x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 28, 2014 |
¨ | 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 July 25, 2014
|
Common Stock, $.01 par value
|
|
10,928,698
|
|
June 28,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Current Assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
37,510
|
$
|
50,032
|
||||
Restricted cash (Note 1)
|
167
|
168
|
||||||
Accounts receivable, less allowances of $2,486 and $2,689 (Note 1)
|
67,233
|
70,271
|
||||||
Inventories (Note 1)
|
60,087
|
62,805
|
||||||
Unbilled contract costs and fees
|
3,344
|
3,679
|
||||||
Other current assets
|
19,893
|
19,189
|
||||||
Assets of discontinued operation
|
130
|
144
|
||||||
Total Current Assets
|
188,364
|
206,288
|
||||||
|
||||||||
Property, Plant, and Equipment, at Cost
|
119,035
|
117,997
|
||||||
Less: accumulated depreciation and amortization
|
75,156
|
73,112
|
||||||
|
43,879
|
44,885
|
||||||
|
||||||||
Other Assets
|
10,894
|
11,230
|
||||||
|
||||||||
Intangible Assets, Gross
|
79,691
|
78,223
|
||||||
Less: accumulated amortization
|
33,386
|
30,373
|
||||||
|
46,305
|
47,850
|
||||||
|
||||||||
Goodwill
|
134,098
|
131,915
|
||||||
|
||||||||
Total Assets
|
$
|
423,540
|
$
|
442,168
|
|
June 28,
|
December 28,
|
||||||
(In thousands, except share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Current Liabilities:
|
|
|
||||||
Current maturities of long-term obligations (Note 6)
|
$
|
625
|
$
|
625
|
||||
Accounts payable
|
29,254
|
28,388
|
||||||
Accrued payroll and employee benefits
|
16,385
|
19,116
|
||||||
Customer deposits
|
21,187
|
28,174
|
||||||
Other current liabilities
|
23,435
|
23,286
|
||||||
Liabilities of discontinued operation
|
213
|
213
|
||||||
Total Current Liabilities
|
91,099
|
99,802
|
||||||
|
||||||||
Other Long-Term Liabilities
|
33,809
|
33,935
|
||||||
|
||||||||
Long-Term Obligations (Note 6)
|
27,569
|
38,010
|
||||||
|
||||||||
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
|
95,998
|
96,809
|
||||||
Retained earnings
|
257,766
|
248,170
|
||||||
Treasury stock at cost, 3,695,461 and 3,524,742 shares
|
(84,665
|
)
|
(76,339
|
)
|
||||
Accumulated other comprehensive items (Note 9)
|
642
|
710
|
||||||
Total Kadant Stockholders' Equity
|
269,887
|
269,496
|
||||||
Noncontrolling interest
|
1,176
|
925
|
||||||
Total Stockholders' Equity
|
271,063
|
270,421
|
||||||
|
||||||||
Total Liabilities and Stockholders' Equity
|
$
|
423,540
|
$
|
442,168
|
|
Three Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
(In thousands, except per share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
$
|
104,835
|
$
|
82,165
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
59,753
|
42,225
|
||||||
Selling, general, and administrative expenses
|
31,588
|
29,445
|
||||||
Research and development expenses
|
1,392
|
1,852
|
||||||
Restructuring costs and other income, net
|
66
|
218
|
||||||
|
92,799
|
73,740
|
||||||
|
||||||||
Operating Income
|
12,036
|
8,425
|
||||||
|
||||||||
Interest Income
|
82
|
142
|
||||||
Interest Expense
|
(250
|
)
|
(231
|
)
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
11,868
|
8,336
|
||||||
Provision for Income Taxes
|
3,870
|
2,492
|
||||||
|
||||||||
Income from Continuing Operations
|
7,998
|
5,844
|
||||||
Loss from Discontinued Operation (net of income tax benefit of $5 and $8)
|
(9
|
)
|
(12
|
)
|
||||
|
||||||||
Net Income
|
7,989
|
5,832
|
||||||
|
||||||||
Net Income Attributable to Noncontrolling Interest
|
(131
|
)
|
(72
|
)
|
||||
|
||||||||
Net Income Attributable to Kadant
|
$
|
7,858
|
$
|
5,760
|
||||
|
||||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$
|
7,867
|
$
|
5,772
|
||||
Loss from Discontinued Operation
|
(9
|
)
|
(12
|
)
|
||||
Net Income Attributable to Kadant
|
$
|
7,858
|
$
|
5,760
|
||||
|
||||||||
