UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 28, 2004
KADANT INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11406 52-1762325
(State or Other (Commission File Number) (IRS Employer
Jurisdiction Identification No.)
of Incorporation)
One Acton Place 01720
Acton, Massachusetts (Zip Code)
(Address of Principal Executive Offices)
(978) 776-2000
Registrant's telephone number, including area code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
KADANT INC.
Item 12. Disclosure of Results of Operations and Financial Condition
On April 28, 2004, Kadant Inc. announced its financial results for
the fiscal quarter ended April 3, 2004. The full text of the press release
issued in connection with the announcement is attached as Exhibit 99 to this
Current Report on Form 8-K.
The information shall not be deemed "filed" for purposes of Section
18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KADANT INC.
Date: April 28, 2004 By: /s/ Thomas M. O'Brien
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Thomas M. O'Brien
Executive Vice President, Chief Financial Officer,
and Treasurer
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EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- --------------------------------------------------------------------------------
99 Press Release dated April 28, 2004
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Exhibit 99
[LOGO] NEWS
KADANT
AN ACCENT ON INNOVATION
One Acton Place, Suite 202
Acton, MA 01720
Investor contact: Thomas M. O'Brien, 978-776-2000
Media contact: GreatPoint Communications, 978-392-6866
Kadant Reports 2004 First Quarter Results
ACTON, Mass., April 28, 2004 - For the first quarter of 2004, Kadant Inc.
(NYSE:KAI) reported GAAP diluted earnings per share (EPS) of $.19, compared with
$.22 in the first quarter of 2003. GAAP net income in the 2004 period was $2.7
million, versus $3.0 million a year ago. First quarter revenues were $51.7
million in 2004 (including $3.0 million from the favorable effect of currency
translation), compared with $51.4 million in 2003.
"We met our EPS guidance for the quarter, although earnings were lower
than last year due primarily to an operating loss of $0.9 million in our
composite building products business, which was within the range we had
forecasted," said William A. Rainville, chairman and chief executive officer of
Kadant. "Revenues, on the other hand, were slightly better than we expected as a
result of strong performance in both of our reporting segments: papermaking
equipment and composite and fiber-based products. Our total order backlog at the
end of the quarter was $42.3 million - a 13 percent increase since the end of
2003.
"China continues to be a key geographic market for our papermaking
equipment, with the growing need for recycled packaging materials driving sales
of our stock-preparation systems. Revenues and bookings from China were strong
in the first three months, and, after quarter end, we received an order for
nearly $4 million from a major containerboard producer there. We are also
pleased that our emphasis on growing the aftermarket business yielded record
sales in China of spare parts during the quarter. In North America and Europe,
we are seeing sporadic improvement in our markets, as evidenced by increased
sales of our paper machine accessories and water management equipment over the
year-ago quarter.
"In our composites business, lower production rates as we work off
inventory and higher quarterly warranty expense than last year led to the
operating loss. However, demand for our decking products is increasing, with
quarterly revenues at $4.2 million - near last year's record high - and
quarterly bookings more than double those of last year. We continue to expand
the national network of lumber yards that stock our composite decking systems
and are in the process of adding regional distributors in certain western and
central states. As the year progresses, we expect the warranty claims to decline
and production rates to rise. This, combined with broader distribution of our
products, should return the composites business to profitability in the second
half of the year."
Mr. Rainville concluded, "For the second quarter of 2004, we expect to
achieve GAAP diluted EPS of $.21 to $.23, on revenues of $55 to $57 million. We
are maintaining our earlier guidance for the full year of $.90 to $1.00 in GAAP
diluted EPS, on revenues of $205 to $215 million."
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Financial Highlights (unaudited)
(In thousands, except per share amounts and percentages)
Three Months Ended
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Consolidated Statement of Operations April 3, 2004 March 29, 2003
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Revenues $ 51,727 $ 51,375
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Costs and Operating Expenses:
Cost of revenues 31,965 32,208
Selling, general, and administrative expenses (a) 14,868 13,512
Research and development expenses 1,018 1,043
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47,851 46,763
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Operating Income 3,876 4,612
Interest Income 329 236
Interest Expense (8) (17)
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Income Before Income Taxes 4,197 4,831
Income Taxes (1,469) (1,836)
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Net Income $ 2,728 $ 2,995
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Basic and Diluted Earnings per Share $ .19 $ .22
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Weighted Average Shares
Basic 14,222 13,574
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Diluted 14,603 13,767
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Three Months Ended
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Business Segment Information April 3, 2004 March 29, 2003
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Revenues:
Pulp and Papermaking Equipment and Systems $ 45,564 $ 45,557
Composite and Fiber-based Products 6,163 5,818
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$ 51,727 $ 51,375
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Gross Profit Margin:
Pulp and Papermaking Equipment and Systems 41% 38%
Composite and Fiber-based Products 16% 32%
38% 37%
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Operating Income:
Pulp and Papermaking Equipment and Systems (a) $ 6,343 $ 5,240
Composite and Fiber-based Products (b) (636) 412
Corporate (1,831) (1,040)
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$ 3,876 $ 4,612
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Bookings:
Pulp and Papermaking Equipment and Systems $ 51,143 $ 58,128
Composite and Fiber-based Products 5,046 2,939
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$ 56,189 $ 61,067
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Capital Expenditures:
Pulp and Papermaking Equipment and Systems $ 330 $ 202
Composite and Fiber-based Products 110 648
Corporate 3 3
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$ 443 $ 853
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Three Months Ended
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Cash Flow and Other Data April 3, 2004 March 29, 2003
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Cash Provided by (Used in) Operations $ 1,058 $ (1,040)
Depreciation and Amortization Expense $ 1,226 $ 1,285
Balance Sheet Data April 3, 2004 Jan. 3, 2004
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Cash and Short-term Investments $ 80,887 $ 74,451
Short- and Long-term Debt $ 381 $ 598
Shareholders' Investment $ 219,389 $ 211,758
(a) Includes a gain of approximately $1.0 million in the 2004 period, which resulted from renegotiating a series of agreements
with one of our licensees.
(b) Includes an operating loss of $932 in the 2004 period and operating income of $84 in the 2003 period from the composite
building products business.
Kadant will hold its earnings conference call on Thursday, April 29,
2004, at 11 a.m. Eastern time. To listen, call 800-709-2159 within the U.S., or
973-582-2810 outside the U.S. You can also listen to the call live on the Web by
visiting www.kadant.com and clicking on "Investors." An audio archive of the
call will be available on our Web site until Thursday, May 27, 2004.
Kadant Inc. is a leading supplier of a range of products for the global
papermaking and paper recycling industries, including stock-preparation
equipment, water-management systems, and paper machine accessories. We also
develop and manufacture composite building materials produced from recycled
fiber and plastic. Kadant, based in Acton, Massachusetts, had approximately $204
million in revenues in 2003 and 1,000 employees worldwide. For more information,
please visit www.kadant.com.
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 regarding our projected operating results
and the future performance of our businesses, particularly our composite
building products business and in the geographic regions in which we operate.
Important factors that could cause actual results to differ materially from
those indicated by such statements are set forth under the heading "Risk
Factors" in Kadant's year-end report on Form 10-K for the fiscal year ended
January 3, 2004. These include risks and uncertainties relating to our
dependence on the pulp and paper industry; international sales and operations;
competition; ability to manufacture and distribute composite building products,
and the seasonality in sales and the long-term performance of such products;
availability of raw materials and exposure to commodity price fluctuations
related to the manufacture of composite and fiber-based products; acquisition
strategy; protection of patents and proprietary rights; fluctuations in
quarterly operating results; 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.
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