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TheStreet Open House

Kadant Reports 2012 Second Quarter Results

Stocks in this article: KAI

Kadant Inc. (NYSE:KAI) reported its financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Financial Highlights

  • GAAP diluted earnings per share (EPS) from continuing operations was $0.56 in the second quarter of 2012 compared to $0.59 in the second quarter of 2011. Guidance was $0.50 to $0.52.
  • Revenues were $83.0 million in the quarter compared to $82.5 million in the second quarter of 2011. Guidance was $83 to $85 million.
  • Net income was $6.5 million in the quarter compared to $7.3 million in the second quarter of 2011.
  • EBITDA was $11.4 million in the quarter, down 8% from the second quarter of 2011, and was 13.8% of revenues compared to 15.1% in last year’s second quarter.
  • Cash flows from continuing operations were $8.6 million in the quarter, up 25% from the second quarter of 2011.
  • Repurchases of common stock were $7.3 million in the second quarter of 2012.

Note: EBITDA is a non-GAAP measure that excludes certain items as detailed later in this press release under the heading “Use of Non-GAAP Financial Measures” and in the reconciliation tables below.

Management Commentary

“We were very pleased with our results in the second quarter of 2012,” said Jonathan W. Painter, president and chief executive officer of Kadant. “Diluted EPS from continuing operations was $0.56, one of the best performances in our twenty-year history as a public company, and exceeded our guidance, which was $0.50 to $0.52.

“Revenues of $83.0 million were at the low end of our guidance, which was $83 to $85 million, and included an unfavorable foreign exchange translation effect of $3.5 million. Revenues also included a $2.4 million increase from Kadant M-Clean, which was acquired late in the second quarter of 2011 and included only one month’s results in that period. We were encouraged that our product gross margins were a solid 43.7 percent, although down from the near record level of 45.7 percent in the second quarter of 2011. Our EBITDA was $11.4 million in the second quarter of 2012, down from $12.5 million in the second quarter of 2011, and represented 13.8 percent of revenues. Operating cash flows from continuing operations were $8.6 million, up from $6.8 million in last year’s second quarter, and we repurchased $7.3 million of our common stock in the quarter. Cash less debt was $30.1 million at the end of the quarter.

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