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.71
|
$
|
0.52
|
||||
Diluted
|
$
|
0.70
|
$
|
0.51
|
||||
|
||||||||
Earnings per Share Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.71
|
$
|
0.52
|
||||
Diluted
|
$
|
0.70
|
$
|
0.51
|
||||
|
||||||||
Weighted Average Shares (Note 4):
|
||||||||
Basic
|
11,049
|
11,178
|
||||||
Diluted
|
11,246
|
11,331
|
||||||
|
||||||||
Cash Dividends Declared per Common Share
|
$
|
0.15
|
$
|
0.125
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
(In thousands, except per share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
$
|
198,202
|
$
|
158,369
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
110,940
|
82,403
|
||||||
Selling, general, and administrative expenses
|
64,070
|
56,395
|
||||||
Research and development expenses
|
3,141
|
3,556
|
||||||
Restructuring costs and other income, net (Note 3)
|
394
|
218
|
||||||
|
178,545
|
142,572
|
||||||
|
||||||||
Operating Income
|
19,657
|
15,797
|
||||||
|
||||||||
Interest Income
|
304
|
251
|
||||||
Interest Expense
|
(556
|
)
|
(396
|
)
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
19,405
|
15,652
|
||||||
Provision for Income Taxes (Note 5)
|
6,222
|
4,459
|
||||||
|
||||||||
Income from Continuing Operations
|
13,183
|
11,193
|
||||||
Loss from Discontinued Operation (net of income tax benefit of $8 and $25)
|
(14
|
)
|
(41
|
)
|
||||
|
||||||||
Net Income
|
13,169
|
11,152
|
||||||
|
||||||||
Net Income Attributable to Noncontrolling Interest
|
(258
|
)
|
(108
|
)
|
||||
|
||||||||
Net Income Attributable to Kadant
|
$
|
12,911
|
$
|
11,044
|
||||
|
||||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$
|
12,925
|
$
|
11,085
|
||||
Loss from Discontinued Operation
|
(14
|
)
|
(41
|
)
|
||||
Net Income Attributable to Kadant
|
$
|
12,911
|
$
|
11,044
|
||||
|
||||||||
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
1.17
|
$
|
0.99
|
||||
Diluted
|
$
|
1.15
|
$
|
0.98
|
||||
|
||||||||
Earnings per Share Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
1.16
|
$
|
0.99
|
||||
Diluted
|
$
|
1.14
|
$
|
0.98
|
||||
|
||||||||
Weighted Average Shares (Note 4):
|
||||||||
Basic
|
11,091
|
11,170
|
||||||
Diluted
|
11,280
|
11,299
|
||||||
|
||||||||
Cash Dividends Declared per Common Share
|
$
|
0.30
|
$
|
0.25
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 28,
|
June 29,
|
June 28,
|
June 29,
|
||||||||||||
(In thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
|
|
|
|
||||||||||||
Net Income
|
$
|
7,989
|
$
|
5,832
|
$
|
13,169
|
$
|
11,152
|
||||||||
|
||||||||||||||||
Other Comprehensive Items:
|
||||||||||||||||
Foreign Currency Translation Adjustment
|
579
|
(381
|
)
|
(178
|
)
|
(3,489
|
)
|
|||||||||
Pension and Other Post-Retirement Liability Adjustments (net of tax of $18 and $61 in the three and six months ended June 28, 2014, respectively, and $63 and $140 in the three and six months ended June 29, 2013, respectively)
|
33
|
120
|
110
|
257
|
||||||||||||
Deferred (Loss) Gain on Hedging Instruments (net of tax of $3 and $52 in the three and six months ended June 28, 2014, respectively, and $51 and $80 in the three and six months ended June 29, 2013, respectively)
|
(99
|
)
|
94
|
(7
|
)
|
289
|
||||||||||
|
513
|
(167
|
)
|
(75
|
)
|
(2,943
|
)
|
|||||||||
Comprehensive Income
|
8,502
|
5,665
|
13,094
|
8,209
|
||||||||||||
Comprehensive Income Attributable to Noncontrolling Interest
|
(118
|
)
|
(97
|
)
|
(251
|
)
|
(85
|
)
|
||||||||
Comprehensive Income Attributable to Kadant
|
$
|
8,384
|
$
|
5,568
|
$
|
12,843
|
$
|
8,124
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Operating Activities:
|
|
|
||||||
Net income attributable to Kadant
|
$
|
12,911
|
$
|
11,044
|
||||
Net income attributable to noncontrolling interest
|
258
|
108
|
||||||
Loss from discontinued operation
|
