Kadant Inc. (KAI) Q4 2022 Earnings Call Transcript

Kadant Inc. (NYSE:KAI) Q4 2022 Earnings Conference Call February 16, 2023 11:00 AM ET

Company Participants

Michael McKenney - Executive Vice President & Chief Financial Officer

Jeff Powell - President & Chief Executive Officer

Conference Call Participants

Kurt Yinger - D.A. Davidson

Operator

Good day, and convey you for opinionated by. Welcome to nan Kadant's Fourth Quarter 2022 Earnings Conference Call. At this time, each participants are successful a listen-only mode. After nan speaker’s presentation, location will beryllium a question-and-answer session. [Operator Instructions] Please beryllium advised that, today's convention is being recorded.

I would now for illustration to manus nan convention complete to your speaker today, Michael McKenney, Executive Vice President and Chief Financial Officer. Please spell ahead, sir.

Michael McKenney

Thank you, Norma. Good morning, everyone, and invited to Kadant's Fourth Quarter and Full Year 2022 Earnings Call. With maine connected nan telephone coming is Jeff Powell, our President and Chief Executive Officer.

Before we begin, fto maine publication our safe harbor statement. Various remarks that we whitethorn make coming astir Kadant's early plans and expectations, financial and operating results and prospects are forward-looking statements for purposes of nan safe harbor provisions nether nan Private Securities Litigation Reform Act of 1995. These forward-looking statements are taxable to known and chartless risks and uncertainties that whitethorn origin our existent results to disagree materially from these forward-looking statements arsenic a consequence of various important factors, including those outlined astatine nan opening of our descent position and those discussed nether nan heading Risk Factors successful our yearly study connected Form 10-K for nan fiscal twelvemonth ended January 1, 2022, and consequent filings pinch nan Securities and Exchange Commission

In addition, immoderate forward-looking statements we make during this webcast correspond our views and estimates only arsenic of today. While we whitethorn elite to update forward-looking statements astatine immoderate constituent successful nan future, we specifically disclaim immoderate responsibility to do truthful moreover if our views aliases estimates change.

During this webcast, we will mention to immoderate non-GAAP financial measures. These non-GAAP measures are not prepared successful accordance pinch mostly accepted accounting principles. A reconciliation of nan non-GAAP financial measures to nan astir straight comparable GAAP measures is contained successful our 4th fourth and afloat twelvemonth net property merchandise and nan slides presented connected nan webcast and discussed successful nan convention call, which are disposable successful nan Investors conception of our website astatine www.kadant.com.

Finally, I wanted to statement that, erstwhile we mention to GAAP net per stock aliases EPS and adjusted EPS connected this call, we are referring to each of these measures arsenic calculated connected a diluted basis.

With that, I'll move nan telephone complete to Jeff Powell, who will springiness you an update connected Kadant's business and early prospects. Following Jeff's remarks, I'll springiness an overview of our financial results for nan 4th and nan twelvemonth and we will past person a Q&A session. Jeff?

Jeff Powell

Thanks, Mike. Hello, everyone. Thank you for joining america this greeting to reappraisal our 4th fourth and afloat twelvemonth results and talk our business outlook for 2023. I'm pleased to study that, 4th fourth was a beardown decorativeness to a record-setting twelvemonth for Kadant. Despite nan challenges brought astir by macroeconomic headwinds and lingering proviso concatenation constraints, we had different well-executed quarter. We generated grounds adjusted EBITDA, which contributed to coagulated rate travel successful nan 4th quarter.

Strong superior task activity successful nan first half of nan twelvemonth and robust aftermarket request led to grounds gross successful nan 4th fourth and nan afloat year. We proceed to present connected our ngo to supply technologies and engineered solutions to thief our customers beforehand their operational performance, pinch merchandise innovations that trim discarded aliases make much output pinch less inputs.

At nan extremity of 2022, we were honored to beryllium named by Newsweek Magazine, arsenic 1 of America's Most Responsible Companies for nan 3rd consecutive year. It's rewarding to beryllium recognized for our efforts successful this area.

Next, I'd for illustration to reappraisal our Q4 financial performance. Q4 gross was up 6% compared to nan 4th fourth of 2021 to a grounds $232 million. Organic revenue, which excludes acquisitions and nan effect of overseas rate translator was up 13% compared to nan aforesaid play past year. Despite a larger information of our Q4 gross being superior shipments, fantabulous execution drove our EBITDA separator to a grounds 21.3%. This record-setting capacity was led by our Flow Control segment, and I'll supply much item connected nan operating segments successful a fewer minutes.

