(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
(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 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
KADANT INC. | ||
Date: February 12, 2020 | By | /s/ Michael J. McKenney |
Michael J. McKenney Executive Vice President and Chief Financial Officer |
• | Revenue increased 11% to $183 million |
• | GAAP diluted EPS decreased to $0.76 compared to $1.61 in 2018 |
• | Adjusted diluted EPS decreased 20% to $1.32 |
• | Net income decreased to $8.7 million compared to $18.4 million in 2018 |
• | Adjusted EBITDA increased 1% to $32 million |
• | Bookings increased 9% to $160 million |
• | Cash flows from operations were a record $39 million |
• | Revenue increased 11% to $705 million |
• | GAAP diluted EPS decreased 14% to $4.54 |
• | Adjusted diluted EPS was $5.36 |
• | Net income decreased 14% to $52 million |
• | Adjusted EBITDA increased 10% to $127 million |
• | Bookings increased 3% to $688 million |
• | Cash flows from operations increased 55% to a record $97 million |
• | Free cash flow increased 88% to a record $87 million |
• | Pre-tax impairment and restructuring cost of $2.5 million in 2019. |
• | Pre-tax acquisition costs of $1.3 million in 2018. |
• | After-tax settlement loss of $6.4 million ($5.9 million pre-tax and tax expense of $0.5 million) in 2019 and an after-tax curtailment loss of $1.1 million ($1.4 million net of tax of $0.3 million) in 2018 associated with the termination of defined benefits plans at one of our U.S. operations. |
• | After-tax impairment and restructuring cost of $1.9 million ($2.5 million net of tax of $0.6 million) in 2019. |
• | After-tax acquisition costs of $1.1 million ($1.3 million net of tax of $0.2 million) in 2018. |
• | A discrete tax benefit of $1.8 million in 2019 and $1.6 million in 2018. |
• | Capital expenditures of $3.7 million in both 2019 and 2018. |
• | Pre-tax impairment and restructuring cost of $2.5 million in 2019. |
• | Pre-tax restructuring cost of $1.7 million in 2018. |
• | Pre-tax acquisition costs of $0.8 million in 2019 and $1.3 million in 2018. |
• | Pre-tax expense related to acquired profit in inventory and backlog of $4.9 million in 2019 and $0.3 million in 2018. |
• | After-tax settlement loss of $6.4 million ($5.9 million pre-tax and tax expense of $0.5 million) in 2019 and an after-tax curtailment loss of $1.1 million ($1.4 million net of tax of $0.3 million) in 2018 associated with the termination of defined benefits plans at one of our U.S. operations. |
• | After-tax impairment and restructuring costs of $1.9 million ($2.5 million net of tax of $0.6 million) in 2019. |
• | After-tax restructuring cost of $1.3 million ($1.7 million net of tax of $0.4 million) in 2018. |
• | After-tax acquisition costs of $0.7 million ($0.8 million net of tax of $0.1 million) in 2019 and $1.1 million ($1.3 million net of tax of $0.2 million) in 2018. |
• | After-tax expense related to acquired profit in inventory and backlog of $3.7 million ($4.9 million net of tax of $1.2 million) and $0.2 million ($0.3 million net of tax of $0.1 million) in 2018. |
• | A discrete tax benefit of $3.3 million in 2019 and $3.2 million in 2018. |
• | Capital expenditures of $10.0 million in 2019 and $16.6 million in 2018. |
Financial Highlights (unaudited) | ||||||||||||||||||
(In thousands, except per share amounts and percentages) | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
