GlobeNewswire Inc | Feb 17, 2021 04:55PM EST

February 17, 2021

Record Bookings, Operating Cash Flow, and Free Cash Flow in Q4 2020

WESTFORD, Mass., Feb. 17, 2021 (GLOBE NEWSWIRE) -- Kadant Inc. (NYSE: KAI) reported its financial results for the fourth quarter and fiscal year ended January 2, 2021.

Fourth Quarter Financial Highlights

-- Operating cash flow increased 3% to a record $40 million. -- Free cash flow increased 7% to a record $38 million. -- Bookings increased 23% to a record $197 million. -- Revenue decreased 8% to $168 million. -- GAAP diluted EPS increased 84% to $1.40. -- Adjusted diluted EPS increased 17% to $1.54. -- Net income increased 85% to $16 million. -- Adjusted EBITDA was $32 million and represented 19.1% of revenue.

Fiscal Year Financial Highlights

-- Operating cash flow was $93 million and free cash flow was $85 million. -- Bookings decreased 6% to $648 million. -- Revenue decreased 10% to $635 million. -- GAAP diluted EPS increased 5% to $4.77. -- Adjusted diluted EPS decreased 7% to $5.00. -- Net income increased 6% to $55 million. -- Adjusted EBITDA decreased 9% to $116 million and represented 18.3% of revenue.

Note: Percent changes above are based on comparison to the prior year period. Free cash flow, adjusted diluted EPS, adjusted EBITDA, adjusted EBITDA margin, and changes in organic revenue are non-GAAP financial measures that exclude certain items as detailed later in this press release under the heading Use of Non-GAAP Financial Measures.

Management CommentaryWhile the past year has been dominated by the global pandemic that impacted communities around the world, I am proud of the pivotal role Kadant has played in helping essential industries continue to operate, said Jeffrey L. Powell, president and chief executive officer. Our leadership teams across the globe continue to work tirelessly to safeguard our employees while meeting the needs of our customers. New order activity and revenue continued their upward trajectory in the fourth quarter of 2020 led by robust capital project activity in our Industrial Processing segment and strong demand for our parts and consumables across all our operating segments.

Overall, the quarter was better than expected with solid execution from our businesses enabling us to deliver strong margins and earnings in the fourth quarter. This led to record cash flow from operations and record free cash flow in the quarter which, combined with our debt repayments, helped reduce our leverage ratio to 1.61. As our end-market conditions improve and the broader macroeconomic outlook becomes increasingly positive, we are well-positioned to capitalize on new opportunities and accelerate revenue growth.

Fourth Quarter 2020 compared to 2019Revenue decreased eight percent to $168.4 million compared to $182.7 million in 2019. Organic revenue was down 10 percent, which excludes an acquisition and a two percent increase from the favorable effect of foreign currency translation. Gross margin was 44.1 percent compared to 40.9 percent in 2019.

GAAP diluted earnings per share (EPS) was $1.40 compared to $0.76 in 2019. Adjusted diluted EPS increased 17 percent to $1.54 compared to $1.32 in 2019. Adjusted diluted EPS in 2020 excludes $0.13 of impairment and restructuring costs and $0.01 of acquired backlog amortization. Adjusted diluted EPS in 2019 excludes a $0.55 settlement loss, $0.17 of impairment and restructuring costs, and a $0.16 discrete tax benefit. Net income was $16.2 million compared to $8.7 million in 2019 and adjusted EBITDA was $32.1 million compared to $32.2 million in the prior year quarter. Cash flow from operations increased three percent to a record $40.3 million compared to $39.2 million in 2019.

Bookings increased 23 percent to a record $196.5 million compared to $159.8 million in 2019. Organic bookings increased 20 percent, which excludes an acquisition and a three percent increase from the favorable effect of foreign currency translation.

Fiscal Year 2020 compared to 2019Revenue decreased 10 percent to $635.0 million compared to $704.6 million in 2019. Organic revenue was down 10 percent, which excludes an acquisition and the unfavorable effect of foreign currency translation. Gross margin was 43.7 percent compared to 41.7 percent in 2019.

