Kadant (NYSE: KAI) raises adjusted EPS guidance with new non-GAAP approach

Rhea-AI Filing Summary

Kadant Inc. is changing how it calculates its non-GAAP metrics, including adjusted operating income, adjusted net income, and adjusted EPS, by now excluding all amortization expense related to acquired intangible assets rather than only acquired backlog. The company furnished reconciliations showing the impact of this change on past periods and updated guidance. For the twelve months ending January 2, 2027, EPS attributable to Kadant is guided to $10.27–$10.62, while adjusted EPS under the new methodology is $12.53–$12.88. For the three months ending March 28, 2026, reported EPS guidance is $1.69–$1.79, with adjusted EPS of $2.31–$2.41.

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Equity research analyst

Kadant lifts non-GAAP EPS via new treatment of acquisition amortization.

Kadant is revising its non-GAAP framework to exclude all amortization of acquired intangible assets from adjusted operating income, adjusted net income, and adjusted EPS. This raises adjusted figures without changing underlying cash flows or GAAP results.

The furnished schedules show that for the twelve months ended January 3, 2026, EPS attributable to Kadant was $8.65, while adjusted EPS under the new approach is $11.01. Similar step-ups appear in prior years as amortization is backed out.

Guidance for the twelve months ending January 2, 2027 shows reported EPS of $10.27–$10.62 and adjusted EPS of $12.53–$12.88. For the quarter ending March 28, 2026, reported EPS is guided to $1.69–$1.79 versus adjusted EPS of $2.31–$2.41, highlighting the magnitude of excluded amortization.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

______________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 23, 2026

KADANT INC.

(Exact name of registrant as specified in its charter)

Commission file number 001-11406

Delaware									52-1762325
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

One Technology Park Drive

Westford, Massachusetts 01886

(Address of principal executive offices, including zip code)

(978) 776-2000

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

KAI

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

KADANT INC.

Item 2.02. Results of Operations and Financial Condition.

The reconciliation schedule prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which reconciles the non-GAAP financial measures to the most directly comparable GAAP financial measures and is included in Exhibit 99 to this Current Report on Form 8-K, is incorporated herein by reference into this Item 2.02.

Item 7.01. Regulation FD Disclosure.

On February 19, 2026, Kadant Inc. (the “Company,” “we,” or “our”) announced during its fourth quarter and full-year fiscal 2025 earnings webcast that it will prospectively use a new methodology for calculating adjusted operating income, adjusted net income, and adjusted earnings per share (“adjusted EPS”) (collectively, the “non-GAAP financial measures”) to exclude the full impact of amortization expense related to acquired intangible assets. Previously, the Company excluded only amortization expense related to acquired backlog, which is amortized relatively quickly in the post-acquisition period.

The Company has elected to exclude amortization expense related to acquired intangible assets from these non-GAAP financial measures to provide a more meaningful and consistent comparison of its operating results over time and with peer companies. While the Company has a history of acquisition activity, such transactions do not occur on a predictable cycle, and the size and nature of these transactions will vary. A full description of the Company's non-GAAP financial measures is detailed under the heading “Use of Non-GAAP Financial Measures” in Exhibit 99 in this Current Report on Form 8-K.

The Company's guidance for its fiscal year and first quarter 2026 for adjusted net income and adjusted EPS, calculated in accordance with the new methodology, is set forth below. This guidance reflects only the guidance issued on February 19, 2026, which is subject to change.

						Twelve Months Ended January 2, 2027												Three Months Ended March 28, 2026
						Low						High						Low						High
EPS Attributable to Kadant, as Reported						$10.27						$10.62						$1.69						$1.79
Adjustments, Net of Tax						0.13						0.13						0.09						0.09
Adjusted EPS*, as Previously Reported						$10.40						$10.75						$1.78						$1.88
Amortization of Acquired Intangible Assets, Net of Tax						2.13						2.13						0.53						0.53
Adjusted EPS*, as Currently Reported						$12.53						$12.88						$2.31						$2.41

Notes:

* Represents a non-GAAP financial measure.