Consolidated Statement of Income | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | ||||||||||||||
Revenues | $ | 182,659 | $ | 163,935 | $ | 704,644 | $ | 633,786 | ||||||||||
Costs and Operating Expenses: | ||||||||||||||||||
Cost of revenues | 108,032 | 92,990 | 410,884 | 355,505 | ||||||||||||||
Selling, general, and administrative expenses | 47,642 | 43,618 | 192,525 | 177,414 | ||||||||||||||
Research and development expenses | 2,904 | 2,503 | 10,884 | 10,552 | ||||||||||||||
Impairment and restructuring costs (c) | 2,528 | — | 2,528 | 1,717 | ||||||||||||||
161,106 | 139,111 | 616,821 | 545,188 | |||||||||||||||
Operating Income | 21,553 | 24,824 | 87,823 | 88,598 | ||||||||||||||
Interest Income | 55 | 44 | 213 | 379 | ||||||||||||||
Interest Expense | (2,612 | ) | (1,712 | ) | (12,755 | ) | (7,032 | ) | ||||||||||
Other Expense, Net (b) | (6,063 | ) | (1,681 | ) | (6,359 | ) | (2,417 | ) | ||||||||||
Income Before Provision for Income Taxes | 12,933 | 21,475 | 68,922 | 79,528 | ||||||||||||||
Provision for Income Taxes | 4,048 | 2,907 | 16,358 | 18,482 | ||||||||||||||
Net Income | 8,885 | 18,568 | 52,564 | 61,046 | ||||||||||||||
Net Income Attributable to Noncontrolling Interest | (136 | ) | (146 | ) | (496 | ) | (633 | ) | ||||||||||
Net Income Attributable to Kadant | $ | 8,749 | $ | 18,422 | $ | 52,068 | $ | 60,413 | ||||||||||
Earnings per Share Attributable to Kadant: | ||||||||||||||||||
Basic | $ | 0.77 | $ | 1.66 | $ | 4.63 | $ | 5.45 | ||||||||||
Diluted | $ | 0.76 | $ | 1.61 | $ | 4.54 | $ | 5.30 | ||||||||||
Weighted Average Shares: | ||||||||||||||||||
Basic | 11,344 | 11,107 | 11,235 | 11,086 | ||||||||||||||
Diluted | 11,525 | 11,436 | 11,457 | 11,400 | ||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||
Adjusted Net Income and Adjusted Diluted EPS (a) | Dec. 28, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 29, 2018 | ||||||||||||||
Net Income and Diluted EPS Attributable to Kadant, as Reported | $ | 8,749 | $ | 0.76 | $ | 18,422 | $ | 1.61 | ||||||||||
Adjustments for the Following: | ||||||||||||||||||
Settlement and Curtailment Losses, Net of Tax (b) | 6,352 | 0.55 | 1,078 | 0.09 | ||||||||||||||
Impairment and Restructuring Costs, Net of Tax (c) | 1,905 | 0.17 | — | — | ||||||||||||||
Acquisition Costs, Net of Tax | — | — | 1,096 | 0.10 | ||||||||||||||
Amortization of Acquired Backlog, Net of Tax (d) | 15 | — | — | — | ||||||||||||||
Discrete Tax Items (e) | (1,839 | ) | (0.16 | ) | (1,577 | ) | (0.14 | ) | ||||||||||
Adjusted Net Income and Adjusted Diluted EPS (a) | $ | 15,182 | $ | 1.32 | $ | 19,019 | $ | 1.66 | ||||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||||
Dec. 28, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 29, 2018 | |||||||||||||||
Net Income and Diluted EPS Attributable to Kadant, as Reported | $ | 52,068 | $ | 4.54 | $ | 60,413 | $ | 5.30 | ||||||||||
Adjustments for the Following: | ||||||||||||||||||
Settlement and Curtailment Losses, Net of Tax (b) | 6,352 | 0.55 | 1,078 | 0.09 | ||||||||||||||
Impairment and Restructuring Costs, Net of Tax (c) | 1,905 | 0.17 | 1,308 | 0.11 | ||||||||||||||
Acquisition Costs, Net of Tax | 699 | 0.06 | 1,096 | 0.10 | ||||||||||||||
Amortization of Acquired Profit in Inventory and Backlog, Net of Tax (d,i) | 3,702 | 0.32 | 189 | 0.02 | ||||||||||||||
Discrete Tax Items (e) | (3,338 | ) | (0.29 | ) | (3,249 | ) | (0.29 | ) | ||||||||||
