KADANT INCKAI
KADANT INC Segments Disclosure
Business Segment and Geographical Information
The Company is a global supplier of technologies and engineered systems that drive Sustainable Industrial Processing and operates in three reportable segments consisting of its Flow Control segment, Industrial Processing segment, and Material Handling segment. The Company aggregated its operating segments into its reportable segments where they contained similar products and economic characteristics, and shared similar types of customers, and production and distribution methods. The Flow Control segment is comprised of its fluid-handling and its doctoring, cleaning, & filtration operating segments, and the Industrial Processing segment is comprised of its wood processing and its fiber processing operating segments.
Each of our reportable segments is led by a segment vice president, who reports directly to the Chief Executive Officer (CEO). The Company has determined that its CEO is its Chief Operating Decision Maker (CODM) who is responsible for assessing performance and allocating resources. The CODM utilizes segment gross profit margin and segment operating income margin to evaluate the performance of each segment and allocate resources effectively. The CODM primarily reviews these profit measures in comparison to forecasts, trends, key performance targets, and results of industry peers to assess profitability, identify areas for improvement, and make strategic decisions regarding investments and resource allocation within each segment.
The following is a brief description of the Company's reportable segments:
•Flow Control – Custom-engineered products, systems, and technologies that control the flow of fluids used in industrial and commercial applications to keep critical processes running efficiently in the packaging, paper and tissue, food, energy, defense, and numerous other industrial sectors. The Company's primary products include rotary sealing devices, steam systems, expansion joints, doctor systems, roll and fabric cleaning devices, and filtration and fiber recovery systems.
•Industrial Processing – Equipment, machinery, and technologies used to recycle paper and paperboard and process timber, and optimize industrial steam boiler efficiency for use in the packaging, paper, tissue, wood products and food processing industries, among others. The Company's primary products include fiber processing systems and recycling equipment, chemical pulping equipment, debarkers, stranders, chippers, custom-engineered knife systems, industrial boiler cleaning technologies, and continuous dewatering equipment.
•Material Handling – Products and engineered systems used to handle bulk and discrete materials for secondary processing or transport in the aggregates, mining, food, and waste management industries, among others. The Company's primary products include conveying and vibratory equipment and balers. In addition, the Company manufactures and sells biodegradable, absorbent granules used as carriers in agricultural, home lawn and garden, professional lawn, turf and ornamental applications, and for oil and grease absorption.
The following tables present financial information for the Company's reportable segments:
| January 3, 2026 | ||||||||||||||||||||||||||
| (In thousands) | Flow Control | Industrial Processing | Material Handling | Total | ||||||||||||||||||||||
| Revenue | $ | 382,866 | $ | 409,489 | $ | 259,893 | $ | 1,052,248 | ||||||||||||||||||
Cost of revenue | 182,450 | 233,300 | 160,770 | 576,520 | ||||||||||||||||||||||
| Gross Profit | 200,416 | 176,189 | 99,123 | 475,728 | ||||||||||||||||||||||
| Gross Profit Margin | 52.3% | 43.0% | 38.1% | 45.2% | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
| Selling expenses | 58,422 | 44,841 | 27,273 | 130,536 | ||||||||||||||||||||||
