
		September 26, 2020			December 28, 2019			April 3, 2021		January 2, 2021
(In thousands, except share and per share amounts)	(In thousands, except share and per share amounts)			(In thousands, except share and per share amounts)
Assets	Assets								Assets
Current Assets:	Current Assets:						Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	53,554		$	66,786	Cash and cash equivalents	$	65,982	$	65,682
Restricted cash	Restricted cash	2,650			1,487		Restricted cash	726		958
Accounts receivable, net of allowances of $3,113 and $2,698		94,145			95,740
Accounts receivable, net of allowances of $2,797 and $2,977							Accounts receivable, net of allowances of $2,797 and $2,977	104,378		91,540
Inventories	Inventories	108,715			102,715		Inventories	112,590		106,814
Unbilled revenue	Unbilled revenue	9,095			13,162		Unbilled revenue	6,204		7,576
Other current assets	Other current assets	15,382			17,686		Other current assets	19,874		17,250
Total Current Assets	Total Current Assets	283,541			297,576		Total Current Assets	309,754		289,820
Property, Plant, and Equipment, net of accumulated depreciation of $103,664 and $95,309		82,427			86,032
Property, Plant, and Equipment, net of accumulated depreciation of $109,426 and $107,832							Property, Plant, and Equipment, net of accumulated depreciation of $109,426 and $107,832	82,204		84,642
Other Assets	Other Assets	40,565			45,851		Other Assets	39,669		40,391
Intangible Assets, Net (Note 1)		164,359			173,896
Goodwill (Note 1)		342,999			336,032
Intangible Assets, Net							Intangible Assets, Net	155,534		160,965
Goodwill							Goodwill	348,504		351,753
Total Assets	Total Assets	$	913,891		$	939,387	Total Assets	$	935,665	$	927,571

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity						Liabilities and Stockholders' Equity
Current Liabilities:	Current Liabilities:						Current Liabilities:
Current maturities of long-term obligations (Note 6)		$	1,538		$	2,851
Current maturities of long-term obligations (Note 4)							Current maturities of long-term obligations (Note 4)	$	1,417	$	1,474
Accounts payable	Accounts payable	32,588			45,852		Accounts payable	38,988		32,264
Accrued payroll and employee benefits	Accrued payroll and employee benefits	27,946			31,968		Accrued payroll and employee benefits	25,525		31,168
Customer deposits	Customer deposits	25,834			24,012		Customer deposits	37,434		29,433
Advanced billings	Advanced billings	4,520			11,280		Advanced billings	9,801		8,513
Other current liabilities	Other current liabilities	35,436			30,206		Other current liabilities	33,429		31,836
Total Current Liabilities	Total Current Liabilities	127,862			146,169		Total Current Liabilities	146,594		134,688
Long-Term Obligations (Note 6)		259,049			298,174
Long-Term Obligations (Note 4)							Long-Term Obligations (Note 4)	221,067		232,000
Other Long-Term Liabilities	Other Long-Term Liabilities	64,735			67,965		Other Long-Term Liabilities	63,696		63,978

Commitments and Contingencies (Note 13)
Commitments and Contingencies (Note 10)							Commitments and Contingencies (Note 10)	0		0

Stockholders' Equity:	Stockholders' Equity:						Stockholders' Equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; NaN issued	Preferred stock, $.01 par value, 5,000,000 shares authorized; NaN issued	0			0		Preferred stock, $.01 par value, 5,000,000 shares authorized; NaN issued	0		0
Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued	Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued	146			146		Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued	146		146
Capital in excess of par value	Capital in excess of par value	108,384			106,698		Capital in excess of par value	108,064		110,824
Retained earnings	Retained earnings	465,963			435,249		Retained earnings	493,067		479,400
Treasury stock at cost, 3,114,599 and 3,214,888 shares		(76,320)			(78,778)
Accumulated other comprehensive items (Note 9)		(37,232)			(37,620)
Treasury stock at cost, 3,046,379 and 3,081,919 shares							Treasury stock at cost, 3,046,379 and 3,081,919 shares	(74,649)		(75,519)
Accumulated other comprehensive items (Note 6)							Accumulated other comprehensive items (Note 6)	(24,040)		(19,492)
Total Kadant Stockholders' Equity	Total Kadant Stockholders' Equity	460,941			425,695		Total Kadant Stockholders' Equity	502,588		495,359
Noncontrolling interest	Noncontrolling interest	1,304			1,384		Noncontrolling interest	1,720		1,546
Total Stockholders' Equity	Total Stockholders' Equity	462,245			427,079		Total Stockholders' Equity	504,308		496,905
Total Liabilities and Stockholders' Equity	Total Liabilities and Stockholders' Equity	$	913,891		$	939,387	Total Liabilities and Stockholders' Equity	$	935,665	$	927,571


		Three Months Ended							Nine Months Ended									Three Months Ended
		September 26, 2020				September 28, 2019			September 26, 2020				September 28, 2019					April 3, 2021				March 28, 2020
(In thousands, except per share amounts)	(In thousands, except per share amounts)							(In thousands, except per share amounts)
Revenue (Notes 1 and 12)				$	154,610						$	173,504				$	466,597			$	521,985
Revenue (Notes 1 and 9)															Revenue (Notes 1 and 9)			$	172,463			$	159,127

Costs and Operating Expenses:	Costs and Operating Expenses:														Costs and Operating Expenses:
Cost of revenue	Cost of revenue	86,294				99,257			263,510				302,852		Cost of revenue			96,748				90,804
Selling, general, and administrative expenses	Selling, general, and administrative expenses	43,853				47,097			134,518				144,883		Selling, general, and administrative expenses			49,431				45,592
Research and development expenses	Research and development expenses	2,658				2,597			8,532				7,980		Research and development expenses			2,857				3,076
Restructuring costs (Note 3)		470				0			926				0
		133,275				148,951			407,486				455,715
																		149,036				139,472
Operating Income	Operating Income	21,335				24,553			59,111				66,270		Operating Income			23,427				19,655

Interest Income	Interest Income	52				43			140				158		Interest Income			65				51
Interest Expense	Interest Expense	(1,670)				(3,066)			(6,060)				(10,143)		Interest Expense			(1,111)				(2,459)
Other Expense, Net	Other Expense, Net	(32)				(98)			(95)				(296)		Other Expense, Net			(24)				(32)

Income Before Provision for Income Taxes	Income Before Provision for Income Taxes	19,685				21,432			53,096				55,989		Income Before Provision for Income Taxes			22,357				17,215
Provision for Income Taxes (Note 5)		4,705				5,219			13,738				12,310
Provision for Income Taxes (Note 3)															Provision for Income Taxes (Note 3)			5,561				4,559
Net Income	Net Income	14,980				16,213			39,358				43,679		Net Income			16,796				12,656

Net Income Attributable to Noncontrolling Interest	Net Income Attributable to Noncontrolling Interest	(129)				(98)			(369)				(360)		Net Income Attributable to Noncontrolling Interest			(235)				(125)

Net Income Attributable to Kadant	Net Income Attributable to Kadant	$	14,851			$	16,115		$	38,989			$	43,319	Net Income Attributable to Kadant			$	16,561			$	12,531

Earnings per Share Attributable to Kadant (Note 4)
Earnings per Share Attributable to Kadant (Note 2)															Earnings per Share Attributable to Kadant (Note 2)
Basic	Basic	$	1.29			$	1.43		$	3.40			$	3.87	Basic			$	1.43			$	1.10
Diluted	Diluted	$	1.28			$	1.41		$	3.38			$	3.79	Diluted			$	1.43			$	1.09

Weighted Average Shares (Note 4)
Weighted Average Shares (Note 2)															Weighted Average Shares (Note 2)
Basic	Basic	11,504				11,267			11,472				11,198		Basic			11,553				11,432
Diluted	Diluted	11,589				11,469			11,550				11,434		Diluted			11,612				11,508

Three Months Ended Nine Months Ended
September 26,
2020 September 28,
2019 September 26,
2020 September 28,
2019
(In thousands)
Net Income $ 14,980 $ 16,213 $ 39,358 $ 43,679
Other Comprehensive Items:
Foreign currency translation adjustment 8,656 (9,091) 824 (7,603)
Pension and other post-retirement liability adjustments, net (net of tax (benefit) provision of $(6), $12, $14 and $22) (14) 31 34 59
Effect of other post-retirement plan settlement 0 0 (119) 0
Deferred gain (loss) on cash flow hedges (net of tax provision (benefit) of $19, $(47), $(103) and $(190)) 51 (123) (275) (524)
Total other comprehensive items 8,693 (9,183) 464 (8,068)
Comprehensive Income 23,673 7,030 39,822 35,611
Comprehensive Income Attributable to Noncontrolling Interest (191) (24) (445) (276)
Comprehensive Income Attributable to Kadant $ 23,482 $ 7,006 $ 39,377 $ 35,335


	Three Months Ended
	April 3, 2021		March 28, 2020
(In thousands)
Net Income	$	16,796	$	12,656
Other Comprehensive Items:
Foreign currency translation adjustment	(4,750)		(12,574)
Post-retirement liability adjustments, net (net of tax of $10 and $20)	28		50
Effect of post-retirement plan settlement	0		(119)
Deferred gain (loss) on cash flow hedges (net of tax of $19 and $(119))	113		(302)
Other comprehensive items	(4,609)		(12,945)
Comprehensive Income (Loss)	12,187		(289)
Comprehensive Income Attributable to Noncontrolling Interest	(174)		(114)
Comprehensive Income (Loss) Attributable to Kadant	$	12,013	$	(403)


		Nine Months Ended						Three Months Ended
		September 26, 2020			September 28, 2019			April 3, 2021		March 28, 2020
(In thousands)	(In thousands)			(In thousands)
Operating Activities	Operating Activities								Operating Activities
Net income attributable to Kadant	Net income attributable to Kadant	$	38,989		$	43,319	Net income attributable to Kadant	$	16,561	$	12,531
Net income attributable to noncontrolling interest	Net income attributable to noncontrolling interest	369			360		Net income attributable to noncontrolling interest	235		125

Net income	Net income	39,358			43,679		Net income	16,796		12,656
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	23,260			24,304		Depreciation and amortization	7,686		7,598
Stock-based compensation expense	Stock-based compensation expense	5,126			5,125		Stock-based compensation expense	1,499		1,639
Provision for losses on accounts receivable		505			170
Gain on sale of property, plant, and equipment		(4)			(139)
(Benefit) provision for losses on accounts receivable							(Benefit) provision for losses on accounts receivable	(129)		103
Loss (gain) on sale of property, plant, and equipment							Loss (gain) on sale of property, plant, and equipment	48		(10)
Other items, net	Other items, net	(250)			954		Other items, net	(430)		(877)
Changes in current assets and liabilities, net of effects of acquisitions:
Changes in current assets and liabilities, net of effects of an acquisition:							Changes in current assets and liabilities, net of effects of an acquisition:
Accounts receivable	Accounts receivable	1,306			(1,124)		Accounts receivable	(13,955)		1,929
Unbilled revenue	Unbilled revenue	4,332			1,957		Unbilled revenue	1,231		844
Inventories	Inventories	(6,229)			(10,294)		Inventories	(6,612)		(3,735)
Other current assets	Other current assets	2,840			(4,093)		Other current assets	(2,690)		(1,107)
Accounts payable	Accounts payable	(13,183)			2,798		Accounts payable	8,031		(3,440)
Other current liabilities	Other current liabilities	(4,460)			(5,171)		Other current liabilities	7,617		(9,431)

Net cash provided by operating activities	Net cash provided by operating activities	52,601			58,166		Net cash provided by operating activities	19,092		6,169

Investing Activities	Investing Activities						Investing Activities
Acquisitions, net of cash acquired (Note 2)		(7,095)			(177,058)
Acquisition							Acquisition	(125)		0
Purchases of property, plant, and equipment	Purchases of property, plant, and equipment	(5,419)			(6,236)		Purchases of property, plant, and equipment	(2,259)		(2,686)
Proceeds from sale of property, plant, and equipment	Proceeds from sale of property, plant, and equipment	55			527		Proceeds from sale of property, plant, and equipment	32		14

Net cash used in investing activities	Net cash used in investing activities	(12,459)			(182,767)		Net cash used in investing activities	(2,352)		(2,672)

Financing Activities	Financing Activities						Financing Activities
Repayment of short- and long-term obligations		(69,034)			(108,272)
Proceeds from issuance of short- and long-term obligations		26,000			247,090
Repayment of long-term obligations							Repayment of long-term obligations	(19,563)		(2,969)
Proceeds from issuance of long-term obligations							Proceeds from issuance of long-term obligations	10,139		0
Tax withholding payments related to stock-based compensation							Tax withholding payments related to stock-based compensation	(3,388)		(2,318)
Dividends paid	Dividends paid	(8,141)			(7,604)		Dividends paid	(2,770)		(2,628)
Tax withholding payments related to stock-based compensation		(2,596)			(2,670)

Proceeds from issuance of Company common stock	Proceeds from issuance of Company common stock	1,614			2,006		Proceeds from issuance of Company common stock	0		913

Dividend paid to noncontrolling interest		(525)			0
Other financing activities		(189)			(52)
Net cash (used in) provided by financing activities		(52,871)			130,498

Net cash used in financing activities							Net cash used in financing activities	(15,582)		(7,002)

Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	660			(2,043)		Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	(1,090)		(2,693)

(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash		(12,069)			3,854
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash							Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	68		(6,198)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	68,273			46,117		Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	66,640		68,273
Cash, Cash Equivalents, and Restricted Cash at End of Period	Cash, Cash Equivalents, and Restricted Cash at End of Period	$	56,204		$	49,971	Cash, Cash Equivalents, and Restricted Cash at End of Period	$	66,708	$	62,075


