KAI
$61.60
Kadant
$1.15
1.90%
Earnings Details
4th Quarter December 2016
Thursday, February 23, 2017 4:07:00 PM
Tweet Share Watch
Summary

Kadant Beats but Guides Lower

Kadant (KAI) reported 4th Quarter December 2016 earnings of $0.69 per share on revenue of $100.2 million. The consensus earnings estimate was $0.62 per share on revenue of $100.3 million. The Earnings Whisper number was $0.65 per share. Revenue fell 6.8% compared to the same quarter a year ago.

The company said it expects first quarter earnings of $0.62 to $0.66 per share on revenue of $97.0 million to $100.0 million and 2017 earnings of $3.13 to $3.23 per share on revenue of $423.0 million to $433.0 million. The current consensus earnings estimate is $0.66 per share on revenue of $106.5 million for the quarter ending March 31, 2017 and $3.32 per share on revenue of $436.2 million for the year ending December 31, 2017.

Kadant Inc develops, manufactures, and markets equipment and products for the papermaking, paper recycling and other process industries. It also designs and manufactures stranders and related equipment used in the production of oriented strand board.

Results
Reported Earnings
$0.69
Earnings Whisper
$0.65
Consensus Estimate
$0.62
Reported Revenue
$100.2 Mil
Revenue Estimate
$100.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Kadant Reports Fourth Quarter and Fiscal Year 2016 Results

Kadant Inc. (KAI) reported its financial results for the fourth quarter and fiscal year ended December 31, 2016.

Fourth Quarter Financial Highlights

-- Revenue was $100 million vs. $108 million

-- Gross margin was 46%

-- Diluted EPS was $0.69 vs. $0.94

-- Net Income was $8 million vs. $10 million

-- Adjusted EBITDA was $14.1 million vs. $17.2 million

-- Bookings were $114 million vs. $76 million

-- Cash flows from operations were $16 million vs. $12 million

Fiscal Year Financial Highlights

-- Revenue was a record $414 million vs. $390 million

-- Gross margin was 45.5%

Diluted EPS was $2.88 vs. $3.10; Adjusted Diluted EPS was $3.10 vs. $3.13

-- Net Income was $32 million vs. $34 million

-- Adjusted EBITDA was a record $61.9 million vs. $61.5 million

-- Bookings were $403 million vs. $376 million

-- Cash flows from operations were $51 million vs. $40 million

Note: Adjusted diluted EPS and adjusted EBITDA are non-GAAP measures that exclude certain items as detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

Management Commentary

"We are pleased to report fourth quarter earnings that exceeded our guidance and represented a strong finish to 2016 with record full year revenue and adjusted EBITDA," said Jonathan W. Painter, president and chief executive officer. "Although revenue was down from a record performance in last year’s fourth quarter, we had a 10 percent increase in revenue from parts and consumables, which represented 64 percent of fourth quarter revenue. This favorable revenue mix led to a 290 basis point increase in gross margin.

"One of the highlights of the quarter was our bookings which increased 20 percent sequentially and 50 percent year-on-year, representing the third best bookings quarter in our history. Importantly, our parts and consumables bookings were up 11 percent over the fourth quarter of last year and 6 percent sequentially, driven by a strong performance in North America. We also had strong capital bookings in China in the fourth quarter and see a fairly active market for capital projects in China in 2017.

"As was the case with the fourth quarter, we faced difficult comparisons with the full year 2015, which was an exceptionally strong year for Kadant. Within that context, we were pleased with our overall performance in 2016. We achieved record revenue of $414 million, despite over $8 million in negative foreign currency translation impact, and we maintained a strong gross margin of 45.5 percent. 2016 was also a very strong year for operating cash flows, which reached a near-record $51 million, up from $40 million in 2015."

