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trades on the New York Stock Exchange under the ticker symbol "KAI."
−Removed: 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.
+Added: Unless otherwise noted, references to 2023, 2022, and 2021 in this Annual Report on Form 10-K are to our fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, 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.
−Removed: 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.
−Removed: In recent years, we have acquired several businesses and continue to pursue acquisition opportunities.
+Added: We expect that a significant driver of our long-term growth 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.
+Added: We have acquired several businesses in recent years and continue to pursue acquisition opportunities.
+Added: On January 1, 2024, we acquired Key Knife, Inc.
+Added: and certain of its affiliates (collectively, Key Knife) pursuant to a securities purchase agreement dated December 22, 2023, for approximately $156.0 million in cash, subject to certain customary adjustments.
+Added: Key Knife is a global supplier of engineered knife systems for custom chipping, planing, and flaking solutions for wood products industries and is part of our Industrial Processing segment.
+Added: On January 24, 2024, we acquired all of the outstanding equity securities of KWS Manufacturing Company, Ltd.
+Added: (KWS), for approximately $84.0 million in cash, subject to certain customary adjustments.
+Added: KWS is a leading manufacturer of conveying equipment for the bulk material handling industry and is part of our Material Handling segment.
+Added: See Note 2 , Acquisitions, and Note 15 , Subsequent Events, in the accompanying consolidated financial statements for further details regarding our acquisitions.
Business Segments and Products
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We develop, manufacture and market fluid-handling systems and equipment used in industrial piping systems to compensate for movement and to efficiently transfer fluid, power, and data.
−Removed: Our products are used primarily in the dryer section of the papermaking process and during the production of corrugated packaging, metals, plastics, pharmaceuticals, energy, rubber, textiles, chemicals, and food.
−Removed: Expansion joints are used in industrial piping systems.
+Added: Our products are used primarily in the production of fiber-based packaging, metals, food, energy, chemicals, textiles, plastics and rubber.
Our principal fluid-handling systems and equipment include:
– Rotary joints:
−Removed: Our mechanical devices, used with rotating shafts, allow the transfer of pressurized fluid from a stationary source into and out of rotating machinery for heating, cooling, or the transfer of fluid power.
+Added: Our mechanical sealing devices, used with rotating shafts, allow the transfer of pressurized fluid from a stationary source into and out of rotating machinery for heating, cooling, or the transfer of fluid power.
Our devices, installed inside rotating cylinders, are used to remove fluids from the rotating cylinders through rotary joints or unions located on either end of the cylinder.
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– Expansion joints:
−Removed: Our rubber, metal, fabric and other materials are used to compensate for movement due to thermal expansion, vibration and other causes.
+Added: Our rubber, metal, fabric, and polytetrafluoroethylene (PTFE) expansion joints are used to compensate for movement in industrial piping systems due to thermal expansion, vibration and other causes.
– Engineered steam and condensate systems:
−Removed: Our steam systems control the flow of steam from the boiler to steam-heated rolls or processing machinery, collect condensed steam, and return it to the boiler to improve energy efficiency during the manufacturing process.
−Removed: Our systems and equipment are also used to efficiently and effectively distribute steam in a wide variety of industrial processing applications.
+Added: Our steam systems and advanced controls manage the flow of steam from the boiler to steam-heated rolls or processing machinery, collect condensed steam, and return it to the boiler to facilitate efficient energy utilization during the manufacturing process.
+Added: Our systems and equipment are also used to efficiently and effectively distribute steam in a variety of industrial processing applications.
Doctoring, Cleaning, & Filtration
We develop, manufacture, and market a wide range of doctoring, cleaning, and filtration systems and related consumables that continuously clean rolls to keep paper machines and other industrial processes running efficiently.
−Removed: Doctoring and cleaning systems are also used in other process industries such as carbon fiber, textiles and food processing.
+Added: Doctoring and cleaning systems are also used in other process industries such as carbon fiber, textiles, food, and metals.
Our principal doctoring, cleaning, and filtration products include:
– Doctor systems and holders:
−Removed: Our doctor systems clean papermaking rolls to maintain the efficient operation of paper machines and other equipment by placing a blade against the roll at a constant and uniform pressure.
+Added: Our doctor systems clean papermaking rolls to maintain the efficient operation of paper machines and other equipment by placing a blade against the roll at constant and uniform pressure.
A doctor system consists of the structure supporting the blade and the blade holder.
– Doctor blades:
−Removed: We manufacture doctor and scraper blades made of a variety of materials including metal, bi-metal, or synthetic materials that perform a variety of functions including cleaning, creping, web removal, flaking, and applying coatings.
+Added: We manufacture doctor and scraper blades made of a variety of materials including metal, bi-metal, and synthetic materials that perform a variety of functions including cleaning, creping, web removal, flaking, and applying coatings.
