x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 28, 2013 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to _________ |
Delaware
|
|
52-1762325
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
One Technology Park Drive
|
|
|
Westford, Massachusetts
|
|
01886
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Class
|
|
Outstanding at October 25, 2013
|
Common Stock, $.01 par value
|
|
11,143,167
|
|
September 28,
|
December 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Current Assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
73,001
|
$
|
54,553
|
||||
Restricted cash (Note 1)
|
166
|
–
|
||||||
Accounts receivable, less allowances of $2,404 and $2,306 (Note 1)
|
61,312
|
59,359
|
||||||
Inventories (Note 1)
|
50,925
|
42,077
|
||||||
Unbilled contract costs and fees
|
3,607
|
2,800
|
||||||
Other current assets
|
20,968
|
16,291
|
||||||
Assets of discontinued operation
|
493
|
513
|
||||||
Total Current Assets
|
210,472
|
175,593
|
||||||
|
||||||||
Property, Plant, and Equipment, at Cost
|
113,887
|
109,046
|
||||||
Less: accumulated depreciation and amortization
|
71,782
|
69,878
|
||||||
|
42,105
|
39,168
|
||||||
|
||||||||
Other Assets
|
35,820
|
36,240
|
||||||
|
||||||||
Goodwill
|
110,337
|
107,947
|
||||||
|
||||||||
Total Assets
|
$
|
398,734
|
$
|
358,948
|
|
September 28,
|
December 29,
|
||||||
(In thousands, except share amounts)
|
2013
|
2012
|
||||||
|
|
|
||||||
Current Liabilities:
|
|
|
||||||
Current maturities of long-term obligations (Note 6)
|
$
|
625
|
$
|
625
|
||||
Accounts payable
|
26,169
|
23,124
|
||||||
Accrued payroll and employee benefits
|
16,377
|
16,358
|
||||||
Customer deposits
|
22,370
|
14,811
|
||||||
Accrued warranty costs (Note 1)
|
4,265
|
4,462
|
||||||
Deferred revenue
|
3,758
|
3,918
|
||||||
Other current liabilities
|
16,768
|
11,615
|
||||||
Liabilities of discontinued operation
|
223
|
379
|
||||||
Total Current Liabilities
|
90,555
|
75,292
|
||||||
|
||||||||
Other Long-Term Liabilities
|
29,704
|
27,439
|
||||||
|
||||||||
Long-Term Obligations (Note 6)
|
13,875
|
6,250
|
||||||
|
||||||||
Commitments and Contingencies (Note 13)
|
–
|
–
|
||||||
|
||||||||
Stockholders' Equity:
|
||||||||
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued
|
–
|
–
|
||||||
Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued
|
146
|
146
|
||||||
Capital in excess of par value
|
95,499
|
95,448
|
||||||
Retained earnings
|
243,631
|
230,329
|
||||||
Treasury stock at cost, 3,480,992 and 3,493,546 shares
|
(74,588
|
)
|
(74,025
|
)
|
||||
Accumulated other comprehensive items (Note 9)
|
(1,460
|
)
|
(3,315
|
)
|
||||
Total Kadant Stockholders' Equity
|
263,228
|
248,583
|
||||||
Noncontrolling interest
|
1,372
|
1,384
|
||||||
Total Stockholders' Equity
|
264,600
|
249,967
|
||||||
|
||||||||
Total Liabilities and Stockholders' Equity
|
$
|
398,734
|
$
|
358,948
|
|
Three Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
(In thousands, except per share amounts)
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues
|
$
|
91,315
|
$
|
86,601
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
51,194
|
49,005
|
||||||
Selling, general, and administrative expenses
|
28,606
|
26,171
|
||||||
Research and development expenses
|
1,558
|
1,511
|
||||||
Restructuring costs
|
45
|
–
|
||||||
|
81,403
|
76,687
|
||||||
|
||||||||
Operating Income
|
9,912
|
9,914
|
||||||
|
||||||||
Interest Income
|
155
|
63
|
||||||
Interest Expense
|
(239
|
)
|
(219
|
)
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
9,828
|
9,758
|
||||||
Provision for Income Taxes
|
3,327
|
2,055
|
||||||
|
||||||||
Income from Continuing Operations
|
6,501
|
7,703
|
||||||
(Loss) Income from Discontinued Operation (net of income tax benefit of $8 and income tax expense of $520)
|
(14
|
)
|
844
|
|||||
|
||||||||
Net Income
|
6,487
|
8,547
|
||||||
|
||||||||
Net Income Attributable to Noncontrolling Interest
|
(40
|
)
|
(86
|
)
|
||||
|
||||||||
Net Income Attributable to Kadant
|
$
|
6,447
|
$
