What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-03-01 · 22 added, 47 removed, 255 unchanged (21% of the section changed)

1 unchanged sentence

trades on the New York Stock Exchange under the ticker symbol "KAI."

Unless otherwise noted, references to 2021, 2020, and 2019 in this Annual Report on Form 10-K are to our fiscal years ended January 1, 2022, January 2, 2021, and December 28, 2019, respectively.

Unless otherwise noted, references to 2022, 2021, and 2020 in this Annual Report on Form 10-K are to our fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, respectively.

Description of Our Business

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We believe we have one of the largest installed bases of equipment in the markets we serve around the globe.

We expect that a significant driver of our growth over the next several years will be the acquisition of businesses and technologies that complement or augment our existing products and services or may involve entry into a new process industry.

We continue to pursue acquisition opportunities.

In 2021, we acquired all partnership interests and shares in The Clouth Group of Companies (Clouth) for $92.9 million, net of cash acquired plus debt assumed.

The majority of the Clouth companies were acquired on July 19, 2021 and the acquisition of the last legal entity occurred on August 10, 2021.

Clouth, which is included in our Flow Control segment, is a leading European manufacturer of doctor blades and related equipment used in the production of paper, packaging, and tissue.

On August 23, 2021, we acquired all the outstanding equity securities in East Chicago Machine Tool Corporation (Balemaster) and certain assets of affiliated companies for $53.7 million, net of cash acquired.

Balemaster, which is included in our Material Handling segment, is a leading U.S.

manufacturer of horizontal balers and related equipment used primarily for recycling packaging waste at corrugated box plants and large retail and distribution centers.

See Note 2 , Acquisitions, in the accompanying consolidated financial statements for further details regarding our recent acquisitions.

We expect that one significant driver of our growth over the next several years will be the acquisition of businesses and technologies that complement or augment our existing products and services or may involve entry into a new process industry.

In recent years, we have acquired several businesses and continue to pursue acquisition opportunities.

Business Segments and Products

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Flow Control, Industrial Processing, and Material Handling.

The Flow Control segment consists of our fluid-handling and doctoring, cleaning, & filtration product lines;

the Industrial Processing segment consists of our wood processing and stock-preparation product lines;

and the Material Handling segment consists of our conveying and vibratory, baling, and fiber-based product lines.

Note 12 , Business Segment and Geographical Information, in the accompanying consolidated financial statements for financial information regarding our segments.

See Note 12 , Business Segment and Geographical Information, in the accompanying consolidated financial statements for financial information regarding our segments.

Flow Control Segment

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No single customer accounted for 10% or more of our consolidated revenues in any of the past three years.

In addition, within our Flow Control, Industrial Processing, and Material Handling segments, no customer accounted for more than 10% of each of the respective segment's revenue.

In addition, within our Flow Control, Industrial Processing, and Material Handling segments, no single customer accounted for more than 10% of each of the respective segment's revenue.

Approximately 55% in 2022, 58% in 2021, and 55% in 2020, of our consolidated revenue were to customers outside the United States, principally in Europe, Asia and Canada.

Our backlog of firm orders by segment are as follows:

(In millions) January 1, 2022 January 2, 2021

(In millions) December 31, 2022 January 1, 2022

Flow Control $ 80.2 $ 73.1

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$ 345.3 $ 309.9

We anticipate that the majority of the backlog at year-end 2021 will be shipped or completed during 2022, with the remainder expected to be shipped or completed within 15 months after year-end 2022.

We anticipate that the majority of the backlog at year-end 2022 will be shipped within 24 months.

Some of our capital orders can be canceled by the customer upon payment of a cancellation fee.

10 unchanged sentences

In our Industrial Processing segment, we compete with a limited number of global and regional competitors in the forest products markets and fiber processing equipment markets.

our Material Handling segment, we compete with numerous global, regional, and local competitors for our conveying and vibratory equipment, and strong regional competitors for our baling equipment and fiber-based granules offerings.

In our Material Handling segment, we compete with numerous global, regional, and local competitors for our conveying and vibratory equipment, and strong regional competitors for our baling equipment and fiber-based granules offerings.

Because of the diversity of our products, we face many different types of competitors and competition.

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We license one of our two significant product brand names, Link-Belt®, from a third party pursuant to a trademark license agreement.

More than a quarter of our Material Handling segment revenue in 2021 was generated by sales of conveying equipment under the Link-Belt® name.

Approximately a quarter of our Material Handling segment revenue in 2022 was generated by sales of conveying equipment under the Link-Belt® name.

Under the terms of the license agreement, we have a worldwide, exclusive, royalty-free, perpetual license to use the Link-Belt® trademark in connection with such products.

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We strive to cultivate a culture of diversity and inclusion that supports and enhances our ability to recruit, develop and retain talent at every level.

As of January 1, 2022, we had approximately 2,900 full-time employees worldwide.

As of December 31, 2022, we had approximately 3,100 full-time employees worldwide.

Of our full-time employees, approximately 46% were in North America, 32% were in Europe and 19% were in Asia.

Other than certain of our Canadian employees and typical work councils outside of the U.S., none of our employees are represented by labor unions or covered by a collective bargaining agreement.

Other than certain of our Canadian employees and typical works co uncils outside of the U.S., none of our employees are represented by labor unions or covered by a collective bargaining agreement.

Our management team places significant focus and attention on matters concerning our human capital, particularly their diversity, capability development, and succession planning.

