per share amounts) Q4 24 Q4 23 Revenue $258.0 $238.7 Gross Margin 43.4% 42.7% SG&A % of Revenue 27.3% 25.1% Operating Income $36.9 $39.0 Net Income $24.0 $27.4 Adjusted EBITDA* $52.4 $48.5 EPS $2.04 $2.33 Adjusted EPS* $2.25 $2.41 Operating Cash F
Slide 14: FY 2024 Financial Performance
FY 2024 Financial Performance ($ in millions, except per share amounts) FY 24 FY 23 Revenue $1,053.4 $957.7 Gross Margin 44.3% 43.5% SG&A % of Revenue 26.6% 24.7% Operating Income $171.3 $165.8 Net Income $111.6 $116.1 Adjusted EBITDA* $229.7 $201.3 EPS $9.48 $9.90 Adjusted EPS* $10.28 $10.04 Operat
Slide 15: Adjusted EBITDA and Cash Flow Metrics
$115.9 $159.4 $189.1 $201.3 $229.7 $55.2 $84.0 $120.9 $116.1 $111.6 18.3% 20.3% 20.9% 21.0% 21.8% NET INCOME ADJUSTED EBITDA* ADJ. EBITDA MARGIN* 2020 2021 2022 2023 2024 Adjusted EBITDA* and Cash Flow Metrics KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 15 FY AD
Slide 16: 4Q23 to 4Q24 Adjusted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 4Q23 to 4Q24 Adjusted EPS* 16 $2.41 $0.26 $0.17 $(0.36) $(0.20) $(0.02) $(0.01) $2.25 4Q23 ADJ EPS* ACQUISITIONS GROSS MARGIN REVENUE INTEREST EXPENSE OPERATING EXPENSES TAX PROVISION 4Q24 A
Slide 17: FY 23 to FY 2024 Adjusted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. FY 2023 to FY 2024 Adjusted EPS* 17 $10.04 $0.88 $0.87 $0.02 $(0.72) $(0.54) $(0.24) $(0.03) $10.28 2023 ADJ EPS* GROSS MARGIN ACQUISITIONS TAX PROVISION INTEREST EXPENSE REVENUE OPERATING E
Slide 18: Key Liquidity Metrics
Key Liquidity Metrics KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 18 ($ in millions) Q4 24 Q3 24 Q4 23 Cash, cash equivalents, and restricted cash $95.9 $89.7 $106.5 Debt $286.5 $324.5 $109.1 Lease obligations $2.0 $1.9 $1.8 Net Debt $192.6 $236.7 $4.4 Leverage
Slide 19: Guidance
Guidance KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 19 • FY 2025 revenue of $1.040 to $1.065 billion • FY 2025 GAAP EPS of $9.63 to $9.98 • FY 2025 adjusted EPS* of $9.70 to $10.05 • Q1 2025 revenue of $235 to $242 million • Q1 2025 GAAP EPS of $1.81 to $2.01 •
Slide 20: Questions & Answers
Questions & Answers To participate in the live Q&A session, please go to investor.kadant.com and click on the Q&A session link to receive a dial-in number and unique PIN. Please mute the audio on your computer. 20
Slide 21: 2025 Key Priorities
2025 Key Priorities 21 ENABLE SUSTAINABLE INDUSTRIAL PROCESSING® DELIVER EXCEPTIONAL STAKEHOLDER VALUE PROVIDE STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED.
Slide 22: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com 22
Slide 23: Fourth Quarter and FY 2024 Business Review Appendix
Fourth Quarter and FY 2024 Business Review 23 Appendix February 13, 2025
Slide 24: Revenue by Customer Location
Revenue by Customer Location ($ in thousands) Q4 24 Q4 23 Change Change Excluding Acquisitions and FX* North America $159,796 $137,040 $22,756 $(6,560) Europe 53,852 63,881 (10,029) (11,227) Asia 27,466 25,481 1,985 1,611 Rest of World 16,916 12,277 4,639 4,604 Total $258,030 $238,679 $19,351 $(11,5
Slide 25: Percentage of Parts and Consumables Revenue
Percentage of Parts and Consumables Revenue Q4 24 Q4 23 FY 24 FY 23 Flow Control 71 % 68 % 72 % 69 % Industrial Processing 67 % 64 % 65 % 62 % Material Handling 61 % 45 % 58 % 53 % Consolidated 67 % 60 % 66 % 62 % KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 25
Slide 26: Gross Margin and SG&A
Gross Margin and SG&A KAI 4Q24 BUSINESS REVIEW– FEBRUARY 2025 | © 2025 KADANT INC. ALL RIGHTS RESERVED. 26 25.1% 28.2% 25.5% 25.4% 27.3% 4Q23 1Q24 2Q24 3Q24 4Q24 42.7% 44.6% 44.4% 44.7% 43.4% 4Q23 1Q24 2Q24 3Q24 4Q24 SG&A (as a % of revenue) GROSS MARGIN 43.7% 42.9% 43.1% 43.5% 44.3% 2020 2021 2022
Slide 27: Adjusted EPS Reconciliation
Adjusted EPS* Reconciliation Q4 24 Q4 23 FY 24 FY 23 EPS, as Reported $2.04 $2.33 $9.48 $9.90 Adjustments, Net of Tax Acquired Profit in Inventory and Backlog Amortization 0.14 — 0.54 — Acquisition Costs 0.02 0.10 0.20 0.10 Restructuring and Impairment Costs — 0.02 — 0.04 Other Costs (Income) 0.06 (
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA* Reconciliation ($ in thousands) Q4 24 Q4 23 FY 24 FY 23 Net Income Attributable to Kadant $24,032 $27,396 $111,598 $116,069 Net Income Attributable to Noncontrolling Interests 65 166 956 737 Provision for Income Taxes 8,706 10,449 40,516 42,210 Interest Expense, Net 4,113 971 18,113
Slide 29: 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 6-10 is calculated using actual numbers reported in our press release dated February 12, 2025. FOOTNOTES 1) Leverage ratio is calculated by dividing total