0000886346-23-000120 | 10-Q | XBRL Viewer

Business Segment Information (Tables)

6 Months Ended

Jul. 01, 2023

The following table presents financial information for the Company's reportable operating segments:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Revenue
Flow Control	$	95,729	$	85,220	$	185,250	$	171,046
Industrial Processing	89,967		84,402		173,509		177,487
Material Handling	59,357		52,027		116,052		99,596
	$	245,053	$	221,649	$	474,811	$	448,129

Income Before Provision for Income Taxes
Flow Control	$	25,821	$	22,707	$	50,010	$	44,432
Industrial Processing (a)	16,978		15,285		32,945		53,444
Material Handling (b)	10,374		8,701		19,661		14,545
Corporate (c)	(10,095)		(9,225)		(19,424)		(18,980)
Total operating income	43,078		37,468		83,192		93,441
Interest expense, net (d)	(1,929)		(1,089)		(4,000)		(2,221)
Other expense, net (d)	(21)		(19)		(42)		(41)
	$	41,128	$	36,360	$	79,150	$	91,179

Capital Expenditures
Flow Control	$	1,290	$	1,031	$	2,694	$	1,556
Industrial Processing (e)	6,129		5,073		8,708		7,025
Material Handling	1,358		843		1,820		1,227
Corporate	—		—		24		7
	$	8,777	$	6,947	$	13,246	$	9,815

(a)Includes other costs of $74,000 in the three and six months ended July 1, 2023 and $182,000 in the six months ended July 2, 2022. Includes a gain on the sale of a facility of $20,190,000 (see Note 2, Gain on Sale and Other Costs, Net) and non-cash charges for the write-off of an indemnification asset of $575,000 in the six months ended July 2. 2022.

(b)Includes a non-cash charge for the write-off of an indemnification asset of $177,000 in the three and six months ended July 1, 2023 and acquisition-related expenses of $717,000 in the six months ended July 2, 2022.

(c)Represents general and administrative expenses.

(d)The Company does not allocate interest and other expense, net to its segments.

(e)Includes capital expenditures of $3,108,000 and $3,287,000 in the three and six months ended July 1, 2023, respectively, and $3,128,000 and $3,242,000 in the three and six months ended July 2, 2022, respectively, related to the China Transaction. See Note 2, Gain on Sale and Other Costs, Net.

Short- and Long-Term Obligations

6 Months Ended

Jul. 01, 2023

Debt Disclosure [Abstract]

Short- and Long-Term Obligations

Short- and long-term obligations are as follows:


	July 1, 2023		December 31, 2022
(In thousands)
Revolving Credit Facility, due 2027	$	142,562	$	186,131
Senior Promissory Notes, due 2023 to 2028	10,000		10,000
Finance Leases, due 2023 to 2026	1,757		1,940
Other Borrowings, due 2023 to 2028	2,554		3,090
Total	156,873		201,161
Less: Short-term Obligations and Current Maturities of Long-Term Obligations	(3,464)		(3,821)
Long-Term Obligations	$	153,409	$	197,340

See Note 9, Fair Value Measurements and Fair Value of Financial Instruments, for the fair value information related to the Company's long-term obligations.

Revolving Credit Facility

The Company's unsecured multi-currency revolving credit facility, originally entered into on March 1, 2017 (as amended and restated to date, the Credit Agreement) matures on November 30, 2027 and has a borrowing capacity of $400,000,000, in addition to an uncommitted, unsecured incremental borrowing facility of $200,000,000. Interest on

borrowings outstanding accrues and is payable in arrears calculated at one of the following rates selected by the Company: (i) the Base Rate, as defined, plus an applicable margin of 0% to 1.25%, or (ii) Eurocurrency Rate, Term SOFR (plus a 10 basis point credit spread adjustment), CDOR Rate, and RFR, as applicable and defined, plus an applicable margin of 1.0% to 2.25%. The margin is determined based upon the ratio of the Company's total debt, net of unrestricted cash up to $50,000,000, to earnings before interest, taxes, depreciation, and amortization as defined in the Credit Agreement. Additionally, the Credit Agreement requires the payment of a commitment fee payable in arrears on the available borrowing capacity under the Credit Agreement, which ranges from 0.125% to 0.350%.

Obligations under the Credit Agreement may be accelerated upon the occurrence of an event of default, which includes customary events of default under such financing arrangements. In addition, the Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to maintain a maximum consolidated leverage ratio of 3.75 to 1.00, or, if the Company elects, for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, 4.25 to 1.00, and limitations on making certain restricted payments (including dividends and stock repurchases).

Loans under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company.

As of July 1, 2023, the outstanding balance under the Credit Agreement was $142,562,000, which included $74,562,000 of euro-denominated borrowings. The Company had $257,267,000 of borrowing capacity available as of July 1, 2023, which was calculated by translating its foreign-denominated borrowings using the administrative agent's borrowing date foreign exchange rates, in addition to the $200,000,000 uncommitted, unsecured incremental borrowing facility.

The weighted average interest rate for the outstanding balance under the Credit Agreement was 5.27% as of July 1, 2023 and 4.33% as of year-end 2022.

See Note 8, Derivatives, under the heading Interest Rate Swap Agreement, for information relating to the swap agreement, which matured on June 30, 2023.

Senior Promissory Notes

In 2018, the Company entered into an uncommitted, unsecured Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement). Simultaneous with the execution of the Note Purchase Agreement, the Company issued senior promissory notes (Initial Notes) in an aggregate principal amount of $10,000,000, with a per annum interest rate of 4.90% payable semiannually, and a maturity date of December 14, 2028. The Company is required to prepay a portion of the principal of the Initial Notes beginning on December 14, 2023 and each year thereafter, and may optionally prepay the principal on the Initial Notes, together with any prepayment premium, at any time in accordance with the Note Purchase Agreement. The obligations of the Initial Notes may be accelerated upon an event of default as defined in the Note Purchase Agreement, which includes customary events of default under such financing arrangements.

The Initial Notes are pari passu with the Company’s indebtedness under the Credit Agreement, and any other senior debt of the Company, subject to certain specified exceptions, and participate in a sharing agreement with respect to the obligations of the Company and its subsidiaries under the Credit Agreement. The Senior Promissory Notes are guaranteed by certain of the Company’s domestic subsidiaries.

Debt Compliance

As of July 1, 2023, the Company was in compliance with the covenants related to its debt obligations.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Operating Activities
Net Income Attributable to Kadant	$ 57,809	$ 67,362
Net income attributable to noncontrolling interest	396	488
Net Income	58,205	67,850
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,683	17,931
Stock-based compensation expense	4,886	4,536
Gain on sale of assets (Note 2)	0	(20,190)
Other items, net	1,584	7,579
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(4,002)	(12,336)
Contract assets	2,790	(3,694)
Inventories	(10,808)	(26,816)
Other assets	211	3,589
Accounts payable	(9,364)	(287)
Customer deposits	464	9,329
Other liabilities	(1,305)	(4,926)
Net cash provided by operating activities	59,344	42,565
Investing Activities
Acquisitions, net of cash acquired	277	(62)
Purchases of property, plant, and equipment	(13,246)	(9,815)
Proceeds from sale of property, plant, and equipment	97	1,942
Other investing activities	(30)	41
Net cash used in investing activities	(12,902)	(7,894)
Financing Activities
Proceeds from issuance of short- and long-term obligations	0	16,516
Repayment of short- and long-term obligations	(46,143)	(51,379)
Tax withholding payments related to stock-based compensation	(3,915)	(4,589)
Dividends paid	(6,430)	(5,936)
Other financing activities	(63)	0
Net cash used in financing activities	(56,551)	(45,388)
Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	579	(5,418)
Decrease in Cash, Cash Equivalents, and Restricted Cash	(9,530)	(16,135)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	79,725	94,161
Cash, Cash Equivalents, and Restricted Cash at End of Period	$ 70,195	$ 78,026

Business Segment Information (Details) $ in Thousands	3 Months Ended			6 Months Ended
Business Segment Information (Details) $ in Thousands	Jul. 01, 2023 USD ($)	Jul. 02, 2022 USD ($)	Apr. 02, 2022 USD ($)	Jul. 01, 2023 USD ($) segment	Jul. 02, 2022 USD ($)
Segment Reporting [Abstract]
Number of reportable operating segments \| segment				3
Revenue
Revenue	$ 245,053	$ 221,649		$ 474,811	$ 448,129
Income Before Provision for Income Taxes
Total operating income	43,078	37,468		83,192	93,441
Interest expense, net	(1,929)	(1,089)		(4,000)	(2,221)
Other expense, net	(21)	(19)		(42)	(41)
Income Before Provision for Income Taxes	41,128	36,360		79,150	91,179
Capital Expenditures
Capital expenditures	8,777	6,947		13,246	9,815
Gain on the sale of assets				0	20,190
Industrial Processing
Capital Expenditures
Other costs, machinery and equipment write-down	74		$ 182	74	182
Gain on the sale of assets					20,190
Write-off of indemnification asset					575
Industrial Processing \| CHINA
Capital Expenditures
Capital expenditures	3,108	3,128		3,287	3,242
Material Handling
Capital Expenditures
Write-off of indemnification asset	177			177
Acquisition related (income) expense					717
Operating Segment \| Flow Control
Revenue
Revenue	95,729	85,220		185,250	171,046
Income Before Provision for Income Taxes
Total operating income	25,821	22,707		50,010	44,432
Capital Expenditures
Capital expenditures	1,290	1,031		2,694	1,556
Operating Segment \| Industrial Processing
Revenue
Revenue	89,967	84,402		173,509	177,487
Income Before Provision for Income Taxes
Total operating income	16,978	15,285		32,945	53,444
Capital Expenditures
Capital expenditures	6,129	5,073		8,708	7,025
Operating Segment \| Material Handling
Revenue
Revenue	59,357	52,027		116,052	99,596
Income Before Provision for Income Taxes
Total operating income	10,374	8,701		19,661	14,545
Capital Expenditures
Capital expenditures	1,358	843		1,820	1,227
Corporate
Income Before Provision for Income Taxes
Total operating income	(10,095)	(9,225)		(19,424)	(18,980)
Capital Expenditures
Capital expenditures	$ 0	$ 0		$ 24	$ 7