Fourth Quarter 2016 Financials

Revenue was $100.2 million, a 7 percent decline compared to the fourth quarter of 2015, inclusive of $12.0 million from an acquisition and a negative impact of $1.7 million from foreign currency translation. Revenue was $107.6 million in the fourth quarter of 2015. Gross margin was 46.0 percent. Net income was $7.7 million, or $0.69 per diluted share, compared to $10.4 million, or $0.94 per diluted share, in the fourth quarter of 2015. Adjusted EBITDA was $14.1 million, a decrease of 18 percent from $17.2 million in the fourth quarter of 2015. Operating income was $10.7 million versus $14.4 million in the fourth quarter of 2015. Cash flows from operations were $16.3 million, up 32 percent from $12.3 million in the comparable quarter of 2015. Bookings increased 50 percent to $113.6 million from $75.5 million in the comparable period of 2015, inclusive of the net effect of a $12.1 million increase from an acquisition, a $16.1 million booking reversal in the fourth quarter of 2015, and a negative impact of $2.3 million from foreign currency translation.

Fiscal Year 2016 Financials

Revenue increased 6 percent year-over-year to a record $414.1 million for fiscal 2016, inclusive of $40.8 million from an acquisition and a negative impact of $8.4 million from foreign currency translation. Full year 2015 revenue was $390.1 million. Gross margin was 45.5 percent. Net income was $32.1 million, or $2.88 per diluted share, compared to $34.4 million, or $3.10 per diluted share, in 2015. Adjusted diluted EPS was $3.10 for the full year 2016, compared to $3.13 in 2015. Adjusted EBITDA increased 1 percent to a record $61.9 million from $61.5 million in 2015. Operating income was $45.6 million in 2016, compared to $50.1 million in the prior year. Cash flows from operations increased 26 percent to $51.0 million compared to $40.4 million last year. Bookings were $403.5 million, up 7 percent, including the net effect of a $39.4 million increase from an acquisition, a $16.1 million booking reversal in 2015, and a $9.1 million decrease from foreign currency translation. In 2015, bookings were $376.1 million.

Summary and Outlook

"2016 was a year of solid execution for Kadant," Mr. Painter continued. "We moved forward with several product developments and other initiatives designed to support our expectations of modest organic growth over the long term. In addition, we succeeded in completing an important acquisition that brings potential revenue synergies. We intend to supplement our internal growth with acquisitions, but remain disciplined in considering those opportunities that meet our criteria.

"Looking ahead, we expect 2017 to be a record year for both revenue and EPS. Based on our current visibility, we expect to report GAAP diluted EPS of $3.13 to $3.23 on revenue of $423 million to $433 million. The 2017 guidance includes an unfavorable foreign currency translation effect of $7 million on revenue and $0.10 on diluted EPS compared to 2016. For the first quarter of 2017, we expect GAAP diluted EPS of $0.62 to $0.66 on revenue of $97 million to $100 million."

Conference Call

Kadant will hold a webcast with a slide presentation for investors on Thursday, February 23, 2017, at 4:30 p.m. eastern time to discuss its fourth quarter and fiscal year performance, as well as future expectations. To access the webcast, including the slideshow and accompanying audio, go to www.kadant.com and click on "Investors." To listen to the webcast via teleconference, call 888-326-8410 within the U.S., or +1-704-385-4884 outside the U.S. and reference participant passcode 39878251. 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 www.sec.gov. A replay of the webcast will be available on our website through March 24, 2017.

Shortly after the webcast, Kadant will post its updated general investor presentation incorporating the fourth quarter and fiscal year results on our website at www.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, adjusted operating income, adjusted net income, adjusted diluted EPS, adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA), adjusted EBITDA margin, and free cash flow.

We believe that 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 to 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 an additional measure 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 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.

Revenue included $12.0 million and $40.8 million from an acquisition in the fourth quarter and fiscal year 2016, respectively. Revenue also included $1.7 million and $8.4 million unfavorable foreign currency translation effects in the fourth quarter and fiscal year 2016, respectively. We present increases or decreases in revenue excluding the effect of acquisitions and foreign currency translation to provide investors insight into underlying revenue trends.

Adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted diluted EPS exclude acquisition costs, restructuring costs, other income, and expense related to acquired profit in inventory and backlog. These items are excluded as they are not indicative of our core operating results and are not comparable to other periods, which have differing levels of incremental costs or income or none at all.

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

Pre-tax gain on the sale of assets of $0.3 million in 2016 and pre-tax restructuring costs of $0.5 million in 2015.