All references to EPS are to EPS as calculated on a diluted basis.

In addition, the Company has prepared a financial schedule of adjusted operating income, adjusted net income, and adjusted EPS reconciled to the most directly comparable GAAP financial measure, for fiscal years 2025 and 2024 and each of the four quarters therein, and for fiscal years 2023, 2022, and 2021, as furnished in this Current Report on Form 8-K as Exhibit 99.

The information in Items 2.02 and 7.01 of this Form 8-K (including Exhibit 99) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

2

KADANT INC.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits
			The following exhibits relating to Items 2.02 and 7.01 shall be deemed to be furnished and not filed.
			Exhibit
			No.			Description of Exhibits
			99			Reconciliation of Non-GAAP Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings per Share to GAAP Financial Measures
			104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

3

KADANT INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						KADANT INC.
Date: February 23, 2026			By:			/s/ Michael J. McKenney
						Michael J. McKenney Executive Vice President and Chief Financial Officer

4

Exhibit 99

Reconciliation of Non-GAAP Adjusted Operating Income,

Adjusted Net Income and Adjusted EPS to GAAP Financial Measures

(In thousands, except per share amounts)

Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
						March 29, 2025						June 28, 2025												September 27, 2025												January 3, 2026
						Three Months Ended						Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended						Three Months Ended						Twelve Months Ended
Operating Income, as Reported						$	35,586					$	39,377					$	74,963					$	42,616					$	117,579					$	39,709					$	157,288
Adjustments						698						1,134						1,832						3,170						5,002						3,654						8,656
Adjusted Operating Income*, as Previously Reported						$	36,284					$	40,511					$	76,795					$	45,786					$	122,581					$	43,363					$	165,944
Amortization of Acquired Intangible Assets						6,320						6,333						12,653						6,521						19,174						8,266						27,440
Adjusted Operating Income*, as Currently Reported						$	42,604					$	46,844					$	89,448					$	52,307					$	141,755					$	51,629					$	193,384

Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
						Three Months Ended
						March 29, 2025									June 28, 2025									September 27, 2025									January 3, 2026
Net Income and EPS Attributable to Kadant, as Reported						$	24,063		$2.04						$	26,159		$2.22						$	27,722		$2.35						$	24,025		$2.04
Adjustments, Net of Tax						611			0.06						1,073			0.09						2,847			0.24						2,765			0.24
Adjusted Net Income* and Adjusted EPS*, as Previously Reported						$	24,674		$2.10						$	27,232		$2.31						$	30,569		$2.59						$	26,790		$2.27
Amortization of Acquired Intangible Assets, Net of Tax						4,753			0.40						4,767			0.40						4,900			0.42						6,225			0.53
Adjusted Net Income* and Adjusted EPS*, as Currently Reported						$	29,427		$2.50						$	31,999		$2.71						$	35,469		$3.01						$	33,015		$2.80
Weighted Average Diluted Shares						11,776									11,793									11,802									11,805

						Six Months Ended									Nine Months Ended									Twelve Months Ended
						June 28, 2025									September 27, 2025									January 3, 2026
Net Income and EPS Attributable to Kadant, as Reported						$	50,222		$4.26						$	77,944		$6.61						$	101,969		$8.65
Adjustments, Net of Tax						1,684			0.14						4,531			0.39						7,296			0.61
Adjusted Net Income* and Adjusted EPS*, as Previously Reported						$	51,906		$4.40						$	82,475		$7.00						$	109,265		$9.26
Amortization of Acquired Intangible Assets, Net of Tax						9,520			0.81						14,420			1.22						20,645			1.75
Adjusted Net Income* and Adjusted EPS*, as Currently Reported						$	61,426		$5.21						$	96,895		$8.22						$	129,910		$11.01
Weighted Average Diluted Shares						11,784									11,790									11,794