Earnings per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Income Amounts Attributable to Parent, Disclosures [Abstract]
Net Income Attributable to Kadant	$ 29,734	$ 26,170	$ 57,809	$ 67,362
Basic Weighted Average Shares	11,704	11,660	11,693	11,645
Effect of Restricted Stock Units and Employee Stock Purchase Plan Shares	19	29	16	27
Diluted Weighted Average Shares	11,723	11,689	11,709	11,672
Basic Earnings per Share (in dollars per share)	$ 2.54	$ 2.24	$ 4.94	$ 5.78
Diluted Earnings per Share (in dollars per share)	$ 2.54	$ 2.24	$ 4.94	$ 5.77

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023 USD ($)	Jul. 02, 2022 USD ($)	Jul. 01, 2023 USD ($) segment	Jul. 02, 2022 USD ($)	Dec. 31, 2022 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Number of reportable operating segments \| segment			3
Bank guarantees, expiration period (in months)			12 months
Gross intangible assets	$ 342,742		$ 342,742		$ 343,130
Accumulated amortization	165,300		165,300		155,834
Revenue recognized	20,212	$ 13,424	47,228	$ 47,901
Revenue, remaining performance obligation, amount	54,925		$ 54,925
Banker's acceptance drafts, maturity period (in months)			6 months
Banker's acceptance drafts	$ 3,550		$ 3,550		$ 5,729
Certain Capital Contracts
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Lead time for for certain capital contracts (up to) (in months)			24 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percent	75.00%		75.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months		12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-30
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percent	25.00%		25.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period

Nature of Operations and Summary of Significant Accounting Policies - Warranty Obligations (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Changes in the carrying amount of accrued warranty costs [Roll Forward]
Balance at Beginning of Year	$ 7,283	$ 7,298
Provision charged to expense	3,154	2,657
Usage	(2,335)	(2,548)
Currency translation	97	(429)
Balance at End of Period	$ 8,199	$ 6,978

Accumulated Other Comprehensive Items

6 Months Ended

Jul. 01, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Items

Comprehensive income combines net income and other comprehensive items, which represent certain amounts that are reported as components of stockholders' equity in the accompanying condensed consolidated balance sheet.

Changes in each component of accumulated other comprehensive items (AOCI), net of tax, are as follows:


(In thousands)	Foreign Currency Translation Adjustment		Pension and Other Post-Retirement Benefit Liability Adjustments		Deferred Gain (Loss) on Cash Flow Hedges		Total
Balance at December 31, 2022	$	(54,488)	$	(148)	$	58	$	(54,578)
Other comprehensive items before reclassifications	5,137		(13)		1		5,125
Reclassifications from AOCI	—		5		(99)		(94)
Net current period other comprehensive items	5,137		(8)		(98)		5,031
Balance at July 1, 2023	$	(49,351)	$	(156)	$	(40)	$	(49,547)

Amounts reclassified from AOCI are as follows:


	Three Months Ended				Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		Statement of Income Line Item
Retirement Benefit Plans
Recognized net actuarial loss	$	(1)	$	(6)	$	(2)	$	(13)	Other expense, net
Amortization of prior service cost	(3)		(2)		(5)		(5)		Other expense, net
Total expense before income taxes	(4)		(8)		(7)		(18)
Income tax benefit	1		2		2		5		Provision for income taxes
	(3)		(6)		(5)		(13)
Cash Flow Hedges (a)
Interest rate swap agreement	76		(83)		136		(194)		Interest expense

Income tax (provision) benefit	(23)		20		(37)		47		Provision for income taxes
	53		(63)		99		(147)
Total Reclassifications	$	50	$	(69)	$	94	$	(160)

(a)See Note 8, Derivatives, for additional information.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jul. 01, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Gain on Sale and Other Costs, Net

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

Gain on Sale and Other Costs, Net

Gain on Sale of Assets

The Company entered into several agreements with the local government in China to sell the existing manufacturing building and land use rights of one of its subsidiaries in China for $25,159,000 and relocate to a new facility (the China Transaction). The agreements became effective in the first quarter of 2022 after a 31% down payment was received, including 25% in 2021 and 6% in the first quarter of 2022, and a land use right in a new location was secured. As a result, the Company recognized a gain on the China Transaction of $20,190,000, or $15,143,000 net of deferred taxes of $5,047,000, in the first quarter of 2022. A receivable of $16,082,000 was recognized for the present value of the remaining amount of the sale proceeds, which is due the earlier of when the government sells the property or within two years from the effective date of the agreements. The subsidiary, which is part of the Industrial Processing segment, will continue to occupy its current facility until construction of its new facility is complete, which is expected during the second half of 2023.

A summary of the change in the outstanding receivable on the China Transaction is as follows:


(In thousands)	July 1, 2023
Balance at Inception	$	17,294
Present value discount	(1,212)
Receivable recorded, net	16,082
Accretion of interest income	422
Currency translation	(1,323)
Balance at December 31, 2022 (included in other assets)	15,181
Accretion of interest income	278
Currency translation	(707)
Balance at July 1, 2023 (included in other current assets)	$	14,752

Other Costs

Other costs of $74,000 in the second quarter of 2023 and $182,000 in the first quarter of 2022 consisted of charges in the Company's Industrial Processing segment associated with the China Transaction for the write-down of certain fixed assets that will not be moved to the new manufacturing facility in China and facility moving costs.

Accumulated Other Comprehensive Items - Reclassification Out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Other expense, net	$ (21)	$ (19)	$ (42)	$ (41)
Total expense before income taxes	41,128	36,360	79,150	91,179
Income tax (provision) benefit	(11,182)	(9,951)	(20,945)	(23,329)
Interest expense	(2,245)	(1,366)	(4,615)	(2,600)
Net Income	29,946	26,409	58,205	67,850
Reclassification out of Accumulated Other Comprehensive Items
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Net Income	50	(69)	94	(160)
Reclassification out of Accumulated Other Comprehensive Items \| Retirement Benefit Plans
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Total expense before income taxes	(4)	(8)	(7)	(18)
Income tax (provision) benefit	1	2	2	5
Net Income	(3)	(6)	(5)	(13)
Reclassification out of Accumulated Other Comprehensive Items \| Recognized net actuarial loss
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Other expense, net	(1)	(6)	(2)	(13)
Reclassification out of Accumulated Other Comprehensive Items \| Amortization of prior service cost
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Other expense, net	(3)	(2)	(5)	(5)
Reclassification out of Accumulated Other Comprehensive Items \| Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Income tax (provision) benefit	(23)	20	(37)	47
Net Income	53	(63)	99	(147)
Reclassification out of Accumulated Other Comprehensive Items \| Cash Flow Hedges \| Interest rate swap agreement
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items]
Interest expense	$ 76	$ (83)	$ 136	$ (194)

Short- and Long-Term Obligations - Narrative (Details) - USD ($)	6 Months Ended
	Jul. 01, 2023	Dec. 31, 2022
Revolving Credit Facility, due 2027
Debt Instrument [Line Items]
Long-term debt	$ 142,562,000	$ 186,131,000
Weighted average interest rate for revolving credit facility (as a percentage)	5.27%	4.33%
Revolving Credit Facility, due 2027 \| Credit Agreement
Debt Instrument [Line Items]
Borrowing capacity available under committed portion	$ 400,000,000
Additional borrowing capacity under uncommitted portion	200,000,000
Maximum amount of unrestricted U.S. cash	$ 50,000,000
Maximum consolidated leverage ratio	3.75
Maximum consolidated leverage ratio upon material acquisition	4.25
Long-term debt	$ 142,562,000
Remaining borrowing capacity	257,267,000
Revolving Credit Facility, due 2027 \| Euro-Denominated Borrowing
Debt Instrument [Line Items]
Long-term debt	$ 74,562,000
Revolving Credit Facility, due 2027 \| Minimum \| Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Commitment fee percentage	0.125%
Revolving Credit Facility, due 2027 \| Maximum \| Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Commitment fee percentage	0.35%
Revolving Credit Facility, due 2027 \| Base Rate \| Minimum \| Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate (as a percentage)	0.00%
Revolving Credit Facility, due 2027 \| Base Rate \| Maximum \| Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate (as a percentage)	1.25%
Revolving Credit Facility, due 2027 \| Eurocurrency Rate, Term SOFR, CDOR Rate, And RFR \| Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate (as a percentage)	0.10%
Revolving Credit Facility, due 2027 \| Eurocurrency Rate, Term SOFR, CDOR Rate, And RFR \| Minimum \| Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate (as a percentage)	1.00%
Revolving Credit Facility, due 2027 \| Eurocurrency Rate, Term SOFR, CDOR Rate, And RFR \| Maximum \| Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate (as a percentage)	2.25%
Senior Promissory Notes, due 2023 to 2028
Debt Instrument [Line Items]
Long-term debt	$ 10,000,000	$ 10,000,000
Senior Promissory Notes, due 2023 to 2028 \| Note Purchase Agreement
Debt Instrument [Line Items]
Principal amount	$ 10,000,000
Fixed interest rate	4.90%

Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Jul. 01, 2023

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Kadant Inc. was incorporated in Delaware in November 1991 and trades on the New York Stock Exchange under the ticker symbol "KAI."