		Three Months Ended September 26, 2020																												Three Months Ended April 3, 2021
(In thousands, except share and per share amounts)	(In thousands, except share and per share amounts)	Common Stock			Capital in Excess of Par Value				Retained Earnings				Treasury Stock						Accumulated Other Comprehensive Items		Noncontrolling Interest				Total Stockholders' Equity		(In thousands, except share and per share amounts)			Common Stock					Capital in Excess of Par Value			Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Items		Noncontrolling Interest		Total Stockholders' Equity
		Shares	Amount								Shares			Amount									Shares							Amount							Shares			Amount
Balance at June 27, 2020		14,624,159	$	146			$	107,202			$	453,874		3,127,565			$	(76,638)			$	(45,863)			$	1,638		$	440,359
Balance at January 2, 2021																											Balance at January 2, 2021			14,624,159			$	146	$	110,824		$	479,400	3,081,919	$	(75,519)	$	(19,492)	$	1,546	$	496,905
Net income	Net income	—	—		—				14,851				—		—				—		129				14,980		Net income			—			—		—			16,561		—	—		—		235		16,796
Dividend declared – Common Stock, $0.24 per share		—	—		—				(2,762)				—		—				—		—				(2,762)
Dividend paid to noncontrolling interest		—	—		—				—				—		—				—		(525)				(525)
Dividend declared – Common Stock, $0.25 per share																											Dividend declared – Common Stock, $0.25 per share			—			—		—			(2,894)		—	—		—		—		(2,894)
Activity under stock plans	Activity under stock plans	—	—		1,182				—				(12,966)		318				—		—				1,500		Activity under stock plans			—			—		(2,760)			—		(35,540)	870		—		—		(1,890)
Other comprehensive items	Other comprehensive items	—	—		—				—				—		—				8,631		62				8,693		Other comprehensive items			—			—		—			—		—	—		(4,548)		(61)		(4,609)
Balance at September 26, 2020		14,624,159	$	146	$	108,384			$	465,963			3,114,599		$	(76,320)			$	(37,232)	$	1,304			$	462,245
Balance at April 3, 2021																											Balance at April 3, 2021			14,624,159			$	146	$	108,064		$	493,067	3,046,379	$	(74,649)	$	(24,040)	$	1,720	$	504,308

		Nine Months Ended September 26, 2020
(In thousands, except share and per share amounts)		Common Stock			Capital in Excess of Par Value				Retained Earnings				Treasury Stock						Accumulated Other Comprehensive Items		Noncontrolling Interest				Total Stockholders' Equity
		Shares	Amount								Shares			Amount
Balance at December 28, 2019		14,624,159	$	146			$	106,698			$	435,249		3,214,888			$	(78,778)					$	(37,620)				$	1,384		$	427,079
Net income		—	—		—				38,989				—		—				—		369				39,358
Dividends declared – Common Stock, $0.72 per share		—	—		—				(8,275)				—		—				—		—				(8,275)
Dividend paid to noncontrolling interest		—	—		—				—				—		—				—		(525)				(525)
Activity under stock plans		—	—		1,686				—				(100,289)		2,458				—		—				4,144
Other comprehensive items		—	—		—				—				—		—				388		76				464
Balance at September 26, 2020		14,624,159	$	146	$	108,384			$	465,963			3,114,599		$	(76,320)			$	(37,232)	$	1,304			$	462,245


		Three Months Ended September 28, 2019																												Three Months Ended March 28, 2020
(In thousands, except share and per share amounts)	(In thousands, except share and per share amounts)	Common Stock			Capital in Excess of Par Value				Retained Earnings				Treasury Stock						Accumulated Other Comprehensive Items		Noncontrolling Interest				Total Stockholders' Equity		(In thousands, except share and per share amounts)			Common Stock					Capital in Excess of Par Value			Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Items		Noncontrolling Interest		Total Stockholders' Equity
		Shares	Amount								Shares			Amount									Shares							Amount							Shares			Amount
Balance at June 29, 2019		14,624,159	$	146			$	103,767			$	415,605		3,369,304			$	(82,562)			$	(38,251)			$	1,855		$	400,560
Balance at December 28, 2019																											Balance at December 28, 2019			14,624,159			$	146	$	106,698		$	435,249	3,214,888	$	(78,778)	$	(37,620)	$	1,384	$	427,079
Net income	Net income	—	—		—				16,115				—		—				—		98				16,213		Net income			—			—		—			12,531		—	—		—		125		12,656
Dividend declared – Common Stock, $0.23 per share		—	—		—				(2,593)				—		—				—		—				(2,593)
Dividend declared – Common Stock, $0.24 per share																											Dividend declared – Common Stock, $0.24 per share			—			—		—			(2,753)		—	—		—		—		(2,753)
Activity under stock plans	Activity under stock plans	—	—		1,452				—				(17,270)		424				—		—				1,876		Activity under stock plans			—			—		(1,241)			—		(60,244)	1,476		—		—		235
Other comprehensive items	Other comprehensive items	—	—		—				—				—		—				(9,109)		(74)				(9,183)		Other comprehensive items			—			—		—			—		—	—		(12,934)		(11)		(12,945)
Balance at September 28, 2019		14,624,159	$	146	$	105,219			$	429,127			3,352,034		$	(82,138)			$	(47,360)	$	1,879			$	406,873
Balance at March 28, 2020																											Balance at March 28, 2020			14,624,159			$	146	$	105,457		$	445,027	3,154,644	$	(77,302)	$	(50,554)	$	1,498	$	424,272

		Nine Months Ended September 28, 2019
(In thousands, except share and per share amounts)		Common Stock			Capital in Excess of Par Value				Retained Earnings				Treasury Stock						Accumulated Other Comprehensive Items		Noncontrolling Interest				Total Stockholders' Equity
		Shares	Amount								Shares			Amount
Balance at December 29, 2018		14,624,159	$	146			$	104,731			$	393,578		3,514,163			$	(86,111)					$	(39,376)				$	1,603		$	374,571
Net income		—	—		—				43,319				—		—				—		360				43,679
Adoption of ASU No. 2016-02, Leases		—	—		—				(17)				—		—				—		—				(17)
Dividends declared – Common Stock, $0.69 per share		—	—		—				(7,753)				—		—				—		—				(7,753)
Activity under stock plans		—	—		488				—				(162,129)		3,973				—		—				4,461
Other comprehensive items		—	—		—				—				—		—				(7,984)		(84)				(8,068)
Balance at September 28, 2019		14,624,159	$	146	$	105,219			$	429,127			3,352,034		$	(82,138)			$	(47,360)	$	1,879			$	406,873

On March 11, 2020, the World Health Organization designated the novel coronavirus (COVID-19) a global pandemic, and a national emergency was subsequently declared by the U.S. government. The pandemic has negatively affected the global economy, disrupted global supply chains, and resulted in significant travel and transport restrictions, which have adversely affected the Company’s bookings and financial results. The impact of the COVID-19 pandemic, including the resulting economic impact, continues to evolve and the Company is closely monitoring its impact on all aspects of its business.

The interim condensed consolidated financial statements and related notes presented have been prepared by the Company, are unaudited, and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position at ~~September 26, 2020,~~April 3, 2021, its results of operations, comprehensive income (loss), cash flows, and stockholders' equity for the ~~three- and nine-month~~three-month periods ended ~~September 26, 2020~~April 3, 2021 and ~~September~~March 28, ~~2019, and its cash flows for the nine-month periods ended September 26, 2020 and September 28, 2019.~~2020. Interim results are not necessarily indicative of results for a full year or for any other interim period.

The condensed consolidated balance sheet presented as of ~~December 28, 2019~~January 2, 2021 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019.~~January 2, 2021. The condensed consolidated financial statements and related notes are presented as permitted by the rules and regulations of the Securities and Exchange Commission (SEC) for Form 10-Q and do not contain certain information included in the annual consolidated financial statements and related notes of the Company. The condensed consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019,~~January 2, 2021, filed with the SEC.

In the first quarter of 2020, the Company realigned its business segments into 3 new reportable operating segments: Flow Control, Industrial Processing, and Material Handling. The Company previously reported its financial results by combining its operating entities into 3 reportable operating segments: Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products. Financial information for 2019 has been recast to conform to the new segment presentation. See ~~Note 12, Business Segment Information, for further detail regarding the Company's segments.~~

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements.

~~Notes~~Note 1 ~~and 3~~ to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019 describe~~January 2, 2021 describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the ~~nine~~three months ended September 26, 2020, except that the Company no longer considers its policy with respect to accounting for pension benefits to be a critical accounting policy due to the settlement of its U.S. pension plan in December 2019.April 3, 2021.


		Nine Months Ended					Three Months Ended
(In thousands)	(In thousands)	September 26, 2020		September 28, 2019		(In thousands)	April 3, 2021		March 28, 2020

Cash Paid for Interest	Cash Paid for Interest	$	5,518	$	9,711	Cash Paid for Interest	$	892	$	2,212
Cash Paid for Income Taxes, Net of Refunds	Cash Paid for Income Taxes, Net of Refunds	$	9,953	$	18,037	Cash Paid for Income Taxes, Net of Refunds	$	5,344	$	4,698

Non-Cash Investing Activities:	Non-Cash Investing Activities:					Non-Cash Investing Activities:
Fair value of assets acquired		$	9,295	$	208,558
Cash paid for acquired businesses		(7,565)		(179,489)
Liabilities Assumed of Acquired Businesses		$	1,730	$	29,069

Non-cash additions to property, plant, and equipment	Non-cash additions to property, plant, and equipment	$	101	$	304	Non-cash additions to property, plant, and equipment	$	169	$	128

Non-Cash Financing Activities:	Non-Cash Financing Activities:					Non-Cash Financing Activities:
Issuance of Company common stock upon vesting of restricted stock units	Issuance of Company common stock upon vesting of restricted stock units	$	4,557	$	3,908	Issuance of Company common stock upon vesting of restricted stock units	$	3,203	$	3,670
Dividends declared but unpaid	Dividends declared but unpaid	$	2,762	$	2,593	Dividends declared but unpaid	$	2,894	$	2,753


(In thousands)	(In thousands)	September 26, 2020		September 28, 2019		December 28, 2019		December 29, 2018		(In thousands)	April 3, 2021		March 28, 2020		January 2, 2021		December 28, 2019
Cash and cash equivalents	Cash and cash equivalents	$	53,554	$	48,650	$	66,786	$	45,830	Cash and cash equivalents	$	65,982	$	60,012	$	65,682	$	66,786
Restricted cash	Restricted cash	2,650		1,321		1,487		287		Restricted cash	726		2,063		958		1,487
Total Cash, Cash Equivalents, and Restricted Cash	Total Cash, Cash Equivalents, and Restricted Cash	$	56,204	$	49,971	$	68,273	$	46,117	Total Cash, Cash Equivalents, and Restricted Cash	$	66,708	$	62,075	$	66,640	$	68,273


(In thousands)	(In thousands)	Gross		Accumulated Amortization		Currency Translation		Net		(In thousands)	Gross		Accumulated Amortization		Currency Translation		Net
September 26, 2020
April 3, 2021										April 3, 2021
Definite-Lived	Definite-Lived									Definite-Lived
Customer relationships	Customer relationships	$	174,423	$	(62,018)	$	(3,741)	$	108,664	Customer relationships	$	173,728	$	(68,910)	$	(1,760)	$	103,058
Product technology	Product technology	56,568		(30,674)		(1,520)		24,374		Product technology	56,111		(32,557)		(1,200)		22,354
Tradenames	Tradenames	6,753		(2,811)		(362)		3,580		Tradenames	6,027		(3,054)		(325)		2,648
Other	Other	18,248		(14,036)		(565)		3,647		Other	18,248		(14,569)		(541)		3,138
		255,992		(109,539)		(6,188)		140,265			254,114		(119,090)		(3,826)		131,198
Indefinite-Lived	Indefinite-Lived									Indefinite-Lived
Tradenames	Tradenames	24,100		—		(6)		24,094		Tradenames	24,100		—		236		24,336
Acquired Intangible Assets	Acquired Intangible Assets	$	280,092	$	(109,539)	$	(6,194)	$	164,359	Acquired Intangible Assets	$	278,214	$	(119,090)	$	(3,590)	$	155,534

December 28, 2019
January 2, 2021										January 2, 2021
Definite-Lived	Definite-Lived									Definite-Lived
Customer relationships	Customer relationships	$	171,583	$	(51,798)	$	(4,141)	$	115,644	Customer relationships	$	173,728	$	(65,488)	$	(1,316)	$	106,924
Product technology	Product technology	56,011		(27,819)		(1,709)		26,483		Product technology	56,111		(31,655)		(1,005)		23,451
Tradenames	Tradenames	6,527		(2,421)		(427)		3,679		Tradenames	6,027		(2,946)		(282)		2,799
Other	Other	17,964		(13,295)		(593)		4,076		Other	18,248		(14,369)		(515)		3,364
		252,085		(95,333)		(6,870)		149,882			254,114		(114,458)		(3,118)		136,538
Indefinite-Lived	Indefinite-Lived									Indefinite-Lived
Tradenames	Tradenames	24,100		—		(86)		24,014		Tradenames	24,100		—		327		24,427
Acquired Intangible Assets	Acquired Intangible Assets	$	276,185	$	(95,333)	$	(6,956)	$	173,896	Acquired Intangible Assets	$	278,214	$	(114,458)	$	(2,791)	$	160,965

Intangible assets are ~~initially~~ recorded at fair value at the date of acquisition. Subsequent impairment charges are reflected as a reduction in the gross balance, as applicable. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset.

(In thousands) Flow Control Industrial Processing Material Handling Total
Balance at December 28, 2019 (a)
Gross balance $ 97,680 $ 207,536 $ 116,325 $ 421,541
Accumulated impairment losses 0 (85,509) 0 (85,509)
Net balance 97,680 122,027 116,325 336,032
2020 Adjustments
Acquisition (Note 2) 0 3,985 0 3,985
Currency translation 804 493 1,685 2,982
Total 2020 adjustments 804 4,478 1,685 6,967
Balance at September 26, 2020
Gross balance 98,484 212,014 118,010 428,508
Accumulated impairment losses 0 (85,509) 0 (85,509)
Net balance $ 98,484 $ 126,505 $ 118,010 $ 342,999

The Company evaluates the recoverability of goodwill and indefinite-lived intangible assets as of the end of each fiscal year or more frequently if events or changes in circumstances indicate that it is more likely than not that the carrying value of an asset might be impaired. Potential impairment indicators include a significant decline in sales, earnings, or cash flows, material adverse changes in the ~~business climate, and a significant decline in the Company's market capitalization due to a sustained decrease in its stock price.~~carrying amount of goodwill by segment are as follows:

In March 2020, the Company experienced a significant decrease in market capitalization due to a decline in the Company’s stock price. During that time, the overall U.S. stock market also declined significantly amid market volatility driven by the uncertainty surrounding the COVID-19 pandemic. Based on these occurrences, the Company concluded that a triggering event had occurred related to the indefinite-lived assets within its material handling reporting unit. As a result, the Company prepared a quantitative impairment analysis (Step 1) for its material handling reporting unit, which indicated that its fair value exceeded its carrying value and the indefinite-lived assets were not impaired. In the second and third quarters of 2020, the Company’s market capitalization and the overall stock market, which are potential impairment indicators, recovered from their decreased levels that existed at the end of the first quarter of 2020. No other events that would trigger an impairment analysis were identified during the second and third quarters of 2020. The Company will continue to monitor for impairment indicators and will conduct its annual period impairment analysis as of the end of the fiscal year.


