What does Kadant do and what are its main business segments?

What were the key takeaways from Kadant's earnings call?

What is the revenue and EPS growth rate for Kadant year over year?

What were the key takeaways from Kadant’s earnings call?

What is the market's earnings forecast for Kadant next quarter?

What factors drove the changes in Kadant's revenue and profit?

What is Kadant's gross profit margin?

What guidance did Kadant's management provide for the next earnings period?

- **Aftermarket Dominance**: 76% of Industrial Processing revenue from parts, driving 6% YoY growth.
- **Acquisition Momentum**: Clyde Industries deal to add $23-25M Q4 revenue, offsetting $0.51M costs.
- **Capital Delay Risk**: 60%+ backlog in Flow Control segment reflects 3% Q3 revenue decline.
- **Tariff Volatility**: Uncertain trade policies push $100M+ projects into 2026, impacting 2025 capital equipment outlook.

**【CEO Opening Remarks】**
- Highlighted record aftermarket parts revenue growth (6% YoY) and sequential improvement in Q3 2025.
- Noted persistent capital project delays due to macroeconomic uncertainty, with bookings expected to shift into 2026.
- Emphasized strategic focus on parts and consumables business,76% of Industrial Processing segment revenue.

**【CFO Financial Update】**
- Q3 2025 GAAP EPS of $2.35, adjusted EPS of $2.59 (vs. $2.84 prior year).
- Gross margin improved 50bps to 45.2%, driven by parts mix (69% of revenue).
- Acquisitions of Babbini ($16.5M) and Clyde Industries ($175M) to contribute $23-25M in Q4 revenue.
- Full year 2025 revenue guidance raised to $1.36-1.46B, despite $0.51M acquisition costs.

**【Q&A Highlights】**
- Capital equipment bookings delayed by 12-18 months due to administrative hurdles.
- Material Handling segment saw 11% revenue growth, 23.3% EBITDA margin.
- Tariffs and trade policy uncertainty continue to impact project timelines.
- Clyde acquisition expected to add $30M+ to backlog in Q4 2025.

Kadant Inc. (KAI) Q3 2025 Earnings Call Transcript

- **Record Aftermarket Performance**: Q2 aftermarket revenue hit $181.8 million (+22% YoY), driving 45.9% gross margin. 
- **Backlog Growth**: Ending backlog up 16% YoY to $299 million, with 60%+ of capital bookings for 2026+. 
- **Tariff Mitigation**: $5-6 million annualized tariff impact, partially offset by supplier diversification and manufacturing shifts. 
- **Acquisition Strategy**: Babbini acquisition ($19M) to expand dewatering tech, but modestly dilutive in 2025H2. 
- **Capital Caution**: Customers delaying orders amid trade policy uncertainty, but 2026 capital projects pipeline strong. 


**【CEO Summary Section】**
- **Operational Highlights**: Q2 bookings increased 7% to $269 million, driven by strong aftermarket demand (71% of revenue) and capital project activity. Revenue declined 7% YoY to $255.3 million due to softer capital shipments in 2024H2. Adjusted EBITDA was $52 million, down 15% YoY, with adjusted EPS of $2.31 (-18% YoY). Backlog improved to $299 million (+16% YoY). 
- **Segment Performance**: 
  - **Flow Control**: 4% revenue growth to $96 million, 28.9% EBITDA margin, 75% aftermarket mix. Dynamic Sealing Technologies integration complete. 
  - **Industrial Processing**: Capital orders up 9% to $105 million, but revenue down 16% to $189 million due to lower shipments. 
  - **Material Handling**: Bookings up 16% to $71 million, revenue down 6% to $60 million. 
- **Strategic Moves**: Acquired Babbini (Italy-based dewatering equipment) post-Q2 for $19 million, expected to be modestly dilutive in 2025H2. 

**【CFO Financial Commentary】**
- **Top Line**: Record aftermarket revenue ($181.8 million, +22% YoY) drove 45.9% gross margin (+150bps YoY). 
- **Costs**: SG&A rose 6% to $73.9 million (29% of rev vs 25.5% YoY), driven by FX losses ($1.9M) and acquisitions. 
- **Cash Flow**: Operating cash flow up 44% to $40.5 million, free cash flow +58% to $36.5 million. 
- **Liquidity**: Net debt $151.7 million (-$31M QoQ), leverage ratio 0.86. 
- **Guidance**: Full-year rev $1.2-1.4B, adj EPS $9.05-9.25. Q3 rev $256-263M, adj EPS $2.13-2.23. 

