First Quarter Financial Highlights
Bookings increased 25% to a record $321 million
Revenue increased 18% to $282 million
Gross margin decreased 110 basis points to 45.0%
Net income increased 6% to $26 million
GAAP EPS increased 6% to $2.16
Adjusted EPS increased 14% to $2.84
Adjusted EBITDA increased 19% to $57 million and represented 20.2% of revenue
Operating cash flow decreased 4% to $22 million
Backlog was $326 million
Note: Percent changes above are based on comparison to the prior year period. All references to earnings per share (EPS) are to our EPS as calculated on a diluted basis. Adjusted EPS, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and changes in organic revenue are non-GAAP financial measures that exclude certain items as detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."
Management Commentary"We had an excellent start to the year highlighted by robust demand and solid earnings growth," said Jeffrey L. Powell, president and chief executive officer of Kadant. "Strong demand for our aftermarket parts combined with our recent acquisitions led to record bookings and aftermarket parts revenue along with healthy margin performance."
First Quarter 2026 Compared to 2025Revenue increased 18 percent to $281.5 million compared to $239.2 million in 2025. Organic revenue decreased one percent, which excludes an increase of 14 percent from acquisitions. Gross margin was 45.0 percent, which includes a 50 basis point decrease from acquisition-related costs, compared to 46.1 percent in 2025.
Net income was $25.5 million, increasing six percent compared to $24.1 million in 2025. GAAP EPS increased six percent to $2.16 compared to $2.04 in 2025 and adjusted EPS increased 14 percent to $2.84 compared to $2.50 in 2025. Adjusted EPS excludes intangible asset amortization expense of $0.53 and acquisition-related costs of $0.15 in 2026, and intangible asset amortization expense of $0.40 and acquisition-related costs of $0.06 in 2025.
Adjusted EBITDA increased 19 percent to $56.8 million and represented 20.2 percent of revenue in 2026 compared to $47.9 million and 20.0 percent of revenue in 2025. Operating cash flow decreased four percent to $21.9 million compared to $22.8 million in 2025. Free cash flow decreased two percent to $18.7 million compared to $19.0 million in 2025.
Bookings increased 25 percent to a record $320.8 million compared to $256.2 million in 2025. Organic bookings increased ten percent, which excludes increases of 11 percent from acquisitions and four percent from the favorable effect of foreign currency translation.
Summary and Outlook"Our strong start to the year is encouraging, and we expect capital project activity to continue improving," Mr. Powell continued. "That said, project timing is more uncertain due to heightened geopolitical challenges. We are revising our guidance to reflect our recent acquisition and expect revenue of $1.178 to $1.203 billion in 2026, up from our previous guidance of $1.160 to $1.185 billion. We now expect GAAP EPS of $9.80 to $10.15 in 2026, revised from our previous guidance of $10.27 to $10.62, and adjusted EPS of $12.33 to $12.68, revised from our prior guidance of $12.53 to $12.88. The $0.20 decrease in adjusted EPS relates to our recent acquisition, which will be dilutive in the short term as income is deferred until Kadant's previously acquired inventory is sold to third-party customers. The 2026 adjusted EPS guidance excludes $2.53 of acquisition-related costs, revised from $2.26 in our previous guidance. For the second quarter of 2026, we expect revenue of $296 to $306 million, GAAP EPS of $2.26 to $2.36 and, after excluding $0.62 of acquisition-related costs, adjusted EPS of $2.88 to $2.98."
Conference Call Kadant will hold a webcast with a slide presentation for investors on Wednesday, May 6, 2026, at 11:00 a.m. Eastern Time to discuss its first quarter financial performance, as well as future expectations. To listen to the call live and view the webcast, go to the "Investors" section of the Company's website at kadant.com. Participants interested in joining the call's live question and answer session are required to register by clicking here or selecting the Q&A link on our website to receive a dial-in number and unique PIN. It is recommended that you join the call 10 minutes prior to the start of the event. A replay of the webcast presentation will be available on our website through June 5, 2026.
Prior to the call, our earnings release and the slides used in the webcast presentation will be filed with the Securities and Exchange Commission and will be available at sec.gov. After the webcast, Kadant will post its updated general investor presentation incorporating the first quarter results on its website at kadant.com under the "Investors" section.
Use of Non-GAAP Financial MeasuresIn addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including increases or decreases in revenue excluding the effect of acquisitions and foreign currency translation (organic revenue), adjusted operating income, adjusted net income, adjusted EPS, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA margin, and free cash flow.