-- Pre-tax acquisition costs of $1.8 million in 2016.

Pre-tax expense related to acquired profit in inventory and backlog of $1.9 million in 2016 and $0.2 million in 2015.

Adjusted net income and adjusted diluted EPS exclude:

After-tax gain on the sale of assets of $0.2 million ($0.3 million net of tax of $0.1 million) in 2016 and after-tax restructuring costs of $0.4 million ($0.5 million net of tax of $0.1 million) in 2015.

After-tax acquisition costs of $1.6 million ($1.8 million net of tax of $0.2 million) in 2016.

After-tax expense related to acquired profit in inventory and backlog of $1.4 million ($1.9 million net of tax of $0.5 million) in 2016 and $0.1 million ($0.2 million net of tax of $0.1 million) in 2015.

A benefit from discrete tax items of $0.3 million in 2016. The benefit from discrete tax items was primarily due to the reversal of valuation allowances on certain deferred tax assets in the U.S.

We also report free cash flows, which is calculated as cash flows from continuing operations less capital expenditures of $5.8 million in 2016 and $5.5 million in 2015. This measure provides a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities.

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

Financial Highlights (unaudited)
(In thousands, except per share amounts and percentages)
Three Months Ended
Twelve Months Ended
Consolidated Statement of Income
Dec. 31, 2016
Jan. 2, 2016
Dec. 31, 2016
Jan. 2, 2016
Revenues
$ 100,241
$ 107,600
$ 414,126
$ 390,107
Costs and Operating Expenses:
Cost of revenues
54,168
61,207
225,737
209,982
Selling, general, and administrative expenses
33,658
30,324
135,753
122,814
Research and development expenses
1,740
1,430
7,380
6,677
Restructuring costs and other income
-
215
(317 )
515
89,566
93,176
368,553
339,988
Operating Income
10,675
14,424
45,573
50,119
Interest Income
94
50
269
200
Interest Expense
(379 )
(247 )
(1,293 )
(948 )
Income from Continuing Operations Before Provision for Income Taxes
10,390
14,227
44,549
49,371
Provision for Income Taxes
2,583
3,798
12,083
14,762
Income from Continuing Operations
7,807
10,429
32,466
34,609
Income from Discontinued Operation, Net of Tax
-
18
3
74
Net Income
7,807
10,447
32,469
34,683
Net Income Attributable to Noncontrolling Interest
(74 )
(62 )
(392 )
(294 )
Net Income Attributable to Kadant
$
7,733
$
10,385
$
32,077
$
34,389
Earnings per Share Attributable to Kadant:
Basic
$
0.71
$
0.96
$
2.95
$
3.16
Diluted
$
0.69
$
0.94
$
2.88
$
3.10
Weighted Average Shares:
Basic
10,915
10,767
10,869
10,867
Diluted
11,236
11,021
11,149
11,094
Three Months Ended
Three Months Ended
Adjusted Net Income and Adjusted Diluted EPS (b)
Dec. 31, 2016
Dec. 31, 2016
Jan. 2, 2016
Jan. 2, 2016
Net Income and Diluted EPS Attributable to Kadant, as Reported
$
7,733
$
0.69
$
10,385
$
0.94
Net Income and Diluted EPS from Discontinued Operation
-
-
(18 )
-
Net Income and Diluted EPS from Continuing Operations, as Reported
7,733
0.69
10,367
0.94
Adjustments for the Following:
Restructuring Costs, Net of Tax
-
142
0.01
Adjusted Net Income and Adjusted Diluted EPS
$
7,733
$
0.69
$
10,509
$
0.95
Twelve Months Ended
Twelve Months Ended
Dec. 31, 2016
Dec. 31, 2016
Jan. 2, 2016
Jan. 2, 2016
Net Income and Diluted EPS Attributable to Kadant, as Reported
$
32,077
$
2.88
$
34,389
$
3.10
Net Income and Diluted EPS from Discontinued Operation
(3 )
-
(74 )
(0.01 )
Net Income and Diluted EPS from Continuing Operations, as Reported
32,074
2.88
34,315
3.09
Adjustments for the Following:
Acquisition Costs, Net of Tax
1,625
0.15
-
-
Amortization of Acquired Profit in Inventory and Backlog, Net of Tax
