EX-99 2 kaiform8kexhibit05022016.htm KAI FORM 8-K EXHIBIT 99 05-02-2016 Exhibit
Exhibit 99

[LOGO]
NEWS
KADANT
AN ACCENT ON INNOVATION
One Technology Park Drive
Westford, MA 01886


Investor contact: Michael McKenney, 978-776-2000
Media contact: Wes Martz, 269-278-1715
  
Kadant Reports 2016 First Quarter Results

WESTFORD, Mass., May 2, 2016 - Kadant Inc. (NYSE:KAI) reported its financial results for the first quarter ended April 2, 2016.

First Quarter 2016 Financial Highlights
•
GAAP diluted earnings per share (EPS) was $0.62 in the first quarters of 2016 and 2015. The first quarter of 2016 included a $0.06 unfavorable effect of foreign currency translation compared to the first quarter of 2015. Guidance was $0.55 to $0.58.

•
Adjusted diluted EPS increased 14% to $0.72 in the first quarter of 2016 compared to $0.63 in the first quarter of 2015. Adjusted diluted EPS excludes $0.12 of expenses related to the acquisition of the PAALGROUP and a $0.02 gain on the sale of a building in Sweden in connection with the consolidation of operations in that country.

•
Revenue increased 5% to $97 million in the first quarter of 2016 compared to $92 million in the first quarter of 2015, including a $4 million, or 4%, decrease from the unfavorable effect of foreign currency translation. Excluding the foreign currency translation effect, revenue increased 9% in the first quarter of 2016 compared to the first quarter of 2015. Guidance was $89 to $91 million.

•
Gross margin was 45.6% in the first quarter of 2016 compared to 48.1% in the first quarter of 2015.

•
Bookings decreased 10% to $97 million in the first quarter of 2016 compared to $108 million in the first quarter of 2015, including a $4 million, or 3%, decrease from the unfavorable effect of foreign currency translation. Excluding the foreign currency translation effect, bookings decreased 7% in the first quarter of 2016 compared to the first quarter of 2015.

•
Cash flows from operations were $6 million in the first quarter of 2016 compared to negative cash flows of $2 million in the first quarter of 2015. Net cash (cash less debt) was $34 million at the end of the first quarter of 2016.

Note: Adjusted diluted EPS is a non-GAAP financial measure that excludes certain items as detailed later in this press release under the heading “Use of Non-GAAP Financial Measures” and in the reconciliation tables below.

Management Commentary

“We had a very good first quarter with stronger-than-expected revenue and earnings per share performance,” said Jonathan W. Painter, president and chief executive officer of Kadant Inc. “Our adjusted diluted EPS from continuing operations was $0.72 in the first quarter of 2016, which was better than expected primarily due to the shipment of several capital projects originally projected for the second quarter of 2016. Revenue of $97 million in the first quarter of 2016 was up five percent compared to the first quarter of 2015 and was significantly impacted by the effect of foreign currency translation. Excluding the effect of foreign currency translation, our internal revenue growth was nine percent compared to the


first quarter of 2015. Our strong revenue performance in the first quarter was led by our Stock-Preparation product line, which had solid results in all regions of the world.

After quarter-end, we completed the acquisition of the PAALGROUP (PAAL) for approximately $58 million. PAAL, headquartered in Germany, is the leading European supplier of baler equipment used in the processing of recyclable and waste materials. PAAL’s excellent reputation for reliable and innovative products as well as its strong aftermarket business makes it an excellent fit for Kadant.”

First Quarter 2016

Operating income from continuing operations decreased three percent to $10.1 million in the first quarter of 2016 compared to $10.4 million in the first quarter of 2015. Operating income included $1.4 million of acquisition costs and a $0.3 million gain on the sale of assets in the first quarter of 2016 compared to $0.1 million of expense related to acquired inventory and backlog and $0.1 million of restructuring costs in the first quarter of 2015. Adjusted operating income, a non-GAAP measure, was $11.2 million in the first quarter of 2016 compared to $10.6 million in the first quarter of 2015.