(In thousands)	Flow Control		Industrial Processing		Material Handling		Total
Balance at January 2, 2021
Gross balance	$	101,437	$	215,881	$	119,944	$	437,262
Accumulated impairment losses	0		(85,509)		0		(85,509)
Net balance	101,437		130,372		119,944		351,753
2021 Adjustment
Currency translation	(1,273)		(466)		(1,510)		(3,249)
Total 2021 adjustment	(1,273)		(466)		(1,510)		(3,249)
Balance at April 3, 2021
Gross balance	100,164		215,415		118,434		434,013
Accumulated impairment losses	0		(85,509)		0		(85,509)
Net balance	$	100,164	$	129,906	$	118,434	$	348,504

The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications during a defined period of time. The Company provides for the estimated cost of product warranties at the time of sale based on historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate projected warranty costs may vary from historical patterns. The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications.


		Nine Months Ended					Three Months Ended
(In thousands)	(In thousands)	September 26, 2020		September 28, 2019		(In thousands)	April 3, 2021		March 28, 2020
Balance at Beginning of Year	Balance at Beginning of Year	$	6,467	$	5,726	Balance at Beginning of Year	$	7,064	$	6,467
Provision charged to expense	Provision charged to expense	3,960		3,332		Provision charged to expense	1,664		1,270
Usage	Usage	(3,809)		(2,778)		Usage	(1,361)		(1,365)
Acquisition		0		303

Currency translation	Currency translation	114		(175)		Currency translation	(133)		(162)
Balance at End of Period	Balance at End of Period	$	6,732	$	6,408	Balance at End of Period	$	7,234	$	6,210

~~The Company recognizes revenue under Accounting Standards Codification (ASC) Topic 606,~~ ~~Revenue from Contracts with Customers~~.Most of the Company’s revenue relates to products and services that require minimal customization and is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. Most of the Company’s parts and consumables products and its capital products with minimal customization are accounted for at a point in time. The Company has made a policy election to not treat the obligation to ship as a separate performance obligation under the contract and, as a result, the associated shipping costs are reflected in cost of revenue when revenue is recognized.

The remaining portion of the Company’s revenue is recognized on an over time basis based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Most of the contracts recognized on an over time basis are for large capital projects. These projects are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation.

The transaction price includes estimated variable consideration where applicable. Such variable consideration relates to certain performance guarantees and rights to return the product. The Company estimates variable consideration as the most likely amount to which it expects to be entitled based on the terms of the contracts with customers and historical experience, where relevant. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price.


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 26,		September 28,		September 26,		September 28,			April 3,		March 28,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020
Revenue by Product Type:	Revenue by Product Type:									Revenue by Product Type:
Parts and Consumables	Parts and Consumables	$	102,729	$	105,513	$	305,087	$	330,280	Parts and Consumables	$	118,107	$	105,098
Capital	Capital	51,881		67,991		161,510		191,705		Capital	54,356		54,029
		$	154,610	$	173,504	$	466,597	$	521,985		$	172,463	$	159,127
Revenue by Geography (based on customer location):	Revenue by Geography (based on customer location):									Revenue by Geography (based on customer location):
North America	North America	$	87,366	$	92,041	269,907		291,584		North America	$	95,092	$	93,823
Europe	Europe	38,951		49,146		112,881		131,944		Europe	44,641		36,014
Asia	Asia	18,847		20,971		50,992		61,745		Asia	21,813		15,908
Rest of World	Rest of World	9,446		11,346		32,817		36,712		Rest of World	10,917		13,382
		$	154,610	$	173,504	$	466,597	$	521,985		$	172,463	$	159,127


		September 26, 2020				December 28, 2019					April 3, 2021		January 2, 2021
(In thousands)	(In thousands)			(In thousands)
Accounts Receivable	Accounts Receivable			$	94,145				$	95,740		Accounts Receivable	$	104,378	$	91,540
Contract Assets	Contract Assets	$	9,095			$	13,162	Contract Assets			$	6,204	$	7,576
Contract Liabilities	Contract Liabilities	$	31,847			$	37,216	Contract Liabilities			$	48,286	$	39,269

Contract assets represent unbilled revenue associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advance payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer.

The Company recognized revenue of ~~$1,656,000 in the third quarter of 2020, $4,780,000 in the third quarter of 2019, $28,522,000~~$17,140,000 in the first ~~nine~~three months of ~~2020,~~2021 and ~~$28,302,000~~$19,708,000 in the first ~~nine~~three months of ~~2019~~2020 that was included in the contract liabilities balance at the beginning of ~~2020~~2021 and ~~2019, respectively.~~2020. The majority of the Company's contracts for capital equipment have an original expected duration of one year or less. Certain capital contracts require long lead times and could take up to 24 months to complete. For contracts with an original expected duration of over one year, the aggregate amount of the transaction price allocated to the remaining unsatisfied or partially unsatisfied performance obligations as of ~~September 26,~~

~~Customers in China will often settle their accounts receivable with banker's acceptance drafts, in which case cash settlement will be delayed until~~months and the ~~drafts mature or are settled prior to maturity. For customers outside of China, final payment for~~remaining 52% within the ~~majority of the Company's products is received in the quarter~~ following the product shipment. Certain of the Company's contracts include a longer period before final payment is due, which is typically within one year of final shipment or transfer of control to the customer.

The Company includes in revenue amounts invoiced for shipping and handling with the corresponding costs reflected in cost of revenue. Provisions for discounts, warranties, returns and other adjustments are provided for in the period in which the related sale was recorded. Sales taxes, value-added taxes, and certain excise taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue.

The Company's accounts receivable arise from sales on credit to customers, are recorded at the invoiced amount, and do not bear interest. The Company establishes an allowance for credit losses to reduce accounts receivable to the net amount expected to be collected. The Company exercises judgment in determining its allowance for credit losses, which is based on its historical collection and write-off experience, adjusted for current macroeconomic trends and conditions, credit policies, specific customer collection issues, and accounts receivable aging. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and each customer's current creditworthiness. The Company continuously monitors collections and payments from its customers. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. In some instances, the Company utilizes letters of credit to mitigate its credit exposure.

The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are noninterest-bearing obligations of the issuing bank and mature within six months of the origination date. The Company's Chinese subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled ~~$4,423,000~~$10,347,000 at ~~September 26, 2020~~April 3, 2021 and ~~$5,230,000~~$9,445,000 at ~~December 28, 2019,~~January 2, 2021, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date.

~~Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.~~ In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, which changes the way entities recognize impairment of financial assets, such as accounts receivable, by requiring immediate recognition of estimated credit losses expected to occur over their remaining lives. During 2018 and 2019, the FASB issued additional guidance and clarification. The Company adopted this ASU using a modified retrospective method at the beginning of fiscal 2020 and its adoption did not have a material impact on the condensed consolidated financial statements. See ~~Accounts Receivable and Allowance for Credit Losses~~ ~~in this section for information on the Company's allowance for credit losses.~~

Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance, including the recognition of franchise tax, the treatment of a step up in the tax basis of goodwill, and the timing for recognition of enacted changes in tax laws or rates in the interim period annual effective tax rate computation. This new guidance is effective in fiscal 2021, and the transition requirements are primarily prospective. The Company adopted this ASU prospectively at the beginning of fiscal 2021 and its adoption did not have an impact on the condensed consolidated financial statements.

Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In March 2020, the FASB issued ASU No. 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of reference rates, such as the London Interbank Offered Rate (LIBOR), if certain criteria are met. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. The guidance in this ASU is applicable to the Company's existing contracts and hedging relationships that reference LIBOR and may be adopted prospectively through December 31, 2022. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements.

~~Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes.~~
In December 2019, the FASB issued ASU No. 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance, including the recognition of franchise tax, the treatment of a step up in the tax basis of goodwill, and the timing for recognition of enacted changes in tax laws or rates in the interim period annual effective tax rate computation. This new guidance is effective in fiscal 2021, with early adoption permitted. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements.

The Company’s acquisitions have been accounted for using the purchase method of accounting and the results of the acquired businesses are included in its condensed consolidated financial statements from the date of acquisition. Historically, acquisitions have been made at prices above the fair value of identifiable net assets, resulting in goodwill. Acquisition costs are included inselling, general, and administrative (SG&A) expenses in the accompanying condensed consolidated statement of income as incurred. The Company recorded acquisition costs of $485,000 in the first nine months of 2020 and $843,000 in the first nine months of 2019.

On June 1, 2020, the Company’s Industrial Processing segment acquired Cogent Industrial Technologies Ltd. (Cogent) for approximately $6,866,000, net of cash acquired. The Company funded the acquisition through borrowings under its revolving credit facility. Intangible assets acquired totaled $3,350,000 and are primarily related to customer relationships. Cogent, based in British Columbia, Canada, is an industrial automation and controls solution provider that offers expertise in process technology integration, industrial automation and controls, industrial safety, project management, and operational performance management systems.

The Company recorded restructuring costs of $470,000, consisting of $276,000 in its Flow Control segment and $194,000 in its Industrial Processing segment, in the third quarter of 2020 for severance associated with headcount reductions of 4 employees within its Flow Control segment and 20 employees in its Industrial Processing segment. The Company took these additional cost-containment actions to reduce future payroll-related overhead and operating costs in response to the slowdown in the global economy, largely driven by the COVID-19 pandemic.

The Company recorded total restructuring costs of $926,000, consisting of $732,000 in its Flow Control segment and $194,000 in its Industrial Processing segment, in the first nine months of 2020 for severance associated with headcount reductions of 34 employees within its Flow Control segment and 20 employees in its Industrial Processing segment. The Company also reduced its workforce by 21 employees within its Industrial Processing segment with 0 associated severance costs.


		Three Months Ended							Nine Months Ended									Three Months Ended
		September 26, 2020				September 28, 2019			September 26, 2020				September 28, 2019					April 3, 2021				March 28, 2020
(In thousands, except per share amounts)	(In thousands, except per share amounts)							(In thousands, except per share amounts)

Net Income Attributable to Kadant	Net Income Attributable to Kadant			$	14,851						$	16,115				$	38,989			$	43,319		Net Income Attributable to Kadant	$	16,561	$	12,531

Basic Weighted Average Shares	Basic Weighted Average Shares	11,504				11,267			11,472				11,198		Basic Weighted Average Shares			11,553				11,432
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares	Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares	85				202			78				236		Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares			59				76
Diluted Weighted Average Shares	Diluted Weighted Average Shares	11,589				11,469			11,550				11,434		Diluted Weighted Average Shares			11,612				11,508

Basic Earnings per Share	Basic Earnings per Share	$	1.29			$	1.43		$	3.40			$	3.87	Basic Earnings per Share			$	1.43			$	1.10

Diluted Earnings per Share	Diluted Earnings per Share	$	1.28			$	1.41		$	3.38			$	3.79	Diluted Earnings per Share			$	1.43			$	1.09

The effect of outstanding and unvested restricted stock units (RSUs) of the Company's common stock totaling ~~11,000 shares in the third quarter of 2020, 8,000 shares in the third quarter of 2019, 30,000~~44,000 shares in the first ~~nine months~~quarter of ~~2020,~~2021 and ~~32,000~~43,000 shares in the first ~~nine months~~quarter of ~~2019~~2020 was not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the reporting periods.

The provision for income taxes was ~~$13,738,000~~$5,561,000 in the first ~~nine~~three months of ~~2020~~2021 and ~~$12,310,000~~$4,559,000 in the first ~~nine~~three months of ~~2019.~~2020. The effective tax rate of ~~26%~~25% in the first ~~nine~~three months of ~~2020~~2021 was higher than the Company's statutory rate of 21% primarily due to nondeductible expenses, the distribution of the Company's worldwide earnings, state taxes, and ~~state taxes.~~tax expense associated with the Global Intangible Low-Taxed Income (GILTI) provisions. This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements. The effective tax rate of ~~22%~~26% in the first ~~nine~~three months of ~~2019~~2020 was higher than the Company's statutory rate of 21% primarily due to nondeductible expenses, state taxes, the distribution of the Company’s worldwide earnings, ~~nondeductible expenses,~~and tax expense associated with ~~the Global Intangible Low-Taxed Income (GILTI) provisions of the Tax Cuts and Jobs Act of 2017, state taxes, and the cost of repatriating the earnings of certain foreign subsidiaries.~~GILTI. This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements, a net tax benefit associated with foreign exchange losses and tax costs recognized upon the Company’s repatriation of certain previously taxed foreign earnings, and the reversal of tax reserves associated with uncertain tax positions.

September 26,
2020 December 28,
2019
(In thousands)
Revolving Credit Facility, due 2023 $ 245,010 $ 265,419
Commercial Real Estate Loan 0 19,425
Senior Promissory Notes, due 2023 to 2028 10,000 10,000
Finance Leases, due 2020 to 2025 1,775 2,308
Other Borrowings, due 2020 to 2023 3,802 4,000
Unamortized Debt Issuance Costs 0 (127)
Total 260,587 301,025
Less: Current Maturities of Long-Term Obligations (1,538) (2,851)
Long-Term Obligations $ 259,049 $ 298,174

The Company entered into ~~a five-year,~~an unsecured multi-currency revolving credit facility, dated as of March 1, 2017 (as amended and restated to date, the Credit Agreement). Pursuant to the Credit Agreement, the Company has a borrowing capacity of $400,000,000, with an uncommitted, unsecured incremental borrowing facility of $150,000,000, ~~and~~with a maturity date of December 14, 2023. Interest on borrowings outstanding accrues and is payable in arrears calculated at one of the following rates selected by the Company: (i) the Base Rate, plus an applicable margin of 0% to 1.25%, or (ii) LIBOR (with a 0 percent floor), as defined, plus an applicable margin of 1% to 2.25%. The Base Rate is calculated as the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as published by Citizens Bank, N.A. ~~(Citizens)~~(Citizens Bank) and (c) thirty-day U.S. dollar LIBOR (USD LIBOR), as defined, plus 0.50%. The applicable margin is determined based upon the ratio of the Company's total debt, net of unrestricted cash up to $30,000,000 and certain debt obligations, to earnings before interest, taxes, depreciation, and amortization as defined in the Credit Agreement.