14
|
41
|
||||||
Income from continuing operations
|
13,183
|
11,193
|
||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
5,874
|
4,428
|
||||||
Stock-based compensation expense
|
2,811
|
2,558
|
||||||
Recovery of losses on accounts receivable
|
(29
|
)
|
(193
|
)
|
||||
Gain on the sale of property, plant, and equipment
|
(122
|
)
|
(1,862
|
)
|
||||
Other items, net
|
308
|
10
|
||||||
Contributions to pension plan
|
(540
|
)
|
(540
|
)
|
||||
Changes in current assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
3,461
|
1,225
|
||||||
Unbilled contract costs and fees
|
299
|
1,781
|
||||||
Inventories
|
2,309
|
(6,852
|
)
|
|||||
Other current assets
|
(753
|
)
|
(451
|
)
|
||||
Accounts payable
|
874
|
2,715
|
||||||
Other current liabilities
|
(12,480
|
)
|
4,059
|
|||||
Net cash provided by continuing operations
|
15,195
|
18,071
|
||||||
Net cash used in discontinued operation
|
(1
|
)
|
(173
|
)
|
||||
Net cash provided by operating activities
|
15,194
|
17,898
|
||||||
|
||||||||
Investing Activities:
|
||||||||
Acquisitions, net of cash acquired
|
(2,770
|
)
|
(14,209
|
)
|
||||
Purchases of property, plant, and equipment
|
(1,442
|
)
|
(2,572
|
)
|
||||
Proceeds from sale of property, plant, and equipment
|
171
|
3,309
|
||||||
Other, net
|
-
|
849
|
||||||
Net cash used in continuing operations for investing activities
|
(4,041
|
)
|
(12,623
|
)
|
||||
|
||||||||
Financing Activities:
|
||||||||
Proceeds from issuance of long-term obligations
|
11,401
|
18,900
|
||||||
Repayments of long-term obligations
|
(21,724
|
)
|
(9,750
|
)
|
||||
Purchases of Company common stock
|
(11,250
|
)
|
(2,715
|
)
|
||||
Dividends paid
|
(3,064
|
)
|
(1,401
|
)
|
||||
Proceeds from issuance of Company common stock
|
557
|
337
|
||||||
Change in restricted cash
|
1
|
(165
|
)
|
|||||
Other, net
|
703
|
311
|
||||||
Net cash (used in) provided by continuing operations for financing activities
|
(23,376
|
)
|
5,517
|
|||||
|
||||||||
Exchange Rate Effect on Cash and Cash Equivalents from Continuing Operations
|
(299
|
)
|
(1,023
|
)
|
||||
|
||||||||
(Decrease) Increase in Cash and Cash Equivalents from Continuing Operations
|
(12,522
|
)
|
9,769
|
|||||
Cash and Cash Equivalents at Beginning of Period
|
50,032
|
54,553
|
||||||
Cash and Cash Equivalents at End of Period
|
$
|
37,510
|
$
|
64,322
|
||||
|
(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 29, 2012
|
14,624,159
|
$
|
146
|
$
|
95,448
|
$
|
230,329
|
3,493,546
|
$
|
(74,025
|
)
|
$
|
(3,315
|
)
|
$
|
1,384
|
$
|
249,967
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
11,044
|
–
|
–
|
–
|
108
|
11,152
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividends declared
|
–
|
–
|
–
|
(2,796
|
)
|
–
|
–
|
–
|
–
|
(2,796
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
(1,379
|
)
|
–
|
(131,304
|
)
|
2,784
|
–
|
–
|
1,405
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
312
|
–
|
–
|
–
|
–
|
–
|
312
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
100,000
|
(2,715
|
)
|
–
|
–
|
(2,715
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
(2,920
|
)
|
(23
|
)
|
(2,943
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at June 29, 2013
|
14,624,159
|
$
|
146
|
$
|
94,381
|
$
|
238,577
|
3,462,242
|
$
|
(73,956
|
)
|
$
|
(6,235
|
)
|
$
|
1,469
|
$
|
254,382
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at December 28, 2013
|
14,624,159
|
$
|
146
|
$
|
96,809
|
$
|
248,170
|
3,524,742
|
$
|
(76,339
|
)
|
$
|
710
|
$
|
925
|
$
|
270,421
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
12,911
|
–
|
–
|
–
|
258
|
13,169
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividends declared
|
–
|
–
|
–
|
(3,315
|
)
|
–
|
–
|
–
|
–
|
(3,315
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
(1,514
|
)
|
–
|
(134,416
|
)
|
2,924
|
–
|
–
|