Net income from continuing operations was $6.9 million in the first quarter of 2016, or $0.62 per diluted share, compared to $6.8 million, or $0.62 per diluted share, in the first quarter of 2015. Net income from continuing operations in the first quarter of 2016 included $1.3 million, or $0.12 per diluted share, of after-tax acquisition costs and a $0.2 million, or $0.02 per diluted share, after-tax gain on the sale of assets. Net income from continuing operations in the first quarter of 2015 included after-tax restructuring costs of $0.1 million, or $0.01 per diluted share. Adjusted net income, a non-GAAP measure, was $8.0 million, or $0.72 per diluted share, in the first quarter of 2016 compared to $7.0 million, or $0.63 per diluted share, in the first quarter of 2015.
Adjusted Net Income and Adjusted Diluted EPS Reconciliation (non-GAAP)
 
Three Months Ended
Apr. 2, 2016
 
Three Months Ended
Apr. 4, 2015
 
($ in millions)
 
Diluted EPS
 
($ in millions)
 
Diluted EPS
Net Income and Diluted EPS Attributable to Kadant, as reported
 
$
6.9

 
$
0.62

 
$
6.9

 
$
0.62

Income from discontinued operation, net of tax
 
—

 
—

 
(0.1
)
 
—

Income and Diluted EPS from continuing operations, as reported
 
$
6.9

 
$
0.62

 
$
6.8

 
$
0.62

Adjustments for the following:
 
 
 
 
 
 
 
 
Acquisition costs, net of tax
 
1.3

 
0.12

 
—

 
—

Amortization of acquired backlog and profit in inventory, net of tax
 
—

 
—

 
0.1

 
—

Restructuring costs and other income, net of tax
 
(0.2
)
 
(0.02
)
 
0.1

 
0.01

Adjusted Net Income and Adjusted Diluted EPS
 
$
8.0

 
$
0.72

 
$
7.0

 
$
0.63


Guidance
    
“The inclusion of PAAL will increase our 2016 revenue and adjusted diluted EPS, although the acquisition-related costs will have a negative effect on our GAAP diluted EPS,” Mr. Painter continued. “For 2016, we expect revenues of $412 to $422 million, revised from our previous guidance of $370 to $380 million. We expect to achieve GAAP diluted EPS for 2016 of $2.75 to $2.85, revised from our previous guidance of $2.80 to $2.90. Our revised 2016 guidance includes $0.14 of acquisition costs, $0.10 of expense related to acquired inventory and backlog, and a $0.02 gain on the sale of assets. Excluding the acquisition-related costs and gain, our adjusted diluted EPS guidance for 2016 is $2.97 to $3.07. For the second quarter of 2016, we expect to achieve GAAP diluted EPS of $0.50 to $0.53 on revenue of $103 to $105 million. Our second quarter of 2016 GAAP diluted EPS includes $0.02 of acquisition costs and $0.10 of expense related to acquired inventory and backlog.”

Conference Call



Kadant will hold a webcast with a slide presentation for investors on Tuesday, May 3, 2016, at 11 a.m. eastern time to discuss its first quarter performance, as well as future expectations. To access the webcast, including the slideshow and accompanying audio, go to www.kadant.com and click on “Investors”. To listen to the webcast via teleconference, call 877-703-6107 within the U.S., or +1-857-244-7306 outside the U.S. and reference participant passcode 83375884. Prior to the call, our earnings release and the slides used in the webcast presentation will be filed with the Securities and Exchange Commission and will be available at www.sec.gov. An archive of the webcast presentation will be available on our Web site until June 3, 2016.

Shortly after the webcast, Kadant will post its updated general investor presentation incorporating the first quarter results on its Web site at www.kadant.com under the “Investors” section.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including increases or decreases in revenue excluding the effect of foreign currency translation, adjusted operating income, adjusted net income, adjusted diluted EPS, earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA.

We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results, or future outlook. We believe that the inclusion of such measures helps investors to gain an understanding of our underlying operating performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. Such measures are also used by us in our financial and operating decision-making and for compensation purposes. We also believe this information is responsive to investors' requests and gives them an additional measure of our performance.
    
The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for the results of operations prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this press release have limitations associated with their use as compared to the most directly comparable GAAP measures, in that they may be different from, and therefore not comparable to, similar measures used by other companies.

Revenue included a $3.8 million unfavorable foreign currency translation effect in the first quarter of 2016. We present increases or decreases in revenue excluding the effect of foreign currency translation to provide investors insight into underlying revenue trends.
        
Adjusted operating income, adjusted EBITDA, adjusted net income, and adjusted diluted EPS exclude acquisition costs, restructuring costs, other income, and expense related to acquired inventory and backlog. These items are excluded as they are not indicative of our core operating results and are not comparable to other periods, which have differing levels of incremental costs or income or none at all.

Adjusted operating income and adjusted EBITDA exclude:
•
Pre-tax gain of $0.3 million in the first quarter of 2016 and pre-tax restructuring costs of $0.1 million in the first quarter of 2015.
•
Pre-tax acquisition costs of $1.4 million in the first quarter of 2016.
•
Pre-tax expense related to acquired inventory and backlog of $0.1 million in the first quarter of 2015.