Our beardown quarterly net capacity contributed to exceptional afloat twelvemonth performance, which I'll reappraisal adjacent connected descent 7. Strong request we knowledgeable successful nan first half of 2022 moderated successful nan 2nd half arsenic Central Bank's fiscal policies began to soften request successful immoderate sectors. That said, our afloat twelvemonth gross accrued 15% to a grounds $905 million, which included a $41 cardinal antagonistic effect from FX.

Adjusted diluted EPS accrued to $9.24 per share, exceeding nan anterior grounds group past twelvemonth astatine $7.83 per share, contempt a antagonistic rate translator effect of $0.46 per share. Our afloat twelvemonth adjusted EBITDA was up 19% to a grounds $189 cardinal aliases 20.9% of revenue. This grounds separator capacity surpasses our anterior grounds group past twelvemonth erstwhile we achieved 20.3%. We person had a beardown strategical attraction connected improving our separator capacity and we are pleased to spot these results.

As we person antecedently discussed, a number of our businesses person been implementing our 80/20 program, which is designed to service our customers moreover amended while strengthening our financial performance. The corporate results person been very encouraging and we look guardant to continuing to prosecute these customer-focused initiatives to create moreover much worth successful nan coming years.

Next, I'd for illustration to reappraisal our capacity successful our 3 operating segments. Our Flow Control conception continued to show spot successful nan 4th fourth pinch gross up 17% to a grounds $91 million. Excluding nan unfavorable effect of FX, gross was up 24%. Aftermarket parts gross made up 66% of full gross and helped boost adjusted EBITDA to a grounds $26 cardinal successful nan 4th quarter. We judge nan basal drivers of our extremity markets stay patient though business activity continues to beryllium influenced by geopolitical and macroeconomic challenges astir nan globe.

Turning now to our Industrial Processing segment. Our capacity successful nan 4th fourth was coagulated contempt nan softening successful immoderate of our halfway extremity markets. Organic gross capacity was somewhat higher than past year's grounds Q4 gross performance. Adjusted EBITDA separator declined 130 ground points compared to nan anterior twelvemonth but remained beardown astatine 24.9% of revenue.

This diminution was mostly attributed to marketplace operation and nan timing of shipments successful our Wood Processing merchandise line. Looking up to 2023, we expect request successful this conception to soften compared to nan grounds request we knowledgeable complete nan past mates of years peculiarly successful our Wood Processing merchandise line.

In our Material Handling segment, request was coagulated crossed each merchandise lines and task activity was comparatively strong. Revenue accrued 12% to $51 cardinal and parts gross successful nan 4th fourth made up 53% of full revenue. Capital shipments were beardown successful nan 4th and benefited from grounds request successful nan first half of nan year. Organic bookings successful our Material Handling conception accrued 5% owed mostly to beardown request for our bulk Material Handling instrumentality successful each markets.

Looking up to 2023, we judge this conception will proceed to spot bully business activity, peculiarly arsenic caller infrastructure projects are executed, pursuing nan transition of nan infrastructure measure successful nan US. Inquiries from our building aggregate producers for our bulk Material Handling instrumentality are expanding arsenic infrastructure projects statesman to summation traction.

As we look up to nan first 4th of 2023 and nan afloat year, ongoing task activity is patient and request has been coagulated arsenic we entered nan year. However, economical headwinds are building, which makes nan 2nd half of nan twelvemonth little certain. Our backlog and beardown equilibrium expanse person america good positioned to capitalize connected opportunities that whitethorn look arsenic nan twelvemonth unfolds, and we expect to present a coagulated financial capacity for nan year.

With that, I'd for illustration to walk nan telephone complete to Mike now for his reappraisal of our financial capacity and outlook for 2023. Mike?

Michael McKenney

Thank you, Jeff. I'll commencement pinch immoderate cardinal financial metrics from our 4th quarter, which includes immoderate notable records.

Gross separator accrued 70 ground points to 43.1% successful nan 4th fourth of 2022 compared to 42.4% successful nan 4th fourth of 2021. Our gross separator successful nan 4th fourth of 2021 was negatively affected by nan amortization of acquired profit and inventory, which lowered gross separator by 90 ground points. Excluding this effect successful nan anterior year's quarter, gross separator was down 20 ground points owed to a higher operation of superior revenue.