| General and administrative expenses | 37,755 | 38,408 | 17,837 | 94,000 | ||||||||||||||||||||||
Research and development expenses | 5,580 | 7,441 | 2,243 | 15,264 | ||||||||||||||||||||||
| Intangible asset amortization expense | 5,616 | 11,764 | 10,915 | 28,295 | ||||||||||||||||||||||
| Other segment items (a) | 235 | 5,987 | (386) | 5,836 | ||||||||||||||||||||||
Segment Operating Income | $ | 92,808 | $ | 67,748 | $ | 41,241 | $ | 201,797 | ||||||||||||||||||
Segment Operating Income Margin | 24.2% | 16.5% | 15.9% | |||||||||||||||||||||||
Corporate Expenses (b) | (44,509) | |||||||||||||||||||||||||
Interest Expense, Net (c) | (13,642) | |||||||||||||||||||||||||
Other Expense, Net (c) | (61) | |||||||||||||||||||||||||
Income Before Provision for Income Taxes | $ | 143,585 | ||||||||||||||||||||||||
(In thousands) | Flow Control | Industrial Processing | Material Handling | Corporate | Total | |||||||||||||||||||||||||||
| Other Segment Disclosures | ||||||||||||||||||||||||||||||||
Depreciation expense (d) | $ | 7,536 | $ | 10,640 | $ | 4,697 | $ | 51 | $ | 22,924 | ||||||||||||||||||||||
| Segment assets (e) | 450,911 | 826,062 | 411,813 | 23,392 | 1,712,178 | |||||||||||||||||||||||||||
| Capital expenditures | 6,051 | 5,543 | 5,309 | 145 | 17,048 | |||||||||||||||||||||||||||
| December 28, 2024 | ||||||||||||||||||||||||||
| (In thousands) | Flow Control | Industrial Processing | Material Handling | Total | ||||||||||||||||||||||
| Revenue | $ | 371,177 | $ | 432,738 | $ | 249,469 | $ | 1,053,384 | ||||||||||||||||||
Cost of revenue | 176,340 | 252,068 | 158,828 | 587,236 | ||||||||||||||||||||||
| Gross Profit | 194,837 | 180,670 | 90,641 | 466,148 | ||||||||||||||||||||||
| Gross Profit Margin | 52.5% | 41.8% | 36.3% | 44.3% | ||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||
| Selling expenses | 55,326 | 42,008 | 24,592 | 121,926 | ||||||||||||||||||||||
| General and administrative expenses | 35,686 | 33,638 | 16,668 | 85,992 | ||||||||||||||||||||||
Research and development expenses | 5,874 | 6,231 | 2,213 | 14,318 | ||||||||||||||||||||||
| Intangible asset amortization expense | 5,260 | 11,094 | 12,686 | 29,040 | ||||||||||||||||||||||
| Other segment items (a) | 1,079 | 1,076 | 409 | 2,564 | ||||||||||||||||||||||
Segment Operating Income | $ | 91,612 | $ | 86,623 | $ | 34,073 | $ | 212,308 | ||||||||||||||||||
Segment Operating Income Margin | 24.7% | 20.0% | 13.7% | |||||||||||||||||||||||
Corporate Expenses (b) | (41,056) | |||||||||||||||||||||||||
Interest Expense, Net (c) | (18,113) | |||||||||||||||||||||||||
Other Expense, Net (c) | (69) | |||||||||||||||||||||||||
Income Before Provision for Income Taxes | $ | 153,070 | ||||||||||||||||||||||||
December 28, 2024 (continued) | ||||||||||||||||||||||||||||||||
(In thousands) | Flow Control | Industrial Processing | Material Handling | Corporate | Total | |||||||||||||||||||||||||||
| Other Segment Disclosures | ||||||||||||||||||||||||||||||||
Depreciation expense (d) | $ | 6,675 | $ | 9,513 | $ | 4,310 | $ | 49 | $ | 20,547 | ||||||||||||||||||||||
Segment assets (e) | 431,536 | 569,817 | 411,178 | 17,814 | 1,430,345 | |||||||||||||||||||||||||||
Capital expenditures | 7,225 | 8,121 | 5,638 | 21 | 21,005 | |||||||||||||||||||||||||||
| December 30, 2023 | ||||||||||||||||||||||||||
| (In thousands) | Flow Control | Industrial Processing | Material Handling | Total | ||||||||||||||||||||||
| Revenue | $ | 363,451 | $ | 354,703 | $ | 239,518 | $ | 957,672 | ||||||||||||||||||
Cost of revenue | 175,144 | 212,247 | 153,975 | 541,366 | ||||||||||||||||||||||
| Gross Profit | 188,307 | 142,456 | 85,543 | 416,306 | ||||||||||||||||||||||
| Gross Profit Margin | 51.8% | 40.2% | 35.7% | 43.5% | ||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||