Kadant Inc. (together with its subsidiaries, the Company) is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing. Its products and services play an integral role in enhancing efficiency, optimizing energy utilization, and maximizing productivity in process industries while helping customers advance their sustainability initiatives with products that reduce waste or generate more yield with fewer inputs, particularly fiber, energy, and water. Producing more while consuming less is a core aspect of Sustainable Industrial Processing and a major element of the strategic focus of the Company's three reportable operating segments: Flow Control, Industrial Processing, and Material Handling.

Interim Financial Statements

The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited, and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at July 1, 2023, its results of operations, comprehensive income, and stockholders' equity for the three- and six-month periods ended July 1, 2023 and July 2, 2022 and its cash flows for the six-month periods ended July 1, 2023 and July 2, 2023. Interim results are not necessarily indicative of results for a full year or for any other interim period.

The condensed consolidated balance sheet presented as of December 31, 2022 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the Annual Report). The condensed consolidated financial statements and related notes are presented as permitted by the rules and regulations of the Securities and Exchange Commission (SEC) for Form 10-Q and do not contain certain information included in the annual consolidated financial statements and related notes of the Company. The condensed consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report.

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements.

Note 1 to the consolidated financial statements in the Annual Report describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the six months ended July 1, 2023.

Supplemental Cash Flow Information


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Cash Paid for Interest	$	4,443	$	2,408
Cash Paid for Income Taxes, Net of Refunds	$	23,792	$	19,167

Non-Cash Investing Activities:
Reduction in fair value of assets acquired	$	(270)	$	(1,568)
Cash received (paid) for acquired businesses	277		(62)
Increase (decrease) in liabilities assumed	$	7	$	(1,630)

Purchases of property, plant, and equipment in accounts payable	$	1,134	$	26


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Non-Cash Financing Activities:
Issuance of Company common stock upon vesting of restricted stock units	$	4,717	$	5,040
Dividends declared but unpaid	$	3,395	$	3,033

Restricted Cash

The Company's restricted cash generally serves as collateral for bank guarantees associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business and for certain banker's acceptance drafts issued to vendors. The majority of the bank guarantees will expire over the next twelve months.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows:


(In thousands)	July 1, 2023		July 2, 2022		December 31, 2022		January 1, 2022
Cash and cash equivalents	$	66,725	$	76,540	$	76,371	$	91,186
Restricted cash	3,470		1,486		3,354		2,975
Total Cash, Cash Equivalents, and Restricted Cash	$	70,195	$	78,026	$	79,725	$	94,161

Inventories

The components of inventories are as follows:


	July 1, 2023		December 31, 2022
(In thousands)
Raw Materials	$	73,075	$	71,040
Work in Process	45,428		38,612
Finished Goods	57,877		54,020
	$	176,380	$	163,672

Intangible Assets, Net

Gross intangible assets were $342,742,000 at July 1, 2023 and $343,130,000 at December 31, 2022. Intangible assets are recorded at fair value at the date of acquisition. Subsequent impairment charges are reflected as a reduction in the gross balance, as applicable. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset. Accumulated amortization was $165,300,000 at July 1, 2023 and $155,834,000 at December 31, 2022.

Goodwill

The changes in the carrying amount of goodwill by segment are as follows:


(In thousands)	Flow Control		Industrial Processing		Material Handling		Total
Balance at December 31, 2022
Gross balance	$	118,309	$	209,919	$	142,765	$	470,993
Accumulated impairment losses	—		(85,538)		—		(85,538)
Net balance	118,309		124,381		142,765		385,455
2023 Activity
Acquisition adjustments	—		—		4		4
Currency translation	1,169		1,428		746		3,343
Total 2023 activity	1,169		1,428		750		3,347
Balance at July 1, 2023
Gross balance	119,478		211,347		143,515		474,340
Accumulated impairment losses	—		(85,538)		—		(85,538)
Net balance	$	119,478	$	125,809	$	143,515	$	388,802

Warranty Obligations

The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications during a defined period of time. The Company provides for the estimated cost of product warranties at the time of sale based on historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate projected warranty costs may vary from historical patterns. The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications.

The Company's liability for warranties is included in other current liabilities in the accompanying condensed consolidated balance sheet. The changes in the carrying amount of product warranty obligations are as follows:


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Balance at Beginning of Year	$	7,283	$	7,298
Provision charged to expense	3,154		2,657
Usage	(2,335)		(2,548)

Currency translation	97		(429)
Balance at End of Period	$	8,199	$	6,978

Revenue Recognition

Most of the Company’s revenue relates to products and services that require minimal customization and is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. The remaining portion of the Company’s revenue is recognized over time based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Most of the contracts recognized on an over time basis are for large capital equipment projects. These projects are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation.

The following table presents revenue by revenue recognition method:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Point in Time	$	222,235	$	198,249	$	426,474	$	401,560
Over Time	22,818		23,400		48,337		46,569
	$	245,053	$	221,649	$	474,811	$	448,129

The Company disaggregates its revenue from contracts with customers by reportable operating segment, product type and geography as this best depicts how its revenue is affected by economic factors.

The following table presents the disaggregation of revenue by product type and geography:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Revenue by Product Type:
Parts and consumables	$	153,082	$	145,680	$	304,645	$	291,924
Capital	91,971		75,969		170,166		156,205
	$	245,053	$	221,649	$	474,811	$	448,129
Revenue by Geography (based on customer location) (a):
North America	$	135,385	$	124,080	267,838		248,416
Europe	60,625		58,489		114,782		116,855
Asia	32,867		28,976		60,637		60,963
Rest of world	16,176		10,104		31,554		21,895
	$	245,053	$	221,649	$	474,811	$	448,129

(a) The components of revenue by geography in the three and six months ended July 2, 2022 have been recast to conform to the current period presentation.

See Note 10, Business Segment Information, for information on the disaggregation of revenue by reportable operating segment.

The following table presents contract balances from contracts with customers:


	July 1, 2023		December 31, 2022
(In thousands)
Contract Assets	$	11,986	$	14,898
Contract Liabilities	$	87,780	$	82,413

Contract assets represent unbilled revenue associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of short- and long-term customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities, and long-term customer deposits are included in other long-term liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advance payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer.

The Company recognized revenue of $20,212,000 in the second quarter of 2023 and $13,424,000 in the second quarter of 2022, and $47,228,000 in the first six months of 2023 and $47,901,000 in the first six months of 2022 that was included in the contract liabilities balance at the beginning of 2023 and 2022, respectively. The majority of the Company's contracts for capital equipment have an original expected duration of one year or less. Certain capital equipment contracts require longer lead times and could take up to 24 months to complete. For contracts with an original expected duration of over one year, the aggregate amount of the transaction price allocated to the remaining unsatisfied or partially unsatisfied performance obligations

was $54,925,000 as of July 1, 2023. The Company will recognize revenue for these performance obligations as they are satisfied, approximately 75% of which is expected to occur within the next twelve months and the remaining 25% after the second quarter of 2024.

Banker's Acceptance Drafts Included in Accounts Receivable

The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are non-interest bearing obligations of the issuing bank and generally mature within six months of the origination date. The Company's Chinese subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $3,550,000 at July 1, 2023 and $5,729,000 at December 31, 2022, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date.

Derivatives - Activity in Accumulated Other Comprehensive Items (OCI) (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2023 USD ($)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 655,571
Ending balance	713,025
Cash Flow Hedges
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	58
Gain reclassified to earnings	(99)
Gain recognized in AOCI	1
Ending balance	(40)
Cash Flow Hedges \| Interest Rate Swap Agreement
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	99
Gain reclassified to earnings	(99)
Gain recognized in AOCI	0
Ending balance	0
Cash Flow Hedges \| Forward Currency-Exchange Contract
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(41)
Gain reclassified to earnings	0
Gain recognized in AOCI	1
Ending balance	$ (40)

- Definition

Amount of equity (deficit) attributable to parent and noncontrolling interest. Excludes temporary equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Derivatives (Tables)

6 Months Ended

Jul. 01, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The following table summarizes the fair value of derivative instruments in the accompanying condensed consolidated balance sheet:


		July 1, 2023				December 31, 2022
	Balance Sheet Location	Asset (Liability) (a)		Notional Amount (b)		Asset (Liability) (a)		Notional Amount
(In thousands)
Derivatives Designated as Hedging Instruments:
Derivative in an Asset Position:
2018 Swap Agreement	Other Current Assets	$	—	$	—	$	131	$	15,000
Derivatives in a Liability Position:
Forward currency-exchange contract	Other Current Liabilities	$	(52)	$	430	$	(54)	$	430

Derivatives Not Designated as Hedging Instruments:
Derivatives in an Asset Position:
Forward currency-exchange contracts	Other Current Assets	$	—	$	—	$	15	$	647
Derivatives in a Liability Position:
Forward currency-exchange contract	Other Current Liabilities	$	(1)	$	100	$	—	$	—

(a) See Note 9, Fair Value Measurements and Fair Value of Financial Instruments, for the fair value measurements relating to these financial instruments.

(b) The 2023 notional amounts are indicative of the level of the Company's recurring derivative activity.

Activity in Accumulated Other Comprehensive Items (AOCI)

The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the six months ended July 1, 2023:


(In thousands)	Interest Rate Swap Agreement		Forward Currency-Exchange Contract		Total
Unrealized Gain (Loss), Net of Tax, at December 31, 2022	$	99	$	(41)	$	58
Gain reclassified to earnings (a)	(99)		—		(99)
Gain recognized in AOCI	—		1		1
Unrealized Loss, Net of Tax, at July 1, 2023	$	—	$	(40)	$	(40)

(a) See Note 7, Accumulated Other Comprehensive Items, for the income statement classification.

