Kadant Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 23 February 2026: press release. The quarter’s numbers.

Key takeaways

Record quarterly revenue up 11%: Revenue rose 11% to a record $286.2 million from $258.0 million. Acquisitions added 8 points and favorable currency 3 points. Excluding acquisitions and currency, revenue was down $0.2 million.
Full-year organic revenue fell 4%: Full-year revenue was $1,052.2 million against a record $1,053.4 million. Organic revenue fell 4%, with acquisitions adding 3 points and currency 1 point.
Adjusted measures now exclude intangible amortization: Adjusted operating income, adjusted net income and adjusted EPS now also exclude amortization of acquired intangible assets. The previous release excluded only amortization of acquired profit in inventory and backlog. GAAP figures are unchanged. Source
Q4 adjusted EPS restated to $2.80: Q4 2025 adjusted EPS is restated to $2.80 from $2.27. Adjusted net income is $33.0 million against $26.8 million. Q4 2024 adjusted EPS is restated to $2.68 from $2.25. Source
Full-year 2025 adjusted EPS restated to $11.01: Full-year 2025 adjusted EPS is restated to $11.01 from $9.26, and adjusted operating income to $193.4 million from $165.9 million. Full-year 2024 adjusted EPS is restated to $11.92 from $10.28. Source
Full-year Industrial Processing revenue fell: Full-year Industrial Processing revenue fell $23.2 million to $409.5 million; excluding acquisitions and currency the decline was $51.3 million. Flow Control was $382.9 million and Material Handling $259.9 million.
Q4 organic bookings up 1%: Q4 bookings rose 12% to $270.0 million. Organic bookings rose 1%, with acquisitions adding 8 points and currency 3 points.
Record full-year operating cash flow: Operating cash flow rose 10% to a record $171.3 million for the year. Q4 operating cash flow rose 17% to $60.8 million.

“The fourth quarter was a solid finish to the year”
Jeffrey L. Powell, president and chief executive officer of Kadant Inc.

Guidance

Area	Period	Figure
Revenue	fiscal 2026	$1.160 to $1.185 billion
GAAP EPS	fiscal 2026	$10.27 to $10.62
Adjusted EPS	fiscal 2026	$10.40 to $10.75
Revenue	first quarter of 2026	$270 to $280 million
GAAP EPS	first quarter of 2026	$1.69 to $1.79
Adjusted EPS	first quarter of 2026	$1.78 to $1.88

What changed from last quarter

New: Adjusted operating income, adjusted net income and adjusted EPS now also exclude amortization of acquired intangible assets, with prior periods recast. GAAP results are unchanged. Source

Fourth quarter and full-year results

Record quarterly revenue up 11%: Revenue rose 11% to a record $286.2 million from $258.0 million. Acquisitions added 8 points and favorable currency 3 points. Excluding acquisitions and currency, revenue was down $0.2 million.
Full-year organic revenue fell 4%: Full-year revenue was $1,052.2 million against a record $1,053.4 million. Organic revenue fell 4%, with acquisitions adding 3 points and currency 1 point.
GAAP EPS flat, adjusted EPS up 1%: Q4 GAAP diluted EPS was $2.04 in both periods. Adjusted EPS, as then reported, rose 1% to $2.27 from $2.25. Full-year GAAP EPS fell 9% to $8.65.

Non-GAAP definition change

Adjusted measures now exclude intangible amortization: Adjusted operating income, adjusted net income and adjusted EPS now also exclude amortization of acquired intangible assets. The previous release excluded only amortization of acquired profit in inventory and backlog. GAAP figures are unchanged. Source
Q4 adjusted EPS restated to $2.80: Q4 2025 adjusted EPS is restated to $2.80 from $2.27. Adjusted net income is $33.0 million against $26.8 million. Q4 2024 adjusted EPS is restated to $2.68 from $2.25. Source
Full-year 2025 adjusted EPS restated to $11.01: Full-year 2025 adjusted EPS is restated to $11.01 from $9.26, and adjusted operating income to $193.4 million from $165.9 million. Full-year 2024 adjusted EPS is restated to $11.92 from $10.28. Source
2026 guidance not restated in 8-K: The 18 February release gave 2026 adjusted EPS of $10.40 to $10.75, after excluding $0.13 of acquisition-related costs. This 8-K contains no 2026 guidance and does not restate it.

