falsedesktopKAI2020-09-26000088634620000136{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage\nPART I: Financial Information\t\t\nItem 1.\tFinancial Statements\t\n\tCondensed Consolidated Balance Sheet as of September 26 2020 and December 28 2019 (unaudited)\t3\n\tCondensed Consolidated Statement of Income for the three- and nine-month periods ended September 26 2020 and September 28 2019 (unaudited)\t4\n\tCondensed Consolidated Statement of Comprehensive Income for the three- and nine-month periods ended September 26 2020 and September 28 2019 (unaudited)\t5\n\tCondensed Consolidated Statement of Cash Flows for the nine-month periods ended September 26 2020 and September 28 2019 (unaudited)\t6\n\tCondensed Consolidated Statement of Stockholders' Equity for the three- and nine-month periods ended September 26 2020 and September 28 2019 (unaudited)\t7\n\tNotes to Condensed Consolidated Financial Statements (unaudited)\t8\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t24\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t34\nItem 4.\tControls and Procedures\t34\nPART II: Other Information\t\t\nItem 1A.\tRisk Factors\t35\nItem 6.\tExhibits\t36\n", "q10k_tbl_2": "\tSeptember 26 2020\tDecember 28 2019\n(In thousands except share and per share amounts)\t\nAssets\t\t\nCurrent Assets:\t\t\nCash and cash equivalents\t53554\t66786\nRestricted cash\t2650\t1487\nAccounts receivable net of allowances of $3113 and $2698\t94145\t95740\nInventories\t108715\t102715\nUnbilled revenue\t9095\t13162\nOther current assets\t15382\t17686\nTotal Current Assets\t283541\t297576\nProperty Plant and Equipment net of accumulated depreciation of $103664 and $95309\t82427\t86032\nOther Assets\t40565\t45851\nIntangible Assets Net (Note 1)\t164359\t173896\nGoodwill (Note 1)\t342999\t336032\nTotal Assets\t913891\t939387\nLiabilities and Stockholders' Equity\t\t\nCurrent Liabilities:\t\t\nCurrent maturities of long-term obligations (Note 6)\t1538\t2851\nAccounts payable\t32588\t45852\nAccrued payroll and employee benefits\t27946\t31968\nCustomer deposits\t25834\t24012\nAdvanced billings\t4520\t11280\nOther current liabilities\t35436\t30206\nTotal Current Liabilities\t127862\t146169\nLong-Term Obligations (Note 6)\t259049\t298174\nOther Long-Term Liabilities\t64735\t67965\nCommitments and Contingencies (Note 13)\t\t\nStockholders' Equity:\t\t\nPreferred stock $.01 par value 5000000 shares authorized; none issued\t0\t0\nCommon stock $.01 par value 150000000 shares authorized; 14624159 shares issued\t146\t146\nCapital in excess of par value\t108384\t106698\nRetained earnings\t465963\t435249\nTreasury stock at cost 3114599 and 3214888 shares\t(76320)\t(78778)\nAccumulated other comprehensive items (Note 9)\t(37232)\t(37620)\nTotal Kadant Stockholders' Equity\t460941\t425695\nNoncontrolling interest\t1304\t1384\nTotal Stockholders' Equity\t462245\t427079\nTotal Liabilities and Stockholders' Equity\t913891\t939387\n", "q10k_tbl_3": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\tSeptember 26 2020\tSeptember 28 2019\n(In thousands except per share amounts)\t\t\nRevenue (Notes 1 and 12)\t154610\t173504\t466597\t521985\nCosts and Operating Expenses:\t\t\t\t\nCost of revenue\t86294\t99257\t263510\t302852\nSelling general and administrative expenses\t43853\t47097\t134518\t144883\nResearch and development expenses\t2658\t2597\t8532\t7980\nRestructuring costs (Note 3)\t470\t0\t926\t0\n\t133275\t148951\t407486\t455715\nOperating Income\t21335\t24553\t59111\t66270\nInterest Income\t52\t43\t140\t158\nInterest Expense\t(1670)\t(3066)\t(6060)\t(10143)\nOther Expense Net\t(32)\t(98)\t(95)\t(296)\nIncome Before Provision for Income Taxes\t19685\t21432\t53096\t55989\nProvision for Income Taxes (Note 5)\t4705\t5219\t13738\t12310\nNet