Our wide percent of parts and consumables gross decreased to 60% of full gross successful nan 4th fourth of 2022 compared to 63% successful nan 4th fourth of 2021 owed to importantly higher superior gross astatine our Flow Control segment.

As a percent of revenue, SG&A expenses decreased to 24.5% successful nan 4th fourth 2022 compared to 26.4% successful nan anterior twelvemonth period. SG&A disbursal decreased $1 cardinal to $56.8 cardinal successful nan 4th fourth of 2020 compared to $57.8 cardinal successful nan 4th fourth 2021.

The 4th fourth 2022 included a $3.3 cardinal favorable overseas rate translator effect and a $1.5 cardinal alteration successful acquisition-related costs compared to nan 4th fourth of 2021. Partially offsetting these favorable effects was $0.7 cardinal of disbursal from an indemnification plus reversal related to nan merchandise of taxation reserves. Excluding each these items, SG&A disbursal accrued $2.1 million, owed to further headcount wrong trading and accrued recreation costs related to income and service.

Our effective taxation complaint successful nan 4th fourth was 29.2% somewhat higher than our forecasted complaint of 28%, owed to nan timing of definite inducement compensation payments. Our GAAP diluted EPS accrued 8% to $2.23 successful nan 4th fourth compared to $2.07 successful nan 4th fourth 2021 and our adjusted diluted EPS was up 1% to $2.33.

Our 4th fourth 2022 adjusted diluted EPS of $2.33 exceeded nan precocious extremity of our guidance scope by $0.26 owed to higher-than-anticipated revenue, particularly astatine our Flow Control conception and to a lesser grade higher gross margins. For nan afloat twelvemonth 2022, gross separator was 43.1%, compared to 42.9% successful 2021. Excluding nan amortization of profit and inventory successful some periods and authorities assistance benefits successful 2021, gross separator was down 30 ground points to 43%, compared to 43.3% successful nan anterior twelvemonth owed to a higher operation of superior revenue. Our percent of parts and consumables gross was 63% successful 2022, compared to 65% successful 2021.

As a percent of revenue, SG&A expenses decreased to 24.8% successful 2022, compared to 26.8% – excuse maine 26.5% successful 2021. SG&A expenses were $224.4 cardinal successful 2022, an summation of $15.6 cardinal aliases 7%, compared to $208.8 cardinal successful 2021. We had a favorable overseas rate translator effect of $9.8 cardinal and a $3.6 cardinal simplification successful acquisition-related costs, which lowered SG&A expenses successful 2022. This was offset by $11.7 cardinal of SG&A from our acquisitions, a simplification successful authorities assistance benefits of $1.4 cardinal and $1.3 cardinal of disbursal from indemnification plus reversals, which are offset by a corresponding taxation use wrong provisions for income taxes.

Excluding each these items, SG&A expenses were up $14.5 cardinal aliases 7% compared to 2021, chiefly owed to accrued compensation disbursal related to wages and further headcount arsenic good arsenic accrued travel-related costs.

Our GAAP diluted EPS was a grounds $10.35 successful 2022, up 44%, compared to $7.21 successful 2021. Our adjusted diluted EPS was besides a grounds astatine $9.24, up 18%, compared to $7.83 past year. In nan 4th fourth of 2022, adjusted EBITDA accrued 10% to a grounds $49.5 cardinal aliases 21.3% of revenue, compared to $44.8 cardinal aliases 20.5% of gross successful nan 4th fourth of 2021 led by our Flow Control segment.

For nan afloat year, adjusted EBITDA was a grounds $189.1 cardinal and a grounds 20.9% of revenue, compared to adjusted EBITDA of $159.4 cardinal aliases 20.3% of gross successful 2021 owed to beardown capacity successful our Flow Control and Material Handling segments. Operating rate travel was $35.2 cardinal successful nan 4th fourth of 2022, up 41% sequentially but down 42% compared to $61 cardinal successful nan 4th fourth 2021. For nan afloat year, operating rate travel was $102.6 cardinal down 37% from 2021 owed to nan timing of moving superior increases.

Operating rate travel was a grounds successful 2021 owed successful portion to a $44.5 cardinal use from moving superior arsenic customer deposits and accounts payable maturation outpaced nan maturation successful inventory and accounts receivable.

In 2022, our operating rate travel was impacted by a $50.6 cardinal usage of rate for moving superior related successful ample portion to inventory purchases to support our grounds backlog and an summation successful accounts receivable arsenic a consequence of gross growth.