“Good execution by our businesses combined with our recent acquisitions drove record revenue performance and strong cash flows despite a challenging economic environment.”
Jeffrey L. Powell, president and chief executive officer of Kadant Inc.

Segments, products and parts mix

Industrial Processing drove Q4 revenue gain: Industrial Processing Q4 revenue rose $16.2 million to $117.6 million, but excluding acquisitions and currency it fell $7.3 million. Flow Control rose $5.0 million to $99.6 million; Material Handling rose $7.0 million to $68.9 million.
Full-year Industrial Processing revenue fell: Full-year Industrial Processing revenue fell $23.2 million to $409.5 million; excluding acquisitions and currency the decline was $51.3 million. Flow Control was $382.9 million and Material Handling $259.9 million.
Industrial Processing gross margin rose: Industrial Processing gross margin rose to 42.0% in Q4 from 39.9%, and to 43.0% for the year from 41.8%. Flow Control gross margin was 50.5% in Q4 against 51.4%.
Flow Control adjusted EBITDA margin eased: Flow Control adjusted EBITDA margin was 26.9% in Q4 against 28.7%, and 27.8% for the year against 28.8%.
Parts and consumables share of revenue rose: Parts and consumables were 70% of Q4 revenue against 67% a year earlier, and 71% of full-year revenue against 66%.

Costs and margins

Consolidated gross margin up: Consolidated gross margin rose to 43.9% in Q4 from 43.4%, and to 45.2% for the year from 44.3%.
SG&A grew faster than revenue: Selling, general and administrative expenses rose to $80.9 million in Q4 from $70.6 million, about 15%, against revenue growth of 11%. Full-year SG&A was $301.9 million against $279.9 million.
Adjusted EBITDA margin flat in Q4: Adjusted EBITDA rose 11% to $58.0 million, a 20.3% margin in both periods. Full-year adjusted EBITDA fell 6% to $216.3 million, a 20.6% margin against 21.8%.
Per-share items excluded from adjusted EPS: Adjusted EPS excluded $0.17 of Q4 acquisition-related costs and $0.07 of other costs. Full-year exclusions were $0.53 of acquisition-related costs and $0.08 of other costs.

“Our capital project bookings are expected to strengthen supported by steady aftermarket demand, a strong balance sheet, and robust cash flow generation.”
Jeffrey L. Powell, president and chief executive officer of Kadant Inc.

Demand and bookings

Q4 organic bookings up 1%: Q4 bookings rose 12% to $270.0 million. Organic bookings rose 1%, with acquisitions adding 8 points and currency 3 points.
Industrial Processing bookings fell organically: Industrial Processing Q4 bookings rose $17.4 million to $121.0 million, but excluding acquisitions and currency fell $4.4 million. Flow Control bookings reached $93.6 million and Material Handling $55.4 million.
Record full-year bookings: Full-year bookings rose 5% to a record $1,033.9 million. Organic bookings rose 1%, with acquisitions adding 4%.
Parts share of bookings rose: Parts and consumables were 73% of Q4 bookings against 70%, and 72% of full-year bookings against 71%.

Capital, cash and balance sheet

Record full-year operating cash flow: Operating cash flow rose 10% to a record $171.3 million for the year. Q4 operating cash flow rose 17% to $60.8 million.
Record free cash flow, lower capex: Full-year free cash flow rose 15% to a record $154.3 million, after capital expenditures of $17.0 million against $21.0 million a year earlier. Q4 free cash flow was $54.7 million.
Cash, debt and inventories all higher: Cash rose to $122.7 million from $95.9 million. Debt obligations rose to $372.7 million from $286.5 million, and inventories rose to $206.9 million from $146.1 million.