Income\t14980\t16213\t39358\t43679\nNet Income Attributable to Noncontrolling Interest\t(129)\t(98)\t(369)\t(360)\nNet Income Attributable to Kadant\t14851\t16115\t38989\t43319\nEarnings per Share Attributable to Kadant (Note 4)\t\t\t\t\nBasic\t1.29\t1.43\t3.40\t3.87\nDiluted\t1.28\t1.41\t3.38\t3.79\nWeighted Average Shares (Note 4)\t\t\t\t\nBasic\t11504\t11267\t11472\t11198\nDiluted\t11589\t11469\t11550\t11434\n", "q10k_tbl_4": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\tSeptember 26 2020\tSeptember 28 2019\n(In thousands)\t\t\nNet Income\t14980\t16213\t39358\t43679\nOther Comprehensive Items:\t\t\t\t\nForeign currency translation adjustment\t8656\t(9091)\t824\t(7603)\nPension and other post-retirement liability adjustments net (net of tax (benefit) provision of $(6) $12 $14 and $22)\t(14)\t31\t34\t59\nEffect of other post-retirement plan settlement\t0\t0\t(119)\t0\nDeferred gain (loss) on cash flow hedges (net of tax provision (benefit) of $19 $(47) $(103) and $(190))\t51\t(123)\t(275)\t(524)\nTotal other comprehensive items\t8693\t(9183)\t464\t(8068)\nComprehensive Income\t23673\t7030\t39822\t35611\nComprehensive Income Attributable to Noncontrolling Interest\t(191)\t(24)\t(445)\t(276)\nComprehensive Income Attributable to Kadant\t23482\t7006\t39377\t35335\n", "q10k_tbl_5": "\tNine Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\n(In thousands)\t\nOperating Activities\t\t\nNet income attributable to Kadant\t38989\t43319\nNet income attributable to noncontrolling interest\t369\t360\nNet income\t39358\t43679\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation and amortization\t23260\t24304\nStock-based compensation expense\t5126\t5125\nProvision for losses on accounts receivable\t505\t170\nGain on sale of property plant and equipment\t(4)\t(139)\nOther items net\t(250)\t954\nChanges in current assets and liabilities net of effects of acquisitions:\t\t\nAccounts receivable\t1306\t(1124)\nUnbilled revenue\t4332\t1957\nInventories\t(6229)\t(10294)\nOther current assets\t2840\t(4093)\nAccounts payable\t(13183)\t2798\nOther current liabilities\t(4460)\t(5171)\nNet cash provided by operating activities\t52601\t58166\nInvesting Activities\t\t\nAcquisitions net of cash acquired (Note 2)\t(7095)\t(177058)\nPurchases of property plant and equipment\t(5419)\t(6236)\nProceeds from sale of property plant and equipment\t55\t527\nNet cash used in investing activities\t(12459)\t(182767)\nFinancing Activities\t\t\nRepayment of short- and long-term obligations\t(69034)\t(108272)\nProceeds from issuance of short- and long-term obligations\t26000\t247090\nDividends paid\t(8141)\t(7604)\nTax withholding payments related to stock-based compensation\t(2596)\t(2670)\nProceeds from issuance of Company common stock\t1614\t2006\nDividend paid to noncontrolling interest\t(525)\t0\nOther financing activities\t(189)\t(52)\nNet cash (used in) provided by financing activities\t(52871)\t130498\nExchange Rate Effect on Cash Cash Equivalents and Restricted Cash\t660\t(2043)\n(Decrease) Increase in Cash Cash Equivalents and Restricted Cash\t(12069)\t3854\nCash Cash Equivalents and Restricted Cash at Beginning of Period\t68273\t46117\nCash Cash Equivalents and Restricted Cash at End of Period\t56204\t49971\n", "q10k_tbl_6": "\t\tThree Months Ended September 26 2020\t\t\t\t\t\t\t\t\t\t\t\n(In thousands except share and per share amounts)\t\tCommon Stock\t\t\tCapital in Excess of Par Value\t\tRetained Earnings\t\tTreasury Stock\t\tAccumulated Other Comprehensive Items\tNoncontrolling Interest\tTotal Stockholders' Equity\n\tShares\t\tAmount\t\t\tShares\t\tAmount\t\t\nBalance at June 27 2020\t\t14624159\t\t146\t107202\t\t453874\t\t3127565\t(76638)\t(45863)\t1638\t440359\nNet income\t\t0\t\t0\t0\t\t14851\t\t0\t0\t0\t129\t14980\nDividend