|
8,461
|
||||
|
||||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$
|
6,461
|
$
|
7,617
|
||||
(Loss) Income from Discontinued Operation
|
(14
|
)
|
844
|
|||||
Net Income Attributable to Kadant
|
$
|
6,447
|
$
|
8,461
|
||||
|
||||||||
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.58
|
$
|
0.67
|
||||
Diluted
|
$
|
0.57
|
$
|
0.66
|
||||
|
||||||||
Earnings per Share Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.58
|
$
|
0.75
|
||||
Diluted
|
$
|
0.57
|
$
|
0.74
|
||||
|
||||||||
Weighted Average Shares (Note 4):
|
||||||||
Basic
|
11,153
|
11,341
|
||||||
Diluted
|
11,365
|
11,491
|
||||||
|
||||||||
Cash Dividend Declared per Common Share
|
$
|
0.125
|
$
|
–
|
|
Nine Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
(In thousands, except per share amounts)
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues
|
$
|
249,684
|
$
|
253,696
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
133,597
|
141,430
|
||||||
Selling, general, and administrative expenses
|
85,001
|
77,804
|
||||||
Research and development expenses
|
5,114
|
4,436
|
||||||
Restructuring costs and other (income) expense, net (Note 3)
|
263
|
307
|
||||||
|
223,975
|
223,977
|
||||||
|
||||||||
Operating Income
|
25,709
|
29,719
|
||||||
|
||||||||
Interest Income
|
406
|
231
|
||||||
Interest Expense
|
(635
|
)
|
(624
|
)
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
25,480
|
29,326
|
||||||
Provision for Income Taxes (Note 5)
|
7,786
|
7,898
|
||||||
|
||||||||
Income from Continuing Operations
|
17,694
|
21,428
|
||||||
(Loss) Income from Discontinued Operation (net of income tax benefit of $33 and income tax expense of $467)
|
(55
|
)
|
780
|
|||||
|
||||||||
Net Income
|
17,639
|
22,208
|
||||||
|
||||||||
Net Income Attributable to Noncontrolling Interest
|
(148
|
)
|
(151
|
)
|
||||
|
||||||||
Net Income Attributable to Kadant
|
$
|
17,491
|
$
|
22,057
|
||||
|
||||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$
|
17,546
|
$
|
21,277
|
||||
(Loss) Income from Discontinued Operation
|
(55
|
)
|
780
|
|||||
Net Income Attributable to Kadant
|
$
|
17,491
|
$
|
22,057
|
||||
|
||||||||
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
1.57
|
$
|
1.85
|
||||
Diluted
|
$
|
1.55
|
$
|
1.83
|
||||
|
||||||||
Earnings per Share Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
1.57
|
$
|
1.91
|
||||
Diluted
|
$
|
1.55
|
$
|
1.90
|
||||
|
||||||||
Weighted Average Shares (Note 4):
|
||||||||
Basic
|
11,165
|
11,523
|
||||||
Diluted
|
11,321
|
11,633
|
||||||
|
||||||||
Cash Dividends Declared per Common Share
|
$
|
0.375
|
$
|
–
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 28,
|
September 29,
|
September 28,
|
September 29,
|
||||||||||||
(In thousands)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Net Income
|
$
|
6,487
|
$
|
8,547
|
$
|
17,639
|
$
|
22,208
|
||||||||
|
||||||||||||||||
Other Comprehensive Items:
|
||||||||||||||||
Foreign Currency Translation Adjustment
|
4,678
|
4,542
|
1,189
|
2,881
|
||||||||||||
Pension and Other Post-Retirement Liability Adjustments, net (net of tax provision of $58 and $198 in the three and nine months ended September 28, 2013, respectively, and $67 and $205 in the three and nine months ended September 29, 2012, respectively)
|
105
|
110
|
362
|
361
|
||||||||||||
Deferred Gain on Hedging Instruments (net of tax provision of $30 and $110 in the three and nine months ended September 28, 2013, respectively, and $49 and $50 in the three and nine months ended September 29, 2012, respectively)
|
61
|
93
|
350
|
83
|
||||||||||||
|
4,844
|
4,745
|
1,901
|
3,325
|
||||||||||||
Comprehensive Income
|
11,331
|
13,292
|
19,540
|
25,533
|
||||||||||||
Comprehensive Income Attributable to Noncontrolling Interest
|
(109
|
)
|
(128
|
)
|
(194
|
)
|
(149
|
)
|
||||||||
Comprehensive Income Attributable to Kadant
|
$
|
11,222
|
$
|
13,164
|
$
|
19,346
|
$
|
25,384
|
|
Nine Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Operating Activities:
|
|
|
||||||
Net income attributable to Kadant