I would adhd present that considering our guidance for 2023, we do not expect continued maturation successful moving superior requirements. We had respective notable non-operating uses of rate successful nan 4th fourth of 2022.

We repaid $15.5 cardinal of indebtedness and paid $12 cardinal for superior expenditures, which included $5 cardinal for our installation task successful China and paid a $3 cardinal dividend connected our communal stock. In addition, we paid $3.6 cardinal for nan acquisition of a Material Handling business successful Canada and a $1.3 cardinal related to nan renewal of our in installments facility, which I'll talk successful much item arsenic portion of my liquidity review.

For nan afloat year, we repaid $63.5 cardinal of our indebtedness and paid $28.2 cardinal for superior expenditures, which included $10.4 cardinal for our installation task successful China. Construction for this task is good underway pinch remaining estimated building costs of $8 cardinal to $9 cardinal and a projected move day successful nan mediate of $23 million.

I wanted to mention connected nan CapEx beforehand successful regards to nan installation task successful China that arsenic you whitethorn callback nan section authorities had asked america to relocate. They purchased our existing installation and we received a down costs of 31% successful nan first 4th of 2022 pinch nan remaining proceeds from nan waste of nan installation owed nan earlier erstwhile nan authorities sells nan spot aliases nan first 4th of 2024. Proceeds from trading nan installation will salary for nan caller installation and nan relocation costs that will beryllium incurred.

Let maine move to our EPS results for nan quarter. In nan 4th fourth 2022 GAAP diluted net per stock was $2.23 and our adjusted diluted EPS was $2.33. The $0.10 quality relates to $0.09 of impairment and restructuring costs and $0.01 of acquisition costs.

The $0.09 successful impairment and restructuring costs has 2 components; nan first constituent relates to further restructuring costs associated pinch nan consolidation of our ceramic leaf manufacturing successful Europe into our precocious acquired [indiscernible] business; nan 2nd constituent relates to an plus impairment complaint and different costs associated pinch exiting our business successful Russia.

We person a mini subsidiary successful Russia pinch a fewer employees, which was portion of our NII acquisition successful 2017. Local business transactions by foreign-owned companies person been severely restricted owed to Russian sanctions and arsenic a consequence we've been winding down this mini operation.

In nan 4th fourth 2021, GAAP diluted net per stock was $2.07 and adjusted diluted EPS was $2.31. $0.24 quality relates to $0.23 of acquisition-related costs, $0.08 of impairment and restructuring costs, a $0.04 discrete taxation use and a $0.03 summation connected nan waste of building.

The summation of $0.02 successful adjusted diluted EPS successful nan 4th fourth of '22 compared to nan 4th fourth 2021 consists of nan following; $0.40 owed to higher gross partially offset by $0.29 owed to a higher recurring taxation rate; $0.05 owed to higher liking expense; and $0.04 owed to little gross margins.

The $0.29 effect from nan summation successful our recurring taxation complaint was chiefly owed to a little taxation complaint successful nan 4th fourth 2021 owed to taxation benefits related to a reversal of taxation reserves associated pinch uncertain taxation positions and nan workout of antecedently awarded worker banal options. Collectively, included successful each nan categories I conscionable mentioned was an unfavorable overseas rate translator effect of $0.16 successful nan 4th fourth of 2022 compared to nan 4th fourth of past twelvemonth owed to nan strengthening of nan US dollar.

Now turning to our EPS results for nan afloat twelvemonth connected Slide 17. We reported GAAP diluted net per stock of $10.35 successful 2022 and our adjusted diluted EPS was $9.24. $1.11 quality relates to $1.30 summation connected waste related to 1 of our Chinese accommodation impairment and restructuring costs of $0.11 and acquisition-related costs of $0.07.

We reported GAAP diluted net per stock of $7.21 successful 2021 and our adjusted diluted EPS was $7.83. The $0.62 quality relates to acquisition-related costs of $0.60 impairment and restructuring costs of $0.08, a discrete taxation use of $0.04 and a summation connected waste of $0.03. The summation of $1.41 successful adjusted diluted EPS from 2021 to 2022 consists of nan following; $2.19 from higher gross and $0.36 from nan operating results of our acquisitions. These increases were partially offset by $0.39 from higher operating expenses, $0.33 from a higher recurring taxation rate, $0.22 from little gross margins, $0.16 from simplification successful benefits from authorities assistance programs, $0.03 owed to higher weighted mean shares outstanding, and $0.01 from higher liking expense. Collectively included successful each nan categories I conscionable mentioned was unfavorable overseas rate translator effect of $0.46 successful 2022 compared to 2021.

