Kadant Inc · NYSE:KAI
Kadant — Q1 2021 Earnings Presentation
24 slides from Kadant's earnings presentation, May 4, 2021
Slide 1: First Quarter 2021 Business Review
First Quarter 2021 Business Review May 5, 2021 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 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED.
Slide 5: Operational Highlights
Operational Highlights • Record demand for parts and solid execution by our businesses led to strong margin performance and excellent cash flow in the first quarter • Capital project activity combined with high demand for parts and consumables led to record bookings in the first quarter • Strong cas
Slide 6: Q1 2021 Performance
Q1 2021 Performance 6 Q1 21 Q1 20 Change Revenue $172.5 $159.1 +8.4% Net Income $16.6 $12.5 +32.2% Adjusted EBITDA* $31.1 $27.3 +14.2% Adjusted EBITDA Margin* 18.0% 17.1% +90 bps Diluted EPS $1.43 $1.09 +31.2% Operating Cash Flow $19.1 $6.2 +209.5% Free Cash Flow* $16.8 $3.5 +383.3% Bookings $204.5
Slide 7: Flow Control
$67.7 $49.4 $49.6 $61.9 $76.0 1Q20 2Q20 3Q20 4Q20 1Q21 Flow Control 7 $ in millions Q1 21 Q1 20 Change Revenue $63.8 $57.1 +11.6% Bookings $76.0 $67.7 +12.2% Adjusted EBITDA* $18.0 $14.9 +20.8% Adjusted EBITDA Margin* 28.3% 26.1% +220 bps HIGHLIGHTS • Robust Q1 capital project activity and bookings
Slide 8: Industrial Processing
$65.8 $53.1 $59.9 $94.8 $86.6 1Q20 2Q20 3Q20 4Q20 1Q21 Industrial Processing 8 $ in millions Q1 21 Q1 20 Change Revenue $69.2 $64.7 +6.9% Bookings $86.6 $65.8 +31.5% Adjusted EBITDA* $14.5 $12.6 +15.4% Adjusted EBITDA Margin* 21.0% 19.5% +150 bps HIGHLIGHTS • Strong demand for wood products supporte
Slide 9: Material Handling
$42.0 $30.5 $33.8 $39.9 $41.9 1Q20 2Q20 3Q20 4Q20 1Q21 Material Handling 9 $ in millions Q1 21 Q1 20 Change Revenue $39.6 $37.3 +6.1% Bookings $41.9 $42.0 -0.4% Adjusted EBITDA* $7.1 $6.9 +2.7% Adjusted EBITDA Margin* 18.0% 18.6% -60 bps HIGHLIGHTS • Stable demand with revenue increasing 6% compared
Slide 10: Business Outlook
Business Outlook • Demand expected to remain strong as industrial activity increases in North America and Europe • Variability around vaccine distribution and infection rates lead to continued uncertainty on the global macroeconomic front • Our solid balance sheet and strong cash flows position us t
Slide 11: Financial Review
FINANCIAL REVIEW Michael J. McKenney, EVP & CFO KAI 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED. 11
Slide 12: Q1 2021 Financial Performance
Q1 2021 Financial Performance Q1 21 Q1 20 Gross Margin 43.9% 42.9% SG&A % of Revenue 28.7% 28.7% Operating Income $23.4 $19.7 Net Income $16.6 $12.5 Adjusted EBITDA* $31.1 $27.3 Diluted EPS $1.43 $1.09 HIGHLIGHTS • Adjusted EBITDA margin* of 18.0% • Operating cash flow of $19.1 million • Free cash f
Slide 13: Key Consolidated Financial Metrics
$3.5 $21.1 $22.6 $38.1 $16.8 1Q20 2Q20 3Q20 4Q20 1Q21 FREE CASH FLOW* OPERATING CASH FLOW 17.1% 17.4% 19.4% 19.1% 18.0% 1Q20 2Q20 3Q20 4Q20 1Q21 28.7% 29.5% 28.4% 28.1% 28.7% 1Q20 2Q20 3Q20 4Q20 1Q21 42.9% 43.5% 44.2% 44.1% 43.9% 1Q20 2Q20 3Q20 4Q20 1Q21 Key Consolidated Financial Metrics CASH FLOW
Slide 14: 1Q20 to 1Q21 Adjusted Diluted EPS
1Q20 to 1Q21 Adjusted Diluted EPS* KAI 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED. 14 $1.09 $0.35 $0.09 $0.08 $0.04 $0.03 ($0.23) ($0.01) ($0.01) $1.43 $0.00 $0.50 $1.00 $1.50 $2.00
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics $ in millions Q1 21 Q4 20 Q1 20 Cash, cash equivalents, and restricted cash $66.7 $66.7 $62.1 Debt $217.3 $228.0 $289.5 Lease obligations $5.2 $5.5 $5.9 Net Debt $155.8 $166.8 $233.3 Leverage ratio1 1.50 1.61 2.04 Working capital % LTM revenue2 15.1% 14.2% 14.2% Cash conversion
Slide 16: Financial Outlook for 2021
Financial Outlook for 2021 16KAI 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED. • Revenue of $710 to $730 million, up 12% to 15% over 2020 • Gross margin of 43%
Slide 17: Questions & Answers
Questions & Answers To ask a question, please call 888-326-8410 within the U.S. or +1 704-385-4884 outside the U.S. and reference 418 9188. Please mute the audio on your computer. KAI 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED. 17
Slide 18: 2021 Key Priorities
2021 Key Priorities 18 MEET OUR CUSTOMERS’ NEEDS ACCELERATE OUR REVENUE GROWTH MAINTAIN STRONG CASH FLOW CAPITALIZE ON NEW OPPORTUNITIES KAI 1Q21 BUSINESS REVIEW–MAY 2021 | © 2021 KADANT INC. ALL RIGHTS RESERVED.
Slide 19: Investor Relations Contact
INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 [email protected] MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 [email protected] May 5, 2021
Slide 20: Appendix
APPENDIX First Quarter 2021 Business Review
Slide 21: Adjusted Diluted EPS Reconciliation
Adjusted Diluted EPS Reconciliation Q1 21 Q1 20 Diluted EPS, as reported $1.43 $1.09 Amortization of Acquired Backlog, Net of Tax - - Adjusted Diluted EPS $1.43 $1.09 Free Cash Flow Reconciliation $ in thousands Q1 21 Q1 20 Operating Cash Flow $19,092 $6,169 Less Capital Expenditures (2,259) (2,686)
Slide 22: 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 Q1 21 Q1 20 Net Income Attributable to Kadant $16,561 $12,531 Ne
Slide 23: Revenue by Customer Location
Revenue by Customer Location $ in thousands Q1 21 Q1 20 Change Change Excl. Acquisition and FX North America $95,092 $93,823 $1,269 $12 Europe 44,641 36,014 8,627 4,719 Asia 21,813 15,908 5,905 4,347 Rest of World 10,917 13,382 (2,465) (2,263) TOTAL $172,463 $159,127 $13,336 $6,815
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 May 4, 2021. FOOTNOTES 1) Leverage ratio is calculated by dividing total debt b