|
$
|
17,491
|
$
|
22,057
|
||||
Net income attributable to noncontrolling interest
|
148
|
151
|
||||||
Loss (income) from discontinued operation
|
55
|
(780
|
)
|
|||||
Income from continuing operations
|
17,694
|
21,428
|
||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
6,730
|
6,419
|
||||||
Stock-based compensation expense
|
3,794
|
3,560
|
||||||
(Recoveries) provision for losses on accounts receivable
|
(40
|
)
|
65
|
|||||
Gain on the sale of property, plant, and equipment
|
(1,908
|
)
|
(209
|
)
|
||||
Other items, net
|
309
|
1,144
|
||||||
Changes in current assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
3,563
|
(563
|
)
|
|||||
Unbilled contract costs and fees
|
(780
|
)
|
(3,934
|
)
|
||||
Inventories
|
(2,176
|
)
|
7,398
|
|||||
Other current assets
|
(1,871
|
)
|
(980
|
)
|
||||
Accounts payable
|
2,276
|
(5,890
|
)
|
|||||
Other current liabilities
|
3,916
|
(9,981
|
)
|
|||||
Contributions to pension plan
|
(810
|
)
|
(720
|
)
|
||||
Net cash provided by continuing operations
|
30,697
|
17,737
|
||||||
Net cash used in discontinued operation
|
(191
|
)
|
(1,359
|
)
|
||||
Net cash provided by operating activities
|
30,506
|
16,378
|
||||||
|
||||||||
Investing Activities:
|
||||||||
Acquisitions, net of cash acquired
|
(14,209
|
)
|
113
|
|||||
Proceeds from sale of property, plant, and equipment
|
3,320
|
370
|
||||||
Purchases of property, plant, and equipment
|
(4,149
|
)
|
(1,514
|
)
|
||||
Other, net
|
646
|
(10
|
)
|
|||||
Net cash used in continuing operations for investing activities
|
(14,392
|
)
|
(1,041
|
)
|
||||
|
||||||||
Financing Activities:
|
||||||||
Proceeds from issuance of short- and long-term obligations
|
18,900
|
5,000
|
||||||
Repayments of short- and long-term obligations
|
(11,275
|
)
|
(5,375
|
)
|
||||
Purchases of Company common stock
|
(3,481
|
)
|
(9,799
|
)
|
||||
Dividends paid
|
(2,796
|
)
|
–
|
|||||
Proceeds from issuance of Company common stock
|
337
|
359
|
||||||
Change in restricted cash
|
(166
|
)
|
632
|
|||||
Other, net
|
327
|
(517
|
)
|
|||||
Net cash provided by (used in) continuing operations for financing activities
|
1,846
|
(9,700
|
)
|
|||||
|
||||||||
Exchange Rate Effect on Cash and Cash Equivalents from Continuing Operations
|
488
|
752
|
||||||
|
||||||||
Increase in Cash and Cash Equivalents from Continuing Operations
|
18,448
|
6,389
|
||||||
Cash and Cash Equivalents at Beginning of Period
|
54,553
|
46,950
|
||||||
Cash and Cash Equivalents at End of Period
|
$
|
73,001
|
$
|
53,339
|
||||
|
(In thousands, except share
|
Common
Stock
|
Capital in
Excess of Par
|
Retained
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
|
Noncontrolling
|
Total
Stockholders'
|
|||||||||||||||||||||||||||||
amounts)
|
Shares
|
Amount
|
Value
|
Earnings
|
Shares
|
Amount
|
Items
|
Interest
|
Equity
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance at December 31, 2011
|
14,624,159
|
$
|
146
|
$
|
93,701
|
$
|
198,706
|
2,983,717
|
$
|
(62,118
|
)
|
$
|
(7,955
|
)
|
$
|
1,150
|
$
|
223,630
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
22,057
|
–
|
–
|
–
|
151
|
22,208
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
543
|
–
|
(117,502
|
)
|
2,453
|
–
|
–
|
2,996
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
118
|
–
|
–
|
–
|
–
|
–
|
118
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
438,848
|
(9,799
|
)
|
–
|
–
|
(9,799
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
3,327
|
(2
|
)
|
3,325
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at September 29, 2012
|
14,624,159
|
$
|
146
|
$
|
94,362
|
$
|
220,763
|
3,305,063
|
$
|
(69,464
|
)
|
$
|
(4,628
|
)
|
$
|
1,299
|
$
|
242,478
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at December 29, 2012
|
14,624,159
|
$
|
146
|
$
|
95,448
|
$
|
230,329
|
3,493,546
|
$
|
(74,025
|
)
|
$
|
(3,315
|
)
|
$
|
1,384
|
$
|
249,967
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
17,491
|
–
|
–
|
–
|
148
|
17,639
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividends declared
