Kurt Yinger's questions to Kadant Inc (KAI) leadership • Q3 2024
Question
Kurt Yinger of D.A. Davidson asked about the expected magnitude of the Q4 capital bookings pickup, key end-market opportunities, the normalization of the backlog, and the sustainability of high gross margins. He also followed up on Q3/Q4 foreign exchange impacts, the composition of the industrial sales mix, and specific exposure to box plants.
Answer
CEO Jeffrey Powell stated that the capital bookings recovery is expected to be a 'slow climb' rather than a step change, with the OSB market showing particular strength. Michael McKenney, Executive, confirmed the backlog consumption should normalize in 2025 and attributed strong gross margins to project mix, lower commodity costs, and the 80/20 program. McKenney also quantified the Q3 FX headwind and noted an expected favorable impact in Q4. Powell added that exposure to box plants is primarily through the sale of balers for waste handling.