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Our commitment to safety is reinforced by our robust safety program and training.

Throughout the COVID-19 pandemic, we have remained focused on protecting the health and safety of our employees while meeting the needs of our customers.

We have adopted enhanced safety measures and practices across our facilities to protect employee health and safety and ensure a reliable supply of essential products to our customers.

These enhanced safety measures and practices include encouraging vaccinations and the use of face coverings, adding safety and hygiene protocols within our facilities, and other safeguards.

We monitor and track the impact of COVID-19 on our employees and within our operations, and proactively modify or adopt new practices to promote their health and safety.

We believe that our employees are the core of our business, and we intend to continue building upon our culture to drive sustainable performance across the business.

10 unchanged sentences

Powell 64 President and Chief Executive Officer (2009)

Langevin 59 Executive Vice President and Chief Operating Officer (2006)

McKenney 61 Executive Vice President and Chief Financial Officer (2002)

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Selwood 54 Senior Vice President and Chief Accounting Officer (2015)

Flynn 72 Senior Vice President (2019)

Thomas Andrew Blanchard 64 Vice President (2021)

Colwell 57 Vice President (2019)

Flynn 71 Vice President (2019)

Westerhout 58 Vice President (2021)

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Powell was the chairman and chief executive officer of Castion Corporation from April 2003 through December 2007.

Langevin, who will retire on March 31, 2022, has been an executive vice president and chief operating officer since April 2019 and has supervisory responsibility for our fluid-handling, doctoring, cleaning, & filtration, and conveying and vibratory businesses.

From March 2018 to April 2019, he served as executive vice president and co-chief operating officer.

From January 2010 to March 2018, he served as executive vice president and chief operating officer.

Prior to January 2010, Mr.

Langevin had been our senior vice president since March 2007 and had supervisory responsibility for our fluid-handling and doctoring, cleaning, & filtration businesses.

He served as vice president, with responsibility for our doctoring, cleaning, & filtration business, from 2006 to 2007.

From 2001 to 2006, Mr.

Langevin was president of Kadant Web Systems Inc.

(now our Kadant Solutions division) and before that served as its senior vice president and vice president of operations.

Prior to 2001,

Langevin managed several product groups and departments within Kadant Web Systems after joining us in 1986 as a product development engineer.

McKenney has been an executive vice president and our chief financial officer since March 2018.

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Krause was head of commerce cloud commercial legal at salesforce.com, inc., a global SAAS software company, from July 2016 to December 2017.

She previously served assistant general counsel of Demandware, Inc., a global SAAS software company, from January 2014 to July 2016, prior to its acquisition by salesforce.com, and was assistant general counsel of Entegris, Inc., a provider of advanced materials and materials handling solutions, from 2011 to 2014.

She previously served as assistant general counsel of Demandware, Inc., a global SAAS software company, from January 2014 to July 2016, prior to its acquisition by salesforce.com, and was assistant general counsel of Entegris, Inc., a provider of advanced materials and materials handling solutions, from 2011 to 2014.

Prior to 2011, Ms.

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Selwood held various financial positions at Arthur Andersen LLP and Genuity Inc.

Blanchard has been our vice president since November 2021 with supervisory responsibility for portions of our Material Handling segment.

Flynn has been our senior vice president since August 2022 and provides strategic management support, including management of special projects.

He previously served as our vice president from July 2019 to July 2022 with supervisory responsibility for our stock-preparation business, which is part of our Industrial Processing segment, and our baling product

line, which is part of our Material Handling segment.

Prior to July 2019, Mr.

Flynn served as the president of our Kadant Black Clawson LLC subsidiary from 2003 to 2019.

Kadant Black Clawson manufactures stock-preparation equipment primarily for the pulp and paper industry.

Blanchard has been our vice president responsible for our Material Handling segment since August 2022, and prior to that, had supervisory responsibility for our conveying and vibratory equipment and fiber-based products businesses from November 2021 to July 2022.

Blanchard previously served as the president of our Syntron Material Handling subsidiaries (SMH) since January 2019 when we acquired SMH.

1 unchanged sentence

SMH, which is part of our Material Handling segment, designs and manufactures conveyors and vibratory feeders for bulk material handling in the aggregates, mining and food industries.

Colwell has been our vice president since July 2019 with supervisory responsibility for our wood processing business, which is part of our Industrial Processing segment.

Colwell has been our vice president responsible for our Industrial Processing segment since August 2022, and prior to that, had supervisory responsibility for our wood processing business, which is part of our Industrial Processing segment, from July 2019 to July 2022.

He previously had responsibility for our fiber-based products business from July 2019 to November 2021.

3 unchanged sentences

from April 2010 until its acquisition by us in November 2013.

Flynn has been our vice president since July 2019 with supervisory responsibility for our stock-preparation business, which is part of our Industrial Processing segment, and our baling product line, which is part of our Material Handling segment.

Prior to July 2019, Mr.

Flynn served as the president of our Kadant Black Clawson LLC subsidiary from 2003 to 2019.

Kadant Black Clawson manufactures stock-preparation equipment primarily for the pulp and paper industry.

Westerhout has been our vice president since November 2021 with supervisory responsibilities for our Flow Control segment.

Westerhout has been our vice president responsible for our Flow Control segment since November 2021.

Westerhout previously served as the vice president of our flow control subsidiaries in Europe since April 2014.

These businesses are part of our Flow Control segment.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business