|
–
|
–
|
–
|
(4,189
|
)
|
–
|
–
|
–
|
–
|
(4,189
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividend paid to minority shareholder
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(206
|
)
|
(206
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
(276
|
)
|
–
|
(137,554
|
)
|
2,918
|
–
|
–
|
2,642
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
327
|
–
|
–
|
–
|
–
|
–
|
327
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
125,000
|
(3,481
|
)
|
–
|
–
|
(3,481
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
1,855
|
46
|
1,901
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at September 28, 2013
|
14,624,159
|
$
|
146
|
$
|
95,499
|
$
|
243,631
|
3,480,992
|
$
|
(74,588
|
)
|
$
|
(1,460
|
)
|
$
|
1,372
|
$
|
264,600
|
1. | Nature of Operations and Summary of Significant Accounting Policies |
1. | Nature of Operations and Summary of Significant Accounting Policies (continued) |
|
Nine Months Ended
|
|||||||
(In thousands)
|
September 28, 2013
|
September 29, 2012
|
||||||
|
|
|
||||||
Non-Cash Investing Activities:
|
|
|
||||||
Fair Value of Assets Acquired
|
$
|
22,688
|
$
|
–
|
||||
Cash Paid for Acquired Businesses
|
(15,332
|
)
|
–
|
|||||
Liabilities Assumed of Acquired Businesses
|
$
|
7,356
|
$
|
–
|
||||
|
||||||||
Non-Cash Financing Activities:
|
||||||||
Issuance of Company Common Stock
|
$
|
2,515
|
$
|
1,967
|
||||
Dividends Declared but Unpaid
|
$
|
1,393
|
$
|
–
|
|
September 28,
|
December 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Raw Materials and Supplies
|
$
|
20,422
|
$
|
19,561
|
||||
Work in Process
|
13,656
|
8,371
|
||||||
Finished Goods
|
16,847
|
14,145
|
||||||
|
$
|
50,925
|
$
|
42,077
|
|
Nine Months Ended
|
|||||||
(In thousands)
|
September 28, 2013
|
September 29, 2012
|
||||||
|
|
|
||||||
Balance at beginning of period
|
$
|
4,462
|
$
|
4,129
|
||||
Provision
|
969
|
1,128
|
||||||
Usage
|
(1,366
|
)
|
(1,171
|
)
|
||||
Acquired
|
138
|
–
|
||||||
Currency translation
|
62
|
34
|
||||||
Balance at end of period
|
$
|
4,265
|
$
|
4,120
|
2. | Acquisitions |
(In thousands)
|
Other
Costs
|
Severance Costs
|
Total
Costs
|
|||||||||
Provision
|
$
|
45
|
$
|
1,958
|
$
|
2,003
|
||||||
Usage
|
(46
|
)
|
(633
|
)
|
(679
|
)
|
||||||
Currency translation
|
1
|
(86
|
)
|
(85
|
)
|
|||||||
Balance at September 28, 2013
|
$
|
–
|
$
|
1,239
|
$
|
1,239
|
4. | Earnings per Share |
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 28,
|
September 29,
|
September 28,
|
September 29,
|
||||||||||||
(In thousands, except per share amounts)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Amounts Attributable to Kadant:
|
|
|
|
|
||||||||||||
Income from Continuing Operations
|
$
|
6,461
|
$
|
7,617
|
$
|
17,546
|
$
|
21,277
|
||||||||
(Loss) Income from Discontinued Operation
|
(14
|
)
|
844
|
(55
|
)
|
780
|
||||||||||
Net Income
|
$
|
6,447
|
$
|
8,461
|
$
|
17,491
|
$
|
22,057
|
||||||||
|
||||||||||||||||
Basic Weighted Average Shares
|
11,153
|
11,341
|
11,165
|
11,523
|
||||||||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan
|
212
|
150
|
156
|
110
|
||||||||||||
Diluted Weighted Average Shares
|
11,365
|
11,491
|
11,321
|
11,633
|
||||||||||||
|
||||||||||||||||
Basic Earnings per Share:
|
||||||||||||||||
Continuing Operations
|
$
|
0.58
|
$
|
0.67
|
$
|
1.57
|
$
|
1.85
|
||||||||
Discontinued Operation
|
$
|
–
|
$
|
0.07
|
$
|
–
|
$
|
0.07
|
||||||||
Net Income per Basic Share
|
$
|
0.58
|
$
|
0.75
|
$
|
1.57
|
$
|
1.91
|
||||||||
|
||||||||||||||||
Diluted Earnings per Share:
|
||||||||||||||||
Continuing Operations
|
$
|
0.57
|
$
|
0.66
|
$
|
1.55
|
$
|
1.83
|
||||||||
Discontinued Operation
|
$
|
–
|
$
|
0.07
|
$
|
–
|
$
|
0.07
|
||||||||
Net Income per Diluted Share
|
$
|
0.57
|
$
|
0.74
|
$
|
1.55
|
$
|
1.90
|
5. | Provision for Income Taxes |
6. | Long-Term Obligations |
|
September 28,
|
December 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Revolving Credit Facility, due 2017
|
$
|
8,000
|
$
|
–
|
||||
Variable Rate Term Loan, due from 2013 to 2016