declared - Common Stock $0.24 per share\t\t0\t\t0\t0\t\t(2762)\t\t0\t0\t0\t0\t(2762)\nDividend paid to noncontrolling interest\t\t0\t\t0\t0\t\t0\t\t0\t0\t0\t(525)\t(525)\nActivity under stock plans\t\t0\t\t0\t1182\t\t0\t\t(12966)\t318\t0\t0\t1500\nOther comprehensive items\t\t0\t\t0\t0\t\t0\t\t0\t0\t8631\t62\t8693\nBalance at September 26 2020\t\t14624159\t\t146\t108384\t\t465963\t\t3114599\t(76320)\t(37232)\t1304\t462245\n\t\tNine Months Ended September 26 2020\t\t\t\t\t\t\t\t\t\t\t\n(In thousands except share and per share amounts)\t\tCommon Stock\t\t\tCapital in Excess of Par Value\t\tRetained Earnings\t\tTreasury Stock\t\tAccumulated Other Comprehensive Items\tNoncontrolling Interest\tTotal Stockholders' Equity\n\tShares\t\tAmount\t\t\tShares\t\tAmount\t\t\nBalance at December 28 2019\t\t14624159\t\t146\t106698\t\t435249\t\t3214888\t(78778)\t(37620)\t1384\t427079\nNet income\t\t0\t\t0\t0\t\t38989\t\t0\t0\t0\t369\t39358\nDividends declared - Common Stock $0.72 per share\t\t0\t\t0\t0\t\t(8275)\t\t0\t0\t0\t0\t(8275)\nDividend paid to noncontrolling interest\t\t0\t\t0\t0\t\t0\t\t0\t0\t0\t(525)\t(525)\nActivity under stock plans\t\t0\t\t0\t1686\t\t0\t\t(100289)\t2458\t0\t0\t4144\nOther comprehensive items\t\t0\t\t0\t0\t\t0\t\t0\t0\t388\t76\t464\nBalance at September 26 2020\t\t14624159\t\t146\t108384\t\t465963\t\t3114599\t(76320)\t(37232)\t1304\t462245\n", "q10k_tbl_7": "\t\tThree Months Ended September 28 2019\t\t\t\t\t\t\t\t\t\t\t\n(In thousands except share and per share amounts)\t\tCommon Stock\t\t\tCapital in Excess of Par Value\t\tRetained Earnings\t\tTreasury Stock\t\tAccumulated Other Comprehensive Items\tNoncontrolling Interest\tTotal Stockholders' Equity\n\tShares\t\tAmount\t\t\tShares\t\tAmount\t\t\nBalance at June 29 2019\t\t14624159\t\t146\t103767\t\t415605\t\t3369304\t(82562)\t(38251)\t1855\t400560\nNet income\t\t0\t\t0\t0\t\t16115\t\t0\t0\t0\t98\t16213\nDividend declared - Common Stock $0.23 per share\t\t0\t\t0\t0\t\t(2593)\t\t0\t0\t0\t0\t(2593)\nActivity under stock plans\t\t0\t\t0\t1452\t\t0\t\t(17270)\t424\t0\t0\t1876\nOther comprehensive items\t\t0\t\t0\t0\t\t0\t\t0\t0\t(9109)\t(74)\t(9183)\nBalance at September 28 2019\t\t14624159\t\t146\t105219\t\t429127\t\t3352034\t(82138)\t(47360)\t1879\t406873\n\t\tNine Months Ended September 28 2019\t\t\t\t\t\t\t\t\t\t\t\n(In thousands except share and per share amounts)\t\tCommon Stock\t\t\tCapital in Excess of Par Value\t\tRetained Earnings\t\tTreasury Stock\t\tAccumulated Other Comprehensive Items\tNoncontrolling Interest\tTotal Stockholders' Equity\n\tShares\t\tAmount\t\t\tShares\t\tAmount\t\t\nBalance at December 29 2018\t\t14624159\t\t146\t104731\t\t393578\t\t3514163\t(86111)\t(39376)\t1603\t374571\nNet income\t\t0\t\t0\t0\t\t43319\t\t0\t0\t0\t360\t43679\nAdoption of ASU No. 2016-02 Leases\t\t0\t\t0\t0\t\t(17)\t\t0\t0\t0\t0\t(17)\nDividends declared - Common Stock $0.69 per share\t\t0\t\t0\t0\t\t(7753)\t\t0\t0\t0\t0\t(7753)\nActivity under stock plans\t\t0\t\t0\t488\t\t0\t\t(162129)\t3973\t0\t0\t4461\nOther comprehensive items\t\t0\t\t0\t0\t\t0\t\t0\t0\t(7984)\t(84)\t(8068)\nBalance at September 28 2019\t\t14624159\t\t146\t105219\t\t429127\t\t3352034\t(82138)\t(47360)\t1879\t406873\n", "q10k_tbl_8": "\tNine Months Ended\t\n(In thousands)\tSeptember 26 2020\tSeptember 28 2019\nCash Paid for Interest\t5518\t9711\nCash Paid for Income Taxes Net of Refunds\t9953\t18037\nNon-Cash Investing Activities:\t\t\nFair value of assets acquired\t9295\t208558\nCash paid for acquired businesses\t(7565)\t(179489)\nLiabilities Assumed of Acquired Businesses\t1730\t29069\nNon-cash additions to property plant and equipment\t101\t304\nNon-Cash Financing Activities:\t\t\nIssuance of Company common stock upon vesting of restricted stock units\t4557\t3908\nDividends declared