January
4, 2008
VIA
EDGAR TRANSMISSION
Ms.
Angela J. Crane
Securities
and Exchange Commission
Division
of Corporation Finance
450
Fifth
Street, N.W.
Washington,
D.C. 20549-0306
Re: Kadant
Inc.
Form
10-K for the fiscal year ended
December 30, 2006
Filed
March 13, 2007
File
No.
1-11406
Dear
Ms.
Crane:
On
behalf
of Kadant Inc., we hereby respond to the comments set forth in your letter
dated
December 13, 2007. The comments in the letter are reproduced below, together
with our responses thereto.
Form
10-K for the year ended December 30, 2006
Consolidated
Statement of Cash Flows, page F-6
1.
Comment:
It
appears that your presentation of cash flows related to discontinued operations
is inconsistent with SFAS 95 because it appears that your use of the indirect
method of determining cash flows from operating activities begins with net
loss
from continuing operations rather than net loss as required by SFAS 95,
paragraph 28. Please revise future filings as necessary or tell us why your
presentation complies with GAAP.
Response:
We
respectfully submit that the presentation of cash flows related to discontinued
operations is consistent with SFAS 95 as our use of the indirect method of
determining cash flows from operating activities in the statement of cash flows
does begin with net income as required by SFAS 95, paragraph 28. Net income
per
the statement of income included in our 2006 Form 10-K was $17,097,000,
$6,877,000 and $654,000 in 2006, 2005 and 2004, respectively, which is presented
as the first line of our statement of cash flows. For convenience, an excerpt
of
the first few lines of the statement of cash flows included in our 2006 Form
10-K is provided below:
Consolidated
Statement of Cash Flows
|
(In
thousands)
|
2006
|
2005
|
|
2004
|
||||||||
|
Operating
Activities
|
|
|
|
|||||||||
|
Net
income
|
$ |
17,097
|
$ |
6,877
|
$ |
654
|
||||||
|
Loss
from discontinued operation (Note 9)
|
1,184
|
2,988
|
5,099
|
|||||||||
|
Income
from continuing operations
|
18,281
|
9,865
|
5,753
|
|||||||||
1
Note
2. Acquisitions, page F-17
2. Comment:
We
note
the disclosure on page F-21 that the fair value of the intangible assets
acquired as part of your acquisition of Kadant Johnson were valued by an
independent valuation consultant. While in future filings management may elect
to take full responsibility, if you choose to continue to refer to the expert
in
any capacity, please revise future filings, beginning with your next 10-Q,
to
name the independent valuation firm. In addition, please note that if you intend
to incorporate your Form 10-K by reference into any registration statement,
you
will be required to include the consent of the independent valuation firm as
an
exhibit to the registration statement.
Response:
We
have
noted your comment and will revise future filings accordingly by deleting the
reference to the independent valuation consultant.
Acknowledgement
of the Company
We
acknowledge that:
|
·
|
the
Company is responsible for the adequacy and accuracy of the disclosures
in
the filings;
|
|
·
|
staff
comments or changes to disclosure in response to staff comments do
not
foreclose the Commission from taking any action with respect to the
filing; and
|
|
·
|
the
Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
|
Please
do
not hesitate to contact me at 978-776-2012 if you have any questions or comments
regarding this response.
Very
truly yours,
/s/
Thomas M. O’Brien
Thomas
M.
O’Brien
Executive
Vice President and Chief Financial Officer
2