Kadant Reports Second Quarter 2026 Results

WESTFORD, Mass., Aug. 04, 2026 (GLOBE NEWSWIRE) -- Kadant Inc. (NYSE: KAI) reported its financial results for the second quarter ended July 4, 2026.

Second Quarter Financial Highlights

• Bookings increased 16% to $312 million

• Revenue increased 23% to a record $313 million

• Gross margin decreased 210 basis points to 43.8%

• Net income increased 24% to $32 million

• GAAP EPS increased 24% to $2.75  

• Adjusted EPS increased 26% to a record $3.42

• Adjusted EBITDA increased 30% to a record $68 million and represented 21.8% of revenue

• Operating cash flow increased 32% to $54 million

• Backlog was $340 million
  
  

Note: Percent changes above are based on comparison to the corresponding prior year quarter. All references to earnings per share (EPS) are to our EPS as calculated on a diluted basis. Adjusted EPS, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and changes in organic revenue are non-GAAP financial measures that exclude certain items as detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

Management Commentary
"Our second-quarter results reflect solid execution across our businesses and robust demand for our aftermarket parts and services, resulting in record revenue and strong earnings growth," said Jeffrey L. Powell, president and chief executive officer of Kadant. "Although capital project timing remains challenged by customer caution and extended approval cycles, we continue to see evidence that interest in our products and technologies remains healthy. Our large installed base and disciplined operational execution enabled us to deliver excellent results in the quarter while positioning the company for meaningful upside as capital spending recovers."

Second Quarter 2026 Compared to 2025
Revenue increased 23 percent to a record $312.9 million compared to $255.3 million in 2025. Organic revenue increased eight percent, which excludes an increase of 13 percent from acquisitions, and two percent from the favorable effect of foreign currency translation. Gross margin decreased 210 basis points to 43.8 percent, compared to 45.9 percent in 2025 due in part to an unfavorable product mix and a lower gross margin profile associated with recent acquisitions.

Net income was $32.5 million, increasing 24 percent compared to $26.2 million in 2025. GAAP EPS increased 24 percent to $2.75 compared to $2.22 in 2025 and adjusted EPS increased 26 percent to a record $3.42 compared to $2.71 in 2025. Adjusted EPS excludes intangible asset amortization expense of $0.55 and acquisition-related costs of $0.13 in 2026, and intangible asset amortization expense of $0.40 and acquisition-related costs of $0.09 in 2025.

Adjusted EBITDA increased 30 percent to a record $68.1 million and represented 21.8 percent of revenue in 2026 compared to $52.4 million and 20.5 percent of revenue in 2025. Operating cash flow increased 32 percent to $53.5 million compared to $40.5 million in 2025. Free cash flow increased 17 percent to $42.6 million compared to $36.5 million in 2025.

Bookings increased 16 percent to $312.1 million compared to $269.4 million in 2025. Organic bookings decreased one percent, which excludes increases of 15 percent from acquisitions and two percent from the favorable effect of foreign currency translation.

Summary and Outlook
"As we look ahead to the second half of the year, we are encouraged by healthy quote activity and active commercial engagement, while the primary headwinds remain customer approval cycles and geopolitical uncertainty," continued Mr. Powell. "We recognize that the timing of capital project spending can be uneven across our end markets and geographies, and we continue to focus on disciplined execution, cash flow generation, and servicing our customers. We expect revenue of $1.190 to $1.210 billion in 2026, revised from our previous guidance of $1.178 to $1.203 billion, and GAAP EPS of $9.78 to $10.03, revised from our previous guidance of $9.80 to $10.15. We expect adjusted EPS for 2026 of $12.43 to $12.68, revised from our prior guidance of $12.33 to $12.68. Our revised adjusted EPS guidance excludes $2.65 per share of acquisition-related costs. For the third quarter of 2026, we expect revenue of $297 to $307 million, GAAP EPS of $2.28 to $2.38, and adjusted EPS of $2.90 to $3.00, which excludes $0.62 per share of acquisition-related costs."

Conference Call
Kadant will hold a webcast with a slide presentation for investors on Wednesday, August 5, 2026, at 11:00 a.m. Eastern Time to discuss its second quarter financial performance, as well as future expectations. To listen to the call live and view the webcast, go to the "Investors" section of the Company's website at kadant.com. Participants interested in joining the call's live question and answer session are required to register by clicking here or selecting the Q&A link on our website to receive a dial-in number and unique PIN. It is recommended that you join the call 10 minutes prior to the start of the event. A replay of the webcast presentation will be available on our website through September 4, 2026.