Adjusted Net Income and Adjusted Diluted EPS (a) | $ | 61,388 | $ | 5.36 | $ | 60,835 | $ | 5.34 | ||||||||||
Increase | ||||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Three Months Ended | Increase (Decrease) | Acquisition | ||||||||||||||||
Revenue by Segment | Dec. 28, 2019 | Dec. 29, 2018 | and FX (a,f) | |||||||||||||||
Stock-Preparation | $ | 56,098 | $ | 57,091 | $ | (993 | ) | $ | 9 | |||||||||
Fluid-Handling | 32,300 | 33,330 | (1,030 | ) | (440 | ) | ||||||||||||
Doctoring, Cleaning, & Filtration | 29,247 | 28,667 | 580 | 1,045 | ||||||||||||||
Papermaking Systems | 117,645 | 119,088 | (1,443 | ) | 614 | |||||||||||||
Wood Processing Systems | 38,538 | 42,031 | (3,493 | ) | (3,210 | ) | ||||||||||||
Material Handling Systems | 22,301 | — | 22,301 | — | ||||||||||||||
Fiber-Based Products | 4,175 | 2,816 | 1,359 | 1,359 | ||||||||||||||
$ | 182,659 | $ | 163,935 | $ | 18,724 | $ | (1,237 | ) | ||||||||||
Increase | ||||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Twelve Months Ended | Increase (Decrease) | Acquisition | ||||||||||||||||
Dec. 28, 2019 | Dec. 29, 2018 | and FX (a,f) | ||||||||||||||||
Stock-Preparation | $ | 215,091 | $ | 221,933 | $ | (6,842 | ) | $ | 341 | |||||||||
Fluid-Handling | 132,501 | 131,830 | 671 | 4,488 | ||||||||||||||
Doctoring, Cleaning, & Filtration | 117,838 | 116,136 | 1,702 | 4,946 | ||||||||||||||
Papermaking Systems | 465,430 | 469,899 | (4,469 | ) | 9,775 | |||||||||||||
Wood Processing Systems | 143,187 | 151,366 | (8,179 | ) | (3,816 | ) | ||||||||||||
Material Handling Systems | 83,364 | — | 83,364 | — | ||||||||||||||
Fiber-Based Products | 12,663 | 12,521 | 142 | 142 | ||||||||||||||
$ | 704,644 | $ | 633,786 | $ | 70,858 | $ | 6,101 | |||||||||||
Increase (Decrease) | Increase | |||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Three Months Ended | Acquisition | |||||||||||||||||
Revenue by Geography (g) | Dec. 28, 2019 | Dec. 29, 2018 | and FX (a,f) | |||||||||||||||
North America | $ | 95,368 | $ | 78,538 | $ | 16,830 | $ | (2,607 | ) | |||||||||
Europe | 48,944 | 43,244 | 5,700 | 7,041 | ||||||||||||||
Asia | 22,960 | 31,151 | (8,191 | ) | (9,744 | ) | ||||||||||||
Rest of World | 15,387 | 11,002 | 4,385 | 4,073 | ||||||||||||||
$ | 182,659 | $ | 163,935 | $ | 18,724 | $ | (1,237 | ) | ||||||||||
Increase | ||||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Twelve Months Ended | Increase (Decrease) | Acquisition | ||||||||||||||||
Dec. 28, 2019 | Dec. 29, 2018 | and FX (a,f) | ||||||||||||||||
North America | $ | 386,952 | $ | 305,618 | $ | 81,334 | $ | 8,086 | ||||||||||
Europe | 180,888 | 174,681 | 6,207 | 15,686 | ||||||||||||||
Asia | 84,705 | 109,688 | (24,983 | ) | (25,414 | ) | ||||||||||||
Rest of World | 52,099 | 43,799 | 8,300 | 7,743 | ||||||||||||||
$ | 704,644 | $ | 633,786 | $ | 70,858 | $ | 6,101 | |||||||||||
Increase | ||||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Three Months Ended | Increase (Decrease) | Acquisition | ||||||||||||||||
Bookings by Segment | Dec. 28, 2019 | Dec. 29, 2018 | and FX (f) | |||||||||||||||
Stock-Preparation | $ | 43,934 | $ | 41,371 | $ | 2,563 | $ | 3,172 | ||||||||||
Fluid-Handling | 28,339 | 30,867 | (2,528 | ) | (1,970 | ) | ||||||||||||
Doctoring, Cleaning, & Filtration | 28,635 | 32,938 | (4,303 | ) | (3,926 | ) | ||||||||||||
Papermaking Systems | 100,908 | 105,176 | (4,268 | ) | (2,724 | ) | ||||||||||||
Wood Processing Systems | 30,923 | 38,971 | (8,048 | ) | (7,789 | ) | ||||||||||||