1,359
0.12
104
0.01
Benefit from Discrete Tax Items
(261 )
(0.02 )
-
-
Restructuring Costs and Other Income, Net of Tax
(247 )
(0.02 )
351
0.03
Adjusted Net Income and Adjusted Diluted EPS
$
34,550
$
3.10
$
34,770
$
3.13
Increase
(Decrease)
Excluding Effect
Three Months Ended
Increase
of Currency
Revenues by Product Line
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a,b)
Stock-Preparation
$
39,220
$
46,716
$
(7,496 )
$
(7,020 )
Doctoring, Cleaning, & Filtration
25,564
24,379
1,185
2,098
Fluid-Handling
21,241
23,497
(2,256 )
(1,985 )
Papermaking Systems
86,025
94,592
(8,567 )
(6,907 )
Wood Processing Systems
11,413
10,477
936
936
Fiber-Based Products
2,803
2,531
272
272
$ 100,241
$ 107,600
$
(7,359 )
$
(5,699 )
Increase
(Decrease)
Excluding Effect
Twelve Months Ended
Increase
of Currency
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a,b)
Stock-Preparation
$ 171,378
$ 148,341
$
23,037
$
24,631
Doctoring, Cleaning, & Filtration
105,938
101,523
4,415
8,111
Fluid-Handling
89,145
92,797
(3,652 )
(1,866 )
Papermaking Systems
366,461
342,661
23,800
30,876
Wood Processing Systems
36,850
36,387
463
1,780
Fiber-Based Products
10,815
11,059
(244 )
(244 )
$ 414,126
$ 390,107
$
24,019
$
32,412
Increase
(Decrease)
Excluding Effect
Three Months Ended
Increase
of Currency
Sequential Revenues by Product Line
Dec. 31, 2016
Oct. 1, 2016
(Decrease)
Translation (a,b)
Stock-Preparation
$
39,220
$
44,099
$
(4,879 )
$
(4,035 )
Doctoring, Cleaning, & Filtration
25,564
28,955
(3,391 )
(2,855 )
Fluid-Handling
21,241
23,024
(1,783 )
(1,352 )
Papermaking Systems
86,025
96,078
(10,053 )
(8,242 )
Wood Processing Systems
11,413
7,962
3,451
3,721
Fiber-Based Products
2,803
1,479
1,324
1,324
$ 100,241
$ 105,519
$
(5,278 )
$
(3,197 )
Increase
(Decrease)
Excluding Effect
Three Months Ended
Increase
of Currency
Revenues by Geography (c)
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a,b)
North America
$
47,430
$
53,325
$
(5,895 )
$
(5,516 )
Europe
29,622
20,736
8,886
9,450
Asia
17,247
26,701
(9,454 )
(8,427 )
Rest of World
5,942
6,838
(896 )
(1,206 )
$ 100,241
$ 107,600
$
(7,359 )
$
(5,699 )
Increase
(Decrease)
Excluding Effect
Twelve Months Ended
Increase
of Currency
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a,b)
North America
$ 203,063
$ 224,480
$ (21,417 )
$ (19,086 )
Europe
115,233
73,077
42,156
43,325
Asia
62,703
65,750
(3,047 )
339
Rest of World
33,127
26,800
6,327
7,834
$ 414,126
$ 390,107
$
24,019
$
32,412
Increase
(Decrease)
Excluding Effect
Three Months Ended
Increase
of Currency
Sequential Revenues by Geography (c)
Dec. 31, 2016
Oct. 1, 2016
(Decrease)
Translation (a,b)
North America
$
47,430
$
46,994
$
436
$
781
Europe
29,622
31,686
(2,064 )
(978 )
Asia
17,247
18,466
(1,219 )
(691 )
Rest of World
5,942
8,373
(2,431 )
(2,309 )
$ 100,241
$ 105,519
$
(5,278 )
$
(3,197 )
Increase
(Decrease)
Excluding Effect
Three Months Ended
Increase
of Currency
Bookings by Product Line
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a)
Stock-Preparation
$
55,648
$
23,090
$
32,558
$
33,752
Doctoring, Cleaning, & Filtration
23,923
20,918
3,005
3,845
Fluid-Handling
19,360
19,662
(302 )
(42 )
Papermaking Systems
98,931
63,670
35,261
37,555
Wood Processing Systems
11,202
8,709
2,493
2,493
Fiber-Based Products
3,477
3,159
318
318
$ 113,610
$
75,538
$
38,072
$
40,366
Increase
(Decrease)
Excluding Effect
Twelve Months Ended
Increase
of Currency
Dec. 31, 2016
Jan. 2, 2016
(Decrease)
Translation (a)
Stock-Preparation
$ 158,876
$ 138,108
$
20,768
$
23,113
Doctoring, Cleaning, & Filtration
110,064
98,593
11,471
15,288
Fluid-Handling
85,696
91,943
(6,247 )
(4,749 )