but unpaid\t2762\t2593\n", "q10k_tbl_9": "(In thousands)\tSeptember 26 2020\tSeptember 28 2019\tDecember 28 2019\tDecember 29 2018\nCash and cash equivalents\t53554\t48650\t66786\t45830\nRestricted cash\t2650\t1321\t1487\t287\nTotal Cash Cash Equivalents and Restricted Cash\t56204\t49971\t68273\t46117\n", "q10k_tbl_10": "\tSeptember 26 2020\tDecember 28 2019\n(In thousands)\t\nRaw Materials\t47918\t49332\nWork in Process\t17089\t15344\nFinished Goods\t43708\t38039\n\t108715\t102715\n", "q10k_tbl_11": "(In thousands)\tGross\tAccumulated Amortization\tCurrency Translation\tNet\nSeptember 26 2020\t\t\t\t\nDefinite-Lived\t\t\t\t\nCustomer relationships\t174423\t(62018)\t(3741)\t108664\nProduct technology\t56568\t(30674)\t(1520)\t24374\nTradenames\t6753\t(2811)\t(362)\t3580\nOther\t18248\t(14036)\t(565)\t3647\n\t255992\t(109539)\t(6188)\t140265\nIndefinite-Lived\t\t\t\t\nTradenames\t24100\t0\t(6)\t24094\nAcquired Intangible Assets\t280092\t(109539)\t(6194)\t164359\nDecember 28 2019\t\t\t\t\nDefinite-Lived\t\t\t\t\nCustomer relationships\t171583\t(51798)\t(4141)\t115644\nProduct technology\t56011\t(27819)\t(1709)\t26483\nTradenames\t6527\t(2421)\t(427)\t3679\nOther\t17964\t(13295)\t(593)\t4076\n\t252085\t(95333)\t(6870)\t149882\nIndefinite-Lived\t\t\t\t\nTradenames\t24100\t0\t(86)\t24014\nAcquired Intangible Assets\t276185\t(95333)\t(6956)\t173896\n", "q10k_tbl_12": "(In thousands)\tFlow Control\tIndustrial Processing\tMaterial Handling\tTotal\nBalance at December 28 2019 (a)\t\t\t\t\nGross balance\t97680\t207536\t116325\t421541\nAccumulated impairment losses\t0\t(85509)\t0\t(85509)\nNet balance\t97680\t122027\t116325\t336032\n2020 Adjustments\t\t\t\t\nAcquisition (Note 2)\t0\t3985\t0\t3985\nCurrency translation\t804\t493\t1685\t2982\nTotal 2020 adjustments\t804\t4478\t1685\t6967\nBalance at September 26 2020\t\t\t\t\nGross balance\t98484\t212014\t118010\t428508\nAccumulated impairment losses\t0\t(85509)\t0\t(85509)\nNet balance\t98484\t126505\t118010\t342999\n", "q10k_tbl_13": "\tNine Months Ended\t\n(In thousands)\tSeptember 26 2020\tSeptember 28 2019\nBalance at Beginning of Year\t6467\t5726\nProvision charged to expense\t3960\t3332\nUsage\t(3809)\t(2778)\nAcquisition\t0\t303\nCurrency translation\t114\t(175)\nBalance at End of Period\t6732\t6408\n", "q10k_tbl_14": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26\tSeptember 28\tSeptember 26\tSeptember 28\n(In thousands)\t2020\t2019\t2020\t2019\nPoint in Time\t137679\t151101\t403568\t457093\nOver Time\t16931\t22403\t63029\t64892\n\t154610\t173504\t466597\t521985\n", "q10k_tbl_15": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26\tSeptember 28\tSeptember 26\tSeptember 28\n(In thousands)\t2020\t2019\t2020\t2019\nRevenue by Product Type:\t\t\t\t\nParts and Consumables\t102729\t105513\t305087\t330280\nCapital\t51881\t67991\t161510\t191705\n\t154610\t173504\t466597\t521985\nRevenue by Geography (based on customer location):\t\t\t\t\nNorth America\t87366\t92041\t269907\t291584\nEurope\t38951\t49146\t112881\t131944\nAsia\t18847\t20971\t50992\t61745\nRest of World\t9446\t11346\t32817\t36712\n\t154610\t173504\t466597\t521985\n", "q10k_tbl_16": "\tSeptember 26 2020\tDecember 28 2019\n(In thousands)\t\nAccounts Receivable\t94145\t95740\nContract Assets\t9095\t13162\nContract Liabilities\t31847\t37216\n", "q10k_tbl_17": "\tNine Months Ended\t\n(In thousands)\tSeptember 26 2020\tSeptember 28 2019\nBalance at Beginning of Period\t2698\t2897\nProvision charged to expense\t505\t170\nAccounts written off\t(133)\t(138)\nCurrency translation\t43\t(103)\nBalance at End of Period\t3113\t2826\n", "q10k_tbl_18": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\tSeptember 26 2020\tSeptember 28 2019\n(In thousands except per share amounts)\t\t\nNet Income Attributable to