Kadant Inc. is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing, with products and services that enhance efficiency, optimize energy utilization, and maximize productivity in process industries while helping customers advance sustainability initiatives with products that reduce waste or generate more yield with fewer inputs, particularly fiber, energy, and water. The company operates in process industries such as paper, packaging, and tissue; wood products; mining; metals; food processing; and recycling and waste management, among others. Some of its businesses or their predecessor companies have been in operation for more than 100 years, and its diverse customer base includes global and regional industrial manufacturers and distributors who participate in the broader resource transformation sector.

Kadant believes it has one of the largest installed bases of equipment in the markets it serves around the globe. The company competes primarily on the basis of technical expertise, product innovation, and product performance, and believes the reputation it has established for high-performance, high-reliability products supported by its in-depth process knowledge and application expertise provides a competitive advantage. In its Flow Control segment, Kadant is a leading supplier of systems and equipment in each of its product lines, facing several global and numerous local competitors. In its Industrial Processing segment, it competes with a limited number of global and regional competitors in the forest products markets and fiber processing equipment markets. In its Material Handling segment, it competes with numerous global, regional, and local competitors for its conveying and vibratory equipment, and strong regional competitors for its baling equipment and fiber-based granules offerings.

Kadant generates revenue through the sale of custom-engineered products, systems, and technologies that control the flow of fluids, process timber and fiber, and handle bulk and discrete materials. The company's revenue mix includes both parts and consumables (recurring) and capital equipment (transactional) sales. In 2025, parts and consumables represented a record 71% of revenue. The company's primary customer segments include global and regional industrial manufacturers and distributors in process industries. Kadant's three reportable segments are Flow Control, Industrial Processing, and Material Handling.

The Flow Control segment provides custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications, consisting of fluid-handling and doctoring, cleaning, and filtration product lines. Fluid-handling products include rotary joints, syphons, Turbulator bars, expansion joints, and engineered steam and condensate systems. Doctoring, cleaning, and filtration products include doctor systems and holders, doctor blades, cleaning showers and fabric-conditioning systems, forming systems and wear surfaces, and water-filtration systems. The Industrial Processing segment provides equipment, machinery, and technologies used to recycle paper and paperboard, process timber, and optimize industrial steam boiler efficiency, consisting of wood processing and fiber processing product lines. Wood processing products include ring and rotary debarkers, stranders, chippers, engineered knife systems, and industrial automation and control. Fiber processing products include recycling and approach flow systems, virgin pulping process equipment, boiler cleaning technologies, and single- and double-screw presses. The Material Handling segment provides products and engineered systems used to handle bulk and discrete materials for secondary processing or transport, consisting of conveying and vibratory, baling, and fiber-based product lines. Conveying and vibratory products include vibratory equipment and conveying equipment. Baling products include horizontal channel balers, vertical balers, conveyors, compactors, and bale wrapping machines. Fiber-based products are biodegradable, absorbent granules derived from papermaking by-products used primarily as carriers in agricultural applications and for oil and grease absorption.

On July 9, 2025, Kadant acquired all the outstanding equity securities of Babbini S.p.A and G.P.S. Engineering S.r.l (collectively, Babbini), two Italy-based companies specializing in industrial dewatering and engineered power transmission solutions, for approximately $16.5 million ¹, net of cash acquired. On October 7, 2025, Kadant acquired all the outstanding equity securities of Clyde Industries Holdings, Inc. and its subsidiaries (collectively, Clyde Industries), a manufacturer of highly engineered boiler efficiency and cleaning system technologies for $173.7 million ², net of cash acquired. Both Babbini and Clyde Industries are part of the Industrial Processing segment. On January 29, 2026, Kadant entered into a definitive agreement to acquire the shares of voestalpine BÖHLER Profil GmbH & Co KG and voestalpine BÖHLER Profil VerwaltungsGmbH (collectively, voestalpine BÖHLER Profil), a global supplier of tailor-made special profiles with complex geometries and high-performance industrial knives, for approximately 157.0 million euros ³ in cash, subject to certain customary adjustments. On May 15, 2025, the board of directors approved the repurchase of up to $50.0 million ⁴ of equity securities during the period from May 15, 2025 to May 15, 2026. Kadant paid cash dividends of $15.8 million ⁵ in 2025.

Consolidated revenue for fiscal 2025 was $1,052,248,000 ⁶, compared to $1,053,384,000 ⁷ in fiscal 2024, representing a decrease of $1,136,000 ⁸ or essentially flat. Organic revenue decreased 4% ⁹ primarily due to weaker demand for capital equipment products, especially in the Industrial Processing segment. Net income attributable to Kadant was $101,969,000 ¹⁰ in 2025, compared to $111,598,000 ¹¹ in 2024. Diluted earnings per share attributable to Kadant was $8.65 ¹² in 2025, compared to $9.48 ¹³ in 2024. Consolidated gross profit margin increased to 45.2% ¹⁴ in 2025 from 44.3% ¹⁵ in 2024 due to an increase in the proportion of higher-margin parts and consumables revenue. Net cash provided by operating activities was $171,328,000 ¹⁶ in 2025, compared to $155,265,000 ¹⁷ in 2024.

