Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 29, 2014 | Apr. 25, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Kadant Inc | ' |
Entity Central Index Key | '0000886346 | ' |
Current Fiscal Year End Date | '--01-03 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 11,174,583 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 29-Mar-14 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheet (Unaudited) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $57,024 | $50,032 |
Restricted cash (Note 1) | 162 | 168 |
Accounts receivable, less allowances of $2,695 and $2,689 (Note 1) | 69,258 | 70,271 |
Inventories (Note 1) | 61,962 | 62,805 |
Unbilled contract costs and fees | 1,621 | 3,679 |
Other current assets | 19,280 | 19,189 |
Assets of discontinued operation | 137 | 144 |
Total Current Assets | 209,444 | 206,288 |
Property, Plant, and Equipment, at Cost | 118,290 | 117,997 |
Less: accumulated depreciation and amortization | 74,024 | 73,112 |
Property, Plant and Equipment, at Cost, Net | 44,266 | 44,885 |
Other Assets | 10,687 | 11,230 |
Intangible Assets, Gross | 77,690 | 78,223 |
Less: accumulated amortization | 31,998 | 30,373 |
Intangible Assets, Net | 45,692 | 47,850 |
Goodwill | 134,809 | 131,915 |
Total Assets | 444,898 | 442,168 |
Current Liabilities: | ' | ' |
Current maturities of long-term obligations (Note 6) | 648 | 625 |
Accounts payable | 26,172 | 28,388 |
Accrued payroll and employee benefits | 17,956 | 19,116 |
Customer deposits | 25,977 | 28,174 |
Other current liabilities | 26,342 | 23,286 |
Liabilities of discontinued operation | 213 | 213 |
Total Current Liabilities | 97,308 | 99,802 |
Other Long-Term Liabilities | 33,246 | 33,935 |
Long-Term Obligations (Note 6) | 42,290 | 38,010 |
Commitments and Contingencies (Note 13) | 0 | 0 |
Stockholders' Equity: | ' | ' |
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued | 146 | 146 |
Capital in excess of par value | 94,731 | 96,809 |
Retained earnings | 251,547 | 248,170 |
Treasury stock at cost, 3,449,576 and 3,524,742 shares | -75,544 | -76,339 |
Accumulated other comprehensive items (Note 9) | 116 | 710 |
Total Kadant Stockholders' Equity | 270,996 | 269,496 |
Noncontrolling interest | 1,058 | 925 |
Total Stockholders' Equity | 272,054 | 270,421 |
Total Liabilities and Stockholders' Equity | $444,898 | $442,168 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Current Assets: | ' | ' |
Accounts receivable, allowances | $2,695 | $2,689 |
Stockholders' Equity: | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 14,624,159 | 14,624,159 |
Treasury stock (in shares) | 3,449,576 | 3,524,742 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statement of Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Condensed Consolidated Statement of Income (Unaudited) [Abstract] | ' | ' |
Revenues | $93,367 | $76,204 |
Costs and Operating Expenses: | ' | ' |
Cost of revenues | 51,187 | 40,178 |
Selling, general, and administrative expenses | 32,482 | 26,950 |
Research and development expenses | 1,749 | 1,704 |
Restructuring costs (Note 3) | 328 | 0 |
Total Costs and Operating Expenses | 85,746 | 68,832 |
Operating Income | 7,621 | 7,372 |
Interest Income | 222 | 109 |
Interest Expense | -306 | -165 |
Income from Continuing Operations Before Provision for Income Taxes | 7,537 | 7,316 |
Provision for Income Taxes (Note 5) | 2,352 | 1,967 |
Income from Continuing Operations | 5,185 | 5,349 |
Loss from Discontinued Operation | -5 | -29 |
Net Income | 5,180 | 5,320 |
Net Income Attributable to Noncontrolling Interest | -127 | -36 |
Net Income Attributable to Kadant | 5,053 | 5,284 |
Amounts Attributable to Kadant: | ' | ' |
Income from Continuing Operations | 5,058 | 5,313 |
Loss from Discontinued Operation | -5 | -29 |
Net Income Attributable to Kadant | $5,053 | $5,284 |
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4): | ' | ' |
Basic (in dollars per share) | $0.45 | $0.48 |
Diluted (in dollars per share) | $0.45 | $0.47 |
Earnings per Share Attributable to Kadant (Note 4): | ' | ' |
Basic (in dollars per share) | $0.45 | $0.47 |
Diluted (in dollars per share) | $0.45 | $0.47 |
Weighted Average Shares (Note 4): | ' | ' |
Basic (in shares) | 11,132 | 11,163 |
Diluted (in shares) | 11,314 | 11,267 |
Cash Dividends Declared per Common Share (in dollars per share) | $0.15 | $0.13 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Income (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Condensed Consolidated Statement of Income (Unaudited) [Abstract] | ' | ' |
Loss from Discontinued Operation, income tax benefit | $3 | $17 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Condensed Consolidated Statement of Comprehensive Income (Unaudited) [Abstract] | ' | ' |
Net Income | $5,180 | $5,320 |
Other Comprehensive Items: | ' | ' |
Foreign Currency Translation Adjustment | -757 | -3,108 |
Pension and Other Post-Retirement Liability Adjustments, net (net of tax provision of $43 and $77 in 2014 and 2013, respectively) | 77 | 137 |
Deferred Gain on Hedging Instruments (net of tax provision of $49 and $29 in 2014 and 2013, respectively) | 92 | 195 |
Other Comprehensive Items | -588 | -2,776 |
Comprehensive Income | 4,592 | 2,544 |
Comprehensive (Income) Loss Attributable to Noncontrolling Interest | -133 | 12 |
Comprehensive Income Attributable to Kadant | $4,459 | $2,556 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Other Comprehensive Items: | ' | ' |
Pension and other post-retirement liability adjustments, tax expense | $43 | $77 |
Deferred gain on hedging instruments, tax expense | $49 | $29 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Operating Activities: | ' | ' |
Net income attributable to Kadant | $5,053 | $5,284 |
Net Income Attributable to Noncontrolling Interest | 127 | 36 |
Loss from discontinued operation | 5 | 29 |
Income from continuing operations | 5,185 | 5,349 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 3,045 | 1,953 |
Stock-based compensation expense | 1,395 | 1,269 |
Provision (benefit) for losses on accounts receivable | 85 | -158 |
Gain on the sale of property, plant, and equipment | -96 | -78 |
Other items, net | -197 | -210 |
Contributions to pension plan | -270 | -270 |
Changes in current assets and liabilities, net of effects of acquisitions: | ' | ' |
Accounts receivable | 1,187 | 1,092 |
Unbilled contract costs and fees | 2,065 | -621 |
Inventories | 312 | -592 |
Other current assets | -813 | -829 |
Accounts payable | -2,290 | 83 |
Other current liabilities | -3,406 | -7 |
Net cash provided by continuing operations | 6,202 | 6,981 |
Net cash provided by (used in) discontinued operation | 1 | -106 |
Net cash provided by operating activities | 6,203 | 6,875 |
Investing Activities: | ' | ' |
Acquisitions, net of cash acquired | -2,035 | 0 |
Purchases of property, plant, and equipment | -539 | -1,178 |
Proceeds from sale of property, plant, and equipment | 139 | 222 |
Other, net | 1 | 0 |
Net cash used in continuing operations for investing activities | -2,434 | -956 |
Financing Activities: | ' | ' |
Proceeds from issuance of long-term obligations | 5,354 | 4,500 |
Repayments of long-term obligations | -131 | -4,750 |
Purchases of Company common stock | -1,918 | -1,334 |
Dividends paid | -1,389 | 0 |
Proceeds from issuance of Company common stock | 514 | 337 |
Other, net | 683 | 303 |
Net cash provided by (used in) continuing operations for financing activities | 3,113 | -944 |
Exchange Rate Effect on Cash and Cash Equivalents from Continuing Operations | 110 | -1,126 |
Increase in Cash and Cash Equivalents from Continuing Operations | 6,992 | 3,849 |
Cash and Cash Equivalents at Beginning of Period | 50,032 | 54,553 |
Cash and Cash Equivalents at End of Period | $57,024 | $58,402 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Items [Member] | Noncontrolling Interest [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||||
Beginning balance at Dec. 29, 2012 | $146 | $95,448 | $230,329 | ($74,025) | ($3,315) | $1,384 | $249,967 |
Beginning balance (in shares) at Dec. 29, 2012 | 14,624,159 | ' | ' | 3,493,546 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net Income | 0 | 0 | 5,284 | 0 | 0 | 36 | 5,320 |
Dividend declared | 0 | 0 | -1,401 | 0 | 0 | 0 | -1,401 |
Activity under stock plans | 0 | -2,535 | 0 | 2,651 | 0 | 0 | 116 |
Treasury stock reissued (in shares) | 0 | ' | ' | -125,054 | ' | ' | ' |
Tax benefits related to employees' and directors' stock plans | 0 | 303 | 0 | 0 | 0 | 0 | 303 |
Purchases of Company common stock | 0 | 0 | 0 | -1,334 | 0 | 0 | -1,334 |
Purchases of Company common stock (in shares) | 0 | ' | ' | 50,000 | ' | ' | ' |
Other Comprehensive Items | 0 | 0 | 0 | 0 | -2,728 | -48 | -2,776 |
Ending balance at Mar. 30, 2013 | 146 | 93,216 | 234,212 | -72,708 | -6,043 | 1,372 | 250,195 |
Ending balance (in shares) at Mar. 30, 2013 | 14,624,159 | ' | ' | 3,418,492 | ' | ' | ' |
Beginning balance at Dec. 28, 2013 | 146 | 96,809 | 248,170 | -76,339 | 710 | 925 | 270,421 |
Beginning balance (in shares) at Dec. 28, 2013 | 14,624,159 | ' | ' | 3,524,742 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net Income | 0 | 0 | 5,053 | 0 | 0 | 127 | 5,180 |
Dividend declared | 0 | 0 | -1,676 | 0 | 0 | 0 | -1,676 |
Activity under stock plans | 0 | -2,761 | 0 | 2,713 | 0 | 0 | -48 |
Treasury stock reissued (in shares) | 0 | ' | ' | -125,166 | ' | ' | ' |
Tax benefits related to employees' and directors' stock plans | 0 | 683 | 0 | 0 | 0 | 0 | 683 |
Purchases of Company common stock | 0 | 0 | 0 | -1,918 | 0 | 0 | -1,918 |
Purchases of Company common stock (in shares) | 0 | ' | ' | 50,000 | ' | ' | ' |
Other Comprehensive Items | 0 | 0 | 0 | 0 | -594 | 6 | -588 |
Ending balance at Mar. 29, 2014 | $146 | $94,731 | $251,547 | ($75,544) | $116 | $1,058 | $272,054 |
Ending balance (in shares) at Mar. 29, 2014 | 14,624,159 | ' | ' | 3,449,576 | ' | ' | ' |
Nature_of_Operations_and_Summa
Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | ' | ||||||||
1 | Nature of Operations and Summary of Significant Accounting Policies | ||||||||
Nature of Operations | |||||||||
Kadant Inc. and its subsidiaries' (collectively, "we," Kadant," "the Company," or "the Registrant") continuing operations include two reportable operating segments, Papermaking Systems and Wood Processing Systems, and a separate product line, Fiber-based Products. | |||||||||
Through its Papermaking Systems segment, the Company develops, manufactures, and markets a range of equipment and products primarily for the global papermaking and paper recycling and process industries. The Company's principal products in this segment include custom-engineered stock-preparation systems and equipment for the preparation of wastepaper for conversion into recycled paper; fluid-handling systems used primarily in the dryer section of the papermaking process and during the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals, and food; doctoring systems and equipment and related consumables important to the efficient operation of paper machines; and cleaning and filtration systems essential for draining, purifying, and recycling process water and cleaning paper machine fabrics and rolls. | |||||||||
Through its Wood Processing Systems segment, the Company designs and manufactures stranders and related equipment used in the production of oriented strand board (OSB), an engineered wood panel product used primarily in home construction. This segment also supplies debarking and wood chipping equipment used in the forest products and the pulp and paper industries. | |||||||||
Through its Fiber-based Products business, the Company manufactures and sells granules derived from papermaking byproducts primarily for use as agricultural carriers and for home lawn and garden applications, as well as for oil and grease absorption. | |||||||||
Interim Financial Statements | |||||||||
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 March 29, 2014 and its results of operations, comprehensive income, cash flows, and stockholders' equity for the three-month periods ended March 29, 2014 and March 30, 2013. 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, 2013 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K. The condensed consolidated financial statements and related notes are presented as permitted by the Securities and Exchange Commission (SEC) rules and regulations 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, 2013, filed with the SEC. | |||||||||
Fiscal Year | |||||||||
Typically, the Company's fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to the end of the corresponding calendar quarter in the case of the Company's fiscal quarters and on the Saturday closest to December 31 in the case of the Company's fourth fiscal quarter and fiscal year. As a result, a 53rd week is added to the Company's fiscal year every five or six years. In a 53-week fiscal year the Company's fourth fiscal quarter contains 14 weeks. The Company's fiscal year ending January 3, 2015 (fiscal 2014) contains 53 weeks and the Company's fiscal year ending December 28, 2013 (fiscal 2013) contains 52 weeks. Each quarter of fiscal 2014 and 2013 contains 13 weeks, except the fourth quarter of 2014, which will contain 14 weeks. | |||||||||
Critical Accounting Policies | |||||||||
Critical accounting policies are defined as those that entail significant judgments and estimates, and could potentially result in materially different results under different assumptions and conditions. The Company believes that the most critical accounting policies upon which its financial position depends, and which involve the most complex or subjective decisions or assessments, concern revenue recognition and accounts receivable, warranty obligations, income taxes, the valuation of goodwill and intangible assets, inventories and pension obligations. A discussion of the application of these and other accounting policies is included in Notes 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, 2013. | |||||||||
Supplemental Cash Flow Information | |||||||||
Three Months Ended | |||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | |||||||
Non-Cash Investing Activities: | |||||||||
Fair Value of Assets Acquired | $ | 5,610 | $ | – | |||||
Cash Paid for Acquired Businesses | (2,709 | ) | – | ||||||
Liabilities Assumed of Acquired Businesses | $ | 2,901 | $ | – | |||||
Non-Cash Financing Activities: | |||||||||
Issuance of Company Common Stock | $ | 2,480 | $ | 2,191 | |||||
Dividends Declared but Unpaid | $ | 1,676 | $ | 1,401 | |||||
Restricted Cash | |||||||||
 As of March 29, 2014 and December 28, 2013, the Company had restricted cash of $162,000 and $168,000, respectively. This cash serves as collateral for bank guarantees primarily associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business. All the bank guarantees will expire by the end of 2014. | |||||||||
Banker's Acceptance Drafts | |||||||||
The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The banker's acceptance drafts are non-interest bearing obligations of the issuing bank and mature within six months of the origination date. The Company has the ability to 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 $6,947,000 and $10,765,000 at March 29, 2014 and December 28, 2013, respectively, are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary obtains cash payment on the scheduled maturity date or upon the sale or transfer of the drafts prior to maturity. | |||||||||
Inventories | |||||||||
The components of inventories are as follows: | |||||||||
March 29, | December 28, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Raw Materials and Supplies | $ | 21,042 | $ | 20,836 | |||||
Work in Process | 20,980 | 21,051 | |||||||
Finished Goods | 19,940 | 20,918 | |||||||
$ | 61,962 | $ | 62,805 | ||||||
Warranty Obligations | |||||||||
The Company provides for the estimated cost of product warranties at the time of sale based on the actual historical occurrence rates and repair costs. The Company typically negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. While the Company engages in extensive product quality programs and processes, the Company's warranty obligation is affected by product failure rates, repair costs, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Should actual product failure rates, repair costs, service delivery costs, or supplier warranties on parts differ from the Company's estimates, revisions to the estimated warranty liability would be required. | |||||||||
The changes in the carrying amount of accrued warranty costs included in other current liabilities in the accompanying condensed consolidated balance sheet are as follows: | |||||||||
Three Months Ended | |||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | |||||||
Balance at beginning of period | $ | 4,571 | $ | 4,462 | |||||
Provision | 559 | 291 | |||||||
Usage | (697 | ) | (555 | ) | |||||
Currency translation | (9 | ) | (79 | ) | |||||
Balance at end of period | $ | 4,424 | $ | 4,119 | |||||
Use of Estimates | |||||||||
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 revenues and expenses during the reporting period. | |||||||||
Recent Accounting Pronouncements | |||||||||
Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11. Currently, GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This ASU clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, although early adoption is permitted. This ASU will be applied prospectively to all unrecognized tax benefits that exist at the effective date. The Company adopted this ASU in the first quarter of 2014, which did not have an impact on its consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended | |
Mar. 29, 2014 | ||
Acquisitions [Abstract] | ' | |
Acquisitions [Text Block] | ' | |
2 | Acquisitions | |
On December 30, 2013, the Company acquired all the outstanding shares of a European producer of creping and coating blades for approximately $2,627,000 in cash, including $674,000 of cash acquired and $53,000 of debt assumed. An additional 1,000,000 euros, or approximately $1,377,000, of contingent consideration is due to the sellers within two years of the closing date if certain conditions are met, as defined in the purchase agreement. | ||
This acquisition has been accounted for using the purchase method of accounting and its results have been included in the accompanying financial statements from the date of the acquisition. The Company has made a preliminary fair value assessment of the assets acquired and liabilities assumed, including identifiable intangible assets acquired of $1,800,000, which are being amortized using the straight-line method over 12 years. The excess of the acquisition purchase price over the tangible and identifiable intangible assets was recorded as goodwill and totaled $1,590,000, which is not deductible for tax purposes. The fair values are subject to adjustment upon finalization of the valuation, and therefore the current measurements of intangible assets, acquired goodwill, and assumed assets and liabilities are subject to change. | ||
Pro forma disclosures of the results of operations are not required, as the acquisition is not considered a material business combination as outlined in FASB Accounting Standards Codification 805, "Business Combinations." | ||
The Company recorded acquisition transaction costs of approximately $156,000 in the first three months of 2014 in selling, general, and administrative expenses in the accompanying condensed consolidated statement of income. During the first three months of 2014, the Company made a post-closing adjustment payment of $82,000 related to an acquisition completed prior to 2014. |
Restructuring_Costs
Restructuring Costs | 3 Months Ended | ||||||||||||
Mar. 29, 2014 | |||||||||||||
Restructuring Costs [Abstract] | ' | ||||||||||||
Restructuring Costs [Text Block] | ' | ||||||||||||
3.            Restructuring Costs | |||||||||||||
2013 Restructuring Plan | |||||||||||||
The Company's Papermaking Systems Segment recorded net restructuring costs of $328,000 in the first three months of 2014 related to the 2013 restructuring plan, including additional facility-related costs of $339,000, net of income from a reduction in severance and associated costs of $11,000. | |||||||||||||
A summary of the changes in accrued restructuring costs included in other current liabilities in the accompanying condensed consolidated balance sheet is as follows: | |||||||||||||
(In thousands)Â | Severance | Other | Total | ||||||||||
Costs | Costs | Costs | |||||||||||
Balance at December 28, 2013 | $ | 467 | $ | – | $ | 467 | |||||||
Provision | (11 | ) | 339 | 328 | |||||||||
Usage | (206 | ) | (338 | ) | (544 | ) | |||||||
Currency translation | 6 | (1 | ) | 5 | |||||||||
Balance at March 29, 2014 | $ | 256 | $ | – | $ | 256 | |||||||
The Company expects to pay the remaining accrued restructuring costs by the end of 2014. |
Earnings_per_Share
Earnings per Share | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Earnings per Share | ' | ||||||||
4 | Earnings per Share | ||||||||
Basic and diluted earnings per share are calculated as follows: | |||||||||
Three Months Ended | |||||||||
March 29, | March 30, | ||||||||
(In thousands, except per share amounts) | 2014 | 2013 | |||||||
Amounts Attributable to Kadant: | |||||||||
Income from Continuing Operations | $ | 5,058 | $ | 5,313 | |||||
Loss from Discontinued Operation | (5 | ) | (29 | ) | |||||
Net Income | $ | 5,053 | $ | 5,284 | |||||
Basic Weighted Average Shares | 11,132 | 11,163 | |||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan | 182 | 104 | |||||||
Diluted Weighted Average Shares | 11,314 | 11,267 | |||||||
Basic Earnings per Share: | |||||||||
Continuing Operations | $ | 0.45 | $ | 0.48 | |||||
Discontinued Operation | $ | – | $ | – | |||||
Net Income per Basic Share | $ | 0.45 | $ | 0.47 | |||||
Diluted Earnings per Share: | |||||||||
Continuing Operations | $ | 0.45 | $ | 0.47 | |||||
Discontinued Operation | $ | – | $ | – | |||||
Net Income per Diluted Share | $ | 0.45 | $ | 0.47 | |||||
Options to purchase approximately 111,000 shares of the Company's common stock for the first quarter of 2013 were not included in the computation of diluted earnings per share as the effect of their inclusion would have been anti-dilutive. Unvested restricted stock units equivalent to approximately 57,000 and 81,000 shares of common stock for the first quarters of 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because either the effect of their inclusion would have been anti-dilutive, or for unvested performance-based restricted stock units, the performance conditions had not been met as of the end of the reporting period. |
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 29, 2014 | ||
Income Taxes [Abstract] | ' | |
Income Taxes | ' | |
5 | Provision for Income Taxes | |
The provision for income taxes was $2,352,000 and $1,967,000 in the first quarters of 2014 and 2013, respectively, and represented 31% and 27% of pre-tax income. The effective tax rate of 31% in the first quarter of 2014 was lower than the Company's statutory tax rate primarily due to the release of tax reserves that resulted from the expiration of tax statutes of limitations in jurisdictions outside the U.S. and the distribution of the Company's worldwide earnings. These tax benefits were offset in part by tax expense associated with a reduction in deferred tax assets and an increase in nondeductible expenses. The effective tax rate of 27% in the first quarter of 2013 was lower than the Company's statutory tax rate primarily due to the reduction of the 2012 U.S. tax cost of foreign earnings and a benefit from the 2012 U.S. research and development tax credit, both of which resulted from U.S. tax legislation enacted in January 2013. Also, the effective tax rate was lower due to a statutory tax rate change in the Company's overseas operations and the distribution of the Company's worldwide earnings. |
LongTerm_Obligations
Long-Term Obligations | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Long-Term Obligations [Abstract] | ' | ||||||||
Long-Term Obligations | ' | ||||||||
6 | Long-Term Obligations | ||||||||
Long-term obligations are as follows: | |||||||||
March 29, | December 28, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Revolving Credit Facility, due 2018 | $ | 36,640 | $ | 32,260 | |||||
Variable Rate Term Loan, due from 2014 to 2016 | 6,250 | 6,375 | |||||||
Other | 48 | – | |||||||
Total Long-Term Obligations | 42,938 | 38,635 | |||||||
Less: Current Maturities | (648 | ) | (625 | ) | |||||
Long-Term Obligations, less Current Maturities | $ | 42,290 | $ | 38,010 | |||||
The weighted average interest rate for the Company's long-term obligations was 2.54% as of March 29, 2014. | |||||||||
The Company entered into a five-year unsecured revolving credit facility (2012 Credit Agreement) in the aggregate principal amount of up to $100,000,000 on August 3, 2012 and amended it on November 1, 2013. The 2012 Credit Agreement also includes an uncommitted unsecured incremental borrowing facility of up to an additional $50,000,000. The principal on any borrowings made under the 2012 Credit Agreement is due on November 1, 2018. Interest on any loans outstanding under the 2012 Credit Agreement accrues and is payable quarterly in arrears at one of the following rates selected by the Company: (i) the highest of (a) the federal funds rate plus 0.50% plus an applicable margin of 0% to 1%, (b) the prime rate, as defined, plus an applicable margin of 0% to 1% and (c) the Eurocurrency rate, as defined, plus 0.50% plus an applicable margin of 0% to 1% or (ii) the Eurocurrency rate, as defined, plus an applicable margin of 1% to 2%. The applicable margin is determined based upon the ratio of the Company's total debt to earnings before interest, taxes, depreciation, and amortization (EBITDA), as defined in the 2012 Credit Agreement. For this purpose, total debt is defined as total debt less up to $25,000,000 of unrestricted U.S. cash. There was $36,640,000 outstanding under the 2012 Credit Agreement at March 29, 2014. | |||||||||
The obligations of the Company under the 2012 Credit Agreement may be accelerated upon the occurrence of an event of default under the 2012 Credit Agreement, which includes customary events of default including without limitation payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy- and insolvency-related defaults, defaults relating to such matters as the Employment Retirement Income Security Act (ERISA), unsatisfied judgments, the failure to pay certain indebtedness, and a change of control default. In addition, the 2012 Credit Agreement contains negative covenants applicable to the Company and its subsidiaries including financial covenants requiring the Company to comply with a maximum consolidated leverage ratio of 3.5 to 1, a minimum consolidated interest coverage ratio of 3 to 1, and restrictions on liens, indebtedness, fundamental changes, dispositions of property, making certain restricted payments (including dividends and stock repurchases), investments, transactions with affiliates, sale and leaseback transactions, swap agreements, changing its fiscal year, arrangements affecting subsidiary distributions, entering into new lines of business, and certain actions related to the discontinued operation. As of March 29, 2014, the Company was in compliance with these covenants. | |||||||||
Loans under the 2012 Credit Agreement are guaranteed by certain domestic subsidiaries of the Company pursuant to a Guarantee Agreement, effective August 3, 2012. | |||||||||
As of March 29, 2014, the Company had $62,194,000 of borrowing capacity available under the committed portion of its 2012 Credit Agreement. The amount the Company is able to borrow under the 2012 Credit Agreement is the total borrowing capacity of $100,000,000 less any outstanding borrowings, letters of credit and multi-currency borrowings issued under the 2012 Credit Agreement. | |||||||||
In the first quarter of 2014, the Company assumed $53,000 of debt as part of an acquisition, of which $48,000 was outstanding at March 29, 2014. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |
Mar. 29, 2014 | ||
Stock-Based Compensation [Abstract] | ' | |
Stock-Based Compensation | ' | |
7 | Stock-Based Compensation | |
Stock-based compensation expense of $1,395,000 and $1,269,000 in the first quarters of 2014 and 2013, respectively, was recognized within selling, general, and administrative expenses in the accompanying condensed consolidated statement of income. Unrecognized compensation expense related to stock-based compensation totaled approximately $8,390,000 at March 29, 2014, and will be recognized over a weighted average period of 1.9 years. | ||
On March 5, 2014, the Company granted to executive officers of the Company performance-based restricted stock units (RSUs), which represented, in aggregate, the right to receive 56,445 shares (the target RSU amount), subject to adjustment, with a grant date fair value of $38.81 per share. The RSUs are subject to adjustment based on the achievement of the performance measure selected for the 2014 fiscal year, which is a specified target for adjusted EBITDA generated from continuing operations for the 2014 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. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2014 fiscal year, all performance-based RSUs will be forfeited. In the first quarter of 2014, the Company recognized compensation expense based on the probable number of performance-based RSUs expected to vest, which was 100% of the target RSU amount. 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 2015, 2016, and 2017, provided that the executive officer is employed by the Company on the applicable vesting dates. In March 2014, the Company also granted time-based RSUs representing 85,122 shares to its executive officers, employees, and non-employee directors. |
Employee_Benefit_Plans
Employee Benefit Plans | 3 Months Ended | ||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||
Employee Benefit Plans [Abstract] | ' | ||||||||||||||||
Employee Benefit Plans | ' | ||||||||||||||||
8 | Employee Benefit Plans | ||||||||||||||||
The Company sponsors a noncontributory defined benefit retirement plan for the benefit of eligible employees at its Kadant Solutions division and its corporate office (included in the table below in "Pension Benefits"). The Company also sponsors a restoration plan for the benefit of certain executive officers who also participate in the noncontributory defined benefit retirement plan (included in the table below in "Other Benefits"). In addition, employees at certain of the Company's subsidiaries participate in defined benefit retirement and post-retirement welfare benefit plans (included in the table below in "Other Benefits"). | |||||||||||||||||
The components of the net periodic benefit cost for the pension benefits and other benefits plans are as follows: | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
29-Mar-14 | 30-Mar-13 | ||||||||||||||||
(In thousands) | Pension | Other | Pension | Other | |||||||||||||
Benefits | Benefits | Benefits | Benefits | ||||||||||||||
Components of Net Periodic Benefit Cost: | |||||||||||||||||
Service cost | $ | 213 | $ | 69 | $ | 263 | $ | 53 | |||||||||
Interest cost | 321 | 72 | 301 | 70 | |||||||||||||
Expected return on plan assets | (370 | ) | (12 | ) | (381 | ) | (13 | ) | |||||||||
Recognized net actuarial loss | 79 | 9 | 151 | 21 | |||||||||||||
Amortization of prior service cost | 14 | 21 | 14 | 21 | |||||||||||||
Net periodic benefit cost | $ | 257 | $ | 159 | $ | 348 | $ | 152 | |||||||||
The weighted average assumptions used to determine net periodic benefit cost are as follows: | |||||||||||||||||
Discount rate | 4.79 | % | 4.23 | % | 3.89 | % | 3.92 | % | |||||||||
Expected long-term return on plan assets | 5.75 | % | – | 5.75 | % | – | |||||||||||
Rate of compensation increase | 3.5 | % | 3.19 | % | 3.5 | % | 3.67 | % | |||||||||
The Company made cash contributions of $270,000 to its Kadant Solutions division's noncontributory defined benefit retirement plan in the first quarter of 2014 and expects to make cash contributions of $810,000 over the remainder of 2014. For the remaining pension and post-retirement welfare benefits plans, the Company does not expect to make cash contributions other than to fund current benefit payments. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Items | 3 Months Ended | ||||||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||||||
Accumulated Other Comprehensive Items [Abstract] | ' | ||||||||||||||||||||
Accumulated Other Comprehensive Items | ' | ||||||||||||||||||||
9 | Accumulated Other Comprehensive Items | ||||||||||||||||||||
Comprehensive income combines net income and other comprehensive items, which represent certain amounts that are reported as components of stockholders' equity in the accompanying condensed consolidated balance sheet, including foreign currency translation adjustments, deferred losses and unrecognized prior service cost associated with pension and other post-retirement plans, and deferred losses on hedging instruments. | |||||||||||||||||||||
Changes in each component of accumulated other comprehensive items (AOCI), net of tax, in the accompanying condensed consolidated balance sheet are as follows: | |||||||||||||||||||||
(In thousands) | Foreign | Unrecognized | Deferred Loss | Deferred Loss | Accumulated | ||||||||||||||||
Currency | Prior Service | on Pension and | on Hedging | Other | |||||||||||||||||
Translation | Cost | Other Post- | Instruments | Comprehensive | |||||||||||||||||
Adjustment | Retirement | Items | |||||||||||||||||||
Plans | |||||||||||||||||||||
Balance at December 28, 2013 | $ | 8,919 | $ | (657 | ) | $ | (6,919 | ) | $ | (633 | ) | $ | 710 | ||||||||
Other comprehensive (loss) income before reclassifications | (763 | ) | – | (3 | ) | 38 | (728 | ) | |||||||||||||
Reclassifications from AOCI | – | 22 | 58 | 54 | 134 | ||||||||||||||||
Net current period other comprehensive (loss) income | (763 | ) | 22 | 55 | 92 | (594 | ) | ||||||||||||||
Balance at March 29, 2014 | $ | 8,156 | $ | (635 | ) | $ | (6,864 | ) | $ | (541 | ) | $ | 116 | ||||||||
Balance at December 29, 2012 | $ | 8,124 | $ | (748 | ) | $ | (9,645 | ) | $ | (1,046 | ) | $ | (3,315 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (3,060 | ) | 2 | – | (47 | ) | (3,105 | ) | |||||||||||||
Reclassifications from AOCI | – | 22 | 113 | 242 | 377 | ||||||||||||||||
Net current period other comprehensive (loss) income | (3,060 | ) | 24 | 113 | 195 | (2,728 | ) | ||||||||||||||
Balance at March 30, 2013 | $ | 5,064 | $ | (724 | ) | $ | (9,532 | ) | $ | (851 | ) | $ | (6,043 | ) | |||||||
Amounts reclassified out of accumulated other comprehensive items are as follows: | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | Statement of Income Line Item | ||||||||||||||||||
Pension and Other Post-retirement Plans: (1) | Â Â Â | ||||||||||||||||||||
Amortization of prior service cost | $ | (35 | ) | $ | (35 | ) | Selling, general, and administrative expenses | ||||||||||||||
Amortization of actuarial losses | (88 | ) | (172 | ) | Selling, general, and administrative expenses | ||||||||||||||||
Total expense before income taxes | (123 | ) | (207 | ) | |||||||||||||||||
Income tax benefit | 43 | 72 | Provision for income taxes | ||||||||||||||||||
(80 | ) | (135 | ) | ||||||||||||||||||
Cash Flow Hedges: (2) | Â Â Â | ||||||||||||||||||||
Interest rate swap agreements | (84 | ) | (106 | ) | Interest expense | ||||||||||||||||
Forward currency-exchange contracts | – | (43 | ) | Revenues | |||||||||||||||||
Total expense before income taxes | (84 | ) | (149 | ) | |||||||||||||||||
Income tax benefit (provision) | 30 | (93 | ) | Provision for income taxes | |||||||||||||||||
(54 | ) | (242 | ) | ||||||||||||||||||
Total reclassifications | $ | (134 | ) | $ | (377 | ) | |||||||||||||||
-1 | Included in the computation of net periodic benefit costs. See Note 8 for additional information. | ||||||||||||||||||||
-2 | See Note 10 for additional information. | ||||||||||||||||||||
Derivatives
Derivatives | 3 Months Ended | |||||||||||||||||
Mar. 29, 2014 | ||||||||||||||||||
Derivatives [Abstract] | ' | |||||||||||||||||
Derivatives | ' | |||||||||||||||||
10 | Derivatives | |||||||||||||||||
The Company uses derivative instruments primarily to reduce its exposure to changes in currency exchange rates and interest rates. When the Company enters into a derivative contract, the Company makes a determination as to whether the transaction is deemed to be a hedge for accounting purposes. For a contract deemed to be a hedge, the Company formally documents the relationship between the derivative instrument and the risk being hedged. In this documentation, the Company specifically identifies the asset, liability, forecasted transaction, cash flow, or net investment that has been designated as the hedged item, and evaluates whether the derivative instrument is expected to reduce the risks associated with the hedged item. To the extent these criteria are not met, the Company does not use hedge accounting for the derivative. The changes in the fair value of a derivative not deemed to be a hedge are recorded currently in earnings. The Company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. | ||||||||||||||||||
Accounting Standards Codification 815, "Derivatives and Hedging," requires that all derivatives be recognized on the balance sheet at fair value. For derivatives designated as cash flow hedges, the related gains or losses on these contracts are deferred as a component of accumulated other comprehensive items. These deferred gains and losses are recognized in the period in which the underlying anticipated transaction occurs. For derivatives designated as fair value hedges, the unrealized gains and losses resulting from the impact of currency exchange rate movements are recognized in earnings in the period in which the exchange rates change and offset the currency gains and losses on the underlying exposures being hedged. The Company performs an evaluation of the effectiveness of the hedge both at inception and on an ongoing basis. The ineffective portion of a hedge, if any, and changes in the fair value of a derivative not deemed to be a hedge are recorded in the condensed consolidated statement of income. | ||||||||||||||||||
Interest Rate Swaps | ||||||||||||||||||
The Company entered into a swap agreement in 2006 (the 2006 Swap Agreement) to convert a portion of the Company's outstanding variable rate term loan from a floating to a fixed rate of interest. The swap agreement matures in 2016, has the same terms and quarterly payment dates as the corresponding debt, and reduces proportionately in line with the amortization of the debt. Under the 2006 Swap Agreement, the Company receives a three-month LIBOR rate and pays a fixed rate of interest of 5.63% plus an applicable margin. The fair value for this instrument as of March 29, 2014, is included in other long-term liabilities, with an offset to accumulated other comprehensive items (net of tax) in the accompanying condensed consolidated balance sheet. The Company has structured the interest rate swap agreement to be 100% effective and as a result, there is no current impact to earnings resulting from hedge ineffectiveness. Management believes that any credit risk associated with the outstanding swap agreement is remote based on the Company's financial position and the creditworthiness of the financial institution issuing the swap agreement. | ||||||||||||||||||
The counterparty to the swap agreement could demand an early termination of the swap agreement if the Company is in default under the 2012 Credit Agreement, or any agreement that amends or replaces the 2012 Credit Agreement in which the counterparty is a member, and the Company is unable to cure the default. An event of default under the 2012 Credit Agreement includes customary events of default and failure to comply with financial covenants, including a maximum consolidated leverage ratio of 3.5 to 1, and a minimum consolidated interest coverage ratio of 3 to 1. As of March 29, 2014, the Company was in compliance with these covenants. The unrealized loss of $690,000 as of March 29, 2014, represents the estimated amount that the Company would pay to the counterparty in the event of an early termination. | ||||||||||||||||||
Forward Currency-Exchange Contracts | ||||||||||||||||||
The Company uses forward currency-exchange contracts primarily to hedge exposures resulting from fluctuations in currency exchange rates. Such exposures result primarily from portions of the Company's operations and assets and liabilities that are denominated in currencies other than the functional currencies of the businesses conducting the operations or holding the assets and liabilities. The Company typically manages its level of exposure to the risk of currency-exchange fluctuations by hedging a portion of its currency exposures anticipated over the ensuing 12-month period, using forward currency-exchange contracts that have maturities of 12 months or less. | ||||||||||||||||||
Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges. The fair values for these instruments are included in other current assets for unrecognized gains and in other current liabilities for unrecognized losses, with an offset in accumulated other comprehensive items (net of tax). For forward currency-exchange contracts that are designated as fair value hedges, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item are recognized currently in earnings. The fair values of forward currency-exchange contracts that are not designated as hedges are recorded currently in earnings. | ||||||||||||||||||
The Company recognized a gain of $36,000 and a loss of $2,000 in the first quarters of 2014 and 2013, respectively, included in selling, general, and administrative expenses in the accompanying condensed consolidated statement of income, associated with forward currency-exchange contracts that were not designated as hedges. Management believes that any credit risk associated with forward currency-exchange contracts is remote based on the Company's financial position and the creditworthiness of the financial institutions issuing the contracts. | ||||||||||||||||||
The following table summarizes the fair value of the Company's derivative instruments designated and not designated as hedging instruments, the notional values of the associated derivative contracts, and the location of these instruments in the condensed consolidated balance sheet: | ||||||||||||||||||
  | 29-Mar-14 | 28-Dec-13 | ||||||||||||||||
                                                            Balance Sheet | Asset | Notional | Asset | Notional | ||||||||||||||
(In thousands) | Location | (Liability) (a) | Amount (b) | (Liability) (a) | Amount | |||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||
Derivatives in an Asset Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Assets | $ | 44 | $ | 840 | $ | – | $ | – | |||||||||
Derivatives in a Liability Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Liabilities | $ | (8 | ) | $ | 500 | $ | (22 | ) | $ | 1,340 | |||||||
Interest rate swap agreement | Other Long-Term Liabilities | $ | (690 | ) | $ | 6,250 | $ | (773 | ) | $ | 6,375 | |||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||||
Derivatives in an Asset Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Assets | $ | – | $ | – | $ | 97 | $ | 1,419 | |||||||||
Derivatives in a Liability Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Liabilities | $ | – | $ | – | $ | (1 | ) | $ | 288 | ||||||||
(a) | See Note 11 for the fair value measurements related to these financial instruments. | |||||||||||||||||
(b) | The total notional amount is indicative of the level of the Company's derivative activity during the first three months of 2014. | |||||||||||||||||
The following table summarizes the activity in accumulated other comprehensive items (OCI) associated with the Company's derivative instruments designated as cash flow hedges as of and for the period ended March 29, 2014: | ||||||||||||||||||
(In thousands) | Interest Rate Swap | Forward Currency- | Total | |||||||||||||||
Agreements | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||
Unrealized loss, net of tax, at December 28, 2013 | $ | (618 | ) | $ | (15 | ) | $ | (633 | ) | |||||||||
Loss reclassified to earnings | 54 | – | 54 | |||||||||||||||
Gain recognized in OCI | – | 38 | 38 | |||||||||||||||
Unrealized (loss) gain, net of tax, at March 29, 2014 | $ | (564 | ) | $ | 23 | $ | (541 | ) | ||||||||||
As of March 29, 2014, $237,000 of the net unrealized loss included in OCI is expected to be reclassified to earnings over the next twelve months. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
11 | Fair Value Measurements | ||||||||||||||||
Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: | |||||||||||||||||
• | Level 1—Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
• | Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. | ||||||||||||||||
• | Level 3—Unobservable inputs based on the Company's own assumptions. | ||||||||||||||||
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Fair Value as of March 29, 2014 | |||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Money market funds and time deposits | $ | 15,665 | $ | – | $ | – | $ | 15,665 | |||||||||
Banker's acceptance drafts (a) | $ | – | $ | 6,947 | $ | – | $ | 6,947 | |||||||||
Forward currency-exchange contracts | $ | – | $ | 44 | $ | – | $ | 44 | |||||||||
Liabilities: | |||||||||||||||||
Forward currency-exchange contracts | $ | – | $ | 8 | $ | – | $ | 8 | |||||||||
Interest rate swap agreement | $ | – | $ | 690 | $ | – | $ | 690 | |||||||||
Contingent consideration (b) | $ | – | $ | – | $ | 1,377 | $ | 1,377 | |||||||||
Fair Value as of December 28, 2013 | |||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Money market funds and time deposits | $ | 17,090 | $ | – | $ | – | $ | 17,090 | |||||||||
Banker's acceptance drafts (a) | $ | – | $ | 10,765 | $ | – | $ | 10,765 | |||||||||
Forward currency-exchange contracts | $ | – | $ | 97 | $ | – | $ | 97 | |||||||||
Liabilities: | |||||||||||||||||
Forward currency-exchange contracts | $ | – | $ | 23 | $ | – | $ | 23 | |||||||||
Interest rate swap agreement | $ | – | $ | 773 | $ | – | $ | 773 | |||||||||
(a) | Included in accounts receivable in the accompanying condensed consolidated balance sheet. | ||||||||||||||||
(b) | Included in other current liabilities in the accompanying condensed consolidated balance sheet. | ||||||||||||||||
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 quarter of 2014. The Company's financial assets and liabilities carried at fair value include cash equivalents and derivative instruments used to hedge the Company's foreign currency and interest rate risks. The Company's cash equivalents are comprised of money market funds and bank deposits that are highly liquid and easily tradable. These investments are valued using inputs observable in active markets for identical securities. The carrying value of the banker's acceptance drafts approximates their fair value due to their short-term nature. The fair values of the Company's interest rate swap agreement are based on LIBOR yield curves at the reporting date. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The forward currency-exchange contracts and interest rate swap agreement are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above. The Company recorded contingent consideration as part of its acquisition of a European manufacturer on December 30, 2013. The fair value of the contingent consideration is based on the present value of the estimated future cash flows. | |||||||||||||||||
The carrying value and fair value of the Company's long-term debt obligations are as follows: | |||||||||||||||||
29-Mar-14 | 28-Dec-13 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
(In thousands) | Value | Value | Value | Value | |||||||||||||
Long-term debt obligations | $ | 42,290 | $ | 42,290 | $ | 38,010 | $ | 38,010 | |||||||||
The carrying value of long-term debt obligations approximates fair value as the obligations bear variable rates of interest, which adjust quarterly based on prevailing market rates. |
Business_Segment_Information
Business Segment Information | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Business Segment Information [Abstract] | ' | ||||||||
Business Segment Information | ' | ||||||||
12 | Business Segment Information | ||||||||
The Company has combined its operating entities into two reportable operating segments, Papermaking Systems and Wood Processing Systems, and a separate product line, Fiber-based Products. In classifying operational entities into a particular segment, the Company aggregated businesses with similar economic characteristics, products and services, production processes, customers, and methods of distribution. | |||||||||
Three Months Ended | |||||||||
March 29, | March 30, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Revenues: | |||||||||
Papermaking Systems | $ | 78,184 | $ | 72,397 | |||||
Wood Processing Systems | 11,273 | – | |||||||
Fiber-based Products | 3,910 | 3,807 | |||||||
$ | 93,367 | $ | 76,204 | ||||||
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||
Papermaking Systems | $ | 9,410 | $ | 9,944 | |||||
Wood Processing Systems | 1,354 | – | |||||||
Corporate and Fiber-based Products (a) | (3,143 | ) | (2,572 | ) | |||||
Total Operating Income | 7,621 | 7,372 | |||||||
Interest Expense, Net | (84 | ) | (56 | ) | |||||
$ | 7,537 | $ | 7,316 | ||||||
Capital Expenditures: | |||||||||
Papermaking Systems | $ | 517 | $ | 1,172 | |||||
Other | 22 | 6 | |||||||
$ | 539 | $ | 1,178 | ||||||
(a) Corporate primarily includes general and administrative expenses. |
Contingencies_and_Litigation
Contingencies and Litigation | 3 Months Ended | |
Mar. 29, 2014 | ||
Contingencies and Litigation [Abstract] | ' | |
Contingencies and Litigation | ' | |
13 | Contingencies and Litigation | |
Right of Recourse | ||
 In the ordinary course of business, the Company's subsidiaries in China may receive banker's acceptance drafts from customers in payment of outstanding accounts receivable. These banker's acceptance drafts are non-interest bearing obligations of the issuing bank and mature within six months of the origination date. The Company's 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 date. As of March 29, 2014 and December 28, 2013, the Company had $3,821,000 and $5,688,000, respectively, of banker's acceptance drafts subject to customary right of recourse provisions, which were transferred to vendors and had not reached their scheduled maturity date. Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company. | ||
General | ||
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 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. |
Nature_of_Operations_and_Summa1
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 29, 2014 | |
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' |
Critical Accounting Policies | ' |
Critical Accounting Policies | |
Critical accounting policies are defined as those that entail significant judgments and estimates, and could potentially result in materially different results under different assumptions and conditions. The Company believes that the most critical accounting policies upon which its financial position depends, and which involve the most complex or subjective decisions or assessments, concern revenue recognition and accounts receivable, warranty obligations, income taxes, the valuation of goodwill and intangible assets, inventories and pension obligations. A discussion of the application of these and other accounting policies is included in Notes 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, 2013. | |
Warranty Obligations | ' |
Warranty Obligations | |
The Company provides for the estimated cost of product warranties at the time of sale based on the actual historical occurrence rates and repair costs. The Company typically negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. While the Company engages in extensive product quality programs and processes, the Company's warranty obligation is affected by product failure rates, repair costs, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Should actual product failure rates, repair costs, service delivery costs, or supplier warranties on parts differ from the Company's estimates, revisions to the estimated warranty liability would be required. | |
Use of Estimates | ' |
Use of Estimates | |
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 revenues and expenses during the reporting period. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11. Currently, GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This ASU clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, although early adoption is permitted. This ASU will be applied prospectively to all unrecognized tax benefits that exist at the effective date. The Company adopted this ASU in the first quarter of 2014, which did not have an impact on its consolidated financial statements. | |
Derivatives | ' |
The Company uses derivative instruments primarily to reduce its exposure to changes in currency exchange rates and interest rates. When the Company enters into a derivative contract, the Company makes a determination as to whether the transaction is deemed to be a hedge for accounting purposes. For a contract deemed to be a hedge, the Company formally documents the relationship between the derivative instrument and the risk being hedged. In this documentation, the Company specifically identifies the asset, liability, forecasted transaction, cash flow, or net investment that has been designated as the hedged item, and evaluates whether the derivative instrument is expected to reduce the risks associated with the hedged item. To the extent these criteria are not met, the Company does not use hedge accounting for the derivative. The changes in the fair value of a derivative not deemed to be a hedge are recorded currently in earnings. The Company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. | |
Accounting Standards Codification 815, "Derivatives and Hedging," requires that all derivatives be recognized on the balance sheet at fair value. For derivatives designated as cash flow hedges, the related gains or losses on these contracts are deferred as a component of accumulated other comprehensive items. These deferred gains and losses are recognized in the period in which the underlying anticipated transaction occurs. For derivatives designated as fair value hedges, the unrealized gains and losses resulting from the impact of currency exchange rate movements are recognized in earnings in the period in which the exchange rates change and offset the currency gains and losses on the underlying exposures being hedged. The Company performs an evaluation of the effectiveness of the hedge both at inception and on an ongoing basis. The ineffective portion of a hedge, if any, and changes in the fair value of a derivative not deemed to be a hedge are recorded in the condensed consolidated statement of income. |
Nature_of_Operations_and_Summa2
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Supplemental Cash Flow Information | ' | ||||||||
Supplemental Cash Flow Information | |||||||||
Three Months Ended | |||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | |||||||
Non-Cash Investing Activities: | |||||||||
Fair Value of Assets Acquired | $ | 5,610 | $ | – | |||||
Cash Paid for Acquired Businesses | (2,709 | ) | – | ||||||
Liabilities Assumed of Acquired Businesses | $ | 2,901 | $ | – | |||||
Non-Cash Financing Activities: | |||||||||
Issuance of Company Common Stock | $ | 2,480 | $ | 2,191 | |||||
Dividends Declared but Unpaid | $ | 1,676 | $ | 1,401 | |||||
Inventories | ' | ||||||||
The components of inventories are as follows: | |||||||||
March 29, | December 28, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Raw Materials and Supplies | $ | 21,042 | $ | 20,836 | |||||
Work in Process | 20,980 | 21,051 | |||||||
Finished Goods | 19,940 | 20,918 | |||||||
$ | 61,962 | $ | 62,805 | ||||||
Warranty Obligations | ' | ||||||||
The changes in the carrying amount of accrued warranty costs included in other current liabilities in the accompanying condensed consolidated balance sheet are as follows: | |||||||||
Three Months Ended | |||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | |||||||
Balance at beginning of period | $ | 4,571 | $ | 4,462 | |||||
Provision | 559 | 291 | |||||||
Usage | (697 | ) | (555 | ) | |||||
Currency translation | (9 | ) | (79 | ) | |||||
Balance at end of period | $ | 4,424 | $ | 4,119 |
Restructuring_Costs_Tables
Restructuring Costs (Tables) | 3 Months Ended | ||||||||||||
Mar. 29, 2014 | |||||||||||||
Restructuring Costs [Abstract] | ' | ||||||||||||
Summary of changes in accrued restructuring costs | ' | ||||||||||||
A summary of the changes in accrued restructuring costs included in other current liabilities in the accompanying condensed consolidated balance sheet is as follows: | |||||||||||||
(In thousands)Â | Severance | Other | Total | ||||||||||
Costs | Costs | Costs | |||||||||||
Balance at December 28, 2013 | $ | 467 | $ | – | $ | 467 | |||||||
Provision | (11 | ) | 339 | 328 | |||||||||
Usage | (206 | ) | (338 | ) | (544 | ) | |||||||
Currency translation | 6 | (1 | ) | 5 | |||||||||
Balance at March 29, 2014 | $ | 256 | $ | – | $ | 256 |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Basic and diluted earnings per share | ' | ||||||||
Basic and diluted earnings per share are calculated as follows: | |||||||||
Three Months Ended | |||||||||
March 29, | March 30, | ||||||||
(In thousands, except per share amounts) | 2014 | 2013 | |||||||
Amounts Attributable to Kadant: | |||||||||
Income from Continuing Operations | $ | 5,058 | $ | 5,313 | |||||
Loss from Discontinued Operation | (5 | ) | (29 | ) | |||||
Net Income | $ | 5,053 | $ | 5,284 | |||||
Basic Weighted Average Shares | 11,132 | 11,163 | |||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan | 182 | 104 | |||||||
Diluted Weighted Average Shares | 11,314 | 11,267 | |||||||
Basic Earnings per Share: | |||||||||
Continuing Operations | $ | 0.45 | $ | 0.48 | |||||
Discontinued Operation | $ | – | $ | – | |||||
Net Income per Basic Share | $ | 0.45 | $ | 0.47 | |||||
Diluted Earnings per Share: | |||||||||
Continuing Operations | $ | 0.45 | $ | 0.47 | |||||
Discontinued Operation | $ | – | $ | – | |||||
Net Income per Diluted Share | $ | 0.45 | $ | 0.47 |
LongTerm_Obligations_Tables
Long-Term Obligations (Tables) | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Long-Term Obligations [Abstract] | ' | ||||||||
Long-term obligations | ' | ||||||||
Long-term obligations are as follows: | |||||||||
March 29, | December 28, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Revolving Credit Facility, due 2018 | $ | 36,640 | $ | 32,260 | |||||
Variable Rate Term Loan, due from 2014 to 2016 | 6,250 | 6,375 | |||||||
Other | 48 | – | |||||||
Total Long-Term Obligations | 42,938 | 38,635 | |||||||
Less: Current Maturities | (648 | ) | (625 | ) | |||||
Long-Term Obligations, less Current Maturities | $ | 42,290 | $ | 38,010 |
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||
Employee Benefit Plans [Abstract] | ' | ||||||||||||||||
Components of net periodic benefit cost and assumptions used | ' | ||||||||||||||||
The components of the net periodic benefit cost for the pension benefits and other benefits plans are as follows: | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
29-Mar-14 | 30-Mar-13 | ||||||||||||||||
(In thousands) | Pension | Other | Pension | Other | |||||||||||||
Benefits | Benefits | Benefits | Benefits | ||||||||||||||
Components of Net Periodic Benefit Cost: | |||||||||||||||||
Service cost | $ | 213 | $ | 69 | $ | 263 | $ | 53 | |||||||||
Interest cost | 321 | 72 | 301 | 70 | |||||||||||||
Expected return on plan assets | (370 | ) | (12 | ) | (381 | ) | (13 | ) | |||||||||
Recognized net actuarial loss | 79 | 9 | 151 | 21 | |||||||||||||
Amortization of prior service cost | 14 | 21 | 14 | 21 | |||||||||||||
Net periodic benefit cost | $ | 257 | $ | 159 | $ | 348 | $ | 152 | |||||||||
The weighted average assumptions used to determine net periodic benefit cost are as follows: | |||||||||||||||||
Discount rate | 4.79 | % | 4.23 | % | 3.89 | % | 3.92 | % | |||||||||
Expected long-term return on plan assets | 5.75 | % | – | 5.75 | % | – | |||||||||||
Rate of compensation increase | 3.5 | % | 3.19 | % | 3.5 | % | 3.67 | % |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Items (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||||||
Accumulated Other Comprehensive Items [Abstract] | ' | ||||||||||||||||||||
Components of accumulated other comprehensive items | ' | ||||||||||||||||||||
Changes in each component of accumulated other comprehensive items (AOCI), net of tax, in the accompanying condensed consolidated balance sheet are as follows: | |||||||||||||||||||||
(In thousands) | Foreign | Unrecognized | Deferred Loss | Deferred Loss | Accumulated | ||||||||||||||||
Currency | Prior Service | on Pension and | on Hedging | Other | |||||||||||||||||
Translation | Cost | Other Post- | Instruments | Comprehensive | |||||||||||||||||
Adjustment | Retirement | Items | |||||||||||||||||||
Plans | |||||||||||||||||||||
Balance at December 28, 2013 | $ | 8,919 | $ | (657 | ) | $ | (6,919 | ) | $ | (633 | ) | $ | 710 | ||||||||
Other comprehensive (loss) income before reclassifications | (763 | ) | – | (3 | ) | 38 | (728 | ) | |||||||||||||
Reclassifications from AOCI | – | 22 | 58 | 54 | 134 | ||||||||||||||||
Net current period other comprehensive (loss) income | (763 | ) | 22 | 55 | 92 | (594 | ) | ||||||||||||||
Balance at March 29, 2014 | $ | 8,156 | $ | (635 | ) | $ | (6,864 | ) | $ | (541 | ) | $ | 116 | ||||||||
Balance at December 29, 2012 | $ | 8,124 | $ | (748 | ) | $ | (9,645 | ) | $ | (1,046 | ) | $ | (3,315 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (3,060 | ) | 2 | – | (47 | ) | (3,105 | ) | |||||||||||||
Reclassifications from AOCI | – | 22 | 113 | 242 | 377 | ||||||||||||||||
Net current period other comprehensive (loss) income | (3,060 | ) | 24 | 113 | 195 | (2,728 | ) | ||||||||||||||
Balance at March 30, 2013 | $ | 5,064 | $ | (724 | ) | $ | (9,532 | ) | $ | (851 | ) | $ | (6,043 | ) | |||||||
Reclassification out of accumulated other comprehensive items | ' | ||||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive items are as follows: | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
(In thousands) | 29-Mar-14 | 30-Mar-13 | Statement of Income Line Item | ||||||||||||||||||
Pension and Other Post-retirement Plans: (1) | Â Â Â | ||||||||||||||||||||
Amortization of prior service cost | $ | (35 | ) | $ | (35 | ) | Selling, general, and administrative expenses | ||||||||||||||
Amortization of actuarial losses | (88 | ) | (172 | ) | Selling, general, and administrative expenses | ||||||||||||||||
Total expense before income taxes | (123 | ) | (207 | ) | |||||||||||||||||
Income tax benefit | 43 | 72 | Provision for income taxes | ||||||||||||||||||
(80 | ) | (135 | ) | ||||||||||||||||||
Cash Flow Hedges: (2) | Â Â Â | ||||||||||||||||||||
Interest rate swap agreements | (84 | ) | (106 | ) | Interest expense | ||||||||||||||||
Forward currency-exchange contracts | – | (43 | ) | Revenues | |||||||||||||||||
Total expense before income taxes | (84 | ) | (149 | ) | |||||||||||||||||
Income tax benefit (provision) | 30 | (93 | ) | Provision for income taxes | |||||||||||||||||
(54 | ) | (242 | ) | ||||||||||||||||||
Total reclassifications | $ | (134 | ) | $ | (377 | ) | |||||||||||||||
-1 | Included in the computation of net periodic benefit costs. See Note 8 for additional information. | ||||||||||||||||||||
-2 | See Note 10 for additional information. | ||||||||||||||||||||
Derivatives_Tables
Derivatives (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 29, 2014 | ||||||||||||||||||
Derivatives [Abstract] | ' | |||||||||||||||||
Fair value of derivative instruments | ' | |||||||||||||||||
The following table summarizes the fair value of the Company's derivative instruments designated and not designated as hedging instruments, the notional values of the associated derivative contracts, and the location of these instruments in the condensed consolidated balance sheet: | ||||||||||||||||||
  | 29-Mar-14 | 28-Dec-13 | ||||||||||||||||
                                                            Balance Sheet | Asset | Notional | Asset | Notional | ||||||||||||||
(In thousands) | Location | (Liability) (a) | Amount (b) | (Liability) (a) | Amount | |||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||
Derivatives in an Asset Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Assets | $ | 44 | $ | 840 | $ | – | $ | – | |||||||||
Derivatives in a Liability Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Liabilities | $ | (8 | ) | $ | 500 | $ | (22 | ) | $ | 1,340 | |||||||
Interest rate swap agreement | Other Long-Term Liabilities | $ | (690 | ) | $ | 6,250 | $ | (773 | ) | $ | 6,375 | |||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||||
Derivatives in an Asset Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Assets | $ | – | $ | – | $ | 97 | $ | 1,419 | |||||||||
Derivatives in a Liability Position: | ||||||||||||||||||
Forward currency-exchange contracts | Other Current Liabilities | $ | – | $ | – | $ | (1 | ) | $ | 288 | ||||||||
(a) | See Note 11 for the fair value measurements related to these financial instruments. | |||||||||||||||||
(b) | The total notional amount is indicative of the level of the Company's derivative activity during the first three months of 2014. | |||||||||||||||||
Activity in accumulated other comprehensive items (OCI) | ' | |||||||||||||||||
The following table summarizes the activity in accumulated other comprehensive items (OCI) associated with the Company's derivative instruments designated as cash flow hedges as of and for the period ended March 29, 2014: | ||||||||||||||||||
(In thousands) | Interest Rate Swap | Forward Currency- | Total | |||||||||||||||
Agreements | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||
Unrealized loss, net of tax, at December 28, 2013 | $ | (618 | ) | $ | (15 | ) | $ | (633 | ) | |||||||||
Loss reclassified to earnings | 54 | – | 54 | |||||||||||||||
Gain recognized in OCI | – | 38 | 38 | |||||||||||||||
Unrealized (loss) gain, net of tax, at March 29, 2014 | $ | (564 | ) | $ | 23 | $ | (541 | ) |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 29, 2014 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Fair value of assets and liabilities measured on a recurring basis | ' | ||||||||||||||||
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Fair Value as of March 29, 2014 | |||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Money market funds and time deposits | $ | 15,665 | $ | – | $ | – | $ | 15,665 | |||||||||
Banker's acceptance drafts (a) | $ | – | $ | 6,947 | $ | – | $ | 6,947 | |||||||||
Forward currency-exchange contracts | $ | – | $ | 44 | $ | – | $ | 44 | |||||||||
Liabilities: | |||||||||||||||||
Forward currency-exchange contracts | $ | – | $ | 8 | $ | – | $ | 8 | |||||||||
Interest rate swap agreement | $ | – | $ | 690 | $ | – | $ | 690 | |||||||||
Contingent consideration (b) | $ | – | $ | – | $ | 1,377 | $ | 1,377 | |||||||||
Fair Value as of December 28, 2013 | |||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Money market funds and time deposits | $ | 17,090 | $ | – | $ | – | $ | 17,090 | |||||||||
Banker's acceptance drafts (a) | $ | – | $ | 10,765 | $ | – | $ | 10,765 | |||||||||
Forward currency-exchange contracts | $ | – | $ | 97 | $ | – | $ | 97 | |||||||||
Liabilities: | |||||||||||||||||
Forward currency-exchange contracts | $ | – | $ | 23 | $ | – | $ | 23 | |||||||||
Interest rate swap agreement | $ | – | $ | 773 | $ | – | $ | 773 | |||||||||
(a) | Included in accounts receivable in the accompanying condensed consolidated balance sheet. | ||||||||||||||||
(b) | Included in other current liabilities in the accompanying condensed consolidated balance sheet. | ||||||||||||||||
Carrying value and fair value of debt obligations | ' | ||||||||||||||||
The carrying value and fair value of the Company's long-term debt obligations are as follows: | |||||||||||||||||
29-Mar-14 | 28-Dec-13 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
(In thousands) | Value | Value | Value | Value | |||||||||||||
Long-term debt obligations | $ | 42,290 | $ | 42,290 | $ | 38,010 | $ | 38,010 |
Business_Segment_Information_T
Business Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 29, 2014 | |||||||||
Business Segment Information [Abstract] | ' | ||||||||
Business segment information | ' | ||||||||
The Company has combined its operating entities into two reportable operating segments, Papermaking Systems and Wood Processing Systems, and a separate product line, Fiber-based Products. In classifying operational entities into a particular segment, the Company aggregated businesses with similar economic characteristics, products and services, production processes, customers, and methods of distribution. | |||||||||
Three Months Ended | |||||||||
March 29, | March 30, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Revenues: | |||||||||
Papermaking Systems | $ | 78,184 | $ | 72,397 | |||||
Wood Processing Systems | 11,273 | – | |||||||
Fiber-based Products | 3,910 | 3,807 | |||||||
$ | 93,367 | $ | 76,204 | ||||||
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||
Papermaking Systems | $ | 9,410 | $ | 9,944 | |||||
Wood Processing Systems | 1,354 | – | |||||||
Corporate and Fiber-based Products (a) | (3,143 | ) | (2,572 | ) | |||||
Total Operating Income | 7,621 | 7,372 | |||||||
Interest Expense, Net | (84 | ) | (56 | ) | |||||
$ | 7,537 | $ | 7,316 | ||||||
Capital Expenditures: | |||||||||
Papermaking Systems | $ | 517 | $ | 1,172 | |||||
Other | 22 | 6 | |||||||
$ | 539 | $ | 1,178 | ||||||
(a) Corporate primarily includes general and administrative expenses. |
Nature_of_Operations_and_Summa3
Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | ||
Mar. 29, 2014 | Mar. 30, 2013 | Dec. 28, 2013 | |
Segment | Segment | ||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ' | ' |
Number of reportable segments | 2 | 1 | ' |
Cash Flow, Noncash Investing Activities Disclosure [Abstract] | ' | ' | ' |
Fair value of assets acquired | $5,610,000 | $0 | ' |
Cash paid for acquired businesses | -2,709,000 | 0 | ' |
Liabilities assumed of acquired businesses | 2,901,000 | 0 | ' |
Cash Flow, Noncash Financing Activities Disclosure [Abstract] | ' | ' | ' |
Issuance of Company Common Stock | 2,480,000 | 2,191,000 | ' |
Dividends Declared but Unpaid | 1,676,000 | 1,401,000 | ' |
Restricted Cash [Abstract] | ' | ' | ' |
Restricted Cash | 162,000 | ' | 168,000 |
Banker's Acceptance Drafts [Abstract] | ' | ' | ' |
Banker's acceptance drafts | 6,947,000 | ' | 10,765,000 |
Inventories [Abstract] | ' | ' | ' |
Raw Materials and Supplies | 21,042,000 | ' | 20,836,000 |
Work in Process | 20,980,000 | ' | 21,051,000 |
Finished Goods | 19,940,000 | ' | 20,918,000 |
Inventories | 61,962,000 | ' | 62,805,000 |
Changes in the carrying amount of accrued warranty costs [Roll Forward] | ' | ' | ' |
Balance at beginning of period | 4,571,000 | 4,462,000 | ' |
Provision | 559,000 | 291,000 | ' |
Usage | -697,000 | -555,000 | ' |
Currency translation | -9,000 | -79,000 | ' |
Balance at end of period | $4,424,000 | $4,119,000 | ' |
Acquisitions_Details
Acquisitions (Details) | 3 Months Ended | 3 Months Ended | ||
Mar. 29, 2014 | Dec. 30, 2013 | Dec. 30, 2013 | Mar. 29, 2014 | |
Radiance [Member] | Radiance [Member] | Radiance [Member] | Acquisitions [Member] | |
USD ($) | USD ($) | EUR (€) | USD ($) | |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Cash Paid to Acquire Entity | ' | $2,627,000 | ' | $82,000 |
Cash Acquired | ' | 674,000 | ' | ' |
Debt Assumed | ' | 53,000 | ' | ' |
Acquisition transaction costs | ' | ' | ' | 156,000 |
Identifiable intangible assets acquired | 1,800,000 | ' | ' | ' |
Weighted average useful life of acquired intangible assets | '12 years | ' | ' | ' |
Non-Tax deductible goodwill acquired | 1,590,000 | ' | ' | ' |
Business Acquisition, Contingent Consideration, Potential Cash Payment | ' | $1,377,000 | € 1,000,000 | ' |
Restructuring_Costs_Details
Restructuring Costs (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Restructuring Costs And Other Income and Expenses [Abstract] | ' | ' |
Restructuring Costs | $328 | $0 |
Papermaking Systems Segment [Member] | 2013 Restructuring Plan [Member] | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance at beginning of period | 467 | ' |
Provision | 328 | ' |
Usage | -544 | ' |
Currency translation | 5 | ' |
Balance at end of period | 256 | ' |
Papermaking Systems Segment [Member] | Employee Severance [Member] | 2013 Restructuring Plan [Member] | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance at beginning of period | 467 | ' |
Provision | -11 | ' |
Usage | -206 | ' |
Currency translation | 6 | ' |
Balance at end of period | 256 | ' |
Papermaking Systems Segment [Member] | Other Cost [Member] | 2013 Restructuring Plan [Member] | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance at beginning of period | 0 | ' |
Provision | 339 | ' |
Usage | -338 | ' |
Currency translation | -1 | ' |
Balance at end of period | $0 | ' |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Amounts Attributable to Kadant [Abstract] | ' | ' |
Income from Continuing Operations | $5,058 | $5,313 |
Loss from Discontinued Operation | -5 | -29 |
Net Income Attributable to Kadant | $5,053 | $5,284 |
Basic Weighted Average Shares (in shares) | 11,132,000 | 11,163,000 |
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan (in shares) | 182,000 | 104,000 |
Diluted Weighted Average Shares (in shares) | 11,314,000 | 11,267,000 |
Basic Earnings Per Share [Abstract] | ' | ' |
Continuing operations (in dollars per share) | $0.45 | $0.48 |
Discontinued operation (in dollars per share) | $0 | $0 |
Net Income per Basic Share (in dollars per share) | $0.45 | $0.47 |
Diluted Earnings Per Share [Abstract] | ' | ' |
Continuing operations (in dollars per share) | $0.45 | $0.47 |
Discontinued operation (in dollars per share) | $0 | $0 |
Net Income per Diluted Share (in dollars per share) | $0.45 | $0.47 |
Stock Options [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | ' | 111,000 |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 57,000 | 81,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Income Taxes [Abstract] | ' | ' |
Provision for income taxes | $2,352 | $1,967 |
Effective income tax rate (in hundredths) | 31.00% | 27.00% |
LongTerm_Obligations_Details
Long-Term Obligations (Details) (USD $) | 3 Months Ended | |
Mar. 29, 2014 | Dec. 28, 2013 | |
Debt obligations [Line Items] | ' | ' |
Total Long-Term Obligations | $42,938,000 | $38,635,000 |
Less: Current Maturities | -648,000 | -625,000 |
Long-Term Obligations, less Current Maturities | 42,290,000 | 38,010,000 |
Weighted average interest rate for long-term obligations (in hundredths) | 2.54% | ' |
Revolving Credit Facility [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Total Long-Term Obligations | 36,640,000 | 32,260,000 |
Term of unsecured revolving credit facility | '5 years | ' |
Borrowing capacity available under committed portion | 100,000,000 | ' |
Additional borrowing capacity | 50,000,000 | ' |
Maturity date | 1-Nov-18 | ' |
Interest rate description | 'Interest on any loans outstanding under the 2012 Credit Agreement accrues and is payable quarterly in arrears at one of the following rates selected by the Company: (i) the highest of (a) the federal funds rate plus 0.50% plus an applicable margin of 0% to 1%, (b) the prime rate, as defined, plus an applicable margin of 0% to 1% and (c) the Eurocurrency rate, as defined, plus 0.50% plus an applicable margin of 0% to 1% or (ii) the Eurocurrency rate, as defined, plus an applicable margin of 1% to 2%. The applicable margin is determined based upon the ratio of the Company's total debt to earnings before interest, taxes, depreciation, and amortization (EBITDA), as defined in the 2012 Credit Agreement. For this purpose, total debt is defined as total debt less up to $25,000,000 of unrestricted U.S. cash. | ' |
Maximum consolidated leverage ratio | 3.5 | ' |
Minimum consolidated interest coverage ratio | 3 | ' |
Remaining borrowing capacity | 62,194,000 | ' |
Face amount of debt | 100,000,000 | ' |
Revolving Credit Facility [Member] | Federal Funds Rate [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Basis spread on variable rate | 'federal funds rate | ' |
Basis spread on variable rate (in hundredths) | 0.50% | ' |
Revolving Credit Facility [Member] | Federal Funds Rate [Member] | Minimum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 0.00% | ' |
Revolving Credit Facility [Member] | Federal Funds Rate [Member] | Maximum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 1.00% | ' |
Revolving Credit Facility [Member] | Prime Rate [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Basis spread on variable rate | 'prime rate | ' |
Revolving Credit Facility [Member] | Prime Rate [Member] | Minimum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 0.00% | ' |
Revolving Credit Facility [Member] | Prime Rate [Member] | Maximum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 1.00% | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Basis spread on variable rate | 'Eurocurrency rate | ' |
Basis spread on variable rate (in hundredths) | 0.50% | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate [Member] | Minimum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 0.00% | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate [Member] | Maximum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 1.00% | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate Two [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Basis spread on variable rate | 'Eurocurrency rate | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate Two [Member] | Minimum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 1.00% | ' |
Revolving Credit Facility [Member] | Eurocurrency Rate Two [Member] | Maximum [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Margin rate of debt instrument (in hundredths) | 2.00% | ' |
Commercial Real Estate Loan [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Total Long-Term Obligations | 6,250,000 | 6,375,000 |
Other Loan [Member] | ' | ' |
Debt obligations [Line Items] | ' | ' |
Total Long-Term Obligations | $48,000 | $0 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation expense | $1,395,000 | $1,269,000 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Unrecognized compensation expense related to stock awards | $8,390,000 | ' |
Recognition period | '1 year 10 months 24 days | ' |
Performance Based Restricted Stock Units [Member] | ' | ' |
Performance Based Restricted Stock Units [Abstract] | ' | ' |
Performance-based Restricted Stock Units, Terms of Award | 'On March 5, 2014, the Company granted to executive officers of the Company performance-based restricted stock units (RSUs), which represented, in aggregate, the right to receive 56,445 shares (the target RSU amount), subject to adjustment, with a grant date fair value of $38.81 per share. The RSUs are subject to adjustment based on the achievement of the performance measure selected for the 2014 fiscal year, which is a specified target for adjusted EBITDA generated from continuing operations for the 2014 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. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2014 fiscal year, all performance-based RSUs will be forfeited. In the first quarter of 2014, the Company recognized compensation expense based on the probable number of performance-based RSUs expected to vest, which was 100% of the target RSU amount. 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 2015, 2016, and 2017, provided that the executive officer is employed by the Company on the applicable vesting dates. | ' |
RSUs granted (in shares) | 56,445 | ' |
Grant date fair value (in dollars per share) | $38.81 | ' |
Number of annual installments in which stock awards vest | 3 | ' |
Employee, Executive Officer or Non employee director [Member] | Time Based Restricted Stock Units [Member] | ' | ' |
Summary of changes in unvested RSU's [Roll Forward] | ' | ' |
Granted (in shares) | 85,122 | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 3 Months Ended | |
Mar. 29, 2014 | Mar. 30, 2013 | |
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ' | ' |
Contributions to noncontributory defined benefit plan | $270,000 | ' |
Expected contributions to nonconributory defined benefit plan for the remainder of the year | 810,000 | ' |
Pension Benefits [Member] | ' | ' |
Components of Net Periodic Benefit Cost | ' | ' |
Service cost | 213,000 | 263,000 |
Interest cost | 321,000 | 301,000 |
Expected return on plan assets | -370,000 | -381,000 |
Recognized net actuarial loss | 79,000 | 151,000 |
Amortization of prior service cost | 14,000 | 14,000 |
Net periodic benefit cost | 257,000 | 348,000 |
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ' | ' |
Discount rate (in hundredths) | 4.79% | 3.89% |
Expected long-term return on plan assets (in hundredths) | 5.75% | 5.75% |
Rate of compensation increase (in hundredths) | 3.50% | 3.50% |
Other Benefits [Member] | ' | ' |
Components of Net Periodic Benefit Cost | ' | ' |
Service cost | 69,000 | 53,000 |
Interest cost | 72,000 | 70,000 |
Expected return on plan assets | -12,000 | -13,000 |
Recognized net actuarial loss | 9,000 | 21,000 |
Amortization of prior service cost | 21,000 | 21,000 |
Net periodic benefit cost | $159,000 | $152,000 |
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ' | ' |
Discount rate (in hundredths) | 4.23% | 3.92% |
Expected long-term return on plan assets (in hundredths) | 0.00% | 0.00% |
Rate of compensation increase (in hundredths) | 3.19% | 3.67% |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Items (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 |
Accumulated Other Comprehensive Items [Line Items] | ' | ' |
Balance at Beginning of Year | $710 | ($3,315) |
Other comprehensive (loss) income before reclassifications | -728 | -3,105 |
Reclassifications from AOCI | 134 | 377 |
Net current period other comprehensive (loss) income | -594 | -2,728 |
Balance at End of Quarter | 116 | -6,043 |
Foreign Currency Translation Adjustment [Member] | ' | ' |
Accumulated Other Comprehensive Items [Line Items] | ' | ' |
Balance at Beginning of Year | 8,919 | 8,124 |
Other comprehensive (loss) income before reclassifications | -763 | -3,060 |
Reclassifications from AOCI | 0 | 0 |
Net current period other comprehensive (loss) income | -763 | -3,060 |
Balance at End of Quarter | 8,156 | 5,064 |
Unrecognized Prior Service Cost [Member] | ' | ' |
Accumulated Other Comprehensive Items [Line Items] | ' | ' |
Balance at Beginning of Year | -657 | -748 |
Other comprehensive (loss) income before reclassifications | 0 | 2 |
Reclassifications from AOCI | 22 | 22 |
Net current period other comprehensive (loss) income | 22 | 24 |
Balance at End of Quarter | -635 | -724 |
Deferred Loss on Pension and Other Post Retirement Plans [Member] | ' | ' |
Accumulated Other Comprehensive Items [Line Items] | ' | ' |
Balance at Beginning of Year | -6,919 | -9,645 |
Other comprehensive (loss) income before reclassifications | -3 | 0 |
Reclassifications from AOCI | 58 | 113 |
Net current period other comprehensive (loss) income | 55 | 113 |
Balance at End of Quarter | -6,864 | -9,532 |
Deferred Loss on Hedging Instruments [Member] | ' | ' |
Accumulated Other Comprehensive Items [Line Items] | ' | ' |
Balance at Beginning of Year | -633 | -1,046 |
Other comprehensive (loss) income before reclassifications | 38 | -47 |
Reclassifications from AOCI | 54 | 242 |
Net current period other comprehensive (loss) income | 92 | 195 |
Balance at End of Quarter | ($541) | ($851) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Items, Reclassifications out of AOCI (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax | $134 | $377 | ||
Pension and Other Post-retirement Plans [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax | 22 | 22 | ||
Cash Flow Hedges [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax | 54 | 242 | ||
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax | -134 | -377 | ||
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Pension and Other Post-retirement Plans [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Transition Asset (Obligation), Recognized in Net Periodic Benefit Cost, before Tax | -123 | [1] | -207 | [1] |
Income tax benefit | 43 | [1] | 72 | [1] |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax [Abstract] | -80 | [1] | -135 | [1] |
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Pension and Other Post-retirement Plans [Member] | Amortization of Prior Service Cost [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Benefit Cost, before Tax | -35 | [1] | -35 | [1] |
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Pension and Other Post-retirement Plans [Member] | Amortization Of Actuarial Losses [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, before Tax | -88 | [1] | -172 | [1] |
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Cash Flow Hedges [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | -84 | [2] | -149 | [2] |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | -84 | [2] | -149 | [2] |
Income tax benefit (provision) | 30 | [2] | -93 | [2] |
Total reclassifications, net of tax | -54 | [2] | -242 | [2] |
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Cash Flow Hedges [Member] | Interest Rate Swap [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | -84 | [2] | -106 | [2] |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | -84 | [2] | -106 | [2] |
Reclassification Out Of Accumulated Other Comprehensive Items [Member] | Cash Flow Hedges [Member] | Forward Currency-Exchange Contracts [Member] | ' | ' | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | ' | ' | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | 0 | [2] | -43 | [2] |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | $0 | [2] | ($43) | [2] |
[1] | Included in the computation of net periodic benefit costs. See Note 8 for additional information. | |||
[2] | See Note 10 for additional information. |
Derivatives_Details
Derivatives (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||||||||||
Mar. 29, 2014 | Mar. 30, 2013 | Mar. 29, 2014 | Mar. 29, 2014 | Mar. 29, 2014 | Mar. 29, 2014 | Mar. 29, 2014 | Dec. 28, 2013 | Mar. 29, 2014 | Mar. 29, 2014 | Mar. 29, 2014 | Dec. 28, 2013 | Mar. 29, 2014 | Dec. 28, 2013 | Mar. 29, 2014 | Dec. 28, 2013 | Mar. 29, 2014 | Dec. 28, 2013 | |||||||||||
Cash Flow Hedging [Member] | 2006 Swap Agreement [Member] | Interest Rate Swap Agreements [Member] | Interest Rate Swap Agreements [Member] | Interest Rate Swap Agreements [Member] | Interest Rate Swap Agreements [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | Forward Currency-Exchange Contracts [Member] | |||||||||||||
Cash Flow Hedging [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | |||||||||||||||||
Other Long Term Liabilities [Member] | Other Long Term Liabilities [Member] | Other Current Assets [Member] | Other Current Assets [Member] | Other Current Liabilities [Member] | Other Current Liabilities [Member] | Other Current Assets [Member] | Other Current Assets [Member] | Other Current Liabilities [Member] | Other Current Liabilities [Member] | |||||||||||||||||||
Interest Rate Swaps [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Fixed rate of interest (in hundredths) | ' | ' | ' | 5.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Rate of effectiveness of interest rate swap agreement (in hundredths) | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Financial covenants | ' | ' | ' | ' | 'maximum consolidated leverage ratio of 3.5 to 1, and a minimum consolidated interest coverage ratio of 3 to 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Maximum consolidated leverage ratio | ' | ' | ' | ' | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Minimum consolidated interest coverage ratio | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Unrealized loss on derivatives | ' | ' | ' | ' | $690,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Forward Currency-Exchange Contracts [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Maximum period over which entity manages its level of exposure of risk | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Recognized gains (losses) | 36,000 | -2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Derivatives in an Asset Position [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Derivatives in an asset position | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44,000 | [1] | 0 | [1] | ' | ' | 0 | [1] | 97,000 | [1] | ' | ' | ||||||
Notional amount, Derivative asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 840,000 | [2] | 0 | ' | ' | 0 | [2] | 1,419,000 | ' | ' | ||||||||
Derivatives in a Liability Position [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Derivatives in a liability position | ' | ' | ' | ' | ' | ' | -690,000 | [1] | -773,000 | [1] | ' | ' | ' | ' | -8,000 | [1] | -22,000 | [1] | ' | ' | 0 | [1] | -1,000 | [1] | ||||
Notional amount, Derivative liability | ' | ' | ' | ' | ' | ' | 6,250,000 | [2] | 6,375,000 | ' | ' | ' | ' | 500,000 | [2] | 1,340,000 | ' | ' | 0 | [2] | 288,000 | |||||||
Accumulated Other Comprehensive Items, Net of Tax [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Unrealized loss, net of tax, at beginning of period | ' | ' | -633,000 | ' | ' | -618,000 | ' | ' | ' | -15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Loss reclassified to earnings | ' | ' | 54,000 | ' | ' | 54,000 | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Gain recognized in OCI | -92,000 | -195,000 | 38,000 | ' | ' | 0 | ' | ' | ' | 38,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Unrealized (loss) gain, net of tax, at end of period | ' | ' | -541,000 | ' | ' | -564,000 | ' | ' | ' | 23,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Net unrealized loss included in OCI expected to be reclassified to earnings over the next 12 months | $237,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
[1] | See Note 11 for the fair value measurements related to these financial instruments. | |||||||||||||||||||||||||||
[2] | The total notional amount is indicative of the level of the Companybs derivative activity during the first three months of 2014. |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair Value [Member] | ' | ' | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' | ||
Long-term debt obligations | $42,290 | $38,010 | ||
Carrying Value [Member] | ' | ' | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' | ||
Long-term debt obligations | 42,290 | 38,010 | ||
Recurring [Member] | ' | ' | ||
Assets [Abstract] | ' | ' | ||
Money market funds and time deposits | 15,665 | 17,090 | ||
Banker's acceptance drafts | 6,947 | [1] | 10,765 | [1] |
Forward currency-exchange contracts | 44 | 97 | ||
Liabilities [Abstract] | ' | ' | ||
Forward currency-exchange contracts | 8 | 23 | ||
Interest rate swap agreement | 690 | 773 | ||
ContingentConsideration | 1,377 | [2] | ' | |
Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets [Abstract] | ' | ' | ||
Money market funds and time deposits | 15,665 | 17,090 | ||
Banker's acceptance drafts | 0 | [1] | 0 | [1] |
Forward currency-exchange contracts | 0 | 0 | ||
Liabilities [Abstract] | ' | ' | ||
Forward currency-exchange contracts | 0 | 0 | ||
Interest rate swap agreement | 0 | 0 | ||
ContingentConsideration | 0 | [2] | ' | |
Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets [Abstract] | ' | ' | ||
Money market funds and time deposits | 0 | 0 | ||
Banker's acceptance drafts | 6,947 | [1] | 10,765 | [1] |
Forward currency-exchange contracts | 44 | 97 | ||
Liabilities [Abstract] | ' | ' | ||
Forward currency-exchange contracts | 8 | 23 | ||
Interest rate swap agreement | 690 | 773 | ||
ContingentConsideration | 0 | [2] | ' | |
Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets [Abstract] | ' | ' | ||
Money market funds and time deposits | 0 | 0 | ||
Banker's acceptance drafts | 0 | [1] | 0 | [1] |
Forward currency-exchange contracts | 0 | 0 | ||
Liabilities [Abstract] | ' | ' | ||
Forward currency-exchange contracts | 0 | 0 | ||
Interest rate swap agreement | 0 | 0 | ||
ContingentConsideration | $1,377 | [2] | ' | |
[1] | Included in accounts receivable in the accompanying condensed consolidated balance sheet. | |||
[2] | Included in other current liabilities in the accompanying condensed consolidated balance sheet. |
Business_Segment_Information_D
Business Segment Information (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 30, 2013 | ||
Segment | Segment | |||
Business Segment Information [Abstract] | ' | ' | ||
Number of reportable segments | 2 | 1 | ||
Revenues by Product line [Abstract] | ' | ' | ||
Revenues | $93,367 | $76,204 | ||
Income from Continuing Operations Before Provision for Income Taxes [Abstract] | ' | ' | ||
Total operating income | 7,621 | 7,372 | ||
Interest expense, net | -84 | -56 | ||
Income from Continuing Operations Before Provision for Income Taxes | 7,537 | 7,316 | ||
Capital Expenditures [Abstract] | ' | ' | ||
Capital expenditures | 539 | 1,178 | ||
Papermaking Systems | ' | ' | ||
Revenues by Product line [Abstract] | ' | ' | ||
Revenues | 78,184 | 72,397 | ||
Income from Continuing Operations Before Provision for Income Taxes [Abstract] | ' | ' | ||
Total operating income | 9,410 | 9,944 | ||
Capital Expenditures [Abstract] | ' | ' | ||
Capital expenditures | 517 | 1,172 | ||
Fiber based Products [Member] | ' | ' | ||
Revenues by Product line [Abstract] | ' | ' | ||
Revenues | 3,910 | 3,807 | ||
Wood Processing Systems Segment [Member] | ' | ' | ||
Revenues by Product line [Abstract] | ' | ' | ||
Revenues | 11,273 | 0 | ||
Income from Continuing Operations Before Provision for Income Taxes [Abstract] | ' | ' | ||
Total operating income | 1,354 | 0 | ||
Corporate and Fiber-based Products [Member] | ' | ' | ||
Income from Continuing Operations Before Provision for Income Taxes [Abstract] | ' | ' | ||
Total operating income | -3,143 | [1] | -2,572 | [1] |
Other Capital Expenditures [Member] | ' | ' | ||
Capital Expenditures [Abstract] | ' | ' | ||
Capital expenditures | $22 | $6 | ||
[1] | Corporate primarily includes general and administrative expenses. |
Contingencies_and_Litigation_D
Contingencies and Litigation (Details) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
Right of Recourse [Abstract] | ' | ' |
Banker's acceptance drafts with recourse | $3,821,000 | $5,688,000 |