Slide 1: Fourth Quarter and FY 2022 Business Review
Fourth Quarter and FY 2022 Business Review February 16, 2023 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 KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights • Excellent execution by our businesses led to strong financial performance and record adjusted EBITDA* in Q4 and FY 2022 • Internal initiatives driving margin improvement • Named by Newsweek as one of America's Most Responsible Companies for the third consecutive year KAI 4Q2
Slide 6: Q4 2022 Performance
Q4 2022 Performance 6 ($ in millions, except per share amounts) Q4 22 Q4 21 Change Revenue $232.1 $218.5 +6.2% Net Income $26.1 $24.2 +8.0% Adjusted EBITDA* $49.5 $44.8 +10.5% Adjusted EBITDA Margin* 21.3% 20.5% +80 bps Diluted EPS $2.23 $2.07 +7.7% Adjusted Diluted EPS* $2.33 $2.31 +0.9% Operating
Slide 7: FY 2022 Performance
FY 2022 Performance 7 ($ in millions, except per share amounts) FY 22 FY 21 Change Revenue $904.7 $786.6 +15.0% Net Income $120.9 $84.0 +43.9% Adjusted EBITDA* $189.1 $159.4 +18.6% Adjusted EBITDA Margin* 20.9 % 20.3 % +60 bps Diluted EPS $10.35 $7.21 +43.6% Adjusted Diluted EPS* $9.24 $7.83 +18.0%
Slide 8: Flow Control
$83.7 $100.1 $97.3 $84.9 $78.8 4Q21 1Q22 2Q22 3Q22 4Q22 8 ($ in millions) Q4 22 Q4 21 Change Revenue $91.2 $78.0 +16.9% Bookings $78.8 $83.7 -5.9% Adjusted EBITDA* $26.2 $19.3 +35.4% Adjusted EBITDA Margin* 28.7% 24.8% +390 bps HIGHLIGHTS • Robust aftermarket demand and capital project activity • Or
Slide 9: Industrial Processing
9 ($ in millions) Q4 22 Q4 21 Change Revenue $90.1 $95.3 -5.4% Bookings $84.1 $94.9 -11.4% Adjusted EBITDA* $22.4 $25.0 -10.2% Adjusted EBITDA Margin* 24.9% 26.2% -130 bps HIGHLIGHTS • Organic revenue* exceeded prior year revenue record despite softening in some end markets • Aftermarket parts booki
Slide 10: Material Handling
10 ($ in millions) Q4 22 Q4 21 Change Revenue $50.8 $45.2 +12.4% Bookings $52.5 $52.2 +0.6% Adjusted EBITDA* $9.5 $9.3 +2.1% Adjusted EBITDA Margin* 18.6% 20.5% -190 bps HIGHLIGHTS • Solid demand for our bulk material handling equipment and baling systems • Business activity remains healthy with rev
Slide 11: Business Outlook
Business Outlook • Good level of project activity going into 2023 • Industrial demand expected to be relatively strong in the first half of the year; less visibility and certainty in the second half • Economic headwinds are expected to strengthen as the year progresses 11KAI 4Q22 BUSINESS REVIEW–FEB
Slide 12: Financial Review
FINANCIAL REVIEW Michael J. McKenney, EVP & CFO KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 12
Slide 13: Q4 2022 Financial Performance
Q4 2022 Financial Performance ($ in millions, except per share amounts) Q4 22 Q4 21 Gross Margin 43.1% 42.4% SG&A % of Revenue 24.5% 26.4% Operating Income $39.0 $31.5 Net Income $26.1 $24.2 Adjusted EBITDA* $49.5 $44.8 Diluted EPS $2.23 $2.07 Adjusted Diluted EPS* $2.33 $2.31 HIGHLIGHTS • Adjusted
Slide 14: FY 2022 Financial Performance
FY 2022 Financial Performance ($ in millions, except per share amounts) FY 22 FY 21 Gross Margin 43.1% 42.9% SG&A % of Revenue 24.8% 26.5% Operating Income $171.3 $116.7 Net Income $120.9 $84.0 Adjusted EBITDA* $189.1 $159.4 Diluted EPS $10.35 $7.21 Adjusted Diluted EPS* $9.24 $7.83 HIGHLIGHTS • Adj
Slide 15: Adjusted EBITDA and Cash Flow Metrics
$115.2 $127.1 $115.9 $159.4 $189.1 $60.4 $52.1 $55.2 $84.0 $120.9 18.2% 18.0% 18.3% 20.3% 20.9% NET INCOME ADJUSTED EBITDA* ADJ. EBITDA MARGIN* 2018 2019 2020 2021 2022 Adjusted EBITDA and Cash Flow Metrics KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 15 FY ADJUST
