Kadant (KAI) Q4 2023 earnings summary

Executive summary

• FY 2023 set records for revenue ($957.7M), adjusted EPS ($10.04), adjusted EBITDA ($201.3M) and operating cash flow ($165.5M).

• Q4 finished with revenue up 3% and strong cash generation, while adjusted EBITDA declined 2%; material handling growth supported the quarter.

Financial highlights

• Q4 revenue was $238.7M, up 3% YoY; organic revenue rose 1%, while FX added 2%.

• Q4 net income rose 5% to $27.4M; diluted GAAP EPS rose 4% to $2.33 and adjusted EPS rose 3% to $2.41.

• FY revenue increased 6% to $957.7M, with organic revenue also up 6%; net income fell 4% to $116.1M.

• FY GAAP EPS declined 4% to $9.90; adjusted EPS increased 9% to a record $10.04.

• Bookings rose 1% to $218.0M in Q4 but fell 4% to $917.4M for FY; year-end backlog was $310M.

Outlook and guidance

• FY 2024 guidance: revenue $1.040B–$1.065B, GAAP EPS $9.55–$9.85 and adjusted EPS $9.75–$10.05; adjusted EPS excludes $0.20 acquired inventory and backlog amortization.

• Q1 2024 guidance: revenue $238M–$246M, GAAP EPS $1.76–$1.86 and adjusted EPS $1.90–$2.00, excluding $0.14 acquired inventory and backlog amortization.

• FY 2024 expectations include record revenue, cash flow and adjusted EBITDA; earnings face higher borrowing costs and acquired-intangible amortization.

• Q1 is expected to be weaker than the remaining 2024 quarters due to capital project timing.