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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): July 30, 2019

KADANT INC.
(Exact name of registrant as specified in its charter)

Commission file number 001-11406
Delaware
 
52-1762325
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
One Technology Park Drive
Westford, Massachusetts 01886
(Address of principal executive offices, including zip code)
(978) 776-2000
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock
 
KAI
 
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨




KADANT INC.

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2019, Kadant Inc. (the “Company”) announced its financial results for the fiscal quarter ended June 29, 2019. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

On July 31, 2019, the Company will hold a webcast and conference call to discuss its financial results for the fiscal quarter ended June 29, 2019. A copy of the slides that will be presented on the webcast and discussed in the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

The information in Item 2.02 and Item 7.01 of this Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


 
The following exhibits relating to Item 2.02 and Item 7.01 shall be deemed to be furnished and not filed.
 
 
 
 
Exhibit
    No.

Description of Exhibits
 
 
 
 
99.1
 
 
 
 
99.2

2



KADANT INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
KADANT INC.

 
 
 
Date: July 30, 2019
By
/s/ Michael J. McKenney
 
 
Michael J. McKenney
Executive Vice President and Chief Financial Officer

3


Exhibit
Exhibit 99.1
https://cdn.kscope.io/0da1c0d23be95034541c2c3a10e05fc0-kadantlogoa30.jpg

KADANT INC.
One Technology Park Drive
Westford, MA 01886

NEWS
Kadant Reports 2019 Second Quarter Results
Reports Record Revenue and Increases EPS Guidance for FY 2019

WESTFORD, Mass., July 30, 2019 - Kadant Inc. (NYSE: KAI) reported its financial results for the second quarter ended June 29, 2019.

Second Quarter 2019 Highlights
•
Revenue increased 14% to a record $177 million
•
GAAP diluted EPS increased 31% to $1.42
•
Adjusted diluted EPS increased 33% to $1.42
•
Net income increased 32% to $16 million
•
Adjusted EBITDA increased 25% to $33 million and represented 18.5% of revenue
•
Gross margin was 42.0%
•
Bookings decreased 1% to $174 million

Note: Adjusted diluted EPS, adjusted EBITDA, and adjusted EBITDA margin 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
“The excellent start we had to 2019 continued in the second quarter with record revenue and a solid EPS guidance beat,” said Jeffrey L. Powell, president and chief executive officer. “Despite foreign currency headwinds and weakening demand in Asia, we achieved good internal revenue growth from our legacy businesses and solid performance from our recent material handling acquisition leading to record revenue of $177 million in the second quarter of 2019.

“Strong operating performance across our businesses led to our near record adjusted EBITDA of $33 million and cash flow from operations of $23 million in the second quarter of 2019. Our end-markets continue to show resiliency and discipline as they balance supply with demand, with the exception of China where market demand is weak and project activity has slowed.

“Our parts and consumables revenue and bookings in the first half of 2019 were excellent with the second quarter performance just as strong as the first quarter, and up 18 percent and 14 percent, respectively, compared to the second quarter of 2018. As a key component of our business strategy, I am pleased to see this outstanding performance in our after-market business.”

Second Quarter 2019 Results
Revenue increased 14 percent to $177.2 million compared to the second quarter of 2018, including $20.2 million from an acquisition and a $5.7 million decrease from the unfavorable effect of foreign currency translation. Excluding the impact of an acquisition and foreign currency translation, revenue increased five percent compared to the second quarter of 2018. Gross margin was 42.0 percent, including a 70 basis point negative impact from the amortization of acquired profit in inventory. Net income was $16.3 million, or $1.42 per diluted share, in the second quarter of 2019 compared to $12.3 million, or $1.08 per diluted share in the second quarter of 2018. Adjusted diluted EPS increased 33 percent to $1.42 compared to $1.07 in the second quarter of 2018. Adjusted diluted EPS in the second quarter of 2019 excludes $0.10 of amortization expense from acquired profit in inventory and backlog and a $0.10 tax benefit related to changing our permanently reinvested position on a portion of our European earnings. Adjusted diluted EPS in the second quarter of 2018 excludes $0.04 of restructuring costs and a $0.05 tax benefit related to the repatriation of foreign earnings.


Adjusted EBITDA increased 25 percent to $32.7 million compared to $26.1 million in the second quarter of 2018. Adjusted EBITDA excludes $1.5 million of amortization from acquired profit in inventory and backlog from our recent acquisition in the second quarter of 2019 and $0.6 million of restructuring costs in the second quarter of 2018. Cash flows from operations decreased 20 percent to $22.6 million compared to $28.4 million in the second quarter of 2018. Bookings decreased one percent to $174.0 million compared to $176.4 million in the second quarter of 2018, including $21.9 million from an acquisition and a $6.0 million decrease from the unfavorable effect of foreign currency translation. Excluding the impact of an acquisition and foreign currency translation, bookings decreased 10 percent compared to our best second quarter ever in 2018.