1

Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
						March 30, 2024						June 29, 2024												September 28, 2024												December 28, 2024
						Three Months Ended						Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended						Three Months Ended						Twelve Months Ended
Operating Income, as Reported						$	36,927					$	48,401					$	85,328					$	48,987					$	134,315					$	36,937					$	171,252
Adjustments						4,344						2,098						6,442						2,186						8,628						3,501						12,129
Adjusted Operating Income*, as Previously Reported						$	41,271					$	50,499					$	91,770					$	51,173					$	142,943					$	40,438					$	183,381
Amortization of Acquired Intangible Assets						6,072						6,289						12,361						6,711						19,072						6,716						25,788
Adjusted Operating Income*, as Currently Reported						$	47,343					$	56,788					$	104,131					$	57,884					$	162,015					$	47,154					$	209,169

Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
						Three Months Ended
						March 30, 2024									June 29, 2024									September 28, 2024									December 28, 2024
Net Income and EPS Attributable to Kadant, as Reported						$	24,689		$2.10						$	31,291		$2.66						$	31,586		$2.68						$	24,032		$2.04
Adjustments, Net of Tax						3,299			0.28						1,727			0.15						1,830			0.15						2,516			0.22
Adjusted Net Income* and Adjusted EPS*, as Previously Reported						$	27,988		$2.38						$	33,018		$2.81						$	33,416		$2.84						$	26,548		$2.25
Amortization of Acquired Intangible Assets, Net of Tax						4,566			0.39						4,729			0.40						5,047			0.43						5,049			0.43
Adjusted Net Income* and Adjusted EPS*, as Currently Reported						$	32,554		$2.77						$	37,747		$3.21						$	38,463		$3.27						$	31,597		$2.68
Weighted Average Diluted Shares						11,744									11,766									11,780									11,794

						Six Months Ended									Nine Months Ended									Twelve Months Ended
						June 29, 2024									September 28, 2024									December 28, 2024
Net Income and EPS Attributable to Kadant, as Reported						$	55,980		$4.76						$	87,566		$7.44						$	111,598		$9.48
Adjustments, Net of Tax						5,026			0.43						6,856			0.58						9,372			0.80
Adjusted Net Income* and Adjusted EPS*, as Previously Reported						$	61,006		$5.19						$	94,422		$8.03						$	120,970		$10.28
Amortization of Acquired Intangible Assets, Net of Tax						9,295			0.79						14,342			1.22						19,391			1.65
Adjusted Net Income* and Adjusted EPS*, as Currently Reported						$	70,301		$5.98						$	108,764		$9.25						$	140,361		$11.92
Weighted Average Diluted Shares						11,755									11,763									11,771

2

Reconciliation of Operating Income (GAAP) to Adjusted Operating Income (Non-GAAP)
						Twelve Months Ended
						December 30, 2023						December 31, 2022						January 1, 2022
Operating Income, as Reported						$	165,757					$	171,282					$	116,710
Adjustments						2,267						(16,387)						9,730
Adjusted Operating Income*, as Previously Reported						$	168,024					$	154,895					$	126,440
Amortization of Acquired Intangible Assets						18,448						19,804						19,543
Adjusted Operating Income*, as Currently Reported						$	186,472					$	174,699					$	145,983

Reconciliation of Net Income and EPS (GAAP) to Adjusted Net Income and Adjusted EPS (Non-GAAP)
						Twelve Months Ended
						December 30, 2023									December 31, 2022									January 1, 2022
Net Income and EPS Attributable to Kadant, as Reported						$	116,069		$9.90						$	120,928		$10.35						$	84,043		$7.21
Adjustments, Net of Tax						1,683			0.14						(12,975)			(1.12)						7,226			0.61
Adjusted Net Income* and Adjusted EPS*, as Previously Reported						$	117,752		$10.04						$	107,953		$9.24						$	91,269		$7.83
Amortization of Acquired Intangible Assets, Net of Tax						13,809			1.18						14,824			1.27						14,682			1.26
Adjusted Net Income* and Adjusted EPS*, as Currently Reported						$	131,561		$11.22						$	122,777		$10.50						$	105,951		$9.09
Weighted Average Diluted Shares						11,729									11,688									11,655

