Kadant (NYSE:KAI) Q3 2025 Earnings Call October 29, 2025 11:00 AM ET Company ParticipantsJeff Powell - President and CEOMichael McKenney - EVP and CFOGary Prestopino - Managing DirectorConference Call ParticipantsRoss Sparenblek - Equity Research AnalystEdward Odre - Equity AnalystKurt Yinger - SVP and Research AnalystOperatorThank you for standing by. Welcome to Kadant's third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, ...

Kadant (NYSE:KAI) Q3 2025 Earnings Call October 29, 2025 11:00 AM ET Company ParticipantsJeff Powell - President and CEOMichael McKenney - EVP and CFOGary Prestopino - Managing DirectorConference Call ParticipantsRoss Sparenblek - Equity Research AnalystEdward Odre - Equity AnalystKurt Yinger - SVP and Research AnalystOperatorThank you for standing by. Welcome to Kadant Inc.'s third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentat ...

Kadant (NYSE:KAI) Q3 2025 Earnings Call October 29, 2025 11:00 AM ET Speaker3Thank you for standing by. Welcome to Kadant Inc.'s third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is bei ...

Core Viewpoint - Kadant (KAI) reported quarterly earnings of $2.59 per share, exceeding the Zacks Consensus Estimate of $2.18 per share, but down from $2.84 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +18.81%, following a previous surprise of +19.07% when earnings were $2.31 per share against an expectation of $1.94 [2] - Kadant's revenues for the quarter were $271.57 million, surpassing the Zacks Consensus Estimate by 4.29%, and slightly down from $271.61 million year-over-year [3] Stock Performance and Outlook - Kadant shares have declined approximately 12% year-to-date, contrasting with the S&P 500's gain of 16.9% [4] - The company's current Zacks Rank is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Earnings Expectations - The consensus EPS estimate for the upcoming quarter is $2.55 on revenues of $273.84 million, and for the current fiscal year, it is $9.14 on revenues of $1.03 billion [8] Industry Context - The Manufacturing - General Industrial industry, to which Kadant belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Financial Performance - Revenue for Q3 2025 was $271.6 million, with organic revenue decreasing by 4%[5] - Net income decreased by 12% to $27.7 million compared to $31.6 million in Q3 2024[6] - GAAP EPS decreased by 12% to $2.35, while adjusted EPS decreased by 9% to $2.59[6] - Adjusted EBITDA decreased by 8% to $58.0 million, representing 21.4% of revenue[7] - Operating cash flow decreased by 10% to $47.3 million compared to $52.5 million in Q3 2024[7] - Bookings decreased by 1% to $238.4 million, with organic bookings down by 4%[8] - Revenue for the three months ended September 27, 2025, was $271,567,000, a slight decrease of 0.1% compared to $271,614,000 for the same period in 2024[21] - Net income attributable to Kadant for the three months ended September 27, 2025, was $27,722,000, down 12.0% from $31,586,000 in the prior year[21] - Adjusted net income for the three months ended September 27, 2025, was $30,569,000, resulting in an adjusted diluted EPS of $2.59, compared to $33,416,000 and $2.84 in the same period of 2024[21] - Operating income for the nine months ended September 27, 2025, was $117,579,000, a decrease of 12.5% from $134,315,000 in the same period of 2024[27] - Adjusted EBITDA for the nine months ended September 27, 2025, was $158.314 million, down 10.7% from $177.267 million in the same period of 2024[29] - Adjusted EBITDA margin for the three months ended September 27, 2025, was 21.4%, compared to 23.3% for the same period in 2024[29] Guidance and Expectations - The company expects revenue of $1.036 to $1.046 billion for 2025, revised from previous guidance[10] - Adjusted EPS guidance for 2025 is maintained at $9.05 to $9.25, excluding $0.51 of acquisition-related costs[10] - For Q4 2025, revenue is expected to be between $270 million and $280 million, with GAAP EPS of $1.91 to $2.11[10] Segment Performance - Flow Control segment revenue for the three months ended September 27, 2025, was $94,839,000, down 2.7% from $97,521,000 in 2024[24] - Material Handling segment revenue increased by 11.0% to $70,335,000 for the three months ended September 27, 2025, compared to $63,397,000 in the prior year[24] - The percentage of parts and consumables revenue increased to 69% for the three months ended September 27, 2025, compared to 65% in the same period of 2024[24] - Operating income for the Industrial Processing segment for the three months ended September 27, 2025, was $18.828 million, a decrease of 27.3% from $25.969 million in the same period of 2024[29] - Adjusted operating income for the Material Handling segment for the three months ended September 27, 2025, was $12.565 million, an increase from $9.019 million in the same period of 2024[29] Costs and Expenses - Acquisition costs for the three months ended September 27, 2025, totaled $2.253 million, significantly higher than $469,000 in the same period of 2024[29] - The company reported an operating loss of $11.087 million in the Corporate segment for the three months ended September 27, 2025, compared to a loss of $10.056 million in the same period of 2024[31] Workforce and Operations - The company has approximately 3,900 employees across 22 countries, indicating a stable workforce supporting its global operations[32] - Kadant's products and services focus on enhancing efficiency and optimizing energy utilization in process industries, aligning with sustainable industrial processing goals[32] Risks and Challenges - The company faces various risks, including economic conditions, supply chain constraints, and competition, which may impact future performance[34]