Summary and Outlook
“We are encouraged by our strong performance in the first half of the year, despite the global trade uncertainty, the unfavorable effect of foreign currency translation, and weaker end-market demand in certain sectors,” Mr. Powell continued. “For 2019, we are reaffirming our revenue guidance and raising both our GAAP and adjusted diluted EPS guidance. We now expect to achieve GAAP diluted EPS of $4.97 to $5.09, raised from our previous guidance of $4.84 to $4.99, on revenue of $700 to $710 million. The 2019 guidance includes pre-tax amortization expense associated with acquired profit in inventory and backlog of $4.9 million, or $0.33 per diluted share, pre-tax acquisition costs of $0.8 million, or $0.06 per diluted share, and a tax benefit of $1.2 million, or $0.10 per diluted share. Excluding these items, we expect adjusted diluted EPS of $5.26 to $5.38 for 2019 raised from our previous guidance of $5.20 to $5.35.

“For the third quarter of 2019, we expect GAAP diluted EPS of $1.19 to $1.25 on revenue of $170 to $174 million. The third quarter of 2019 guidance includes pre-tax amortization expense associated with acquired backlog of $0.1 million, or $0.01 per diluted share. Excluding this expense, we expect adjusted diluted EPS of $1.20 to $1.26 for the third quarter of 2019.”

Conference Call
Kadant will hold a webcast with a slide presentation for investors on Wednesday, July 31, 2019, at 11:00 a.m. eastern time to discuss its second quarter 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 7699788. 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. An archive of the webcast presentation will be available on our website until August 30, 2019.

Shortly after the webcast, Kadant will post its updated general investor presentation incorporating the second quarter results on its 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 earnings per share (EPS), earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, and adjusted EBITDA margin.

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 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 $20.2 million and $40.8 million from an acquisition in the second quarter and first six months of 2019, respectively. Revenue also included a $5.7 million and $12.7 million unfavorable foreign currency translation effect in the second quarter and first six months of 2019, 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.
        
Our non-GAAP financial measures exclude restructuring costs, acquisition costs, amortization expense related to acquired profit in inventory and backlog, and discrete tax items. 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.

Second Quarter
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:
•
Pre-tax expense related to amortization of acquired profit in inventory and backlog of $1.5 million in 2019.
•
Pre-tax restructuring costs of $0.6 million in 2018.

Adjusted net income and adjusted diluted EPS exclude:
•
After-tax expense related to amortization of acquired profit in inventory and backlog of $1.2 million ($1.5 million net of tax of $0.3 million) in 2019.
•
A discrete tax benefit of $1.2 million in 2019.
•
After-tax restructuring costs of $0.4 million ($0.6 million net of tax of $0.2 million) in 2018.
•
A discrete tax benefit of $0.6 million in 2018.

First Six Months
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:
•
Pre-tax acquisition costs of $0.8 million in 2019.
•
Pre-tax expense related to amortization of acquired profit in inventory and backlog of $4.8 million in 2019.
•
Pre-tax restructuring costs of $1.3 million in 2018.
•
Pre-tax expense related to acquired backlog of $0.3 million in 2018.

Adjusted net income and adjusted diluted EPS exclude:
•
After-tax acquisition costs of $0.7 million ($0.8 million net of tax of $0.1 million) in 2019.
•
After-tax expense related to amortization of acquired profit in inventory and backlog of $3.7 million ($4.8 million net of tax of $1.1 million) in 2019.
•
A discrete tax benefit of $1.2 million in 2019.
•
After-tax restructuring costs of $1.0 million ($1.3 million net of tax of $0.3 million) in 2018.
•
After-tax expense related to acquired backlog of $0.2 million ($0.3 million net of tax of $0.1 million) in 2018.
•
A discrete tax benefit of $0.1 million in 2018.