Material Handling Systems | 23,460 | — | 23,460 | — | ||||||||||||||
Fiber-Based Products | 4,492 | 2,940 | 1,552 | 1,552 | ||||||||||||||
$ | 159,783 | $ | 147,087 | $ | 12,696 | $ | (8,961 | ) | ||||||||||
Increase | ||||||||||||||||||
(Decrease) | ||||||||||||||||||
Excluding | ||||||||||||||||||
Twelve Months Ended | Increase (Decrease) | Acquisition | ||||||||||||||||
Dec. 28, 2019 | Dec. 29, 2018 | and FX (f) | ||||||||||||||||
Stock-Preparation | $ | 215,948 | $ | 228,444 | $ | (12,496 | ) | $ | (4,947 | ) | ||||||||
Fluid-Handling | 129,125 | 138,230 | (9,105 | ) | (5,050 | ) | ||||||||||||
Doctoring, Cleaning, & Filtration | 112,095 | 119,541 | (7,446 | ) | (4,432 | ) | ||||||||||||
Papermaking Systems | 457,168 | 486,215 | (29,047 | ) | (14,429 | ) | ||||||||||||
Wood Processing Systems | 129,865 | 172,184 | (42,319 | ) | (37,944 | ) | ||||||||||||
Material Handling Systems | 88,123 | — | 88,123 | — | ||||||||||||||
Fiber-Based Products | 13,129 | 12,028 | 1,101 | 1,101 | ||||||||||||||
$ | 688,285 | $ | 670,427 | $ | 17,858 | $ | (51,272 | ) | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
Segment Information | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | ||||||||||||||
Gross Margin: | ||||||||||||||||||
Papermaking Systems | 43.6 | % | 44.1 | % | 44.2 | % | 44.9 | % | ||||||||||
Wood Processing Systems | 37.2 | % | 40.2 | % | 40.7 | % | 40.3 | % | ||||||||||
Material Handling Systems | 30.7 | % | — | % | 28.3 | % | — | % | ||||||||||
Fiber-Based Products | 51.6 | % | 53.1 | % | 49.5 | % | 50.8 | % | ||||||||||
40.9 | % | 43.3 | % | 41.7 | % | 43.9 | % | |||||||||||
Operating Income: | ||||||||||||||||||
Papermaking Systems | $ | 19,864 | $ | 22,052 | $ | 81,232 | $ | 83,454 | ||||||||||
Wood Processing Systems | 5,308 | 9,857 | 28,166 | 31,237 | ||||||||||||||
Material Handling Systems | 2,255 | — | 3,132 | — | ||||||||||||||
Corporate and Other | (5,874 | ) | (7,085 | ) | (24,707 | ) | (26,093 | ) | ||||||||||
$ | 21,553 | $ | 24,824 | $ | 87,823 | $ | 88,598 | |||||||||||
Adjusted Operating Income (a,h): | ||||||||||||||||||
Papermaking Systems | $ | 19,864 | $ | 22,052 | $ | 81,232 | $ | 85,171 | ||||||||||
Wood Processing Systems | 7,836 | 9,857 | 30,694 | 31,489 | ||||||||||||||
Material Handling Systems | 2,275 | — | 8,847 | — | ||||||||||||||
Corporate and Other | (5,874 | ) | (5,764 | ) | (24,707 | ) | (24,772 | ) | ||||||||||
$ | 24,101 | $ | 26,145 | $ | 96,066 | $ | 91,888 | |||||||||||
Capital Expenditures: | ||||||||||||||||||
Papermaking Systems | $ | 2,237 | $ | 2,880 | $ | 6,127 | $ | 12,717 | ||||||||||
Wood Processing Systems | 710 | 686 | 2,133 | 3,272 | ||||||||||||||
Material Handling Systems | 590 | — | 1,195 | — | ||||||||||||||
Corporate and Other | 184 | 176 | 502 | 570 | ||||||||||||||
$ | 3,721 | $ | 3,742 | $ | 9,957 | $ | 16,559 | |||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
Cash Flow and Other Data | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | ||||||||||||||
Cash Provided by Operations | $ | 39,247 | $ | 10,435 | $ | 97,413 | $ | 62,985 | ||||||||||
Less: Capital Expenditures | (3.721 | ) | (3.742 | ) | (9.957 | ) | (16.559 | ) | ||||||||||
Free Cash Flow (a) | $ | 35.526 | $ | 6.693 | $ | 87.456 | $ | 46.426 | ||||||||||
Depreciation and Amortization Expense | $ | 8,086 | $ | 5,829 | $ | 32,390 | $ | 23,568 | ||||||||||
Balance Sheet Data | Dec. 28, 2019 | Dec. 29, 2018 | ||||||||||||||||
Assets | ||||||||||||||||||