**【Q&A Highlights】**
- **Demand Trends**: Capital orders cautious due to trade policy uncertainty, but aftermarket demand resilient (ageing installed base). Q3 parts revenue may dip modestly due to summer lulls. 
- **Tariff Impact**: $5M-6M annualized tariff cost (unchanged from prior guidance). Steel tariffs up 50%, but mitigated via supplier diversification. 
- **Acquisition Impact**: Babbini expected to add ~$19M rev in 2025, but dilutive in 2025H2. 
- **Gross Margin Outlook**: 44.8-45.3% for 2025 as capital mix improves. 
- **Currency Impact**: Weakening USD added $1.9M to SG&A in Q2. 


Kadant Inc. (KAI) Q2 2025 Earnings Conference Call Transcript

- **Revenue resilience**: 69% parts/consumables offset 4% capex decline, up 5% YoY.
- **Tariff battle**: $5M-$6M incremental costs, 50% mitigation via suppliers/manufacturing.
- **Guidance shift**: $0.32-$0.39/share tariff impact, 2025 free cash flow target intact.
- **Customer behavior**: 20M capex deferrals, but 100M+ backlog stable.

**【CEO Summary Section】**
- Q1 revenue of $1.02B (down 4% YoY) driven by soft capital equipment demand, but aftermarket parts at 69% of revenue (up 5% YoY) offset weakness.
- Tariffs add $5M-$6M in incremental costs, with 50% mitigation progress via alternative suppliers and manufacturing shifts.
- 2025 guidance revised to $1.02B-$1.04B (prev $1.04B-$1.06B) with $0.32-$0.39/share tariff impact, reflecting delayed capital orders.

**【CFO Financial Commentary】**
- Q1 GAAP EPS $2.10 vs. $2.38 prior year, impacted by $0.32 tariff costs.
- Gross margin 46.1% (up 150bps vs. 44.6% prior year) driven by parts mix.
- Free cash flow $19M (up 15% YoY) despite $1.4M tariff-related payments.
- 2025 free cash flow target unchanged, with $24M capex for new manufacturing capacity.

**【Q&A Highlights】**
- **Order Deferrals**: $20M-$25M capex pushed to 2026, but 2025 backlog stable at $100M+.
- **Tariff Mitigation**: 50% cost impact mitigated via alternative suppliers, 50% passed to customers via surcharges.
- **Segment Mix**: Flow Control (68%) > Industrial (64%) > Material Handling (62%) in parts/consumables margin.
- **2025 Outlook**: 20%+ EBITDA growth if tariffs stabilize, 69% parts mix vs. 66% prior year.

Kadant (KAI)-30 Apr 25-2025 Q1 Earnings call transcript

- **Record Financials**: 2024 revenue $1.53B (+10%), EPS $10.28, up 2% YoY.
- **Segment Strength**: Industrial Processing EBITDA +250bps, Flow Control margin 28.7%.
- **2025 Outlook**: Capital bookings to strengthen in H2, gross margin 44.5%-45%.
- **Risks**: FX headwinds ($23.5M), China tariffs ($1.6M), Europe industrial weakness.
- **Acquisition Focus**: High-margin parts/consumables businesses to drive organic growth.

**【CEO Business Overview】**
- **Record Year Performance**: 2024 revenue reached $1.53 billion, up 10% YoY, driven by acquisitions and stable demand. Adjusted EPS hit $10.28, a 2% increase from 2023.
- **Segment Highlights**: 
  - **Flow Control**: Q4 revenue $95M (+8%), EBITDA margin 28.7%.
  - **Industrial Processing**: Full year EBITDA $110.8M, up 250bps margin.
  - **Material Handling**: Q4 revenue $62M (-4%), EBITDA margin decline due to lower capital revenue.
- **2025 Outlook**: Capital bookings expected to strengthen, especially in Wood Processing. Second half of 2025 sees potential recovery in Europe and Asia.

**【CFO Financial Review】**
- **Q4 2024 Results**: Revenue $258M (+8%), adjusted EBITDA $52.4M (+8%). Full year cash flow $155.3M, free cash flow $134.3M.
- **2025 Guidance**: 
  - Revenue $1.04B-$1.065B, adjusted EPS $9.70-$10.05.
  - Gross margin 44.5%-45%, SG&A 26.5%-27%.
  - Interest expense down 30% to $13M-$13.5M.
- **Risks**: Tariffs on China imports could add $1.6M cost, 75% mitigable. FX headwinds expected to impact 2025 revenue by $23.5M.

**【Q&A Key Takeaways】**
- **Capital Equipment**: 2025 backlog ($257M, 57% capital) expected to convert in H2. Gross margin on capital projects variable, but smaller replacements may yield higher margins.
- **Geographic Trends**: North America stable, Europe lagging due to industrial weakness. China industrial activity slow, but government stimulus may help.
- **Acquisition Strategy**: Pipeline active, focusing on parts/consumables businesses. 2024 acquisitions contributed $35.6M in SG&A, driving organic growth.
- **Tariff Impact**: <1% of COGS from Canada/Mexico; 10% China tariff adds $1.6M cost, 75% mitigable. Uncertainty over U.S. steel tariffs.


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