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


-more-





Financial Highlights (unaudited)
 
 
 
 
 
 
 
 
(In thousands, except per share amounts and percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
Consolidated Statement of Income
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
177,165

 
$
154,913

 
$
348,481

 
$
304,106

Costs and Operating Expenses:
 
 
 
 
 
 
 
 
 
Cost of revenues
102,794

 
86,749

 
203,595

 
169,863

 
Selling, general, and administrative expenses
48,467

 
45,132

 
97,786

 
90,908

 
Research and development expenses
2,762

 
2,728

 
5,383

 
5,597

 
Restructuring costs
—

 
569

 
—

 
1,339

 
 
 
154,023

 
135,178

 
306,764

 
267,707

Operating Income
 
23,142

 
19,735

 
41,717

 
36,399

Interest Income
 
59

 
122

 
115

 
305

Interest Expense
 
(3,573
)
 
(1,850
)
 
(7,077
)
 
(3,582
)
Other Expense, Net
 
(99
)
 
(245
)
 
(198
)
 
(491
)
 
 
 
 
 
 
 
 
 
Income Before Provision for Income Taxes
19,529

 
17,762

 
34,557

 
32,631

Provision for Income Taxes
 
3,128

 
5,271

 
7,091

 
9,132

Net Income
 
16,401

 
12,491

 
27,466

 
23,499

Net Income Attributable to Noncontrolling Interest
 
(97
)
 
(142
)
 
(262
)
 
(292
)
Net Income Attributable to Kadant
 
$
16,304

 
$
12,349

 
$
27,204

 
$
23,207

 
 
 
 
 
 
 
 
 
 
 
Earnings per Share Attributable to Kadant:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.46

 
$
1.11

 
$
2.44

 
$
2.10

 
 
Diluted
 
$
1.42

 
$
1.08

 
$
2.38

 
$
2.04

 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares:
 
 
 
 
 
 
 
 
 
 
Basic
 
11,194

 
11,092

 
11,164

 
11,067

 
 
Diluted
 
11,448

 
11,400

 
11,416

 
11,371

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
Adjusted Net Income and Adjusted Diluted EPS (a)
 
June 29, 2019
 
June 29, 2019
 
June 30, 2018
 
June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Net Income and Diluted EPS Attributable to Kadant, as Reported
 
$
16,304

 
$
1.42

 
$
12,349

 
$
1.08

Adjustments for the Following:
 
 
 
 
 
 
 
 
 
Restructuring Costs, Net of Tax
 
—

 
—

 
432

 
0.04

 
Amortization of Acquired Profit in Inventory and Backlog, Net of Tax (e,f)
 
1,158

 
0.10

 
—

 
—

 
Discrete Tax Items
 
(1,186
)
 
(0.10
)
 
(574
)
 
(0.05
)
Adjusted Net Income and Adjusted Diluted EPS (a)
$
16,276

 
$
1.42

 
$
12,207

 
$
1.07

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
Six Months Ended
 
 
June 29, 2019
 
June 29, 2019
 
June 30, 2018
 
June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Net Income and Diluted EPS Attributable to Kadant, as Reported
 
$
27,204

 
$
2.38

 
$
23,207

 
$
2.04

Adjustments for the Following:
 
 
 
 
 
 
 
 
 
Restructuring Costs, Net of Tax
 
—

 
—

 
1,021

 
0.09

 
Acquisition Costs, Net of Tax
 
699

 
0.06

 
—

 
—

 
Amortization of Acquired Profit in Inventory and Backlog, Net of Tax (e,f)
 
3,671

 
0.32

 
189

 
0.02

 
Discrete Tax Items
 
(1,186
)
 
(0.10
)
 
(130
)
 
(0.01
)
Adjusted Net Income and Adjusted Diluted EPS (a)
$
30,388

 
$
2.66

 
$
24,287

 
$
2.14

 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Three Months Ended
 
 
 
Acquisition
Revenues by Product Line
 
June 29, 2019
 
June 30, 2018
 
Increase (Decrease)
 
and FX (a,b)
Stock-Preparation
 
$
50,817

 
$
56,376

 
$
(5,559
)
 
$
(3,476
)
Fluid-Handling
 
34,713

 
32,531

 
2,182

 
3,339

Doctoring, Cleaning, & Filtration
 
30,560

 
29,543

 
1,017

 
1,980

 
Papermaking Systems
 
116,090

 
118,450

 
(2,360
)
 
1,843

 
Wood Processing Systems
 
37,869

 
33,152

 
4,717

 
6,228

 
Material Handling Systems
 
20,197

 
—

 
20,197

 
—

 
Fiber-Based Products
 
3,009

 
3,311

 
(302
)
 
(302
)
 
 
 
 
$
177,165

 
$
154,913

 
$
22,252

 
$
7,769

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Six Months Ended
 
Increase (Decrease)
 