Kadant anticipates higher bookings in 2026 compared to 2025, especially in its Industrial Processing segment where customer delays associated with pending orders from 2025 have resulted in a number of capital orders in the pipeline. The company expects steady demand in its Flow Control segment in 2026 and long-term strength in its end markets. In the Industrial Processing segment, Kadant expects steady demand for aftermarket parts to continue in 2026 and anticipates a strengthening in demand for capital equipment products in this segment in 2026, supported by the expected receipt of several large capital orders currently in the pipeline. In the Material Handling segment, Kadant expects steady demand for aftermarket parts and increased demand for capital equipment products in 2026.

Kadant expects that a significant driver of its long-term growth will be the acquisition of businesses and technologies that complement or augment its existing products and services or may involve entry into a new process industry. The company continues to pursue acquisition opportunities. On January 29, 2026, Kadant entered into a definitive agreement to acquire voestalpine BÖHLER Profil for approximately 157.0 million euros ¹⁸ in cash, subject to certain customary adjustments, which will be financed primarily through borrowings under its revolving credit facility. Upon closing, voestalpine BÖHLER Profil will become part of the Industrial Processing segment and its name will change to Kadant Profil GmbH & Co KG. Kadant expects several synergies in connection with its recent acquisitions of Babbini and Clyde Industries, including expansion of product sales into new markets by leveraging its global sales network and relationships, as well as broadening its product portfolio, strengthening its position in the various markets served, and realizing the value of the acquired workforce.

Consolidated gross profit margin increased to 45.2% ¹⁹ in 2025 from 44.3% ²⁰ in 2024 due to an increase in the proportion of higher-margin parts and consumables revenue, which increased to 71% ²¹ of consolidated revenue in 2025 compared to 66% ²² in 2024. Gross profit margin included amortization expense related to acquired profit in inventory of $1.5 million ²³, which lowered gross profit margin by 0.2 percentage points ²⁴ in 2025, compared to expense of $5.2 million ²⁵, which lowered gross profit margin by 0.4 percentage points ²⁶ in 2024. Kadant expects interest expense to increase significantly in 2026 as a result of the borrowing incurred in 2025 to fund its most recent acquisition and the anticipated borrowing in 2026 to fund its pending acquisition.

Kadant plans to make capital expenditures of approximately $23.0 to $27.0 million ²⁷ during 2026 for property, plant, and equipment. The company's global operations have been and continue to be impacted by complex market conditions fueled by tariff-related uncertainty, inflationary pressures, and geopolitical tensions. Kadant expects its operating environment to continue to be challenging, resulting in continued uncertainty for 2026. However, the company believes that the fundamentals of its business remain strong, supported by its solid market position in key product lines, experienced global operations teams, and the long-term strength of its end markets.

Kadant's research and development expenses were $15.3 million ²⁸ in 2025, $14.3 million ²⁹ in 2024, and $13.6 million ³⁰ in 2023. Capital expenditures were $17.0 million ³¹ in 2025 and $21.0 million ³² in 2024. On May 15, 2025, the board of directors approved the repurchase of up to $50.0 million ³³ of equity securities during the period from May 15, 2025 to May 15, 2026. Kadant paid cash dividends of $15.8 million ³⁴ in 2025. On November 13, 2025, Kadant declared a quarterly cash dividend of $0.34 per share ³⁵ totaling $4.0 million ³⁶ that was paid on February 5, 2026. Future declarations of dividends are subject to the board of directors' approval and may be adjusted as business needs or market conditions change.

Kadant's global operations have been and continue to be impacted by complex market conditions fueled by tariff-related uncertainty, inflationary pressures, and geopolitical tensions. The company expects its operating environment to continue to be challenging, resulting in continued uncertainty for 2026. The United States has imposed tariffs on certain countries and imports, which has and will continue to increase the cost of some of the parts and equipment Kadant imports. Foreign countries have implemented and may in the future implement additional retaliatory tariffs in response to these actions by the United States, which have negatively impacted and may in the future negatively impact Kadant's operations. The company's sales to Russia were minimal at $1.9 million ³⁷ in 2025, and as a result of the international sanctions regime in place against Russia, it has become extremely difficult to sell any of its equipment or services into Russia.

