Kadant reports financial growth in 2021

Kadant Inc., an equipment manufacturer in Westford, Massachusetts, has released its financial results for the fourth quarter of 2021 and the fiscal year that ended Jan. 1.   

The company’s business units and brands include Germany-based baler producer Paal; Black-Clawson, which makes stock prep systems for recycled-content paper and board mills; and several others that make equipment for the papermaking and forest products sectors.

Revenue increased 30 percent to $218.5 million compared with $168.4 million in Q4 2020. Organic revenue increased 18 percent. The company’s gross margin was 42.4 percent compared with 44.1 percent in 2020.   

Generally accepted accounting principles (GAAP) diluted earnings per share (EPS) increased 48 percent to $2.07 compared with $1.40 in 2020. Adjusted diluted EPS increased 50 percent to $2.31 compared with $1.54 in 2020. Net income was $24.2 million compared with $16.2 million in 2020. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 39 percent to $44.8 million compared with $32.1 million in the prior-year quarter. Operating cash flow increased 51 percent to a record $61 million compared with$40.3 million in 2020.    

“Solid execution by our businesses led to an exceptional finish to a record-setting year,” says Jeffrey L. Powell, president and chief executive officer of Kadant. “Improved operating leverage drove our adjusted EBITDA margin to 20.5 percent and generated record operating cash flow of $61 million in the fourth quarter.”   

The company says bookings increased 17 percent to a record $230.8 million compared with $196.5 million in 2020. Organic bookings increased 6 percent, which excludes 11 percent from acquisitions.   

For the fiscal year 2021, revenue increased 24 percent to $786.6 million compared with $635 million in 2020. Organic revenue increased 15 percent, which excludes 5 percent from acquisitions and 4 percent from the favorable effect of foreign currency translation. The gross margin was 42.9 percent compared with 43.7 percent in 2020.   

GAAP diluted EPS increased 51 percent to $7.21 compared with $4.77 in 2020. Adjusted diluted EPS increased 57 percent to $7.83 compared with $5 in 2020.    

The company says net income was $84 million compared with $55.2 million in 2020. Adjusted EBITDA increased 38 percent to $159.4 million and 20.3 percent of revenue compared with $115.9 million and 18.3 percent of revenue in 2020. Operating cash flow increased 75 percent to $162.4 million compared with $92.9 million in 2020.   

Bookings increased 38 percent to $893.2 million compared with $648.5 million in 2020. Organic bookings increased 28 percent, which excludes 6 percent from acquisitions and 4 percent from the favorable effect of foreign currency translation.    

“For the full-year 2021, our diluted EPS and adjusted diluted EPS increased more than 50 percent to $7.21 and $7.83, respectively,” Powell says. “While supply chain issues, labor shortages and raw materials inflation remain a challenge, our strong focus on operational excellence and our decentralized business structure has proven valuable in offsetting these headwinds.”   

The company says it expects to deliver strong financial performance in the coming year with full-year GAAP diluted EPS of $8.50 to $8.70 on revenue of $870 to $890 million in 2022.    

Adjusted diluted EPS is expected to be $8.55 to $8.75 in 2022, excluding pretax amortization expense associated with an acquisition-related backlog of $700,000.    

The 2022 guidance includes a negative effect from foreign currency translation, which is lowering revenue by $12 million and adjusted diluted EPS by 15 cents. For the first quarter of 2022, the company expects revenue of $212 to $217 million.