Kadant\t14851\t16115\t38989\t43319\nBasic Weighted Average Shares\t11504\t11267\t11472\t11198\nEffect of Stock Options Restricted Stock Units and Employee Stock Purchase Plan Shares\t85\t202\t78\t236\nDiluted Weighted Average Shares\t11589\t11469\t11550\t11434\nBasic Earnings per Share\t1.29\t1.43\t3.40\t3.87\nDiluted Earnings per Share\t1.28\t1.41\t3.38\t3.79\n", "q10k_tbl_19": "\tSeptember 26 2020\tDecember 28 2019\n(In thousands)\t\nRevolving Credit Facility due 2023\t245010\t265419\nCommercial Real Estate Loan\t0\t19425\nSenior Promissory Notes due 2023 to 2028\t10000\t10000\nFinance Leases due 2020 to 2025\t1775\t2308\nOther Borrowings due 2020 to 2023\t3802\t4000\nUnamortized Debt Issuance Costs\t0\t(127)\nTotal\t260587\t301025\nLess: Current Maturities of Long-Term Obligations\t(1538)\t(2851)\nLong-Term Obligations\t259049\t298174\n", "q10k_tbl_20": "\tThree Months Ended September 26 2020\t\tThree Months Ended September 28 2019\t\t\n(In thousands except percentages)\tNon-U.S. Pension\tOther Post-Retirement\tU.S. Pension\tNon-U.S. Pension\tOther Post-Retirement\nService Cost\t45\t2\t0\t43\t1\nInterest Cost\t22\t9\t283\t27\t37\nExpected Return on Plan Assets\t(14)\t(1)\t(248)\t(16)\t(1)\nRecognized Net Actuarial Loss\t10\t4\t8\t5\t3\nAmortization of Prior Service Cost\t2\t0\t0\t0\t0\n\t65\t14\t43\t59\t40\nThe weighted average assumptions used to determine net periodic benefit cost are as follows:\t\t\t\t\t\nDiscount Rate\t2.05%\t3.80%\t4.10%\t2.82%\t4.44%\nExpected Long-Term Return on Plan Assets\t7.21%\t7.21%\t4.10%\t9.22%\t9.22%\nRate of Compensation Increase\t3.14%\t5.57%\t-%\t2.99%\t5.57%\n", "q10k_tbl_21": "\tNine Months Ended September 26 2020\t\tNine Months Ended September 28 2019\t\t\n(In thousands except percentages)\tNon-U.S. Pension\tOther Post-Retirement\tU.S. Pension\tNon-U.S. Pension\tOther Post-Retirement\nService Cost\t131\t5\t0\t129\t3\nInterest Cost\t66\t29\t850\t84\t112\nExpected Return on Plan Assets\t(45)\t(3)\t(745)\t(50)\t(3)\nRecognized Net Actuarial Loss\t31\t12\t24\t15\t9\nAmortization of Prior Service Cost\t5\t0\t0\t0\t0\n\t188\t43\t129\t178\t121\nThe weighted average assumptions used to determine net periodic benefit cost are as follows:\t\t\t\t\t\nDiscount Rate\t2.12%\t3.83%\t4.10%\t2.81%\t4.44%\nExpected Long-Term Return on Plan Assets\t7.21%\t7.21%\t4.10%\t9.22%\t9.22%\nRate of Compensation Increase\t3.17%\t5.57%\t-%\t2.99%\t5.57%\n", "q10k_tbl_22": "(In thousands)\tForeign Currency Translation Adjustment\tPension and Other Post-Retirement Benefit Liability Adjustments\tDeferred Loss on Cash Flow Hedges\tTotal\nBalance at December 28 2019\t(36145)\t(831)\t(644)\t(37620)\nOther comprehensive income (loss) before reclassifications\t748\t(1)\t(420)\t327\nReclassifications from AOCI\t0\t(84)\t145\t61\nNet current period other comprehensive items\t748\t(85)\t(275)\t388\nBalance at September 26 2020\t(35397)\t(916)\t(919)\t(37232)\n", "q10k_tbl_23": "\tThree Months Ended\t\tNine Months Ended\t\t\n(In thousands)\tSeptember 26 2020\tSeptember 28 2019\tSeptember 26 2020\tSeptember 28 2019\tStatement of Income Line Item\nRetirement Benefit Plans (a)\t\t\t\t\t\nRecognized net actuarial loss\t(14)\t(16)\t(43)\t(48)\tOther expense net\nAmortization of prior service cost\t(2)\t0\t(5)\t0\tOther expense net\nTotal expense before income taxes\t(16)\t(16)\t(48)\t(48)\t\nIncome tax benefit\t4\t4\t132\t12\tProvision for income taxes\n\t(12)\t(12)\t84\t(36)\t\nCash Flow Hedges (b)\t\t\t\t\t\nInterest rate swap agreements\t(109)\t(10)\t(215)\t17\tInterest expense\nForward currency-exchange contracts\t47\t0\t24\t(129)\tCost of revenue\nTotal expense before income taxes\t(62)\t(10)\t(191)\t(112)\t\nIncome tax benefit\t15\t2\t46\t35\tProvision for income taxes\n\t(47)\t(8)\t(145)\t(77)\t\nTotal