1,410
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
703
|
–
|
–
|
–
|
–
|
–
|
703
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
305,135
|
(11,250
|
)
|
–
|
–
|
(11,250
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
(68
|
)
|
(7
|
)
|
(75
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at June 28, 2014
|
14,624,159
|
$
|
146
|
$
|
95,998
|
$
|
257,766
|
3,695,461
|
$
|
(84,665
|
)
|
$
|
642
|
$
|
1,176
|
$
|
271,063
|
1. | Nature of Operations and Summary of Significant Accounting Policies |
1. | Nature of Operations and Summary of Significant Accounting Policies (continued) |
|
Six Months Ended
|
|||||||
(In thousands)
|
June 28, 2014
|
June 29, 2013
|
||||||
|
|
|
||||||
Non-Cash Investing Activities:
|
|
|
||||||
Fair Value of Assets Acquired
|
$
|
5,602
|
$
|
22,812
|
||||
Cash Paid for Acquired Businesses
|
(3,444
|
)
|
(15,332
|
)
|
||||
Liabilities Assumed of Acquired Businesses
|
$
|
2,158
|
$
|
7,480
|
||||
|
||||||||
Non-Cash Financing Activities:
|
||||||||
Issuance of Company Common Stock
|
$
|
2,718
|
$
|
2,353
|
||||
Dividends Declared but Unpaid
|
$
|
1,640
|
$
|
1,395
|
|
June 28,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Raw Materials and Supplies
|
$
|
22,368
|
$
|
20,836
|
||||
Work in Process
|
16,587
|
21,051
|
||||||
Finished Goods
|
21,132
|
20,918
|
||||||
|
$
|
60,087
|
$
|
62,805
|
|
Six Months Ended
|
|||||||
(In thousands)
|
June 28, 2014
|
June 29, 2013
|
||||||
|
|
|
||||||
Balance at beginning of period
|
$
|
4,571
|
$
|
4,462
|
||||
Provision
|
1,284
|
505
|
||||||
Usage
|
(1,600
|
)
|
(996
|
)
|
||||
Acquired
|
–
|
138
|
||||||
Currency translation
|
(6
|
)
|
(44
|
)
|
||||
Balance at end of period
|
$
|
4,249
|
$
|
4,065
|
2. | Acquisitions |
(In thousands)
|
Severance
Costs
|
Other
Costs
|
Total
Costs
|
|||||||||
Balance at December 28, 2013
|
$
|
467
|
$
|
–
|
$
|
467
|
||||||
Provision
|
(11
|
)
|
405
|
394
|
||||||||
Usage
|
(370
|
)
|
(403
|
)
|
(773
|
)
|
||||||
Currency translation
|
(12
|
)
|
(2
|
)
|
(14
|
)
|
||||||
Balance at June 28, 2014
|
$
|
74
|
$
|
–
|
$
|
74
|
4. | Earnings per Share |
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 28,
|
June 29,
|
June 28,
|
June 29,
|
||||||||||||
(In thousands, except per share amounts)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
|
|
|
|
||||||||||||
Amounts Attributable to Kadant:
|
|
|
|
|
||||||||||||
Income from Continuing Operations
|
$
|
7,867
|
$
|
5,772
|
$
|
12,925
|
$
|
11,085
|
||||||||
Income from Discontinued Operation
|
(9
|
)
|
(12
|
)
|
(14
|
)
|
(41
|
)
|
||||||||
Net Income
|
$
|
7,858
|
$
|
5,760
|
$
|
12,911
|
$
|
11,044
|
||||||||
|
||||||||||||||||
Basic Weighted Average Shares
|
11,049
|
11,178
|
11,091
|
11,170
|
||||||||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan
|
197
|
153
|
189
|
129
|
||||||||||||
Diluted Weighted Average Shares
|
11,246
|
11,331
|
11,280
|
11,299
|
||||||||||||
|
||||||||||||||||
Basic Earnings per Share:
|
||||||||||||||||
Continuing Operations
|
$
|
0.71
|
$
|
0.52
|
$
|
1.17
|
$
|
0.99
|
||||||||
Discontinued Operation
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||||
Net Income per Basic Share
|
$
|
0.71
|
$
|
0.52
|
$
|
1.16
|
$
|
0.99
|
||||||||
|
||||||||||||||||
Diluted Earnings per Share:
|
||||||||||||||||
Continuing Operations
|
$
|
0.70
|
$
|
0.51
|
$
|
1.15
|
$
|
0.98
|
||||||||
Discontinued Operation
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||||
Net Income per Diluted Share
|
$
|
0.70
|
$
|
0.51
|
$
|
1.14
|
$
|
0.98
|
5. | Provision for Income Taxes |
6. | Long-Term Obligations |
|
June 28,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revolving Credit Facility, due 2018
|
$
|
22,069
|
$
|
32,260
|
||||
Variable Rate Term Loan, due from 2014 to 2016
|
6,125
|
6,375
|
||||||
Total Long-Term Obligations