Acquisitions and intangible assets

Intangibles and goodwill increased: Intangible assets rose to $350.4 million from $279.5 million, and goodwill to $555.6 million from $479.2 million, comparing January 3, 2026 with December 28, 2024.
Acquisitions not on a fixed cycle: Management said acquisition activity does not follow a predictable cycle, and the size and nature of future transactions will vary. Source
Acquisition costs excluded from adjusted results: Pre-tax acquisition costs excluded from adjusted operating income were $0.9 million in Q4 and $4.4 million for the year.

Figures management reported

Figure	Reported
Bookings, Q4 2025	$270.0 million
Parts and consumables share of revenue, Q4 2025	70%
Parts and consumables share of bookings, Q4 2025	73%
Bookings, fiscal 2025	$1,033.9 million

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Reconciliation of Non-GAAP Adjusted Operating Income,

Adjusted Net Income and Adjusted EPS to GAAP Financial Measures

(In thousands, except per share amounts)

	March 29, 2025	June 28, 2025		September 27, 2025		January 3, 2026
	Three Months Ended	Three Months Ended	Six Months Ended	Three Months Ended	Nine Months Ended	Three Months Ended	Twelve Months Ended
Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
Operating Income, as Reported	$35,586	$39,377	$74,963	$42,616	$117,579	$39,709	$157,288
Adjustments	698	1,134	1,832	3,170	5,002	3,654	8,656
Adjusted Operating Income*, as Previously Reported	$36,284	$40,511	$76,795	$45,786	$122,581	$43,363	$165,944
Amortization of Acquired Intangible Assets	6,320	6,333	12,653	6,521	19,174	8,266	27,440
Adjusted Operating Income*, as Currently Reported	$42,604	$46,844	$89,448	$52,307	$141,755	$51,629	$193,384

	Three Months Ended
	March 29, 2025		June 28, 2025		September 27, 2025		January 3, 2026
Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
Net Income and EPS Attributable to Kadant, as Reported	$24,063	$2.04	$26,159	$2.22	$27,722	$2.35	$24,025	$2.04
Adjustments, Net of Tax	611	0.06	1,073	0.09	2,847	0.24	2,765	0.24
Adjusted Net Income* and Adjusted EPS*, as Previously Reported	$24,674	$2.10	$27,232	$2.31	$30,569	$2.59	$26,790	$2.27
Amortization of Acquired Intangible Assets, Net of Tax	4,753	0.40	4,767	0.40	4,900	0.42	6,225	0.53
Adjusted Net Income* and Adjusted EPS*, as Currently Reported	$29,427	$2.50	$31,999	$2.71	$35,469	$3.01	$33,015	$2.80
Weighted Average Diluted Shares	11,776		11,793		11,802		11,805

	Six Months Ended		Nine Months Ended		Twelve Months Ended
	June 28, 2025		September 27, 2025		January 3, 2026
Net Income and EPS Attributable to Kadant, as Reported	$50,222	$4.26	$77,944	$6.61	$101,969	$8.65
Adjustments, Net of Tax	1,684	0.14	4,531	0.39	7,296	0.61
Adjusted Net Income* and Adjusted EPS*, as Previously Reported	$51,906	$4.40	$82,475	$7.00	$109,265	$9.26
Amortization of Acquired Intangible Assets, Net of Tax	9,520	0.81	14,420	1.22	20,645	1.75
Adjusted Net Income* and Adjusted EPS*, as Currently Reported	$61,426	$5.21	$96,895	$8.22	$129,910	$11.01
Weighted Average Diluted Shares	11,784		11,790		11,794

	March 30, 2024	June 29, 2024		September 28, 2024		December 28, 2024
	Three Months Ended	Three Months Ended	Six Months Ended	Three Months Ended	Nine Months Ended	Three Months Ended	Twelve Months Ended
Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
Operating Income, as Reported	$36,927	$48,401	$85,328	$48,987	$134,315	$36,937	$171,252
Adjustments	4,344	2,098	6,442	2,186	8,628	3,501	12,129
Adjusted Operating Income*, as Previously Reported	$41,271	$50,499	$91,770	$51,173	$142,943	$40,438	$183,381
Amortization of Acquired Intangible Assets	6,072	6,289	12,361	6,711	19,072	6,716	25,788
Adjusted Operating Income*, as Currently Reported	$47,343	$56,788	$104,131	$57,884	$162,015	$47,154	$209,169

