Kadant(US:KAI)2026-02-18 22:11Financial Performance - Fourth quarter revenue increased 11% to a record $286.2 million compared to $258.0 million in 2024, driven by 8% from acquisitions and 3% from favorable foreign currency translation[6] - Gross margin improved to 43.9%, up from 43.4% in the prior year[6] - Adjusted EPS rose 1% to $2.27, while GAAP EPS remained unchanged at $2.04 for both years[7] - Adjusted EBITDA increased 11% to $58 million, representing 20.3% of revenue[9] - Operating cash flow increased 17% to $60.8 million compared to $51.9 million in 2024[9] - Fiscal year 2025 revenue was $1,052.2 million, slightly down from $1,053.4 million in 2024, with organic revenue decreasing 4%[11] - Net income for the fiscal year decreased 9% to $102 million, with GAAP EPS down 9% to $8.65[12] - Revenue for the three months ended January 3, 2026, was $286,204,000, an increase of 10.9% compared to $258,030,000 for the same period in 2024[30] - Net income attributable to Kadant for the twelve months ended January 3, 2026, was $101,969,000, a decrease of 8.6% from $111,598,000 for the twelve months ended December 28, 2024[30] - Adjusted net income for the three months ended January 3, 2026, was $26,790,000, with adjusted diluted EPS of $2.27, compared to $26,548,000 and $2.25 for the same period in 2024[30] Segment Performance - Flow Control segment revenue for the three months ended January 3, 2026, was $99,639,000, up from $94,684,000 in the prior year, representing a 5.1% increase[32] - Industrial Processing segment revenue decreased to $117,635,000 for the three months ended January 3, 2026, from $101,428,000, a decline of 16%[32] - Material Handling segment revenue increased to $68,930,000 for the three months ended January 3, 2026, from $61,918,000, a growth of 11.5%[32] - Total bookings for the three months ended January 3, 2026, were $269,982,000, an increase of 12.2% from $240,644,000 in the prior year[32] Cash Flow and Assets - Operating cash flow for the twelve months ended January 3, 2026, increased to $171.328 million from $155.265 million in 2024, representing a growth of about 10.3%[36] - The company reported a free cash flow of $154.280 million for the twelve months ended January 3, 2026, compared to $134.260 million in 2024, marking an increase of about 14.9%[36] - The total assets as of January 3, 2026, were $1.712 billion, up from $1.430 billion as of December 28, 2024, indicating a growth of approximately 19.7%[38] Liabilities and Expenditures - The company’s total liabilities increased to $721.111 million as of January 3, 2026, from $572.217 million in 2024, representing an increase of about 25.9%[38] - Capital expenditures for the twelve months ended January 3, 2026, totaled $17.048 million, down from $21.005 million in 2024, reflecting a decrease of approximately 19%[36] Future Outlook - For 2026, the company expects revenue between $1.160 billion and $1.185 billion, with GAAP EPS projected between $10.27 and $10.62[15] - The company anticipates first quarter 2026 revenue of $270 to $280 million, with adjusted EPS expected between $1.78 and $1.88[15] Risks and Challenges - The company faces risks related to adverse changes in global and local economic conditions, impacting revenue predictions from large capital equipment projects[43] - There are uncertainties regarding the demand for coal, influenced by economic and environmental risks, which could affect overall performance[43] - Supply chain constraints and inflationary pressures are expected to impact raw material prices and availability, potentially affecting manufacturing operations[43] - Changes in global timber supply and the level of residential construction activity are critical factors influencing the company's operations[43] - The company is monitoring the impact of climate change and compliance with environmental regulations on its mining industry operations[43] - Currency fluctuations and changes in government regulations worldwide pose additional risks to financial stability[43] - Future sales of capital equipment in China remain variable and uncertain, which could significantly impact revenue[43] - The company is addressing cybersecurity risks and the potential for data breaches as part of its operational strategy[43] - The company is focused on managing its internal growth strategy amidst competition and potential restructuring efforts[43] - The company is committed to protecting its intellectual property and managing its debt obligations effectively[43]