KAI - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Kadant Third Quarter 2019 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. President Financial Vice Executive McKenney, and Officer. Chief Michael go ahead, sir. Please

Michael McKenney

today and Wes. With Kadant's call our Good you Executive welcome and me Jeff Chief President morning the Call. Thank Earnings everyone to Officer. Powell, XXXX Third on is, Quarter

begin, financial our Safe under let statements and are and that operating Various Harbor future Kadant's for read Litigation today Reform XXXX. Securities the Private forward-looking provisions make results the may about me Safe purposes plans we statement. remarks of Before we and Harbor of expectations, prospects Act

forward-looking our filings the and at unknown ended and result our our the of for a are slide that the these These actual in Factors Form statements subsequent and cause as under outlined subject year statements, Exchange of to the various from Report and fiscal Risk may and materially with discussed forward-looking risks, Annual XXXX those known heading on important December results Securities factors differ Commission. to those XX, XX-K uncertainties presentation, beginning including

represent any webcast make forward-looking we and of views during statements only this addition, today. estimates In as our

do views we update we in even future, While at obligation specifically so, or our to some disclaim to statements if estimates the change. any point may forward-looking elect

at heading Investor most During section non-GAAP and contained available the A which Principles. in our call, in reconciliation slides this non-GAAP measures website the are comparable and the some presented on our quarter accordance discussed www.kadant.com webcast, These measures Generally the Investor webcast release third we earnings measures GAAP Accepted the press in News. under Accounting of the of will conference financial are to in measures. directly refer is to financial with not prepared non-GAAP

turn update Kadant's With the will you Jeff and give over an who business future on call that, to prospects. Powell, will I

overview financial for Following give and Q&A have a session. I'll the Jeff's will then results quarter, our remarks, of an we

Jeff Powell

this Overall, the everyone. solid and to another morning performance. joining Hello of and outlook of quarter a well Thank are to review performed you our Mike. third us our year. results and we for year financial beat our record on remainder way to discuss thanks, Wes, EPS achieved Thanks the for

quarter. financial our highlights with for the begin I'll

Our X% was revenue by million, up million Material QX to to $XXX Handling bookings increased and led X% business. our $XXX

EBITDA gross and Our margins million XX.X% were XX% of $XX adjusted revenue. or was

XX%, top-end $X.XX. $X.XX was X% of down Adjusted quarter last to was a we of was year. of debt third EPS quarter Adjusted finished from EBITDA the last leverage of ratio million of record finally, and Cash $XX of compared strong guidance third to up from $X.XX, well a quarter X.XX. operations million, And the at year. flow with our above net $XXX

foreign note impact acquisition completed this our you As a the stronger currency slide on was see can significant contribution dollar earlier strong our year. translation. from on Also the of had X, Material Handling

Excluding revenue and FX and in were growth acquisitions, X%. both down internal bookings growth internal our

America, and quarter product down We slightly in Prep and Stock bookings and bookings third revenue Parts X%, and X, to decreased Slide internal X% were of from last year in from Fluid our see benefited decreased last quarter's solid you record our while X%. lines bookings was revenue the X% For revenue. Consumables, growth our can North up QX America. and On sequentially up Handling South Europe compared

were in our I these offset which Processing China, performance. when our I in segment, more discuss in by and declines review regional than Wood However, more will detail

key our combined strong for geographic our volatility. know, business. of strategic diversification Parts This business many economic and diversity, of you with against buffer Consumables a helps As our global is attribute

quarter, of same period the last year. XX% Parts revenue Consumables for XX%, to were up the and compared

our markets exception demand. revenue Consumables acquisition business and softness as all of of pricing Wood growth, which lumber saw this our was decline to stable Our with in a led and due the Parts Material in Handling Processing relatively

up XX% bookings million. Consumable and to Parts $XXX were

the acquisition. the was Handling case As for revenue, largest our was contributor growth Material

