SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 19, 2001
Kadant Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-11406 52-1762325
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(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
245 Winter Street
Waltham, Massachusetts 02451
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On July 19, 2001, the Registrant issued a press release announcing its
financial results for the quarter ended June 30, 2001 and providing guidance in
connection with its estimated financial results for the fiscal years ending
December 29, 2001 and December 28, 2002. The full text of the Registrant's press
release is filed as Exhibit 99 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired: Not Applicable
(b) Pro Forma Financial Information: Not Applicable
(c) Exhibits:
Exhibit No. Description
99 Press release dated July 19, 2001
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 20th day of July, 2001.
KADANT INC.
By: /s/ Theo Melas-Kyriazi
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Theo Melas-Kyriazi
Chief Financial Officer
Exhibit Index
Exhibit No. Description
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99 Press release dated July 19, 2001
Exhibit 99
For more information, call 781-370-1650.
Kadant Announces Second Quarter Results
and Provides Guidance for 2001 and 2002
WALTHAM, Mass., July 19, 2001 - Kadant Inc. (ASE:KAI), formerly known as Thermo
Fibertek Inc., today reported net income of $2.4 million, or $.20 per diluted
share, for the quarter ended June 30, 2001, compared with $3.9 million, or $.32
per diluted share, for the same period last year. Results for the second quarter
of 2000 include a pretax gain of $1.0 million from the sale of an investment.
Excluding this item from the 2000 period, net income would have been $3.3
million, or $.27 per diluted share. Included in the net income results for the
2001 and 2000 periods are $0.6 million and $0.2 million, respectively, of net
losses from the company's new composite building products startup.
Revenues for the quarter ended June 30, 2001, were $56.7 million, compared
with $60.6 million in the same period last year. Excluding unfavorable currency
effects of $1.0 million, revenues decreased 5 percent compared to the second
quarter of 2000. Revenues from the composite building products business in the
2001 quarter were approximately $0.4 million.
"The past few months have been both exhilarating and challenging as we
prepare to be spun off from Thermo Electron," said William A. Rainville,
president and chief executive officer of Kadant. "While we are looking forward
to the many advantages of being an independent public company, there is much we
need to do to capitalize on the opportunities at hand in both our core pulp and
paper systems business and our new composites startup.
"Our customers in the pulp and paper industry continue to respond to weak
market and economic conditions by cutting costs and consolidating operations,
curbing demand for our products for the balance of 2001 and likely into 2002. We
believe, however, that these actions being taken by our customers will create a
stronger industry long term that we are ideally positioned to serve through our
well-regarded global franchise.
"In our new composites business, we are lowering expectations as we work to
expand our distribution network for these fiber-based building materials.
Although startups are difficult to forecast, our estimate of revenues from this
business for each of the remaining quarters in 2001 is $300,000 to $500,000, and
for the year just below $2 million. We have made considerable progress in the
technology and production phases of our composite products launch, and now need
to build our marketing and distribution channels to take advantage of this
growth market.
"In light of these factors, we expect earnings in the third quarter of 2001
for the company overall to be in the range of $.15 to $.20 per share, on
revenues of $55 to $60 million. For the year, we expect earnings per share of
$.80 to $.90, on revenues of $225 to $230 million.
"Looking ahead to 2002, we estimate earnings for the year to increase to
$.90 to $1.05 per share by focusing on a more favorable product mix that
includes higher-margin aftermarket sales and reducing operating expenses in our
businesses that serve the pulp and paper industry, as well as lowering operating
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losses in the composites business. Revenues in 2002 are expected to be between
$225 and $230 million, including $4 to $6 million from sales of composites."
Mr. Rainville concluded, "We finished the second quarter of 2001 with a
healthy balance sheet - $167 million in cash - which will help us fund our plans
for future growth. The spinoff from Thermo Electron marks a new beginning for
us. Our long history of leadership in the pulp and paper industry gives us a
solid foundation from which to build on Kadant's new position as an independent
public company."
A pre-recorded company update will be available from 5 p.m. EDT today until
August 8, 2001. To listen to the recording, call 877-519-4471 within the U.S.,
or 973-341-3080 outside the U.S., passcode: 2711685. An audio archive will also
be available on the Internet until August 8, 2001. Click on "Audio Archives"
under "Investors" at www.thermo.com.