Adjusted net income and adjusted diluted EPS exclude:
•
After-tax gain of $0.2 million ($0.3 million net of tax of $0.1 million) in the first quarter of 2016 and after-tax restructuring costs of $0.1 million in the first quarter of 2015.


•
After-tax acquisition costs of $1.3 million ($1.4 million net of tax of $0.1 million) in the first quarter of 2016.
•
After-tax expense related to acquired inventory and backlog of $0.1 million in the first quarter of 2015.

Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in this press release.

-more-








Financial Highlights (unaudited)
 
 
 
 
 
 
 
 
(In thousands, except per share amounts and percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Consolidated Statement of Income
 
April 2,
2016
 
April 4,
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
96,538

 
$
92,251

 
 
 
 
Costs and Operating Expenses:
 
 
 
 
 
 
 
 
 
Cost of revenues
 
52,562

 
47,914

 
 
 
 
 
Selling, general, and administrative expenses
 
32,496

 
32,222

 
 
 
 
 
Research and development expenses
 
1,704

 
1,660

 
 
 
 
 
Restructuring costs and other income
 
(317
)
 
84

 
 
 
 
 
 
 
86,445

 
81,880

 
 
 
 
Operating Income
 
10,093

 
10,371

 
 
 
 
Interest Income
 
55

 
53

 
 
 
 
Interest Expense
 
(269
)
 
(231
)
 
 
 
 
Income from Continuing Operations Before Provision
 
 
 
 
 
 
 
 
 
for Income Taxes
 
9,879

 
10,193

 
 
 
 
Provision for Income Taxes
 
2,888

 
3,268

 
 
 
 
Income from Continuing Operations
 
6,991

 
6,925

 
 
 
 
Income from Discontinued Operation, Net of Tax
 
—

 
65

 
 
 
 
Net Income
 
6,991

 
6,990

 
 
 
 
Net Income Attributable to Noncontrolling Interest
 
(115
)
 
(93
)
 
 
 
 
Net Income Attributable to Kadant
 
$
6,876

 
$
6,897

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per Share Attributable to Kadant:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.64

 
$
0.63

 
 
 
 
 
 
Diluted
 
$
0.62

 
$
0.62

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares:
 
 
 
 
 
 
 
 
 
 
Basic
 
10,793

 
10,892

 
 
 
 
 
 
Diluted
 
11,018

 
11,086

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding Effect
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
of Currency
Revenues by Product Line
 
April 2,
2016
 
April 4,
2015
 
 
Translation (a,b)
Stock-Preparation
 
$
38,418

 
$
30,646

 
$
7,772

 
$
8,389

Doctoring, Cleaning, & Filtration
 
23,839

 
27,286

 
(3,447
)
 
(2,275
)
Fluid-Handling
 
21,770

 
22,723

 
(953
)
 
87

 
Papermaking Systems
 
84,027

 
80,655

 
3,372

 
6,201

 
Wood Processing Systems
 
8,707

 
7,772

 
935

 
1,857

 
Fiber-Based Products
 
3,804

 
3,824

 
(20
)
 
(20
)
 
 
 
 
$
96,538

 
$
92,251

 
$
4,287

 
$
8,038

 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding Effect
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
of Currency
Sequential Revenues by Product Line
 
April 2,
2016
 
Jan. 2, 2016
 
 
Translation (a,b)
Stock-Preparation
 
$
38,418

 
$
46,716

 
$
(8,298
)
 
$
(8,256
)
Doctoring, Cleaning, & Filtration
 
23,839

 
24,379

 
(540
)
 
(223
)
Fluid-Handling
 
21,770

 
23,497

 
(1,727
)
 
(1,597
)
 
Papermaking Systems
 
84,027

 
94,592

 
(10,565
)
 
(10,076
)
 
Wood Processing Systems
 
8,707

 
10,477

 
(1,770
)
 
(1,528
)
 
Fiber-Based Products
 
3,804

 
2,531

 
1,273

 
1,273

 
 
 
 
$
96,538

 
$
107,600

 
$
(11,062
)
 
$
(10,331
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding Effect
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
of Currency
Revenues by Geography (c)
 
April 2,
2016
 
April 4,
2015
 
 
Translation (a,b)
North America
 
$
54,809

 
$
57,091

 
$
(2,282
)
 
$
(1,185
)
Europe
 
20,965

 
16,256

 
4,709

 
5,439

Asia
 
13,005

 
13,130

 
(125
)
 