Reclassifications\t(59)\t(20)\t(61)\t(113)\t\n", "q10k_tbl_24": "\t\tSeptember 26 2020\t\tDecember 28 2019\t\n\tBalance Sheet Location\tAsset (Liability) (a)\tNotional Amount (b)\tAsset (Liability) (a)\tNotional Amount\n(In thousands)\t\t\nDerivatives Designated as Hedging Instruments:\t\t\t\t\t\nDerivatives in an Asset Position:\t\t\t\t\t\nForward currency-exchange contract\tOther Current Assets\t4\t1311\t0\t0\n2015 Swap Agreement\tOther Current Assets\t0\t0\t11\t10000\nDerivatives in a Liability Position:\t\t\t\t\t\nForward currency-exchange contracts\tOther Current Liabilities\t(14)\t842\t(75)\t4825\n2018 Swap Agreement\tOther Long-Term Liabilities\t(1202)\t15000\t(770)\t15000\nDerivatives Not Designated as Hedging Instruments:\t\t\t\t\t\nDerivatives in an Asset Position:\t\t\t\t\t\nForward currency-exchange contracts\tOther Current Assets\t25\t713\t3\t387\nDerivatives in a Liability Position:\t\t\t\t\t\nForward currency-exchange contracts\tOther Current Liabilities\t(5)\t686\t(43)\t2545\n", "q10k_tbl_25": "(In thousands)\tInterest Rate Swap Agreements\tForward Currency- Exchange Contracts\tTotal\nUnrealized Loss Net of Tax at December 28 2019\t(589)\t(55)\t(644)\nLoss (gain) reclassified to earnings (a)\t163\t(18)\t145\n(Loss) gain recognized in AOCI\t(487)\t67\t(420)\nUnrealized Loss Net of Tax at September 26 2020\t(913)\t(6)\t(919)\n", "q10k_tbl_26": "\tFair Value as of September 26 2020\t\t\t\n(In thousands)\tLevel 1\tLevel 2\tLevel 3\tTotal\nAssets:\t\t\t\t\nMoney market funds and time deposits\t10561\t0\t0\t10561\nBanker's acceptance drafts (a)\t0\t4423\t0\t4423\nForward currency-exchange contracts\t0\t29\t0\t29\nLiabilities:\t\t\t\t\n2018 Swap Agreement\t0\t1202\t0\t1202\nForward currency-exchange contracts\t0\t19\t0\t19\n", "q10k_tbl_27": "\tFair Value as of December 28 2019\t\t\t\n(In thousands)\tLevel 1\tLevel 2\tLevel 3\tTotal\nAssets:\t\t\t\t\nMoney market funds and time deposits\t9920\t0\t0\t9920\nBanker's acceptance drafts (a)\t0\t5230\t0\t5230\n2015 Swap Agreement\t0\t11\t0\t11\nForward currency-exchange contracts\t0\t3\t0\t3\nLiabilities:\t\t\t\t\n2018 Swap Agreement\t0\t770\t0\t770\nForward currency-exchange contracts\t0\t118\t0\t118\n", "q10k_tbl_28": "\tSeptember 26 2020\t\tDecember 28 2019\t\n\tCarrying Value\tFair Value\tCarrying Value\tFair Value\n(In thousands)\t\t\nDebt Obligations:\t\t\t\t\nRevolving credit facility\t245010\t245010\t265419\t265419\nCommercial real estate loan\t0\t0\t19425\t20541\nSenior promissory notes\t10000\t10916\t10000\t10803\n\t255010\t255926\t294844\t296763\n", "q10k_tbl_29": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 26\tSeptember 28\tSeptember 26\tSeptember 28\n(In thousands)\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nFlow Control\t56815\t62375\t165329\t188792\nIndustrial Processing\t62086\t74229\t192468\t222899\nMaterial Handling\t35709\t36900\t108800\t110294\n\t154610\t173504\t466597\t521985\nIncome Before Provision for Income Taxes\t\t\t\t\nFlow Control (a)\t13770\t15103\t37360\t43220\nIndustrial Processing (b)\t12072\t13107\t32147\t38830\nMaterial Handling (c)\t2614\t3525\t10341\t5515\nCorporate (d)\t(7121)\t(7182)\t(20737)\t(21295)\nTotal operating income\t21335\t24553\t59111\t66270\nInterest expense net (e)\t(1618)\t(3023)\t(5920)\t(9985)\nOther expense net (e)\t(32)\t(98)\t(95)\t(296)\n\t19685\t21432\t53096\t55989\nCapital Expenditures\t\t\t\t\nFlow Control\t509\t636\t1667\t1814\nIndustrial Processing\t785\t1053\t2460\t3223\nMaterial Handling\t486\t397\t1167\t1145\nCorporate\t42\t7\t125\t54\n\t1822\t2093\t5419\t6236\n", "q10k_tbl_30": "\t\t\t\t\t\t\t(Non-GAAP)\t\n\tThree Months Ended\t\t\t\tCurrency Translation\tAcquisition\tChange in Organic Revenue\t\n(In thousands except percentages)\tSeptember 26 2020\tSeptember 28 2019\tTotal