We use organic revenue to understand our trends and to forecast and evaluate our financial performance and compare revenue to prior periods. Organic revenue excludes revenue from acquisitions for the four quarterly reporting periods following the date of the acquisition and the effect of foreign currency translation. Revenue in the first quarter of 2026 included $34.0 million from acquisitions and a favorable foreign currency translation effect of $9.8 million compared to the first quarter of 2025. Our other non-GAAP financial measures exclude amortization expense related to acquired intangible assets, profit in inventory, and backlog (collectively, purchase accounting expenses); acquisition costs; and other income or expense, as indicated. We exclude purchase accounting expenses and acquisition costs to provide a more meaningful and consistent comparison of our operating results over time and with peer companies. While we have a history of acquisition activity, such transactions do not occur on a predictable cycle, and the size and nature of these transactions will vary. We believe it is important for investors to understand that these intangible assets were recorded as part of purchase accounting and that they contribute to revenue generation. We also exclude other items as they are not indicative of our core operating results and are not comparable to other periods, which have differing levels of incremental costs, expenditures or income, or none at all. Additionally, we use free cash flow in order to provide insight on our ability to generate cash for acquisitions and debt repayments, as well as for other investing and financing activities.
We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results, or future outlook. We believe that the inclusion of such measures helps investors gain an understanding of our underlying operating performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. Such measures are also used by us in our financial and operating decision-making and for compensation purposes. We also believe this information is responsive to investors' requests and gives them additional measures of our performance.
The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for the results of operations or cash flows prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this press release have limitations associated with their use as compared to the most directly comparable GAAP measures, in that they may be different from, and therefore not comparable to, similar measures used by other companies.
First Quarter
Adjusted operating income, adjusted EBITDA, and adjusted EBITDA margin exclude:
Pre-tax intangible asset amortization expense of $8.4 million in 2026 and $6.3 million in 2025.
Pre-tax profit in inventory and backlog amortization expense of $1.4 million in 2026 and $0.4 million in 2025.
Pre-tax acquisition costs of $0.7 million in 2026 and $0.3 million in 2025.
Adjusted net income and adjusted EPS exclude:
After-tax intangible asset amortization expense of $6.3 million ($8.4 million plus tax of $2.1 million) in 2026 and $4.8 million ($6.3 million net of tax of $1.5 million) in 2025.
After-tax profit in inventory and backlog amortization expense of $1.1 million ($1.4 million net of tax of $0.3 million) in 2026 and $0.3 million ($0.4 million net of tax of $0.1 million) in 2025.
After-tax acquisition costs of $0.7 million in 2026 and $0.3 million in 2025.
Free cash flow is calculated as operating cash flow less:
Capital expenditures of $3.3 million in 2026 and $3.8 million in 2025.
Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in this press release.
Financial Highlights (unaudited)
(In thousands, except per share amounts and percentages)
Three Months Ended
Consolidated Statement of Income
April 4,2026
March 29,2025
Revenue
$
281,505
$
239,210
Costs and Operating Expenses:
Cost of revenue
154,802
128,880
Selling, general, and administrative expenses
82,538
71,221
Research and development expenses
4,056
3,523
241,396
203,624
Operating Income
40,109
35,586
Interest Income
351
517
Interest Expense
(4,484
)
(3,822
)
Other Expense, Net
(13
)
(16
)
Income Before Provision for Income Taxes
35,963
32,265
Provision for Income Taxes
10,142
7,828
Net Income
25,821
24,437
Net Income Attributable to Noncontrolling Interests
(312
)
(374
)
Net Income Attributable to Kadant
$
25,509
$
24,063
Earnings per Share Attributable to Kadant:
Basic
$
2.16
$
2.05
Diluted
$
2.16
$
2.04
Weighted Average Shares:
Basic
11,794
11,760
Diluted
11,802
11,776
Three Months Ended
Three Months Ended
Adjusted Net Income and Adjusted Diluted EPS (a)
April 4,2026
April 4,2026
March 29,2025
March 29,2025
Net Income and Diluted EPS Attributable to Kadant, as Reported
$
25,509
$
2.16
$
24,063
$
2.04
Adjustments, Net of Tax:
Intangible Asset Amortization
6,308
0.53
4,753
0.40
Profit in Inventory and Backlog Amortization
1,057
0.09
296
0.03
Acquisition Costs
671
0.06
315
0.03
Adjusted Net Income and Adjusted Diluted EPS (a,b)
$
33,545
$
2.84
$
29,427
$
2.50
Three Months Ended
Increase (Decrease) Excluding Acquisitions and FX (a,c)
Revenue by Segment
April 4,2026
March 29,2025
Increase
Flow Control
$
98,608
$
92,441
$
6,167
$
1,372
Industrial Processing
123,038
89,524
33,514
(3,957
)
Material Handling
59,859
57,245
2,614
1,058
$
281,505
$
239,210