|
6,500
|
6,875
|
||||||
Total Long-Term Obligations
|
14,500
|
6,875
|
||||||
Less: Current Maturities
|
(625
|
)
|
(625
|
)
|
||||
Long-Term Obligations, less Current Maturities
|
$
|
13,875
|
$
|
6,250
|
7. | Stock-Based Compensation |
8. | Employee Benefit Plans |
8. | Employee Benefit Plans (continued) |
9. | Accumulated Other Comprehensive Items |
(In thousands)
|
Foreign
Currency
Translation
Adjustment
|
Unrecognized
Prior Service
Cost
|
Deferred Loss
on Pension and
Other Post-
Retirement
Plans
|
Deferred Loss
on Hedging
Instruments
|
Accumulated
Other
Comprehensive
Items
|
|||||||||||||||
Balance at December 29, 2012
|
$
|
8,124
|
$
|
(748
|
)
|
$
|
(9,645
|
)
|
$
|
(1,046
|
)
|
$
|
(3,315
|
)
|
||||||
Other comprehensive income (loss) before reclassifications
|
1,143
|
–
|
(6
|
)
|
(81
|
)
|
1,056
|
|||||||||||||
Reclassifications from AOCI
|
–
|
68
|
300
|
431
|
799
|
|||||||||||||||
Net current period other comprehensive income
|
1,143
|
68
|
294
|
350
|
1,855
|
|||||||||||||||
Balance at September 28, 2013
|
$
|
9,267
|
$
|
(680
|
)
|
$
|
(9,351
|
)
|
$
|
(696
|
)
|
$
|
(1,460
|
)
|
|
Three Months Ended
|
Nine Months Ended
|
|
||||||
(In thousands)
|
September 28, 2013
|
September 28, 2013
|
Income Statement Line Item
|
||||||
Pension and Other Post-retirement Plans: (1)
|
|
|
|
||||||
Amortization of prior service cost
|
$
|
(35
|
)
|
$
|
(105
|
)
|
Selling, general, and administrative expenses
|
||
Amortization of actuarial losses
|
(150
|
)
|
(459
|
)
|
Selling, general, and administrative expenses
|
||||
Total expense before income taxes
|
(185
|
)
|
(564
|
)
|
|
||||
Income tax benefit
|
65
|
196
|
Provision for income taxes
|
||||||
|
(120
|
)
|
(368
|
)
|
|
||||
Cash Flow Hedges: (2)
|
|
||||||||
Interest rate swap agreements
|
(91
|
)
|
(287
|
)
|
Interest expense
|
||||
Forward currency-exchange contracts
|
(70
|
)
|
(153
|
)
|
Revenues
|
||||
Total expense before income taxes
|
(161
|
)
|
(440
|
)
|
|
||||
Income tax benefit
|
56
|
9
|
Provision for income taxes
|
||||||
|
(105
|
)
|
(431
|
)
|
|
||||
Total reclassifications
|
$
|
(225
|
)
|
$
|
(799
|
)
|
|
(1) | Included in the computation of net periodic benefit costs. See Note 8 for additional information. |
(2) | See Note 10 for additional information. |
10. | Derivatives |
10. | Derivatives (continued) |
|
|
September 28, 2013
|
December 29, 2012
|
||||||||||||||
|
Asset
|
Notional
|
Asset
|
Notional
|
|||||||||||||
(In thousands)
|
Balance Sheet Location
|
(Liability) (a)
|
Amount (b)
|
(Liability) (a)
|
Amount
|
||||||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
||||||||||||
Derivatives in an Asset Position:
|
|
|
|
|
|
||||||||||||
Forward currency-exchange contracts
|
Other Current Assets
|
$
|
–
|
$
|
–
|
$
|
5
|
$
|
269
|
||||||||
Derivatives in a Liability Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
(42
|
)
|
$
|
1,340
|
$
|
(161
|
)
|
$
|
3,180
|
||||||
Interest rate swap agreement
|
Other Current Liabilities
|
$
|
–
|
$
|
–
|
$
|
(19
|
)
|
$
|
–
|
|||||||
Interest rate swap agreement
|
Other Long-Term Liabilities
|
$
|
(853
|
)
|
$
|
6,500
|
$
|
(1,029
|
)
|
$
|
6,875
|
||||||
|
|
||||||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
||||||||||||||||
Derivatives in an Asset Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Assets
|
$
|
37
|
$
|
1,463
|
$
|
24
|
$
|
1,013
|
||||||||
Derivatives in a Liability Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
–
|
$
|
–
|
$
|
(12
|
)
|
$
|
815
|
(a) | See Note 11 for the fair value measurements related to these financial instruments. |
(b) | The total notional amount is indicative of the level of the Company's derivative activity during the first nine months of 2013. |
(In thousands)
|
Interest Rate Swap
Agreements
|
Forward Currency-
Exchange
Contracts
|
Total
|
|||||||||
Unrealized loss, net of tax, at December 29, 2012
|
$
|
(939
|
)
|
$
|
(107
|
)
|
$
|
(1,046
|
)
|
|||
Loss reclassified to earnings (a)
|
329
|
102
|
431
|
|||||||||
Loss recognized in OCI
|
(58
|