Core Insights - Kadant Inc. reported its third-quarter financial results for the period ending September 27, 2025, highlighting solid performance despite ongoing challenges in demand for capital equipment and global trade uncertainties [1][3]. Financial Performance - Revenue for the third quarter was $271.6 million, unchanged from the previous year, with organic revenue decreasing by four percent, offset by a two percent increase from acquisitions and a two percent favorable foreign currency translation effect [4]. - Gross margin improved to 45.2% from 44.7% in the prior year [4]. - Net income decreased by 12% to $27.7 million compared to $31.6 million in 2024, with GAAP EPS also down 12% to $2.35 [5]. - Adjusted EPS fell by nine percent to $2.59, excluding acquisition-related costs [5]. - Adjusted EBITDA decreased by eight percent to $58.0 million, representing 21.4% of revenue, down from 23.3% in 2024 [6][27]. - Operating cash flow decreased by 10% to $47.3 million, while free cash flow decreased by nine percent to $44.1 million [6][26]. Bookings and Outlook - Bookings decreased by one percent to $238.4 million, with organic bookings down four percent [7]. - The company anticipates healthy demand for aftermarket parts and improving order activity for capital equipment in the fourth quarter, revising revenue guidance for 2025 to $1.036 to $1.046 billion [8]. - Adjusted EPS guidance remains at $9.05 to $9.25, while GAAP EPS is expected to be between $8.52 and $8.72 [8]. Segment Performance - The Flow Control segment reported revenue of $94.8 million, down from $97.5 million, while Industrial Processing revenue decreased to $106.4 million from $110.7 million [24]. - Material Handling segment revenue increased to $70.3 million from $63.4 million [24]. - The percentage of revenue from parts and consumables increased to 69% from 65% [24]. Company Overview - Kadant Inc. is a global supplier of technologies and engineered systems that enhance efficiency and productivity in process industries, with approximately 3,900 employees across 22 countries [29].

Core Viewpoint - Kadant Inc. is set to release its third quarter results for 2025 on October 28, 2025, followed by a webcast on October 29, 2025, to discuss financial performance and future expectations [1]. Company Overview - Kadant is a global supplier of technologies and engineered systems focused on Sustainable Industrial Processing, enhancing efficiency, optimizing energy utilization, and maximizing productivity in process industries [3]. - The company is headquartered in Westford, Massachusetts, and employs approximately 3,900 people across 22 countries [3]. Investor Information - Interested participants can access the live call and webcast through the "Investors" section of Kadant's website, with a recommendation to join 10 minutes early [2]. - A replay of the webcast will be available until November 28, 2025, and the earnings release along with the webcast presentation will also be posted in the "Investors" section [2].

Core Insights - Kadant Inc. is currently in Phase 8 of its 18-phase Adhishthana cycle, with a negative outlook as the stock has broken below its Cakra structure, indicating potential selling pressure and underperformance ahead [1][7]. Stock Performance Analysis - The stock formed a Cakra structure between Phases 4 and 8, which typically has bullish implications, but has recently shifted to a bearish outlook after breaking below the lower arc of its Cakra [2][3]. - Following the breakdown, Kadant's stock has fallen by approximately 23% since it broke its Cakra near the $350 level, suggesting continued underperformance until it enters the Guna Triads in Phases 14, 15, and 16, which will not occur until September 2029 [6]. Market Outlook - The current weekly structure indicates sustained weakness for Kadant, with the monthly chart also reflecting a bearish setup as it is in the descent leg of its Himalayan Formation [7]. - While short-term rallies may occur, the overall Adhishthana framework suggests a prolonged phase of consolidation and selling pressure, advising caution for investors and traders considering long positions in Kadant [8].

Group 1 - Kadant is conducting a conference call to discuss its acquisition of Clyde Industries, indicating a strategic move to enhance its business operations [2] - The call features key executives, including Michael McKenney, Executive VP & CFO, and Jeff Powell, President and CEO, highlighting the importance of leadership in the acquisition process [2] - The acquisition is positioned as a forward-looking strategy, with expectations of benefits that may arise from this transaction [3][4] Group 2 - The company acknowledges that forward-looking statements regarding the acquisition are subject to various risks and uncertainties, which could lead to actual results differing from expectations [4][5] - The call emphasizes the importance of understanding risk factors associated with the acquisition, as outlined in the company's annual report and SEC filings [4]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]