Slide 1: Second Quarter 2022 Business Review
Second Quarter 2022 Business Review August 3, 2022 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 4KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights • Strong demand continued through the second quarter • Capital project activity was robust across all operating segments despite macroeconomic headwinds • Solid execution by our businesses led to record adjusted EBITDA* 5KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC
Slide 6: Q2 2022 Performance
Q2 2022 Performance 6 Q2 22 Q2 21 Change Revenue $221.6 $195.8 +13.2% Net Income $26.2 $22.9 +14.5% Adjusted EBITDA* $46.0 $41.3 +11.2% Adjusted EBITDA Margin* 20.7% 21.1% -40 bps Diluted EPS $2.24 $1.96 +14.3% Adjusted Diluted EPS* $2.24 $2.01 +11.4% Operating Cash Flow $18.8 $44.4 -57.7% Bookings
Slide 7: Flow Control
$71.8 $76.7 $83.7 $100.1 $97.3 2Q21 3Q21 4Q21 1Q22 2Q22 Flow Control 7 $ in millions Q2 22 Q2 21 Change Revenue $85.2 $70.8 +20.4% Bookings $97.3 $71.8 +35.5% Adjusted EBITDA* $25.0 $21.1 +18.3% Adjusted EBITDA Margin* 29.3% 29.9% -60 bps HIGHLIGHTS • Strong aftermarket demand and capital project ac
Slide 8: Industrial Processing
$101.9 $118.9 $94.9 $106.3 $109.9 2Q21 3Q21 4Q21 1Q22 2Q22 Industrial Processing 8 $ in millions Q2 22 Q2 21 Change Revenue $84.4 $82.7 +2.1% Bookings $109.9 $101.9 +7.8% Adjusted EBITDA* $18.4 $20.7 -11.3% Adjusted EBITDA Margin* 21.8% 25.0% -320 bps HIGHLIGHTS • Strong end-market demand drove book
Slide 9: Material Handling
$39.4 $49.1 $52.2 $59.6 $58.7 2Q21 3Q21 4Q21 1Q22 2Q22 Material Handling 9 $ in millions Q2 22 Q2 21 Change Revenue $52.0 $42.4 +22.8% Bookings $58.7 $39.4 +48.7% Adjusted EBITDA* $11.8 $8.3 +42.0% Adjusted EBITDA Margin* 22.6% 19.6% +300 bps HIGHLIGHTS • Demand was exceptionally strong for our bulk
Slide 10: Business Outlook
Business Outlook • Demand expected to remain solid but softening as macroeconomic headwinds strengthen • Record backlog has us well positioned for the remainder of the year • Expecting to generate record earnings in fiscal 2022 10KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS R
Slide 11: Financial Review
FINANCIAL REVIEW Michael J. McKenney, EVP & CFO KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 11
Slide 12: Q2 2022 Financial Performance
Q2 2022 Financial Performance Q2 22 Q2 21 Gross Margin 43.3% 43.6% SG&A % of Revenue 25.0% 25.2% Operating Income $37.5 $33.0 Net Income $26.2 $22.9 Adjusted EBITDA* $46.0 $41.3 Diluted EPS $2.24 $1.96 Adjusted Diluted EPS* $2.24 $2.01 HIGHLIGHTS • Adjusted EBITDA margin* of 20.7% • Operating cash f
Slide 13: Key Consolidated Financial Metrics
$42.3 $34.6 $55.9 $20.9 $11.9 2Q21 3Q21 4Q21 1Q22 2Q22 FREE CASH FLOW* OPERATING CASH FLOW 21.1% 20.5% 20.5% 20.2% 20.7% 2Q21 3Q21 4Q21 1Q22 2Q22 25.2% 26.2% 26.4% 26.1% 25.0% 2Q21 3Q21 4Q21 1Q22 2Q22 43.6% 41.9% 42.4% 43.4% 43.3% 2Q21 3Q21 4Q21 1Q22 2Q22 Key Consolidated Financial Metrics CASH FLOW
Slide 14: 2Q21 to 2Q22 Adjusted Diluted EPS
$2.01 $0.20 $0.16 $0.02 ($0.10) ($0.04) ($0.01) $2.24 2Q21 to 2Q22 Adjusted Diluted EPS* KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 14 2Q21 ADJ EPS* 2Q22 ADJ EPS* REVENUE ACQUISTIONS INTEREST EXPENSE OPERATING EXPENSE GOV’T PROGRAMS GROSS MARGIN
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics $ in millions Q2 22 Q1 22 Q2 21 Cash, cash equivalents, and restricted cash $78.0 $89.0 $158.1 Debt $223.8 $243.4 $268.7 Lease obligations $4.5 $4.5 $5.0 Net Debt $150.3 $158.9 $115.6 Leverage ratio1 1.05 1.16 1.71 Working capital % LTM revenue2 12.4% 10.8% 12.7% Cash conversio
Slide 16: Guidance
Guidance 16KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. • FY 2022 GAAP diluted EPS of $10.05 to $10.25 • FY 2022 adjusted diluted EPS* of $8.80 to $9.00 • FY 2022 revenue of $890 to $905 million • Q3 2022 GAAP diluted EPS of $1.99 to $2.09 • Q3 2022 revenue of $211
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 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 17
Slide 18: 2022 Key Priorities
2022 Key Priorities 18 ACCELERATE SUSTAINABLE INDUSTRIAL PROCESSING DELIVER EXCEPTIONAL STAKEHOLDER VALUE MAINTAIN STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED.
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 August 3, 2022
Slide 20: Appendix
APPENDIX Second Quarter 2022 Business Review KAI 2Q22 BUSINESS REVIEW–AUGUST 2022 | © 2022 KADANT INC. ALL RIGHTS RESERVED. 20
Slide 21: Revenue by Customer Location
Revenue by Customer Location $ in thousands Q2 22 Q2 21 Change Change Excl. Acquisitions and FX* North America $123,964 $106,767 $17,197 9,352 Europe 52,249 55,827 (3,578) (5,082) Asia 30,851 24,729 6,122 4,877 Rest of World 14,585 8,488 6,097 5,788 TOTAL $221,649 $195,811 $25,838 $14,989 KAI 2Q22 B
Slide 22: Adjusted Diluted EPS and Free Cash Flow Reconciliation
Adjusted Diluted EPS Reconciliation Q2 22 Q2 21 Diluted EPS, as reported $2.24 $1.96 Acquisition Costs, Net of Tax - 0.05 Adjusted Diluted EPS* $2.24 $2.01 Free Cash Flow Reconciliation $ in thousands Q2 22 Q2 21 Operating Cash Flow $18,797 $44,386 Less Capital Expenditures 6,947 2,059 Free Cash Flo
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA in a given period by revenue in the same period. $ in thousands Q2 22 Q2 21 Net Income Attributable to Kadant $26,170 $22,864 Ne
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 August 2, 2022. FOOTNOTES 1) Leverage ratio is calculated by dividing total deb