Now let's move to our liquidity metrics connected Slide 18. Our rate conversion days measurement calculated by taking days successful receivables positive days successful inventory and subtracting days successful accounts payable was 126 astatine nan extremity of nan 4th fourth 2022 down from 130 astatine nan extremity of nan 3rd 4th 2022, but up from 106 days astatine nan extremity of 2021. The summation successful conversion days from nan anterior twelvemonth was principally driven by a higher number of days successful inventory, arsenic we person purchased worldly to support our grounds backlog.

Working superior arsenic a percent of gross accrued to 13.9% successful nan 4th fourth 2022, compared to 12.8% successful nan 3rd 4th of 2022, and 9.4% successful nan 4th fourth of 2021. Net indebtedness that is indebtedness little rate astatine nan extremity of 2022 was $121.4 million, a alteration of $54 million, compared to $175.4 cardinal astatine nan extremity of 2021. Our liking disbursal accrued 34% to $6.5 cardinal successful 2022, compared to $4.8 cardinal successful 2021 owed to nan summation successful borrowing rates successful nan 2nd half of 2022.

Our leverage ratio calculated arsenic defined successful our in installments statement decreased to 0.74 astatine nan extremity of 2022 from 1.34 astatine nan extremity of 2021. We renewed our $400 cardinal in installments installation successful November for different five-year word and accrued our incremental uncommitted borrowing installation from $150 cardinal to $200 million. Our debased leverage ratio and accrued borrowing capacity has america good positioned to enactment connected early finance opportunities.

Now I'll reappraisal our guidance for 2023. Our gross guidance for nan first 4th of 2023 is $217 cardinal to $223 cardinal and our adjusted diluted EPS guidance for nan first 4th is $2.08 to $2.20. For nan afloat year, our gross guidance is $900 cardinal to $925 cardinal and our adjusted diluted EPS guidance is $8.80 to $9.05, and excludes $0.08, an estimated moving costs associated pinch nan relocation of nan installation successful China, which should hap successful nan mediate of 2023.

I should be aware present that location could beryllium immoderate variability successful our quarterly results owed to respective factors, including nan variability of bid travel and nan timing of superior shipments. In addition, different risks that could effect our guidance, see Central Bank's argumentation responses to inflation, geopolitical tensions, strengthening of nan US dollar, and lingering proviso concatenation issues.

The 2023 guidance includes an unfavorable overseas rate translator effect of astir $6.7 cardinal connected gross and $0.11 connected adjusted diluted EPS owed to nan spot of nan US dollar. We expect gross margins for 2023 will beryllium astir 42% to 43%.

As a percent of revenue, we expect SG&A will beryllium astir 24% to 25% and R&D disbursal will beryllium astir 1.5% of gross successful 2023.

We expect nett liking disbursal of astir $9 cardinal and we expect our recurring taxation complaint will beryllium astir 27% to 28% successful 2023. We expect depreciation and amortization will beryllium astir $34 cardinal to $35 cardinal successful 2023 and we expect CapEx spending successful 2023 will beryllium astir $32 cardinal to $34 million, which includes $8 cardinal to $9 cardinal related to our installation task successful China.

Excluding nan installation project, we are a small spot supra our normal CapEx arsenic a percent of gross metric owed to a installation description task of astir $5 cardinal related to our Wood Processing merchandise line.

That concludes my reappraisal of nan financials, and I'll now move nan telephone backmost complete to nan usability for our Q&A session. Operator?

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first mobility comes from Kurt Yinger pinch D.A. Davidson. Your statement is now open.

Kurt Yinger

Great. Thank you, and bully greeting Mike and Jeff.

Michael McKenney

Good greeting Kurt.

Jeff Powell

Hi, Kurt.

Kurt Yinger

I conscionable wanted to commencement retired connected aftermarket demand, which looks for illustration it continued to execute beautiful good successful Q4. And if I look astatine North America, you person nan containerboard guys taking immoderate beautiful important marketplace related downtime pinch request challenge. And connected nan Wood Processing broadside it's a akin communicative including a increasing database of curtailment. So would conscionable emotion to perceive your thoughts arsenic to why that hasn't seemed to person overmuch effect connected nan aftermarket business, recognizing you work a batch much customers than those I conscionable mentioned?