626

Rest of World
 
7,759

 
5,774

 
1,985

 
3,158

 
 
 
 
$
96,538

 
$
92,251

 
$
4,287

 
$
8,038

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding Effect
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
of Currency
Sequential Revenues by Geography (c)
 
April 2,
2016
 
Jan. 2, 2016
 
 
Translation (a,b)
North America
 
$
54,809

 
$
53,325

 
$
1,484

 
$
1,799

Europe
 
20,965

 
20,736

 
229

 
261

Asia
 
13,005

 
26,701

 
(13,696
)
 
(13,425
)
Rest of World
 
7,759

 
6,838

 
921

 
1,034

 
 
 
 
$
96,538

 
$
107,600

 
$
(11,062
)
 
$
(10,331
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase
 
 
 
 
 
 
 
 
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
Excluding Effect
 
 
 
 
Three Months Ended
 
Increase (Decrease)
 
of Currency
Bookings by Product Line
 
April 2,
2016
 
April 4,
2015
 
 
Translation (a)
Stock-Preparation
 
$
29,037

 
$
44,343

 
$
(15,306
)
 
$
(14,680
)
Doctoring, Cleaning, & Filtration
 
31,001

 
27,048

 
3,953

 
5,261

Fluid-Handling
 
22,495

 
26,092

 
(3,597
)
 
(2,705
)
 
Papermaking Systems
 
82,533

 
97,483

 
(14,950
)
 
(12,124
)
 
Wood Processing Systems
 
10,381

 
7,990

 
2,391

 
3,490

 
Fiber-Based Products
 
3,990

 
2,524

 
1,466

 
1,466

 
 
 
 
$
96,904

 
$
107,997

 
$
(11,093
)
 
$
(7,168
)
 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Business Segment Information
 
April 2,
2016
 
April 4,
2015
 
 
 
 
Gross Profit Margin:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
46.6
%
 
47.5
%
 
 
 
 
 
 
Other
 
38.6
%
 
52.1
%
 
 
 
 
 
 
 
 
45.6
%
 
48.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
13,497

 
$
12,283

 
 
 
 
 
 
Corporate and Other
 
(3,404
)
 
(1,912
)
 
 
 
 
 
 
 
 
$
10,093

 
$
10,371

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Income (b) (g):
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
14,585

 
$
12,506

 
 
 
 
 
 
Corporate and Other
 
(3,404
)
 
(1,912
)
 
 
 
 
 
 
 
 
$
11,181

 
$
10,594

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures:
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
$
518

 
$
952

 
 
 
 
 
 
Corporate and Other
 
6

 
264

 
 
 
 
 
 
 
 
$
524

 
$
1,216

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Cash Flow and Other Data
 
April 2,
2016
 
April 4,
2015
 
 
 
 
Cash Provided by (Used in) Operations (h)
 
$
5,518

 
$
(2,219
)
 
 
 
 
Depreciation and Amortization Expense
 
2,564

 
2,910

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data
 
April 2, 2016
 
Jan. 2, 2016
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Cash, Cash Equivalents, and Restricted Cash
 
$
106,039

 
$
66,936

 
 
 
 
Accounts Receivable, net
 
62,029

 
64,321

 
 
 
 
Inventories
 
58,681

 
56,758

 
 
 
 
Unbilled Contract Costs and Fees
 
2,319

 
6,580

 
 
 
 
Other Current Assets
 
15,518

 
10,525

 
 
 
 
Property, Plant and Equipment, net
 
42,125

 
42,293

 
 
 
 
Intangible Assets
 
38,147

 
38,032

 
 
 
 
Goodwill
 
121,681

 
119,051

 
 
 
 
Other Assets
 
11,081

 
11,002

 
 
 
 
 
 
 
 
$
457,620

 
$
415,498

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
Accounts Payable
 
$
23,796

 
$
24,418

 
 
 
 
Short- and Long-term Debt
 
72,171

 
31,250

 
 
 
 
Other Liabilities
 
84,050

 
91,885

 
 
 
 
 
Total Liabilities
 
180,017

 
147,553

 
 
 
 
 
Stockholders' Equity
 
277,603

 
267,945

 
 
 
 
 
 
 
 
$
457,620

 
$
415,498

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

-more-

 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Income and Adjusted EBITDA
 
Three Months Ended
 
 
Reconciliation
 
April 2,
2016
 
April 4,
2015
 
 
 
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Kadant
 
$
6,876

 
$
6,897

 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interest
 
115

 
93

 
 
 
 
 
 
Income from Discontinued Operation, Net of Tax
 
—

 
(65
)
 
