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Kadant Reports Results For Third Quarter 2011: 50% Increase In Adjusted Net Income And Record Backlog Of $128 Million

Stocks in this article: KAI

Kadant Inc. (NYSE:KAI) reported revenues from continuing operations of $84.4 million in the third quarter of 2011, an increase of $17.9 million, or 27 percent, compared to $66.5 million in the third quarter of 2010. Revenues in the third quarter of 2011 included increases of $4.0 million, or 6 percent, from foreign currency translation and $1.6 million, or 2 percent, from acquisitions compared to the third quarter of 2010. Operating income from continuing operations in the third quarter of 2011 was $10.8 million, or 12.8 percent of revenues, compared to $6.3 million, or 9.4 percent of revenues, in the third quarter of 2010. Operating income in the third quarters of 2011 and 2010 included income of $2.3 million and $0.7 million, respectively, related to gains from the sale of assets. Net income in the third quarter of 2011 was $8.6 million, or $.70 per diluted share, compared to $4.5 million, or $.36 per diluted share, in the third quarter of 2010. Net income from continuing operations in the third quarter of 2011 was $9.8 million, or $.80 per diluted share, compared to $4.5 million, or $.36 per diluted share, in the third quarter of 2010. Net income from continuing operations in the third quarter of 2011 included after-tax gains from the sale of assets of $2.0 million, or $.16 per diluted share, and a benefit from discrete tax items of $2.1 million, or $.17 per share, primarily due to the favorable resolution of an uncertain tax position. Net income from continuing operations in the third quarter of 2010 included after-tax gains from the sale of assets of $0.7 million, or $.06 per diluted share. Loss from discontinued operation in the third quarter of 2011 was $1.2 million, or $.10 per diluted share, due to an increase in the estimated liability associated with the recently filed class action settlement disclosed in a Form 8-K filed today. Adjusted net income, a non-GAAP measure, in the third quarter of 2011 was $5.7 million, or $.47 per diluted share, increasing 50 percent compared to $3.8 million, or $.30 per diluted share, in the third quarter of 2010.

Adjusted Net Income and Adjusted Diluted Earningsper Share (EPS) Reconciliation (non-GAAP)

 

Three Months Ended Oct. 1, 2011

 

Three Months Ended Oct. 2, 2010

($ in millions)

 

Diluted EPS

($ in millions)

 

Diluted EPS

Net Income and Diluted EPS Attributable to Kadant, as reported

$

8.6

$

.70

$

4.5

$

.36

Loss from discontinued operation   1.2   .10   -   -
Income and Diluted EPS from Continuing Operations, as reported

9.8

.80

4.5

.36

Adjustments for the following:
Gains from the sale of assets (2.0 ) (.16 ) (0.7 ) (.06 )
Benefit from discrete tax items   (2.1 )   (.17 )   -   -
Adjusted Net Income and Adjusted Diluted EPS $ 5.7 $ .47 $ 3.8 $ .30

“We had another outstanding quarter,” said Jonathan W. Painter, president and chief executive officer of Kadant. “GAAP diluted EPS from continuing operations was $.80 and is the highest quarterly result achieved in our 19 years as a public company. Excluding the gains from the sale of a building and a benefit from discrete tax items, adjusted diluted EPS increased over 50 percent from last year’s third quarter to $.47. This exceeded our guidance of $.40 to $.42, largely due to higher than expected revenues, and included bad debt expense of $.03 for a customer bankruptcy which occurred during the quarter and was not reflected in our guidance.

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