FX, That Consumables were organic X% impact year. said, bookings for off Parts Excluding FX from the and quarter. year-to-date this acquisition our bookings, up the are and from last excluding

where Next, to to growth increased like the where major geographic review product Material performance in was I'd our line. million. begin Handling America QX our operate. revenue This by with I will led regions XX% we North $XX

was down impact the the Excluding FX and X%. of revenue acquisition,

million, Bookings QX up in to last of $XX XX%, compared North America year. were

a to increase. this made contribution acquisition significant Our

Stock product market. Excluding the Wood our saw North impact bookings and solid equipment serves Handling Prep Processing FX bookings of and growth Fluid primarily housing We our in decreased America, the lines were in the X%. and which down acquisition, in

in activity project products our as less has demand to we last demand are and during capital sector the the call earnings stated experienced last softened, our Wood in year. we compared historic Capital we seeing Processing XXXX, that for

on segment. within recent Handling positive a Material North development I I comment to Before and our America, leave want

quarter, with could During into an a million that new for up $XX a business project us. for the mining third customer in agreement we to entered represent

XXXX booked by forecasted We growth. million we and third after sectors are and mining, at close. the for this the and valued orders $X quarter under food agreement The market aggregate another have already encouraged $X promising looks outlook million for

Europe, to this shows with our markets continue weak turn replacement performance Europe. in demand revenue customers performing parts. of the as are and pursue region Even to new projects Europe. XX let's our and well Next, we in export Slide bookings in

X% up million. was a $XX revenue record quarter Third to

impact the was FX, Excluding of negative up revenue XX%.

X% X%, our High-Performance Handling product Europe in QX. last of Strong except in were year, was and Fluid product this demand for growth. led lines, All excluding Balers and quarter bookings our Handling the for FX. up of our Fluid up lines third compared to up Bookings

on in Next, XX. general chart at slide both the Asia, beginning a the is the A which and continued mid-XXXX pace in dominated of since be XXXX. can market seen China on revenue by similar slowdown as bookings Asia

bookings This is last XX%. Our $XX and was a revenue in XX% QX due comparison down of QX challenging strength year. down the record from Asia million to were last year's of record

has in and reflect investment project China As slower and discussed capacity. bookings activity of slowed we new pace in last containerboard our quarter, this

positive more although we several than been Fluid and in product DCF Fluid tissue markets, orders provide products lines. a industries growing. and These high-value note, production are have providing where doctoring On containerboard, Handling smaller our investment and for nice Handling

the Many are to with China relieve with, I customers the from was additional returned our have those the leaders I strategies needed, spoke from waste the fiber ban. paper shortages of with investments I expectation few finalized ago our pleased weeks and and there. as business that discussion China are resulting

calls, being are of outside prior earnings discussed new these China. As facilities processing on built

of and orders the or to have As most supply to end such over systems now we online received come the of them twelve of XX expect supply months. next QX, supplied to

of in bookings Turning results, the were now to XXXX. to rest second the the the of world in strong our in the quarter world only record-setting bookings QX, rest of the third

quarter, the smaller booked helped one bookings and order, number a orders System QX. which large of capital drive During Stock-Prep we near-record performance in our

While product and in see revenue growth QX Handling lines. solid XX%, was revenue we Fluid our DCF did down

QX remarks with and guidance a few would our like my comments to I for the conclude full year. on

another of Our results. us record for well financial performance to-date positioned year has

businesses Handling metrics. have of nice financial continued acquisition solid to provided a Material lift our to performance Our operating our and all

factors three are to performing challenge. continued we well, be While a

U.S. our negatively currencies dollar, when US a is which first The affects we stronger results dollars. into foreign translate

capital The U.S., is projects. associated global trade tampering second and with a and believe dispute, tariffs third we is investment economic the which China is the slowdown,

obscures EPS year full the I our believe and to impact effect business expect We the be of tariffs of this underlying year. the performance $X.XX, of which, FX

And in $X.X wanted is $X.XX or terminate finally, associated the the will risk plan. pension million uncertainties expect This which cost the fourth save share to his terminate briefly annually, these eliminates completed and be in $X I plan to benefit with Mike, expected will plan, be quarter. the provide more remarks. We on our comment approximately and will to per approximately details we to plans. million our defined estimate us

million impact $XXX our guidance our to million, FX million year, to to guidance $XXX of million full the lowering $XXX we $XXX For largely due previous are the to translation. from revenue of

of GAAP guidance pension $X.XX termination includes to EPS cost. EPS This expect abovementioned the $X.XX previous for to revised from $X.XX guidance revised $X.XX. $X.XX, of achieve our to We diluted

expect be $X.XX We to our previous EPS, $X.XX. adjusted $X.XX to things diluted which pension termination XXXX, excludes other among cost for from $X.XX of revised to the guidance