Papermaking Systems
354,636
328,644
25,992
33,652
Wood Processing Systems
38,183
37,309
874
2,327
Fiber-Based Products
10,641
10,140
501
501
$ 403,460
$ 376,093
$
27,367
$
36,480
Three Months Ended
Twelve Months Ended
Business Segment Information
Dec. 31, 2016
Jan. 2, 2016
Dec. 31, 2016
Jan. 2, 2016
Gross Margin:
Papermaking Systems
46.7 %
42.7 %
45.9 %
45.9 %
Other
41.2 %
46.1 %
42.2 %
48.3 %
46.0 %
43.1 %
45.5 %
46.2 %
Operating Income:
Papermaking Systems
$
12,680
$
15,230
$
57,427
$
56,789
Corporate and Other
(2,005 )
(806 )
(11,854 )
(6,670 )
$
10,675
$
14,424
$
45,573
$
50,119
Adjusted Operating Income (b) (g):
Papermaking Systems
$
12,680
$
15,445
$
60,601
$
57,492
Corporate and Other
(2,005 )
(806 )
(11,587 )
(6,670 )
$
10,675
$
14,639
$
49,014
$
50,822
Capital Expenditures:
Papermaking Systems
$
2,163
$
1,227
$
5,504
$
4,639
Corporate and Other
62
184
300
840
$
2,225
$
1,411
$
5,804
$
5,479
Three Months Ended
Twelve Months Ended
Cash Flow and Other Data
Dec. 31, 2016
Jan. 2, 2016
Dec. 31, 2016
Jan. 2, 2016
Cash Provided by Operations (h)
$
16,261
$
12,330
$
51,000
$
40,410
Depreciation and Amortization Expense
3,392
2,574
14,326
10,821
Twelve Months Ended
Free Cash Flow Reconciliation
Dec. 31, 2016
Jan. 2, 2016
Cash Provided by Operations, as Reported
$
51,000
$
40,410
Capital Expenditures
(5,804 )
(5,479 )
Free Cash Flow (b)
$
45,196
$
34,931
Balance Sheet Data
Dec. 31, 2016
Jan. 2, 2016
Assets
Cash, Cash Equivalents, and Restricted Cash
$
73,569
$
66,936
Accounts Receivable, net
65,963
64,321
Inventories
54,951
56,758
Unbilled Contract Costs and Fees
3,068
6,580
Other Current Assets
9,799
10,525
Property, Plant and Equipment, net
47,704
42,293
Intangible Assets
52,730
38,032
Goodwill
151,455
119,051
Other Assets
11,452
11,002
$ 470,691
$ 415,498
Liabilities and Stockholders’ Equity
Accounts Payable
$
23,929
$
24,418
Short- and Long-term Debt
61,494
31,250
Capital Lease Obligations
4,917
-
Other Liabilities
96,072
91,885
Total Liabilities
186,412
147,553
Stockholders’ Equity
284,279
267,945
$ 470,691
$ 415,498
Adjusted Operating Income and Adjusted EBITDA
Three Months Ended
Twelve Months Ended
Reconciliation
Dec. 31, 2016
Jan. 2, 2016
Dec. 31, 2016
Jan. 2, 2016
Consolidated
Net Income Attributable to Kadant
$
7,733
$
10,385
$
32,077
$
34,389
Net Income Attributable to Noncontrolling Interest
74
62
392
294
Income from Discontinued Operation, Net of Tax
-
(18 )
(3 )
(74 )
Provision for Income Taxes
2,583
3,798
12,083
14,762
Interest Expense, net
285
197
1,024
748
Operating Income
10,675
14,424
45,573
50,119
Restructuring Costs and Other Income
-
215
(317 )
515
Acquisition Costs (d)
-
-
1,832
-
Acquired Backlog Amortization (e)
-
-
1,468
107
Acquired Profit in Inventory (f)
-
-
458
81
Adjusted Operating Income (b)
10,675
14,639
49,014
50,822
Depreciation and Amortization
3,392
2,574
12,858
10,714
Adjusted EBITDA (b)
$
14,067
$
17,213
$
61,872
$
61,536
Papermaking Systems
Operating Income
$
12,680
$
15,230
$
57,427
$
56,789
Restructuring Costs and Other Income
-
215
(317 )
515
Acquisition Costs (d)
-
-
1,565
-
Acquired Backlog Amortization (e)
-
-
1,468
107
Acquired Profit in Inventory (f)
-
-
458
81
Adjusted Operating Income (b)
12,680
15,445
60,601
57,492
Depreciation and Amortization
2,686
1,875
10,045
7,791
Adjusted EBITDA (b)
$
15,366
$
17,320
$
70,646
$
65,283
Corporate and Other
Operating Loss
$
(2,005 )
$
(806 )
$ (11,854 )
$
(6,670 )
Acquisition Costs (d)
-
-
267
-
Adjusted Operating Loss (b)
(2,005 )
(806 )
(11,587 )
(6,670 )
Depreciation and Amortization
706
699
2,813
2,923
Adjusted EBITDA (b)
$
(1,299 )
$
(107 )
$
(8,774 )
$
(3,747 )

