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Sep 26, 2020
Kadant Q3 2020 Earnings Report
Kadant's financial performance for Q3 2020 was reported, showing a mix of challenges and strengths amidst the pandemic.
Key Takeaways
Kadant reported a decrease in revenue and bookings compared to the previous year, but experienced sequential growth in revenue driven by increased demand in the Industrial Processing and Flow Control segments. The company achieved its highest quarterly adjusted diluted EPS for the year due to operational execution and government employee retention programs. Strong cash flow allowed for debt reduction, lowering the leverage ratio.
Revenue decreased by 11% to $155 million, but increased sequentially.
Bookings decreased by 16% to $143 million.
GAAP diluted EPS decreased by 9% to $1.28, while adjusted diluted EPS decreased by 5% to $1.31.
Operating cash flow was $24 million, and free cash flow was $23 million.
Forward Guidance
Kadant anticipates a solid sequential improvement in capital bookings in the fourth quarter and expects demand for parts and consumables to remain stable. The company will not be providing guidance due to uncertainty surrounding the timing of the recovery in markets around the world.
Positive Outlook
- Capital projects are showing signs of increasing activity.
- Expect a solid sequential improvement in capital bookings in the fourth quarter.
- Demand for parts and consumables is expected to remain stable.
- Customers are expected to perform year-end maintenance on their equipment.
- Global footprint and diversity of product offerings have provided stability.
Challenges Ahead
- Benefits from government employee retention programs will be lower in the fourth quarter.
- Uncertainty surrounding the timing of the recovery in markets around the world.
- No guidance provided due to market uncertainty.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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