|
28,194
|
38,635
|
||||||
Less: Current Maturities
|
(625
|
)
|
(625
|
)
|
||||
Long-Term Obligations, less Current Maturities
|
$
|
27,569
|
$
|
38,010
|
7. | Stock-Based Compensation |
8. | Employee Benefit Plans |
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 28, 2013
|
$
|
8,919
|
$
|
(657
|
)
|
$
|
(6,919
|
)
|
$
|
(633
|
)
|
$
|
710
|
|||||||
Other comprehensive loss before reclassifications
|
(171
|
)
|
(51
|
)
|
(1
|
)
|
(356
|
)
|
(579
|
)
|
||||||||||
Reclassifications from AOCI
|
–
|
47
|
115
|
349
|
511
|
|||||||||||||||
Net current period other comprehensive (loss) income
|
(171
|
)
|
(4
|
)
|
114
|
(7
|
)
|
(68
|
)
|
|||||||||||
Balance at June 28, 2014
|
$
|
8,748
|
$
|
(661
|
)
|
$
|
(6,805
|
)
|
$
|
(640
|
)
|
$
|
642
|
|||||||
|
||||||||||||||||||||
Balance at December 29, 2012
|
$
|
8,124
|
$
|
(748
|
)
|
$
|
(9,645
|
)
|
$
|
(1,046
|
)
|
$
|
(3,315
|
)
|
||||||
Other comprehensive (loss) income before reclassifications
|
(3,466
|
)
|
–
|
9
|
(37
|
)
|
(3,494
|
)
|
||||||||||||
Reclassifications from AOCI
|
–
|
46
|
202
|
326
|
574
|
|||||||||||||||
Net current period other comprehensive (loss) income
|
(3,466
|
)
|
46
|
211
|
289
|
(2,920
|
)
|
|||||||||||||
Balance at June 29, 2013
|
$
|
4,658
|
$
|
(702
|
)
|
$
|
(9,434
|
)
|
$
|
(757
|
)
|
$
|
(6,235
|
)
|
|
Three Months Ended
|
Six Months Ended
|
Statement of Income
|
||||||||||||||
(In thousands)
|
June 28, 2014
|
June 29, 2013
|
June 28, 2014
|
June 29, 2013
|
Line Item
|
||||||||||||
Pension and Other Post-retirement Plans: (1)
|
|
|
|
|
|
||||||||||||
Amortization of prior service cost
|
$
|
(38
|
)
|
$
|
(35
|
)
|
$
|
(73
|
)
|
$
|
(70
|
)
|
SG&A expenses
|
||||
Amortization of actuarial losses
|
(88
|
)
|
(137
|
)
|
(176
|
)
|
(309
|
)
|
SG&A expenses
|
||||||||
Total expense before income taxes
|
(126
|
)
|
(172
|
)
|
(249
|
)
|
(379
|
)
|
|
||||||||
Income tax benefit
|
44
|
59
|
87
|
131
|
Provision for income taxes
|
||||||||||||
|
(82
|
)
|
(113
|
)
|
(162
|
)
|
(248
|
)
|
|
||||||||
Cash Flow Hedges: (2)
|
|
||||||||||||||||
Interest rate swap agreements
|
(84
|
)
|
(90
|
)
|
(168
|
)
|
(196
|
)
|
Interest expense
|
||||||||
Forward currency-exchange contracts
|
–
|
(40
|
)
|
–
|
(83
|
)
|
Revenues
|
||||||||||
Forward currency-exchange contract
|
(278
|
)
|
–
|
(278
|
)
|
–
|
SG&A expenses
|
||||||||||
Total expense before income taxes
|
(362
|
)
|
(130
|
)
|
(446
|
)
|
(279
|
)
|
|
||||||||
Income tax benefit (expense)
|
67
|
46
|
97
|
(47
|
)
|
Provision for income taxes
|
|||||||||||
|
(295
|
)
|
(84
|
)
|
(349
|
)
|
(326
|
)
|
|
||||||||
Total reclassifications
|
$
|
(377
|
)
|
$
|
(197
|
)
|
$
|
(511
|
)
|
$
|
(574
|
)
|
|
(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) |
|
|
June 28, 2014
|
December 28, 2013
|
||||||||||||||
Balance Sheet
|
Asset
|
Notional
|
Asset
|
Notional
|
|||||||||||||
(In thousands)
|
Location
|
(Liability) (a)
|
Amount (b)
|
(Liability) (a)
|
Amount
|
||||||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
||||||||||||
Derivatives in a Liability Position:
|
|
|
|
|
|
||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
(31
|
)
|
$
|
1,340
|
$
|
(22
|
)
|
$
|
1,340
|
||||||
Forward currency-exchange contract
|
Other Long-Term Liabilities
|
$
|
(384
|
)
|
$
|
16,571
|
$
|
–
|
$
|
–
|
|||||||
Interest rate swap agreement
|
Other Long-Term Liabilities
|
$
|
(619
|
)
|
$
|
6,125
|
$
|
(773
|
)
|
$
|
6,375
|
||||||
|
|
||||||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
||||||||||||||||
Derivatives in an Asset Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Assets
|
$
|
–
|
$
|
–
|
$
|
97
|
$
|
1,419
|
||||||||
Derivatives in a Liability Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
–
|
$
|
–
|
$
|
(1
|
)
|
$
|
288
|
(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 six months of 2014. |