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures, including adjusted operating income, adjusted net income, and adjusted EPS. These non-GAAP financial measures exclude amortization expense related to acquired intangible assets, profit in inventory and backlog (collectively, “purchase accounting expenses”); acquisition costs; restructuring and impairment costs; and other income or expense, as indicated. We exclude acquisition-related purchase accounting expenses to provide a more meaningful and consistent comparison of our operating results over time and with peer companies. While we have a history of acquisition activity, such transactions do not occur on a predictable cycle, and the size and nature of these transactions will vary. We believe it is important for investors to understand that these intangible assets were recorded as part of purchase accounting and that they contribute to revenue generation. We also exclude other items as they are not indicative of our core operating results and are not comparable to other periods, which have differing levels of incremental costs, expenditures or income, or none at all.

We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results, or future outlook. We believe that the inclusion of such measures helps investors gain an understanding of our underlying operating performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. Such measures are also used by us in our financial and operating decision-making and for compensation purposes. We also believe this information is responsive to investors' requests and gives them additional measures of our performance.

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The non-GAAP financial measures included in this Current Report on Form 8-K are not meant to be considered superior to or a substitute for the results of operations prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this Current Report on Form 8-K have limitations associated with their use as compared to the most directly comparable GAAP measures, in that they may be different from, and therefore not comparable to, similar measures used by other companies.

Notes:

* Represents a non-GAAP financial measure.

All references to EPS (earnings per share) are to EPS as calculated on a diluted basis.

Certain per share data in the tables above may not foot or recalculate due to rounding.

4

FAQ

How is Kadant Inc. (KAI) changing its non-GAAP earnings calculations?

Kadant is revising its non-GAAP metrics to exclude all amortization expense related to acquired intangible assets. Previously it removed only backlog amortization. This change affects adjusted operating income, adjusted net income, and adjusted EPS, increasing these measures without altering GAAP results or cash flows.

What adjusted EPS guidance did Kadant (KAI) provide for fiscal 2026?

For the twelve months ending January 2, 2027, Kadant guided EPS attributable to the company at $10.27–$10.62. Under the new methodology, adjusted EPS is forecast at $12.53–$12.88, reflecting the exclusion of amortization of acquired intangible assets from the non-GAAP calculation.

What is Kadant’s (KAI) adjusted EPS guidance for Q1 2026 under the new methodology?

For the three months ending March 28, 2026, Kadant projects EPS attributable to the company of $1.69–$1.79. Adjusted EPS under the revised non-GAAP definition is higher at $2.31–$2.41, due to excluding amortization of acquired intangible assets net of tax.

How much does the new non-GAAP method change Kadant’s 2025 adjusted EPS?

For the twelve months ended January 3, 2026, Kadant’s EPS attributable to the company was $8.65. Previously reported adjusted EPS was $9.26, but under the new methodology, adjusted EPS rises to $11.01 after excluding amortization of acquired intangible assets net of tax.

Which items does Kadant (KAI) exclude in its non-GAAP measures?

Kadant’s non-GAAP measures exclude amortization related to acquired intangible assets, profit in inventory and backlog, acquisition costs, restructuring and impairment costs, and specified other income or expense. Management believes these items are not indicative of core operating performance or comparable across periods.

Why does Kadant believe its revised non-GAAP metrics are useful to investors?

Kadant states the revised non-GAAP metrics provide more meaningful and consistent comparisons over time and versus peers. Management also uses these measures for internal decision-making and compensation, and believes excluding acquisition-related and other specified items clarifies underlying operating performance and future prospects.

Filing Exhibits & Attachments

4 documents

Press Releases

• EX-99 KAI FORM 8-K EXHIBIT 99 02-23-2026 184.0 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 1.8 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 21.4 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 12.3 KB