GAAP diluted EPS increased five percent to $4.77 compared to $4.54 in 2019. Adjusted diluted EPS decreased seven percent to $5.00 compared to $5.36 in 2019. Adjusted diluted EPS in 2020 excludes $0.19 of impairment and restructuring costs, $0.04 of acquired backlog amortization, $0.03 of acquisition costs, and a $0.03 discrete tax benefit. Adjusted diluted EPS in 2019 excludes a $0.55 settlement loss, $0.32 of acquired profit in inventory and backlog amortization, a $0.29 discrete tax benefit, $0.17 of impairment and restructuring costs, and $0.06 of acquisition costs. Net income was $55.2 million compared to $52.1 million in 2019. Adjusted EBITDA decreased nine percent to $115.9 million compared to $127.1 million in 2019. Cash flow from operations decreased five percent to $92.9 million compared to $97.4 million in 2019.

Bookings decreased six percent to $648.5 million compared to $688.3 million in 2019. Organic bookings were down six percent, which excludes an acquisition and the unfavorable effect of foreign currency translation.

Summary and OutlookOur record bookings in the fourth quarter were led by strong capital project activity and solid contributions from our parts and consumables," Mr. Powell continued. "As we start 2021, we expect demand to improve as industrial production continues to strengthen. Our global footprint and the diversity of our product offerings have provided stability as the timing of the market recovery has varied by region and industry. While we have seen a recent strengthening in demand, there is uncertainty in how global markets may respond to the pandemic as the vaccine distribution has proven to be uneven around the world. As a result, we will not be providing guidance at this time.

Conference CallKadant will hold a webcast with a slide presentation for investors on Thursday, February 18, 2021, at 11:00 a.m. eastern time to discuss its fourth quarter and full-year performance, as well as future expectations. To access the webcast, including the slideshow and accompanying audio, go to www.kadant.comand click on Investors. To listen to the webcast via teleconference, call 888-326-8410 within the U.S., or +1-704-385-4884 outside the U.S. and reference participant passcode 2636925. 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 website until March 19, 2021.

Shortly after the webcast, Kadant will post its updated general investor presentation incorporating the fourth quarter and fiscal year results on its website at www.kadant.comunder the Investors section.

Use of Non-GAAP Financial MeasuresIn 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 acquisitions and foreign currency translation (organic revenue), adjusted operating income, adjusted net income, adjusted diluted EPS, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA margin, and free cash flow.

We believe 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 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 in the fourth quarter of 2020 included a $3.6 million favorable foreign currency translation effect and $0.7 million from an acquisition. Revenue in 2020 included a $2.2 million unfavorable foreign currency translation effect and $1.6 million from an acquisition. We present increases or decreases in organic revenue, which excludes the effect of acquisitions and foreign currency translation, to provide investors insight into underlying revenue trends.

Our non-GAAP financial measures exclude benefit plan settlement losses, impairment and restructuring costs, acquisition costs, amortization expense related to acquired profit in inventory and backlog, and discrete tax items. Free cash flow excludes capital expenditures from cash flow from operations. 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, expenditures or income, or none at all.

Fourth Quarter

Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:

-- Pre-tax impairment and restructuring costs of $2.1 million in 2020 and $2.5 million in 2019. -- Pre-tax expense related to acquired backlog amortization of $0.2 million in 2020.

Adjusted net income and adjusted diluted EPS exclude:

-- After-tax settlement loss of $6.4 million ($5.9 million pre-tax and tax expense of $0.5 million) in 2019. -- After-tax impairment and restructuring costs of $1.5 million ($2.1 million net of tax of $0.6 million) in 2020 and $1.9 million ($2.5 million net of tax of $0.6 million) in 2019. -- After-tax expense related to acquired backlog amortization of $0.1 million ($0.2 million net of tax of $0.1 million) in 2020. -- A discrete tax benefit of $1.8 million in 2019.

Free cash flow is calculated as cash flow from operations less:

-- Capital expenditures of $2.2 million in 2020 and $3.7 million in 2019.

Fiscal Year

Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:

-- Pre-tax impairment and restructuring costs of $3.0 million in 2020 and $2.5 million in 2019. -- Pre-tax acquisition costs of $0.5 million in 2020 and $0.8 million in 2019. -- Pre-tax expense related to acquired backlog amortization of $0.5 million in 2020 and $1.3 million in 2019. -- Pre-tax expense related to amortization of acquired profit in inventory of $3.5 million in 2019.