)
|
(23
|
)
|
(81
|
)
|
||||||
Unrealized loss, net of tax, at September 28, 2013
|
$
|
(668
|
)
|
$
|
(28
|
)
|
$
|
(696
|
)
|
11. | Fair Value Measurements |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. |
• | Level 3—Unobservable inputs based on the Company's own assumptions. |
|
Fair Value as of September 28, 2013
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
33,004
|
$
|
–
|
$
|
–
|
$
|
33,004
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
10,577
|
$
|
–
|
$
|
10,577
|
||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
37
|
$
|
–
|
$
|
37
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
42
|
$
|
–
|
$
|
42
|
||||||||
Interest rate swap agreement
|
$
|
–
|
$
|
853
|
$
|
–
|
$
|
853
|
|
Fair Value as of December 29, 2012
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
19,768
|
$
|
–
|
$
|
–
|
$
|
19,768
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
9,794
|
$
|
–
|
$
|
9,794
|
||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
29
|
$
|
–
|
$
|
29
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
173
|
$
|
–
|
$
|
173
|
||||||||
Interest rate swap agreements
|
$
|
–
|
$
|
1,048
|
$
|
–
|
$
|
1,048
|
(a) | Included in accounts receivable in the accompanying condensed consolidated balance sheet. |
11. | Fair Value Measurements (continued) |
|
September 28, 2013
|
December 29, 2012
|
||||||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
(In thousands)
|
Value
|
Value
|
Value
|
Value
|
||||||||||||
|
|
|
|
|
||||||||||||
Long-term debt obligations
|
$
|
13,875
|
$
|
13,875
|
$
|
6,250
|
$
|
6,250
|
12. | Business Segment Information |
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 28,
|
September 29,
|
September 28,
|
September 29,
|
||||||||||||
(In thousands)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Papermaking Systems
|
$
|
89,465
|
$
|
85,211
|
$
|
241,115
|
$
|
245,322
|
||||||||
Fiber-based Products
|
1,850
|
1,390
|
8,569
|
8,374
|
||||||||||||
|
$
|
91,315
|
$
|
86,601
|
$
|
249,684
|
$
|
253,696
|
||||||||
|
||||||||||||||||
Income from Continuing Operations Before Provision for Income Taxes:
|
||||||||||||||||
Papermaking Systems
|
$
|
14,210
|
$
|
14,385
|
$
|
35,975
|
$
|
38,261
|
||||||||
Corporate and Fiber-based Products (a)
|
(4,298
|
)
|
(4,471
|
)
|
(10,266
|
)
|
(8,542
|
)
|
||||||||
Total Operating Income
|
9,912
|
9,914
|
25,709
|
29,719
|
||||||||||||
Interest Expense, Net
|
(84
|
)
|
(156
|
)
|
(229
|
)
|
(393
|
)
|
||||||||
|
$
|
9,828
|
$
|
9,758
|
$
|
25,480
|
$
|
29,326
|
||||||||
|
||||||||||||||||
Capital Expenditures:
|
||||||||||||||||
Papermaking Systems
|
$
|
1,427
|
$
|
578
|
$
|
3,825
|
$
|
1,339
|
||||||||
Corporate and Fiber-based Products
|
150
|
95
|
324
|
175
|
||||||||||||
|
$
|
1,577
|
$
|
673
|
$
|
4,149
|
$
|
1,514
|
13. | Contingencies and Litigation |
14. | Subsequent Events |
|
-
|
Stock-Preparation: custom-engineered systems and equipment, as well as standard individual components, for pulping, de-inking, screening, cleaning, and refining primarily recycled fiber for preparation for entry into the paper machine; recausticizing and evaporation equipment and systems used in the production of virgin pulp;
|
|
-
|
Fluid-Handling: rotary joints, precision unions, steam and condensate systems, components, and controls used primarily in the dryer section of the papermaking process and during the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals, and food; and
|
|
-
|
Doctoring, Cleaning, & Filtration: doctoring systems and related consumables that continuously clean rolls to keep paper machines running efficiently; doctor blades made of a variety of materials to perform functions including cleaning, creping, web removal, flaking, and the application of coatings; profiling systems that control moisture, web curl, and gloss during paper converting; and systems and equipment used to continuously clean paper machine fabrics and rolls, drain water from pulp mixtures, form the sheet or web, and filter the process water for reuse.