Cash, Cash Equivalents, and Restricted Cash | $ | 68,273 | $ | 46,117 | ||||||||||||||
Accounts Receivable, net | 95,740 | 92,624 | ||||||||||||||||
Inventories | 102,715 | 86,373 | ||||||||||||||||
Unbilled Revenues | 13,162 | 15,741 | ||||||||||||||||
Property, Plant, and Equipment, net | 86,032 | 80,157 | ||||||||||||||||
Intangible Assets | 173,896 | 113,347 | ||||||||||||||||
Goodwill | 336,032 | 258,174 | ||||||||||||||||
Other Assets | 63,537 | 33,216 | ||||||||||||||||
$ | 939,387 | $ | 725,749 | |||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||
Accounts Payable | $ | 45,852 | $ | 35,720 | ||||||||||||||
Debt Obligations | 294,717 | 171,434 | ||||||||||||||||
Other Borrowings | 6,308 | 4,387 | ||||||||||||||||
Other Liabilities | 165,431 | 139,637 | ||||||||||||||||
Total Liabilities | 512,308 | 351,178 | ||||||||||||||||
Stockholders' Equity | 427,079 | 374,571 | ||||||||||||||||
$ | 939,387 | $ | 725,749 | |||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
Adjusted Operating Income and Adjusted EBITDA Reconciliation (a) | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | ||||||||||||||
Consolidated | ||||||||||||||||||
Net Income Attributable to Kadant | $ | 8,749 | $ | 18,422 | $ | 52,068 | $ | 60,413 | ||||||||||
Net Income Attributable to Noncontrolling Interest | 136 | 146 | 496 | 633 | ||||||||||||||
Provision for Income Taxes | 4,048 | 2,907 | 16,358 | 18,482 | ||||||||||||||
Interest Expense, Net | 2,557 | 1,668 | 12,542 | 6,653 | ||||||||||||||
Other Expense, Net (b) | 6,063 | 1,681 | 6,359 | 2,417 | ||||||||||||||
Operating Income | 21,553 | 24,824 | 87,823 | 88,598 | ||||||||||||||
Impairment and Restructuring Costs (c) | 2,528 | — | 2,528 | 1,717 | ||||||||||||||
Acquisition Costs | — | 1,321 | 843 | 1,321 | ||||||||||||||
Acquired Backlog Amortization (d) | 20 | — | 1,323 | 252 | ||||||||||||||
Acquired Profit in Inventory (i) | — | — | 3,549 | — | ||||||||||||||
Adjusted Operating Income (a) | 24,101 | 26,145 | 96,066 | 91,888 | ||||||||||||||
Depreciation and Amortization | 8,066 | 5,829 | 31,067 | 23,316 | ||||||||||||||
Adjusted EBITDA (a) | $ | 32,167 | $ | 31,974 | $ | 127,133 | $ | 115,204 | ||||||||||
Adjusted EBITDA Margin (a,j) | 17.6 | % | 19.5 | % | 18.0 | % | 18.2 | % | ||||||||||
Papermaking Systems | ||||||||||||||||||
Operating Income | $ | 19,864 | $ | 22,052 | $ | 81,232 | $ | 83,454 | ||||||||||
Restructuring Costs (c) | — | — | — | 1,717 | ||||||||||||||
Adjusted Operating Income (a) | 19,864 | 22,052 | 81,232 | 85,171 | ||||||||||||||
Depreciation and Amortization | 3,405 | 3,154 | 13,010 | 12,561 | ||||||||||||||
Adjusted EBITDA (a) | $ | 23,269 | $ | 25,206 | $ | 94,242 | $ | 97,732 | ||||||||||
Wood Processing Systems | ||||||||||||||||||
Operating Income | $ | 5,308 | $ | 9,857 | $ | 28,166 | $ | 31,237 | ||||||||||
Impairment and Restructuring Costs (c) | 2,528 | — | 2,528 | — | ||||||||||||||
Acquired Backlog Amortization (d) | — | — | — | 252 | ||||||||||||||
Adjusted Operating Income (a) | 7,836 | 9,857 | 30,694 | 31,489 | ||||||||||||||
Depreciation and Amortization | 2,409 | 2,480 | 9,571 | 10,065 | ||||||||||||||
Adjusted EBITDA (a) | $ | 10,245 | $ | 12,337 | $ | 40,265 | $ | 41,554 | ||||||||||
Material Handling Systems | ||||||||||||||||||
Operating Income | $ | 2,255 | $ | — | $ | 3,132 | $ | — | ||||||||||
Acquisition Costs | — | — | 843 | — | ||||||||||||||
Acquired Backlog Amortization (d) | 20 | — | 1,323 | — | ||||||||||||||
