Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2019 | Apr. 26, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | KADANT INC | |
Entity Central Index Key | 0000886346 | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 11,174,431 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 56,478 | $ 45,830 |
Restricted cash (Note 1) | 697 | 287 |
Accounts receivable, less allowances of $2,951 and $2,897 (Note 1) | 104,120 | 92,624 |
Inventories (Note 1) | 103,029 | 86,373 |
Unbilled revenues | 16,996 | 15,741 |
Other current assets | 13,020 | 11,906 |
Total Current Assets | 294,340 | 252,761 |
Property, Plant, and Equipment, at Cost | 181,384 | 170,697 |
Less: accumulated depreciation and amortization | 93,652 | 90,540 |
Property, Plant, and Equipment, at Cost, Net | 87,732 | 80,157 |
Other Assets (Note 8) | 47,804 | 21,310 |
Intangible Assets, Net (Notes 1 and 2) | 184,596 | 113,347 |
Goodwill (Notes 1 and 2) | 343,768 | 258,174 |
Total Assets | 958,240 | 725,749 |
Current Liabilities: | ||
Current maturities of long-term obligations (Note 5) | 2,631 | 1,668 |
Accounts payable | 43,571 | 35,720 |
Customer deposits | 30,693 | 26,987 |
Accrued payroll and employee benefits | 25,843 | 30,902 |
Advanced billings | 5,869 | 5,534 |
Other current liabilities | 33,555 | 28,178 |
Total Current Liabilities | 142,162 | 128,989 |
Long-Term Obligations (Note 5) | 358,286 | 174,153 |
Long-Term Deferred Income Taxes | 26,602 | 22,962 |
Other Long-Term Liabilities (Note 8) | 49,194 | 25,074 |
Commitments and Contingencies (Note 14) | ||
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 | 102,780 | 104,731 |
Retained earnings | 401,891 | 393,578 |
Treasury stock at cost, 3,449,728 and 3,514,163 shares | (84,532) | (86,111) |
Accumulated other comprehensive items (Note 9) | (40,024) | (39,376) |
Total Kadant Stockholders' Equity | 380,261 | 372,968 |
Noncontrolling interest | 1,735 | 1,603 |
Total Stockholders' Equity | 381,996 | 374,571 |
Total Liabilities and Stockholders' Equity | $ 958,240 | $ 725,749 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current Assets: | ||
Accounts receivable, allowances | $ 2,951 | $ 2,897 |
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) | 3,449,728 | 3,514,163 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues (Notes 1 and 12) | $ 171,316 | $ 149,193 |
Costs and Operating Expenses: | ||
Cost of revenues | 100,801 | 83,114 |
Selling, general, and administrative expenses | 49,319 | 45,776 |
Research and development expenses | 2,621 | 2,869 |
Restructuring costs (Note 13) | 0 | 770 |
Total Costs and Operating Expenses | 152,741 | 132,529 |
Operating Income | 18,575 | 16,664 |
Interest Income | 56 | 183 |
Interest Expense | (3,504) | (1,732) |
Other Expense, Net (Note 7) | (99) | (246) |
Income Before Provision for Income Taxes | 15,028 | 14,869 |
Provision for Income Taxes (Note 4) | 3,963 | 3,861 |
Net Income | 11,065 | 11,008 |
Net Income Attributable to Noncontrolling Interest | (165) | (150) |
Net Income Attributable to Kadant | $ 10,900 | $ 10,858 |
Earnings per Share Attributable to Kadant (Note 3): | ||
Basic (in dollars per share) | $ 0.98 | $ 0.98 |
Diluted (in dollars per share) | $ 0.96 | $ 0.96 |
Weighted Average Shares (Note 3): | ||
Basic (in shares) | 11,133 | 11,042 |
Diluted (in shares) | 11,385 | 11,342 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 11,065 | $ 11,008 |
Other Comprehensive Items: | ||
Foreign currency translation adjustment | (465) | 5,336 |
Pension and other post-retirement liability adjustments (net of tax provision of $8 and $34) | 21 | 117 |
Deferred (loss) gain on cash flow hedges (net of tax benefit (provision) of $104 and ($8)) | (237) | 93 |
Other Comprehensive Items | (681) | 5,546 |
Comprehensive Income | 10,384 | 16,554 |
Comprehensive Income Attributable to Noncontrolling Interest | (132) | (193) |
Comprehensive Income Attributable to Kadant | $ 10,252 | $ 16,361 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Other Comprehensive Items: | ||
Pension and other post-retirement liability adjustments, tax effect | $ 8 | $ 34 |
Deferred benefit (provision) on cash flow hedges, tax effect | $ 104 | |
Deferred benefit (provision) on cash flow hedges, tax effect | $ (8) |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Operating Activities | ||
Net Income Attributable to Kadant | $ 10,900 | $ 10,858 |
Net income attributable to noncontrolling interest | 165 | 150 |
Net income | 11,065 | 11,008 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,231 | 6,099 |
Stock-based compensation expense | 1,553 | 1,464 |
Right-of-use asset amortization | 1,083 | 0 |
Provision for losses on accounts receivable | 64 | 316 |
(Gain) loss on the sale of property, plant, and equipment | (200) | 24 |
Other items, net | (487) | (386) |
Changes in current assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (1,190) | (799) |
Unbilled revenues | (1,055) | 2,064 |
Inventories | (3,263) | (9,674) |
Other current assets | (189) | (435) |
Accounts payable | 3,872 | 3,854 |
Other current liabilities | (9,608) | (6,319) |
Net cash provided by operating activities | 9,876 | 7,216 |
Investing Activities | ||
Acquisition, net of cash acquired (Note 2) | (175,288) | 0 |
Purchases of property, plant, and equipment | (2,168) | (5,151) |
Proceeds from sale of property, plant, and equipment | 293 | 28 |
Net cash used in investing activities | (177,163) | (5,123) |
Financing Activities | ||
Proceeds from issuance of long-term obligations | 189,000 | 12,000 |
Repayment of long-term obligations | (6,404) | (13,493) |
Tax withholding payments related to stock-based compensation | (2,647) | (3,641) |
Dividends paid | (2,444) | (2,316) |
Proceeds from issuance of Company common stock | 723 | 742 |
Payment of debt issuance costs | (36) | 0 |
Net cash provided by (used in) financing activities | 178,192 | (6,708) |
Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash | 153 | 1,511 |
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 11,058 | (3,104) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 46,117 | 76,846 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 57,175 | $ 73,742 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Items | Noncontrolling Interest |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of ASU | ASU No. 2014-09 | $ 119 | $ 119 | |||||
Adoption of ASU | ASU No. 2016-16 | (75) | (75) | |||||
Beginning balance (in shares) at Dec. 30, 2017 | 14,624,159 | 3,613,838 | |||||
Beginning balance at Dec. 30, 2017 | 332,504 | $ 146 | $ 103,221 | 342,893 | $ (88,554) | $ (26,715) | $ 1,513 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 11,008 | 10,858 | 150 | ||||
Dividend declared – Common Stock, $0.22/share in 2018 and $0.23/share in 2019 | (2,440) | (2,440) | |||||
Activity under stock plans | (1,435) | (3,393) | $ 1,958 | ||||
Activity under stock plans (in shares) | (79,888) | ||||||
Other comprehensive items | 5,546 | 5,503 | 43 | ||||
Ending balance (in shares) at Mar. 31, 2018 | 14,624,159 | 3,533,950 | |||||
Ending balance at Mar. 31, 2018 | 345,227 | $ 146 | 99,828 | 351,355 | $ (86,596) | (21,212) | 1,706 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of ASU | ASU No. 2016-02 | (17) | (17) | |||||
Beginning balance (in shares) at Dec. 29, 2018 | 14,624,159 | 3,514,163 | |||||
Beginning balance at Dec. 29, 2018 | 374,571 | $ 146 | 104,731 | 393,578 | $ (86,111) | (39,376) | 1,603 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 11,065 | 10,900 | 165 | ||||
Dividend declared – Common Stock, $0.22/share in 2018 and $0.23/share in 2019 | (2,570) | (2,570) | |||||
Activity under stock plans | (372) | (1,951) | $ 1,579 | ||||
Activity under stock plans (in shares) | (64,435) | ||||||
Other comprehensive items | (681) | (648) | (33) | ||||
Ending balance (in shares) at Mar. 30, 2019 | 14,624,159 | 3,449,728 | |||||
Ending balance at Mar. 30, 2019 | $ 381,996 | $ 146 | $ 102,780 | $ 401,891 | $ (84,532) | $ (40,024) | $ 1,735 |
Condensed Consolidated Statem_6
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - Parenthetical - $ / shares | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash Dividends Declared per Common Share (in dollars per share) | $ 0.23 | $ 0.22 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 30, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Kadant Inc. was incorporated in Delaware in November 1991 and currently trades on the New York Stock Exchange under the ticker symbol "KAI." Kadant Inc. (together with its subsidiaries, the Company) is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. The Company has a diverse and large customer base, including most of the world's major paper, lumber and oriented strand board (OSB) manufacturers, and various mining companies across multiple industries. Its products, technologies, and services play an integral role in enhancing process efficiency, optimizing energy utilization, and maximizing productivity in resource-intensive industries. The Company's operations include three reportable operating segments, Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products. See Note 2 for information regarding the Company's most recent acquisition, which comprises its new Material Handling Systems segment. 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 30, 2019 , its results of operations, comprehensive income, cash flows, and stockholders' equity for the three -month periods ended March 30, 2019 and March 31, 2018 . 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 29, 2018 has been derived from the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2018 . 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 29, 2018 , filed with the SEC. Use of Estimates and Critical Accounting Policies 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. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements. Notes 1 and 3 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2018 describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the three months ended March 30, 2019, except for the adoption of Accounting Standards Codification (ASC), Leases (Topic 842) (ASC 842). See Recently Adopted Accounting Pronouncements within this note and Note 8 for further details. Supplemental Cash Flow Information See Note 8 for supplemental cash flow information related to the Company's lease obligations. Three Months Ended (In thousands) March 30, March 31, Cash Paid for Interest $ 2,782 $ 2,459 Cash Paid for Income Taxes, Net of Refunds $ 4,679 $ 8,455 Non-Cash Investing Activities: Post-closing adjustments $ 1,567 $ 397 Liabilities assumed of acquired business $ 29,664 $ — Non-cash additions to property, plant, and equipment $ 193 $ 1,816 Non-Cash Financing Activities: Issuance of Company common stock upon vesting of restricted stock units $ 3,278 $ 2,755 Dividends declared but unpaid $ 2,570 $ 2,440 Restricted Cash The Company's restricted 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. The majority of the bank guarantees will expire over the next twelve months . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows: (In thousands) March 30, March 31, December 29, December 30, Cash and cash equivalents $ 56,478 $ 72,210 $ 45,830 $ 75,425 Restricted cash 697 1,532 287 1,421 Total Cash, Cash Equivalents, and Restricted Cash $ 57,175 $ 73,742 $ 46,117 $ 76,846 Banker's Acceptance Drafts included in Accounts Receivable The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are noninterest-bearing obligations of the issuing bank and mature within six months of the origination date. The Company's subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $7,772,000 at March 30, 2019 and $7,976,000 at December 29, 2018 , are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date. Inventories The components of inventories are as follows: March 30, December 29, (In thousands) Raw Materials $ 46,684 $ 44,522 Work in Process 20,239 15,876 Finished Goods 36,106 25,975 $ 103,029 $ 86,373 Intangible Assets, Net Acquired intangible assets by major asset class are as follows: (In thousands) Gross Accumulated Currency Net March 30, 2019 Definite-Lived Customer relationships $ 166,183 $ (41,222 ) $ (4,498 ) $ 120,463 Product technology 57,001 (24,619 ) (1,761 ) 30,621 Tradenames 5,227 (2,090 ) (419 ) 2,718 Other 17,784 (12,581 ) (576 ) 4,627 246,195 (80,512 ) (7,254 ) 158,429 Indefinite-Lived Tradenames 26,300 — (133 ) 26,167 Acquired Intangible Assets $ 272,495 $ (80,512 ) $ (7,387 ) $ 184,596 December 29, 2018 Definite-Lived Customer relationships $ 113,283 $ (38,160 ) $ (4,520 ) $ 70,603 Product technology 46,501 (23,563 ) (1,677 ) 21,261 Tradenames 5,227 (1,980 ) (390 ) 2,857 Other 13,744 (11,476 ) (127 ) 2,141 178,755 (75,179 ) (6,714 ) 96,862 Indefinite-Lived Tradenames 16,600 — (115 ) 16,485 Acquired Intangible Assets $ 195,355 $ (75,179 ) $ (6,829 ) $ 113,347 Intangible assets are initially recorded at fair value at the date of acquisition. Definite-lived intangible assets are stated net of accumulated amortization and currency translation in the accompanying condensed consolidated balance sheet. The Company amortizes definite-lived intangible assets over lives that have been determined based on the anticipated cash flow benefits of the intangible asset. Goodwill The changes in the carrying amount of goodwill by segment are as follows: (In thousands) Papermaking Systems Wood Processing Systems Material Handling Systems Total Balance at December 29, 2018 Gross balance $ 241,912 $ 101,771 $ — $ 343,683 Accumulated impairment losses (85,509 ) — — (85,509 ) Net balance 156,403 101,771 — 258,174 2019 Adjustments Acquisition (Note 2) — — 86,502 86,502 Currency translation (1,031 ) 123 — (908 ) Total 2019 adjustments (1,031 ) 123 86,502 85,594 Balance at March 30, 2019 Gross balance 240,881 101,894 86,502 429,277 Accumulated impairment losses (85,509 ) — — (85,509 ) Net balance $ 155,372 $ 101,894 $ 86,502 $ 343,768 Warranty Obligations The Company's contracts covering the sale of its products include warranty provisions that provide assurance to its customers that the products will comply with agreed-upon specifications. The Company negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. 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) March 30, March 31, Balance at Beginning of Year $ 5,726 $ 5,498 Provision charged to expense 1,076 715 Usage (925 ) (364 ) Acquisition 295 — Currency translation (3 ) 61 Balance at End of Period $ 6,169 $ 5,910 Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. Most of the Company’s revenue is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. The majority of the Company’s parts and consumables products and capital products with minimal customization are accounted for at a point in time. The Company has made a policy election not to treat the obligation to ship as a separate performance obligation under the contract and, as a result, the associated shipping costs are accrued when revenue is recognized. The remaining portion of the Company’s revenue is recognized on an over time basis based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Contracts recognized on an over time basis are typically for large capital projects which are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation. The following table presents revenue by revenue recognition method: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Point in time $ 148,276 $ 142,005 Over time 23,040 7,188 $ 171,316 $ 149,193 The transaction price is typically based on the amount billed to the customer and includes estimated variable consideration where applicable. Such variable consideration relates to certain performance guarantees and rights to return the product. The Company estimates variable consideration as the most likely amount to which it expects to be entitled based on the terms of the contracts with customers and historical experience, where relevant. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. The following table presents the disaggregation of revenues by product type and geography: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Revenues by Product Type: Parts and Consumables $ 112,850 $ 95,985 Capital 58,466 53,208 $ 171,316 $ 149,193 Revenues by Geography: North America $ 100,876 $ 77,616 Europe 38,985 41,493 Asia 17,078 20,148 Rest of World 14,377 9,936 $ 171,316 $ 149,193 See Note 12 , Business Segment Information, for further details on the disaggregation of revenues by segment and product line. The following table presents balances from contracts with customers: March 30, December 29, (In thousands) Accounts receivable $ 104,120 $ 92,624 Contract assets $ 16,996 $ 15,741 Contract liabilities $ 38,950 $ 34,774 Contract assets represent unbilled revenues associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advanced payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer. The Company recognized revenue of $19,095,000 in the first three months of 2019 and $ 27,325,000 in the first three months of 2018 that was included in the contract liabilities balance at the beginning of 2019 and 2018, respectively. Customers in China will often settle their accounts receivable with a banker's acceptance draft, in which case cash settlement will be delayed until the banker's acceptance draft matures or is settled prior to maturity. For customers outside of China, final payment for the majority of the Company's products is received in the quarter following the product shipment. Certain of the Company's contracts include a longer period before final payment is due, which is typically within one year of final shipment or transfer of control to the customer. Recently Adopted Accounting Pronouncements Leases (Topic 842) . In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, which requires a lessee to recognize a right-of-use (ROU) asset and a corresponding lease liability for operating leases, initially measured at the present value of the future lease payments, on its balance sheet. This ASU also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. The Company adopted this ASU as of the beginning of fiscal 2019 using the cumulative-effect adjustment method. As a result, prior period amounts were not restated and continue to be under Topic 840, Leases , which did not require the recognition of operating leases on the balance sheet and is not comparative. As permitted under ASC 842, the Company elected the package of practical expedients for expired or existing contracts, which does not require the reassessment of prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected practical expedients relating to its ongoing accounting, including a short-term lease recognition exemption allowing lessees not to recognize ROU assets and liabilities with a term of 12 months or less and an election not to separate lease and non-lease components for all leases except vehicle leases. The adoption of this standard as of the beginning of fiscal 2019 resulted in increases of 2.3% to total assets and 4.8% to total liabilities and an immaterial decrease to retained earnings. In addition, the adoption of this ASU did not have a material impact on the Company’s condensed consolidated statements of income or cash flows. See Note 8 , Leases , for required lease accounting disclosures. Derivatives and Hedging (Topic 815), Targeted Improvements in Accounting for Hedging Activity. In August 2017, the FASB issued ASU No. 2017-12, which revises hedge accounting to better portray the economic results of an entity’s risk management activities, simplifies hedge accounting guidance, and improves disclosures of hedge accounting arrangements. The Company adopted this ASU on a prospective basis at the beginning of fiscal 2019. The adoption of this ASU did not have a material effect on the Company's condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU No. 2016-13, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining lives. This new guidance is effective for the Company in fiscal 2020 with early adoption permitted beginning in fiscal 2019. The Company is currently evaluating the effects that the adoption of this ASU will have on its condensed consolidated financial statements. Compensation-Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. In August 2018, the FASB issued ASU 2018-14, which removes, adds and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This new guidance is effective on a retrospective basis for the Company in fiscal 2021. Early adoption is permitted. The Company does not believe that the adoption of this ASU will have a material effect on its condensed consolidated financial statements. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition The Company’s acquisitions have been accounted for using the purchase method of accounting and its results are included in its condensed consolidated financial statements from the date of acquisition. Historically, the Company’s acquisitions have been made at prices above the fair value of identifiable net assets, resulting in goodwill. Acquisition transaction costs are included in selling, general, and administrative expenses (SG&A) in the accompanying condensed consolidated statement of income as incurred. The Company recorded acquisition transaction costs of $843,000 in the first three months of 2019 relating to its recent acquisition described below. On January 2, 2019, the Company acquired, directly and indirectly, all the outstanding equity interests of Syntron Material Handling Group, LLC and certain of its affiliates (SMH) pursuant to an equity purchase agreement, dated December 9, 2018, for approximately $176,855,000 , net of cash acquired, which includes a post-closing adjustment of $ 1,567,000 that was paid by the Company in April 2019. The Company funded the acquisition through borrowings under its revolving credit facility. SMH, which comprises the Company's new Material Handling Systems segment, has manufacturing operations in Mississippi, United States and in China. SMH is a leading provider of material handling equipment and systems to various process industries, including mining, aggregates, food processing, packaging, and pulp and paper. Revenues for SMH were approximately $89,365,000 for the trailing twelve months ended October 31, 2018. The Company expects several synergies in connection with this acquisition, including expansion of product sales into new markets by leveraging SMH's existing presence, strengthening of SMH's relationships in the pulp and paper industry, and sourcing efficiencies. Goodwill from the SMH acquisition was $ 86,502,000 , of which $64,438,000 is expected to be deductible for tax purposes over 15 years. In addition, intangible assets acquired were $77,140,000 , of which $ 66,725,000 is expected to be deductible for tax purposes over 15 years. For the quarter ended March 30, 2019 , the Company recorded revenues of $ 20,584,000 and an operating loss of $ 1,353,000 for SMH from the date of acquisition, including amortization expense of $3,308,000 associated with acquired profit in inventory and backlog, and $843,000 of acquisition transaction costs. The following table summarizes the estimated fair values of assets acquired and liabilities assumed and the purchase price for SMH. The final purchase accounting and purchase price allocation remain subject to change as the Company continues to refine its preliminary valuation of certain acquired assets and the valuation of acquired intangibles. (In thousands) Net Assets Acquired: Cash, Cash Equivalents, and Restricted Cash $ 2,431 Accounts Receivable 10,271 Inventory 12,982 Other Current Assets 900 Property, Plant, and Equipment 7,730 Other Assets 10,994 Definite-Lived Intangible Assets Customer relationships 52,900 Product technology 10,500 Other 4,040 Indefinite-Lived Intangible Assets Tradenames 9,700 Goodwill 86,502 Total assets acquired 208,950 Accounts Payable 4,663 Customer Deposits 2,919 Other Current Liabilities 3,724 Long-Term Lease Liabilities 15,244 Long-Term Deferred Income Taxes 3,114 Total liabilities assumed 29,664 Net assets acquired $ 179,286 Purchase Price: Cash Paid to Seller Borrowed Under Revolving Credit Facility $ 177,719 Post-Closing Adjustment to be Paid to Seller 1,567 Total Purchase Price $ 179,286 The weighted-average amortization period for definite-lived intangible assets is 14 years, including weighted-average amortization periods of 15 years for customer relationships, 14 years for product technology, and 8 years for other intangible assets. Unaudited Supplemental Pro Forma Information Had the acquisition of SMH been completed as of the beginning of 2018, the Company’s pro forma results of operations for the three months ended March 30, 2019 and March 31, 2018 would have been as follows: Three Months Ended (In thousands, except per share amounts) March 30, 2019 March 31, 2018 Revenues $ 171,316 $ 170,532 Net Income Attributable to Kadant $ 14,112 $ 8,475 Earnings per Share Attributable to Kadant: Basic $ 1.27 $ 0.77 Diluted $ 1.24 $ 0.75 Pro forma results include the following non-recurring pro forma adjustments that were directly attributable to the business combination: • Pre-tax charge to SG&A expenses of $ 843,000 in 2018 and reversal in 2019, for acquisition transaction costs. • Estimated pre-tax charge to cost of revenues of $ 2,310,000 in 2018 and reversal in 2019, for the sale of SMH inventory revalued at the date of acquisition. • Estimated pre-tax charge to SG&A expenses of $ 998,000 in 2018 and reversal in 2019, for intangible asset amortization related to acquired backlog. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have resulted had the acquisition of SMH occurred as of the beginning of 2018, or that may result in the future. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic and diluted earnings per share (EPS) are calculated as follows: Three Months Ended March 30, March 31, (In thousands, except per share amounts) Amounts Attributable to Kadant: Net Income $ 10,900 $ 10,858 Basic Weighted Average Shares 11,133 11,042 Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares 252 300 Diluted Weighted Average Shares 11,385 11,342 Basic Earnings per Share $ 0.98 $ 0.98 Diluted Earnings per Share $ 0.96 $ 0.96 The dilutive effect of the outstanding and unvested restricted stock units (RSUs) of the Company's common stock totaling 44,000 shares in the first three months of 2019 and 30,000 in the first three months of 2018 , was not included in the computation of diluted EPS for the respective periods as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the reporting periods. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Provision for Income Taxes The provision for income taxes was $ 3,963,000 in the first three months of 2019 and $ 3,861,000 in the first three months of 2018 . The effective tax rate of 26% in the first three months of 2019 was higher than the Company's statutory rate of 21% primarily due to nondeductible expenses, the distribution of the Company’s worldwide earnings, state taxes, and tax expense associated with the Global Intangible Low-Taxed Income (GILTI) provisions of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act). This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements. The effective tax rate of 26% in the first three months of 2018 was higher than the Company's statutory tax rate of 21% primarily due to a true-up to the federal provisional net income tax expense initially recorded in 2017 for the 2017 Tax Act, the U.S. tax cost of foreign operations, including the GILTI provisions of the 2017 Tax Act, and the distribution of the Company's worldwide earnings. This incremental tax expense was offset in part by a decrease in tax related to the net excess income tax benefits from stock-based compensation arrangements, the reversal of tax reserves associated with uncertain tax positions, and a favorable impact to state taxes primarily related to the true-up to the provisional net income tax expense initially recorded in 2017 for the 2017 Tax Act. |
Long-Term Obligations
Long-Term Obligations | 3 Months Ended |
Mar. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | Long-Term Obligations Long-term obligations are as follows: March 30, December 29, (In thousands) Revolving Credit Facility, due 2023 $ 324,720 $ 141,106 Commercial Real Estate Loan, due 2019 to 2028 20,213 20,475 Senior Promissory Notes, due 2023 to 2028 10,000 10,000 Finance Leases, due 2019 to 2024 1,921 — Other Borrowings, due 2019 to 2023 4,206 4,388 Unamortized Debt Issuance Costs (143 ) (148 ) Total 360,917 175,821 Less: Current Maturities of Long-Term Obligations (2,631 ) (1,668 ) Long-Term Obligations $ 358,286 $ 174,153 See Note 11 for the fair value information related to the Company's long-term obligations. Revolving Credit Facility In 2018, the Company entered into a second amendment (Second Amendment) to its existing amended and restated five -year, unsecured multi-currency revolving credit facility, dated as of March 1, 2017 (as amended, the Credit Agreement). Pursuant to the Second Amendment, the Company has a borrowing capacity of $400,000,000 , with an uncommitted unsecured incremental borrowing facility of $150,000,000 under its Credit Agreement, and a maturity date of December 14, 2023. Interest on borrowings outstanding accrues and is payable quarterly in arrears and is calculated at one of the following rates selected by the Company: (i) the Base Rate, calculated as the highest of (a) the federal funds rate plus 0.50% , (b) the prime rate as published by Citizens Bank, N.A., and (c) the thirty-day London Inter-Bank Offered Rate (LIBOR) rate, as defined, plus 0.50% ; or (ii) the LIBOR rate (with a zero percent floor), as defined, plus an applicable margin of 1% to 2.25% . The applicable margin is determined based upon the ratio of the Company's total debt, net of unrestricted cash up to $30,000,000 and certain debt obligations, to earnings before interest, taxes, depreciation, and amortization (EBITDA) as defined in the Credit Agreement. The obligations of the Company under the Credit Agreement may be accelerated upon the occurrence of an event of default, which includes customary events of default under such financing arrangements. In addition, as amended by the Second Amendment, the Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to maintain a maximum consolidated leverage ratio of 3.75 to 1.00, or for the quarter during which a material acquisition occurs and for the three fiscal quarters thereafter, 4.00 to 1.00, and limitations on making certain restricted payments (including dividends and stock repurchases). Loans under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company. In addition, one of the Company’s foreign subsidiaries entered into a separate guarantee agreement limited to certain obligations of two foreign subsidiary borrowers. As of March 30, 2019 , the outstanding balance under the Credit Agreement was $324,720,000 , and included $39,863,000 of Canadian dollar-denominated borrowings and $15,857,000 of euro-denominated borrowings. As of March 30, 2019 , the Company had $75,344,000 of borrowing capacity available under its Credit Agreement, which was calculated by translating its foreign-denominated borrowings using borrowing date foreign exchange rates. See Note 10 , Derivatives, under the heading Interest Rate Swap Agreements , for information relating to the swap agreements used to hedge the Company’s exposure to movements in the three-month LIBOR rate on its U.S. dollar-denominated debt borrowed under the Credit Agreement. The weighted average interest rate for the outstanding balance under the Credit Agreement was 3.64% as of March 30, 2019 . Commercial Real Estate Loan In 2018, the Company and certain domestic subsidiaries borrowed $21,000,000 under a promissory note (Real Estate Loan) which is repayable in quarterly principal installments of $262,500 over a ten -year period with the remaining principal balance of $10,500,000 due upon maturity. Interest accrues and is payable quarterly in arrears at a fixed rate of 4.45% per annum. The Company is not