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Kadant Reports Fourth Quarter and Fiscal Year 2016 Results

Q4 Bookings Increase 20% Sequentially

WESTFORD, Mass.--(BUSINESS WIRE)--Feb. 23, 2017-- Kadant Inc. (NYSE: 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.

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

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