~~Obligations~~The obligations under the Credit Agreement may be accelerated upon the occurrence of an event of default, which includes customary events of default under such financing arrangements. In addition, the Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to maintain a maximum consolidated leverage ratio of 3.75 to 1.00, or, if the Company elects, for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, 4.00 to 1.00, and limitations on making certain restricted payments (including dividends and stock repurchases).

As of ~~September 26, 2020,~~April 3, 2021, the outstanding balance under the Credit Agreement was ~~$245,010,000, and~~$207,257,000, which included ~~$50,656,000~~$48,257,000 of euro-denominated ~~borrowings and $14,354,000 of Canadian dollar-denominated~~ borrowings. As of ~~September 26, 2020,~~April 3, 2021, the Company had ~~$154,790,000~~$192,819,000 of borrowing capacity available under ~~the~~its Credit Agreement, which was calculated by translating its foreign-denominated borrowings using borrowing date foreign exchange rates.

In July 2020, the Company prepaid the outstanding principal balance on the Real Estate Loan of $18,900,000, together with accrued interest and a prepayment fee of 1.00% of the outstanding principal balance, resulting in a loss on the extinguishment of debt of $189,000, which is included in selling, general, and administrative expenses in the accompanying condensed consolidated statement of income. To prepay the Real Estate Loan, the Company used $19,000,000 of borrowings available under the Credit Agreement.April 3, 2021.

In 2018, the Company entered into an uncommitted, unsecured Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement). Simultaneous with the execution of the Note Purchase Agreement, the Company issued senior promissory notes (Initial Notes) in an aggregate principal amount of $10,000,000, with a per annum interest rate of 4.90% payable semiannually, and a maturity date of December 14, 2028. The Company is required to prepay a portion of the principal of the Initial Notes beginning on December 14, 2023 and each year thereafter, and may optionally prepay the principal on the Initial Notes, together with any prepayment premium, at any time (in a minimum amount of $1,000,000, or the foreign currency equivalent thereof, if applicable) in accordance with the Note Purchase Agreement. The obligations of the Initial Notes

In accordance with the Note Purchase Agreement, the Company may also issue additional senior promissory notes (together with the Initial Notes, the Senior Promissory Notes) up to an additional $115,000,000 until the earlier of December 14, 2021 or the thirtieth day after written notice to terminate the issuance and sale of additional notes pursuant to the Note Purchase Agreement. The Senior Promissory Notes are pari passu with the Company’s indebtedness under the Credit Agreement, and any other senior debt of the Company, subject to certain specified exceptions, and participate in a sharing agreement with respect to the obligations of the Company and its subsidiaries under the Credit Agreement. The Senior Promissory Notes are guaranteed by certain of the Company’s domestic subsidiaries.

Other borrowings include a sale-leaseback financing arrangement for a manufacturing facility in Germany. Under this arrangement, the quarterly lease payment includes principal, interest, and a payment to the landlord toward a loan receivable. The interest rate on the outstanding obligation is 1.79%. The secured loan receivable, which is included in other assets in the accompanying condensed consolidated balance sheet, was ~~$1,127,000~~$1,266,000 at ~~September 26, 2020.~~April 3, 2021. The lease arrangement provides for a fixed price purchase option, net of the projected loan receivable, of ~~$1,549,000~~$1,566,000 at the end of the lease term in August 2022. If the Company does not exercise the purchase option for the facility, itthe Company will receive cash from the landlord to settle the loan receivable. As of ~~September 26, 2020, $3,704,000~~April 3, 2021, $3,615,000 was outstanding under this obligation.

The Company recognized stock-based compensation expense of ~~$1,610,000~~$1,499,000 in the ~~third~~first quarter of 2021 and $1,639,000 in the first quarter of 2020 ~~$1,658,000 in the third quarter of 2019, $5,126,000 in the first nine months of 2020,~~within selling, general, and ~~$5,125,000 in the first nine months of 2019 within SG&A~~administrative (SG&A) expenses in the accompanying condensed consolidated statement of income. The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known. Unrecognized compensation expense related to stock-based compensation totaled approximately ~~$6,913,000~~$11,500,000 at ~~September 26, 2020~~April 3, 2021 and will be recognized over a weighted average period of ~~1.7~~2.1 years.

On March 9, 2021, the Company granted performance-based RSUs to certain of its officers, which represented, in aggregate, the right to receive 22,613 shares (the target RSU amount), with an aggregate grant date fair value of $3,962,000. The RSUs are subject to adjustment based on the achievement of the performance measure selected for the 2021 fiscal year, which is a specified target for adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) generated from operations for the 2021 fiscal year. The RSUs are adjusted by comparing the actual adjusted EBITDA for the performance period to the target adjusted EBITDA. Actual adjusted EBITDA between 50% and 100% of the target adjusted EBITDA results in an adjustment of 50% to 100% of the RSU amount. Actual adjusted EBITDA between 100% and 115% of the target adjusted EBITDA results in an adjustment using a straight-line linear scale between 100% and 150% of the RSU amount. Actual adjusted EBITDA in excess of 115% results in an adjustment capped at 150% of the RSU amount. If actual

~~8. Retirement Benefit Plans~~adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2021 fiscal year, these performance-based RSUs will be forfeited. The Company recognizes compensation expense based on the probable number of performance-based RSUs expected to vest. Following the adjustment, the performance-based RSUs will be subject to additional time-based vesting, and will vest in three equal annual installments on March 10 of 2022, 2023, and 2024, provided that the officer is employed by the Company on the applicable vesting dates.

In 2018, the Company's board of directors and its compensation committee approved amendments to freeze and terminate its U.S. pension plan (Retirement Plan) and its restoration plan (Restoration Plan). In the fourth quarter of 2019,On March 9, 2021, the Company ~~settled~~also granted time-based RSUs representing 21,559 shares to its ~~Retirement Plan obligation. In the first quarter~~officers and employees with an aggregate grant date fair value of ~~2020,~~$3,777,000. These time-based RSUs generally vest in three equal annual installments on March 10 of 2022, 2023, and 2024, provided that a recipient remains employed by the Company ~~settled its Restoration Plan obligation of $2,427,000 by paying a lump sum to its plan participants. No benefit costs were incurred related to these plans in 2020.~~

Three Months Ended
September 26, 2020 Three Months Ended
September 28, 2019
(In thousands, except percentages) Non-U.S. Pension Other Post-Retirement U.S. Pension Non-U.S. Pension Other Post-Retirement
Service Cost $ 45 $ 2 $ 0 $ 43 $ 1
Interest Cost 22 9 283 27 37
Expected Return on Plan Assets (14) (1) (248) (16) (1)
Recognized Net Actuarial Loss 10 4 8 5 3
Amortization of Prior Service Cost 2 0 0 0 0
$ 65 $ 14 $ 43 $ 59 $ 40
The weighted average assumptions used to determine net periodic benefit cost are as follows:
Discount Rate 2.05 % 3.80 % 4.10 % 2.82 % 4.44 %
Expected Long-Term Return on Plan Assets 7.21 % 7.21 % 4.10 % 9.22 % 9.22 %
Rate of Compensation Increase 3.14 % 5.57 % 0 % 2.99 % 5.57 %

Nine Months Ended
September 26, 2020 Nine Months Ended
September 28, 2019
(In thousands, except percentages) Non-U.S. Pension Other Post-Retirement U.S. Pension Non-U.S. Pension Other Post-Retirement
Service Cost $ 131 $ 5 $ 0 $ 129 $ 3
Interest Cost 66 29 850 84 112
Expected Return on Plan Assets (45) (3) (745) (50) (3)
Recognized Net Actuarial Loss 31 12 24 15 9
Amortization of Prior Service Cost 5 0 0 0 0
$ 188 $ 43 $ 129 $ 178 $ 121
The weighted average assumptions used to determine net periodic benefit cost are as follows:
Discount Rate 2.12 % 3.83 % 4.10 % 2.81 % 4.44 %
Expected Long-Term Return on Plan Assets 7.21 % 7.21 % 4.10 % 9.22 % 9.22 %
Rate of Compensation Increase 3.17 % 5.57 % 0 % 2.99 % 5.57 %


(In thousands)	(In thousands)	Foreign Currency Translation Adjustment		Pension and Other Post-Retirement Benefit Liability Adjustments		Deferred Loss on Cash Flow Hedges		Total		(In thousands)	Foreign Currency Translation Adjustment		Post-Retirement Benefit Liability Adjustments		Deferred Loss on Cash Flow Hedges		Total
Balance at December 28, 2019		$	(36,145)	$	(831)	$	(644)	$	(37,620)
Other comprehensive income (loss) before reclassifications		748		(1)		(420)		327
Balance at January 2, 2021										Balance at January 2, 2021	$	(17,894)	$	(770)	$	(828)	$	(19,492)
Other comprehensive items before reclassifications										Other comprehensive items before reclassifications	(4,689)		18		30		(4,641)
Reclassifications from AOCI	Reclassifications from AOCI	0		(84)		145		61		Reclassifications from AOCI	0		10		83		93
Net current period other comprehensive items	Net current period other comprehensive items	748		(85)		(275)		388		Net current period other comprehensive items	(4,689)		28		113		(4,548)
Balance at September 26, 2020		$	(35,397)	$	(916)	$	(919)	$	(37,232)
Balance at April 3, 2021										Balance at April 3, 2021	$	(22,583)	$	(742)	$	(715)	$	(24,040)


		Three Months Ended				Nine Months Ended						Three Months Ended
(In thousands)	(In thousands)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019		Statement of Income Line Item	(In thousands)	April 3, 2021		March 28, 2020		Statement of Income Line Item
Retirement Benefit Plans (a)
Post-retirement Benefit Plans											Post-retirement Benefit Plans
Recognized net actuarial loss	Recognized net actuarial loss	$	(14)	$	(16)	$	(43)	$	(48)	Other expense, net	Recognized net actuarial loss	$	(11)	$	(15)	Other expense, net
Amortization of prior service cost	Amortization of prior service cost	(2)		0		(5)		0		Other expense, net	Amortization of prior service cost	(3)		(2)		Other expense, net
Total expense before income taxes	Total expense before income taxes	(16)		(16)		(48)		(48)			Total expense before income taxes	(14)		(17)
Income tax benefit	Income tax benefit	4		4		132		12		Provision for income taxes	Income tax benefit	4		124		Provision for income taxes
		(12)		(12)		84		(36)				(10)		107
Cash Flow Hedges ~~(b)~~(a)	Cash Flow Hedges ~~(b)~~(a)										Cash Flow Hedges ~~(b)~~(a)
Interest rate swap agreements	Interest rate swap agreements	(109)		(10)		(215)		17		Interest expense	Interest rate swap agreements	(109)		(34)		Interest expense
Forward currency-exchange contracts	Forward currency-exchange contracts	47		0		24		(129)		Cost of revenue	Forward currency-exchange contracts	0		(23)		Cost of revenue
Total expense before income taxes	Total expense before income taxes	(62)		(10)		(191)		(112)			Total expense before income taxes	(109)		(57)
Income tax benefit	Income tax benefit	15		2		46		35		Provision for income taxes	Income tax benefit	26		14		Provision for income taxes
		(47)		(8)		(145)		(77)				(83)		(43)
Total Reclassifications	Total Reclassifications	$	(59)	$	(20)	$	(61)	$	(113)		Total Reclassifications	$	(93)	$	64

~~The Company has entered into interest rate swap agreements to hedge its exposure to movements in USD LIBOR on its U.S. dollar-denominated debt.~~ In 2018, the Company entered into an interest rate swap agreement (2018 Swap Agreement) with Citizens ~~which~~Bank to hedge its exposure to movements in USD LIBOR on its U.S. dollar-denominated debt. The 2018 Swap Agreement has a $15,000,000 notional value and expires on June 30, 2023. On a quarterly basis, the Company receives three-month USD LIBOR, which is subject to a zero percent floor, and pays a fixed rate of interest of 3.15% plus an applicable margin as defined in the Credit Agreement. ~~In 2015, the Company entered into an interest rate swap agreement (2015 Swap Agreement) with Citizens which had a $10,000,000 notional value and expired on March 27, 2020. Under the 2015 Swap~~

The ~~interest rate swap agreements have been~~Company designated its 2018 Swap Agreement as a cash flow ~~hedges~~hedge and ~~are~~ structured it to be 100% effective. Unrealized gains and losses related to the fair ~~values~~value of the ~~swap agreements~~2018 Swap Agreement are recorded to AOCI, net of tax. In the event of early termination, ~~of the 2018 Swap Agreement,~~ the Company will receive from or pay to the counterparty the fair value of the ~~interest rate swap agreement,~~2018 Swap Agreement, and the unrealized gain or loss outstanding will be recognized in earnings.

Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges and unrecognized gains and losses are recorded to AOCI, net of tax. Deferred gains and losses are recognized in the statement of income in the period in which the underlying transaction occurs. The fair values of forward currency-exchange contracts that are designated as fair value hedges and forward currency-exchange contracts that are not designated as hedges are recognized currently in earnings.

The Company recognized losses of $3,000 in the first quarter of 2021 and $34,000 in the first quarter of 2020 within SG&A expenses in the accompanying condensed consolidated statement of income ~~gains of $27,000 in the third quarter of 2020, losses of $14,000 in the third quarter of 2019, losses of $1,000 in the first nine months of 2020, and losses of $46,000 in the first nine months of 2019~~ associated with forward currency-exchange contracts that were not designated as hedges.