Acquisition
 
 
June 29, 2019
 
June 30, 2018
 
 
and FX (a,b)
Stock-Preparation
 
$
102,865

 
$
101,859

 
$
1,006

 
$
5,653

Fluid-Handling
 
67,467

 
65,417

 
2,050

 
4,546

Doctoring, Cleaning, & Filtration
 
58,950

 
56,765

 
2,185

 
4,278

 
Papermaking Systems
 
229,282

 
224,041

 
5,241

 
14,477

 
Wood Processing Systems
 
71,918

 
72,293

 
(375
)
 
3,111

 
Material Handling Systems
 
40,781

 
—

 
40,781

 
—

 
Fiber-Based Products
 
6,500

 
7,772

 
(1,272
)
 
(1,272
)
 
 
 
 
$
348,481

 
$
304,106

 
$
44,375

 
$
16,316

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Three Months Ended
 
 
 
Acquisition
Revenues by Geography (c)
 
June 29, 2019
 
June 30, 2018
 
Increase (Decrease)
 
and FX (a,b)
North America
 
$
98,667

 
$
75,375

 
$
23,292

 
$
5,782

Europe
 
43,813

 
45,032

 
(1,219
)
 
1,399

Asia
 
23,696

 
25,502

 
(1,806
)
 
(1,135
)
Rest of World
 
10,989

 
9,004

 
1,985

 
1,723

 
 
 
 
$
177,165

 
$
154,913

 
$
22,252

 
$
7,769

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Six Months Ended
 
Increase (Decrease)
 
Acquisition
 
 
June 29, 2019
 
June 30, 2018
 
 
and FX (a,b)
North America
 
$
199,543

 
$
152,991

 
$
46,552

 
$
11,585

Europe
 
82,798

 
86,525

 
(3,727
)
 
2,138

Asia
 
40,774

 
45,650

 
(4,876
)
 
(3,778
)
Rest of World
 
25,366

 
18,940

 
6,426

 
6,371

 
 
 
 
$
348,481

 
$
304,106

 
$
44,375

 
$
16,316

 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
Acquisition
Bookings by Product Line
 
June 29, 2019
 
June 30, 2018
 
 
and FX (b)
Stock-Preparation
 
$
52,296

 
$
61,217

 
$
(8,921
)
 
$
(6,576
)
Fluid-Handling
 
31,709

 
37,922

 
(6,213
)
 
(5,062
)
Doctoring, Cleaning, & Filtration
 
28,985

 
30,484

 
(1,499
)
 
(481
)
 
Papermaking Systems
 
112,990

 
129,623

 
(16,633
)
 
(12,119
)
 
Wood Processing Systems
 
36,558

 
44,404

 
(7,846
)
 
(6,356
)
 
Material Handling Systems
 
21,941

 
—

 
21,941

 
—

 
Fiber-Based Products
 
2,471

 
2,393

 
78

 
78

 
 
 
 
$
173,960

 
$
176,420

 
$
(2,460
)
 
$
(18,397
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Decrease
 
 
 
 
 
 
 
 
 
 
Excluding
 
 
 
 
Six Months Ended
 
Increase (Decrease)
 
Acquisition
 
 
June 29, 2019
 
June 30, 2018
 
 
and FX (b)
Stock-Preparation
 
$
108,124

 
$
117,732

 
$
(9,608
)
 
$
(4,446
)
Fluid-Handling
 
68,748

 
77,692

 
(8,944
)
 
(6,146
)
Doctoring, Cleaning, & Filtration
 
56,681

 
58,815

 
(2,134
)
 
(48
)
 
Papermaking Systems
 
233,553

 
254,239

 
(20,686
)
 
(10,640
)
 
Wood Processing Systems
 
71,440

 
97,133

 
(25,693
)
 
(21,998
)
 
Material Handling Systems
 
46,416

 
—

 
46,416

 
—

 
Fiber-Based Products
 
6,163

 
6,968

 
(805
)
 
(805
)
 
 
 
 
$
357,572

 
$
358,340

 
$
(768
)
 
$
(33,443
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
Business Segment Information
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Gross Margin:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
44.1
%
 
45.3
%
 
44.1
%
 
45.4
%
 
 
Wood Processing Systems
 
42.6
%
 
38.9
%
 
42.1
%
 
39.2
%
 
 
Material Handling Systems
 
27.9
%
 
—
%
 
25.2
%
 
—
%
 
 
Fiber-Based Products
 
47.5
%
 
50.0
%
 
49.1
%
 
53.5
%
 
 
 
 
42.0
%
 
44.0
%
 
41.6
%
 
44.1
%
 
 
 
 
 
 
 
 
 
 
 
Operating Income:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
20,061

 
$
20,899

 
$
38,570

 
$
35,483

 
 
Wood Processing Systems
 
8,801

 
5,313

 
16,071

 
12,676

 
 