10. | Derivatives (continued) |
(In thousands)
|
Interest Rate Swap
Agreements
|
Forward Currency-
Exchange
Contracts
|
Total
|
|||||||||
Unrealized loss, net of tax, at December 28, 2013
|
$
|
(618
|
)
|
$
|
(15
|
)
|
$
|
(633
|
)
|
|||
Loss reclassified to earnings
|
108
|
241
|
349
|
|||||||||
Loss recognized in OCI
|
(8
|
)
|
(348
|
)
|
(356
|
)
|
||||||
Unrealized loss, net of tax, at June 28, 2014
|
$
|
(518
|
)
|
$
|
(122
|
)
|
$
|
(640
|
)
|
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 June 28, 2014
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
5,992
|
$
|
–
|
$
|
–
|
$
|
5,992
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
9,267
|
$
|
–
|
$
|
9,267
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
415
|
$
|
–
|
$
|
415
|
||||||||
Interest rate swap agreement
|
$
|
–
|
$
|
619
|
$
|
–
|
$
|
619
|
||||||||
Contingent consideration (b)
|
$
|
–
|
$
|
–
|
$
|
1,362
|
$
|
1,362
|
|
Fair Value as of December 28, 2013
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
17,090
|
$
|
–
|
$
|
–
|
$
|
17,090
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
10,765
|
$
|
–
|
$
|
10,765
|
||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
97
|
$
|
–
|
$
|
97
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
23
|
$
|
–
|
$
|
23
|
||||||||
Interest rate swap agreement
|
$
|
–
|
$
|
773
|
$
|
–
|
$
|
773
|
(a) | Included in accounts receivable in the accompanying condensed consolidated balance sheet. |
(b) | Included in other current liabilities in the accompanying condensed consolidated balance sheet. |
11. | Fair Value Measurements (continued) |
|
June 28, 2014
|
December 28, 2013
|
||||||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
(In thousands)
|
Value
|
Value
|
Value
|
Value
|
||||||||||||
|
|
|
|
|
||||||||||||
Long-term debt obligations
|
$
|
27,569
|
$
|
27,569
|
$
|
38,010
|
$
|
38,010
|
12. | Business Segment Information |
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 28,
|
June 29,
|
June 28,
|
June 29,
|
||||||||||||
(In thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
|
|
|
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Papermaking Systems
|
$
|
91,975
|
$
|
79,253
|
$
|
170,159
|
$
|
151,650
|
||||||||
Wood Processing Systems
|
9,837
|
–
|
21,110
|
–
|
||||||||||||
Fiber-based Products
|
3,023
|
2,912
|
6,933
|
6,719
|
||||||||||||
|
$
|
104,835
|
$
|
82,165
|
$
|
198,202
|
$
|
158,369
|
||||||||
|
||||||||||||||||
Income from Continuing Operations Before Provision for Income Taxes:
|
||||||||||||||||
Papermaking Systems
|
$
|
13,803
|
$
|
11,821
|
$
|
23,213
|
$
|
21,765
|
||||||||
Wood Processing Systems
|
1,495
|
–
|
2,849
|
–
|
||||||||||||
Corporate and Fiber-based Products (a)
|
(3,262
|
)
|
(3,396
|
)
|
(6,405
|
)
|
(5,968
|
)
|
||||||||
Total Operating Income
|
12,036
|
8,425
|
19,657
|
15,797
|
||||||||||||
Interest Expense, Net
|
(168
|
)
|
(89
|
)
|
(252
|
)
|
(145
|
)
|
||||||||
|
$
|
11,868
|
$
|
8,336
|
$
|
19,405
|
$
|
15,652
|
||||||||
|
||||||||||||||||
Capital Expenditures:
|
||||||||||||||||
Papermaking Systems
|
$
|
772
|
$
|
1,226
|
$
|
1,289
|
$
|
2,398
|
||||||||
Other
|
131
|
168
|
153
|
174
|
||||||||||||
|
$
|
903
|
$
|
1,394
|
$
|
1,442
|
$
|
2,572
|
13. | Contingencies and Litigation |
|
-
|
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.
|
|
-
|
Stranders: disc and ring stranders that cut trees into strands for OSB production;
|
|
-
|
Rotary Debarkers: rotary debarkers that employ a combination of mechanical abrasion and log-to-log contact to efficiently remove bark from logs of all shapes and species; and
|
|
-
|
Chippers: disc, drum, and veneer chippers that are high quality, robust chipper systems for waste-wood and whole-log applications found in pulp woodrooms, chip plants, sawmill, and planer mill sites.