			September 26, 2020					December 28, 2019								April 3, 2021				January 2, 2021
		Balance Sheet Location	Asset (Liability) (a)		Notional Amount (b)			Asset (Liability) (a)		Notional Amount				Balance Sheet Location		Asset (Liability) (a)		Notional Amount (b)		Asset (Liability) (a)		Notional Amount
(In thousands)	(In thousands)						(In thousands)
Derivatives Designated as Hedging Instruments:	Derivatives Designated as Hedging Instruments:														Derivatives Designated as Hedging Instruments:
Derivatives in an Asset Position:	Derivatives in an Asset Position:												Derivatives in an Asset Position:
Forward currency-exchange contract	Forward currency-exchange contract	Other Current Assets	$	4	$	1,311		$	0	$	0	Forward currency-exchange contract		Other Current Assets		$	0	$	0	$	25	$	842
2015 Swap Agreement		Other Current Assets	$	0	$	0		$	11	$	10,000
Derivatives in a Liability Position:	Derivatives in a Liability Position:											Derivatives in a Liability Position:
Forward currency-exchange contracts		Other Current Liabilities	$	(14)	$	842		$	(75)	$	4,825
Forward currency-exchange contract												Forward currency-exchange contract		Other Current Liabilities		$	(9)	$	842	$	0	$	0
2018 Swap Agreement	2018 Swap Agreement	Other Long-Term Liabilities	$	(1,202)	$	15,000		$	(770)	$	15,000	2018 Swap Agreement		Other Long-Term Liabilities		$	(933)	$	15,000	$	(1,099)	$	15,000

Derivatives Not Designated as Hedging Instruments:	Derivatives Not Designated as Hedging Instruments:											Derivatives Not Designated as Hedging Instruments:
Derivatives in an Asset Position:	Derivatives in an Asset Position:											Derivatives in an Asset Position:
Forward currency-exchange contracts	Forward currency-exchange contracts	Other Current Assets	$	25	$	713		$	3	$	387	Forward currency-exchange contracts		Other Current Assets		$	0	$	0	$	12	$	582
Derivatives in a Liability Position:	Derivatives in a Liability Position:											Derivatives in a Liability Position:
Forward currency-exchange contracts	Forward currency-exchange contracts	Other Current Liabilities	$	(5)	$	686		$	(43)	$	2,545	Forward currency-exchange contracts		Other Current Liabilities		$	(3)	$	266	$	(7)	$	825

(In thousands) Interest Rate Swap
Agreements Forward Currency-
Exchange
Contracts Total
Unrealized Loss, Net of Tax, at December 28, 2019 $ (589) $ (55) $ (644)
Loss (gain) reclassified to earnings (a) 163 (18) 145
(Loss) gain recognized in AOCI (487) 67 (420)
Unrealized Loss, Net of Tax, at September 26, 2020 $ (913) $ (6) $ (919)


(In thousands)	Interest Rate Swap Agreement		Forward Currency- Exchange Contracts		Total
Unrealized (Loss) Gain, Net of Tax, at January 2, 2021	$	(846)	$	18	$	(828)
Loss reclassified to earnings (a)	83		0		83
Gain (loss) recognized in AOCI	55		(25)		30
Unrealized Loss, Net of Tax, at April 3, 2021	$	(708)	$	(7)	$	(715)


		Fair Value as of September 26, 2020									Fair Value as of April 3, 2021
(In thousands)	(In thousands)	Level 1		Level 2		Level 3		Total		(In thousands)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Money market funds and time deposits	Money market funds and time deposits	$	10,561	$	0	$	0	$	10,561	Money market funds and time deposits	$	10,637	$	0	$	0	$	10,637

Banker's acceptance drafts (a)	Banker's acceptance drafts (a)	$	0	$	4,423	$	0	$	4,423	Banker's acceptance drafts (a)	$	0	$	10,347	$	0	$	10,347
Forward currency-exchange contracts		$	0	$	29	$	0	$	29

Liabilities:	Liabilities:									Liabilities:
2018 Swap Agreement	2018 Swap Agreement	$	0	$	1,202	$	0	$	1,202	2018 Swap Agreement	$	0	$	933	$	0	$	933
Forward currency-exchange contracts	Forward currency-exchange contracts	$	0	$	19	$	0	$	19	Forward currency-exchange contracts	$	0	$	12	$	0	$	12


		Fair Value as of December 28, 2019									Fair Value as of January 2, 2021
(In thousands)	(In thousands)	Level 1		Level 2		Level 3		Total		(In thousands)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Money market funds and time deposits	Money market funds and time deposits	$	9,920	$	0	$	0	$	9,920	Money market funds and time deposits	$	8,054	$	0	$	0	$	8,054
Banker's acceptance drafts (a)	Banker's acceptance drafts (a)	$	0	$	5,230	$	0	$	5,230	Banker's acceptance drafts (a)	$	0	$	9,445	$	0	$	9,445
2015 Swap Agreement		$	0	$	11	$	0	$	11
Forward currency-exchange contracts	Forward currency-exchange contracts	$	0	$	3	$	0	$	3	Forward currency-exchange contracts	$	0	$	37	$	0	$	37
Liabilities:	Liabilities:									Liabilities:
2018 Swap Agreement	2018 Swap Agreement	$	0	$	770	$	0	$	770	2018 Swap Agreement	$	0	$	1,099	$	0	$	1,099
Forward currency-exchange contracts	Forward currency-exchange contracts	$	0	$	118	$	0	$	118	Forward currency-exchange contracts	$	0	$	7	$	0	$	7

The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during the first ~~nine~~three months of ~~2020.~~2021. Banker's acceptance drafts are carried at face ~~value~~value. which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair ~~values~~value of ~~interest rate swap agreements are~~the 2018 Swap Agreement is based on USD LIBOR yield curves at the reporting date. The forward currency-exchange contracts and ~~interest rate swap agreements~~the 2018 Swap Agreement are hedges of either recorded assets or liabilities or anticipated transactions and represent the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.


		September 26, 2020					December 28, 2019					April 3, 2021				January 2, 2021
		Carrying Value		Fair Value			Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
(In thousands)	(In thousands)					(In thousands)
Debt Obligations:	Debt Obligations:														Debt Obligations:
Revolving credit facility	Revolving credit facility	$	245,010	$	245,010		$	265,419	$	265,419	Revolving credit facility	$	207,257	$	207,257	$	217,963	$	217,963
Commercial real estate loan		0		0			19,425		20,541
Senior promissory notes	Senior promissory notes	10,000		10,916			10,000		10,803		Senior promissory notes	10,000		11,130		10,000		11,157
		$	255,010	$	255,926		$	294,844	$	296,763		$	217,257	$	218,387	$	227,963	$	229,120

The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates. The fair ~~values~~value of the ~~commercial real estate loan, which was repaid in July 2020, and~~ senior promissory notes ~~are~~is primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period ends, which represent Level 2 measurements.

The Company ~~previously reported its financial results by combining~~has combined its operating entities into 3 reportable operating segments: Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products. During the first quarter of 2020, the Company changed its reportable operating segments to better align with its strategic initiatives to grow both organically and through acquisitions. Such growth and diversification resulted in a change in the internal organization of the Company and how its chief operating decision maker makes operating decisions, assesses the performance of the business, and allocates resources. Accordingly, the Company's financial results are reported in 3 new reportable operating segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment consists of the ~~Company’s~~ fluid-handling and doctoring, cleaning, & filtration product lines; the Industrial Processing segment consists of the ~~Company’s~~ wood processing and stock-preparation product ~~lines (excluding baling products);~~lines; and the Material Handling segment consists of the ~~Company’s~~ conveying and screening, baling, and fiber-based product lines. ~~Financial information for 2019 has been recast to conform to the new segment presentation.~~ A description of each segment follows.

•Flow Control – Custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications to keep critical processes running efficiently in the packaging, tissue, food, metals, and other industrial sectors. The Company's primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.

•Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard and process timber for use in the packaging, tissue, wood products and alternative fuel industries, among others. The Company's primary products include stock-preparation systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, and logging machinery. In addition, the Company provides industrial automation and digitization solutions to process industries.

•Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others. The Company's primary products include conveying and vibratory equipment and balers. In addition, the Company manufactures and sells biodegradable, absorbent granules used as carriers in agricultural applications and for oil and grease absorption.


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 26,		September 28,		September 26,		September 28,			April 3,		March 28,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020
Revenue	Revenue									Revenue
Flow Control	Flow Control	$	56,815	$	62,375	$	165,329	$	188,792	Flow Control	$	63,754	$	57,149
Industrial Processing	Industrial Processing	62,086		74,229		192,468		222,899		Industrial Processing	69,154		64,709
Material Handling	Material Handling	35,709		36,900		108,800		110,294		Material Handling	39,555		37,269
		$	154,610	$	173,504	$	466,597	$	521,985		$	172,463	$	159,127

Income Before Provision for Income Taxes	Income Before Provision for Income Taxes									Income Before Provision for Income Taxes
Flow Control (a)		$	13,770	$	15,103	$	37,360	$	43,220
Industrial Processing (b)		12,072		13,107		32,147		38,830
Material Handling (c)		2,614		3,525		10,341		5,515
Flow Control										Flow Control	$	16,443	$	13,330
Industrial Processing										Industrial Processing	11,133		9,436
Material Handling										Material Handling	4,443		4,134
Corporate ~~(d)~~(a)	Corporate ~~(d)~~(a)	(7,121)		(7,182)		(20,737)		(21,295)		Corporate ~~(d)~~(a)	(8,592)		(7,245)
Total operating income	Total operating income	21,335		24,553		59,111		66,270		Total operating income	23,427		19,655
Interest expense, net ~~(e)~~(b)	Interest expense, net ~~(e)~~(b)	(1,618)		(3,023)		(5,920)		(9,985)		Interest expense, net ~~(e)~~(b)	(1,046)		(2,408)
Other expense, net ~~(e)~~(b)	Other expense, net ~~(e)~~(b)	(32)		(98)		(95)		(296)		Other expense, net ~~(e)~~(b)	(24)		(32)
		$	19,685	$	21,432	$	53,096	$	55,989		$	22,357	$	17,215

Capital Expenditures	Capital Expenditures									Capital Expenditures
Flow Control	Flow Control	$	509	$	636	$	1,667	$	1,814	Flow Control	$	334	$	821
Industrial Processing	Industrial Processing	785		1,053		2,460		3,223		Industrial Processing	1,804		1,464
Material Handling	Material Handling	486		397		1,167		1,145		Material Handling	121		398
Corporate	Corporate	42		7		125		54		Corporate	0		3
		$	1,822	$	2,093	$	5,419	$	6,236		$	2,259	$	2,686

(c) Includes acquisition-related expenses of $248,000 in the three-month period ended September 26, 2020 and $256,000 in the nine-month period ended September 26, 2020. Includes acquisition-related expenses of $21,000 in the three-month period ended September 28, 2019 and $5,695,000 in the nine-month period ended September 28, 2019. Acquisition-related expenses include amortization expense associated with acquired profit in inventory and backlog, and acquisition costs.

In the ordinary course of business, the Company's Chinese subsidiaries ~~in China~~ may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are noninterest-bearing obligations of the issuing bank and mature within six months of the origination date. The Company's Chinese subsidiaries ~~in China~~ may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Banker's acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates. The Company had ~~$7,702,000~~$6,476,000 at ~~September 26, 2020~~April 3, 2021 and ~~$7,003,000~~$7,568,000 at ~~December 28, 2019~~January 2, 2021 of banker's acceptance drafts subject to recourse, which were transferred to vendors and had not reached their scheduled maturity dates. Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company.

From time to time, the Company is subject to various claims and legal proceedings covering a range of matters that arise in the ordinary course of business. Such litigation may include, but is not limited to, claims and counterclaims by and against the Company for breach of contract or warranty, canceled contracts, product liability, or bankruptcy-related claims. For legal proceedings in which a loss is probable and estimable, the Company accrues a loss based on the low end of the range of estimated loss when there is no better estimate within the range. If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals.

This Quarterly Report on Form 10-Q and the documents we incorporate by reference in this report include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and Section 27A of the Securities Act of 1933, as amended. These forward-looking statements are not statements of historical fact and may include statements regarding possible or assumed future results of operations. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of our management, using information currently available to our management. When we use words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "seeks," "should," "likely," "will," "would," "may," "continue," "could," or similar expressions, we are making forward-looking statements.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions. Our future results of operations may differ materially from those expressed in the forward-looking statements. Many of the important factors that will determine these results and values are beyond our ability to control or predict. You should not put undue reliance on any forward-looking statements. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. For a discussion of important factors that may cause our actual results to differ materially from those suggested by the forward-looking statements, you should read carefully Risk Factors included in Part ~~II,~~ ~~Item 1A, within this report and the section captioned~~ ~~Risk Factors,~~ ~~in Part~~ I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019,~~January 2, 2021, as filed with the Securities and Exchange Commission (SEC) and as may be further amended and/or restated in subsequent filings with the SEC.

We previously reported our financial results by combining operating entities into three reportable operating segments: Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products. During the first quarter of 2020, we changed our reportable operating segments to better align with our strategic initiatives to grow both organically and through acquisitions. See ~~Note 12, Business Segment Information, in the accompanying condensed consolidated financial statements for further detail regarding our segments. Accordingly, our~~Our financial results are reported in three ~~new~~ reportable operating segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment consists of our fluid-handling and doctoring, cleaning, & filtration product lines; the Industrial Processing

•Flow Control – Custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications to keep critical processes running efficiently in the packaging, tissue, food, metals, and other industrial sectors. Our primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.

•Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard and process timber for use in the packaging, tissue, wood products, and alternative fuel industries, among others. Our primary products include stock-preparation systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, and logging machinery. In addition, we provide industrial automation and digitization solutions to process industries.

•Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others. Our primary products include conveying and vibratory equipment and balers. In addition, we manufacture and sell biodegradable, absorbent granules used as carriers in agricultural applications and for oil and grease absorption.

~~The COVID-19 pandemic has resulted in significant worldwide economic disruption and adversely affected our bookings and results of operations primarily~~2021 due to ~~delayed or reduced spending by~~strong demand for our ~~customers,~~parts and consumables products, as well as ~~customer-requested delays on certain~~a high level of capital ~~projects and service work. While our businesses continue to be impacted by COVID-19, we experienced an 8% sequential increase~~project activity. This follows the previous bookings record set in bookings in the third quarter of 2020 compared to the second quarter of 2020, mainly attributable to improved capital equipment bookings at our Industrial Processing segment's wood processing business. For the fourth quarter of 2020 ~~we expect a sequential increase in capital equipment bookings, and our parts and consumables bookings to remain stable~~ as our ~~customers perform year-end maintenance on their equipment.~~

•~~Flow Control~~ ~~– Bookings decreased 16%~~pandemic, which began to affect our Chinese operations in February 2020 and our other major operations late in the ~~third~~first quarter of 2020. As a result, our bookings and revenue were adversely impacted for a substantial part of 2020 ~~compared with the third quarter of 2019. Bookings for capital equipment at our North American and European operations continue~~due to ~~be negatively impacted by~~reduced or delayed ~~or reduced capital~~ spending by our customers. Bookings for parts and consumables products at our North American and European operations declined slightly as a result of decreased demand from industrial customers due to production downtime, shutdowns and visitation restrictions at customer facilities related to COVID-19, while demand from our packaging, food processing, and tissue customers remained relatively stable.