Management's message in the MD&A emphasizes that the company's consolidated bookings increased 5% ⁴⁶ to a record $1.034 billion ⁴⁷ in 2025 compared to 2024, driven by strong demand for parts and consumables products and contributions from recent acquisitions. Management notes that demand for capital equipment products in 2025 was consistent with the prior year, as market uncertainty impacted customers' capital investment decisions, driven by escalating tariff rates and economic policies impacting manufacturers' operating costs. Management states that it anticipates higher bookings in 2026 compared to 2025, especially in the Industrial Processing segment where customer delays associated with pending orders from 2025 have resulted in a number of capital orders in the pipeline. The strategic priorities emphasized for the period ahead include continuing to pursue acquisition opportunities as a significant driver of long-term growth, mitigating the impact of tariffs through pricing and sourcing strategies, and maintaining focus on the long-term strength of end markets as customers rely on Kadant's products to enhance productivity through more efficient production processes.

For fiscal 2025, total revenue was $1,052,248,000 ⁴⁸ compared to $1,053,384,000 ⁴⁹ in fiscal 2024. Net income attributable to Kadant was $101,969,000 ⁵⁰ in 2025 versus $111,598,000 ⁵¹ in 2024. Diluted earnings per share attributable to Kadant was $8.65 ⁵² in 2025 compared to $9.48 ⁵³ in 2024. Operating income was $157,288,000 ⁵⁴ in 2025 versus $171,252,000 ⁵⁵ in 2024. Consolidated gross profit margin was 45.2% ⁵⁶ in 2025 compared to 44.3% ⁵⁷ in 2024. Net cash provided by operating activities was $171,328,000 ⁵⁸ in 2025 versus $155,265,000 ⁵⁹ in 2024. Free cash flow, a non-GAAP measure defined as net cash provided by operating activities less capital expenditures, was $154,280,000 ⁶⁰ in 2025 compared to $134,260,000 ⁶¹ in 2024. Cash and cash equivalents were $119,551,000 ⁶² at year-end 2025 versus $94,660,000 ⁶³ at year-end 2024. Total debt (current maturities of long-term obligations plus long-term obligations) was $374,501,000 ⁶⁴ at year-end 2025 versus $288,527,000 ⁶⁵ at year-end 2024. Adjusted EBITDA, a non-GAAP measure, was $216,308,000 ⁶⁶ in 2025 versus $229,716,000 ⁶⁷ in 2024, and adjusted EBITDA margin was 20.6% ⁶⁸ in 2025 versus 21.8% ⁶⁹ in 2024. The decrease in net income was due to a $14.0 million ⁷⁰ decrease in operating income, offset in part by a $4.5 million ⁷¹ decrease in interest expense and a $0.6 million ⁷² decrease in income taxes. In 2025, the company recognized restructuring costs of $0.1 million ⁷³ and an impairment charge of $0.3 million ⁷⁴ associated with previously acquired technology, as well as land remediation costs of $0.9 million ⁷⁵ associated with the prior-period sale of a manufacturing facility and land use rights at one of its Chinese subsidiaries. In the Flow Control segment, revenue increased 3% ⁷⁶ to $382,866,000 ⁷⁷ in 2025 from $371,177,000 ⁷⁸ in 2024. In the Industrial Processing segment, revenue decreased 5% ⁷⁹ to $409,489,000 ⁸⁰ in 2025 from $432,738,000 ⁸¹ in 2024. In the Material Handling segment, revenue increased 4% ⁸² to $259,893,000 ⁸³ in 2025 from $249,469,000 ⁸⁴ in 2024.

Adverse changes in global and local economic conditions may negatively affect Kadant's industry, business, and results of operations, as a significant portion of revenue is from customers based in North America, Europe, and China, and uncertainties in economic outlooks have negatively affected demand for capital equipment. Revenues from the sale of large capital equipment and systems projects are often difficult to predict accurately, and approximately 29% ³⁸ of revenue in 2025 was from the sale of capital equipment to be used in process industries. The company's acquisition strategy involves risks, including difficulties identifying and executing acquisitions, competition with other prospective buyers, and the assumption of significant liabilities, some of which may be unknown at the time of acquisition. The development and increasing use of digital media has had an adverse impact on the Flow Control and Industrial Processing segments, and approximately 4% ³⁹ of revenue in 2025 was from customers producing newsprint and printing and writing grades of paper. The Material Handling segment can be materially impacted by cyclical economic conditions affecting the global mining industry, and approximately 4% ⁴⁰ of consolidated revenue in 2025 was from this segment's mining customers. Approximately 2% ⁴¹ and 1% ⁴² of the Material Handling segment's 2025 revenue came from its thermal and metallurgical coal-mining customers, respectively, which represented in aggregate less than 1% ⁴³ of consolidated revenue. The company's global operations subject it to various risks, including fluctuations in foreign currency exchange rates, and a 10% ⁴⁴ decrease in functional currencies relative to the U.S. dollar would have resulted in a reduction in stockholders' equity of $87.2 million ⁴⁵ at year-end 2025.