|
|
Three Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
57
|
52
|
||||||
Selling, general, and administrative expenses
|
30
|
36
|
||||||
Research and development expenses
|
1
|
2
|
||||||
Restructuring costs and other income, net
|
–
|
–
|
||||||
|
88
|
90
|
||||||
Operating Income
|
12
|
10
|
||||||
Interest Income
|
–
|
–
|
||||||
Interest Expense
|
–
|
–
|
||||||
Income from Continuing Operations Before Provision for Income Taxes
|
12
|
10
|
||||||
Provision for Income Taxes
|
4
|
3
|
||||||
Income from Continuing Operations
|
8
|
%
|
7
|
%
|
|
Three Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
91,975
|
$
|
79,253
|
||||
Wood Processing Systems
|
9,837
|
–
|
||||||
Fiber-based Products
|
3,023
|
2,912
|
||||||
|
$
|
104,835
|
$
|
82,165
|
|
Three Months Ended
|
Increase
Excluding
Effect of
|
||||||||||||||
(In thousands)
|
June 28,
2014
|
June 29,
2013
|
Increase
|
Currency
Translation
|
||||||||||||
|
|
|
|
|
||||||||||||
Papermaking Systems Segment Product Lines:
|
|
|
|
|
||||||||||||
Stock-Preparation
|
$
|
36,248
|
$
|
28,493
|
$
|
7,755
|
$
|
7,089
|
||||||||
Doctoring, Cleaning, & Filtration
|
28,180
|
27,666
|
514
|
363
|
||||||||||||
Fluid-Handling
|
27,547
|
23,094
|
4,453
|
4,071
|
||||||||||||
|
$
|
91,975
|
$
|
79,253
|
$
|
12,722
|
$
|
11,523
|
|
Three Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Gross Profit Margin:
|
|
|
||||||
Papermaking Systems
|
43.5
|
%
|
48.7
|
%
|
||||
Wood Processing Systems
|
36.3
|
–
|
||||||
Fiber-based Products
|
48.2
|
47.1
|
||||||
|
43.0
|
%
|
48.6
|
%
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
56
|
52
|
||||||
Selling, general, and administrative expenses
|
32
|
36
|
||||||
Research and development expenses
|
2
|
2
|
||||||
Restructuring costs and other income, net
|
–
|
–
|
||||||
|
90
|
90
|
||||||
Operating Income
|
10
|
10
|
||||||
Interest Income
|
–
|
–
|
||||||
Interest Expense
|
–
|
–
|
||||||
Income from Continuing Operations Before Provision for Income Taxes
|
10
|
10
|
||||||
Provision for Income Taxes
|
3
|
3
|
||||||
Income from Continuing Operations
|
7
|
%
|
7
|
%
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
170,159
|
$
|
151,650
|
||||
Wood Processing Systems
|
21,110
|
–
|
||||||
Fiber-based Products
|
6,933
|
6,719
|
||||||
|
$
|
198,202
|
$
|
158,369
|
|
Six Months Ended
|
Increase
Excluding
Effect of
|
||||||||||||||
(In thousands)
|
June 28,
2014
|
June 29,
2013
|
Increase
|
Currency
Translation
|
||||||||||||
|
|
|
|
|
||||||||||||
Papermaking Systems Segment Product Lines:
|
|
|
|
|
||||||||||||
Stock-Preparation
|
$
|
62,422
|
$
|
51,495
|
$
|
10,927
|
$
|
9,875
|
||||||||
Doctoring, Cleaning, & Filtration
|
55,189
|
53,528
|
1,661
|
1,348
|
||||||||||||
Fluid-Handling
|
52,548
|
46,627
|
5,921
|
5,585
|
||||||||||||
|
$
|
170,159
|
$
|
151,650
|
$
|
18,509
|
$
|
16,808
|
|
Six Months Ended
|
|||||||
|
June 28,
|
June 29,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Gross Profit Margin:
|
|
|
||||||
Papermaking Systems
|
45.4
|
%
|
47.8
|
%
|
||||
Wood Processing Systems
|
32.0
|
–
|
||||||
Fiber-based Products
|
47.4
|
51.4
|
||||||
|
44.0
|
%
|
48.0
|
%
|
|
–
|
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 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 of 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 process industries we serve,
|
|
–
|
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 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
|
||||||||||||
3/30/14 – 4/30/14
|
–
|
–
|
–
|
$
|
16,195,995
|
|||||||||||
5/1/14 – 5/31/14
|
238,723
|
$
|
36.50
|
238,723
|
$
|
7,482,474
|
||||||||||
6/1/14 – 6/28/14
|
16,412
|
$
|
37.73
|
16,412
|
$
|
6,863,175
|
||||||||||
Total:
|
255,135
|
$
|
36.58
|
255,135
|
(1)
|
On November 4, 2013, we announced that our board of directors approved the repurchase by us of up to $20 million of our equity securities during the period from November 8, 2013 to November 8, 2014. Repurchases may be made in public or private transactions, including under Securities Exchange Act Rule 10b-5-1 trading plans. In the second quarter of 2014, we repurchased 255,135 shares of our common stock for $9.3 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
|
|
Amendments to the Restoration Plan of the Registrant effective as of May 20, 2014.