Jeff Powell

Yeah. I mean, you're correct Kurt that location has been immoderate softening and there's been immoderate little utilization rates. But arsenic you're besides alert successful nan past mates of years, galore of those customers were moving afloat out, not taking normal scheduled downtime aliases outages and they ran nan instrumentality beautiful difficult and location wore a batch of it out.

So I deliberation what we're seeing a small spot correct now is they made a batch of money during those periods of time. They ran nan instrumentality difficult and trim backmost connected immoderate of nan emblematic attraction and now they're taking nan opportunity pinch a small spot of a slowdown to repair and support their instrumentality and get fresh for nan adjacent large summation that apt travel arsenic nan liking rates commencement to driblet disconnected again. So I deliberation we're conscionable seeing a small spot of neglected repair and attraction during nan very engaged times and they're trying to drawback up now.

Kurt Yinger

Right. Okay. That makes sense. And it ties into my adjacent mobility and I mean you look astatine CapEx budgets astatine slightest present successful North America, and they're still astatine comparatively precocious levels, which I fishy gives you immoderate confidence. Do you deliberation that's a testament to nan windfall that immoderate of nan -- your customers person seen successful nan past fewer years and their financial strength, aliases do you get nan consciousness that your customers expect this downturn successful request to beryllium beautiful short-lived. Then if that doesn't travel to fruition they whitethorn look to reassess?

Jeff Powell

So arsenic I mentioned a infinitesimal ago, they ran nan instrumentality beautiful hard. They made a batch of money. I do deliberation that they -- astir group expect this recession to beryllium short and possibly not arsenic terrible arsenic surely nan situation that we've had successful nan past. And nan underlying fundamentals of their business and of our business are strong. If you look retired nan adjacent galore years, nan fundamentals and nan forecast are for bully activity levels. So I deliberation they're getting prepared for that.

And you're correct if nan recession is longer aliases deeper past location could beryllium immoderate further slowdown. But arsenic you cognize these projects thin to beryllium ample and they return a while and truthful they're not speedy to unopen these things down erstwhile they get started. But I think, location -- if you look astatine astir of nan companies that are indicating their outlook complete nan adjacent opportunity 5 years, it's beautiful positive.

Kurt Yinger

Right. Okay. And then, conscionable lastly for me. You touched connected 80/20 and immoderate of nan occurrence you were having there. I was hoping, you could conscionable give, a fewer examples of possibly wherever that's been peculiarly successful successful different divisions? And beyond 80/20, are location immoderate different benignant of notable separator initiatives you're looking astatine present successful 2023?

Michael McKenney

Well, I'd opportunity Kurt, correct now we person astir -- if you look astatine it connected a gross ground astir half of our gross is successful nan program. And immoderate of course, are successful nan earlier stages and immoderate successful nan -- person had successful spot for a fewer years, and we've seen very bully benefits. And I'd say, successful peculiar erstwhile I look crossed nan segments, 1 of nan first operations was successful Flow Control. We've had a fewer much successful Flow Control that person besides joined in. So, we've seen immoderate very bully advancement connected nan -- successful Flow Control and besides we're starting to spot immoderate bully traction successful Industrial Processing.

Jeff Powell

As acold arsenic nan different programs, we ever person benignant of ongoing continuous improvement. Lean is simply a large attraction of ours, that you ne'er benignant of vanished there. So we ever person different programs going connected trying to optimize, our operations but 80/20 has surely been nan probably, nan biggest finance and probably, we've seen nan astir encouraging results from that complete nan past fewer years.

Kurt Yinger

Got it. Thanks for each nan details.

Operator

Thank you [Operator Instructions] And astatine this time, I'd for illustration to move nan convention backmost complete to Mr. Powell, for immoderate closing remarks.

Jeff Powell

Thank you, Norma. Before we wrap up nan telephone today, I conscionable want to time off you pinch a fewer takeaways. 2022 was a record-setting twelvemonth for Kadant and our labor merit a batch of in installments for achieving these fantabulous results. I really want to convey our labor astir nan world, for nan dedicated efforts to service our customers' needs.

In 2023, we will proceed to activity caller opportunities to create worth arsenic we attraction connected gathering our customers' needs, pinch innovative technologies and solutions that thrust sustainable business processing. Our financial wellness is fantabulous and our expertise to make beardown free rate travel remains, a cornerstone of our business model. We expect to present exceptional worth for our stakeholders again, successful 2023. We want to convey you for joining nan telephone today, and enactment safe.

Operator

This concludes today's convention call. Thank you for your participation. You whitethorn now disconnect. Everyone, person a awesome day.