Q3 2024 Kadant Inc Earnings Call Transcript
Key Points
- Kadant Inc (KAI) achieved record adjusted EBITDA, EBITDA margin, and adjusted EPS in the third quarter of 2024.
- Revenue increased by 11% compared to the third quarter of 2023, reaching $272 million, driven by strong aftermarket parts business and acquisitions.
- Cash flow from operations and free cash flow were robust, at $52 million and $48 million respectively, showcasing the strength of the business model.
- Bookings increased by 15% year-over-year, supported by acquisitions and strong activity in North America.
- The company is optimistic about future growth, with plans to present new five-year financial targets and growth initiatives at an upcoming Investor Day.
- Demand in Europe and Asia was sluggish due to persistent economic headwinds, impacting overall market performance.
- SG&A expenses as a percentage of revenue increased to 25.4% in Q3 2024 from 23.7% in the prior year, primarily due to acquisition-related costs.
- Adjusted EBITDA margin in the material handling segment declined by 210 basis points compared to Q3 of last year, largely due to product mix and lower revenue volume.
- The company anticipates lower gross margins in Q4 due to the mix of projects, which could lead to comparatively lower earnings.
- Foreign currency translation had a negative impact, with a 17% adverse effect on guidance compared to the beginning of the year.
Good day and thank you for standing by. Welcome to Kadant third quarter, 2024 earnings conference call at this time. All participants are on a listen-only mode after the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's call is being recorded. I will now hand the conference over to your speaker host, Michael Mckenney, Executive Vice President and Chief Financial Officer. Please go ahead, sir.
Thank you, Olivia. Good morning, everyone and welcome to Kadant third quarter 2024 earnings call with me on the call. Today is Jeff Powell, our President and Chief Executive Officer.
Before we begin. Let me read our Safe Harbor statement various remarks that we may make today about cadence, future plans and expectations, financial and operating results and prospects are forward-looking
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