Decrease\t% Change\t\tDecrease\t% Change\nFlow Control\t56815\t62375\t(5560)\t(9)%\t(260)\t0\t(5300)\t(8)%\nIndustrial Processing\t62086\t74229\t(12143)\t(16)%\t411\t752\t(13306)\t(18)%\nMaterial Handling\t35709\t36900\t(1191)\t(3)%\t498\t0\t(1689)\t(5)%\nConsolidated Revenue\t154610\t173504\t(18894)\t(11)%\t649\t752\t(20295)\t(12)%\n", "q10k_tbl_31": "\tThree Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\nFlow Control\t52.9%\t52.9%\nIndustrial Processing\t43.7%\t38.7%\nMaterial Handling\t31.1%\t34.0%\nConsolidated Gross Profit Margin\t44.2%\t42.8%\n", "q10k_tbl_32": "\tThree Months Ended\t\t\t\t\t\n(In thousands except percentages)\tSeptember 26 2020\t% of Revenue\tSeptember 28 2019\t% of Revenue\tDecrease\t% Change\nFlow Control\t15136\t27%\t16942\t27%\t(1806)\t(11)%\nIndustrial Processing\t13759\t22%\t14538\t20%\t(779)\t(5)%\nMaterial Handling\t7955\t22%\t8564\t23%\t(609)\t(7)%\nCorporate\t7003\tN/A\t7053\tN/A\t(50)\t(1)%\nConsolidated SG&A Expenses\t43853\t28%\t47097\t27%\t(3244)\t(7)%\n", "q10k_tbl_33": "\t\t\t\t\t\t\t(Non-GAAP)\t\n\tNine Months Ended\t\t\t\tCurrency Translation\tAcquisition\tChange in Organic Revenue\t\n(In thousands except percentages)\tSeptember 26 2020\tSeptember 28 2019\tTotal Decrease\t% Change\t\tDecrease\t% Change\nFlow Control\t165329\t188792\t(23463)\t(12)%\t(3694)\t0\t(19769)\t(10)%\nIndustrial Processing\t192468\t222899\t(30431)\t(14)%\t(2013)\t957\t(29375)\t(13)%\nMaterial Handling\t108800\t110294\t(1494)\t(1)%\t(178)\t0\t(1316)\t(1)%\nConsolidated Revenue\t466597\t521985\t(55388)\t(11)%\t(5885)\t957\t(50460)\t(10)%\n", "q10k_tbl_34": "\tNine Months Ended\t\n\tSeptember 26 2020\tSeptember 28 2019\nFlow Control\t53.1%\t51.7%\nIndustrial Processing\t41.0%\t39.0%\nMaterial Handling\t33.5%\t31.4%\nConsolidated Gross Profit Margin\t43.5%\t42.0%\n", "q10k_tbl_35": "\tNine Months Ended\t\t\t\t\t\n(In thousands except percentages)\tSeptember 26 2020\t% of Revenue\tSeptember 28 2019\t% of Revenue\tDecrease\t% Change\nFlow Control\t46876\t28%\t51324\t27%\t(4448)\t(9)%\nIndustrial Processing\t42499\t22%\t44794\t20%\t(2295)\t(5)%\nMaterial Handling\t24730\t23%\t27783\t25%\t(3053)\t(11)%\nCorporate\t20413\tN/A\t20982\tN/A\t(569)\t(3)%\nConsolidated SG&A Expenses\t134518\t29%\t144883\t28%\t(10365)\t(7)%\n", "q10k_tbl_36": "\tNine Months Ended\t\n(In thousands)\tSeptember 26 2020\tSeptember 28 2019\nNet Cash Provided by Operating Activities\t52601\t58166\nNet Cash Used in Investing Activities\t(12459)\t(182767)\nNet Cash (Used in) Provided by Financing Activities\t(52871)\t130498\nExchange Rate Effect on Cash Cash Equivalents and Restricted Cash\t660\t(2043)\n(Decrease) Increase in Cash Cash Equivalents and Restricted Cash\t(12069)\t3854\n", "q10k_tbl_37": "Exhibit Number\t\t\n\tDescription of Exhibit\n31.1\t\tCertification of the Principal Certification of the Principal Executive Officer of the Registrant Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.\n31.2\t\tCertification of the Principal Financial Officer of the Registrant Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.\n32*\t\tCertification of the Chief Executive Officer and the Chief Financial Officer of the Registrant Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS\t\tInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH\t\tInline XBRL Taxonomy Extension Schema Document.\n101.CAL\t\tInline XBRL Taxonomy Extension Calculation Linkbase Document.\n101.DEF\t\tInline XBRL Taxonomy Extension Definition Linkbase Document.\n101.LAB\t\tInline XBRL Taxonomy Extension Label Linkbase Document.\n101.PRE\t\tInline XBRL Taxonomy Extension Presentation Linkbase Document.\n104\t\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_5"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission file number 001-11406
KADANT INC.
