WESTFORD, Mass., Nov. 03, 2026 (GLOBE NEWSWIRE) -- Kadant Inc. (NYSE: KAI) reported its financial results for the third quarter ended October 3, 2026.

Third Quarter Financial Highlights

• Bookings increased 22% to $291 million
• Revenue increased 15% to a record $313 million
• Gross margin decreased 50 basis points to 44.7%
• Net income increased 27% to $35 million
• GAAP EPS increased 26% to $2.96  
• Adjusted EPS increased 21% to a record $3.64
• Adjusted EBITDA increased 24% to a record $72 million and represented 22.9% of revenue
• Operating cash flow increased 33% to a record $63 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
“We delivered an exceptional third quarter, achieving record results across multiple key financial metrics, including revenue, adjusted EPS, and cash flow, while generating strong bookings growth across all three operating segments,” said Jeffrey L. Powell, chief executive officer of Kadant. “The strength of our aftermarket business, combined with disciplined execution and operational excellence, positions us well for a strong finish to the year.”

Third Quarter 2026 Compared to 2025
Revenue increased 15 percent to a record $313.2 million compared to $271.6 million in 2025. Organic revenue increased four percent, which excludes an increase of 11 percent from acquisitions. Gross margin decreased 50 basis points to 44.7 percent, compared to 45.2 percent in 2025.

Net income was $35.1 million, increasing 27 percent compared to $27.7 million in 2025. GAAP EPS increased 26 percent to $2.96 compared to $2.35 in 2025 and adjusted EPS increased 21 percent to a record $3.64 compared to $3.01 in 2025. Adjusted EPS excludes intangible asset amortization expense of $0.56 and acquisition-related costs of $0.11 in 2026, and intangible asset amortization expense of $0.42, acquisition-related costs of $0.22, and other costs of $0.02 in 2025. Acquisition-related costs include acquisition costs and profit in inventory and backlog amortization expense.

Adjusted EBITDA increased 24 percent to a record $71.7 million and represented 22.9 percent of revenue in 2026 compared to $58.0 million and 21.4 percent of revenue in 2025. Operating cash flow increased 33 percent to a record $62.9 million compared to $47.3 million in 2025. Free cash flow increased 32 percent to a record $58.1 million compared to $44.1 million in 2025.

Bookings increased 22 percent to $291.1 million compared to $238.4 million in 2025. Organic bookings increased 10 percent, which excludes an increase of 12 percent from acquisitions.

Summary and Outlook
“Looking ahead to the remainder of the year, we expect aftermarket demand to remain stable and project activity to show some improvement, although the timing of large capital orders continues to be influenced by economic and geopolitical uncertainty,” continued Mr. Powell. “Our strong year-to-date performance positions us to deliver a record-setting 2026. We expect revenue of $1.195 to $1.210 billion in 2026, revised from our previous guidance of $1.190 to $1.210 billion, and GAAP EPS of $9.88 to $10.03, revised from our previous guidance of $9.78 to $10.03. We are raising our adjusted EPS guidance and now expect $12.58 to $12.73 for 2026, revised from our prior guidance of $12.43 to $12.68. Our revised adjusted EPS guidance excludes $2.19 per share of intangible amortization expense and $0.51 per share of acquisition-related costs. For the fourth quarter of 2026, we expect revenue of $287 to $302 million, GAAP EPS of $2.01 to $2.16, and adjusted EPS of $2.67 to $2.82, which excludes $0.55 per share of intangible amortization expense and $0.11 per share of acquisition-related costs.”

Conference Call
Kadant will hold a webcast with a slide presentation for investors on Wednesday, November 4, 2026, at 11:00 a.m. Eastern Time to discuss its third 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 December 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 third 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 third quarter of 2026 included $31.0 million from acquisitions and a favorable foreign currency translation effect of $0.6 million compared to the third quarter of 2025. Revenue in the first nine months of 2026 included $98.9 million from acquisitions and a favorable foreign currency translation effect of $14.5 million compared to the first nine 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.

Third Quarter

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

• Pre-tax intangible asset amortization expense of $8.8 million in 2026 and $6.5 million in 2025.
• Pre-tax profit in inventory and backlog amortization expense of $1.3 million in 2026 and $0.6 million in 2025.
• Pre-tax acquisition costs of $0.5 million in 2026 and $2.3 million in 2025.
• Pre-tax indemnification asset reversal of $0.3 million in 2026.
• Pre-tax impairment costs of $0.3 million in 2025.
  