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Capital in Excess of Par Value	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Items	Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)					3,003,419
Common stock, beginning balance (in shares) at Jan. 01, 2022		14,624,159
Beginning balance at Jan. 01, 2022	$ 565,616	$ 146	$ 115,888	$ 551,848	$ (73,596)	$ (30,350)	$ 1,680
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	67,850			67,362			488
Dividend declared – Common Stock	(6,064)			(6,064)
Activity under stock plans (in shares)					(41,233)
Activity under stock plans	(53)		(1,063)		$ 1,010
Other comprehensive items	(21,185)					(21,029)	(156)
Common stock, ending balance (in shares) at Jul. 02, 2022		14,624,159
Treasury stock, ending balance (in shares) at Jul. 02, 2022					2,962,186
Ending balance at Jul. 02, 2022	606,164	$ 146	114,825	613,146	$ (72,586)	(51,379)	2,012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)					2,964,786
Common stock, beginning balance (in shares) at Apr. 02, 2022		14,624,159
Beginning balance at Apr. 02, 2022	599,738	$ 146	112,651	590,009	$ (72,649)	(32,302)	1,883
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	26,409			26,170			239
Dividend declared – Common Stock	(3,033)			(3,033)
Activity under stock plans (in shares)					(2,600)
Activity under stock plans	2,237		2,174		$ 63
Other comprehensive items	(19,187)					(19,077)	(110)
Common stock, ending balance (in shares) at Jul. 02, 2022		14,624,159
Treasury stock, ending balance (in shares) at Jul. 02, 2022					2,962,186
Ending balance at Jul. 02, 2022	$ 606,164	$ 146	114,825	613,146	$ (72,586)	(51,379)	2,012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)					2,962,186
Treasury stock (in shares)	2,949,997				2,949,997
Common stock, beginning balance (in shares) at Dec. 31, 2022		14,624,159
Beginning balance at Dec. 31, 2022	$ 655,571	$ 146	119,924	660,644	$ (72,287)	(54,578)	1,722
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	58,205			57,809			396
Dividend declared – Common Stock	(6,789)			(6,789)
Activity under stock plans (in shares)					(31,736)
Activity under stock plans	971		193		$ 778
Other comprehensive items	$ 5,067					5,031	36
Common stock, ending balance (in shares) at Jul. 01, 2023		14,624,159
Treasury stock, ending balance (in shares) at Jul. 01, 2023	2,918,261				2,918,261
Ending balance at Jul. 01, 2023	$ 713,025	$ 146	120,117	711,664	$ (71,509)	(49,547)	2,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)					2,920,678
Common stock, beginning balance (in shares) at Apr. 01, 2023		14,624,159
Beginning balance at Apr. 01, 2023	684,305	$ 146	117,547	685,325	$ (71,569)	(49,085)	1,941
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	29,946			29,734			212
Dividend declared – Common Stock	(3,395)			(3,395)
Activity under stock plans (in shares)					(2,417)
Activity under stock plans	2,630		2,570		$ 60
Other comprehensive items	$ (461)					(462)	1
Common stock, ending balance (in shares) at Jul. 01, 2023		14,624,159
Treasury stock, ending balance (in shares) at Jul. 01, 2023	2,918,261				2,918,261
Ending balance at Jul. 01, 2023	$ 713,025	$ 146	$ 120,117	$ 711,664	$ (71,509)	$ (49,547)	$ 2,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)	2,918,261				2,918,261

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

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- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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Amount of equity (deficit) attributable to parent and noncontrolling interest. Excludes temporary equity.

+ References

+ Details

Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Other Comprehensive Items:
Post-retirement liability adjustments, net, tax	$ (1)	$ 11	$ (3)	$ 13
Deferred (loss) gain on cash flow hedges, tax	$ (18)	$ 46	$ (32)	$ 114

Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Designated as Hedging Instrument \| 2018 Swap Agreement
Derivative in an Asset Position:
Derivative asset, fair value, gross asset	$ 0	$ 131
Derivative asset, notional amount	0	15,000
Designated as Hedging Instrument \| Forward currency-exchange contract
Derivatives in a Liability Position:
Derivative liability, fair value, gross liability	(52)	(54)
Derivative liability, notional amount	430	430
Not Designated as Hedging Instrument \| Forward currency-exchange contract
Derivative in an Asset Position:
Derivative asset, fair value, gross asset	0	15
Derivative asset, notional amount	0	647
Derivatives in a Liability Position:
Derivative liability, fair value, gross liability	(1)	0
Derivative liability, notional amount	$ 100	$ 0

Fair Value Measurements and Fair Value of Financial Instruments

6 Months Ended

Jul. 01, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments

Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

•Level 3—Unobservable inputs based on the Company's own assumptions.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:


	Fair Value as of July 1, 2023
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	4,541	$	—	$	—	$	4,541

Banker's acceptance drafts (a)	$	—	$	3,550	$	—	$	3,550

Liabilities:

Forward currency-exchange contracts	$	—	$	53	$	—	$	53


	Fair Value as of December 31, 2022
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	8,351	$	—	$	—	$	8,351
Banker's acceptance drafts (a)	$	—	$	5,729	$	—	$	5,729
2018 Swap Agreement (b)	$	—	$	131	$	—	$	131
Forward currency-exchange contracts	$	—	$	15	$	—	$	15
Liabilities:
Forward currency-exchange contract	$	—	$	54	$	—	$	54

(a)Included in accounts receivable in the accompanying condensed consolidated balance sheet.

(b)The 2018 Swap Agreement matured on June 30, 2023.

The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during the first six months of 2023. Banker's acceptance drafts are carried at face value, which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair value of the 2018 Swap Agreement was based on USD LIBOR yield curves at the reporting date. The forward currency-exchange contracts and the 2018 Swap Agreement prior to its maturity were hedges of either recorded assets or liabilities or anticipated transactions and represent or represented the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.

The carrying value and fair value of debt obligations, excluding lease obligations, are as follows:


	July 1, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
(In thousands)
Debt Obligations:
Revolving credit facility	$	142,562	$	142,562	$	186,131	$	186,131
Senior promissory notes	10,000		9,721		10,000		9,773
Other	2,554		2,554		3,090		3,090
	$	155,116	$	154,837	$	199,221	$	198,994

The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates. The fair value of the senior promissory notes is primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period end, which represent Level 2 measurements.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Fair Value Measurements and Fair Value of Financial Instruments - Carrying Value and Fair Value of Debt Obligations (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Carrying Value
Debt Obligations:
Debt obligations	$ 155,116	$ 199,221
Carrying Value \| Revolving credit facility
Debt Obligations:
Debt obligations	142,562	186,131
Carrying Value \| Senior promissory notes
Debt Obligations:
Debt obligations	10,000	10,000
Carrying Value \| Other
Debt Obligations:
Debt obligations	2,554	3,090
Fair Value
Debt Obligations:
Debt obligations	154,837	198,994
Fair Value \| Revolving credit facility
Debt Obligations:
Debt obligations	142,562	186,131
Fair Value \| Senior promissory notes
Debt Obligations:
Debt obligations	9,721	9,773
Fair Value \| Other
Debt Obligations:
Debt obligations	$ 2,554	$ 3,090

Gain on Sale and Other Costs, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended	15 Months Ended
	Jul. 01, 2023	Apr. 02, 2022	Jul. 01, 2023	Jul. 02, 2022	Jan. 01, 2022	Apr. 02, 2022
Property, Plant and Equipment [Line Items]
Proceeds from sale of property, plant, and equipment			$ 97	$ 1,942
Gross gain on sale of assets			0	20,190
Industrial Processing
Property, Plant and Equipment [Line Items]
Gross gain on sale of assets				20,190
Other costs, machinery and equipment write-down	$ 74	$ 182	$ 74	$ 182
CHINA \| Land and Building
Property, Plant and Equipment [Line Items]
Proceeds from sale of property, plant, and equipment		$ 25,159
Down payment percentage		6.00%			25.00%	31.00%
Gross gain on sale of assets		$ 20,190
Net gain on sale of assets		15,143
Deferred taxes		5,047
Receivable recognized		$ 16,082				$ 16,082
Period of recognition of gain on sale and a receivable for remaining amount of sales proceeds (in years)		2 years