Adjusted net income and adjusted diluted EPS exclude:

-- After-tax settlement loss of $6.4 million ($5.9 million pre-tax and tax expense of $0.5 million). -- After-tax impairment and restructuring costs of $2.2 million ($3.0 million net of tax of $0.8 million) in 2020 and $1.9 million ($2.5 million net of tax of $0.6 million) in 2019. -- After-tax acquisition costs of $0.4 million ($0.5 million net of tax of $0.1 million) in 2020 and $0.7 million ($0.8 million net of tax of $0.1 million) in 2019. -- After-tax expense related to acquired backlog amortization of $0.4 million ($0.5 million net of tax of $0.1 million) in 2020 and $1.0 million ($1.3 million net of tax of $0.3 million) in 2019. -- After-tax expense related to amortization of acquired profit in inventory of $2.7 million ($3.5 million net of tax of $0.8 million) in 2019. -- A discrete tax benefit of $0.3 million in 2020 and $3.3 million in 2019.

Free cash flow is calculated as cash flow from operations less:

-- Capital expenditures of $7.6 million in 2020 and $10.0 million in 2019.

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

FinancialHighlights (unaudited)(In thousands, except per share amounts and percentages) Three Months Ended Twelve Months EndedConsolidatedStatement of Jan. 2, 2021 Dec. 28, 2019 Jan. 2, 2021 Dec. 28, 2019IncomeRevenue $ 168,431 $ 182,659 $ 635,028 $ 704,644 Costs andOperating Expenses: Cost of revenue 94,212 108,032 357,722 410,884 Selling, general, and administrative 47,387 47,642 181,905 192,525 expenses Research and development 2,766 2,904 11,298 10,884 expenses Impairment and restructuring 2,053 2,528 2,979 2,528 costs (b) 146,418 161,106 553,904 616,821 Operating Income 22,013 21,553 81,124 87,823 Interest Income 41 55 181 213 Interest Expense (1,363 ) (2,612 ) (7,423 ) (12,755 ) Other Expense, Net (100 ) (6,063 ) (195 ) (6,359 ) (c)Income BeforeProvision for 20,591 12,933 73,687 68,922 Income TaxesProvision for 4,210 4,048 17,948 16,358 Income TaxesNet Income 16,381 8,885 55,739 52,564 Net IncomeAttributable to (174 ) (136 ) (543 ) (496 ) NoncontrollingInterestNet IncomeAttributable to $ 16,207 $ 8,749 $ 55,196 $ 52,068 Kadant Earnings per ShareAttributable to Kadant: Basic $ 1.41 $ 0.77 $ 4.81 $ 4.63 Diluted $ 1.40 $ 0.76 $ 4.77 $ 4.54 Weighted Average Shares: Basic 11,513 11,344 11,482 11,235 Diluted 11,608 11,525 11,564 11,457 Three Months Ended Three Months EndedAdjusted Net Incomeand Adjusted Diluted Jan. 2, 2021 Jan. 2, 2021 Dec. 28, 2019 Dec. 28, 2019EPS (a)Net Income andDiluted EPSAttributable to $ 16,207 $ 1.40 $ 8,749 $ 0.76 Kadant, asReportedAdjustments for the Following: Settlement Loss, ? ? 6,352 0.55 Net of Tax (c) Impairment and Restructuring 1,543 0.13 1,905 0.17 Costs, Net of Tax (b) Amortization of Acquired 132 0.01 15 ? Backlog, Net of Tax (g) Discrete Tax ? ? (1,839 ) (0.16 ) Items (i)Adjusted Net Incomeand Adjusted Diluted $ 17,882 $ 1.54 $ 15,182 $ 1.32 EPS (a) Twelve Months Ended Twelve Months EndedAdjusted Net Incomeand Adjusted Diluted Jan. 2, 2021 Jan. 2, 2021 Dec. 28, 2019 Dec. 28, 2019EPS (a)Net Income andDiluted EPSAttributable to $ 55,196 $ 4.77 $ 52,068 $ 4.54 Kadant, asReportedAdjustments for the Following: Settlement Loss, ? ? 6,352 0.55 Net of Tax (c) Impairment and Restructuring 2,210 0.19 1,905 0.17 Costs, Net of Tax (b) Acquisition Costs, Net of 355 0.03 699 0.06 Tax Amortization of Acquired Profit in Inventory and 407 0.04 3,702 0.32 Backlog, Net of Tax (g,h) Discrete Tax (338 ) (0.03 ) (3,338 ) (0.29 ) Items (i)Adjusted Net Incomeand Adjusted Diluted $ 57,830 $ 5.00 $ 61,388 $ 5.36 EPS (a) Three Months Ended Decrease ExcludingRevenue by Segment Acquisition(d) Jan. 2, 2021 Dec. 28, 2019 Decrease and FX (a,e)