(Exact name of registrant as specified in its charter)
Delaware
52-1762325
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Technology Park Drive
Westford, Massachusetts01886
(Address of principal executive offices, including zip code)
(978) 776-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $.01 par value
KAI
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 23, 2020, the registrant had 11,509,560 shares of common stock outstanding.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Kadant Inc. was incorporated in Delaware in November 1991 and trades on the New York Stock Exchange under the ticker symbol "KAI."
Kadant Inc. (together with its subsidiaries, the Company) is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. Its products, technologies, and services play an integral role in enhancing process efficiency, optimizing energy utilization, and maximizing productivity in resource-intensive industries.
COVID-19
On March 11, 2020, the World Health Organization designated the novel coronavirus (COVID-19) a global pandemic, and a national emergency was subsequently declared by the U.S. government. The pandemic has negatively affected the global economy, disrupted global supply chains, and resulted in significant travel and transport restrictions, which have adversely affected the Company’s bookings and financial results. The impact of the COVID-19 pandemic, including the resulting economic impact, continues to evolve and the Company is closely monitoring its impact on all aspects of its business.
Interim Financial Statements
The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited, and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at September 26, 2020, its results of operations, comprehensive income, and stockholders' equity for the three- and nine-month periods ended September 26, 2020 and September 28, 2019, and its cash flows for the nine-month periods ended September 26, 2020 and September 28, 2019. Interim results are not necessarily indicative of results for a full year or for any other interim period.
The condensed consolidated balance sheet presented as of December 28, 2019 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2019. The condensed consolidated financial statements and related notes are presented as permitted by the rules and regulations of the Securities and Exchange Commission (SEC) for Form 10-Q and do not contain certain information included in the annual consolidated financial statements and related notes of the Company. The condensed consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the SEC.
Financial Statement Presentation
In the first quarter of 2020, the Company realigned its business segments into three new reportable operating segments: Flow Control, Industrial Processing, and Material Handling. The Company previously reported its financial results by combining its operating entities into three reportable operating segments: Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products. Financial information for 2019 has been recast to conform to the new segment presentation. See Note 12, Business Segment Information, for further detail regarding the Company's segments.
Use of Estimates and Critical Accounting Policies
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Notes 1 and 3 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2019 describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 26, 2020, except that the Company no longer considers its policy with respect to accounting for pension benefits to be a critical accounting policy due to the settlement of its U.S. pension plan in December 2019.
Supplemental Cash Flow Information
Nine Months Ended
(In thousands)
September 26, 2020
September 28, 2019
Cash Paid for Interest
$
5,518
$
9,711
Cash Paid for Income Taxes, Net of Refunds
$
9,953
$
18,037
Non-Cash Investing Activities:
Fair value of assets acquired
$
9,295
$
208,558
Cash paid for acquired businesses
(7,565)
(179,489)
Liabilities Assumed of Acquired Businesses
$
1,730
$
29,069
Non-cash additions to property, plant, and equipment
$
101
$
304
Non-Cash Financing Activities:
Issuance of Company common stock upon vesting of restricted stock units
$
4,557
$
3,908
Dividends declared but unpaid
$
2,762
$
2,593
Restricted Cash
The Company's restricted cash serves as collateral for certain banker's acceptance drafts issued to vendors and for bank guarantees associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business. The majority of the bank guarantees will expire over the next twelve months.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows:
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Intangible Assets, Net
Acquired intangible assets by major asset class are as follows:
(In thousands)
Gross
Accumulated Amortization
Currency Translation
Net
September 26, 2020
Definite-Lived
Customer relationships
$
174,423
$
(62,018)
$
(3,741)
$
108,664
Product technology
56,568
(30,674)
(1,520)
24,374
Tradenames
6,753
(2,811)
(362)
3,580
Other
18,248
(14,036)
(565)
3,647
255,992
(109,539)
(6,188)
140,265
Indefinite-Lived
Tradenames
24,100
—
(6)
24,094
Acquired Intangible Assets
$
280,092
$
(109,539)
$
(6,194)
$
164,359
December 28, 2019
Definite-Lived
Customer relationships
$
171,583
$
(51,798)
$
(4,141)
$
115,644
Product technology
56,011
(27,819)
(1,709)
26,483
Tradenames
6,527
(2,421)
(427)
3,679
Other
17,964
(13,295)
(593)
4,076
252,085
(95,333)
(6,870)
149,882
Indefinite-Lived
Tradenames
24,100
—
(86)
24,014
Acquired Intangible Assets
$
276,185
$
(95,333)
$
(6,956)
$
173,896
Gross intangible assets include $3,907,000 for acquired intangible assets from acquisitions that occurred in the second quarter of 2020. See Note 2, Acquisitions, for further details.
Intangible assets are initially recorded at fair value at the date of acquisition. Subsequent impairment charges are reflected as a reduction in the gross balance, as applicable. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset.
Goodwill
The changes in the carrying amount of goodwill by segment are as follows: