KAI · Kadant Inc.

Kadant Inc. delivered a strong start to 2026 with record bookings of $320.8 million, up 25% year-over-year, fueled by robust aftermarket parts demand and contributions from recent acquisitions. Organic bookings grew 10%, excluding 11% from acquisitions and 4% from favorable foreign currency. Revenue reached $281.5 million, a 18% increase, though organic revenue dipped 1%, highlighting acquisition-driven growth with $34.0 million from new deals and $9.8 million FX tailwind. Gross margin contracted 110 basis points to 45.0%, pressured by 50 basis points of acquisition-related costs, yet adjusted EBITDA climbed 19% to $56.8 million (20.2% margin), reflecting solid execution amid healthy parts revenue at 74% of total. Segment performance varied: Industrial Processing surged with 37% revenue growth and 36% adjusted EBITDA increase, boosted by acquisitions (organic bookings +23%); Flow Control saw steady 7% revenue growth with record aftermarket at 77%; Material Handling grew modestly 5%. GAAP net income rose 6% to $25.5 million, with adjusted EPS up 14% to $2.84 after excluding $0.53 intangible amortization, $0.09 profit in inventory/backlog, and $0.06 acquisition costs. Management, led by CEO Jeffrey L. Powell, emphasized 'excellent start' with 'robust demand' and 'healthy margin performance,' while noting project timing uncertainty from geopolitical challenges. Guidance was revised post-acquisition: FY2026 revenue up to $1.178-$1.203 billion (prior $1.160-$1.185B), GAAP EPS down to $9.80-$10.15 (prior $10.27-$10.62), adjusted EPS to $12.33-$12.68 excluding $2.53 acquisition costs, with short-term dilution from deferred income on prior inventory. Q2 outlook: $296-$306M revenue, adjusted EPS $2.88-$2.98. Backlog stands at $326 million, operating cash flow dipped 4% to $21.9 million, balance sheet solid with $120M cash and 1.27x leverage.