Flow Control $ 60,115 $ 61,547 $ (1,432 ) $ (2,304 ) Industrial 69,109 79,049 (9,940 ) (12,283 ) ProcessingMaterial Handling 39,207 42,063 (2,856 ) (3,951 ) $ 168,431 $ 182,659 $ (14,228 ) $ (18,538 ) Percentage ofParts and 67 % 60 % ConsumablesRevenue Twelve Months Ended Decrease Decrease Excluding Jan. 2, 2021 Dec. 28, 2019 Acquisition and FX (a,e)Flow Control $ 225,444 $ 250,339 $ (24,895 ) $ (22,073 ) Industrial 261,577 301,948 (40,371 ) (41,658 ) ProcessingMaterial Handling 148,007 152,357 (4,350 ) (5,267 ) $ 635,028 $ 704,644 $ (69,616 ) $ (68,998 ) Percentage ofParts and 66 % 63 % ConsumablesRevenue Three Months Ended Increase Increase (Decrease)Bookings by (Decrease) ExcludingSegment (d) Jan. 2, 2021 Dec. 28, 2019 Acquisition and FX (e)Flow Control $ 61,878 $ 56,974 $ 4,904 $ 4,171 Industrial 94,759 61,874 32,885 29,972 ProcessingMaterial Handling 39,898 40,935 (1,037 ) (2,196 ) $ 196,535 $ 159,783 $ 36,752 $ 31,947 Percentage ofParts and 61 % 70 % ConsumablesBookings Twelve Months Ended Decrease Decrease Excluding Jan. 2, 2021 Dec. 28, 2019 Acquisition and FX (e)Flow Control $ 228,591 $ 241,220 $ (12,629 ) $ (9,345 ) Industrial 273,644 290,881 (17,237 ) (18,818 ) ProcessingMaterial Handling 146,242 156,184 (9,942 ) (11,201 ) $ 648,477 $ 688,285 $ (39,808 ) $ (39,364 ) Percentage ofParts and 65 % 64 % ConsumablesBookings Three Months Ended Twelve Months EndedBusiness Segment Jan. 2, 2021 Dec. 28, 2019 Jan. 2, 2021 Dec. 28, 2019Information (d)Gross Margin: Flow Control 52.5 % 50.5 % 52.9 % 51.4 % Industrial 42.3 % 36.2 % 41.3 % 38.3 % Processing Material 34.3 % 35.6 % 33.7 % 32.5 % Handling 44.1 % 40.9 % 43.7 % 41.7 % Operating Income: Flow Control $ 14,170 $ 12,123 $ 51,530 $ 55,343 Industrial 10,824 10,769 42,971 49,599 Processing Material 4,034 6,085 14,375 11,600 Handling Corporate (7,015 ) (7,424 ) (27,752 ) (28,719 ) $ 22,013 $ 21,553 $ 81,124 $ 87,823 Adjusted Operating Income (a,f): Flow Control $ 14,108 $ 12,123 $ 52,189 $ 55,343 Industrial 12,840 13,297 45,788 52,127 Processing Material 4,310 6,105 14,907 17,315 Handling Corporate (7,015 ) (7,424 ) (27,752 ) (28,719 ) $ 24,243 $ 24,101 $ 85,132 $ 96,066 Capital Expenditures: Flow Control $ 1,141 $ 825 $ 2,808 $ 2,639 Industrial 663 1,890 3,123 5,113 Processing Material 372 999 1,539 2,144 Handling Corporate ? 7 125 61 $ 2,176 $ 3,721 $ 7,595 $ 9,957 Three Months Ended Twelve Months EndedCash Flow and Jan. 2, 2021 Dec. 28, 2019 Jan. 2, 2021 Dec. 28, 2019Other DataCash Provided by $ 40,283 $ 39,247 $ 92,884 $ 97,413 OperationsLess: Capital (2,176 ) (3,721 ) (7,595 ) (9,957 ) ExpendituresFree Cash Flow (a) $ 38,107 $ 35,526 $ 85,289 $ 87,456 Depreciation andAmortization $ 8,074 $ 8,086 $ 31,334 $ 32,390 Expense Balance Sheet Data Jan. 2, 2021 Dec. 28, 2019Assets Cash, CashEquivalents, and $ 66,640 $ 68,273 Restricted CashAccounts 91,540 95,740 Receivable, netInventories 106,814 102,715 Unbilled Revenue 7,576 13,162 Property, Plant, 84,642 86,032 and Equipment, netIntangible Assets 160,965 173,896 Goodwill 351,753 336,032 Other Assets 57,641 63,537 $ 927,571 $ 939,387 Liabilities andStockholders' EquityAccounts Payable $ 32,264 $ 45,852 Debt Obligations 227,963 294,717 Other Borrowings 5,511 6,308 Other Liabilities 164,928 165,431 Total 430,666 512,308 Liabilities Stockholders' 496,905 427,079 Equity $ 927,571 $ 939,387 Three Months Ended Twelve Months EndedAdjusted OperatingIncome andAdjusted EBITDA Jan. 2, 2021 Dec. 28, 2019 Jan. 2, 2021 Dec. 28, 2019Reconciliation(a,d)Consolidated Net Income Attributable $ 16,207 $ 8,749 $ 55,196 $ 52,068 to Kadant Net Income Attributable to 174 136 543 496 Noncontrolling Interest Provision for 4,210 4,048 17,948 16,358 Income Taxes Interest 1,322 2,557 7,242 12,542 Expense, Net Other Expense, 100 6,063 195 6,359 Net (c) Operating 22,013 21,553 81,124 87,823 Income Impairment and Restructuring 2,053 2,528 2,979 2,528 Costs (b) Acquisition ? ? 