$XXX the fourth of on EPS For million. quarter $XXX GAAP expect to of achieve million to to diluted $X.XX of revenue XXXX, $X.XX we

the pension to $X.XX $X.XX adjusted just termination the Excluding mentioned, diluted expect quarter. EPS we for of fourth cost, I

will performance to additional some in pass details over the for I call Mike on financial our now QX.

Michael McKenney

third quarter the compared gross profile XXXX. in XXXX, quarter due Material with first business, Consolidated basis start I'll acquired of gross were of performance. XXX margins the XX.X% third lower the gross you our to Thank margin the in of Handling of inclusion quarter Jeff. in to points, down XX.X% the XXXX margin our of

XXXX, Parts Consumable in the the of to Our of total revenue compared XXXX. and quarter quarter revenue represented third XX% in third XX% of

to and our increase of favorable currency $X.X the expenses. of $X.X quarter SG&A effect. foreign XXXX, from XX the from decrease let's expenses and million SG&A an of This Slide third Now, up million included $X.X from in XXXX. of quarter turn quarterly third were a our acquisition million $XX.X million a translation

XXXX, of revenue to of increased expense, in compared quarter to XXXX. the XX.X% SG&A in of XX.X% percentage third quarter as third the a

tax associated $X.XX quarter Let was that quarter diluted tax the the both costs, results adjusted of to third GAAP covering $X.XX and me our and benefit related The In the uncertain position, reserves GAAP next $X.XX diluted diluted multiple discrete $X.XX of EPS $X.XX. our and the of a EPS with reversal quarter. was of third to EPS years. turn $X.XX. relates XXXX, were restructuring XXXX, EPS for tax adjusted difference In tax to

lower $X.XX $X.XX consists expense of $X.XX expense. diluted interest EPS in portion compared of to revenue. $X.XX to quarter due due increases third decrease of adjusted to after $X.XX adjusted lower a These margins of the allocating operating to diluted a non-controlling lower totaling effective rate, XXXX, $X.XX interest lower due in due the EPS expenses; XXXX and offset to to expense, following: due $X.XX The third gross lower from interest of the $X.XX by higher in tax the quarter acquisition; were to

translation of I've third categories the was just to foreign the last compared the to the $X.XX U.S. the all third including year quarter of currency an of XXXX, mentioned strengthening unfavorable of effect Collectively, due dollar. in quarter

to Let our call. take to moment earnings July EPS guidance diluted we XXXX me a adjusted quarter third results the also in the compare issued our during

of the diluted $X.XX XXXX EPS of diluted adjusted guidance reported was adjusted We for Our third $X.XX. EPS $X.XX. quarter to

the reversal the result increase tax with of options. a the to range tax uncertain high-end of positions primarily exercise reserves $X.XX of to associated was of expiration guidance year's employee The tax extent over of related current stock $X.XX lesser benefit, the and, a our

In contributed and addition, improvement lower a expense, beat. guidance interest to gross margins modest also in SG&A,

As awarded exercise of four there mentioned tax as the three benefits years options dates. with years associated I the stock their next the on XX-year could be reach call, additional last over unexercised to previously employee options, expiration