Prior to the call, our earnings release and the slides used in the webcast presentation will be filed with the Securities and Exchange Commission and will be available at sec.gov. After the webcast, Kadant will post its updated general investor presentation incorporating the second quarter results on its website at kadant.com under the "Investors" section.

Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with 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 translation (organic revenue), adjusted operating income, adjusted net income, adjusted EPS, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA margin, and free cash flow.

We use organic revenue to understand our trends and to forecast and evaluate our financial performance and compare revenue to prior periods. Organic revenue excludes revenue from acquisitions for the four quarterly reporting periods following the date of the acquisition and the effect of foreign currency translation. Revenue in the second quarter of 2026 included $33.9 million from acquisitions and a favorable foreign currency translation effect of $4.1 million compared to the second quarter of 2025. Revenue in the first six months of 2026 included $67.9 million from acquisitions and a favorable foreign currency translation effect of $13.9 million compared to the first six months of 2025. Our other non-GAAP financial measures exclude amortization expense related to acquired intangible assets, profit in inventory, and backlog (collectively, purchase accounting expenses); acquisition costs; and other income or expense, as indicated. We exclude purchase accounting expenses and acquisition costs to provide a more meaningful and consistent comparison of our operating results over time and with peer companies. While we have a history of acquisition activity, such transactions do not occur on a predictable cycle, and the size and nature of these transactions will vary. We believe it is important for investors to understand that these intangible assets were recorded as part of purchase accounting and that they contribute to revenue generation. We also exclude other items as they are not indicative of our core operating results and are not comparable to other periods, which have differing levels of incremental costs, expenditures or income, or none at all. Additionally, we use free cash flow in order to provide insight on our ability to generate cash for acquisitions and debt repayments, as well as for other investing and financing activities.

We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results, or future outlook. We believe that the inclusion of such measures helps investors gain an understanding of our underlying operating performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. Such measures are also used by us in our financial and operating decision-making and for compensation purposes. We also believe this information is responsive to investors' requests and gives them additional measures of our performance.

The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for the results of operations or cash flows prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this press release have limitations associated with their use as compared to the most directly comparable GAAP measures, in that they may be different from, and therefore not comparable to, similar measures used by other companies.

Second Quarter

Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:

• Pre-tax intangible asset amortization expense of $8.6 million in 2026 and $6.3 million in 2025.

• Pre-tax profit in inventory and backlog amortization expense of $1.2 million in 2026 and $0.2 million in 2025.

• Pre-tax acquisition costs of $0.6 million in 2026 and $0.9 million in 2025.
  
  

Adjusted net income and adjusted EPS exclude:

• After-tax intangible asset amortization expense of $6.5 million ($8.6 million net of tax of $2.1 million) in 2026 and $4.8 million ($6.3 million net of tax of $1.5 million) in 2025.

• After-tax profit in inventory and backlog amortization expense of $0.9 million ($1.2 million net of tax of $0.3 million) in 2026 and $0.2 million in 2025.

• After-tax acquisition costs of $0.6 million in 2026 and $0.9 million in 2025.
  
  

Free cash flow is calculated as operating cash flow less:

• Capital expenditures of $10.9 million in 2026 and $4.0 million in 2025.
  
  

First Six Months

Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:

• Pre-tax intangible asset amortization expense of $17.0 million in 2026 and $12.7 million in 2025.

• Pre-tax profit in inventory and backlog amortization expense of $2.6 million in 2026 and $0.6 million in 2025.

• Pre-tax acquisition costs of $1.3 million in 2026 and $1.2 million in 2025.
  
  

Adjusted net income and adjusted EPS exclude:

• After-tax intangible asset amortization expense of $12.8 million ($17.0 million net of tax of $4.2 million) in 2026 and $9.5 million ($12.7 million net of tax of $3.2 million) in 2025.

• After-tax profit in inventory and backlog amortization expense of $2.0 million ($2.6 million net of tax of $0.6 million) in 2026 and $0.5 million ($0.6 million net of tax of $0.1 million) in 2025.

• After-tax acquisition costs of $1.3 million in 2026 and $1.2 million in 2025.
  
  

Free cash flow is calculated as operating cash flow less:

• Capital expenditures of $14.2 million in 2026 and $7.8 million in 2025.
  
  

Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in this press release.