485 843 Costs Acquired Backlog 177 20 544 1,323 Amortization (g) Acquired Profit in ? ? ? 3,549 Inventory (h) Adjusted Operating 24,243 24,101 85,132 96,066 Income (a) Depreciation and 7,897 8,066 30,790 31,067 Amortization Adjusted $ 32,140 $ 32,167 $ 115,922 $ 127,133 EBITDA (a) Adjusted EBITDA Margin 19.1 % 17.6 % 18.3 % 18.0 % (a,j) Flow Control Operating $ 14,170 $ 12,123 $ 51,530 $ 55,343 Income Restructuring (62 ) ? 659 ? (Income) Costs Adjusted Operating 14,108 12,123 52,189 55,343 Income (a) Depreciation and 1,604 1,780 6,333 6,603 Amortization Adjusted $ 15,712 $ 13,903 $ 58,522 $ 61,946 EBITDA (a) Adjusted EBITDA Margin 26.1 % 22.6 % 26.0 % 24.7 % (a,j) Industrial Processing Operating $ 10,824 $ 10,769 $ 42,971 $ 49,599 Income Impairment and Restructuring 1,933 2,528 2,138 2,528 Costs Acquisition ? ? 485 ? Costs Acquired Backlog 83 ? 194 ? Amortization (g) Adjusted Operating 12,840 13,297 45,788 52,127 Income (a) Depreciation and 3,371 3,281 12,969 13,012 Amortization Adjusted $ 16,211 $ 16,578 $ 58,757 $ 65,139 EBITDA (a) Adjusted EBITDA Margin 23.5 % 21.0 % 22.5 % 21.6 % (a,j) Material Handling Operating $ 4,034 $ 6,085 $ 14,375 $ 11,600 Income Restructuring 182 ? 182 ? Costs Acquisition ? ? ? 843 Costs Acquired Backlog 94 20 350 1,323 Amortization (g) Acquired Profit in ? ? ? 3,549 Inventory (h) Adjusted Operating 4,310 6,105 14,907 17,315 Income (a) Depreciation and 2,862 2,946 11,278 11,205 Amortization Adjusted $ 7,172 $ 9,051 $ 26,185 $ 28,520 EBITDA (a) Adjusted EBITDA Margin 18.3 % 21.5 % 17.7 % 18.7 % (a,j) Corporate Operating Loss $ (7,015 ) $ (7,424 ) $ (27,752 ) $ (28,719 ) Depreciation and 60 59 210 247 Amortization EBITDA (a) $ (6,955 ) $ (7,365 ) $ (27,542 ) $ (28,472 ) (a) Represents a non-GAAP financial measure. The fourth quarter of 2020 includes an intangible asset impairment charge of $1,861 ($1,389 after tax) related to our Industrial Processing segment's timber-harvesting product line and consolidated restructuring costs of $192 ($154 after tax), and the full-year 2020 includes an intangible asset(b) impairment charge of $1,861 ($1,389 after tax) and restructuring costs of $1,118 ($821 after tax). The fourth quarter and full-year of 2019 includes an intangible asset impairment charge of $2,336 ($1,765 after tax) and restructuring costs of $192 ($140 after tax) related to our Industrial Processing segment's timber-harvesting product line. Includes a settlement loss of $5,887 ($6,352 after tax) in the three- and(c) twelve-month periods ended December 28, 2019 associated with the termination of defined benefit plans at one of our U.S. operations. Reflects our new reportable operating segments announced on April 22, 2020.(d) Prior period information has been recast to conform to the current period presentation. Represents the increase (decrease) resulting from the exclusion of an(e) acquisition and 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. (f) See reconciliation to the most directly comparable GAAP financial measure under "Adjusted Operating Income and Adjusted EBITDA Reconciliation." (g) Represents intangible amortization expense associated with acquired backlog. (h) Represents expense within cost of revenues associated with amortization of acquired profit in inventory. The discrete tax benefit of $1,839, or $0.16 per diluted share, in the fourth(i) quarter of 2019 and $3,338, or $0.29 per diluted share, for the full-year 2019 relates to the exercise of employee stock options, which were significantly higher in these periods than in other comparable reporting periods. (j) Calculated as adjusted EBITDA divided by revenue in each period.