The Slide of compared up Handling XX XX.X% over revenue, of EBITDA XXXX. of million acquisition. XXXX performance. adjusted first increase adjusted of $XX revenue the XX.X% XX.X% a $XX.X of million EBITDA quarterly Quarterly EBITDA months result for Adjusted from Material nine contributions our was quarter the to EBITDA of or in the is first nine revenue, months from of or or to the $XX.X presents XXXX. XX.X% XXXX third compared $XX.X adjusted in was $XX.X for revenue million million or of million XX% or

and of million working Free metrics of third flow let's compared increased the third capital flows XX. was to million, third quarter Cash operations XXXX, $XX.X of Now, compared $XX Slide $XX.X the million XXXX. flow million on quarter our quarter turn XXXX. to $XX.X to starting from the to cash for in cash in

down uses the nine the XXXX. million months several months first For had in quarter on increased to common of of dividend third first compared $X.X $XX.X bank million $XX.X nine notable $XX.X flow million XX% We a to XXXX, capital the cash non-operating We in of million free million, paid expenditures. for XXXX. cash and paid of debt paid by $X.X stock our

was taking our at overall inventory days capital working end the receivables days by our subtracting third conversion plus payables quarter in days and in of calculated XXXX. Looking position, measure, the at and days XXX of cash

XXXX XX.X% less XX.X% is XX.X% was of debt debt, of quarter revenue second to sequentially of $XXX.X third end the percentage the in quarter a quarter but million, of as at capital Working XXXX. second XXXX, of quarter $XXX.X from of was the the of third end in at of million cash the at in debt up third of quarter that quarter XXXX. XXXX $XXX.X million compared down end third from the the of net of the XXXX, Net and the

on As from this last used third was I coming cash under U.S. with These cash the our repatriated our funds under outstanding the operations. we the our was European call, down $XX from were facility. of million hand. quarter, that credit borrowings debt mentioned of to facility through on during remainder euro-denominated pay million credit $XX

debt debt, interest have associated result quarter exchanged interest and we $XX.X a which lower we paid euro-denominated of As U.S. is included the of this million for $XX in the on this, that higher rates paid down million with debt. down rates

annual of on interest lower rates. $X.X the the approximately As interest euro-denominated savings market current a debt, we estimate of result at million rates

we cash flows utilize us our operations addition, debt. it pay easier expect be European down the will to from to In for

As in of the credit second decreased slide ratio with you from to end XXXX. X.XX third can facility, the XXXX XX, the our at quarter see end accordance leverage of quarter on at calculated of the our X.XX

credit Under less requirement following quarters must our down our X.XX. three than for agreement ratio less the Material to defined as ratio facility, X, than this the acquisition steps and be then credit in

were an our defined option the U.S. froze on supplemental given and pension of few guidance lump terminating in receive XXXX, pension plan In A benefit we the of the comments a our process plan or annuity. payment plan either sum and Participants XXXX. to one for the at operations. began benefit a

and past mentioned of settlement charge of part On likely part would calls, related we incurred cash non-cash. in would late a XXXX, be be which

settlement included U.S. fourth XXXX now the GAAP expected quarter, estimated pension plan. in of with have We the associated $X.XX this settlement guidance an in of our loss

associated of million, and consists purchase provision net cash annuities includes tax of an associated $X.X of an of which net charge settlement loss This million. estimated additional funding and $X.X the $X.X for pre-tax million of provision tax

and year tax from additional the The associated quarter $X amounts comprehensive benefit from million in cash adjusted net for tax tax provision guidance for primarily $X.XX related EPS $X.XX income. $X.X of charge expense, million to by settlement the $X.XX of The other includes has the to excluded a fourth to our funding, of of offset the diluted full been $X.XX $X.XX.

additional termination two; due rates quarter in to, the cash loss plan annuities, anticipated chose are of very XXXX settlement receive connection the higher Both more and expected fund the fall and than today, the lump cash required termination. long-term than significant one; to planned participants pension in rather significantly than fourth interest from with sums to to the

XXXX. a plan any this early anticipate the $X.X P&L at with is in impact supplemental benefit The on not We for associated sheet settlement. we liability expect be million balance will cash-settled already do and reflected this material

and part we resulting lower estimate With debt, having this year, million. now made for $XX.X exchanged the interest will U.S. euro-denominated million approximately year $XX of net the rates be debt interest from paying far to progress so for million $XX down debt we've our nearly expense on in

expiration for reversal quarter a rate reserves on of XXXX with the option benefit related XX%, associated associated positions. the tax exercise $X.XX a third current tax was year's of $X.XX which Our included of and to tax employee with of awards stock tax benefit the certain

benefit stock quarter XX% potential We to after expect of awards. pension any This our exercise the the impact of not approximately include the XXXX rate of excluding XX% does option settlement. for plan fourth associated tax to with employee the tax be

turn for Q&A and our Operator? over back financials, review to my concludes now operator I of the session. the call That will the

Operator

Research. Our of comes from first Chris Barrington Howe line the Instructions] question [Operator with

Your line open. is now

Chris Howe

Good Jeff and morning, Mike.