 
 
 
 
 
Provision for Income Taxes
 
2,888

 
3,268

 
 
 
 
 
 
Interest Expense, net
 
214

 
178

 
 
 
 
 
 
Operating Income
 
10,093

 
10,371

 
 
 
 
 
 
Restructuring Costs and Other Income
 
(317
)
 
84

 
 
 
 
 
 
Acquisition Costs (d)
 
1,405

 
—

 
 
 
 
 
 
Acquired Backlog Amortization (e)
 
—

 
91

 
 
 
 
 
 
Acquired Profit in Inventory (f)
 
—

 
48

 
 
 
 
 
 
Adjusted Operating Income (b)
 
11,181

 
10,594

 
 
 
 
 
 
Depreciation and Amortization
 
2,564

 
2,819

 
 
 
 
 
 
Adjusted EBITDA (b)
 
$
13,745

 
$
13,413

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Papermaking Systems
 
 
 
 
 
 
 
 
 
 
Operating Income
 
$
13,497

 
$
12,283

 
 
 
 
 
 
Restructuring Costs and Other Income
 
(317
)
 
84

 
 
 
 
 
 
Acquisition Costs (d)
 
1,405

 
—

 
 
 
 
 
 
Acquired Backlog Amortization (e)
 
—

 
91

 
 
 
 
 
 
Acquired Profit in Inventory (f)
 
—

 
48

 
 
 
 
 
 
Adjusted Operating Income (b)
 
14,585

 
12,506

 
 
 
 
 
 
Depreciation and Amortization
 
1,876

 
2,072

 
 
 
 
 
 
Adjusted EBITDA (b)
 
$
16,461

 
$
14,578

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
Operating Loss
 
$
(3,404
)
 
$
(1,912
)
 
 
 
 
 
 
Depreciation and Amortization
 
688

 
747

 
 
 
 
 
 
EBITDA (b)
 
$
(2,716
)
 
$
(1,165
)
 
 
 
 
 
 
(a)
Represents the increase (decrease) resulting from the conversion of current period amounts reported in local currencies into U.S. dollars at the exchange rate of the prior period compared to the U.S. dollar amount reported in the prior period.
 
 
 
(b)
Represents a non-GAAP financial measure.
 
 
 
 
 
 
 
 
 
 
 
(c)
Geographic revenues are attributed to regions based on customer location.
 
 
 
(d)
Represents transaction costs related to our acquisition of RT Holding GmbH, the parent corporation of a group of companies known as the PAALGROUP.
 
 
(e)
Represents intangible amortization expense associated with acquired backlog.
 
 
 
 
 
 
 
 
 
 
(f)
Represents expense within cost of revenues associated with acquired profit in inventory.
 
 
(g)
See reconciliation to the most directly comparable GAAP financial measure under "Adjusted Operating Income and Adjusted EBITDA Reconciliation."
 
 
 
 
 
 
 
 
 
 
(h)
Prior period amount has been restated to conform to the current period presentation as a result of the adoption of Financial Accounting Standards Board's Accounting Standards Update No. 2016-09.

-more-

About Kadant

Kadant Inc. is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. The Company’s products, technologies, and services play an integral role in enhancing process efficiency, optimizing energy utilization, and maximizing productivity in resource-intensive industries. Kadant is based in Westford, Massachusetts, with revenue of $390 million in fiscal year 2015 and 1,800 employees in 18 countries worldwide. For more information, visit www.kadant.com.

The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties, including forward-looking statements about our expected future financial and operating performance, demand for our products, and economic and industry outlook. Our actual results may differ materially from these forward-looking statements as a result of various important factors, including those set forth under the heading "Risk Factors" in Kadant’s annual report on Form 10-K for the year ended January 2, 2016. These include risks and uncertainties relating to adverse changes in global and local economic conditions; the variability and difficulty in accurately predicting revenue from large capital equipment and systems projects; the variability and uncertainties in sales of capital equipment in China; currency fluctuations; our customers’ ability to obtain financing for capital equipment projects; changes in government regulations and policies; the oriented strand board market and levels of residential construction activity; development and use of digital media; price increases or shortages of raw materials; dependence on certain suppliers; international sales and operations; disruption in production; our acquisition strategy; our internal growth strategy; competition; soundness of suppliers and customers; our effective tax rate; future restructurings; soundness of financial institutions; our debt obligations; restrictions in our credit agreement; loss of key personnel; reliance on third-party research; protection of patents and proprietary rights; failure of our information systems or breaches of data security; fluctuations in our share price; and anti-takeover provisions. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.





###