	Three Months Ended
	March 30, 2024		June 29, 2024		September 28, 2024		December 28, 2024
Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
Net Income and EPS Attributable to Kadant, as Reported	$24,689	$2.10	$31,291	$2.66	$31,586	$2.68	$24,032	$2.04
Adjustments, Net of Tax	3,299	0.28	1,727	0.15	1,830	0.15	2,516	0.22
Adjusted Net Income* and Adjusted EPS*, as Previously Reported	$27,988	$2.38	$33,018	$2.81	$33,416	$2.84	$26,548	$2.25
Amortization of Acquired Intangible Assets, Net of Tax	4,566	0.39	4,729	0.40	5,047	0.43	5,049	0.43
Adjusted Net Income* and Adjusted EPS*, as Currently Reported	$32,554	$2.77	$37,747	$3.21	$38,463	$3.27	$31,597	$2.68
Weighted Average Diluted Shares	11,744		11,766		11,780		11,794

	Six Months Ended		Nine Months Ended		Twelve Months Ended
	June 29, 2024		September 28, 2024		December 28, 2024
Net Income and EPS Attributable to Kadant, as Reported	$55,980	$4.76	$87,566	$7.44	$111,598	$9.48
Adjustments, Net of Tax	5,026	0.43	6,856	0.58	9,372	0.80
Adjusted Net Income* and Adjusted EPS*, as Previously Reported	$61,006	$5.19	$94,422	$8.03	$120,970	$10.28
Amortization of Acquired Intangible Assets, Net of Tax	9,295	0.79	14,342	1.22	19,391	1.65
Adjusted Net Income* and Adjusted EPS*, as Currently Reported	$70,301	$5.98	$108,764	$9.25	$140,361	$11.92
Weighted Average Diluted Shares	11,755		11,763		11,771

	Twelve Months Ended
	December 30, 2023	December 31, 2022	January 1, 2022
Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
Operating Income, as Reported	$165,757	$171,282	$116,710
Adjustments	2,267	(16,387)	9,730
Adjusted Operating Income*, as Previously Reported	$168,024	$154,895	$126,440
Amortization of Acquired Intangible Assets	18,448	19,804	19,543
Adjusted Operating Income*, as Currently Reported	$186,472	$174,699	$145,983

	Twelve Months Ended
	December 30, 2023		December 31, 2022		January 1, 2022
Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
Net Income and EPS Attributable to Kadant, as Reported	$116,069	$9.90	$120,928	$10.35	$84,043	$7.21
Adjustments, Net of Tax	1,683	0.14	(12,975)	(1.12)	7,226	0.61
Adjusted Net Income* and Adjusted EPS*, as Previously Reported	$117,752	$10.04	$107,953	$9.24	$91,269	$7.83
Amortization of Acquired Intangible Assets, Net of Tax	13,809	1.18	14,824	1.27	14,682	1.26
Adjusted Net Income* and Adjusted EPS*, as Currently Reported	$131,561	$11.22	$122,777	$10.50	$105,951	$9.09
Weighted Average Diluted Shares	11,729		11,688		11,655

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures, including adjusted operating income, adjusted net income, and adjusted EPS. These non-GAAP financial measures exclude amortization expense related to acquired intangible assets, profit in inventory and backlog (collectively, “purchase accounting expenses”); acquisition costs; restructuring and impairment costs; and other income or expense, as indicated. We exclude acquisition-related purchase accounting expenses to provide a more meaningful and consistent comparison of our operating results over time and with peer companies. While we have a history of acquisition activity, such transactions do not occur on a predictable cycle, and the size and nature of these transactions will vary. We believe it is important for investors to understand that these intangible assets were recorded as part of purchase accounting and that they contribute to revenue generation. We also exclude other items 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.

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 additional measures of our performance.

The non-GAAP financial measures included in this Current Report on Form 8-K 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 Current Report on Form 8-K 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.

Notes:

* Represents a non-GAAP financial measure.

All references to EPS (earnings per share) are to EPS as calculated on a diluted basis.

Certain per share data in the tables above may not foot or recalculate due to rounding.