Michael McKenney

Good morning, Chris.

Jeff Powell

Chris. morning, Good

Chris Howe

On Consumables, going look on mentioned, still an up. be just Hey, as to was of but to as of as there it and for down, performance in still just for mentioned you we you've geographic it year - it can over what forward? and we the some Consumables, basis, are and far the your Parts you're for up and think that comments seeing be the Parts organic a on the comment quarter? about basis, you expectations

Jeff Powell

actually experiencing. quite recycled say rates indication up customers been and Yes, in one course Consumables the our that is area of where the a the a holding our of amount which Consumables of well, there they material there would reduction is down that are are China The is there generally Parts I that's in and an operating Parts has that has speaking, are because and processing. and been in runrates currently our reduction

building are these of Asia, in over them, the not come of have processing in there yet. we the most Southeast vast new majority but, process And facilities online

not are they yet. parts So, generating

have Asia, definitely seen we initial transfer China U.S. this reduction So, fiber the as processing China of as our from parts associated with in Mainland a in Southeast to well

say, good I have would been in for parts us. Europe quite actually

Some strong. I'd in areas on globally down are because holding the Wood holding some Parts Processing rates own, bit quite Processing, But which speaking, the say Wood well. exception and And US the I are say, its with would is the operating the is side. a little of Consumables down up the generally surprisingly

of are year from else. year, when with take the you kind FX slightly We out of last up and last kind everything flat

think a operations healthy So, that we're operating indicates rate rate that actually run still pleased from a with customers an that from are – we and our at standpoint.

Chris Howe

then to leads that my me Yes, question. great. And next that's

with are environment outside should And having pay as update, as shortage XX fiber China, the or bookmarks to to give what regard coming monitor The the attention inflections key we, more we timeline there? in as Asia, we in orders are and the some current China. you're can the we specifically, you where that offsetting an success on? far are that Just where about capital of equipment

Jeff Powell

down give standard imported to XX.X down and to cleanliness million let permitted. is XX implemented, data XX.X before tons wastepaper. XXXX, cleanliness In a China been be XXXX, that waste tons of million have implemented there tons October the So, to dropped of started was import million In me standard about that as and applied. the that you was In was couple XXXX, XX.X XXXX, in points. tons the ban million through

waste, this much you gives as XXXX. in that a third had looking year, at sense a that imported they we So, possibly are as

Now, I China XXXX. go the few and to Paper tells the will fact reduce in will permits had completely be and ago continue of this was that over ban Association in he import China actually Head with dinner weeks us forward. in eliminated the next and year that They'll

you vast XX got the Today, only it that replace in of to million about I is XX say million which at if the million XX they've tons okay, can So, fiber. received majority placed, the think were tons of been represents that you tons for, systems importing look the they XXXX, replacement. somehow orders have orders X we've all

So, XX stages. early XX replace in fact, see the tons, to you they've to million if in got million that, we're can tons

call, said, works, I the of starts think activity case. we or start systems machine that it into making this the have shift these to kind in processed they fiber have to still to this before first into I it would were up and I occur. that's because doing get inning and starting last are biological this are the inning China they is, and sure What of they they say – second the in second are

China having that. sure So, I to short Mainland processing timeline this that. they've success get it it worked they and And I they in think shipping fact, want and between could think are got conceptually doing make they very that in to the do that fiber in that to a

and project starting are that. we activity so, more to And investments see associated with more

I over to this there of Southeast amount couple next in have stick a strategy the So, assuming these countries, to is activity be they plants think processing Asia the of fair particular shortfall. of years, replace to with going putting these

pulp form. some also buying to going and idle in it are case, are mills they dry this over U.S., the in and dry they send a in the Now,

to have here that China. time do of the takes of length from that You get it because to to