permitted to prepay any amount before July 6, 2019. Any voluntary prepayments are subject to a 2% prepayment fee if paid in the twelve months following July 6, 2019 and are subject to a 1% prepayment fee if paid in the twelve months following July 6, 2020. Thereafter, no prepayment fee will be applied to voluntary prepayment by the Company. The Real Estate Loan is secured by real estate and related personal property of the Company and certain of its domestic subsidiaries, pursuant to the mortgage and security agreements dated July 6, 2018 (Mortgage and Security Agreements). The obligations of the Company under the Real Estate Loan may be accelerated upon the occurrence of an event of default under the Real Estate Loan and the Mortgage and Security Agreements, which includes customary events of default for financings of this type. In addition, a default under the Credit Agreement or any successor credit facility would be an event of default under the Real Estate Loan. The effective interest rate for the Real Estate Loan, including amortization of debt issuance costs, was 4.60 % as of March 30, 2019 . Senior Promissory Notes In 2018, the Company entered into an uncommitted, unsecured Multi-Currency Note Purchase and Private Shelf Agreement (Note Purchase Agreement). Simultaneous with the execution of the Note Purchase Agreement, the Company issued senior promissory notes (Initial Notes) in an aggregate principal amount of $10,000,000 , with a per annum interest rate of 4.90% payable semiannually, and a maturity date of December 14, 2028. The Company is required to prepay a portion of the principal of the Initial Notes beginning on December 14, 2023 and each year thereafter, and may optionally prepay the principal on the Initial Notes, together with any prepayment premium, at any time (in a minimum amount of $1,000,000 , or the foreign currency equivalent thereof, if applicable) in accordance with the Note Purchase Agreement. The obligations of Initial Notes may be accelerated upon an event of default as defined in the Note Purchase Agreement, which includes customary events of default under such financing arrangements. In accordance with the Note Purchase Agreement, the Company may also issue additional senior promissory notes (together with the Initial Notes, the Senior Promissory Notes) up to an additional $115,000,000 until the earlier of December 14, 2021 or the thirtieth day after written notice to terminate the issuance and sale of additional notes pursuant to the Note Purchase Agreement. The Senior Promissory Notes are pari passu with the Company’s indebtedness under the Credit Agreement, and any other senior debt of the Company, subject to certain specified exceptions, and participate in a sharing agreement with respect to the obligations of the Company and its subsidiaries under the Credit Agreement. The Senior Promissory Notes are guaranteed by certain of the Company’s domestic subsidiaries. Debt Compliance As of March 30, 2019 , the Company was in compliance with the covenants related to its debt obligations. Finance Leases The Company's finance leases primarily relate to contracts for its fleet of vehicles. See Note 8 for further information relating to the Company's finance leases. Other Borrowings Other borrowings include a sale-leaseback financing arrangement for a manufacturing facility in Germany. Under this arrangement, the quarterly lease payment includes principal, interest, and a payment to the landlord toward a loan receivable. The interest rate on the outstanding obligation is 1.79% . The secured loan receivable, which is included in other assets in the accompanying condensed consolidated balance sheet, was $736,000 at March 30, 2019 . The lease arrangement provides for a fixed price purchase option, net of the projected loan receivable, of $1,494,000 at the end of the lease term in 2022 . If the Company does not exercise the purchase option for the facility, the Company will receive cash from the landlord to settle the loan receivable. As of March 30, 2019 , $3,941,000 was outstanding under this obligation. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recognized stock-based compensation expense of $1,553,000 in the first three months of 2019 and $1,464,000 in the first three months of 2018 within SG&A expenses in the accompanying condensed consolidated statement of income. The Company recognizes compensation expense for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. For time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award based on the grant date fair value, and net of actual forfeitures recorded when they occur. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately-vesting portion of the award based on the grant date fair value, net of actual forfeitures recorded when they occur, and remeasured each reporting period until the total number of RSUs to be issued is known. Unrecognized compensation expense related to stock-based compensation totaled approximately $9,388,000 at March 30, 2019 , and will be recognized over a weighted average period of 2.0 years. On March 4, 2019, the Company granted to certain of its officers performance-based RSUs, which represented, in aggregate, the right to receive 27,422 shares (the target RSU amount), with an aggregate grant date fair value of $2,364,000 . The RSUs are subject to adjustment based on the achievement of the performance measure selected for the 2019 fiscal year, which is a specified target for adjusted EBITDA generated from operations for the 2019 fiscal year. The RSUs are adjusted by comparing the actual adjusted EBITDA for the performance period to the target adjusted EBITDA. Actual adjusted EBITDA between 50% and 100% of the target adjusted EBITDA results in an adjustment of 50% to 100% of the RSU amount. Actual adjusted EBITDA between 100% and 115% of the target adjusted EBITDA results in an adjustment using a straight-line linear scale between 100% and 150% of the RSU amount. Actual adjusted EBITDA in excess of 115% results in an adjustment capped at 150% of the RSU amount. If actual adjusted EBITDA is below 50% of the target adjusted EBITDA for the 2019 fiscal year, these performance-based RSUs will be forfeited. In the first three months of 2019, 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 2020, 2021, and 2022, provided that the officer is employed by the Company on the applicable vesting dates. On March 4, 2019, the Company also granted time-based RSUs representing 39,206 shares to its officers and employees with an aggregate grant date fair value of $3,385,000 . These time-based RSUs generally vest in three equal annual installments on March 10 of 2020, 2021, and 2022, provided that a recipient remains employed by the Company on the applicable vesting dates. |
Retirement Benefit Plans
Retirement Benefit Plans | 3 Months Ended |
Mar. 30, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans The Company includes the service cost of net periodic benefit cost in operating income and all other components are included in other expense, net in the accompanying condensed consolidated statement of income. The components of net periodic benefit cost are as follows: Three Months Ended Three Months Ended (In thousands, except percentages) U.S. Pension Non-U.S. Pension Other Post-Retirement U.S. Pension Non-U.S. Pension Other Post-Retirement Service Cost $ — $ 43 $ 1 $ 175 $ 36 $ 53 Interest Cost 283 29 38 298 30 43 Expected Return on Plan Assets (249 ) (17 ) (1 ) (322 ) (11 ) (1 ) Recognized Net Actuarial Loss 8 5 3 135 16 34 Amortization of Prior Service Cost — — — — 2 22 $ 42 $ 60 $ 41 $ 286 $ 73 $ 151 The weighted average assumptions used to determine net periodic benefit cost are as follows: Discount Rate 4.10 % 2.80 % 4.44 % 3.51 % 3.80 % 3.65 % Expected Long-Term Return on Plan Assets 4.10 % 9.22 % 9.22 % 4.50 % 7.43 % 7.43 % Rate of Compensation Increase — % 2.98 % 5.57 % 3.00 % 3.69 % 3.07 % In 2018, the Company's board of directors and its compensation committee approved amendments to freeze and terminate the Company's U.S. pension plan (Retirement Plan) and its restoration plan (Restoration Plan) as of December 29, 2018. Procedures for plan settlement and distribution of the Retirement Plan assets will be initiated once the plan termination satisfies certain regulatory requirements, which is expected to occur in late 2019 or early 2020. At the settlement date, the Company will recognize a loss based on the difference between the unrecognized actuarial loss, unfunded benefit obligation, and any additional cash required to be paid. Participants in the Retirement Plan will have the option to receive either a lump sum payment or an annuity. Retirees will continue to receive payments pursuant to their current annuity elections. The Company will settle liabilities under the Restoration Plan by paying a lump sum to plan participants between twelve and twenty-four months following the termination date. The Company expects to settle the liabilities under the Restoration Plan in early 2020. The Company has included both the Retirement Plan liability of $ 1,020,000 and the Restoration Plan liability of $2,300,000 at March 30, 2019 in accrued payroll and employee benefits in the accompanying condensed consolidated balance sheet. The Company does not plan to make any material cash contributions to its other pension and post-retirement plans in 2019. |
Leases
Leases | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Under ASC 842, Leases , the Company determines if an arrangement is a lease obligation at inception of the contract. The Company enters into operating and finance lease commitments primarily for its manufacturing and office space, fleet of vehicles, and equipment leases that expire on various dates over the next 15 years, some of which include one or more options to extend the lease for up to 5 years. In addition, the Company leases land associated with certain of its buildings in Canada and China, under long-term leases expiring on various dates ranging from 2032 to 2062, one of which includes an assumed option to extend the lease for up to 10 years. The Company's operating lease ROU assets and operating lease liabilities with contract terms greater than 12 months are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. In determining the present value of future lease payments, the Company utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease. In addition, the calculation may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company recognizes its operating lease expense for lease payments on a straight-line basis over the lease term. Variable lease costs are not included in fixed lease payments and as a result, are excluded from the measurement of the ROU assets and lease liabilities. The Company expenses all variable lease costs as incurred, which were not material for the quarter ended March 30, 2019. The Company's lease agreements often contain lease and non-lease components. For real estate and equipment leases, the Company accounts for the lease and non-lease components as a single lease component. For vehicle leases, the Company does not combine lease and non-lease components. The components of lease expense are as follows: Three Months Ended (In thousands) March 30, 2019 Operating Lease Cost $ 1,370 Short-Term Lease Cost 185 Finance Lease Cost: ROU asset amortization 293 Interest on lease liabilities 19 Total Finance Lease Cost 312 Total Lease Costs $ 1,867 Supplemental cash flow information related to leases is as follows: Three Months Ended (In thousands) March 30, 2019 Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Operating cash flows from operating leases $ 1,391 Operating cash flows from finance leases $ 19 Financing cash flows from finance leases $ 274 ROU Assets Obtained in Exchange for Lease Obligations (a): Operating leases $ 27,044 Finance leases $ 2,161 (a) Includes additions related to the transition adjustment for the adoption ASC 842. The post-adoption additions of operating leases were $11,726,000 , of which $10,994,000 related to ROU assets obtained as part of our acquisition of SMH. The post-adoption additions of finance leases were not material. Supplemental balance sheet information related to leases is as follows: (In thousands, except lease term and discount rate) Balance Sheet Line Item March 30, 2019 Operating Leases: ROU assets Other assets $ 29,348 Short-term liabilities Other current liabilities $ 4,188 Long-term liabilities Other long-term liabilities 26,607 Total operating lease liabilities $ 30,795 Finance Leases: ROU assets, at cost Property, plant, and equipment, at cost $ 3,288 ROU assets accumulated amortization Less: accumulated depreciation and amortization (1,219 ) ROU assets, net Property, plant, and equipment, net $ 2,069 Short-term obligations Current maturities of long-term obligations $ 978 Long-term obligations Long-term obligations 943 Total finance lease liabilities $ 1,921 Weighted Average Remaining Lease Term: Operating leases 10.6 years Finance leases 2.2 years Weighted Average Discount Rate: Operating leases 3.94 % Finance leases 4.13 % As of March 30, 2019, future lease payments for lease liabilities are as follows: Operating Finance (In thousands) Leases Leases 2019 $ 4,038 $ 803 2020 4,876 806 2021 4,079 347 2022 3,416 37 2023 3,065 14 Thereafter 18,657 — Total Future Lease Payments 38,131 2,007 Less: Imputed Interest (7,336 ) (86 ) Present Value of Lease Payments $ 30,795 $ 1,921 As of March 30, 2019, the Company has no significant operating and finance leases that had not yet commenced. As previously disclosed in the Company's 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for noncancelable operating leases were as follows: (In thousands) December 29, 2018 2019 $ 4,507 2020 3,275 2021 2,230 2022 1,579 2023 987 Thereafter 1,713 Total Future Minimum Lease Payments $ 14,291 |