  

Adjusted net income and adjusted EPS exclude:

• After-tax intangible asset amortization expense of $6.6 million ($8.8 million net of tax of $2.2 million) in 2026 and $4.9 million ($6.5 million net of tax of $1.6 million) in 2025.
• After-tax profit in inventory and backlog amortization expense of $1.0 million ($1.3 million net of tax of $0.3 million) in 2026 and $0.5 million ($0.6 million net of tax of $0.1 million) in 2025.
• After-tax acquisition costs of $0.4 million ($0.5 million net of tax of $0.1 million) in 2026 and $2.2 million ($2.3 million net of tax of $0.1 million) in 2025.
• After-tax impairment costs of $0.2 million ($0.3 million net of tax of $0.1 million) in 2025.
  
  

Free cash flow is calculated as operating cash flow less:

• Capital expenditures of $4.8 million in 2026 and $3.2 million in 2025.
  
  

First Nine Months

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

• Pre-tax intangible asset amortization expense of $25.9 million in 2026 and $19.2 million in 2025.
• Pre-tax profit in inventory and backlog amortization expense of $3.9 million in 2026 and $1.2 million in 2025.
• Pre-tax acquisition costs of $1.7 million in 2026 and $3.5 million in 2025.
• Pre-tax indemnification asset reversal of $0.2 million in 2026.
• Pre-tax impairment costs of $0.3 million in 2025.
  
  

Adjusted net income and adjusted EPS exclude:

• After-tax intangible asset amortization expense of $19.4 million ($25.9 million net of tax of $6.5 million) in 2026 and $14.4 million ($19.2 million net of tax of $4.8 million) in 2025.
• After-tax profit in inventory and backlog amortization expense of $2.9 million ($3.9 million net of tax of $1.0 million) in 2026 and $0.9 million ($1.2 million net of tax of $0.3 million) in 2025.
• After-tax acquisition costs of $1.7 million in 2026 and $3.4 million ($3.5 million net of tax of $0.1 million) in 2025.
• After-tax impairment costs of $0.2 million ($0.3 million net of tax of $0.1 million) in 2025.
  
  

Free cash flow is calculated as operating cash flow less:

• Capital expenditures of $19.0 million in 2026 and $11.0 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.

About Kadant 
Kadant Inc. is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing^®. The Company’s products and services play an integral role in enhancing efficiency, optimizing energy utilization, and maximizing productivity in process industries. Kadant is based in Westford, Massachusetts, with approximately 4,000 employees in 22 countries worldwide. For more information, visit kadant.com.

Safe Harbor Statement
The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties, including forward-looking statements about our future financial and operating performance, demand for our products, and economic and industry outlook. These forward-looking statements represent our expectations as of the date of this press release. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those set forth under the heading “Risk Factors” in Kadant’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026 and subsequent filings with the Securities and Exchange Commission. These include risks and uncertainties relating to adverse changes in global and local economic conditions; the variability and difficulty in accurately predicting revenues from large capital equipment and systems projects; our acquisition strategy; levels of residential construction activity; reductions by our wood processing customers of their capital spending or production of oriented strand board; changes to the global timber supply; development and use of digital media; cyclical economic conditions affecting the global mining industry; demand for coal, including economic and environmental risks associated with coal; failure of our information systems or breaches of data security and cybersecurity incidents; implementation of our internal growth strategy; competition; our ability to successfully manage our manufacturing operations; supply chain constraints, inflationary pressure, price increases or shortages in raw materials; loss of key personnel and effective succession planning; future restructurings; protection of intellectual property; changes to tax laws and regulations; climate change; adequacy of our insurance coverage; global operations; policies of the Chinese government; the variability and uncertainties in sales of capital equipment in China; currency fluctuations; changes to government regulations and policies around the world; compliance with government regulations and policies and compliance with laws; environmental laws and regulations; environmental, health and safety laws and regulations impacting the mining industry; our debt obligations; restrictions in our credit agreement and note purchase agreement; soundness of financial institutions; fluctuations in our share price; and anti-takeover provisions.

Contacts
Investor Contact Information:
Michael McKenney, 978-776-2000
IR@kadant.com

Media Contact Information:
Wes Martz, 978-776-2000
media@kadant.com