|
|
Three Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
56
|
57
|
||||||
Selling, general, and administrative expenses
|
31
|
30
|
||||||
Research and development expenses
|
2
|
2
|
||||||
Restructuring costs
|
–
|
–
|
||||||
|
89
|
89
|
||||||
|
||||||||
Operating Income
|
11
|
11
|
||||||
|
||||||||
Interest Income
|
–
|
–
|
||||||
Interest Expense
|
–
|
–
|
||||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
11
|
11
|
||||||
Provision for Income Taxes
|
4
|
2
|
||||||
|
||||||||
Income from Continuing Operations
|
7
|
%
|
9
|
%
|
||||
|
|
Three Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
89,465
|
$
|
85,211
|
||||
Fiber-based Products
|
1,850
|
1,390
|
||||||
|
$
|
91,315
|
$
|
86,601
|
|
Three Months Ended
|
Increase
(Decrease)
Excluding
Effect of
|
||||||||||||||
(In millions)
|
September 28,
2013
|
September 29,
2012
|
Increase (Decrease)
|
Currency
Translation
|
||||||||||||
|
|
|
|
|
||||||||||||
Papermaking Systems Product Lines:
|
|
|
|
|
||||||||||||
Stock-Preparation
|
$
|
38.8
|
$
|
34.5
|
$
|
4.3
|
$
|
3.2
|
||||||||
Doctoring, Cleaning, & Filtration
|
28.8
|
27.1
|
1.7
|
1.5
|
||||||||||||
Fluid-Handling
|
21.8
|
23.6
|
(1.8
|
)
|
(2.0
|
)
|
||||||||||
|
$
|
89.4
|
$
|
85.2
|
$
|
4.2
|
$
|
2.7
|
|
Three Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Gross Profit Margin:
|
|
|
||||||
Papermaking Systems
|
44.3
|
%
|
43.6
|
%
|
||||
Fiber-based Products
|
26.7
|
30.4
|
||||||
|
43.9
|
%
|
43.4
|
%
|
|
Nine Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
54
|
56
|
||||||
Selling, general, and administrative expenses
|
34
|
30
|
||||||
Research and development expenses
|
2
|
2
|
||||||
Restructuring costs and other (income) expense, net
|
–
|
–
|
||||||
|
90
|
88
|
||||||
|
||||||||
Operating Income
|
10
|
12
|
||||||
|
||||||||
Interest Income
|
–
|
–
|
||||||
Interest Expense
|
–
|
–
|
||||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
10
|
12
|
||||||
Provision for Income Taxes
|
3
|
3
|
||||||
|
||||||||
Income from Continuing Operations
|
7
|
%
|
9
|
%
|
|
Nine Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
(In thousands)
|
2013
|
2012
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
241,115
|
$
|
245,322
|
||||
Fiber-based Products
|
8,569
|
8,374
|
||||||
|
$
|
249,684
|
$
|
253,696
|
|
Nine Months Ended
|
Increase
(Decrease)
Excluding
Effect of
|
||||||||||||||
(In millions)
|
September 28,
2013
|
September 29,
2012
|
Increase (Decrease)
|
Currency
Translation
|
||||||||||||
|
|
|
|
|
||||||||||||
Papermaking Systems Product Lines:
|
|
|
|
|
||||||||||||
Stock-Preparation
|
$
|
90.3
|
$
|
95.9
|
$
|
(5.6
|
)
|
$
|
(7.0
|
)
|
||||||
Doctoring, Cleaning, & Filtration
|
82.3
|
79.7
|
2.6
|
1.8
|
||||||||||||
Fluid-Handling
|
68.5
|
69.7
|
(1.2
|
)
|
(1.4
|
)
|
||||||||||
|
$
|
241.1
|
$
|
245.3
|
$
|
(4.2
|
)
|
$
|
(6.6
|
)
|
|
Nine Months Ended
|
|||||||
|
September 28,
|
September 29,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Gross Profit Margin:
|
|
|
||||||
Papermaking Systems
|
46.5
|
%
|
44.0
|
%
|
||||
Fiber-based Products
|
46.1
|
50.7
|
||||||
|
46.5
|
%
|
44.3
|
%
|
|
–
|
agreements may be difficult to enforce and receivables difficult to collect through a foreign country's legal system,
|
|
–
|
foreign customers may have longer payment cycles,
|
|
–
|
foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs, adopt other restrictions on foreign trade, impose currency restrictions or enact other protectionist or anti-trade measures,
|
|
–
|
worsening economic conditions may result in worker unrest, labor actions, and potential work stoppages,
|
|
–
|
political unrest may disrupt commercial activities of ours or our customers,
|
|
–
|
it may be difficult to repatriate funds, due to unfavorable domestic and foreign tax consequences or other restrictions or limitations imposed by foreign governments, and
|
|
–
|
the protection of intellectual property in foreign countries may be more difficult to enforce.
|
|
–
|
competition with other prospective buyers resulting in our inability to complete an acquisition or in us paying a substantial premium over the fair value of the net assets of the acquired business,
|
|
–
|
inability to obtain regulatory approvals, including antitrust approvals,
|
|
–
|
difficulty in assimilating operations, technologies, products and the key employees of the acquired business,
|
|
–
|
inability to maintain existing customers or to sell the products and services of the acquired business to our existing customers,
|
|
–
|
inability to retain key management of the acquired business,
|
|
–
|
diversion of management's attention away from other business concerns,
|
|
–
|
inability to improve the revenues and profitability or realize the cost savings and synergies expected of the acquisition,
|
|
–
|
assumption of significant liabilities, some of which may be unknown at the time,
|
|
–
|
potential future impairment of the value of goodwill and intangible assets acquired, and
|
|
–
|
identification of internal control deficiencies of the acquired business.
|
|
–
|
strengthening our presence in selected geographic markets, including emerging markets and existing markets where we see opportunities;
|
|
–
|
focusing on parts and consumables sales;
|
|
–
|
using low cost manufacturing bases, such as China and Mexico;
|
|
–
|
allocating research and development funding to products with higher growth prospects;
|
|
–
|
developing new applications for our technologies;
|
|
–
|
combining sales and marketing operations in appropriate markets to compete more effectively;
|
|
–
|
finding new markets for our products; and
|
|
–
|
continuing to develop cross-selling opportunities for our products and services to take advantage of our depth in product offerings.