Material Handling Systems
 
488

 
—

 
(865
)
 
—

 
 
Corporate and Other
 
(6,208
)
 
(6,477
)
 
(12,059
)
 
(11,760
)
 
 
 
 
$
23,142

 
$
19,735

 
$
41,717

 
$
36,399

 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Income (a,d):
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
20,061

 
$
21,468

 
$
38,570

 
$
36,822

 
 
Wood Processing Systems
 
8,801

 
5,313

 
16,071

 
12,928

 
 
Material Handling Systems
 
2,011

 
—

 
4,809

 
—

 
 
Corporate and Other
 
(6,208
)
 
(6,477
)
 
(12,059
)
 
(11,760
)
 
 
 
 
$
24,665

 
$
20,304

 
$
47,391

 
$
37,990

 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
1,157

 
$
3,840

 
$
2,514

 
$
8,489

 
 
Wood Processing Systems
 
428

 
1,184

 
979

 
1,560

 
 
Material Handling Systems
 
342

 
—

 
380

 
—

 
 
Corporate and Other
 
48

 
36

 
270

 
162

 
 
 
 
$
1,975

 
$
5,060

 
$
4,143

 
$
10,211

 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
Three Months Ended
 
Six Months Ended
Cash Flow and Other Data
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Cash Provided by Operations
 
$
22,612

 
$
28,355

 
$
32,488

 
$
35,571

Depreciation and Amortization Expense
 
8,310

 
5,844

 
16,541

 
11,943

 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data
 
 
 
 
 
June 29, 2019
 
Dec. 29, 2018
Assets
 
 
 
 
 
 
 
 
Cash, Cash Equivalents, and Restricted Cash
 
 
 
 
 
$
58,138

 
$
46,117

Accounts Receivable, net
 
 
 
 
 
106,202

 
92,624

Inventories
 
 
 
 
 
109,788

 
86,373

Unbilled Revenues
 
 
 
 
 
13,728

 
15,741

Property, Plant, and Equipment, net
 
 
 
 
 
86,586

 
80,157

Intangible Assets
 
 
 
 
 
186,390

 
113,347

Goodwill
 
 
 
 
 
340,191

 
258,174

Other Assets
 
 
 
 
 
64,768

 
33,216

 
 
 
 
 
 
 
 
$
965,791

 
$
725,749

Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
Accounts Payable
 
 
 
 
 
$
41,974

 
$
35,720

Debt Obligations
 
 
 
 
 
340,166

 
171,434

Other Borrowings
 
 
 
 
 
6,623

 
4,387

Other Liabilities
 
 
 
 
 
176,468

 
139,637

 
Total Liabilities
 
 
 
 
 
565,231

 
351,178

 
Stockholders' Equity
 
 
 
 
 
400,560

 
374,571

 
 
 
 
 
 
 
 
$
965,791

 
$
725,749

 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
Three Months Ended
 
Six Months Ended
Adjusted Operating Income and Adjusted EBITDA Reconciliation
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Consolidated
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Kadant
 
$
16,304

 
$
12,349

 
$
27,204

 
$
23,207

 
 
Net Income Attributable to Noncontrolling Interest
 
97

 
142

 
262

 
292

 
 
Provision for Income Taxes
 
3,128

 
5,271

 
7,091

 
9,132

 
 
Interest Expense, Net
 
3,514

 
1,728

 
6,962

 
3,277

 
 
Other Expense, Net
 
99

 
245

 
198

 
491

 
 
Operating Income
 
23,142

 
19,735

 
41,717

 
36,399

 
 
Restructuring Costs
 
—

 
569

 
—

 
1,339

 
 
Acquisition Costs
 
—

 
—

 
843

 
—

 
 
Acquired Backlog Amortization (e)
 
284

 
—

 
1,282

 
252

 
 
Acquired Profit in Inventory (f)
 
1,239

 
—

 
3,549

 
—

 
 
Adjusted Operating Income (a)
 
24,665

 
20,304

 
47,391

 
37,990

 
 
Depreciation and Amortization
 
8,026

 
5,844

 
15,259

 
11,691

 
 
Adjusted EBITDA (a)
 
$
32,691

 
$
26,148

 
$
62,650

 
$
49,681

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA Margin (a,g)
 
18.5
%
 
16.9
%
 
18.0
%
 
16.3
%
 
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
 
 
 
 
 
 
 
 
 
Operating Income
 
$
20,061

 
$
20,899

 
$
38,570

 
$
35,483

 
 
Restructuring costs
 
—

 
569

 
—

 
1,339

 
 
Adjusted Operating Income (a)
 