Kadant Inc. is a leading supplier of a range of products for the global
papermaking and paper-recycling industries, including de-inking systems,
stock-preparation equipment, water-management systems, and papermaking
accessories. Through its majority-owned Thermo Fibergen subsidiary, the company
also develops and commercializes composite building materials produced from
natural fiber and recycled plastic. Kadant is a public subsidiary of Thermo
Electron Corporation that will be spun off as a dividend to Thermo Electron
shareholders on August 8, 2001.
The following constitutes a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release contains forward-looking
statements that involve a number of risks and uncertainties. Important factors
that could cause actual results to differ materially from those indicated by
such forward-looking statements are set forth under the heading "Risk Factors"
in Exhibit 99.3 to the company's current report on Form 8-K filed with the
Securities and Exchange Commission on July 12, 2001. These include risks and
uncertainties relating to: the company's dependence on the paper industry and
pulp and paper prices, international operations, competition, ability to enter
the composite building products market, acquisition strategy, dependence on
patents and proprietary rights, fluctuations in quarterly operating results, and
the proposed spinoff of the company.
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Financial Highlights (unaudited)
(In thousands except per share amounts)
Consolidated Statement of Income
Three Month Ended Six Months Ended
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June 30, 2001 July 1, 2000 June 30,2001 July 1, 2001
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Revenues $ 56,732 $ 60,565 $115,632 $118,487
Costs and Operating Expenses:
Cost of revenues 36,084 37,930 72,280 72,537
Selling, general, and administrative expenses (a) 14,585 15,749 30,441 31,580
Research and development expenses 1,871 1,953 3,663 3,816
Gain on sale of property - (971) - (971)
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52,540 54,661 106,384 106,962
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Operating Income (b) 4,192 5,904 9,248 11,525
Interest Income 1,812 2,691 3,953 5,194
Interest Expense (1,871) (1,865) (3,744) (3,755)
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Income Before Provision for Income Taxes and Minority Interest 4,133 6,730 9,457 12,964
Provision for Income Taxes 1,736 2,775 3,955 5,300
Minority Interest (Income) Expense (50) 45 (74) 194
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Income Before Cumulative Effect of Change in Accounting Principle 2,447 3,910 5,576 7,470
Cumulative Effect of Change in Accounting Principle - - - (870)
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Net Income 2,447 3,910 5,576 6,600
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Basic and Diluted Earnings per Share Before Cumulative Effect
of Change in Accounting Principle $ .20 $ .32 $ .45 $ .61
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Basic and Diluted Earnings per Share $ .20 $ .32 $ .45 $ .54
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Weighted Average Shares:
Basic 12,277 12,257 12,277 12,253
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Diluted 12,294 12,301 12,292 12,310
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Other Financial Data
Adjusted EBITDA (c) $ 6,531 $ 7,375 $ 13,968 $ 15,396
Cash Flow from Operations 11,187 10,903 13,298 10,523
Pro Forma Data (d)
Net Income $ 2,447 $ 3,327 $ 5,576 $ 6,887
Diluted Earnings per Share .20 .27 .45 .56
Balance Sheet Data As of
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June 30, 2001 July 1, 2000
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Cash, Cash Equivalents, Advance to Affiliates,
and Available-for-Sale Investments $166,687 $185,006
Short- and Long-term Debt 154,703 155,212
Shareholders' Investment 175,762 165,606
(a) Includes a $0.6 million charge to provide for a customer dispute in the
2000 periods.
(b) Includes operating losses from our startup composite building products
business of $1,054, $487, $1,638, and $869 in the three months ended June
30, 2001, the three months ended July 1, 2000, the six months ended June
30, 2001, and the six months ended July 1, 2000, respectively.
(c) Adjusted EBITDA is calculated as earnings before interest, income taxes,
depreciation, amortization, and gain on the sale of property.
(d) Excludes gain on the sale of property in the 2000 periods and the
cumulative effect of a change in accounting principle in the six months
ended July 1, 2000.