Slide 16: 4Q21 to 4Q22 Adjusted Diluted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 4Q21 to 4Q22 Adjusted Diluted EPS* 16 $2.31 $0.40 $(0.29) $(0.05) $(0.04) $2.33 4Q21 ADJ EPS* REVENUE TAX PROVISION INTEREST EXPENSE GROSS MARGIN 4Q22 ADJ EPS*
Slide 17: FY 2021 to FY 2022 Adjusted Diluted EPS
2Q21 ADJ EPS* 2Q22 ADJ EPS* KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. FY 2021 to FY 2022 Adjusted Diluted EPS* 17 $7.83 $2.19 $0.36 $(0.39) $(0.33) $(0.22) $(0.16) $(0.03) $(0.01) $9.24 2021 ADJ EPS* REVENUE ACQUISITIONS OPERATING EXPENSES TAX PROVISION GROSS M
Slide 18: Key Liquidity Metrics
Key Liquidity Metrics KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 18 ($ in millions) Q4 22 Q3 22 Q4 21 Cash, cash equivalents, and restricted cash $79.7 $75.1 $94.2 Debt $199.2 $207.9 $264.6 Lease obligations $1.9 $1.8 $4.9 Net Debt $121.4 $134.6 $175.4 Leverage
Slide 19: Guidance for 2023
Guidance for 2023 KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 19 • Q1 2023 revenue of $217 to $223 million • Q1 2023 adjusted diluted EPS* of $2.08 to $2.20 • FY 2023 revenue of $900 to $925 million • FY 2023 adjusted diluted EPS* of $8.80 to $9.05 • Gross margin
Slide 20: Questions & Answers
Questions & Answers To participate in the live Q&A session, please go to investor.kadant.com and click on the Q&A session link to receive a dial-in number and unique PIN. Please mute the audio on your computer. KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 20
Slide 21: 2023 Key Priorities
2023 Key Priorities 21 ENABLE SUSTAINABLE INDUSTRIAL PROCESSING DELIVER EXCEPTIONAL STAKEHOLDER VALUE PROVIDE STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED.
Slide 22: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com February 16, 2023
Slide 23: Appendix
APPENDIX Fourth Quarter and FY 2022 Business Review KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 23
Slide 24: Revenue by Customer Location
Revenue by Customer Location ($ in thousands) Q4 22 Q4 21 Change Change Excluding Acquisitions and FX* North America $133,784 $113,139 $20,645 $23,244 Europe 59,526 61,297 (1,771) 6,125 Asia 26,016 31,764 (5,748) (2,740) Rest of World 12,774 12,316 458 1,059 Total $232,100 $218,516 $13,584 $27,688 K
Slide 25: Gross Margin and SG&A
Gross Margin and SG&A KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | © 2023 KADANT INC. ALL RIGHTS RESERVED. 25 26.4% 26.1% 25.0% 23.7% 24.5% 4Q21 1Q22 2Q22 3Q22 4Q22 42.4% 43.4% 43.3% 42.5% 43.1% 4Q21 1Q22 2Q22 3Q22 4Q22 SG&A (as a % of revenue) GROSS MARGIN 43.9% 41.7% 43.7% 42.9% 43.1% 2018 2019 2020 2
Slide 26: Adjusted Diluted EPS Reconciliation
Adjusted Diluted EPS Reconciliation Q4 22 Q4 21 FY 22 FY 21 Diluted EPS, as reported $2.23 $2.07 $10.35 $7.21 Gain on Sale, Net of Tax — (0.03) (1.30) (0.03) Acquisition Costs, Net of Tax 0.01 0.06 0.04 0.26 Impairment and Restructuring Costs, Net of Tax 0.09 0.08 0.11 0.08 Acquired Profit in Invent
Slide 27: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q4 22 Q4 21 FY 22 FY 21 Operating Cash Flow $35.2 $61.0 $102.6 $162.4 Less Capital Expenditures (12.0) (5.1) (28.2) (12.8) Free Cash Flow* $23.2 $55.9 $74.4 $149.6 Free cash flow is a non-GAAP financial measure. KAI 4Q22 BUSINESS REVIEW–FEBRUARY 2023 | ©
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA in a given period by revenue in the same period. ($ in thousands) Q4 22 Q4 21 FY 22 FY 21 Net Income Attributable to Kadant $26,
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 15, 2023. FOOTNOTES 1) Leverage ratio is calculated by dividing total