20,061

 
21,468

 
38,570

 
36,822

 
 
Depreciation and Amortization
 
3,211

 
3,139

 
6,399

 
6,275

 
 
Adjusted EBITDA (a)
 
$
23,272

 
$
24,607

 
$
44,969

 
$
43,097

 
 
 
 
 
 
 
 
 
Wood Processing Systems
 
 
 
 
 
 
 
 
 
 
Operating Income
 
$
8,801

 
$
5,313

 
$
16,071

 
$
12,676

 
 
Acquired Backlog Amortization (e)
 
—

 
—

 
—

 
252

 
 
Adjusted Operating Income (a)
 
8,801

 
5,313

 
16,071

 
12,928

 
 
Depreciation and Amortization
 
2,375

 
2,536

 
4,762

 
5,080

 
 
Adjusted EBITDA (a)
 
$
11,176

 
$
7,849

 
$
20,833

 
$
18,008

 
 
 
 
 
 
 
 
 
 
 
Material Handling Systems
 
 
 
 
 
 
 
 
 
 
Operating Income (Loss)
 
$
488

 
$
—

 
$
(865
)
 
$
—

 
 
Acquisition Costs
 
—

 
—

 
843

 
—

 
 
Acquired Backlog Amortization (e)
 
284

 
—

 
1,282

 
—

 
 
Acquired Profit in Inventory (f)
 
1,239

 
—

 
3,549

 
—

 
 
Adjusted Operating Income (a)
 
2,011

 
—

 
4,809

 
—

 
 
Depreciation and Amortization
 
2,241

 
—

 
3,707

 
—

 
 
Adjusted EBITDA (a)
 
$
4,252

 
$
—

 
$
8,516

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
Operating Loss
 
$
(6,208
)
 
$
(6,477
)
 
$
(12,059
)
 
$
(11,760
)
 
 
Depreciation and Amortization
 
199

 
169

 
391

 
336

 
 
EBITDA (a)
 
$
(6,009
)
 
$
(6,308
)
 
$
(11,668
)
 
$
(11,424
)
 
 
 
 
 
 
 
 
 
 
(a)
Represents a non-GAAP financial measure.
 
 
 
 
 
 
 
 
 
 
 
(b)
Represents the increase (decrease) resulting from the exclusion of an acquisition and 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.
 
 
 
(c)
Geographic revenues are attributed to regions based on customer location.
 
 
(d)
See reconciliation to the most directly comparable GAAP financial measure under "Adjusted Operating Income and Adjusted EBITDA Reconciliation."
 
 

-more-

(e)
Represents intangible amortization expense associated with acquired backlog.
 
 
(f)
Represents expense within cost of revenues associated with amortization of acquired profit in inventory.
 
 
(g)
Calculated as adjusted EBITDA divided by revenue in each period.

-more-

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 approximately 2,800 employees in 20 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. 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 year ended December 29, 2018 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 customers’ ability to obtain financing for capital equipment projects; international sales and operations; the variability and uncertainties in sales of capital equipment in China; the oriented strand board market and levels of residential construction activity; development and use of digital media; currency fluctuations; cyclical economic conditions affecting the global mining industry and the continued demand for coal; price increases or shortages of raw materials; dependence on certain suppliers; our acquisition strategy; failure of our information systems or breaches of data security and cybertheft; changes in government regulations and policies and compliance with laws; our internal growth strategy; competition; soundness of suppliers and customers; changes in our tax provision or exposure to additional tax liabilities; our ability to successfully manage our manufacturing operations; disruption in production; future restructurings; economic conditions and regulatory changes caused by the United Kingdom’s exit from the European Union; our debt obligations; restrictions in our credit agreement and note purchase agreement; loss of key personnel and effective succession planning; protection of intellectual property; fluctuations in our share price; soundness of financial institutions; environmental laws and regulations; climate change; environmental, health and safety laws and regulations; adequacy of our insurance coverage; anti-takeover provisions; and reliance on third-party research.