|
|
–
|
increasing our vulnerability to adverse economic and industry conditions,
|
|
–
|
limiting our ability to obtain additional financing,
|
|
–
|
limiting our ability to pay dividends on or to repurchase our capital stock,
|
|
–
|
limiting our ability to complete a merger or an acquisition,
|
|
–
|
limiting our ability to acquire new products and technologies through acquisitions or licensing agreements, and
|
|
–
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete.
|
|
–
|
incur additional indebtedness,
|
|
–
|
pay dividends on, redeem, or repurchase our capital stock,
|
|
–
|
make investments,
|
|
–
|
create liens,
|
|
–
|
sell assets,
|
|
–
|
enter into transactions with affiliates, and
|
|
–
|
consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries.
|
–
|
failure of our products to pass contractually agreed upon acceptance tests, which would delay or prohibit recognition of revenues under applicable accounting guidelines,
|
|
|
–
|
changes in the assumptions used for revenue recognized under the percentage-of-completion method of accounting,
|
|
–
|
fluctuations in revenues due to customer-initiated delays in product shipments,
|
|
–
|
failure of a customer, particularly in Asia, to comply with an order's contractual obligations or inability of a customer to provide financial assurances of performance,
|
|
–
|
adverse changes in demand for and market acceptance of our products,
|
|
–
|
competitive pressures resulting in lower sales prices for our products,
|
|
–
|
adverse changes in the pulp and paper industry,
|
|
–
|
delays or problems in our introduction of new products,
|
|
–
|
delays or problems in the manufacture of our products,
|
|
–
|
our competitors' announcements of new products, services, or technological innovations,
|
|
–
|
contractual liabilities incurred by us related to guarantees of our product performance,
|
|
–
|
increased costs of raw materials or supplies, including the cost of energy,
|
|
–
|
changes in the timing of product orders,
|
|
–
|
changes in the estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, or expenses,
|
|
–
|
the impact of new acquisition accounting, including the treatment of acquisition and restructuring costs as period costs,
|
|
–
|
fluctuations in our effective tax rate,
|
|
–
|
the operating and share price performance of companies that investors consider to be comparable to us, and
|
|
–
|
changes in global financial markets and global economies and general market conditions.
|
|
–
|
authorize the issuance of "blank check" preferred stock without any need for action by shareholders,
|
|
–
|
provide for a classified board of directors with staggered three-year terms,
|
|
–
|
require supermajority shareholder voting to effect various amendments to our charter and bylaws,
|
|
–
|
eliminate the ability of our shareholders to call special meetings of shareholders,
|
|
–
|
prohibit shareholder action by written consent, and
|
|
–
|
establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings.
|
Issuer Purchases of Equity Securities
|
||||||||||||||||
Period
|
Total Number of Shares
Purchased (1)
|
Average Price Paid
per Share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans (1)
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased
Under the Plans
|
||||||||||||
6/30/13 – 7/31/13
|
–
|
–
|
–
|
$
|
12,591,884
|
|||||||||||
8/1/13 – 8/31/13
|
25,000
|
$
|
30.63
|
25,000
|
$
|
11,826,131
|
||||||||||
9/1/13 – 9/28/13
|
–
|
–
|
–
|
$
|
11,826,131
|
|||||||||||
Total:
|
25,000
|
$
|
30.63
|
25,000
|
(1)
|
On October 29, 2012, our board of directors authorized and announced the repurchase by us of up to $20 million of our equity securities during the period from November 7, 2012 to November 7, 2013. Repurchases may be made in public or private transactions, including under Securities Exchange Act Rule 10b-5-1 trading plans. In the third quarter of 2013, we repurchased 25,000 shares of our common stock for $0.8 million under this authorization.
|
|
KADANT INC.
|
|
|
|
/s/ Thomas M. O'Brien
|
|
Thomas M. O'Brien
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
|
10.1
|
|
Form of Amendment to Performance-Based Restricted Stock Unit Award Agreement between the Company and its executive officers applicable to outstanding restricted stock unit awards effective on September 18, 2013.
|
|
|
|
10.2
|
|
Form of Amendment to Stock Option Agreement between the Company and its executive officers applicable to outstanding stock option awards effective on September 18, 2013.
|
|
|
|
31.1
|
|
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.
|
|
|
|
31.2
|
|
Certification 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.
|
|
|
|
32
|
|
Certification 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.
|
|
|
|
101.INS
|
|
XBRL Instance Document.*
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.*
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.*
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.*
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.*
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document.*
|
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 28, 2013 of Kadant Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
|
Date: November 7, 2013
|
/s/ Jonathan W. Painter
|
|
Jonathan W. Painter
|
|
Chief Executive Officer
|
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 28, 2013 of Kadant Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
|
Date: November 7, 2013
|
/s/ Thomas M. O'Brien
|
|
Thomas M. O'Brien
|
|
Chief Financial Officer
|
|
|
Dated: November 7, 2013
|
/s/ Jonathan W. Painter
|
|
Jonathan W. Painter
|
|
Chief Executive Officer
|
|
|
|
/s/ Thomas M. O'Brien
|
|
Thomas M. O'Brien
|
|
Chief Financial Officer
|