Kadant Inc. (NYSE:KAI) reported that revenues from continuing operations grew 49 percent in the first quarter of 2006, to $75.6 million, compared with $50.7 million in the first quarter of 2005.
Excluding a 40 percent revenue increase in the 2006 period from the company’s Kadant Johnson subsidiary and a 3 percent decrease from currency translation, revenues from continuing operations grew 12 percent.
Operating income from continuing operations in the 2006 quarter was $4.8 million (including $2.1 million from Kadant Johnson), versus $2.8 million in 2005. Income from continuing operations (after-tax) was $2.8 million in 2006, or $.20 of diluted earnings per share (EPS), versus income of $3.1 million, or $.22 of diluted EPS, a year ago. “We’re off to an excellent start in 2006,” said William A. Rainville, chairman and chief executive officer of Kadant. “We saw especially strong demand for our stock-preparation technologies in China and for our Kadant Johnson fluid-handling equipment in North America, both of which contributed to record revenues in the first quarter. We are also very pleased with our first quarter bookings, which rose 73 percent over the same quarter last year to a record $104 million on the strength of these two product lines. Even without the contribution of Kadant Johnson, bookings increased 33 percent. This led to a record quarter-end backlog as well, which nearly doubled from the 2005 first quarter to $83 million.
“China’s paper-recycling market remains an exciting growth opportunity for Kadant, and continued demand for our innovative stock-preparation systems from that country’s leading paper producers reinforces that we are clearly a technology leader. Revenues from these products in China were $9 million in the first quarter of 2006, a 59 percent increase over last year. Even more noteworthy, China bookings for stock-preparation systems in the period, which included the largest single order in our history, totaled $29 million – exceeding our total annual bookings from China in each of the last two years.
“In the North American paper industry, although the market for our accessories and water management product lines remained soft, we believe that our customers’ focus on lowering energy costs is driving demand for our fluid-handling and control technologies. These systems, which are used primarily to optimize drying – the most energy-intensive stage of paper production – contributed $23 million in first quarter 2006 bookings.
“We believe our strong performance this quarter is further evidence that our efforts to increase our breadth – of global market coverage and product offerings – are contributing to growth. With record bookings, we expect a strong second quarter as well, with GAAP diluted EPS from continuing operations of $.34 to $.36, on revenues of $85 to $87 million. That said, we are still seeing weakness in some North American and European markets, and therefore remain cautiously optimistic about the second half of the year.”
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