Contacts
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








###

kaiform8kexhibit99207312
Exhibit 99.2 Second Quarter 2019 Business Review July 31, 2019

 
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 financial and operating performance, demand for our products, and economic and industry outlook. These forward-looking statements represent Kadant’s expectations as of the date of this presentation. 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 year ended December 29, 2018 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 customers’ ability to obtain financing for capital equipment projects; international sales and operations; the variability and uncertainties in sales of capital equipment in China; the oriented strand board market and levels of residential construction activity; development and use of digital media; currency fluctuations; cyclical economic conditions affecting the global mining industry and the continued demand for coal; price increases or shortages of raw materials; dependence on certain suppliers; our acquisition strategy; failure of our information systems or breaches of data security and cybertheft; changes in government regulations and policies and compliance with laws; our internal growth strategy; competition; soundness of suppliers and customers; changes in our tax provision or exposure to additional tax liabilities; our ability to successfully manage our manufacturing operations; disruption in production; future restructurings; economic conditions and regulatory changes caused by the United Kingdom’s exit from the European Union; our debt obligations; restrictions in our credit agreement and note purchase agreement; loss of key personnel and effective succession planning; protection of intellectual property; fluctuations in our share price; soundness of financial institutions; environmental laws and regulations; climate change; environmental, health and safety laws and regulations; adequacy of our insurance coverage; anti-takeover provisions; and reliance on third-party research. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 2

 
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 revenues that exclude 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. A reconciliation of those numbers to the most directly comparable GAAP financial measures is shown in our 2019 second quarter earnings press release issued July 30, 2019, which is available in the Investors section of our website at investor.kadant.com under the heading News Releases. 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 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 an additional measure of our performance. The non-GAAP financial measures included in this presentation 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 presentation 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. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 3

 
BUSINESS REVIEW Jeffrey L. Powell | President & CEO KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 4

 
Q2 2019 Financial Highlights ($ Millions, except per share amounts) Q2 2019 Q2 2018 % Change2 Bookings $174.0 $176.4 -1.4% Revenue $177.2 $154.9 14.4% Gross Margin 42.0% 44.0% n.m. Net Income $16.3 $12.3 32.0% Adjusted EBITDA1 $32.7 $26.1 25.0% Adjusted EBITDA Margin1 18.5% 16.9% n.m. Diluted EPS $1.42 $1.08 31.5% Adjusted Diluted EPS1 $1.42 $1.07 32.7% Cash Flow from Operations $22.6 $28.4 -20.3% Net Debt $288.7 $145.7 98.1% 1 Adjusted EBITDA, adjusted EBITDA/revenue (margin), and adjusted diluted EPS are non-GAAP financial measures that exclude certain items as detailed in our press release dated July 30, 2019. 2 Percent change calculated using actual numbers reported in our press release dated July 30, 2019. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 5

 
FX Translation and Acquisition Impact Q2 2019 ($ in millions) Revenue Bookings Parts & Consumables Revenue Parts & Consumables Bookings As Reported $177.2 $174.0 $111.9 $109.3 Growth1 14.4% -1.4% 18.0% 14.5% Growth excluding FX2 18.1% 2.0% 21.3% 17.9% Growth excluding FX and Acquisitions3 5.0% -10.4% 4.1% 1.1% 1 Growth is the year-over-year percent change between the current period and the comparable prior period. 2 Represents the year-over-year percent change excluding the impact of current period versus prior period exchange rates. 3 Represents the year-over-year percent change excluding the impact of acquisitions and current period versus prior period exchange rates. Acquired businesses are classified as Acquisitions for the first four quarters after acquisition. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 6

 
Bookings and Revenue US$ (millions) BOOKINGS REVENUE $200 $160 $120 $80 $40 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 7

 
Parts and Consumables Bookings and Revenue US$ (millions) BOOKINGS REVENUE $140 $120 $100 $80 $60 $40 $20 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 8

 
North America Bookings and Revenue US$ (millions) BOOKINGS REVENUE $120 $100 $80 $60 $40 $20 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 9

 
Europe Bookings and Revenue US$ (millions) BOOKINGS REVENUE $60 $50 $40 $30 $20 $10 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 10

 
Asia Bookings and Revenue US$ (millions) BOOKINGS REVENUE $40 $30 $20 $10 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 11

 
Rest-of-World Bookings and Revenue US$ (millions) BOOKINGS REVENUE $20 $15 $10 $5 $0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 12

 
Guidance • FY 2019 GAAP diluted EPS of $4.97 to $5.09 • FY 2019 adjusted diluted EPS* of $5.26 to $5.38 • FY 2019 revenue of $700 to $710 million • Q3 2019 GAAP diluted EPS of $1.19 to $1.25 • Q3 2019 adjusted diluted EPS* of $1.20 to $1.26 • Q3 2019 revenue of $170 to $174 million * Adjusted diluted EPS is a non-GAAP financial measure that excludes certain items as detailed in our press release dated July 30, 2019. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 13

 
FINANCIAL REVIEW Michael J. McKenney | Executive Vice President & CFO KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 14

 
Gross Margin 50% 47.7% 47.9% 45.6% 45.6% 46.0% 44.9% 45% 44.3% 44.0% 44.1% 43.3% 43.3% 42.3% 42.0% 41.2% 40% 35% 30% All data for 2017, 2018, and 2019 is presented in conformity with the Financial Accounting Standards Board’s Accounting Standards Update No. 2017-07. Prior period amounts have not been restated. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 15

 
SG&A US$ (millions) SG&A SG&A as a % of Revenues $50 45% $40 40% $30 35% $20 30% 29.1% 28.8% 27.4% $10 25% $0 20% All data for 2017, 2018, and 2019 is presented in conformity with the Financial Accounting Standards Board’s Accounting Standards Update No. 2017-07. Prior period amounts have not been restated. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 16

 
2Q18 to 2Q19 Adjusted Diluted EPS* $2.00 $0.02 ($0.02) $1.50 $0.05 $1.42 $0.11 $0.19 $1.07 $1.00 $0.50 $0.00 * Adjusted diluted EPS is a non-GAAP financial measure that excludes certain items as detailed in our press release dated July 30, 2019. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 17

 
Adjusted EBITDA* Adjusted EBITDA* Adjusted EBITDA / Revenue* 25% $35 $30 20% $25 18.5% 17.5% 15% 16.9% $20 % of of Revenue % $15 10% EBITDA Adjusted $10 5% $5 0% $0 * Adjusted EBITDA and adjusted EBITDA/revenue (margin) are non-GAAP financial measures that exclude certain items as detailed in our press release dated July 30, 2019. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 18

 
Cash Flow US$ (millions) Q2 2019 Q2 2018 H1 2019 H1 2018 Net Income $16.4 $12.5 $27.5 $23.5 Depreciation and Amortization 8.3 5.8 16.5 11.9 Stock-Based Compensation 1.9 2.2 3.5 3.6 ROU Asset Amortization 1.1 - 2.2 - Other Items (0.8) (0.3) (1.5) (0.3) Change in Current Assets & Liabilities (excl. acquisitions) (4.3) 8.2 (15.7) (3.1) Cash Provided by Operating Activities $22.6 $28.4 $32.5 $35.6 Purchases of Property, Plant, and Equipment (2.0) (5.1) (4.2) (10.2) Free Cash Flow* $20.6 $23.3 $28.3 $25.4 * Free cash flow, a non-GAAP financial measure, is defined as cash flows from continuing operations less capital expenditures, as calculated above. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 19

 
Working Capital and Cash Conversion Days Q2 2019 Q1 2019 Q2 2018 Working Capital % LTM Revenues* 15.4% 14.9% 10.2% Cash Conversion Days** 117 days 110 days 116 days *Working Capital is defined as current assets less current liabilities, excluding cash and debt. ** Based on days in receivables plus days in inventory less days in accounts payable. Cash Conversion Days ** Working Capital % LTM Revenues * 20% 200 15% 150 10% 100 Days % of Revenue 5% 50 0% 0 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 20

 
Cash and Debt US$ (millions) Q2 2019 Q1 2019 Q2 2018 Cash, cash equivalents, and restricted cash $58.1 $57.2 $61.2 Debt (340.2) (354.8) (202.2) Other borrowings (6.6) (6.1) (4.7) Net debt $(288.7) $(303.7) $(145.7) $75 $33.9 $22.2 $25 $7.2 $2.5 ($25) $(3.3) $(14.7) ($75) ($125) $(135.6) $(129.7) ($175) $(145.7) $(165.2) $(167.2) US$(millions) $(187.4) ($225) ($275) $(288.7) ($325) $(303.7) KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 21

 
Leverage Ratio Debt/EBITDA * 4.00 3.50 3.00 2.50 2.19 2.00 1.50 1.00 0.50 0.00 *Calculated by adding or subtracting certain items from Adjusted EBITDA, as required by our Credit Facility. Our amended and restated Credit Facility defines total debt as debt less worldwide cash of up to $30 million. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 22

 
Guidance • FY 2019 GAAP diluted EPS of $4.97 to $5.09 • FY 2019 adjusted diluted EPS* of $5.26 to $5.38 • FY 2019 revenue of $700 to $710 million * Adjusted diluted EPS is a non-GAAP financial measure that excludes certain items as detailed in our press release dated July 30, 2019. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 23

 
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 769 9788. Please mute the audio on your computer. KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 24

 
Key Take-Aways • Record Q2 revenue and good operating performance • China’s decelerating economy and global trade uncertainties creating a drag on business activity in China • Raising full-year GAAP and adjusted diluted EPS guidance for 2019 • Expecting record revenue and adjusted EBITDA in 2019 KAI Q219 Business Review–July 31, 2019 | © 2019 Kadant Inc. All rights reserved. 25