Nature of Operations and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 01, 2023
Accounting Policies [Abstract]
Use of Estimates and Critical Accounting Policies	Use of Estimates and Critical Accounting PoliciesThe preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements.
Restricted Cash	Restricted Cash The Company's restricted cash generally serves as collateral for bank guarantees associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business and for certain banker's acceptance drafts issued to vendors. The majority of the bank guarantees will expire over the next twelve months.
Intangible Assets, Net	Intangible assets are recorded at fair value at the date of acquisition. Subsequent impairment charges are reflected as a reduction in the gross balance, as applicable. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset.
Warranty Obligations	Warranty Obligations The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications during a defined period of time. The Company provides for the estimated cost of product warranties at the time of sale based on historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate projected warranty costs may vary from historical patterns. The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. The Company's liability for warranties is included in other current liabilities in the accompanying condensed consolidated balance sheet.
Revenue Recognition	Revenue Recognition Most of the Company’s revenue relates to products and services that require minimal customization and is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. The remaining portion of the Company’s revenue is recognized over time based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Most of the contracts recognized on an over time basis are for large capital equipment projects. These projects are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation. The Company disaggregates its revenue from contracts with customers by reportable operating segment, product type and geography as this best depicts how its revenue is affected by economic factors.Contract assets represent unbilled revenue associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of short- and long-term customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities, and long-term customer deposits are included in other long-term liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advance payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer.
Banker's Acceptance Drafts Included in Accounts Receivable	Banker's Acceptance Drafts Included in Accounts ReceivableThe Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are non-interest bearing obligations of the issuing bank and generally mature within six months of the origination date. The Company's Chinese subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date.
Stock-Based Compensation	The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known.The RSUs are subject to adjustment based on the achievement of the performance measure selected for the fiscal year, which is a specified target for adjusted earnings before interest, taxes, depreciation, and amortization (target adjusted EBITDA) generated from operations for the fiscal year. The RSUs are adjusted by comparing the actual adjusted EBITDA for the performance period to the target adjusted EBITDA. Actual adjusted EBITDA between 50% and 100% of the target adjusted EBITDA results in an adjustment of 50% to 100% of the target RSU amount. Actual adjusted EBITDA between 100% and 115% of the target adjusted EBITDA results in an adjustment using a straight-line linear scale between 100% and 150% of the target RSU amount. Actual adjusted EBITDA in excess of 115% results in an adjustment capped at 150% of the target RSU amount. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2023 fiscal year, these performance-based RSUs will be forfeited. The Company recognizes compensation expense based on the probable number of performance-based RSUs expected to vest. Following the adjustment, the performance-based RSUs will be subject to additional time-based vesting, and will vest in three equal annual installments on March 10 of 2024, 2025, and 2026, provided that the officer is employed by the Company on the applicable vesting dates.
Forward Currency-Exchange Contracts	Forward Currency-Exchange Contracts The Company uses forward currency-exchange contracts that generally have maturities of twelve months or less to hedge exposures resulting from fluctuations in currency exchange rates. Such exposures result from assets and liabilities that are denominated in currencies other than the functional currencies of the Company's subsidiaries. Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges and unrecognized gains and losses are recorded to AOCI, net of tax. Deferred gains and losses are recognized in the statement of income in the period in which the underlying transaction occurs. The fair values of forward currency-exchange contracts that are designated as fair value hedges and forward currency-exchange contracts that are not designated as hedges are recognized currently in earnings.
Fair Value Measurement	Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: •Level 1—Quoted prices in active markets for identical assets or liabilities. •Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. •Level 3—Unobservable inputs based on the Company's own assumptions. The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during the first six months of 2023. Banker's acceptance drafts are carried at face value, which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair value of the 2018 Swap Agreement was based on USD LIBOR yield curves at the reporting date. The forward currency-exchange contracts and the 2018 Swap Agreement prior to its maturity were hedges of either recorded assets or liabilities or anticipated transactions and represent or represented the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates. The fair value of the senior promissory notes is primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period end, which represent Level 2 measurements.
Litigation	Litigation From time to time, the Company is subject to various claims and legal proceedings covering a range of matters that arise in the ordinary course of business. Such litigation may include, but is not limited to, claims and counterclaims by and against the Company for breach of contract or warranty, canceled contracts, product liability, or bankruptcy-related claims. For legal proceedings in which a loss is probable and estimable, the Company accrues a loss based on the low end of the range of estimated loss when there is no better estimate within the range. If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals.

Earnings per Share

6 Months Ended

Jul. 01, 2023

Earnings Per Share [Abstract]

Earnings per Share

Basic and diluted earnings per share (EPS) were calculated as follows:


	Three Months Ended				Six Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
(In thousands, except per share amounts)
Net Income Attributable to Kadant	$	29,734	$	26,170	$	57,809	$	67,362

Basic Weighted Average Shares	11,704		11,660		11,693		11,645
Effect of Restricted Stock Units and Employee Stock Purchase Plan Shares	19		29		16		27
Diluted Weighted Average Shares	11,723		11,689		11,709		11,672

Basic Earnings per Share	$	2.54	$	2.24	$	4.94	$	5.78

Diluted Earnings per Share	$	2.54	$	2.24	$	4.94	$	5.77

The effect of outstanding and unvested restricted stock units (RSUs) of the Company's common stock totaling 26,000 shares in the second quarter of 2023, 8,000 shares in the second quarter of 2022, 32,000 shares in the first six months of 2023 and 13,000 shares in the first six months of 2022 were not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the respective reporting periods.

Condensed Consolidated Statement of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Income Statement [Abstract]
Revenue (Notes 1 and 10)	$ 245,053	$ 221,649	$ 474,811	$ 448,129
Costs and Operating Expenses:
Cost of revenue	138,503	125,611	266,215	253,880
Selling, general, and administrative expenses	59,990	55,319	118,552	114,487
Research and development expenses	3,408	3,251	6,778	6,329
Gain on sale and other costs, net (Note 2)	74	0	74	(20,008)
Total Costs and Operating Expenses	201,975	184,181	391,619	354,688
Operating Income	43,078	37,468	83,192	93,441
Interest Income	316	277	615	379
Interest Expense	(2,245)	(1,366)	(4,615)	(2,600)
Other Expense, Net	(21)	(19)	(42)	(41)
Income Before Provision for Income Taxes	41,128	36,360	79,150	91,179
Provision for Income Taxes (Note 4)	11,182	9,951	20,945	23,329
Net Income	29,946	26,409	58,205	67,850
Net Income Attributable to Noncontrolling Interest	(212)	(239)	(396)	(488)
Net Income Attributable to Kadant	$ 29,734	$ 26,170	$ 57,809	$ 67,362
Earnings per Share Attributable to Kadant (Note 3)
Basic (in dollars per share)	$ 2.54	$ 2.24	$ 4.94	$ 5.78
Diluted (in dollars per share)	$ 2.54	$ 2.24	$ 4.94	$ 5.77
Weighted Average Shares (Note 3)
Basic (in shares)	11,704	11,660	11,693	11,645
Diluted (in shares)	11,723	11,689	11,709	11,672

Gain on Sale and Other Costs, Net - Summary of Changes in Nontrade Receivables (Details) - CHINA - Land and Building - USD ($) $ in Thousands	6 Months Ended	9 Months Ended
	Jul. 01, 2023	Dec. 31, 2022	Apr. 02, 2022
Restructuring Cost and Reserve [Line Items]
Balance at Inception			$ 17,294
Present value discount			(1,212)
Receivable recorded, net			$ 16,082
Beginning balance	$ 15,181
Accretion of interest income	278	$ 422
Currency translation	(707)	(1,323)
Ending balance	$ 14,752	$ 15,181

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Nature of Operations and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 01, 2023

Accounting Policies [Abstract]

Supplemental Cash Flow Information


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Cash Paid for Interest	$	4,443	$	2,408
Cash Paid for Income Taxes, Net of Refunds	$	23,792	$	19,167

Non-Cash Investing Activities:
Reduction in fair value of assets acquired	$	(270)	$	(1,568)
Cash received (paid) for acquired businesses	277		(62)
Increase (decrease) in liabilities assumed	$	7	$	(1,630)

Purchases of property, plant, and equipment in accounts payable	$	1,134	$	26


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Non-Cash Financing Activities:
Issuance of Company common stock upon vesting of restricted stock units	$	4,717	$	5,040
Dividends declared but unpaid	$	3,395	$	3,033

Cash and Cash Equivalents


(In thousands)	July 1, 2023		July 2, 2022		December 31, 2022		January 1, 2022
Cash and cash equivalents	$	66,725	$	76,540	$	76,371	$	91,186
Restricted cash	3,470		1,486		3,354		2,975
Total Cash, Cash Equivalents, and Restricted Cash	$	70,195	$	78,026	$	79,725	$	94,161

Restricted Cash


(In thousands)	July 1, 2023		July 2, 2022		December 31, 2022		January 1, 2022
Cash and cash equivalents	$	66,725	$	76,540	$	76,371	$	91,186
Restricted cash	3,470		1,486		3,354		2,975
Total Cash, Cash Equivalents, and Restricted Cash	$	70,195	$	78,026	$	79,725	$	94,161

Inventories

The components of inventories are as follows:


	July 1, 2023		December 31, 2022
(In thousands)
Raw Materials	$	73,075	$	71,040
Work in Process	45,428		38,612
Finished Goods	57,877		54,020
	$	176,380	$	163,672

Changes in the Carrying Amount of Goodwill

The changes in the carrying amount of goodwill by segment are as follows:


(In thousands)	Flow Control		Industrial Processing		Material Handling		Total
Balance at December 31, 2022
Gross balance	$	118,309	$	209,919	$	142,765	$	470,993
Accumulated impairment losses	—		(85,538)		—		(85,538)
Net balance	118,309		124,381		142,765		385,455
2023 Activity
Acquisition adjustments	—		—		4		4
Currency translation	1,169		1,428		746		3,343
Total 2023 activity	1,169		1,428		750		3,347
Balance at July 1, 2023
Gross balance	119,478		211,347		143,515		474,340
Accumulated impairment losses	—		(85,538)		—		(85,538)
Net balance	$	119,478	$	125,809	$	143,515	$	388,802

Changes in the Carrying Amount of Product Warranty Obligations

The changes in the carrying amount of product warranty obligations are as follows:


	Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Balance at Beginning of Year	$	7,283	$	7,298
Provision charged to expense	3,154		2,657
Usage	(2,335)		(2,548)

Currency translation	97		(429)
Balance at End of Period	$	8,199	$	6,978

Revenue Recognition Method and Disaggregation of Revenue by Product Type and Geography

The following table presents revenue by revenue recognition method:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Point in Time	$	222,235	$	198,249	$	426,474	$	401,560
Over Time	22,818		23,400		48,337		46,569
	$	245,053	$	221,649	$	474,811	$	448,129

The following table presents the disaggregation of revenue by product type and geography:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Revenue by Product Type:
Parts and consumables	$	153,082	$	145,680	$	304,645	$	291,924
Capital	91,971		75,969		170,166		156,205
	$	245,053	$	221,649	$	474,811	$	448,129
Revenue by Geography (based on customer location) (a):
North America	$	135,385	$	124,080	267,838		248,416
Europe	60,625		58,489		114,782		116,855
Asia	32,867		28,976		60,637		60,963
Rest of world	16,176		10,104		31,554		21,895
	$	245,053	$	221,649	$	474,811	$	448,129

(a) The components of revenue by geography in the three and six months ended July 2, 2022 have been recast to conform to the current period presentation.