|
|
|
|
10.2
|
|
Amended and Restated 2006 Equity Incentive Plan of the Registrant effective as of May 20, 2014.
|
|
|
|
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.
|
The first sentence of Article 1 is amended to reflect the name change of the Qualified Plan to the Kadant Inc. Retirement Plan, so that as amended the first sentence shall read as follows:
|
2.
|
The following Section 5.1 is amended in its entirety, effective January 1, 2014, to read as follows:
|
a.
|
single life annuity payable at the Participant's Normal Retirement Date or, if later, at the Participant's Separation from Service, determined under the provisions of Section 3.1 of the Qualified Plan, but (i) substituting the Participant's Total Compensation determined under this Plan for the Participant's "Compensation" determined under the Qualified Plan, (ii) ignoring any limitations under Code section 415 or 401(a)(17), (iii) taking into account only Total Compensation and service through the date the Participant's participation in the Plan is terminated, and (iv) ignoring any maximum Years of Benefit Service or limitations of Years of Benefit Service in excess of 25 as applied in Section 3.1(c) of the Qualified Plan until the later of the Participant's Normal Retirement Date and the Participant's attainment of 30 Years of Benefit Service. Upon the later of Normal Retirement Date and 30 Years of Benefit Service, the Participant shall cease to accrue future Years of Benefit Service; and
|
b.
|
the Participant's Qualified Plan Benefit.
|
·
|
prescribe, amend and rescind rules and regulations relating to the Plan and Awards,
|
·
|
select the persons to whom Awards will be granted ("Participants"),
|
·
|
determine the type and amount of Awards to be granted to Participants (including any combination of Awards),
|
·
|
determine the terms and conditions of Awards granted under the Plan (including terms and conditions relating to events of merger, consolidation, dissolution and liquidation, change in control, vesting, forfeiture, restrictions, dividends and interest, if any, on deferred amounts),
|
·
|
waive compliance by a Participant with any obligation to be performed by him or her under an Award,
|
·
|
waive any term or condition of an Award, cancel an existing Award in whole or in part with the consent of a Participant,
|
·
|
grant replacement Awards,
|
·
|
accelerate the vesting or lapse of any restrictions of any Award,
|
·
|
correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award, and
|
·
|
adopt the form of instruments evidencing Awards under the Plan and change such forms from time to time.
|
·
|
shares of Common Stock covered by Awards of stock appreciation rights shall be counted against the number of shares available for the grant of Awards under the Plan; provided that Awards of stock appreciation rights that may be settled in cash only shall not be so counted;
|
·
|
if any Award of shares of Common Stock expires or terminates without having been exercised in full, is forfeited or is otherwise terminated, surrendered or cancelled in whole or in part (including as a result of shares of Common Stock subject to such Award being repurchased by the Company pursuant to the terms of any Award, the unused shares of Common Stock covered by such Award shall be available again for the future grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any applicable limitations under the Internal Revenue Code of 1986, as amended (the "Code");
|
·
|
if any Award results in Common Stock not being issued (including as a result of an stock appreciation right that could be settled either in cash or in stock and was actually settled in cash), the unused shares of Common Stock covered by such Award shall be available again for the future grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any limitations under the Code;
|
·
|
Shares of Common Stock tendered to the Company by a Participant to purchase shares of Common Stock upon the exercise of an Award or to satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation), the number of shares tendered shall be added to the number of shares of Common Stock available for the future grant of Awards under the Plan; and
|
|
|
·
|
Any shares of Common Stock underlying Awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or any of its subsidiaries or affiliates or with which the Company or any of its subsidiaries or affiliates combines, shall not, unless required by law or regulation, count against the number of shares of Common Stock available for the future grant of Awards under the Plan.
|
9 . | General Provisions |
9.1 | Documentation of Awards |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 28, 2014 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. |
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Date: August 6, 2014
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/s/ Jonathan W. Painter
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Jonathan W. Painter
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Chief Executive Officer
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1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 28, 2014 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. |
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Date: August 6, 2014
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/s/ Thomas M. O'Brien
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Thomas M. O'Brien
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Chief Financial Officer
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Dated: August 6, 2014
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/s/ Jonathan W. Painter
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Jonathan W. Painter
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Chief Executive Officer
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/s/ Thomas M. O'Brien
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Thomas M. O'Brien
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Chief Financial Officer
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