•~~Industrial Processing~~ – Bookings decreased 20% in the third quarter of 2020 compared with the third quarter of 2019. Bookings at our stock-preparation business declined primarily due to delays or reductions in capital equipment spending by our customers as a result of COVID-19 and uncertainty in the Asian market surrounding the response to China's recovered paper import restrictions. The decline at our stock-preparation business was partially offset by increased capital equipment bookings at our wood processing business due to a robust U.S. housing market and a rebound in lumber, oriented strand board and plywood prices, which has driven increased capital investment by our customers. Our wood processing business continues to experience steady bookings for parts and consumables products due to an improved U.S. housing market and higher demand for wood-based products, which have increased mill run rates resulting in higher parts consumption by our customers.

•~~Material Handling~~ – Bookings decreased 9% in the third quarter of 2020 compared with the third quarter of 2019. Demand for our conveying and vibratory equipment continues to be negatively impacted by reduced customer spending primarily as a result of COVID-19 shutdowns and visitation restrictions. Despite a slight decline in bookings in the third quarter of 2020 compared to a strong third quarter of 2019, orders at our baler business improved significantly from the first two quarters of 2020 as a result of increased economic activity and eased COVID-19 restrictions in Europe in the third quarter, in addition to orders from new markets.

~~To mitigate the adverse effects~~However, many of the pandemic on our business, we continue to manage discretionary spending in such areas as capital expenditures and travel-related costs, utilize government employee retention assistance programs, and execute restructuring actions to reduce payroll-related costs at certain of our operations. During the third quarter of 2020, we received benefits from government employee retention assistance programs of $2.8 million. We expect the benefits received from these programs to decrease in the fourth quarter of 2020.

We continue to evaluate the impact of COVID-19 on our business and will take actions that are in the best interests of our employees, customers, and stakeholders or as mandated by governmental authorities. While our global presence and the diversity of our products have provided some stability during the COVID-19 pandemic, there is continued uncertainty surrounding the trajectory of the pandemic which has been impacted by a recent resurgence of infections in many regions of the world, the timing of recovery in the markets in which we operate began to normalize in the latter part of 2020. We ended the first quarter of 2021 with a record backlog of $223 million. An overview of our business by segment is as follows:

•Flow Control – Orders for our parts and consumables products at all our Flow Control businesses began to recover in the latter part of 2020 and this trend continued through the first quarter of 2021. This was partially due to pent-up demand resulting from the adverse effect of COVID-19 pandemic-related downtimes and shutdowns, as well as visitation restrictions at many customer facilities earlier in 2020. Capital equipment bookings increased from depressed levels encountered during most of 2020, with capital equipment revenue anticipated to increase in the second quarter of 2021.

•Industrial Processing – Our wood processing business continues to experience strong demand for its products, fueled by a robust U.S. housing market and high demand for lumber, oriented strand board and plywood, which increased mill run rates resulting in higher parts consumption and capital equipment investment by our customers at our North American operations. Additionally, our European wood processing operation is experiencing a similar impact. While bookings for both parts and consumables products and capital equipment have been strong, revenue related to capital equipment orders will not accelerate until the second quarter of 2021. Conversely, despite several large project orders at our U.S. and Chinese operations in the fourth quarter of 2020, our stock-preparation business continues to be negatively impacted by delays on large capital projects and reductions in capital equipment spending due to the COVID-19 pandemic, as well as uncertainty in Asia surrounding our customers' response to China's recovered paper import restriction. The continued strength for our stock-preparation parts and consumables products, due in part to the ongoing recovery from a significant downturn in mid-2020 as a result of the COVID-19 pandemic, partially mitigated the effects of depressed capital equipment orders.

•Material Handling – Bookings for parts and consumables products rebounded in the first quarter of 2021 primarily due to increased customer spending as a result of the relaxation of COVID-19 pandemic-related shutdowns and visitation restrictions, which we expect to continue. Demand for our capital equipment has increased in the last few quarters driven by our baling business, which has experienced improved business conditions, including the recovery of recycled commodity prices.

While we have seen improved market conditions and increased demand for our products over the last two quarters, there is uncertainty surrounding the continued recovery in certain regions of the world due to variability around vaccine availability and COVID-19 infection rates. Travel and visitation restrictions continue to have an impact on our ~~results~~ability to interact with our customers, which affects the timing of ~~operations, financial condition and cash flows. Accordingly, we cannot predict the extent of the impact that COVID-19 may have on our business for the remainder of fiscal 2020.~~

In 2018, the United States began imposing tariffs on certain imports from China, which has and will continue to increase the cost of some of the equipment that we import. Although we are working to mitigate the impact of tariffs through pricing and sourcing strategies, we cannot be sure how our customers and competitors will react to certain actions we take. For more information on risks associated with our global operations, including tariffs, please see Part I, Item 1A. ~~Risk Factors, included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, as further amended in subsequent filings with the SEC.~~January 2, 2021.

Slightly more than half of our sales are to customers outside the United States, mainly in Europe, Asia, and Canada. As a result, our financial performance can be materially affected by currency exchange rate fluctuations between the U.S. dollar and foreign currencies. To mitigate the impact of foreign currency ~~rate~~ fluctuations, we generally seek to charge our customers in the same currency in which our operating costs are incurred. Additionally, we may enter into forward currency exchange contracts to hedge certain firm purchase and sale commitments denominated in currencies other than our subsidiaries' functional currencies. We currently do not use derivative instruments to hedge our exposure to exchange rate fluctuations created by the translation into the U.S. dollar of our foreign subsidiaries' results that are in functional currencies other than the U.S. dollar.

In 2018, the United States began imposing tariffs on certain imports from China, which has and will continue to increase the cost of some of the equipment that we import. Although we have worked to mitigate the impact of tariffs through pricing and sourcing strategies, we cannot be sure these strategies will effectively mitigate the impact of these costs. For more information on risks associated with our global operations, including tariffs, please see Part I, Item 1A, Risk Factors, included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021.

We expect that a significant driver of our growth over the next several years will be the acquisition of businesses and technologies that complement or augment our existing products and services or may involve entry into a new process industry. We continue to pursue acquisition opportunities. In June 2020, we made an acquisition in our Industrial Processing segment for approximately $6.9 million, net of cash acquired. ~~See~~ ~~Note 2, Acquisitions, for further details. Our significant acquisition in 2019 is described below.~~

~~assumptions that affect~~the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities. Our critical accounting policies are defined as those that entail significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. Management evaluates its estimates on an ongoing basis based on historical experience, current economic and market conditions, and other assumptions management believes are reasonable. Our actual results may differ from these estimates under different assumptions or conditions. We believe that our most critical accounting policies which are significant to our consolidated financial statements, and which involve the most complex or subjective decisions or assessments, are those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the section captioned "Application of Critical Accounting Policies and Estimates" in Part II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended December 28, 2019. There have been no material changes to these critical accounting policies since the end of fiscal 2019 that warrant disclosure, except that management no longer considers our policy with respect to accounting for pension benefits to be a critical accounting policy due to the settlement of our U.S. pension plan in December 2019.

The following table presents the change in revenue by segment between the ~~third~~first quarters of ~~2020~~2021 and ~~2019,~~2020, and those changes excluding the effect of foreign currency translation and an acquisition which we refer to as change in organic revenue. The presentation of the change in organic revenue is a non-GAAP measure. We believe this non-GAAP measure helps investors gain an understanding of our underlying operations consistent with how management measures and forecasts its performance, especially when comparing such results to prior periods. This non-GAAP measure should not be considered superior to or a substitute for the corresponding ~~GAAP~~U.S. generally accepted accounting principles (GAAP) measure.


																		(Non-GAAP)																														(Non-GAAP)
		Three Months Ended								Currency Translation				Acquisition				Change in Organic Revenue									Three Months Ended																Currency Translation			Acquisition		Change in Organic Revenue
(In thousands, except percentages)	(In thousands, except percentages)	September 26, 2020		September 28, 2019		Total Decrease		% Change								Decrease				% Change		(In thousands, except percentages)			April 3, 2021				March 28, 2020				Total Increase				% Change								Increase			% Change
Flow Control	Flow Control	$	56,815	$	62,375	$	(5,560)	(9)	%			$	(260)			$	—			$	(5,300)			(8)	%	Flow Control			$	63,754			$	57,149			$	6,605			12	%				$	1,630	$	—	$	4,975		9	%
Industrial Processing	Industrial Processing	62,086		74,229		(12,143)		(16)	%	411				752				(13,306)				(18)	%	Industrial Processing			69,154				64,709				4,445				7	%			3,027			509		909		1		%
Material Handling	Material Handling	35,709		36,900		(1,191)		(3)	%	498				—				(1,689)				(5)	%	Material Handling			39,555				37,269				2,286				6	%			1,355			—		931		2		%
Consolidated Revenue	Consolidated Revenue	$	154,610	$	173,504	$	(18,894)	(11)	%	$	649			$	752			$	(20,295)			(12)	%	Consolidated Revenue			$	172,463			$	159,127			$	13,336			8	%			$	6,012		$	509	$	6,815	4		%

Revenue at our Flow Control segment ~~decreased 9%~~increased 12% in the ~~third~~first quarter of ~~2020,~~2021, while organic revenue ~~declined 8%~~increased 9%. These increases resulted from higher demand for parts and consumables products across all our operations, which was due in part to maintenance requirements at many of our customer locations and pent-up demand resulting from the adverse effect of the COVID-19 pandemic during most of 2020. Organic revenue ~~declined primarily due to decreased demand~~ for capital equipment declined slightly in the first quarter of 2021 compared to the first quarter of 2020. The continued impact of curtailed capital equipment orders by our customers during 2020 primarily at our North American operations ~~which~~ was ~~negatively impacted~~mostly offset by ~~reduced customer spending~~an increase in capital equipment revenue at our Chinese business due to lower revenues in the first quarter of 2020 from customer-requested deferrals of equipment installations and ~~customer-requested delays as~~ a ~~result~~rebound in the Chinese economy in the first quarter of ~~COVID-19.~~2021.

Revenue at our Industrial Processing segment ~~decreased 16%~~increased 7% in the ~~third~~first quarter of ~~2020,~~2021, while organic revenue ~~declined 18%~~increased 1%. ~~Organic revenue at our stock-preparation business was adversely affected by decreased~~Increased demand for capital equipment at our Chinese and European operations due to reduced or delayed customer spending as a result of COVID-19, and at our Chinese operations due to uncertainty in the Asian market surrounding the response to China's recovered paper import restrictions. Additionally, organic revenue for parts and consumables products declined at our European operations as a result of unusually high demand in the 2019 period and at our North American operations due to reduced customer spending as a result of COVID-19. Organic revenue at our wood processing business also decreased due to lower capital equipment revenue at our North American operations related to changes in certain end markets and, to a lesser extent, reduced spending as a result of COVID-19. These decreases were offset in part by higher parts and consumables revenue at our North American operationswas driven by ~~increased~~continued near-capacity mill run rates resulting in higher parts ~~consumption~~consumption. Revenue for parts and consumables at most of our stock-preparation operations also increased, due in part to pent-up demand related to the impact of the COVID-19 pandemic and lower revenue from the adverse effects of COVID-19 in the 2020 quarter. These increases were largely offset by a decline in demand for capital equipment at our stock-preparation business due to the continued impact of curtailed capital equipment spending by our ~~customers.~~customers as a result of the COVID-19 pandemic.

Revenue at our Material Handling segment increased 6% in the first quarter of 2021, while organic revenue increased 2%. Organic revenue increased at our conveying and screening business primarily due to incremental capital equipment revenue related to a large order which began in the fourth quarter of 2019 that will be essentially complete in the second quarter of 2021, and at our baling business due to improved business conditions, including the recovery of recycled commodity prices. These increases were partially offset by a decline in demand for parts and consumables at our conveying and screening business due to a reduction in customer spending as a result of the continued impact of shutdowns and visitation restrictions related to the COVID-19 pandemic.

Revenue at our Material Handling segment decreased 3% in the third quarter of 2020, while organic revenue declined 5%. Organic revenue declined due to a decrease in demand for our parts and consumables products primarily at our conveying and vibratory equipment business related to a reduction in customer spending as a result of shutdowns and visitation restrictions related to COVID-19. A decrease in organic revenue from capital equipment at our baler business due to a weak European economy, compounded by the effect of COVID-19, was more than offset by an increase in organic revenue from capital equipment at our conveying and vibratory equipment business primarily due to revenue from a large order received in late 2019.


		Three Months Ended					Three Months Ended		Basis Point Change
		September 26, 2020		September 28, 2019			April 3, 2021	March 28, 2020
Flow Control	Flow Control	52.9	%	52.9	%	Flow Control	53.3%	52.9%	40	bps
Industrial Processing	Industrial Processing	43.7	%	38.7	%	Industrial Processing	40.5%	38.4%	210	bps
Material Handling	Material Handling	31.1	%	34.0	%	Material Handling	34.7%	35.5%	(80)	bps
Consolidated Gross Profit Margin	Consolidated Gross Profit Margin	44.2	%	42.8	%	Consolidated Gross Profit Margin	43.9%	42.9%	100	bps

Consolidated gross profit margin increased in the ~~third~~first quarter of 2021 compared with the first quarter of 2020 primarily due to ~~benefits received from government employee retention assistance programs~~a greater proportion of ~~$1.6 million, which increased consolidated gross profit margin in the third quarter of 2020 by 1.1 percentage points.~~higher-margin parts and consumables revenue and improved margins on our capital equipment products.

Gross profit margin at our Industrial Processing segment increased in the ~~third~~first quarter of ~~2020 due~~2021 driven by improved margins at our wood processing business resulting from a greater proportion of higher-margin parts and consumables revenue, manufacturing efficiencies related to higher production volumes, and benefits received from government employee retention assistance programs of $1.4 million, which improved gross profit margin by 2.3 percentage points. Gross profit margin also improved in the third quarter of 2020 due to an increased proportion of higher-margin parts and consumables revenue at our wood processing business and a favorable change in product mix for capital equipment revenue at our stock-preparation business.programs.

Gross profit margin at our Material Handling segment decreased in the ~~third~~first quarter of ~~2020~~2021 primarily due to ~~lower margins on our capital equipment revenue and decreased manufacturing efficiency related to lower production volumes at our baler business, as well as an increased~~a greater proportion of lower-margin capital equipment revenue at our conveying and ~~vibratory~~screening business, offset in part by improved margins on our capital equipment at our baling business.


		Three Months Ended												Three Months Ended
(In thousands, except percentages)	(In thousands, except percentages)	September 26, 2020		% of Revenue		September 28, 2019		% of Revenue		Decrease		% Change	(In thousands, except percentages)	April 3, 2021		% of Revenue		March 28, 2020		% of Revenue		Increase		% Change
Flow Control	Flow Control	$	15,136	27	%	$	16,942	27	%	$	(1,806)	(11)%	Flow Control	$	16,508	26	%	$	15,942	28	%	$	566	4%
Industrial Processing	Industrial Processing	13,759		22	%	14,538		20	%	(779)		(5)%	Industrial Processing	15,662		23	%	13,820		21	%	1,842		13%
Material Handling	Material Handling	7,955		22	%	8,564		23	%	(609)		(7)%	Material Handling	8,786		22	%	8,681		23	%	105		1%
Corporate	Corporate	7,003		N/A		7,053		N/A		(50)		(1)%	Corporate	8,475		N/A		7,149		N/A		1,326		19%
Consolidated SG&A Expenses	Consolidated SG&A Expenses	$	43,853	28	%	$	47,097	27	%	$	(3,244)	(7)%	Consolidated SG&A Expenses	$	49,431	29	%	$	45,592	29	%	$	3,839	8%

Consolidated SG&A expenses as a percentage of revenue ~~increased~~remained unchanged at 29% in the first quarters of 2021 and 2020. Consolidated SG&A expenses were adversely impacted by the unfavorable effect of currency translation of $1.7 million, incremental professional services fees at Corporate, and the impact of foreign currency transactions of $1.3 million primarily related to gains in the 2020 period on U.S. dollar-denominated cash at foreign operations. These increases were offset in part by reduced travel-related costs in the first quarter of 2021.

SG&A expenses as a percentage of revenue at our Flow Control segment decreased to 26% in the first quarter of 2021 compared with 28% in the ~~third~~first quarter of 2020 ~~compared with 27% in the third quarter of 2019~~ due to ~~lower~~higher revenues in the ~~2020~~2021 period. ~~Consolidated~~ SG&A expenses ~~decreased $3.2 million~~increased in the ~~third~~first quarter of 2021 compared with the first quarter of 2020 principally due to $0.5 million from the unfavorable effect of foreign currency translation and the impact of foreign currency transactions primarily related to gains in the 2020 period on U.S. dollar-denominated cash at our Mexican business, offset in part by reduced travel-related costs.

SG&A expenses at our Industrial Processing segment increased to 23% of revenue in the first quarter of 2021 compared with 21% in the first quarter of 2020 principally due to $0.9 million from the unfavorable effect of foreign currency translation and $0.6 million from the impact of foreign currency transactions primarily related to gains in the 2020 period on U.S. dollar-denominated cash at this segment's Canadian operations.

SG&A expenses as a percentage of revenue at our Flow Control segment was 27% in both the third quarters of 2020 and 2019. SG&A expenses decreased in the third quarter of 2020 compared with the third quarter of 2019 principally due to reduced travel-related costs of $0.6 million, as well as lower payroll-related costs as a result of restructuring actions taken in the first half of 2020 and benefits received from government employee retention assistance programs.

SG&A expenses as a percentage of revenue at our Industrial Processing segment increased to 22% in the third quarter of 2020 compared with 20% in the third quarter of 2019 due to lower revenues in the 2020 period. SG&A expenses decreased in the third quarter of 2020 compared with the third quarter of 2019 principally due to reduced travel-related costs of $0.7 million and benefits received from government employee retention assistance programs.

Restructuring costs of $0.5 million, consisting of $0.3 million in our Flow Control segment and $0.2 million in our Industrial Processing segment, in the third quarter of 2020 represent severance costs for an additional 24 employees. See Res~~tructuring Costs~~ ~~in Results of Operations, "First Nine Months 2020 Compared With First Nine Months 2019" for further discussion related to this restructuring plan.~~

Interest expense decreased to ~~$1.7~~$1.1 million in the ~~third~~first quarter of 2021 from $2.5 million in the first quarter of 2020 ~~from $3.1 million in the third quarter of 2019~~ due to lower outstanding debt and a lower weighted-average interest rate and lower outstanding debt. At the end of the third quarter of 2020, our leverage ratio on our credit facility decreased to 1.88, which will have the effect of reducing the applicable margin on the outstanding debt under our revolving credit facility by 25 basis points in future quarters.

Our provision for income taxes decreased to $4.7 million in the third quarter of 2020 from $5.2 million in the third quarter of 2019 and represented 24% of pre-tax income in both periods. The effective tax rate of 24% in the third quarter of 2020 was higher than our statutory rate of 21% primarily due to nondeductible expenses and the distribution of our worldwide earnings. This incremental tax expense was offset in part by a tax benefit related to final Global Intangible Low-Taxed Income (GILTI) regulations issued by the U.S. Treasury Department during the third quarter of 2020 on an election to provide a high-tax exception to the GILTI tax retroactive to 2018. The effective tax rate of 24% in the third quarter of 2019 was higher than our statutory rate of 21% primarily due to the distribution of our worldwide earnings, tax expense associated with GILTI, nondeductible expenses, state taxes, and the cost of repatriating the earnings of certain foreign subsidiaries. This incremental tax expense was offset in part by a decrease in tax related to the reversal of tax reserves associated with uncertain tax positions and the net excess income tax benefits from stock-based compensation arrangements.

The following table presents changes in revenue by segment between the first nine months of 2020 and 2019, and those changes excluding the effect of foreign currency translation and an acquisition which we refer to as change in organic revenue. The presentation of the change in organic revenue is a non-GAAP measure. We believe this non-GAAP measure helps investors gain an understanding of our underlying operations consistent with how management measures and forecasts its performance, especially when comparing such results to prior periods. This non-GAAP measure should not be considered superior to or a substitute for the corresponding GAAP measure.

(Non-GAAP)
Nine Months Ended Currency Translation Acquisition Change in Organic Revenue

(In thousands, except percentages) September 26,
2020 September 28,
2019 Total Decrease % Change Decrease % Change
Flow Control $ 165,329 $ 188,792 $ (23,463) (12) % $ (3,694) $ — $ (19,769) (10) %
Industrial Processing 192,468 222,899 (30,431) (14) % (2,013) 957 (29,375) (13) %
Material Handling 108,800 110,294 (1,494) (1) % (178) — (1,316) (1) %
Consolidated Revenue $ 466,597 $ 521,985 $ (55,388) (11) % $ (5,885) $ 957 $ (50,460) (10) %

Revenue from our Flow Control segment decreased 12% in the first nine months of 2020, while organic revenue declined 10%. Organic revenue declined due to decreased demand for capital equipment at our North American and, to a lesser extent, our European operations due to reduced customer spending and customer-requested delays as a result of COVID-19. Additionally, the 2019 period included relatively high demand for capital equipment at our North American operations. Organic revenue was also impacted by a decline in demand for parts and consumables at our North American operations and, to a lesser extent, our European operations due to downtimes and shutdowns, as well as visitation restrictions at many customer facilities related to COVID-19.

Revenue from our Industrial Processing segment decreased 14% in the first nine months of 2020, while organic revenue declined by 13%. Organic revenue at our stock-preparation business was negatively impacted by decreased demand for capital equipment at our Chinese operations due to reduced or delayed customer spending as a result of COVID-19 and uncertainty in the Asian market surrounding the response to China's recovered paper import restrictions. Additionally, organic revenue from parts and consumables at our North American operations and capital equipment at our European operations decreased due to reduced customer spending as a result of COVID-19. Organic revenue from capital equipment at our North American wood processing operations decreased due to changes in certain end markets and, to a lesser extent, reduced spending as a result of COVID-19.

Revenue and organic revenue at our Material Handling segment decreased 1% in the first nine months of 2020. Organic revenue from our parts and consumables products at our conveying and vibratory equipment business decreased due to a reduction in customer spending primarily as a result of shutdowns and visitation restrictions related to COVID-19. A decrease in organic revenue from capital equipment at our baler business due to a weak European economy, compounded by the effect of COVID-19, was more than offset by an increase in organic revenue from capital equipment at our conveying and vibratory equipment business primarily due to revenue from a large order received in late 2019.

Consolidated gross profit margin increased in the first nine months of 2020 largely due to the amortization of acquired profit in inventory of $3.5 million related to the SMH acquisition that lowered consolidated gross profit margin in the first nine months of 2019 by 0.7 percentage points, and benefits received in the second and third quarters of 2020 from government employee retention assistance programs of $2.9 million, which increased consolidated gross profit margin in the first nine months of 2020 by 0.6 percentage points.

Gross profit margin at our Material Handling Systems segment in the first nine months of 2019 was negatively affected by the amortization of acquired profit in inventory of $3.5 million, which lowered the gross profit margin in 2019 by 3.2 percentage points. The remaining 1.1 percentage point difference was due to lower gross margins on our capital equipment as a result of an unfavorable change in product mix.

Nine Months Ended

(In thousands, except percentages) September 26,
2020 % of Revenue September 28,
2019 % of Revenue Decrease % Change
Flow Control $ 46,876 28 % $ 51,324 27 % $ (4,448) (9)%
Industrial Processing 42,499 22 % 44,794 20 % (2,295) (5)%
Material Handling 24,730 23 % 27,783 25 % (3,053) (11)%
Corporate 20,413 N/A 20,982 N/A (569) (3)%
Consolidated SG&A Expenses $ 134,518 29 % $ 144,883 28 % $ (10,365) (7)%

Consolidated SG&A expenses as a percentage of revenue increased to 29% in the first nine months of 2020 compared with 28% in the first nine months of 2019 due to lower revenues in the 2020 period. Consolidated SG&A expenses decreased $10.4 million in the first nine months of 2020 compared with the first nine months of 2019 due to reduced travel-related costs of $5.7 million, benefits received from government employee retention assistance programs of $1.8 million, a favorable effect of foreign currency translation of $1.5 million, and lower acquisition-related costs of $1.3 million.

SG&A expenses as a percentage of revenue at our Flow Control segment increased to 28% in the first nine months of 2020 compared with 27% in the first nine months of 2019 due to lower revenues in the 2020 period. SG&A expenses decreased in the first nine months of 2020 compared with the first nine months of 2019 due to reduced travel-related costs of $2.1 million and lower payroll-related costs as a result of restructuring actions taken in the first half of 2020 and benefits received from government employee retention assistance programs.

SG&A expenses as a percentage of revenue at our Industrial Processing segment increased to 22% in the first nine months of 2020 compared with 20% in the first nine months of 2019 due to lower revenues in the 2020 period. SG&A expenses decreased in the first nine months of 2020 compared with the first nine months of 2019 principally due to reduced travel-related costs of $2.2 million and benefits received from government employee retention assistance programs of $1.2 million. These decreases were partially offset by higher professional service fees and acquisition-related costs of $0.6 million in the 2020 period.

SG&A expenses as a percentage of revenue at our Material Handling segment decreased to 23% in the first nine months of 2020 compared with 25% in the first nine months of 2019. The 2020 period includes amortization of acquired backlog associated with the acquisition of SMH of $0.3 million, while the 2019 period includes amortization of acquired backlog of $1.3 million and other acquisition-related costs of $0.8 million for the acquisition of SMH. Excluding these acquisition-related costs, SG&A expenses as a percentage of revenue decreased to 22% in the first nine months of 2020 compared to 23% in the first nine months of 2019 due to reduced travel-related costs.

Restructuring costs of $0.9 million, consisting of $0.7 million in our Flow Control segment and $0.2 million in our Industrial Processing segment, in the first nine months of 2020 represent severance costs for 54 employees to reduce future payroll-related overhead and operating costs in response to the slowdown in the global economy, largely driven by COVID-19. In the first nine months of 2020, we also reduced our workforce by 21 employees within our Industrial Processing segment with no associated severance costs. We expect annualized payroll-related savings as a result of these actions of approximately $4.1 million, including $2.7 million at our Flow Control segment and $1.4 million at our Industrial Processing segment, which consist of approximately $2.0 million related to cost of sales and $2.1 million related to operating expenses. We may incur additional restructuring costs as we continue to evaluate the impact of COVID-19 and the resulting global economic downturn on our business.

Our provision for income taxes increased to ~~$13.7~~$5.6 million in the first ~~nine months~~quarter of ~~2020~~2021 from ~~$12.3~~$4.6 million in the first ~~nine months~~quarter of ~~2019.~~2020. The effective tax rate of ~~26%~~25% in the first ~~nine months~~quarter of ~~2020~~2021 was higher than our statutory rate of 21% primarily due to nondeductible expenses, the distribution of our worldwide earnings, ~~and~~ state ~~taxes. These increases in~~taxes, and tax expense ~~were~~associated with Global Intangible Low-Taxed Income (GILTI) provisions. This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements. The effective tax rate of ~~22%~~26% in the first ~~nine months~~quarter of ~~2019~~2020 was higher than our statutory rate of 21% primarily due to nondeductible expenses, state taxes, the distribution of our worldwide earnings, ~~nondeductible expenses,~~and tax expense associated with ~~GILTI, state taxes, and the cost of repatriating the earnings of certain foreign subsidiaries.~~GILTI. This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements, a net tax benefit associated with foreign exchange losses and tax costs recognized upon our repatriation of certain previously taxed foreign earnings, and the reversal of tax reserves associated with uncertain tax positions.

Net income ~~decreased $4.3~~increased $4.1 million to ~~$39.4~~$16.8 million in the first ~~nine months~~quarter of ~~2020~~2021 from ~~$43.7~~$12.7 million in the first ~~nine months~~quarter of ~~2019~~2020 primarily due to a ~~$7.2~~$3.8 million ~~decrease~~increase in operating income and a ~~$1.4~~$1.3 million decrease in interest expense, offset in part by a $1.0 million increase in provision for income taxes ~~offset in part by a decrease in interest expense of $4.1 million~~ (see discussions above for further details).

Consolidated working capital was ~~$155.7~~$163.2 million at ~~September 26, 2020,~~April 3, 2021, compared with ~~$151.4~~$155.1 million at ~~December 28, 2019. Included in working capital were cash~~January 2, 2021. Cash and cash equivalents ~~of $53.6~~were $66.0 million at ~~September 26, 2020,~~April 3, 2021, compared with ~~$66.8~~$65.7 million at ~~December 28, 2019. Cash~~January 2, 2021, which included cash and cash equivalents held by our foreign subsidiaries ~~was $52.6~~of $64.2 million at ~~September 26, 2020~~April 3, 2021 and ~~$58.9~~$63.6 million at ~~December 28, 2019.~~January 2, 2021.


		Nine Months Ended					Three Months Ended
(In thousands)	(In thousands)	September 26, 2020		September 28, 2019		(In thousands)	April 3, 2021		March 28, 2020
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	$	52,601	$	58,166	Net Cash Provided by Operating Activities	$	19,092	$	6,169
Net Cash Used in Investing Activities	Net Cash Used in Investing Activities	(12,459)		(182,767)		Net Cash Used in Investing Activities	(2,352)		(2,672)
Net Cash (Used in) Provided by Financing Activities		(52,871)		130,498
Net Cash Used in Financing Activities						Net Cash Used in Financing Activities	(15,582)		(7,002)
Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	660		(2,043)		Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash	(1,090)		(2,693)
(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash		$	(12,069)	$	3,854
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash						Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	$	68	$	(6,198)

Cash provided by operating activities ~~decreased~~increased to ~~$52.6~~$19.1 million in the first ~~nine months~~quarter of ~~2020~~2021 from ~~$58.2~~$6.2 million in the first ~~nine months~~quarter of ~~2019.~~2020. Our operating cash flows are primarily from cash received from customers, offset by cash payments for items such as inventory, employee compensation, operating leases, income taxes and interest payments on outstanding debt obligations. The ~~decrease~~increase in cash provided by operating activities in the ~~first nine months of 2020 compared with the first nine months of 2019~~2021 period was ~~primarily due to lower net income, offset~~driven by a reduction in ~~part by slightly less~~ cash used for working ~~capital.~~ capital and improved net income.

Cash used for working capital was ~~$15.4~~$6.4 million in the first ~~nine months~~quarter of ~~2020~~2021 and ~~$15.9~~$14.9 million in the first ~~nine months~~quarter of ~~2019. We~~2020. Cash used ~~cash of $6.2 million~~ for ~~inventory~~working capital in the first ~~nine months~~quarter of 2021 included cash used of $14.0 million for accounts receivable due to revenue growth and the timing of revenue and $6.6 million for inventories relating to purchases for orders that will be shipped later in fiscal 2021. These uses of cash were offset in part by $8.0 million of cash provided by accounts payable primarily for inventory purchases related to increased order activity and $7.6 million from other current liabilities primarily for customer deposits related to capital equipment orders anticipated to ship later in fiscal 2021. Cash used for working capital in the first quarter of 2020 ~~primarily relating~~included cash used of $3.7 million related to the buildup of inventory for large capital ~~equipment and spare parts that will be shipped in late fiscal 2020 and early fiscal 2021 compared to cash used of $10.3~~orders, $3.4 million in ~~the prior period due~~accounts payable for payments related to ~~increased~~ inventory ~~at our wood processing business. We used cash of $13.2~~purchases made in 2019 for large capital orders, and $9.4 million for accounts payable in the first nine months of 2020 primarily due to lower payables resulting from reduced spending levels during 2020 compared with cash received of $2.8 million in the 2019 period. We received cash of $2.8 million from other current ~~assets in the first nine months of 2020 compared with cash used of $4.1 million in the 2019 period~~liabilities primarily related to ~~changes in refundable income taxes in both periods.~~

Our financing activities used cash of $52.9 million in the first nine months of 2020 compared with cash provided of $130.5 million in the first nine months of 2019. Repayment of long-term obligations was $69.0 million in the first nine months of 2020 and $108.3 million in the first nine months of 2019. Repayment in the 2020 period included an $18.9 million prepayment of the outstanding principal balance onto settle our Real Estate Loan using U.S. borrowings available under our revolving credit facility. Repayment in the 2019 period included $71.1 million of cash repatriated from Europe that was used to repay U.S. borrowings under our revolving credit facility. Borrowings under our revolving credit facility were $26.0 million in the 2020 period, including amounts used to prepay our Real Estate Loan, and $247.1 million in the 2019 period, including $179.3 million of U.S.-denominated borrowings for the acquisition of SMH and $56.1 million of euro-denominated borrowings.

The exchange rate effect on cash, cash equivalents, and restricted cash represents the impact of translation of cash balances at our foreign subsidiaries. The ~~$2.0~~$1.1 million reduction in cash, cash equivalents, and restricted cash in the first ~~nine months~~quarter of ~~2019~~2021 is primarily attributable to the strengthening of the U.S. dollar against the euro. The $2.7 million reduction in cash, cash equivalents, and restricted cash in the first quarter of 2020 primarily related to the strengthening of the U.S. dollar ~~particularly~~ against the ~~euro, Chinese renminbi,~~Mexican peso, Canadian dollar and ~~Swedish krona.~~Brazilian real.

~~Under our~~We entered into an unsecured multi-currency revolving credit facility, dated as of March 1, 2017 (as amended and restated to date, the Credit Agreement). As of April 3, 2021, we have a borrowing capacity of ~~$400~~over $450 million, ~~of which $154.8~~including $192.8 million ~~was~~ available ~~to borrow as of September 26, 2020, along with~~under the Credit Agreement, an additional $150 million in an uncommitted, unsecured incremental borrowing facility under the Credit Agreement, and $115 million of ~~$150 million. In addition,~~senior promissory notes available for issuance under our uncommitted Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement)~~, we may issue up to an additional $115 million of senior promissory notes.~~. Under these agreements, our leverage ratio ~~as defined,~~ must be less than ~~3.75.~~3.75, or, if we elect, for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, must be less than 4.00. As of ~~September 26, 2020,~~April 3, 2021, our leverage ratio was ~~1.88~~1.50 and we were in compliance with our debt covenants. We do not have any mandatory principal payments on our long-term debt obligations until 2023. See Note 64, Long-Term Obligations, in the accompanying condensed consolidated financial statements for additional information regarding our debt obligations.

We paid cash dividends of ~~$8.1~~$2.8 million in the first ~~nine months~~quarter of ~~2020.~~2021. On ~~September 17, 2020,~~March 10, 2021, we declared a quarterly cash dividend of ~~$0.24~~$0.25 per share totaling ~~$2.8~~$2.9 million that ~~will be~~was paid on ~~November~~May 12, ~~2020.~~2021. Future declarations of dividends are subject to our board of directors' approval and may be adjusted as business needs or market conditions change. The declaration of cash dividends is subject to our compliance with the covenant in our revolving credit facility related to our consolidated leverage ratio.

As of ~~September 26, 2020,~~April 3, 2021, we had approximately ~~$274.0~~$275.1 million of total unremitted foreign earnings. It is our intent to indefinitely reinvest ~~$252.6~~$252.0 million of these earnings to support the current and future capital needs of our foreign operations, including debt repayments, if any. ~~For~~In the first ~~nine months~~quarter of ~~2020,~~2021, we recorded withholding taxes on the earnings in certain foreign subsidiaries that we plan to repatriate in the foreseeable future. The foreign withholding taxes that would be required if we were to remit the ~~indefinitely reinvested~~indefinitely-reinvested foreign earnings to the United States would be approximately ~~$5.5~~$5.9 million.

In the future, our liquidity position will be affected by the level of cash flows from operations, cash paid to service our debt obligations, acquisitions, capital projects, dividends, and stock repurchases. We believe that our existing resources, together with the borrowings available under our ~~revolving credit facility~~Credit Agreement and available through our Note Purchase Agreement, and the cash we expect to generate from operations, will be sufficient to meet the capital requirements of our operations for the foreseeable future.

There have been no significant changes to our contractual obligations and other commercial commitments during the ~~nine months ended September 26, 2020~~first quarter of 2021 compared with those disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019, except~~January 2, 2021.

Management's discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenue and expenses during the reporting period. Our critical accounting policies are defined as those that entail significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. Management evaluates its estimates on an ongoing basis based on historical experience, current economic and market conditions, and other assumptions management believes are reasonable. We believe that our most critical accounting policies which are significant to our consolidated financial statements, and which involve the most complex or subjective decisions or assessments, are those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the section captioned "Application of Critical Accounting Policies and Estimates" in Part II, Item 7, of our Annual Report on Form 10-K for the ~~prepayment~~fiscal year ended January 2, 2021. There have been no material changes to these critical accounting policies since the end of ~~the Real Estate Loan as disclosed in~~fiscal 2020 that warrant disclosure.

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~September 26, 2020.~~April 3, 2021. The term "disclosure controls and procedures," as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon the evaluation of our disclosure controls and procedures as of ~~September 26, 2020,~~April 3, 2021, our Chief Executive Officer and Chief Financial Officer concluded that as of ~~September 26, 2020,~~April 3, 2021, our disclosure controls and procedures were effective at the reasonable assurance level.

There have been no material changes from the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019 (Form 10-K), as further amended by the section entitled,~~ ~~Risk Factors,~~ ~~in our Quarterly Report on Form 10-Q for the period ended March 28, 2020, which section is incorporated by reference herein, and the section entitled,~~ ~~Risk Factors~~, in our Quarterly Report on Form 10-Q for the period ended June 27, 2020, which section is incorporated by reference herein. The COVID-19 pandemic has led to general uncertainty and adverse changes in global economic conditions and heightened, and in some cases manifested, certain of the risks we normally face in operating our business, including those disclosed in the Form 10-K, as further amended in subsequent filings with the SEC. Such risk factor disclosure is qualified by the information relating to the COVID-19 pandemic that is described in this Quarterly Report on Form 10-Q.January 2, 2021.


Exhibit Number
						Description of Exhibit

10.1*						Summary of non-employee director compensation of the Registrant.

31.1						~~Certification of the Principal~~ 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*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						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


Delaware									52-1762325
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


		Page
PART I: Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheet as of S e p ~~tember~~April 3, 2021 and January 2,6 ~~, 2020 and December 28, 2019~~ 2021 (unaudited)	3

	Condensed Consolidated Statement of Income for the ~~three- and~~ ~~nine-month~~three-month periods ended ~~September 26~~,April 3, 2021 and March 28, 2020 ~~and~~ ~~September 28, 2019~~ (unaudited)	4

	Condensed Consolidated Statement of Comprehensive Income (Loss) for the ~~three- and~~ ~~nine-month~~three-month periods ended ~~September 26~~,April 3, 2021 and March 28, 2020 ~~and~~ ~~September 28, 2019~~ (unaudited)	5

	Condensed Consolidated Statement of Cash Flows for the ~~nine-month~~three-month periods ended ~~September 26,~~April 3, 2021 and March 28, 2020 ~~and September 28, 2019~~ (unaudited)	6

	Condensed Consolidated Statement of Stockholders' Equity for the ~~three- and~~ ~~nine-month~~three-month periods ended ~~September 26~~,April 3, 2021 and March 28, 2020 ~~and~~ ~~September 28,~~ ~~2019~~ (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2419

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3426

Item 4.	Controls and Procedures	3426

PART II: Other Information

Item 1A.	Risk Factors	3527

Item 6.	Exhibits	3627


	September 26, 2020		December 28, 2019
(In thousands)
Raw Materials	$	47,918	$	49,332
Work in Process	17,089		15,344
Finished Goods	43,708		38,039
	$	108,715	$	102,715


	April 3, 2021		January 2, 2021
(In thousands)
Raw Materials	$	45,697	$	46,413
Work in Process	23,789		17,692
Finished Goods	43,104		42,709
	$	112,590	$	106,814


~~(In thousands)~~	~~Severance~~
~~Provision~~	$	~~926~~
~~Usage~~	~~(430)~~
~~Currency translation~~	~~(11)~~
~~Balance at September 26, 2020~~	$	~~485~~


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended September 26, 2020						Three Months Ended September 28, 2019
(In thousands, except percentages)	Non-U.S. Pension			Other Post-Retirement			U.S. Pension			Non-U.S. Pension			Other Post-Retirement
Service Cost	$	45		$	2		$	0		$	43		$	1
Interest Cost	22			9			283			27			37
Expected Return on Plan Assets	(14)			(1)			(248)			(16)			(1)
Recognized Net Actuarial Loss	10			4			8			5			3
Amortization of Prior Service Cost	2			0			0			0			0
	$	65		$	14		$	43		$	59		$	40

The weighted average assumptions used to determine net periodic benefit cost are as follows:

Discount Rate	2.05		%	3.80		%	4.10		%	2.82		%	4.44		%
Expected Long-Term Return on Plan Assets	7.21		%	7.21		%	4.10		%	9.22		%	9.22		%
Rate of Compensation Increase	3.14		%	5.57		%	0		%	2.99		%	5.57		%


	Nine Months Ended September 26, 2020						Nine Months Ended September 28, 2019
(In thousands, except percentages)	Non-U.S. Pension			Other Post-Retirement			U.S. Pension			Non-U.S. Pension			Other Post-Retirement
Service Cost	$	131		$	5		$	0		$	129		$	3
Interest Cost	66			29			850			84			112
Expected Return on Plan Assets	(45)			(3)			(745)			(50)			(3)
Recognized Net Actuarial Loss	31			12			24			15			9
Amortization of Prior Service Cost	5			0			0			0			0
	$	188		$	43		$	129		$	178		$	121

The weighted average assumptions used to determine net periodic benefit cost are as follows:

Discount Rate	2.12		%	3.83		%	4.10		%	2.81		%	4.44		%
Expected Long-Term Return on Plan Assets	7.21		%	7.21		%	4.10		%	9.22		%	9.22		%
Rate of Compensation Increase	3.17		%	5.57		%	0		%	2.99		%	5.57		%


(In thousands)	Interest Rate Swap Agreements		Forward Currency- Exchange Contracts		Total
Unrealized Loss, Net of Tax, at December 28, 2019	$	(589)	$	(55)	$	(644)
Loss (gain) reclassified to earnings (a)	163		(18)		145
(Loss) gain recognized in AOCI	(487)		67		(420)
Unrealized Loss, Net of Tax, at September 26, 2020	$	(913)	$	(6)	$	(919)



*			~~Furnished herewith.~~Management contract or compensatory plan or arrangement.


			KADANT INC.

Date: ~~November 4, 2020~~May 12, 2021			/s/ Michael J. McKenney
			Michael J. McKenney
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)