And so, they replacing still come online but, isn't we that are amount near reality, fiber seeing the anywhere it going need. are to of too, in

I production Their XX a tonnage over their business and so, accordingly. their months there rate requirements XX of a would to quite a be Now, still, bit down is to percent, bit. is is have of But fiber months. replaced off that few decreased still say little next, a has course overall the

Chris Howe

that's Great, of for my last Thanks in expectations. Jeff. my ahead is came question question. your SG&A and last Mike, My helpful

was items, You're further you line at $XX Can talk forward quarter? out, fourth that as million. more $XX.X leverage opportunities And type see look the around million. the expense to about I you what we different here? of specifically,

Michael McKenney

modeled Well, at million so in we Chris and you $XX.X at came had million? it $XX

Chris Howe

Yes. SG&A? For

Michael McKenney

Yes, yes.

Chris Howe

Yes.

Michael McKenney

I quarter, think for fourth probably level. be we'll the that around

think I for good marker a pretty that's So, the activity. quarter fourth

In of on leverage, this point, volumes. operating much it's sales contingent terms very at

Chris Howe

I all for That's Thank Okay. have now. you. right

Operator

with Seaport next Instructions] [Operator Walter line question the comes Liptak Our of Global. from

Your open. line is now

Walter Liptak

Hi. Good guys. morning Thanks.

Jeff Powell

Good morning, Walt.

Walter Liptak

ask follow-on plants. the wanted to southeast a Asia processing I about

and – clarify, to so are – that or already you are… those XX or these out, orders booked that called those systems So just you've

Jeff Powell

delivered say, those been And half roughly I of would already. Walt, have

Walter Liptak

Okay.

the XX comment what you're next other Okay, guess, that up over half, finish was? was great. months, I And the

Jeff Powell

Yes.

Walter Liptak

Okay. those China fiber orders the over enough that to behind next of But, it you that's XX sounds guys significant are like, years. there get talking wet more couple so about? - is Is what into potentially

Jeff Powell

seen a as bit little their their they've a as said, well I like mean, I economy in Yes, slowdown and of exports.

they are isn't I against the starting up tons to bounce So, rate of it the top brought in their of and where they million course, probably although that. kind of XXXX their when try within think continue to of, recovery XX to was China in increase limit they demand

going requirements still is to fiber substantial have replace. that But, to are they there

them that in so, to we'll get really the somewhere that And long work we have bringing in expect for pulp run. doesn't

significant offset be, expect a is investment fiber. to loss fairly So, as of somewhere this said I earlier, requirements that to imported we going there

Walter Liptak

booked was value orders of that What XX on? great. systems already you've the Okay, the

Michael McKenney

It is roughly $XX million-ish

Walter Liptak

helped online into great. how tons Okay, think back that China? you And that many do bring

Jeff Powell

X between million Somewhere million X tons tons. and

Walter Liptak

so, I way fill what you're saying, to is there go the XX million? a Oh see, long to

Jeff Powell

Yes.

Walter Liptak

Okay, great.

And that this coming China? issues. orders? economic orders Okay. orders slug next concern of I or next the the in next for – it might But where any an on of is something we can kind of the or from start visibility start of heard unknown orders is about seeing round event the quarters

Jeff Powell

our projects. in we to customers constantly Obviously, don't occur. are I over there, when engaging ready But discussing there discussions exactly know is that they we if may forecast activity. are and ongoing

Walter Liptak

All wanted I Okay. ask… to enough. right. Fair

Michael McKenney

what's Walt, I to that a wanted $XX because delivered. was I schedule at to That actually now, I here. be referenced, mention that's million looking left

You that. twice what value roughly were the I was asking say would aggregate it's

Walter Liptak

Oh, wow.

Okay.

Michael McKenney

Yes.