Acquired Profit in Inventory (i) | — | — | 3,549 | — | ||||||||||||||
Adjusted Operating Income (a) | 2,275 | — | 8,847 | — | ||||||||||||||
Depreciation and Amortization | 2,044 | — | 7,695 | — | ||||||||||||||
Adjusted EBITDA (a) | $ | 4,319 | $ | — | $ | 16,542 | $ | — | ||||||||||
Corporate and Other | ||||||||||||||||||
Operating Loss | $ | (5,874 | ) | $ | (7,085 | ) | $ | (24,707 | ) | $ | (26,093 | ) | ||||||
Acquisition Costs | — | 1,321 | — | 1,321 | ||||||||||||||
Adjusted Operating Loss (a) | (5,874 | ) | (5,764 | ) | (24,707 | ) | (24,772 | ) | ||||||||||
Depreciation and Amortization | 208 | 195 | 791 | 690 | ||||||||||||||
Adjusted EBITDA (a) | $ | (5,666 | ) | $ | (5,569 | ) | $ | (23,916 | ) | $ | (24,082 | ) | ||||||
(a) | Represents a non-GAAP financial measure. | |||||||||||||||||
(b) | Represents a settlement loss of $5,887 ($6,352 after tax) in the fourth quarter of 2019 and a curtailment loss of $1,425 ($1,078 after tax) in the fourth quarter of 2018 included in Other Expense, Net associated with the termination of defined benefit plans at one of our U.S. operations. | |||||||||||||||||
(c) | Represents an intangible asset impairment charge of $2,336 ($1,765 after tax) and a restructuring charge of $192 ($140 after tax) in the fourth quarter of 2019 related to our Wood Processing Systems segment's timber-harvesting product line and a restructuring charge of $1,717 ($1,308 after tax) in 2018 related to our Papermaking Systems segment's stock-preparation product line. | |||||||||||||||||
(d) | Represents intangible amortization expense associated with acquired backlog. | |||||||||||||||||
(e) | The discrete tax benefit of $1,839, or $0.16 per diluted share, in the fourth quarter of 2019 and $3,338, or $0.29 per diluted share, for the full-year 2019 relates to the exercise of employee stock options. The impact of the tax benefit both for the fourth quarter of 2019, as well as the aggregate impact for the full year 2019, is significantly higher than the future tax benefit anticipated for the remaining outstanding stock options. As a result, our adjusted diluted EPS excludes this benefit for all periods in 2019, including recasting our adjusted diluted EPS for the second and third quarters of 2019. Adjusted diluted EPS in 2018 was not recast as the discrete tax benefit was not material. | |||||||||||||||||
In addition for full-year 2019, we recast our adjusted diluted EPS in the second quarter of 2019 to no longer exclude a tax benefit of $1,186, or $0.10 per diluted share, related to the repatriation of foreign earnings due to the recurring nature of this activity in 2019 and expected prospectively. | ||||||||||||||||||
The discrete tax benefit of $1,577, or $0.14 per diluted share, in the fourth quarter of 2018 and $3,249, or $0.29 per diluted share, for the full-year 2018 relates to adjustments to the provisional amounts recognized due to the U.S. tax legislation enacted in December 2017 and for the full-year 2018 also includes the reversal of tax reserves associated with uncertain tax positions. | ||||||||||||||||||
(f) | 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. | |||||||||||||||||
(g) | Geographic revenues are attributed to regions based on customer location. | |||||||||||||||||
(h) | Represents expense within cost of revenues associated with acquired profit in inventory. | |||||||||||||||||
(i) | Calculated as adjusted EBITDA divided by revenue in each period. |