Leases | Leases Under ASC 842, Leases , the Company determines if an arrangement is a lease obligation at inception of the contract. The Company enters into operating and finance lease commitments primarily for its manufacturing and office space, fleet of vehicles, and equipment leases that expire on various dates over the next 15 years, some of which include one or more options to extend the lease for up to 5 years. In addition, the Company leases land associated with certain of its buildings in Canada and China, under long-term leases expiring on various dates ranging from 2032 to 2062, one of which includes an assumed option to extend the lease for up to 10 years. The Company's operating lease ROU assets and operating lease liabilities with contract terms greater than 12 months are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. In determining the present value of future lease payments, the Company utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease. In addition, the calculation may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company recognizes its operating lease expense for lease payments on a straight-line basis over the lease term. Variable lease costs are not included in fixed lease payments and as a result, are excluded from the measurement of the ROU assets and lease liabilities. The Company expenses all variable lease costs as incurred, which were not material for the quarter ended March 30, 2019. The Company's lease agreements often contain lease and non-lease components. For real estate and equipment leases, the Company accounts for the lease and non-lease components as a single lease component. For vehicle leases, the Company does not combine lease and non-lease components. The components of lease expense are as follows: Three Months Ended (In thousands) March 30, 2019 Operating Lease Cost $ 1,370 Short-Term Lease Cost 185 Finance Lease Cost: ROU asset amortization 293 Interest on lease liabilities 19 Total Finance Lease Cost 312 Total Lease Costs $ 1,867 Supplemental cash flow information related to leases is as follows: Three Months Ended (In thousands) March 30, 2019 Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Operating cash flows from operating leases $ 1,391 Operating cash flows from finance leases $ 19 Financing cash flows from finance leases $ 274 ROU Assets Obtained in Exchange for Lease Obligations (a): Operating leases $ 27,044 Finance leases $ 2,161 (a) Includes additions related to the transition adjustment for the adoption ASC 842. The post-adoption additions of operating leases were $11,726,000 , of which $10,994,000 related to ROU assets obtained as part of our acquisition of SMH. The post-adoption additions of finance leases were not material. Supplemental balance sheet information related to leases is as follows: (In thousands, except lease term and discount rate) Balance Sheet Line Item March 30, 2019 Operating Leases: ROU assets Other assets $ 29,348 Short-term liabilities Other current liabilities $ 4,188 Long-term liabilities Other long-term liabilities 26,607 Total operating lease liabilities $ 30,795 Finance Leases: ROU assets, at cost Property, plant, and equipment, at cost $ 3,288 ROU assets accumulated amortization Less: accumulated depreciation and amortization (1,219 ) ROU assets, net Property, plant, and equipment, net $ 2,069 Short-term obligations Current maturities of long-term obligations $ 978 Long-term obligations Long-term obligations 943 Total finance lease liabilities $ 1,921 Weighted Average Remaining Lease Term: Operating leases 10.6 years Finance leases 2.2 years Weighted Average Discount Rate: Operating leases 3.94 % Finance leases 4.13 % As of March 30, 2019, future lease payments for lease liabilities are as follows: Operating Finance (In thousands) Leases Leases 2019 $ 4,038 $ 803 2020 4,876 806 2021 4,079 347 2022 3,416 37 2023 3,065 14 Thereafter 18,657 — Total Future Lease Payments 38,131 2,007 Less: Imputed Interest (7,336 ) (86 ) Present Value of Lease Payments $ 30,795 $ 1,921 As of March 30, 2019, the Company has no significant operating and finance leases that had not yet commenced. As previously disclosed in the Company's 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for noncancelable operating leases were as follows: (In thousands) December 29, 2018 2019 $ 4,507 2020 3,275 2021 2,230 2022 1,579 2023 987 Thereafter 1,713 Total Future Minimum Lease Payments $ 14,291 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Items | 3 Months Ended |
Mar. 30, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Items | 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. Changes in each component of accumulated other comprehensive items (AOCI), net of tax, are as follows: (In thousands) Foreign Currency Translation Adjustment Pension and Other Post-Retirement Benefit Liability Adjustments Deferred Loss on Cash Flow Hedges Total Balance at December 29, 2018 $ (34,804 ) $ (4,375 ) $ (197 ) $ (39,376 ) Other comprehensive (loss) income before reclassifications (432 ) 9 (222 ) (645 ) Reclassifications from AOCI — 12 (15 ) (3 ) Net current period other comprehensive (loss) income (432 ) 21 (237 ) (648 ) Balance at March 30, 2019 $ (35,236 ) $ (4,354 ) $ (434 ) $ (40,024 ) Amounts reclassified from AOCI are as follows: Three Months Ended (In thousands) March 30, March 31, Statement of Income Line Item Retirement Benefit Plans (a) Amortization of net actuarial loss $ (16 ) $ (185 ) Other expense, net Amortization of prior service cost — (24 ) Other expense, net Total expense before income taxes (16 ) (209 ) Income tax benefit 4 52 Provision for income taxes (12 ) (157 ) Cash Flow Hedges (b) Interest rate swap agreements 20 (5 ) Interest expense Total income (expense) before income taxes 20 (5 ) Income tax (provision) benefit (5 ) 1 Provision for income taxes 15 (4 ) Total Reclassifications $ 3 $ (161 ) (a) Included in the computation of net periodic benefit cost. See Note 7 for additional information. (b) See Note 10 for additional information. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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. If a derivative contract is deemed 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. ASC 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 AOCI. These deferred gains and losses are recognized in the statement of income 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. Interest Rate Swap Agreements In 2018, the Company entered into an interest rate swap agreement (2018 Swap Agreement) which has a $ 15,000,000 notional value and expires on June 30, 2023 . In 2015, the Company also entered into an interest rate swap agreement (2015 Swap Agreement) which has a $10,000,000 notional value and expires on March 27, 2020. The swap agreements hedge the Company’s exposure to movements in the three-month LIBOR rate on U.S. dollar-denominated debt. On a quarterly basis, the Company receives a three-month LIBOR rate and pays a fixed rate of interest of 3.15% plus an applicable margin as defined in the Credit Agreement on the 2018 Swap Agreement and 1.50% plus an applicable margin as defined in the Credit Agreement on the 2015 Swap Agreement. The 2018 Swap Agreement is subject to a zero percent floor on the three-month LIBOR rate. The interest rate swap agreements are designated as cash flow hedges and, accordingly, unrecognized gains and losses are recorded to AOCI, net of tax. Management believes that any credit risk associated with the interest rate swap agreements is remote based on the Company's financial position and the creditworthiness of the financial institution that issued those agreements. The counterparty to the interest rate swap agreements could demand an early termination of those agreements if the Company were to be in default under the Credit Agreement, or any agreement that amends or replaces the Credit Agreement in which the counterparty is a member, and if the Company were to be unable to cure the default (See Note 5 ). The fair values of the interest rate swap agreements represent the estimated amounts that the Company would receive from or pay to the counterparty in the event of 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 manages its level of exposure to the risk of currency-exchange fluctuations by hedging a portion of its anticipated currency exposures, using forward currency-exchange contracts that typically have maturities of twelve months or less. Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges and unrecognized gains and losses are recorded to AOCI, net of tax. 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 within SG&A expenses in the accompanying condensed consolidated statement of income losses of $ 37,000 in the first three months of 2019 and gains of $ 13,000 in the first three months of 2018 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 in the accompanying condensed consolidated balance sheet: March 30, 2019 December 29, 2018 Balance Sheet Location Asset (Liability) (a) Notional Amount (b) Asset (Liability) (a) Notional Amount (In thousands) Derivatives Designated as Hedging Instruments: Derivatives in an Asset Position: 2015 Swap Agreement Other Long-Term Assets $ 99 $ 10,000 $ 148 $ 10,000 Forward currency-exchange contract Other Long-Term Assets $ — $ — $ 11 $ 842 Derivatives in a Liability Position: Forward currency-exchange contract Other Current Liabilities $ (129 ) $ 2,946 $ (50 ) $ 2,946 2018 Swap Agreement Other Long-Term Liabilities $ (540 ) $ 15,000 $ (352 ) $ 15,000 Forward currency-exchange contract Other Long-Term Liabilities $ (15 ) $ 842 $ — $ — Derivatives Not Designated as Hedging Instruments: Derivatives in an Asset Position: Forward currency-exchange contracts Other Current Assets $ — $ — $ 9 $ 1,192 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current Liabilities $ (21 ) $ 1,082 $ (31 ) $ 1,384 (a) See Note 11 for the fair value measurements relating to these financial instruments. (b) The total 2019 notional amounts are indicative of the level of the Company's recurring derivative activity. The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the three months ended March 30, 2019 : (In thousands) Interest Rate Swap Agreements Forward Currency- Exchange Contracts Total Unrealized Loss, Net of Tax, at December 29, 2018 $ (170 ) $ (27 ) $ (197 ) Gain reclassified to earnings (a) (15 ) — (15 ) Loss recognized in AOCI (150 ) (72 ) (222 ) Unrealized Loss, Net of Tax, at March 30, 2019 $ (335 ) $ (99 ) $ (434 ) (a) See Note 9 for the income statement classification. As of March 30, 2019 , the Company expects to reclassify losses of $ 87,000 from AOCI to earnings over the next twelve months based on the estimated cash flows of the interest rate swap agreements and the maturity dates of the forward currency-exchange contracts. |
Fair Value Measurements and Fai
Fair Value Measurements and Fair Value of Financial Instruments | 3 Months Ended |
Mar. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Fair Value of Financial Instruments | Fair Value Measurements and Fair Value of Financial Instruments 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 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: (In thousands) Level 1 Level 2 Level 3 Total March 30, 2019 Assets: Money market funds and time deposits $ 9,124 $ — $ — $ 9,124 Banker's acceptance drafts (a) $ — $ 7,772 $ — $ 7,772 2015 Swap Agreement $ — $ 99 $ — $ 99 Liabilities: 2018 Swap Agreement $ — $ 540 $ — $ 540 Forward currency-exchange contracts $ — $ 165 $ — $ 165 December 29, 2018 Assets: Money market funds and time deposits $ 6,902 $ — $ — $ 6,902 Banker's acceptance drafts (a) $ — $ 7,976 $ — $ 7,976 2015 Swap Agreement $ — $ 148 $ — $ 148 Forward currency-exchange contracts $ — $ 20 $ — $ 20 Liabilities: 2018 Swap Agreement $ — $ 352 $ — $ 352 Forward currency-exchange contracts $ — $ 81 $ — $ 81 (a) Included in accounts receivable 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 three months of 2019 . The Company's banker's acceptance drafts are carried at face value which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair values of the Company's interest rate swap agreements are based on LIBOR yield curves at the reporting date. The forward currency-exchange contracts and interest rate swap agreements are hedges of either recorded assets or liabilities or anticipated transactions and represent the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above. The carrying value and fair value of the Company's debt obligations, excluding lease obligations and other borrowings, are as follows: March 30, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Debt Obligations: Revolving credit facility $ 324,720 $ 324,720 $ 141,106 $ 141,106 Commercial real estate loan 20,213 20,711 20,475 20,575 Senior promissory notes 10,000 10,310 10,000 10,120 $ 354,933 $ 355,741 $ 171,581 $ 171,801 The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust quarterly based on prevailing market rates. The fair values of the commercial real estate loan and senior promissory notes are primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period ends, which represent Level 2 measurements. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company has combined its operating entities into three reportable operating segments, Papermaking Systems, Wood Processing Systems, and Material Handling Systems, and a separate product line, Fiber-based Products, as described below: • Papermaking Systems Segment – The Company develops, manufactures, and markets a range of equipment and products for the global papermaking, paper recycling, recycling and waste management, and other process industries. The Company's Papermaking Systems segment consists of the following product lines: Stock-Preparation; Fluid-Handling; and Doctoring, Cleaning, & Filtration. • Wood Processing Systems Segment – The Company develops, manufactures, and markets stranders, debarkers, chippers, and logging machinery used in the harvesting and production of lumber and OSB. Through this segment, the Company also provides refurbishment and repair of pulping equipment for the pulp and paper industry. • Material Handling Systems Segment – The Company develops, manufactures, and markets material handling equipment and systems to various process industries, including mining, aggregates, food processing, packaging, and pulp and paper. • Fiber-based Products business – The Company manufactures and sells biodegradable, absorbent granules derived from papermaking by-products for use primarily as carriers for agricultural, home lawn and garden, and professional lawn, turf and ornamental applications, as well as for oil and grease absorption. The following table presents financial information for the Company's reportable operating segments: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Revenues: Stock-Preparation $ 52,048 $ 45,483 Fluid-Handling 32,754 32,886 Doctoring, Cleaning, & Filtration 28,390 27,222 Papermaking Systems $ 113,192 $ 105,591 Wood Processing Systems 34,049 39,141 Material Handling Systems (a) 20,584 — Fiber-based Products 3,491 4,461 $ 171,316 $ 149,193 Income Before Provision for Income Taxes: Papermaking Systems (b) $ 18,509 $ 14,584 Wood Processing Systems (c) 7,270 7,363 Material Handling Systems (a, d) (1,353 ) — Corporate and Fiber-based Products (e) (5,851 ) (5,283 ) Total operating income 18,575 16,664 Interest expense, net (f) (3,448 ) (1,549 ) Other expense, net (f) (99 ) (246 ) $ 15,028 $ 14,869 Capital Expenditures: Papermaking Systems $ 1,357 $ 4,649 Wood Processing Systems 551 376 Material Handling Systems (a) 38 — Corporate and Fiber-based Products 222 126 $ 2,168 $ 5,151 March 30, December 29, (In thousands) 2019 2018 Total Assets: Papermaking Systems $ 479,312 $ 462,297 Wood Processing Systems 251,422 247,553 Material Handling Systems (a) 204,189 — Corporate and Fiber-based Products (g) 23,317 15,899 $ 958,240 $ 725,749 (a) Represents SMH, which was acquired on January 2, 2019 (see Note 2 ). (b) Includes restructuring costs of $ 770,000 in the three-month period ended March 31, 2018 (see Note 13 ). (c) Includes acquisition-related expenses of $ 252,000 in the three-month period ended March 31, 2018 for the amortization of acquired backlog. (d) Includes $ 4,151,000 in the three-month period ended March 30, 2019 of acquisition-related expenses. Acquisition-related expenses include acquisition transaction costs and amortization expense associated with acquired profit in inventory and backlog. (e) Corporate primarily includes general and administrative expenses. (f) The Company does not allocate interest and other expense, net to its segments. (g) Primarily includes Corporate and Fiber-based Products' cash and cash equivalents, tax assets, ROU assets, and property, plant, and equipment. |
Restructuring Costs
Restructuring Costs | 3 Months Ended |