| Selling expenses | 51,315 | 31,660 | 19,978 | 102,953 | ||||||||||||||||||||||
| General and administrative expenses | 33,625 | 27,747 | 13,836 | 75,208 | ||||||||||||||||||||||
Research and development expenses | 4,865 | 6,834 | 1,843 | 13,542 | ||||||||||||||||||||||
| Intangible asset amortization expense | 2,953 | 6,355 | 9,140 | 18,448 | ||||||||||||||||||||||
| Other segment items (a) | 300 | 579 | 54 | 933 | ||||||||||||||||||||||
Segment Operating Income | $ | 95,249 | $ | 69,281 | $ | 40,692 | $ | 205,222 | ||||||||||||||||||
Segment Operating Income Margin | 26.2% | 19.5% | 17.0% | |||||||||||||||||||||||
Corporate Expenses (b) | (39,465) | |||||||||||||||||||||||||
Interest Expense, Net (c) | (6,640) | |||||||||||||||||||||||||
Other Expense, Net (c) | (101) | |||||||||||||||||||||||||
Income Before Provision for Income Taxes | $ | 159,016 | ||||||||||||||||||||||||
(In thousands) | Flow Control | Industrial Processing | Material Handling | Corporate | Total | |||||||||||||||||||||||||||
| Other Segment Disclosures | ||||||||||||||||||||||||||||||||
Depreciation expense (d) | $ | 6,094 | $ | 5,443 | $ | 3,239 | $ | 73 | $ | 14,849 | ||||||||||||||||||||||
Segment assets (e) | 391,719 | 443,189 | 326,226 | 14,531 | 1,175,665 | |||||||||||||||||||||||||||
Capital expenditures (f) | 5,920 | 22,068 | 3,834 | 28 | 31,850 | |||||||||||||||||||||||||||
(a)Includes acquisition costs, net indemnification asset reversals associated with uncertain tax positions, restructuring and impairment costs, and certain other income or expense.
(b)Primarily consists of general and administrative expenses.
(c)The Company does not allocate interest expense, net and other expense, net to its segments.
(d)Depreciation expense by reportable segment is included within cost of revenue and selling, general and administrative, and research and development expenses.
(e)Excludes intercompany receivables or payables and investment in subsidiary balances as the CODM uses total assets excluding these amounts as the measurement for the Company's segment assets. Corporate assets primarily consist of cash and cash equivalents, tax assets, ROU assets, and property, plant, and equipment, net.
(f)Included within the Industrial Processing segment are capital expenditures of $7,424,000 in 2023 related to the construction of a new manufacturing facility in China.
The following tables present the Company’s revenue and long-lived assets by geographical area:
| (In thousands) | January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||||
| Geographical Information | ||||||||||||||||||||
Revenue (a): | ||||||||||||||||||||
| United States | $ | 534,041 | $ | 521,528 | $ | 448,600 | ||||||||||||||
| Canada | 104,169 | 114,257 | 73,183 | |||||||||||||||||
| China | 62,604 | 75,896 | 81,458 | |||||||||||||||||
| Germany | 44,246 | 43,858 | 43,036 | |||||||||||||||||
| Other | 307,188 | 297,845 | 311,395 | |||||||||||||||||
| $ | 1,052,248 | $ | 1,053,384 | $ | 957,672 | |||||||||||||||
Long-lived Assets (b): | ||||||||||||||||||||
| United States | $ | 91,655 | $ | 82,048 | $ | 48,394 | ||||||||||||||
| China | 23,438 | 23,346 | 24,380 | |||||||||||||||||
| Germany | 21,022 | 19,310 | 20,953 | |||||||||||||||||
| Finland | 19,667 | 18,114 | 19,958 | |||||||||||||||||
| Canada | 9,622 | 10,301 | 9,136 | |||||||||||||||||
| Other | 31,252 | 17,212 | 17,683 | |||||||||||||||||
| $ | 196,656 | $ | 170,331 | $ | 140,504 | |||||||||||||||
(a)Revenue is attributed to countries based on customer location.
(b)Represents property, plant, and equipment, net.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 3, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2022 | |
| 2021 | Mar 2, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 15, 2017 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.