Contract Balances From Contracts With Customers

The following table presents contract balances from contracts with customers:


	July 1, 2023		December 31, 2022
(In thousands)
Contract Assets	$	11,986	$	14,898
Contract Liabilities	$	87,780	$	82,413

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Section 50
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Stock-Based Compensation (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	May 17, 2023	Mar. 07, 2023	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			$ 2,648	$ 2,276	$ 4,886	$ 4,536
Unrecognized compensation expense related to stock awards			$ 12,021		$ 12,021
Weighted average period (in years)					1 year 9 months 18 days
Restricted Stock Units (RSUs) \| Non-Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)	4,340
Aggregate grant date fair value	$ 849
Restricted Stock Units (RSUs) \| Non-Employee Director \| Share-Based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentages	50.00%
Restricted Stock Units (RSUs) \| Non-Employee Director \| Share-Based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentages	25.00%
Restricted Stock Units (RSUs) \| Non-Employee Director \| Share-Based Payment Arrangement, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentages	25.00%
Performance Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)		21,009
Grant date fair value of shares granted		$ 4,528
Vesting period (in years)		3 years
Performance Based Restricted Stock Units \| Minimum \| Share-Based Compensation Arrangement By Share-Based Payment Award Component One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		50.00%
Adjustment to RSU		50.00%
Performance Based Restricted Stock Units \| Minimum \| Share-Based Compensation Arrangement By Share-Based Payment Award, Component Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		100.00%
Adjustment to RSU		100.00%
Performance Based Restricted Stock Units \| Minimum \| Share-Based Compensation Arrangement By Share-Based Payment Award, Component Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		50.00%
Performance Based Restricted Stock Units \| Maximum \| Share-Based Compensation Arrangement By Share-Based Payment Award Component One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		100.00%
Adjustment to RSU		100.00%
Performance Based Restricted Stock Units \| Maximum \| Share-Based Compensation Arrangement By Share-Based Payment Award, Component Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		115.00%
Adjustment to RSU		150.00%
Performance Based Restricted Stock Units \| Maximum \| Share-Based Compensation Arrangement By Share-Based Payment Award, Component Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of actual adjusted EBITDA		115.00%
Adjustment to RSU		150.00%
Time Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)		16,528
Grant date fair value of shares granted		$ 3,562
Vesting period (in years)		3 years

Nature of Operations and Summary of Significant Accounting Policies - Revenue Recognition Method and Disaggregation of Revenue by Product Type and Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 245,053	$ 221,649	$ 474,811	$ 448,129
North America
Disaggregation of Revenue [Line Items]
Revenue	135,385	124,080	267,838	248,416
Europe
Disaggregation of Revenue [Line Items]
Revenue	60,625	58,489	114,782	116,855
Asia
Disaggregation of Revenue [Line Items]
Revenue	32,867	28,976	60,637	60,963
Rest of world
Disaggregation of Revenue [Line Items]
Revenue	16,176	10,104	31,554	21,895
Parts and consumables
Disaggregation of Revenue [Line Items]
Revenue	153,082	145,680	304,645	291,924
Capital
Disaggregation of Revenue [Line Items]
Revenue	91,971	75,969	170,166	156,205
Point in Time
Disaggregation of Revenue [Line Items]
Revenue	222,235	198,249	426,474	401,560
Over Time
Disaggregation of Revenue [Line Items]
Revenue	$ 22,818	$ 23,400	$ 48,337	$ 46,569

Nature of Operations and Summary of Significant Accounting Policies - Revenue from Contract with Customers (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Contract Assets	$ 11,986	$ 14,898
Contract Liabilities	$ 87,780	$ 82,413

Fair Value Measurements and Fair Value of Financial Instruments (Tables)

6 Months Ended

Jul. 01, 2023

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:


	Fair Value as of July 1, 2023
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	4,541	$	—	$	—	$	4,541

Banker's acceptance drafts (a)	$	—	$	3,550	$	—	$	3,550

Liabilities:

Forward currency-exchange contracts	$	—	$	53	$	—	$	53


	Fair Value as of December 31, 2022
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	8,351	$	—	$	—	$	8,351
Banker's acceptance drafts (a)	$	—	$	5,729	$	—	$	5,729
2018 Swap Agreement (b)	$	—	$	131	$	—	$	131
Forward currency-exchange contracts	$	—	$	15	$	—	$	15
Liabilities:
Forward currency-exchange contract	$	—	$	54	$	—	$	54

(a)Included in accounts receivable in the accompanying condensed consolidated balance sheet.

(b)The 2018 Swap Agreement matured on June 30, 2023.

Carrying Value and Fair Value of Debt Obligations

The carrying value and fair value of debt obligations, excluding lease obligations, are as follows:


	July 1, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
(In thousands)
Debt Obligations:
Revolving credit facility	$	142,562	$	142,562	$	186,131	$	186,131
Senior promissory notes	10,000		9,721		10,000		9,773
Other	2,554		2,554		3,090		3,090
	$	155,116	$	154,837	$	199,221	$	198,994

Short- and Long-Term Obligations (Tables)

6 Months Ended

Jul. 01, 2023

Debt Disclosure [Abstract]

Schedule of Short- and Long-Term Obligations

Short- and long-term obligations are as follows:


	July 1, 2023		December 31, 2022
(In thousands)
Revolving Credit Facility, due 2027	$	142,562	$	186,131
Senior Promissory Notes, due 2023 to 2028	10,000		10,000
Finance Leases, due 2023 to 2026	1,757		1,940
Other Borrowings, due 2023 to 2028	2,554		3,090
Total	156,873		201,161
Less: Short-term Obligations and Current Maturities of Long-Term Obligations	(3,464)		(3,821)
Long-Term Obligations	$	153,409	$	197,340

Nature of Operations and Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022	Jul. 02, 2022	Jan. 01, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 66,725	$ 76,371	$ 76,540	$ 91,186
Restricted cash	3,470	3,354	1,486	2,975
Total Cash, Cash Equivalents, and Restricted Cash	$ 70,195	$ 79,725	$ 78,026	$ 94,161

Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 66,725	$ 76,371
Restricted cash	3,470	3,354
Accounts receivable, net of allowances of $3,578 and $3,595	135,633	130,297
Inventories	176,380	163,672
Contract assets	11,986	14,898
Other current assets	41,449	26,818
Total Current Assets	435,643	415,410
Property, Plant, and Equipment, net of accumulated depreciation of $128,555 and $121,442	125,875	118,855
Other Assets	43,775	54,516
Intangible Assets, Net	167,327	175,645
Goodwill	388,802	385,455
Total Assets	1,161,422	1,149,881
Current Liabilities:
Short-term obligations and current maturities of long-term obligations (Note 5)	3,464	3,821
Accounts payable	48,911	58,060
Accrued payroll and employee benefits	32,003	35,672
Customer deposits	70,580	64,361
Advanced billings	12,043	7,966
Other current liabilities	46,217	43,581
Total Current Liabilities	213,218	213,461
Long-Term Obligations (Note 5)	153,409	197,340
Long-Term Deferred Income Taxes	38,690	38,745
Other Long-Term Liabilities	43,080	44,764
Commitments and Contingencies (Note 11)
Stockholders' Equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued	0	0
Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued	146	146
Capital in excess of par value	120,117	119,924
Retained earnings	711,664	660,644
Treasury stock at cost, 2,918,261 and 2,949,997 shares	(71,509)	(72,287)
Accumulated other comprehensive items (Note 7)	(49,547)	(54,578)
Total Kadant Stockholders' Equity	710,871	653,849
Noncontrolling interest	2,154	1,722
Total Stockholders' Equity	713,025	655,571
Total Liabilities and Stockholders' Equity	$ 1,161,422	$ 1,149,881

Provision for Income Taxes	6 Months Ended
Provision for Income Taxes	Jul. 01, 2023
Income Tax Disclosure [Abstract]
Provision for Income Taxes	Provision for Income Taxes The provision for income taxes was $20,945,000 in the first six months of 2023 and $23,329,000 in the first six months of 2022. The effective tax rate of 26% in the first six months of 2023 was higher than the Company's statutory rate of 21% primarily due to the distribution of the Company's worldwide earnings, state taxes, and nondeductible expenses. The effective tax rate of 26% in the first six months of 2022 was higher than the Company's statutory rate of 21% primarily due to the distribution of the Company's worldwide earnings, nondeductible expenses, and state taxes. These increases in tax expense in the first six months of 2022 were offset in part by a decrease in tax expense related to the net excess income tax benefits from stock-based compensation arrangements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Derivatives - Narrative (Details)	6 Months Ended
Derivatives - Narrative (Details)	Jul. 01, 2023 USD ($)	Dec. 31, 2018 USD ($)
Derivatives, Fair Value [Line Items]
Net unrealized losses included in AOCI expected to be reclassified to earnings over the next 12 months	$ 40,000
Cash Flow Hedging \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Rate of effectiveness of derivative agreement	100.00%
Cash Flow Hedging \| 2018 Swap Agreement \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative, notional amount		$ 15,000,000
Derivative, floor rate		0
Fixed rate of interest		3.15%
Cash Flow Hedging \| Forward Currency-Exchange Contract \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Period over which entity manages its level of exposure of risk	12 months

Commitments and Contingencies (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Banker's acceptance drafts, maturity period (in months)	6 months
Banker's acceptance drafts with recourse	$ 12,315	$ 11,238

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 01, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Right of Recourse In the ordinary course of business, the Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are non-interest bearing obligations of the issuing bank and generally mature within six months of the origination date. The Company's Chinese subsidiaries may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Banker's acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates. The Company had $12,315,000 at July 1, 2023 and $11,238,000 at December 31, 2022 of banker's acceptance drafts subject to recourse, which were transferred to vendors and had not reached their scheduled maturity dates. Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company. Litigation From time to time, the Company is subject to various claims and legal proceedings covering a range of matters that arise in the ordinary course of business. Such litigation may include, but is not limited to, claims and counterclaims by and against the Company for breach of contract or warranty, canceled contracts, product liability, or bankruptcy-related claims. For legal proceedings in which a loss is probable and estimable, the Company accrues a loss based on the low end of the range of estimated loss when there is no better estimate within the range. If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals.