Mar. 30, 2019 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | Restructuring Costs In 2017, the Company constructed a 160,000 square foot manufacturing facility in the United States that integrated its U.S. and Swedish papermaking stock-preparation product lines into a single manufacturing facility to achieve economies of scale and greater efficiencies. As a result of the consolidation and integration of these facilities, the Company developed a restructuring plan totaling $1,920,000 , including $148,000 associated with severance costs for the reduction of four employees in the United States and six employees in Sweden, $ 1,318,000 primarily for relocation costs of machinery, equipment and administrative offices, and $ 454,000 associated with employee retention costs, abandonment of excess facility and other closure costs in the Papermaking Systems segment. The Company does not expect to incur additional charges related to this restructuring plan. As a result of this plan, the Company recorded restructuring charges of $770,000 in the first three months of 2018, including $563,000 for the relocation of machinery, equipment and administrative offices, and $207,000 associated with employee retention and facility closure costs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Right of Recourse In the ordinary course of business, the Company's subsidiaries in China may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are noninterest-bearing obligations of the issuing bank and mature within six months of the origination date. The Company's subsidiaries in China may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Banker's acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates. The Company had $6,005,000 at March 30, 2019 and $12,406,000 at December 29, 2018 of banker's acceptance drafts subject to recourse, which were transferred to vendors but had not reached their scheduled maturity dates. Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company. Litigation From time to time, the Company is subject to various claims and legal proceedings covering a range of matters that arise in the ordinary course of business. Such litigation may include, but is not limited to, claims and counterclaims by and against the Company for breach of contract or warranty, canceled contracts, product liability, or bankruptcy-related claims. For legal proceedings in which a loss is probable and estimable, the Company accrues a loss based on the low end of the range of estimated loss when there is no better estimate within the range. If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 30, 2019 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies | 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. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements. Notes 1 and 3 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2018 describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the three months ended March 30, 2019, except for the adoption of Accounting Standards Codification (ASC), Leases (Topic 842) (ASC 842). See Recently Adopted Accounting Pronouncements within this note and Note 8 for further details. |
Use of Estimates | Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its condensed consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's condensed consolidated financial statements. |
Restricted Cash | The Company's restricted 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. The majority of the bank guarantees will expire over the next twelve months . |
Banker's Acceptance Drafts Included in Accounts Receivable | The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The drafts are noninterest-bearing obligations of the issuing bank and mature within six months of the origination date. The Company's subsidiaries may sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $7,772,000 at March 30, 2019 and $7,976,000 at December 29, 2018 , are included in accounts receivable in the accompanying condensed consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date. |
Revenue Recognition | The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. Most of the Company’s revenue is recognized at a point in time for each performance obligation under the contract when the customer obtains control of the goods or service. The majority of the Company’s parts and consumables products and capital products with minimal customization are accounted for at a point in time. The Company has made a policy election not to treat the obligation to ship as a separate performance obligation under the contract and, as a result, the associated shipping costs are accrued when revenue is recognized. The remaining portion of the Company’s revenue is recognized on an over time basis based on an input method that compares the costs incurred to date to the total expected costs required to satisfy the performance obligation. Contracts are accounted for on an over time basis when they include products which have no alternative use and an enforceable right to payment over time. Contracts recognized on an over time basis are typically for large capital projects which are highly customized for the customer and, as a result, would include a significant cost to rework in the event of cancellation. The transaction price is typically based on the amount billed to the customer and includes estimated variable consideration where applicable. Such variable consideration relates to certain performance guarantees and rights to return the product. The Company estimates variable consideration as the most likely amount to which it expects to be entitled based on the terms of the contracts with customers and historical experience, where relevant. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. Contract assets represent unbilled revenues associated with revenue recognized on contracts accounted for on an over time basis, which will be billed in future periods based on the contract terms. Contract liabilities consist of customer deposits, advanced billings, and deferred revenue. Deferred revenue is included in other current liabilities in the accompanying condensed consolidated balance sheet. Contract liabilities will be recognized as revenue in future periods once the revenue recognition criteria are met. The majority of the contract liabilities relate to advanced payments on contracts accounted for at a point in time. These advance payments will be recognized as revenue when the Company's performance obligations have been satisfied, which typically occurs when the product has shipped and control of the asset has transferred to the customer. The Company recognized revenue of $19,095,000 in the first three months of 2019 and $ 27,325,000 in the first three months of 2018 that was included in the contract liabilities balance at the beginning of 2019 and 2018, respectively. Customers in China will often settle their accounts receivable with a banker's acceptance draft, in which case cash settlement will be delayed until the banker's acceptance draft matures or is settled prior to maturity. For customers outside of China, final payment for the majority of the Company's products is received in the quarter following the product shipment. Certain of the Company's contracts include a longer period before final payment is due, which is typically within one year of final shipment or transfer of control to the customer. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases (Topic 842) . In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, which requires a lessee to recognize a right-of-use (ROU) asset and a corresponding lease liability for operating leases, initially measured at the present value of the future lease payments, on its balance sheet. This ASU also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. The Company adopted this ASU as of the beginning of fiscal 2019 using the cumulative-effect adjustment method. As a result, prior period amounts were not restated and continue to be under Topic 840, Leases , which did not require the recognition of operating leases on the balance sheet and is not comparative. As permitted under ASC 842, the Company elected the package of practical expedients for expired or existing contracts, which does not require the reassessment of prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected practical expedients relating to its ongoing accounting, including a short-term lease recognition exemption allowing lessees not to recognize ROU assets and liabilities with a term of 12 months or less and an election not to separate lease and non-lease components for all leases except vehicle leases. The adoption of this standard as of the beginning of fiscal 2019 resulted in increases of 2.3% to total assets and 4.8% to total liabilities and an immaterial decrease to retained earnings. In addition, the adoption of this ASU did not have a material impact on the Company’s condensed consolidated statements of income or cash flows. See Note 8 , Leases , for required lease accounting disclosures. Derivatives and Hedging (Topic 815), Targeted Improvements in Accounting for Hedging Activity. In August 2017, the FASB issued ASU No. 2017-12, which revises hedge accounting to better portray the economic results of an entity’s risk management activities, simplifies hedge accounting guidance, and improves disclosures of hedge accounting arrangements. The Company adopted this ASU on a prospective basis at the beginning of fiscal 2019. The adoption of this ASU did not have a material effect on the Company's condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU No. 2016-13, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining lives. This new guidance is effective for the Company in fiscal 2020 with early adoption permitted beginning in fiscal 2019. The Company is currently evaluating the effects that the adoption of this ASU will have on its condensed consolidated financial statements. Compensation-Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. In August 2018, the FASB issued ASU 2018-14, which removes, adds and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This new guidance is effective on a retrospective basis for the Company in fiscal 2021. Early adoption is permitted. The Company does not believe that the adoption of this ASU will have a material effect on its condensed 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. If a derivative contract is deemed 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. ASC 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 AOCI. These deferred gains and losses are recognized in the statement of income 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. |
Fair Value Measurement | 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 three months of 2019 . The Company's banker's acceptance drafts are carried at face value which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair values of the Company's interest rate swap agreements are based on LIBOR yield curves at the reporting date. The forward currency-exchange contracts and interest rate swap agreements are hedges of either recorded assets or liabilities or anticipated transactions and represent the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above. The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust quarterly based on prevailing market rates. The fair values of the commercial real estate loan and senior promissory notes are primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period ends, which represent Level 2 measurements. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Accounting Policies [Abstract] | |
Supplemental Cash Flow Information | Three Months Ended (In thousands) March 30, March 31, Cash Paid for Interest $ 2,782 $ 2,459 Cash Paid for Income Taxes, Net of Refunds $ 4,679 $ 8,455 Non-Cash Investing Activities: Post-closing adjustments $ 1,567 $ 397 Liabilities assumed of acquired business $ 29,664 $ — Non-cash additions to property, plant, and equipment $ 193 $ 1,816 Non-Cash Financing Activities: Issuance of Company common stock upon vesting of restricted stock units $ 3,278 $ 2,755 Dividends declared but unpaid $ 2,570 $ 2,440 |
Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows: (In thousands) March 30, March 31, December 29, December 30, Cash and cash equivalents $ 56,478 $ 72,210 $ 45,830 $ 75,425 Restricted cash 697 1,532 287 1,421 Total Cash, Cash Equivalents, and Restricted Cash $ 57,175 $ 73,742 $ 46,117 $ 76,846 |
Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheet that are shown in aggregate in the accompanying condensed consolidated statement of cash flows: (In thousands) March 30, March 31, December 29, December 30, Cash and cash equivalents $ 56,478 $ 72,210 $ 45,830 $ 75,425 Restricted cash 697 1,532 287 1,421 Total Cash, Cash Equivalents, and Restricted Cash $ 57,175 $ 73,742 $ 46,117 $ 76,846 |
Inventories | The components of inventories are as follows: March 30, December 29, (In thousands) Raw Materials $ 46,684 $ 44,522 Work in Process 20,239 15,876 Finished Goods 36,106 25,975 $ 103,029 $ 86,373 |
Acquired Intangible Assets | Acquired intangible assets by major asset class are as follows: (In thousands) Gross Accumulated Currency Net March 30, 2019 Definite-Lived Customer relationships $ 166,183 $ (41,222 ) $ (4,498 ) $ 120,463 Product technology 57,001 (24,619 ) (1,761 ) 30,621 Tradenames 5,227 (2,090 ) (419 ) 2,718 Other 17,784 (12,581 ) (576 ) 4,627 246,195 (80,512 ) (7,254 ) 158,429 Indefinite-Lived Tradenames 26,300 — (133 ) 26,167 Acquired Intangible Assets $ 272,495 $ (80,512 ) $ (7,387 ) $ 184,596 December 29, 2018 Definite-Lived Customer relationships $ 113,283 $ (38,160 ) $ (4,520 ) $ 70,603 Product technology 46,501 (23,563 ) (1,677 ) 21,261 Tradenames 5,227 (1,980 ) (390 ) 2,857 Other 13,744 (11,476 ) (127 ) 2,141 178,755 (75,179 ) (6,714 ) 96,862 Indefinite-Lived Tradenames 16,600 — (115 ) 16,485 Acquired Intangible Assets $ 195,355 $ (75,179 ) $ (6,829 ) $ 113,347 |
Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill by segment are as follows: (In thousands) Papermaking Systems Wood Processing Systems Material Handling Systems Total Balance at December 29, 2018 Gross balance $ 241,912 $ 101,771 $ — $ 343,683 Accumulated impairment losses (85,509 ) — — (85,509 ) Net balance 156,403 101,771 — 258,174 2019 Adjustments Acquisition (Note 2) — — 86,502 86,502 Currency translation (1,031 ) 123 — (908 ) Total 2019 adjustments (1,031 ) 123 86,502 85,594 Balance at March 30, 2019 Gross balance 240,881 101,894 86,502 429,277 Accumulated impairment losses (85,509 ) — — (85,509 ) Net balance $ 155,372 $ 101,894 $ 86,502 $ 343,768 |
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) March 30, March 31, Balance at Beginning of Year $ 5,726 $ 5,498 Provision charged to expense 1,076 715 Usage (925 ) (364 ) Acquisition 295 — Currency translation (3 ) 61 Balance at End of Period $ 6,169 $ 5,910 |
Revenue by Product Line, Product Type, Geography, and Revenue Recognition Method | The following table presents the disaggregation of revenues by product type and geography: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Revenues by Product Type: Parts and Consumables $ 112,850 $ 95,985 Capital 58,466 53,208 $ 171,316 $ 149,193 Revenues by Geography: North America $ 100,876 $ 77,616 Europe 38,985 41,493 Asia 17,078 20,148 Rest of World 14,377 9,936 $ 171,316 $ 149,193 The following table presents revenue by revenue recognition method: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Point in time $ 148,276 $ 142,005 Over time 23,040 7,188 $ 171,316 $ 149,193 |
Balances from Contracts with Customers | The following table presents balances from contracts with customers: March 30, December 29, (In thousands) Accounts receivable $ 104,120 $ 92,624 Contract assets $ 16,996 $ 15,741 Contract liabilities $ 38,950 $ 34,774 |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Business Combinations [Abstract] | |
Summary of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of assets acquired and liabilities assumed and the purchase price for SMH. The final purchase accounting and purchase price allocation remain subject to change as the Company continues to refine its preliminary valuation of certain acquired assets and the valuation of acquired intangibles. (In thousands) Net Assets Acquired: Cash, Cash Equivalents, and Restricted Cash $ 2,431 Accounts Receivable 10,271 Inventory 12,982 Other Current Assets 900 Property, Plant, and Equipment 7,730 Other Assets 10,994 Definite-Lived Intangible Assets Customer relationships 52,900 Product technology 10,500 Other 4,040 Indefinite-Lived Intangible Assets Tradenames 9,700 Goodwill 86,502 Total assets acquired 208,950 Accounts Payable 4,663 Customer Deposits 2,919 Other Current Liabilities 3,724 Long-Term Lease Liabilities 15,244 Long-Term Deferred Income Taxes 3,114 Total liabilities assumed 29,664 Net assets acquired $ 179,286 Purchase Price: Cash Paid to Seller Borrowed Under Revolving Credit Facility $ 177,719 Post-Closing Adjustment to be Paid to Seller 1,567 Total Purchase Price $ 179,286 |
Unaudited Supplemental Pro Forma Information | Had the acquisition of SMH been completed as of the beginning of 2018, the Company’s pro forma results of operations for the three months ended March 30, 2019 and March 31, 2018 would have been as follows: Three Months Ended (In thousands, except per share amounts) March 30, 2019 March 31, 2018 Revenues $ 171,316 $ 170,532 Net Income Attributable to Kadant $ 14,112 $ 8,475 Earnings per Share Attributable to Kadant: Basic $ 1.27 $ 0.77 Diluted $ 1.24 $ 0.75 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Basic and diluted earnings per share (EPS) are calculated as follows: Three Months Ended March 30, March 31, (In thousands, except per share amounts) Amounts Attributable to Kadant: Net Income $ 10,900 $ 10,858 Basic Weighted Average Shares 11,133 11,042 Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares 252 300 Diluted Weighted Average Shares 11,385 11,342 Basic Earnings per Share $ 0.98 $ 0.98 Diluted Earnings per Share $ 0.96 $ 0.96 |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | Long-term obligations are as follows: March 30, December 29, (In thousands) Revolving Credit Facility, due 2023 $ 324,720 $ 141,106 Commercial Real Estate Loan, due 2019 to 2028 20,213 20,475 Senior Promissory Notes, due 2023 to 2028 10,000 10,000 Finance Leases, due 2019 to 2024 1,921 — Other Borrowings, due 2019 to 2023 4,206 4,388 Unamortized Debt Issuance Costs (143 ) (148 ) Total 360,917 175,821 Less: Current Maturities of Long-Term Obligations (2,631 ) (1,668 ) Long-Term Obligations $ 358,286 $ 174,153 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost and Assumptions Used | The components of net periodic benefit cost are as follows: Three Months Ended Three Months Ended (In thousands, except percentages) U.S. Pension Non-U.S. Pension Other Post-Retirement U.S. Pension Non-U.S. Pension Other Post-Retirement Service Cost $ — $ 43 $ 1 $ 175 $ 36 $ 53 Interest Cost 283 29 38 298 30 43 Expected Return on Plan Assets (249 ) (17 ) (1 ) (322 ) (11 ) (1 ) Recognized Net Actuarial Loss 8 5 3 135 16 34 Amortization of Prior Service Cost — — — — 2 22 $ 42 $ 60 $ 41 $ 286 $ 73 $ 151 The weighted average assumptions used to determine net periodic benefit cost are as follows: Discount Rate 4.10 % 2.80 % 4.44 % 3.51 % 3.80 % 3.65 % Expected Long-Term Return on Plan Assets 4.10 % 9.22 % 9.22 % 4.50 % 7.43 % 7.43 % Rate of Compensation Increase — % 2.98 % 5.57 % 3.00 % 3.69 % 3.07 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense are as follows: Three Months Ended (In thousands) March 30, 2019 Operating Lease Cost $ 1,370 Short-Term Lease Cost 185 Finance Lease Cost: ROU asset amortization 293 Interest on lease liabilities 19 Total Finance Lease Cost 312 Total Lease Costs $ 1,867 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows: Three Months Ended (In thousands) March 30, 2019 Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Operating cash flows from operating leases $ 1,391 Operating cash flows from finance leases $ 19 Financing cash flows from finance leases $ 274 ROU Assets Obtained in Exchange for Lease Obligations (a): Operating leases $ 27,044 Finance leases $ 2,161 (a) Includes additions related to the transition adjustment for the adoption ASC 842. The post-adoption additions of operating leases were $11,726,000 , of which $10,994,000 related to ROU assets obtained as part of our acquisition of SMH. The post-adoption additions of finance leases were not material. |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: (In thousands, except lease term and discount rate) Balance Sheet Line Item March 30, 2019 Operating Leases: ROU assets Other assets $ 29,348 Short-term liabilities Other current liabilities $ 4,188 Long-term liabilities Other long-term liabilities 26,607 Total operating lease liabilities $ 30,795 Finance Leases: ROU assets, at cost Property, plant, and equipment, at cost $ 3,288 ROU assets accumulated amortization Less: accumulated depreciation and amortization (1,219 ) ROU assets, net Property, plant, and equipment, net $ 2,069 Short-term obligations Current maturities of long-term obligations $ 978 Long-term obligations Long-term obligations 943 Total finance lease liabilities $ 1,921 Weighted Average Remaining Lease Term: Operating leases 10.6 years Finance leases 2.2 years Weighted Average Discount Rate: Operating leases 3.94 % Finance leases 4.13 % |
Lessee, Operating Lease, Liability, Maturity | As of March 30, 2019, future lease payments for lease liabilities are as follows: Operating Finance (In thousands) Leases Leases 2019 $ 4,038 $ 803 2020 4,876 806 2021 4,079 347 2022 3,416 37 2023 3,065 14 Thereafter 18,657 — Total Future Lease Payments 38,131 2,007 Less: Imputed Interest (7,336 ) (86 ) Present Value of Lease Payments $ 30,795 $ 1,921 |
Finance Lease, Liability, Maturity | As of March 30, 2019, future lease payments for lease liabilities are as follows: Operating Finance (In thousands) Leases Leases 2019 $ 4,038 $ 803 2020 4,876 806 2021 4,079 347 2022 3,416 37 2023 3,065 14 Thereafter 18,657 — Total Future Lease Payments 38,131 2,007 Less: Imputed Interest (7,336 ) (86 ) Present Value of Lease Payments $ 30,795 $ 1,921 |
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in the Company's 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for noncancelable operating leases were as follows: (In thousands) December 29, 2018 2019 $ 4,507 2020 3,275 2021 2,230 2022 1,579 2023 987 Thereafter 1,713 Total Future Minimum Lease Payments $ 14,291 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Items (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Items | Changes in each component of accumulated other comprehensive items (AOCI), net of tax, are as follows: (In thousands) Foreign Currency Translation Adjustment Pension and Other Post-Retirement Benefit Liability Adjustments Deferred Loss on Cash Flow Hedges Total Balance at December 29, 2018 $ (34,804 ) $ (4,375 ) $ (197 ) $ (39,376 ) Other comprehensive (loss) income before reclassifications (432 ) 9 (222 ) (645 ) Reclassifications from AOCI — 12 (15 ) (3 ) Net current period other comprehensive (loss) income (432 ) 21 (237 ) (648 ) Balance at March 30, 2019 $ (35,236 ) $ (4,354 ) $ (434 ) $ (40,024 ) |
Reclassification Out of Accumulated Other Comprehensive Items | Amounts reclassified from AOCI are as follows: Three Months Ended (In thousands) March 30, March 31, Statement of Income Line Item Retirement Benefit Plans (a) Amortization of net actuarial loss $ (16 ) $ (185 ) Other expense, net Amortization of prior service cost — (24 ) Other expense, net Total expense before income taxes (16 ) (209 ) Income tax benefit 4 52 Provision for income taxes (12 ) (157 ) Cash Flow Hedges (b) Interest rate swap agreements 20 (5 ) Interest expense Total income (expense) before income taxes 20 (5 ) Income tax (provision) benefit (5 ) 1 Provision for income taxes 15 (4 ) Total Reclassifications $ 3 $ (161 ) (a) Included in the computation of net periodic benefit cost. See Note 7 for additional information. (b) See Note 10 for additional information. |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The following table summarizes the fair value of the Company's derivative instruments in the accompanying condensed consolidated balance sheet: March 30, 2019 December 29, 2018 Balance Sheet Location Asset (Liability) (a) Notional Amount (b) Asset (Liability) (a) Notional Amount (In thousands) Derivatives Designated as Hedging Instruments: Derivatives in an Asset Position: 2015 Swap Agreement Other Long-Term Assets $ 99 $ 10,000 $ 148 $ 10,000 Forward currency-exchange contract Other Long-Term Assets $ — $ — $ 11 $ 842 Derivatives in a Liability Position: Forward currency-exchange contract Other Current Liabilities $ (129 ) $ 2,946 $ (50 ) $ 2,946 2018 Swap Agreement Other Long-Term Liabilities $ (540 ) $ 15,000 $ (352 ) $ 15,000 Forward currency-exchange contract Other Long-Term Liabilities $ (15 ) $ 842 $ — $ — Derivatives Not Designated as Hedging Instruments: Derivatives in an Asset Position: Forward currency-exchange contracts Other Current Assets $ — $ — $ 9 $ 1,192 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current Liabilities $ (21 ) $ 1,082 $ (31 ) $ 1,384 (a) See Note 11 for the fair value measurements relating to these financial instruments. (b) The total 2019 notional amounts are indicative of the level of the Company's recurring derivative activity. |
Activity in Accumulated Other Comprehensive Items (OCI) | The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the three months ended March 30, 2019 : (In thousands) Interest Rate Swap Agreements Forward Currency- Exchange Contracts Total Unrealized Loss, Net of Tax, at December 29, 2018 $ (170 ) $ (27 ) $ (197 ) Gain reclassified to earnings (a) (15 ) — (15 ) Loss recognized in AOCI (150 ) (72 ) (222 ) Unrealized Loss, Net of Tax, at March 30, 2019 $ (335 ) $ (99 ) $ (434 ) (a) See Note 9 for the income statement classification. |
Fair Value Measurements and F_2
Fair Value Measurements and Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Fair Value Disclosures [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: (In thousands) Level 1 Level 2 Level 3 Total March 30, 2019 Assets: Money market funds and time deposits $ 9,124 $ — $ — $ 9,124 Banker's acceptance drafts (a) $ — $ 7,772 $ — $ 7,772 2015 Swap Agreement $ — $ 99 $ — $ 99 Liabilities: 2018 Swap Agreement $ — $ 540 $ — $ 540 Forward currency-exchange contracts $ — $ 165 $ — $ 165 December 29, 2018 Assets: Money market funds and time deposits $ 6,902 $ — $ — $ 6,902 Banker's acceptance drafts (a) $ — $ 7,976 $ — $ 7,976 2015 Swap Agreement $ — $ 148 $ — $ 148 Forward currency-exchange contracts $ — $ 20 $ — $ 20 Liabilities: 2018 Swap Agreement $ — $ 352 $ — $ 352 Forward currency-exchange contracts $ — $ 81 $ — $ 81 (a) Included in accounts receivable 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 debt obligations, excluding lease obligations and other borrowings, are as follows: March 30, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Debt Obligations: Revolving credit facility $ 324,720 $ 324,720 $ 141,106 $ 141,106 Commercial real estate loan 20,213 20,711 20,475 20,575 Senior promissory notes 10,000 10,310 10,000 10,120 $ 354,933 $ 355,741 $ 171,581 $ 171,801 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Reporting Information | The following table presents financial information for the Company's reportable operating segments: Three Months Ended March 30, March 31, (In thousands) 2019 2018 Revenues: Stock-Preparation $ 52,048 $ 45,483 Fluid-Handling 32,754 32,886 Doctoring, Cleaning, & Filtration 28,390 27,222 Papermaking Systems $ 113,192 $ 105,591 Wood Processing Systems 34,049 39,141 Material Handling Systems (a) 20,584 — Fiber-based Products 3,491 4,461 $ 171,316 $ 149,193 Income Before Provision for Income Taxes: Papermaking Systems (b) $ 18,509 $ 14,584 Wood Processing Systems (c) 7,270 7,363 Material Handling Systems (a, d) (1,353 ) — Corporate and Fiber-based Products (e) (5,851 ) (5,283 ) Total operating income 18,575 16,664 Interest expense, net (f) (3,448 ) (1,549 ) Other expense, net (f) (99 ) (246 ) $ 15,028 $ 14,869 Capital Expenditures: Papermaking Systems $ 1,357 $ 4,649 Wood Processing Systems 551 376 Material Handling Systems (a) 38 — Corporate and Fiber-based Products 222 126 $ 2,168 $ 5,151 March 30, December 29, (In thousands) 2019 2018 Total Assets: Papermaking Systems $ 479,312 $ 462,297 Wood Processing Systems 251,422 247,553 Material Handling Systems (a) 204,189 — Corporate and Fiber-based Products (g) 23,317 15,899 $ 958,240 $ 725,749 (a) Represents SMH, which was acquired on January 2, 2019 (see Note 2 ). (b) Includes restructuring costs of $ 770,000 in the three-month period ended March 31, 2018 (see Note 13 ). (c) Includes acquisition-related expenses of $ 252,000 in the three-month period ended March 31, 2018 for the amortization of acquired backlog. (d) Includes $ 4,151,000 in the three-month period ended March 30, 2019 of acquisition-related expenses. Acquisition-related expenses include acquisition transaction costs and amortization expense associated with acquired profit in inventory and backlog. (e) Corporate primarily includes general and administrative expenses. (f) The Company does not allocate interest and other expense, net to its segments. (g) Primarily includes Corporate and Fiber-based Products' cash and cash equivalents, tax assets, ROU assets, and property, plant, and equipment. |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019USD ($)Segment | Mar. 31, 2018USD ($) | Dec. 29, 2018USD ($) | Dec. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Number of reportable segments | Segment | 3 | |||
Bank guarantees, expiration period | 12 months | |||
Banker's acceptance drafts, maturity period | 6 months | |||
Banker's acceptance drafts | $ 7,772 | $ 7,976 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Currency Translation | (7,387) | $ (6,829) | ||
Revenue recognized | $ 19,095 | $ 27,325 | ||
Assets | ASU No. 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle in period of adoption, percent | 2.30% | |||
Liabilities | ASU No. 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle in period of adoption, percent | 4.80% |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Cash Paid for Interest | $ 2,782 | $ 2,459 |
Cash Paid for Income Taxes, Net of Refunds | 4,679 | 8,455 |
Non-Cash Investing Activities: | ||
Post-closing adjustments | 1,567 | 397 |
Liabilities assumed of acquired business | 29,664 | 0 |
Non-cash additions to property, plant, and equipment | 193 | 1,816 |
Non-Cash Financing Activities: | ||
Issuance of Company common stock upon vesting of restricted stock units | 3,278 | 2,755 |
Dividends declared but unpaid | $ 2,570 | $ 2,440 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 | Mar. 31, 2018 | Dec. 30, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 56,478 | $ 45,830 | $ 72,210 | $ 75,425 |
Restricted cash | 697 | 287 | 1,532 | 1,421 |
Total Cash, Cash Equivalents, and Restricted Cash | $ 57,175 | $ 46,117 | $ 73,742 | $ 76,846 |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 46,684 | $ 44,522 |
Work in Process | 20,239 | 15,876 |
Finished Goods | 36,106 | 25,975 |
Total Inventories | $ 103,029 | $ 86,373 |
Nature of Operations and Summ_8
Nature of Operations and Summary of Significant Accounting Policies - Intangible Assets By Major Asset Class (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2019 | Dec. 29, 2018 | |
Acquired Definite-Lived Intangible Assets [Line Items] | ||
Gross | $ 246,195 | $ 178,755 |
Accumulated Amortization | (80,512) | (75,179) |
Currency Translation | (7,254) | (6,714) |
Net | 158,429 | 96,862 |
Acquired Intangible Assets [Abstract] | ||
Gross | 272,495 | 195,355 |
Currency Translation | (7,387) | (6,829) |
Net | 184,596 | 113,347 |
Tradenames | ||
Acquired Indefinite-Lived Intangible Assets [Line Items] | ||
Gross | 26,300 | 16,600 |
Currency Translation | (133) | (115) |
Net | 26,167 | 16,485 |
Customer relationships | ||
Acquired Definite-Lived Intangible Assets [Line Items] | ||
Gross | 166,183 | 113,283 |
Accumulated Amortization | (41,222) | (38,160) |
Currency Translation | (4,498) | (4,520) |
Net | 120,463 | 70,603 |
Product technology | ||
Acquired Definite-Lived Intangible Assets [Line Items] | ||
Gross | 57,001 | 46,501 |
Accumulated Amortization | (24,619) | (23,563) |
Currency Translation | (1,761) | (1,677) |
Net | 30,621 | 21,261 |
Tradenames | ||
Acquired Definite-Lived Intangible Assets [Line Items] | ||
Gross | 5,227 | 5,227 |
Accumulated Amortization | (2,090) | (1,980) |
Currency Translation | (419) | (390) |
Net | 2,718 | 2,857 |
Other | ||
Acquired Definite-Lived Intangible Assets [Line Items] | ||
Gross | 17,784 | 13,744 |
Accumulated Amortization | (12,581) | (11,476) |
Currency Translation | (576) | (127) |
Net | $ 4,627 | $ 2,141 |
Nature of Operations and Summ_9
Nature of Operations and Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Gross Balance, Beginning Balance | $ 343,683 |
Accumulated impairment losses | (85,509) |
Net Balance, Beginning Balance | 258,174 |
Acquisition | 86,502 |
Currency translation | (908) |
Total 2019 adjustments | 85,594 |
Gross Balance, Ending Balance | 429,277 |
Accumulated impairment losses | (85,509) |
Net Balance, Ending Balance | 343,768 |
Operating Segment | Papermaking Systems | |
Goodwill [Roll Forward] | |
Gross Balance, Beginning Balance | 241,912 |
Accumulated impairment losses | (85,509) |
Net Balance, Beginning Balance | 156,403 |
Acquisition | 0 |
Currency translation | (1,031) |
Total 2019 adjustments | (1,031) |
Gross Balance, Ending Balance | 240,881 |
Accumulated impairment losses | (85,509) |
Net Balance, Ending Balance | 155,372 |
Operating Segment | Wood Processing Systems | |
Goodwill [Roll Forward] | |
Gross Balance, Beginning Balance | 101,771 |
Accumulated impairment losses | 0 |
Net Balance, Beginning Balance | 101,771 |
Acquisition | 0 |
Currency translation | 123 |
Total 2019 adjustments | 123 |
Gross Balance, Ending Balance | 101,894 |
Accumulated impairment losses | 0 |
Net Balance, Ending Balance | 101,894 |
Operating Segment | Material Handling Systems | |
Goodwill [Roll Forward] | |
Gross Balance, Beginning Balance | 0 |
Accumulated impairment losses | 0 |
Net Balance, Beginning Balance | 0 |
Acquisition | 86,502 |
Currency translation | 0 |
Total 2019 adjustments | 86,502 |
Gross Balance, Ending Balance | 86,502 |
Accumulated impairment losses | 0 |
Net Balance, Ending Balance | $ 86,502 |
Nature of Operations and Sum_10
Nature of Operations and Summary of Significant Accounting Policies - Warranty Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Changes in the carrying amount of accrued warranty costs [Roll Forward] | ||
Balance at Beginning of Year | $ 5,726 | $ 5,498 |
Provision charged to expense | 1,076 | 715 |
Usage | (925) | (364) |
Acquisition | 295 | 0 |
Currency translation | (3) | 61 |
Balance at End of Period | $ 6,169 | $ 5,910 |
Nature of Operations and Sum_11
Nature of Operations and Summary of Significant Accounting Policies - Revenue Recognition by Product Line, Product Type, Geography and Revenue Recognition Method (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 171,316 | $ 149,193 |
Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 148,276 | 142,005 |
Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 23,040 | 7,188 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 100,876 | 77,616 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 38,985 | 41,493 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 17,078 | 20,148 |
Rest of World | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,377 | 9,936 |
Parts and Consumables | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 112,850 | 95,985 |
Capital | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 58,466 | $ 53,208 |
Nature of Operations and Sum_12
Nature of Operations and Summary of Significant Accounting Policies - Revenue from Contract with Customers (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 104,120 | $ 92,624 |
Contract assets | 16,996 | 15,741 |
Contract liabilities | $ 38,950 | $ 34,774 |
Acquisition - Acquisition of Sy
Acquisition - Acquisition of Syntron Material Handling Group, LLC (Details) - USD ($) | Jan. 02, 2019 | Mar. 30, 2019 | Mar. 31, 2018 | Oct. 31, 2018 | Dec. 29, 2018 |
Business Acquisition [Line Items] | |||||
Acquisition transaction costs | $ 843,000 | ||||
Payments to acquire business, net | 175,288,000 | $ 0 | |||
Goodwill | 343,768,000 | $ 258,174,000 | |||
Syntron Material Handling Group, LLC | |||||
Business Acquisition [Line Items] | |||||
Acquisition transaction costs | 843,000 | ||||
Payments to acquire business, net | $ 176,855,000 | ||||
Post-closing adjustment to be paid to seller | 1,567,000 | ||||
Revenues | $ 89,365,000 | ||||
Goodwill | 86,502,000 | ||||
Goodwill, expected tax deductible amount | 64,438,000 | ||||
Intangible assets other than goodwill acquired | 77,140,000 | ||||
Intangible assets other than goodwill, expected tax deductible amount | $ 66,725,000 | ||||
Acquired intangible assets other than goodwill income tax payments, period (years) | 15 years | ||||
Deferred income tax payments, period (years) | 15 years | ||||
Revenues from the date of acquisition | 20,584,000 | ||||
Operating income from the date of acquisition | 1,353,000 | ||||
Amortization expense | $ 3,308,000 |
Acquisition - Purchase Price Al
Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Mar. 30, 2019 | Dec. 29, 2018 |
Net Assets Acquired: | |||
Goodwill | $ 343,768 | $ 258,174 | |
Syntron Material Handling Group, LLC | |||
Net Assets Acquired: | |||
Cash, Cash Equivalents, and Restricted Cash | $ 2,431 | ||
Accounts Receivable | 10,271 | ||
Inventory | 12,982 | ||
Other Current Assets | 900 | ||
Property, Plant, and Equipment | 7,730 | ||
Other Assets | 10,994 | ||
Goodwill | 86,502 | ||
Total assets acquired | 208,950 | ||
Accounts Payable | 4,663 | ||
Customer Deposits | 2,919 | ||
Other Current Liabilities | 3,724 | ||
Long-Term Lease Liabilities | 15,244 | ||
Long-Term Deferred Income Taxes | 3,114 | ||
Total liabilities assumed | 29,664 | ||
Net assets acquired | 179,286 | ||
Purchase Price: | |||
Cash Paid to Seller Borrowed Under Revolving Credit Facility | 177,719 | ||
Post-Closing Adjustment to be Paid to Seller | 1,567 | ||
Total Purchase Price | $ 179,286 | ||
Weighted average useful life of acquired intangible assets | 14 years | ||
Syntron Material Handling Group, LLC | Tradenames | |||
Net Assets Acquired: | |||
Indefinite-Lived Intangible Assets | $ 9,700 | ||
Syntron Material Handling Group, LLC | Customer relationships | |||
Net Assets Acquired: | |||
Definite-Lived Intangible Assets | $ 52,900 | ||
Purchase Price: | |||
Weighted average useful life of acquired intangible assets | 15 years | ||
Syntron Material Handling Group, LLC | Product technology | |||
Net Assets Acquired: | |||
Definite-Lived Intangible Assets | $ 10,500 | ||
Purchase Price: | |||
Weighted average useful life of acquired intangible assets | 14 years | ||
Syntron Material Handling Group, LLC | Other | |||
Net Assets Acquired: | |||
Definite-Lived Intangible Assets | $ 4,040 | ||
Purchase Price: | |||
Weighted average useful life of acquired intangible assets | 8 years |
Acquisition - Pro Forma Informa
Acquisition - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Pro Forma Information | ||
Nonrecurring adjustments | $ 10,900 | $ 10,858 |
Syntron Material Handling Group, LLC | ||
Business Acquisition [Line Items] | ||
Revenues | 171,316 | 170,532 |
Net Income Attributable to Kadant | $ 14,112 | $ 8,475 |
Earnings per Share Attributable to Kadant: | ||
Basic (in dollars per share) | $ 1.27 | $ 0.77 |
Diluted (in dollars per share) | $ 1.24 | $ 0.75 |
Syntron Material Handling Group, LLC | Acquisition-related transaction costs | ||
Pro Forma Information | ||
Nonrecurring adjustments | $ (843) | $ 843 |
Syntron Material Handling Group, LLC | Inventory revalued | ||
Pro Forma Information | ||
Nonrecurring adjustments | (2,310) | 2,310 |
Syntron Material Handling Group, LLC | Intangible amortization related to acquired backlog | ||
Pro Forma Information | ||
Nonrecurring adjustments | $ (998) | $ 998 |
Earnings per Share - Basic and
Earnings per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Amounts Attributable to Kadant: | ||
Net Income Attributable to Kadant | $ 10,900 | $ 10,858 |
Basic Weighted Average Shares (in shares) | 11,133 | 11,042 |
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan Shares (in shares) | 252 | 300 |
Diluted Weighted Average Shares (in shares) | 11,385 | 11,342 |
Basic Earnings per Share (in dollars per share) | $ 0.98 | $ 0.98 |
Diluted Earnings per Share (in dollars per share) | $ 0.96 | $ 0.96 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Amount of antidilutive securities excluded from computation of EPS (in shares) | 44 | 30 |
Provision for Income Taxes - Na
Provision for Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 3,963 | $ 3,861 |
Effective tax rate | 26.00% | 26.00% |
Long-Term Obligations - Schedul
Long-Term Obligations - Schedule of Long-Term Obligations (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Finance Leases, due 2019 to 2024 | $ 1,921 | |
Unamortized Debt Issuance Expense | (143) | $ (148) |
Total | 360,917 | 175,821 |
Less: Current Maturities of Long-Term Obligations | (2,631) | (1,668) |
Long-Term Obligations | 358,286 | 174,153 |
Revolving Credit Facility, due 2023 | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 324,720 | 141,106 |
Commercial Real Estate Loan, due 2019 to 2028 | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 20,213 | 20,475 |
Senior Promissory Notes, due 2023 to 2028 | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 10,000 | 10,000 |
Other Borrowings, due 2019 to 2023 | ||
Debt Instrument [Line Items] | ||
Other Borrowings, due 2019 to 2023 | $ 4,206 | $ 4,388 |
Long-Term Obligations - Narrati
Long-Term Obligations - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Mar. 30, 2019 | |
Debt Instrument [Line Items] | ||
Weighted average interest rate for revolving credit facility (in hundredths) | 3.64% | |
Loan receivable | $ 736,000 | |
Commercial Real Estate Loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.60% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 141,106,000 | $ 324,720,000 |
Remaining borrowing capacity | 75,344,000 | |
Revolving Credit Facility | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Term of debt agreement | 5 years | |
Borrowing capacity available under committed portion | $ 400,000,000 | |
Additional borrowing capacity | $ 150,000,000 | |
Basis spread on variable rate floor (as a percentage) | 0.00% | |
Maximum amount of unrestricted U.S. cash | $ 30,000,000 | |
Maximum consolidated leverage ratio | 3.75 | |
Minimum consolidated interest charge coverage ratio | 4 | |
Revolving Credit Facility | Credit Agreement | Federal Funds Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percentage) | 0.50% | |
Revolving Credit Facility | Credit Agreement | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percentage) | 0.50% | |
Revolving Credit Facility | Credit Agreement | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percentage) | 1.00% | |
Revolving Credit Facility | Credit Agreement | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percentage) | 2.25% | |
Revolving Credit Facility | Canadian Denominated Borrowing | ||
Debt Instrument [Line Items] | ||
Long-term debt | 39,863,000 | |
Revolving Credit Facility | Euro-Denominated Borrowing | ||
Debt Instrument [Line Items] | ||
Long-term debt | 15,857,000 | |
Secured Debt | Commercial Real Estate Loan | ||
Debt Instrument [Line Items] | ||
Term of debt agreement | 10 years | |
Long-term debt | $ 10,500,000 | |
Principal amount | 21,000,000 | |
Quarterly installment amount | $ 262,500 | |
Fixed interest rate | 4.45% | |
Senior Promissory Notes, due 2023 to 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 10,000,000 | $ 10,000,000 |
Senior Promissory Notes, due 2023 to 2028 | Note Purchase Agreement | ||
Debt Instrument [Line Items] | ||
Additional borrowing capacity | 115,000,000 | |
Principal amount | $ 10,000,000 | |
Fixed interest rate | 4.90% | |
Senior Promissory Notes, due 2023 to 2028 | Note Purchase Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Minimum debt prepayment increment | $ 1,000,000 | |
Capital Lease Obligations | Sale Leaseback Arrangement | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.79% | |
Net purchase option | $ 1,494,000 | |
Outstanding balance | $ 3,941,000 | |
Debt Covenant Period One | Secured Debt | Commercial Real Estate Loan | ||
Debt Instrument [Line Items] | ||
Prepayment fee | 2.00% | |
Debt Covenant Period Two | Secured Debt | Commercial Real Estate Loan | ||
Debt Instrument [Line Items] | ||
Prepayment fee | 1.00% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | Mar. 01, 2019 | Mar. 30, 2019 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1,553 | $ 1,464 | |
Unrecognized compensation expense related to stock awards | $ 9,388 | ||
Recognition period | 2 years | ||
Executive Officer | Performance Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of units granted (in shares) | 27,422 | ||
Aggregate grant date fair value | $ 2,364 | ||
Actual adjusted EBITDA, forfeiture threshold | 50.00% | ||
Percentage of target award expected to vest | 100.00% | ||
Executive Officers And Employees | Time Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of units granted (in shares) | 39,206 | ||
Aggregate grant date fair value | $ 3,385 | ||
Share-Based Compensation Award, Performance Metric, Actual Adjusted EBITDA Between 50 Percent And 100 Percent | Executive Officer | Performance Based Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of adjustment of award amount | 50.00% | ||
Share-Based Compensation Award, Performance Metric, Actual Adjusted EBITDA Between 50 Percent And 100 Percent | Executive Officer | Performance Based Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of adjustment of award amount | 100.00% | ||
Share-based Compensation Award, Performance Metric, Actual Adjusted EBITDA Between 100 Percent And 115 Percent | Executive Officer | Performance Based Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of adjustment of award amount | 100.00% | ||
Share-based Compensation Award, Performance Metric, Actual Adjusted EBITDA Between 100 Percent And 115 Percent | Executive Officer | Performance Based Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of adjustment of award amount | 150.00% | ||
Share-Based Compensation Award, Performance Metric, Actual Adjusted EBITDA In Excess Of 115 Percent | Executive Officer | Performance Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of adjustment of award amount | 150.00% | ||
Share-based Compensation Award, Tranche One | Executive Officer | Performance Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Share-based Compensation Award, Tranche One | Executive Officers And Employees | Time Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Share-based Compensation Award, Tranche Two | Executive Officer | Performance Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Share-based Compensation Award, Tranche Two | Executive Officers And Employees | Time Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Share-based Compensation Award, Tranche Three | Executive Officer | Performance Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Share-based Compensation Award, Tranche Three | Executive Officers And Employees | Time Based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% |
Retirement Benefit Plans - Comp
Retirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Pension Benefits | U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service Cost | $ 0 | $ 175 |
Interest Cost | 283 | 298 |
Expected Return on Plan Assets | (249) | (322) |
Recognized Net Actuarial Loss | 8 | 135 |
Amortization of Prior Service Cost | 0 | 0 |
Net Periodic Benefit Cost | $ 42 | $ 286 |
The weighted average assumptions used to determine net periodic benefit cost are as follows: | ||
Discount Rate (as a percentage) | 4.10% | 3.51% |
Expected Long-Term Return on Plan Assets (as a percentage) | 4.10% | 4.50% |
Rate of Compensation Increase (as a percentage) | 0.00% | 3.00% |
Pension Benefits | Non-U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service Cost | $ 43 | $ 36 |
Interest Cost | 29 | 30 |
Expected Return on Plan Assets | (17) | (11) |
Recognized Net Actuarial Loss | 5 | 16 |
Amortization of Prior Service Cost | 0 | 2 |
Net Periodic Benefit Cost | $ 60 | $ 73 |
The weighted average assumptions used to determine net periodic benefit cost are as follows: | ||
Discount Rate (as a percentage) | 2.80% | 3.80% |
Expected Long-Term Return on Plan Assets (as a percentage) | 9.22% | 7.43% |
Rate of Compensation Increase (as a percentage) | 2.98% | 3.69% |
Other Postretirement Benefits Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service Cost | $ 1 | $ 53 |
Interest Cost | 38 | 43 |
Expected Return on Plan Assets | (1) | (1) |
Recognized Net Actuarial Loss | 3 | 34 |
Amortization of Prior Service Cost | 0 | 22 |
Net Periodic Benefit Cost | $ 41 | $ 151 |
The weighted average assumptions used to determine net periodic benefit cost are as follows: | ||
