Kadant Inc. (NYSE:KAI) reported revenues from continuing operations of $71.7 million in the first quarter of 2011, an increase of $10.6 million, or 17 percent, compared to $61.1 million in the first quarter of 2010. Revenues in the first quarter of 2011 included a $1.0 million, or 1 percent, increase from foreign currency translation compared to the first quarter of 2010. Operating income from continuing operations in the first quarter of 2011 was $8.3 million, or 11.6 percent of revenues, compared to $4.7 million, or 7.7 percent of revenues, in the first quarter of 2010. Operating income in the first quarter of 2010 included income of $0.3 million related to a gain on the sale of real estate. Net income from continuing operations in the first quarter of 2011 was $5.8 million, or $.47 per diluted share, compared to $3.6 million, or $.29 per diluted share, in the first quarter of 2010. Net income from continuing operations in the first quarter of 2010 included an after-tax gain on the sale of real estate of $0.2 million, or $.02 per diluted share.
“We’re off to an excellent start in 2011,” said Jonathan W. Painter, president and chief executive officer of Kadant. “Diluted EPS from continuing operations was $.47 in the first quarter of 2011 compared to our guidance of $.35 to $.37. The increase was due to record quarterly gross margins of 47.6 percent, with strong margin performances across all our product lines and territories.
“Revenues of $71.7 million in the first quarter of 2011 were within the range of our guidance and were up 17 percent compared to last year. Operating income from continuing operations was $8.3 million and, at 11.6 percent of revenues, reached the highest quarterly profitability level in almost eight years. Operating cash flows were only slightly positive, as expected, and were significantly impacted by the build up in inventory as we began sourcing material for several large systems orders that are scheduled for delivery later in the year. Nevertheless, we ended the quarter with $57.6 million in cash and $17.6 million in total debt, for a net cash position of $40.0 million, an increase of $19.5 million compared to a year ago.
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