(a) Represents the increase (decrease) resulting from the conversion of current period amounts reported in local currencies into U.S. dollars at the exchange rate of the prior period compared to the U.S. dollar amount reported in the prior period.

(b) Represents a non-GAAP financial measure.

(c) Geographic revenues are attributed to regions based on customer location.

(d) Represents transaction costs related to our acquisition of RT Holding GmbH, the parent corporation of a group of companies known as the PAALGROUP.

(e) Represents intangible amortization expense associated with acquired backlog.

(f) Represents expense within cost of revenues associated with acquired profit in inventory.

(g) See reconciliation to the most directly comparable GAAP financial measure under "Adjusted Operating Income and Adjusted EBITDA Reconciliation."

(h) Prior period amounts have been restated to conform to the current period presentation as a result of the adoption of the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-09.

About Kadant

Kadant Inc. is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. The Company’s products, technologies, and services play an integral role in enhancing process efficiency, optimizing energy utilization, and maximizing productivity in resource-intensive industries. Kadant is based in Westford, Massachusetts, with 2,000 employees in 18 countries worldwide. For more information, visit www.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. Our actual results may 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 year ended January 2, 2016 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; the variability and uncertainties in sales of capital equipment in China; currency fluctuations; our customers’ ability to obtain financing for capital equipment projects; changes in government regulations and policies; the oriented strand board market and levels of residential construction activity; development and use of digital media; price increases or shortages of raw materials; dependence on certain suppliers; international sales and operations; economic conditions and regulatory changes caused by the United Kingdom’s likely exit from the European Union; disruption in production; our acquisition strategy; our internal growth strategy; competition; soundness of suppliers and customers; our effective tax rate; future restructurings; soundness of financial institutions; our debt obligations; restrictions in our credit agreement; loss of key personnel; reliance on third-party research; protection of patents and proprietary rights; failure of our information systems or breaches of data security; fluctuations in our share price; and anti-takeover provisions. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170223006617r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170223006617/en/

SOURCE: Kadant Inc.

Kadant Inc.
Investor Contact Information:
Michael McKenney, 978-776-2000
mike.mckenney@kadant.com
or
Media Contact Information:
Wes Martz, 269-278-1715
wes.martz@kadant.com