About Kadant Kadant Inc. is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. The Companys 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 approximately 2,600 employees in 20 countries worldwide. For more information, visit www.kadant.com.

Safe Harbor StatementThe 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 future financial and operating performance, demand for our products, and economic and industry outlook. These forward-looking statements represent our expectations as of the date of this press release. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those set forth under the heading "Risk Factors" in Kadants annual report on Form 10-K for the year ended December 28, 2019 and subsequent filings with the Securities and Exchange Commission. These include risks and uncertainties relating to the impact of the COVID-19 pandemic on our operating and financial results; adverse changes in global and local economic conditions; the variability and difficulty in accurately predicting revenues from large capital equipment and systems projects; our customers ability to obtain financing for capital equipment projects; international sales and operations; health epidemics; changes to government regulations and policies around the world; policies of the Chinese government; the variability and uncertainties in sales of capital equipment in China; levels of residential construction activity; reductions by our wood processing customers of their capital spending or production of oriented strand board; changes to the global timber supply; cyclical economic conditions affecting the global mining industry; development and use of digital media; currency fluctuations; demand for coal, including economic and environmental risks associated with coal; price increases or shortages of raw materials; dependence on certain suppliers; our acquisition strategy; failure of our information systems or breaches of data security and cybertheft; compliance with government regulations and policies and compliance with laws; implementation of our internal growth strategy; competition; soundness of suppliers and customers; changes in our tax provision or exposure to additional tax liabilities; our ability to successfully manage our manufacturing operations; disruption in production; future restructurings; economic conditions and regulatory changes caused by the United Kingdoms exit from the European Union; our debt obligations; restrictions in our credit agreement and note purchase agreement; substitution of an alternative index for LIBOR; loss of key personnel and effective succession planning; protection of intellectual property; fluctuations in our share price; soundness of financial institutions; environmental laws and regulations; climate change; environmental, health and safety laws and regulations; adequacy of our insurance coverage; anti-takeover provisions; and reliance on third-party research.

ContactsInvestor Contact Information:Michael McKenney, 978-776-2000IR@kadant.comorMedia Contact Information:Wes Martz, 269-278-1715media@kadant.com