Short- and Long-Term Obligations - Schedule of Short- and Long-Term Obligations (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Finance Leases, due 2023 to 2026	$ 1,757	$ 1,940
Total	156,873	201,161
Less: Short-term Obligations and Current Maturities of Long-Term Obligations	(3,464)	(3,821)
Long-Term Obligations	153,409	197,340
Revolving Credit Facility, due 2027
Debt Instrument [Line Items]
Long-term debt	142,562	186,131
Senior Promissory Notes, due 2023 to 2028
Debt Instrument [Line Items]
Long-term debt	10,000	10,000
Other Borrowings, due 2023 to 2028
Debt Instrument [Line Items]
Other Borrowings, due 2023 to 2028	$ 2,554	$ 3,090

Accumulated Other Comprehensive Items (Tables)

6 Months Ended

Jul. 01, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components of Accumulated Other Comprehensive Items

Changes in each component of accumulated other comprehensive items (AOCI), net of tax, are as follows:


(In thousands)	Foreign Currency Translation Adjustment		Pension and Other Post-Retirement Benefit Liability Adjustments		Deferred Gain (Loss) on Cash Flow Hedges		Total
Balance at December 31, 2022	$	(54,488)	$	(148)	$	58	$	(54,578)
Other comprehensive items before reclassifications	5,137		(13)		1		5,125
Reclassifications from AOCI	—		5		(99)		(94)
Net current period other comprehensive items	5,137		(8)		(98)		5,031
Balance at July 1, 2023	$	(49,351)	$	(156)	$	(40)	$	(49,547)

Reclassification Out of Accumulated Other Comprehensive Items

Amounts reclassified from AOCI are as follows:


	Three Months Ended				Six Months Ended
(In thousands)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022		Statement of Income Line Item
Retirement Benefit Plans
Recognized net actuarial loss	$	(1)	$	(6)	$	(2)	$	(13)	Other expense, net
Amortization of prior service cost	(3)		(2)		(5)		(5)		Other expense, net
Total expense before income taxes	(4)		(8)		(7)		(18)
Income tax benefit	1		2		2		5		Provision for income taxes
	(3)		(6)		(5)		(13)
Cash Flow Hedges (a)
Interest rate swap agreement	76		(83)		136		(194)		Interest expense

Income tax (provision) benefit	(23)		20		(37)		47		Provision for income taxes
	53		(63)		99		(147)
Total Reclassifications	$	50	$	(69)	$	94	$	(160)

(a)See Note 8, Derivatives, for additional information.

Earnings per Share - Narrative (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of antidilutive securities excluded from computation of EPS (in shares)	26	8	32	13

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jul. 01, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based CompensationThe Company recognized stock-based compensation expense of $2,648,000 in the second quarter of 2023, $2,276,000 in the second quarter of 2022, $4,886,000 in the first six months of 2023 and $4,536,000 in the first six months of 2022 within selling, general, and administrative (SG&A) expenses in the accompanying condensed consolidated statement of income. The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known. Unrecognized compensation expense related to stock-based compensation totaled approximately $12,021,000 at July 1, 2023, which will be recognized over a weighted average period of 1.8 years. Non-Employee Director RSUs In May 2023, the Company granted an aggregate of 4,340 RSUs to its non-employee directors with an aggregate grant date fair value of $849,000, of which 50% vested on June 1, 2023, 25% vest on the last day of the third fiscal quarter of 2023 and the remaining 25% vest on the last day of the fourth fiscal quarter of 2023. Performance-based RSUs On March 7, 2023, the Company granted performance-based RSUs to certain of its officers, which represented, in aggregate, the right to receive 21,009 shares (target RSU amount), with an aggregate grant date fair value of $4,528,000. The RSUs are subject to adjustment based on the achievement of the performance measure selected for the fiscal year, which is a specified target for adjusted earnings before interest, taxes, depreciation, and amortization (target adjusted EBITDA) generated from operations for the fiscal year. The RSUs are adjusted by comparing the actual adjusted EBITDA for the performance period to the target adjusted EBITDA. Actual adjusted EBITDA between 50% and 100% of the target adjusted EBITDA results in an adjustment of 50% to 100% of the target RSU amount. Actual adjusted EBITDA between 100% and 115% of the target adjusted EBITDA results in an adjustment using a straight-line linear scale between 100% and 150% of the target RSU amount. Actual adjusted EBITDA in excess of 115% results in an adjustment capped at 150% of the target RSU amount. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2023 fiscal year, these performance-based RSUs will be forfeited. The Company recognizes compensation expense based on the probable number of performance-based RSUs expected to vest. Following the adjustment, the performance-based RSUs will be subject to additional time-based vesting, and will vest in three equal annual installments on March 10 of 2024, 2025, and 2026, provided that the officer is employed by the Company on the applicable vesting dates. Time-based RSUs On March 7, 2023, the Company granted time-based RSUs representing 16,528 shares to certain of its officers and employees with an aggregate grant date fair value of $3,562,000. These time-based RSUs vest in three equal annual installments on March 10 of 2024, 2025, and 2026, provided that a recipient is employed by the Company on the applicable vesting dates.

Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 11,182	$ 9,951	$ 20,945	$ 23,329
Effective tax rate			26.00%	26.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Nature of Operations and Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2023 USD ($)
Goodwill [Roll Forward]
Gross balance, beginning balance	$ 470,993
Accumulated impairment losses	(85,538)
Net balance, beginning balance	385,455
Acquisition adjustments	4
Currency translation	3,343
Total 2023 activity	3,347
Gross balance, ending balance	474,340
Accumulated impairment losses	(85,538)
Net balance, ending balance	388,802
Operating Segment \| Flow Control
Goodwill [Roll Forward]
Gross balance, beginning balance	118,309
Accumulated impairment losses	0
Net balance, beginning balance	118,309
Acquisition adjustments	0
Currency translation	1,169
Total 2023 activity	1,169
Gross balance, ending balance	119,478
Accumulated impairment losses	0
Net balance, ending balance	119,478
Operating Segment \| Industrial Processing
Goodwill [Roll Forward]
Gross balance, beginning balance	209,919
Accumulated impairment losses	(85,538)
Net balance, beginning balance	124,381
Acquisition adjustments	0
Currency translation	1,428
Total 2023 activity	1,428
Gross balance, ending balance	211,347
Accumulated impairment losses	(85,538)
Net balance, ending balance	125,809
Operating Segment \| Material Handling
Goodwill [Roll Forward]
Gross balance, beginning balance	142,765
Accumulated impairment losses	0
Net balance, beginning balance	142,765
Acquisition adjustments	4
Currency translation	746
Total 2023 activity	750
Gross balance, ending balance	143,515
Accumulated impairment losses	0
Net balance, ending balance	$ 143,515

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Statement of Stockholders' Equity [Abstract]
Dividend declared – Common Stock (in dollars per share)	$ 0.29	$ 0.26	$ 0.58	$ 0.52

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Pay vs Performance Disclosure
Net Income Attributable to Kadant	$ 29,734	$ 26,170	$ 57,809	$ 67,362

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Nature of Operations and Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Raw Materials	$ 73,075	$ 71,040
Work in Process	45,428	38,612
Finished Goods	57,877	54,020
Total Inventories	$ 176,380	$ 163,672

Business Segment Information

6 Months Ended

Jul. 01, 2023

Segment Reporting [Abstract]

Business Segment Information

Business Segment InformationThe Company has three reportable operating segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment consists of the fluid-handling and doctoring, cleaning, & filtration product lines; the Industrial Processing segment consists of the wood processing and stock-preparation product lines; and the Material Handling segment consists of the conveying and vibratory, baling, and fiber-based product lines.

A description of each segment follows:

•Flow Control – Custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications to keep critical processes running efficiently in the packaging, tissue, food, metals, and other industrial sectors. The Company's primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.

•Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard and process timber for use in the packaging, tissue, wood products and alternative fuel industries, among others. The Company's primary products include stock-preparation systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, and logging machinery. In addition, the Company provides industrial automation and digitization solutions to process industries.

•Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others. The Company's primary products include conveying and vibratory equipment and balers. In addition, the Company manufactures and sells biodegradable, absorbent granules used as carriers in agricultural applications and for oil and grease absorption.

The following table presents financial information for the Company's reportable operating segments:


	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
(In thousands)	2023		2022		2023		2022
Revenue
Flow Control	$	95,729	$	85,220	$	185,250	$	171,046
Industrial Processing	89,967		84,402		173,509		177,487
Material Handling	59,357		52,027		116,052		99,596
	$	245,053	$	221,649	$	474,811	$	448,129

Income Before Provision for Income Taxes
Flow Control	$	25,821	$	22,707	$	50,010	$	44,432
Industrial Processing (a)	16,978		15,285		32,945		53,444
Material Handling (b)	10,374		8,701		19,661		14,545
Corporate (c)	(10,095)		(9,225)		(19,424)		(18,980)
Total operating income	43,078		37,468		83,192		93,441
Interest expense, net (d)	(1,929)		(1,089)		(4,000)		(2,221)
Other expense, net (d)	(21)		(19)		(42)		(41)
	$	41,128	$	36,360	$	79,150	$	91,179

Capital Expenditures
Flow Control	$	1,290	$	1,031	$	2,694	$	1,556
Industrial Processing (e)	6,129		5,073		8,708		7,025
Material Handling	1,358		843		1,820		1,227
Corporate	—		—		24		7
	$	8,777	$	6,947	$	13,246	$	9,815

(c)Represents general and administrative expenses.