Discount Rate (as a percentage) | 4.44% | 3.65% |
Expected Long-Term Return on Plan Assets (as a percentage) | 9.22% | 7.43% |
Rate of Compensation Increase (as a percentage) | 5.57% | 3.07% |
Retirement Benefit Plans - Narr
Retirement Benefit Plans - Narrative (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Retirement Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Liability, defined benefit plan | $ 1,020 |
Restoration Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Liability, defined benefit plan | $ 2,300 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |
Lease, remaining term (years) | 15 years |
Lease, option to extend, term (years) | 5 years |
China and Canada | |
Lessee, Lease, Description [Line Items] | |
Lease, option to extend, term (years) | 10 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating Lease Cost | $ 1,370 |
Short-Term Lease Cost | 185 |
Finance Lease Cost: | |
ROU asset amortization | 293 |
Interest on lease liabilities | 19 |
Total Finance Lease Cost | 312 |
Total Lease Costs | $ 1,867 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information to Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 1,391 |
Operating cash flows from finance leases | 19 |
Financing cash flows from finance leases | 274 |
Right-of-use asset obtained in exchange for operating lease liability | 27,044 |
Right-of-use asset obtained in exchange for finance lease liability | $ 2,161 |
Leases - Supplemental Cash Fl_2
Leases - Supplemental Cash Flow Information to Leases Footnote (Details) | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Right-of-use asset obtained in exchange for operating lease liability | $ 27,044,000 |
ASU No. 2016-02 | |
Lessee, Lease, Description [Line Items] | |
Right-of-use asset obtained in exchange for operating lease liability | 11,726,000 |
ASU No. 2016-02 | Syntron Material Handling Group, LLC | |
Lessee, Lease, Description [Line Items] | |
Right-of-use asset obtained in exchange for operating lease liability | $ 10,994,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Operating Leases: | |
ROU assets | $ 29,348 |
Short-term liabilities | 4,188 |
Long-term liabilities | 26,607 |
Total operating lease liabilities | 30,795 |
Finance Leases: | |
ROU assets, at cost | 3,288 |
ROU assets accumulated amortization | (1,219) |
ROU assets, net | 2,069 |
Short-term obligations | 978 |
Long-term obligations | 943 |
Total finance lease liabilities | $ 1,921 |
Weighted Average Remaining Lease Term: | |
Operating lease, weighted average remaining lease term (in years) | 10 years 7 months 6 days |
Finance lease, weighted average remaining lease term (in years) | 2 years 2 months 12 days |
Weighted Average Discount Rate: | |
Operating lease, weighted average discount rate (percent) | 3.94% |
Finance lease, weighted average discount rate (percent) | 4.13% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 4,038 |
2020 | 4,876 |
2021 | 4,079 |
2022 | 3,416 |
2023 | 3,065 |
Thereafter | 18,657 |
Total Future Lease Payments | 38,131 |
Less: Imputed Interest | (7,336) |
Present Value of Lease Payments | 30,795 |
Finance Leases | |
2019 | 803 |
2020 | 806 |
2021 | 347 |
2022 | 37 |
2023 | 14 |
Thereafter | 0 |
Total Future Lease Payments | 2,007 |
Less: Imputed Interest | (86) |
Present Value of Lease Payments | $ 1,921 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments for Noncancelable Operating Leases (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 4,507 |
2020 | 3,275 |
2021 | 2,230 |
2022 | 1,579 |
2023 | 987 |
Thereafter | 1,713 |
Total Future Minimum Lease Payments | $ 14,291 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Items - Components of AOCI (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | $ 374,571 |
Other comprehensive (loss) income before reclassifications | (645) |
Reclassifications from AOCI | (3) |
Net current period other comprehensive (loss) income | (648) |
Ending balance | 381,996 |
Foreign Currency Translation Adjustment | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (34,804) |
Other comprehensive (loss) income before reclassifications | (432) |
Reclassifications from AOCI | 0 |
Net current period other comprehensive (loss) income | (432) |
Ending balance | (35,236) |
Pension and Other Post-Retirement Benefit Liability Adjustments | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (4,375) |
Other comprehensive (loss) income before reclassifications | 9 |
Reclassifications from AOCI | 12 |
Net current period other comprehensive (loss) income | 21 |
Ending balance | (4,354) |
Deferred Loss on Cash Flow Hedges | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (197) |
Other comprehensive (loss) income before reclassifications | (222) |
Reclassifications from AOCI | (15) |
Net current period other comprehensive (loss) income | (237) |
Ending balance | (434) |
Accumulated Other Comprehensive Items | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (39,376) |
Ending balance | $ (40,024) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Items - Reclassification Out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Other expense, net | $ (99) | $ (246) |
Total income (expense) before income taxes | 15,028 | 14,869 |
Income tax (provision) benefit | (3,963) | (3,861) |
Interest expense | (3,504) | (1,732) |
Net Income Attributable to Kadant | 10,900 | 10,858 |
Reclassification out of Accumulated Other Comprehensive Items | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Net Income Attributable to Kadant | 3 | (161) |
Reclassification out of Accumulated Other Comprehensive Items | Pension and Other Post-retirement Plans [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Total income (expense) before income taxes | (16) | (209) |
Income tax (provision) benefit | 4 | 52 |
Net Income Attributable to Kadant | (12) | (157) |
Reclassification out of Accumulated Other Comprehensive Items | Amortization of net actuarial loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Other expense, net | (16) | (185) |
Reclassification out of Accumulated Other Comprehensive Items | Amortization of prior service cost | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Other expense, net | 0 | (24) |
Reclassification out of Accumulated Other Comprehensive Items | Cash Flow Hedges | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Total income (expense) before income taxes | 20 | (5) |
Income tax (provision) benefit | (5) | 1 |
Net Income Attributable to Kadant | 15 | (4) |
Reclassification out of Accumulated Other Comprehensive Items | Cash Flow Hedges | Interest rate swap agreements | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Items [Line Items] | ||
Interest expense | $ 20 | $ (5) |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Jan. 02, 2016 | |
Forward Currency-Exchange Contracts [Abstract] | ||||
Recognized gains (losses) | $ 37,000 | $ 13,000 | ||
Cash Flow Hedging | Designated as Hedging Instrument | 2015 Swap Agreement | ||||
Interest Rate Swaps [Abstract] | ||||
Derivative, notional amount | $ 10,000,000 | |||
Fixed rate of interest (in hundredths) | 1.50% | |||
Cash Flow Hedging | Designated as Hedging Instrument | 2018 Swap Agreement | ||||
Interest Rate Swaps [Abstract] | ||||
Derivative, notional amount | $ 15,000,000 | |||
Fixed rate of interest (in hundredths) | 3.15% | |||
LIBOR | Cash Flow Hedging | Designated as Hedging Instrument | 2018 Swap Agreement | ||||
Interest Rate Swaps [Abstract] | ||||
Interest rate floor | 0.00% |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Designated as Hedging Instrument | 2015 Swap Agreement | Other Long-Term Assets | ||
Derivatives in an Asset Position: | ||
Derivatives in an asset position | $ 99 | $ 148 |
Notional amount, Derivative asset | 10,000 | 10,000 |
Designated as Hedging Instrument | Forward currency-exchange contract | Other Long-Term Assets | ||
Derivatives in an Asset Position: | ||
Derivatives in an asset position | 0 | 11 |
Notional amount, Derivative asset | 0 | 842 |
Designated as Hedging Instrument | Forward currency-exchange contract | Other Current Liabilities | ||
Derivatives in a Liability Position: | ||
Derivatives in a liability position | (129) | (50) |
Notional amount, Derivative liability | 2,946 | 2,946 |
Designated as Hedging Instrument | Forward currency-exchange contract | Other Long-Term Liabilities | ||
Derivatives in a Liability Position: | ||
Derivatives in a liability position | (15) | 0 |
Notional amount, Derivative liability | 842 | 0 |
Designated as Hedging Instrument | 2018 Swap Agreement | Other Long-Term Liabilities | ||
Derivatives in a Liability Position: | ||
Derivatives in a liability position | (540) | (352) |
Notional amount, Derivative liability | 15,000 | 15,000 |
Not Designated as Hedging Instrument | Forward currency-exchange contract | Other Current Liabilities | ||
Derivatives in a Liability Position: | ||
Derivatives in a liability position | (21) | (31) |
Notional amount, Derivative liability | 1,082 | 1,384 |
Not Designated as Hedging Instrument | Forward currency-exchange contract | Other Current Assets | ||
Derivatives in an Asset Position: | ||
Derivatives in an asset position | 0 | 9 |
Notional amount, Derivative asset | $ 0 | $ 1,192 |
Derivatives - Activity in Accum
Derivatives - Activity in Accumulated Other Comprehensive Items (OCI) (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | $ 374,571 |
Loss recognized in AOCI before reclassifications | (645) |
Ending balance | 381,996 |
Net unrealized losses included in AOCI expected to be reclassified to earnings over the next 12 months | (87) |
Cash Flow Hedging | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (197) |
Gain reclassified to earnings | (15) |
Loss recognized in AOCI before reclassifications | (222) |
Ending balance | (434) |
Cash Flow Hedging | Interest Rate Swap Agreements | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (170) |
Gain reclassified to earnings | (15) |
Loss recognized in AOCI before reclassifications | (150) |
Ending balance | (335) |
Cash Flow Hedging | Forward currency-exchange contract | |
Total Stockholders' Equity [Roll Forward] | |
Beginning balance | (27) |
Gain reclassified to earnings | 0 |
Loss recognized in AOCI before reclassifications | (72) |
Ending balance | $ (99) |
Fair Value Measurements and F_3
Fair Value Measurements and Fair Value of Financial Instruments - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Assets: | ||
Money market funds and time deposits | $ 9,124 | $ 6,902 |
Banker's acceptance drafts | 7,772 | 7,976 |
2015 Swap Agreement | 99 | 148 |
Forward currency-exchange contract(s) | 20 | |
Liabilities: | ||
2018 Swap Agreement | 540 | 352 |
Forward currency-exchange contracts | 165 | 81 |
Level 1 | ||
Assets: | ||
Money market funds and time deposits | 9,124 | 6,902 |
Banker's acceptance drafts | 0 | 0 |
2015 Swap Agreement | 0 | 0 |
Forward currency-exchange contract(s) | 0 | |
Liabilities: | ||
2018 Swap Agreement | 0 | 0 |
Forward currency-exchange contracts | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds and time deposits | 0 | 0 |
Banker's acceptance drafts | 7,772 | 7,976 |
2015 Swap Agreement | 99 | 148 |
Forward currency-exchange contract(s) | 20 | |
Liabilities: | ||
2018 Swap Agreement | 540 | 352 |
Forward currency-exchange contracts | 165 | 81 |
Level 3 | ||
Assets: | ||
Money market funds and time deposits | 0 | 0 |
Banker's acceptance drafts | 0 | 0 |
2015 Swap Agreement | 0 | 0 |
Forward currency-exchange contract(s) | 0 | |
Liabilities: | ||
2018 Swap Agreement | 0 | 0 |
Forward currency-exchange contracts | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Fair Value of Financial Instruments - Carrying Value and Fair Value of Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Carrying Value | ||
Debt Obligations: | ||
Revolving credit facility | $ 324,720 | $ 141,106 |
Commercial real estate loan | 20,213 | 20,475 |
Senior promissory notes | 10,000 | 10,000 |
Debt obligations | 354,933 | 171,581 |
Fair Value | ||
Debt Obligations: | ||
Revolving credit facility | 324,720 | 141,106 |
Commercial real estate loan | 20,711 | 20,575 |
Senior promissory notes | 10,310 | 10,120 |
Debt obligations | $ 355,741 | $ 171,801 |
Business Segment Information -
Business Segment Information - Summary of Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019USD ($)Segment | Mar. 31, 2018USD ($) | Dec. 29, 2018USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 3 | ||
Revenues: | |||
Revenues | $ 171,316 | $ 149,193 | |
Income Before Provision for Income Taxes: | |||
Total operating income (loss) | 18,575 | 16,664 | |
Interest expense, net | (3,448) | (1,549) | |
Other expense, net | (99) | (246) | |
Income Before Provision for Income Taxes | 15,028 | 14,869 | |
Capital Expenditures: | |||
Capital expenditures | 2,168 | 5,151 | |
Total Assets: | |||
Total Assets | 958,240 | $ 725,749 | |
Restructuring costs | 0 | 770 | |
Acquisition transaction costs | 843 | ||
Operating Segment | Papermaking Systems | |||
Revenues: | |||
Revenues | 113,192 | 105,591 | |
Income Before Provision for Income Taxes: | |||
Total operating income (loss) | 18,509 | 14,584 | |
Capital Expenditures: | |||
Capital expenditures | 1,357 | 4,649 | |
Total Assets: | |||
Total Assets | 479,312 | 462,297 | |
Restructuring costs | 770 | ||
Operating Segment | Papermaking Systems | Stock-Preparation | |||
Revenues: | |||
Revenues | 52,048 | 45,483 | |
Operating Segment | Papermaking Systems | Fluid-Handling | |||
Revenues: | |||
Revenues | 32,754 | 32,886 | |
Operating Segment | Papermaking Systems | Doctoring, Cleaning, & Filtration | |||
Revenues: | |||
Revenues | 28,390 | 27,222 | |
Operating Segment | Wood Processing Systems | |||
Revenues: | |||
Revenues | 34,049 | 39,141 | |
Income Before Provision for Income Taxes: | |||
Total operating income (loss) | 7,270 | 7,363 | |
Capital Expenditures: | |||
Capital expenditures | 551 | 376 | |
Total Assets: | |||
Total Assets | 251,422 | 247,553 | |
Acquisition transaction costs | 252 | ||
Operating Segment | Material Handling Systems | |||
Revenues: | |||
Revenues | 20,584 | 0 | |
Income Before Provision for Income Taxes: | |||
Total operating income (loss) | (1,353) | 0 | |
Capital Expenditures: | |||
Capital expenditures | 38 | 0 | |
Total Assets: | |||
Total Assets | 204,189 | 0 | |
Acquisition transaction costs | 4,151 | ||
Corporate and Fiber-based Products | |||
Income Before Provision for Income Taxes: | |||
Total operating income (loss) | (5,851) | (5,283) | |
Capital Expenditures: | |||
Capital expenditures | 222 | 126 | |
Total Assets: | |||
Total Assets | 23,317 | $ 15,899 | |
Corporate and Fiber-based Products | Fiber based Products | |||
Revenues: | |||
Revenues | $ 3,491 | $ 4,461 |
Restructuring Costs - Narrative
Restructuring Costs - Narrative (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 29, 2018USD ($)Employee | Dec. 30, 2017USD ($)ft² | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 770 | ||
United States | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated related to restructuring (employee) | Employee | 4 | |||
Sweden | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated related to restructuring (employee) | Employee | 6 | |||
Restructuring Plan 2017 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 770 | $ 1,920 | ||
Restructuring Plan 2017 | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 148 | |||
Restructuring Plan 2017 | Relocation Of Machinery And Equipment And Administrative Offices | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 563 | $ 1,318 | ||
Restructuring Plan 2017 | Employee Retention, Facility Closing, And Other Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 207 | $ 454 | ||
Restructuring Plan 2017 | United States | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Manufacturing facility square footage (in sqft) | ft² | 160 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Banker's acceptance drafts, maturity period | 6 months | |
Banker's acceptance drafts with recourse | $ 6,005 | $ 12,406 |