Walter Liptak

great. right, All

XX million for $XX systems. So

wanted profitability are the I a on on to for starting these is through to I market, ask because - Handling the Congratulations be, those Okay. going we to pricing come guess, Are order. orders where there in normal that Material or these? coming pressure? margin the How of in. is

Jeff Powell

like they – on from – this projects large always think quite it's there more as But, the they more have vary pressure. Well, to when product-to-product. really a say competition with is our many other projects, and case and a the price products multi-million fair dollar imagine amount fair is might of the mix have I you businesses, margins on of

and systems higher big systems really are of smaller margin. margin are in and they course speaking, generally say parts the the lower would I So

Chris Howe

bad, like up to ask the Europe, or excluding comment good. I X% you'd the wondered, about the want then, other And on EU. see is we about, But, just going Great. visibility down. the I foreign of looked slowing everything Europe in Okay. down, the hear about pretty we bookings bookings ISM sustainability projects if is currency,

Jeff Powell

Yes.

of – I seeing little Romania, they Europe think in in I have that call So, demand standard of there, that, developing mentioned more bit for activity to tends are increases Eastern and Europe, the as this level the world kind we products. Belarus, parts developing is be last Russia, the the a more living our the of

in active historical is that. all has And still very a and Turkey slower, down export so, slowed places definitely in are kind Western the I say, The in would now. Eastern of like right little But we and market is decent Europe, clearly There Europe of Europe, activity. Germany.

So, in would the what our year activity has Europe. project kind portions I the, call would level of been developing quite say that of high this we

Walter Liptak

Okay.

then is last one there great. as to Mike. the a will pension, is be – for the Thinking or this for a in level be? of the result maybe me, in Okay, And pension of about that what going is expense XXXX lower change

Michael McKenney

million at about roughly it Well, had cost. been running $X.XX $X.X a year, let's say $X.XX or

Walter Liptak

Okay, great.

that goes away XXXX? So in

Michael McKenney

Right. away go in XXXX. Yes. That will

Walter Liptak

Okay, great. All right. Thanks guys.

Michael McKenney

You're welcome.

Operator

Barrington from have a line with Instructions] of [Operator We Howe Chris the follow-up Research. question

line Your now open. is

Chris Howe

Hey, it's me again.

overall seeing about the How pricing are far synergistic to other mentioned the acquisition, that M&A? size have on what Kadant/Syntron. environment How does acquisition deal? compare Just of following customers up Handling of Walt's Material time in at does are question opportunities, about as potential comment the on market? that you the related you look? this the order, And the to can this for environment you And as

Jeff Powell

Yes.

order. So, of out a projects would the considered there it's Certainly, we large it's larger the large that project on side larger larger But a that order, on there – than this of this. – be are could are a orders. aware be

that as one indicated the the had opportunities as and company, mentioned, the amount strategic group was when of company, business plan actually and the just time you of the size and for present. liked would really our we we been diversity we As things the bought markets that that of their that far a developing a spending development fair acquisitions, with the has

We case. And I think we see that are still excited the that. still is about

are guys we have now ten obviously, so, – known for And months. we these

develop still to plan are But and process. expand planning working we're in them business early it. that grow So closely a the with we to

not that to have Valuations specific last be and very adhere discipline deviate have the more for to us it from. high and years few to we been for they try that we continued because a which we challenging makes high,

I we it's think now, are that because to So, more companies able reasonable for quite look you successful and that been – return of But the opportunities over are that, in case buy because years, a expect it's although us challenge a what we we if going that. clearly us have at been prices high. and will been forward, always the be have identifying difficult

Chris Howe

the for color, it. so Thanks much Appreciate Jeff.

Operator

I time. I'd queue am further questions call showing to remarks. turn for Powell the no this like closing back Mr. at in to

Jeff Powell

Thank you, operator.

like would I takeaways go, the to what quarter. the you key let I Before summarize from are think I

good had performance a operating and cash we EPS with flow. in beat strong First, QX excellent

Second slowdown Wood achieve segment China's the business expect to range economic record finally, in full-year and EBITDA XXXX. adjusted of in and our our guidance and activity. high-end revenue our adjusted maintaining headwinds Processing impacting And are we are EPS the

We updating thank to we to for and next you us look today you joining quarter. want forward

Operator

Ladies for and you call. Thank participating. gentlemen, this concludes today’s conference

You may disconnect. now

Kadant (KAI) 3 Nov 192019 Q3 Earnings call transcript