(d)The Company does not allocate interest and other expense, net to its segments.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

Earnings per Share (Tables)

6 Months Ended

Jul. 01, 2023

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

Basic and diluted earnings per share (EPS) were calculated as follows:


	Three Months Ended				Six Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
(In thousands, except per share amounts)
Net Income Attributable to Kadant	$	29,734	$	26,170	$	57,809	$	67,362

Basic Weighted Average Shares	11,704		11,660		11,693		11,645
Effect of Restricted Stock Units and Employee Stock Purchase Plan Shares	19		29		16		27
Diluted Weighted Average Shares	11,723		11,689		11,709		11,672

Basic Earnings per Share	$	2.54	$	2.24	$	4.94	$	5.78

Diluted Earnings per Share	$	2.54	$	2.24	$	4.94	$	5.77

Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Statement of Comprehensive Income [Abstract]
Net Income	$ 29,946	$ 26,409	$ 58,205	$ 67,850
Other Comprehensive Items:
Foreign currency translation adjustment	(400)	(19,364)	5,173	(21,648)
Post-retirement liability adjustments, net (net of tax of $(1), $11, $(3) and $13)	(2)	31	(8)	40
Deferred (loss) gain on cash flow hedges (net of tax of $(18), $46, $(32) and $114)	(59)	146	(98)	423
Other comprehensive items	(461)	(19,187)	5,067	(21,185)
Comprehensive Income	29,485	7,222	63,272	46,665
Comprehensive Income Attributable to Noncontrolling Interest	(213)	(129)	(432)	(332)
Comprehensive Income Attributable to Kadant	$ 29,272	$ 7,093	$ 62,840	$ 46,333

Gain on Sale and Other Costs, Net (Tables)

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

Summary of Changes in Nontrade Receivables

A summary of the change in the outstanding receivable on the China Transaction is as follows:


(In thousands)	July 1, 2023
Balance at Inception	$	17,294
Present value discount	(1,212)
Receivable recorded, net	16,082
Accretion of interest income	422
Currency translation	(1,323)
Balance at December 31, 2022 (included in other assets)	15,181
Accretion of interest income	278
Currency translation	(707)
Balance at July 1, 2023 (included in other current assets)	$	14,752

Cover - shares	6 Months Ended
Cover - shares	Jul. 01, 2023	Jul. 28, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 01, 2023
Document Transition Report	false
Entity File Number	001-11406
Entity Registrant Name	KADANT INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-1762325
Entity Address, Address Line One	One Technology Park Drive
Entity Address, City or Town	Westford
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01886
City Area Code	978
Local Phone Number	776-2000
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	KAI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		11,705,898
Entity Central Index Key	0000886346
Current Fiscal Year End Date	--12-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Stockholders' Equity:
Allowance for credit losses	$ 3,578	$ 3,595
Accumulated depreciation	$ 128,555	$ 121,442
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	14,624,159	14,624,159
Treasury stock (in shares)	2,918,261	2,949,997

Nature of Operations and Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Accounting Policies [Abstract]
Cash Paid for Interest	$ 4,443	$ 2,408
Cash Paid for Income Taxes, Net of Refunds	23,792	19,167
Non-Cash Investing Activities:
Reduction in fair value of assets acquired	(270)	(1,568)
Cash received (paid) for acquired businesses	277	(62)
Increase (decrease) in liabilities assumed	7	(1,630)
Purchases of property, plant, and equipment in accounts payable	1,134	26
Non-Cash Financing Activities:
Issuance of Company common stock upon vesting of restricted stock units	4,717	5,040
Dividends declared but unpaid	$ 3,395	$ 3,033

Accumulated Other Comprehensive Items - Components of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 684,305	$ 599,738	$ 655,571	$ 565,616
Other comprehensive items	(461)	(19,187)	5,067	(21,185)
Ending balance	713,025	606,164	713,025	606,164
Total
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(49,085)	(32,302)	(54,578)	(30,350)
Other comprehensive items before reclassifications			5,125
Reclassifications from AOCI			(94)
Other comprehensive items	(462)	(19,077)	5,031	(21,029)
Ending balance	(49,547)	$ (51,379)	(49,547)	$ (51,379)
Foreign Currency Translation Adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			(54,488)
Other comprehensive items before reclassifications			5,137
Reclassifications from AOCI			0
Other comprehensive items			5,137
Ending balance	(49,351)		(49,351)
Pension and Other Post-Retirement Benefit Liability Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			(148)
Other comprehensive items before reclassifications			(13)
Reclassifications from AOCI			5
Other comprehensive items			(8)
Ending balance	(156)		(156)
Deferred Gain (Loss) on Cash Flow Hedges
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			58
Other comprehensive items before reclassifications			1
Reclassifications from AOCI			(99)
Other comprehensive items			(98)
Ending balance	$ (40)		$ (40)

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

- Definition

Amount of equity (deficit) attributable to parent and noncontrolling interest. Excludes temporary equity.

+ References

+ Details

Fair Value Measurements and Fair Value of Financial Instruments - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Assets:
Money market funds and time deposits	$ 4,541	$ 8,351
Banker's acceptance drafts	3,550	5,729
2018 Swap Agreement		131
Forward currency-exchange contracts		15
Liabilities:
Forward currency-exchange contracts	53	54
Level 1
Assets:
Money market funds and time deposits	4,541	8,351
Banker's acceptance drafts	0	0
2018 Swap Agreement		0
Forward currency-exchange contracts		0
Liabilities:
Forward currency-exchange contracts	0	0
Level 2
Assets:
Money market funds and time deposits	0	0
Banker's acceptance drafts	3,550	5,729
2018 Swap Agreement		131
Forward currency-exchange contracts		15
Liabilities:
Forward currency-exchange contracts	53	54
Level 3
Assets:
Money market funds and time deposits	0	0
Banker's acceptance drafts	0	0
2018 Swap Agreement		0
Forward currency-exchange contracts		0
Liabilities:
Forward currency-exchange contracts	$ 0	$ 0

Derivatives

6 Months Ended

Jul. 01, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Interest Rate Swap Agreement

In 2018, the Company entered into an interest rate swap agreement (2018 Swap Agreement) with Citizens Bank to hedge its exposure to movements in USD LIBOR on its U.S. dollar-denominated debt. The 2018 Swap Agreement, which had a $15,000,000 notional value, matured on June 30, 2023. Prior to the maturity of the 2018 Swap Agreement, on a quarterly basis, the Company received three-month USD LIBOR, which was subject to a zero percent floor, and paid a fixed rate of interest of 3.15% plus an applicable margin as was defined in the Credit Agreement.

The Company had designated its 2018 Swap Agreement as a cash flow hedge and structured it to be 100% effective. Unrealized gains and losses related to the fair value of the 2018 Swap Agreement were recorded to AOCI, net of tax.

Forward Currency-Exchange Contracts

The Company uses forward currency-exchange contracts that generally have maturities of twelve months or less to hedge exposures resulting from fluctuations in currency exchange rates. Such exposures result from assets and liabilities that are denominated in currencies other than the functional currencies of the Company's subsidiaries.

Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges and unrecognized gains and losses are recorded to AOCI, net of tax. Deferred gains and losses are recognized in the statement of income in the period in which the underlying transaction occurs. The fair values of forward currency-exchange contracts that are designated as fair value hedges and forward currency-exchange contracts that are not designated as hedges are recognized currently in earnings.

Gains and losses reported within SG&A expenses in the accompanying condensed consolidated statement of income associated with the Company's forward currency-exchange contracts that were not designated as hedges were not material for the three- and six-month periods ended July 1, 2023 and July 2, 2022.

The following table summarizes the fair value of derivative instruments in the accompanying condensed consolidated balance sheet:


		July 1, 2023				December 31, 2022
	Balance Sheet Location	Asset (Liability) (a)		Notional Amount (b)		Asset (Liability) (a)		Notional Amount
(In thousands)
Derivatives Designated as Hedging Instruments:
Derivative in an Asset Position:
2018 Swap Agreement	Other Current Assets	$	—	$	—	$	131	$	15,000
Derivatives in a Liability Position:
Forward currency-exchange contract	Other Current Liabilities	$	(52)	$	430	$	(54)	$	430

Derivatives Not Designated as Hedging Instruments:
Derivatives in an Asset Position:
Forward currency-exchange contracts	Other Current Assets	$	—	$	—	$	15	$	647
Derivatives in a Liability Position:
Forward currency-exchange contract	Other Current Liabilities	$	(1)	$	100	$	—	$	—

(a) See Note 9, Fair Value Measurements and Fair Value of Financial Instruments, for the fair value measurements relating to these financial instruments.

(b) The 2023 notional amounts are indicative of the level of the Company's recurring derivative activity.

The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the six months ended July 1, 2023:


(In thousands)	Interest Rate Swap Agreement		Forward Currency-Exchange Contract		Total
Unrealized Gain (Loss), Net of Tax, at December 31, 2022	$	99	$	(41)	$	58
Gain reclassified to earnings (a)	(99)		—		(99)
Gain recognized in AOCI	—		1		1
Unrealized Loss, Net of Tax, at July 1, 2023	$	—	$	(40)	$	(40)

(a) See Note 7, Accumulated Other Comprehensive Items, for the income statement classification.

As of July 1, 2023, the Company expects to reclassify losses of $40,000 from AOCI to earnings over the next twelve months based on the maturity date of the forward currency-exchange contract.