A typical doctor blade has a life ranging from eight hours to two months, depending on the application.
−Removed: – Shower and fabric-conditioning systems:
−Removed: Our shower and fabric-conditioning systems assist in the removal of contaminants that collect on paper machine fabrics used to convey the paper web through the forming, pressing, and drying sections of the paper machine.
−Removed: A typical paper machine has between three and 12 fabrics.
+Added: – Cleaning showers and fabric-conditioning systems:
+Added: Our cleaning shower and fabric-conditioning systems assist in the removal of contaminants that collect on paper machine fabrics and roll surfaces.
+Added: A typical paper machine has between three and 12 fabrics and multiple rolls.
These fabrics can easily become contaminated with fiber, fillers, pitch, and dirt that can have a detrimental effect on paper machine performance and paper quality.
−Removed: Our shower and fabric-conditioning systems assist in the removal of these contaminants.
−Removed: – Formation systems:
+Added: Our cleaning shower and fabric-conditioning systems assist in the removal of these contaminants.
+Added: – Forming systems and wear surfaces:
We supply structures that drain, purify, and recycle process water from the pulp mixture during paper sheet and web formation.
+Added: Our wear surfaces are used to remove water from the paper web as it travels across the structures in the forming section of the paper machine.
– Water-filtration systems:
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Wood Processing
−Removed: We develop, manufacture, and market debarkers, stranders, chippers, logging machinery, and related equipment used in the harvesting and production of lumber and oriented strand board (OSB).
+Added: We develop, manufacture, and market debarkers, stranders, chippers, and related equipment used in the production of lumber, oriented strand board (OSB) and other wood products.
In addition, we provide industrial automation and digitization solutions to process industries.
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Our disc, drum, and veneer chippers and related parts and consumables are high-quality, robust chipper systems for waste-wood and whole-log applications found in pulp woodrooms, chip plants, and sawmill and planer mill sites.
−Removed: – Logging machinery:
−Removed: Our log loaders and swing yarders are used to gather timber for lumber production.
+Added: – Engineered knife systems:
+Added: Our equipment includes custom chipping, planing, and flaking products and systems used in sawmills, pulp mills, chip plants and other applications.
– Industrial automation and control:
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Conveying and Vibratory Equipment
−Removed: We develop, manufacture, and market conveying and vibratory equipment and systems to various process industries, including mining, aggregates, food processing, packaging, and pulp and paper.
+Added: We develop, manufacture, and market conveying and vibratory equipment and systems to various process industries, including mining, aggregates, food processing, packaging, and paper.
Our principal conveying and vibratory products include:
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transport idlers, power terminal units, and electric controls, used to transport bulk materials in harsh above- and below-ground mining environments;
−Removed: and screw conveyors and bucket elevators used for material handling operations in agricultural, food, and paper markets.
+Added: and screw conveyors and feeders, slide gates, and bucket elevators used for material handling operations in the agricultural, food, chemical, and paper industries, among others.
We develop, manufacture, and market individual components and equipment for baling recyclable and waste materials to prepare them for secondary processing, transport, or storage.
−Removed: Our principal baling products include:
−Removed: – Balers and related equipment:
−Removed: Our equipment includes horizontal channel balers, vertical balers, conveyors, compactors, and bale wrapping machines used in the processing of recyclable and waste materials.
+Added: Our principal baling products include horizontal channel balers, vertical balers, conveyors, compactors, and bale wrapping machines used in the processing of recyclable and waste materials.
Fiber-based Products
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Dependency on a Single Customer
−Removed: No single customer accounted for 10% or more of our consolidated revenues in any of the past three years.
+Added: No single customer accounted for 10% or more of our consolidated revenue in any of the past three years.
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.
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Our backlog of firm orders by segment are as follows:
−Removed: (In millions) December 31, 2022 January 1, 2022
+Added: (In millions) December 30, 2023 December 31, 2022
Flow Control $ 79.6 $ 80.2
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We develop a broad range of products for all facets of the markets we serve.
−Removed: We operate research and development facilities in the United States, Europe, and Canada, and focus our product innovations on process industry challenges and the need for improved fiber processing, heat transfer, roll and fabric cleaning, fluid handling, timber harvesting, wood processing, and secondary material handling.
+Added: We operate research and development facilities in the United States, Europe, and Canada, and focus our product innovations on process industry challenges and the need for improved fiber processing, heat transfer, roll and fabric cleaning, fluid handling, wood processing, and secondary material handling.
In addition to internal product development activities, our research centers allow customers to simulate their own operating conditions and applications to identify and quantify opportunities for improvement.
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Sales and Marketing
−Removed: We market and sell our engineered products, services, and systems to process industries using a combination of a direct sales force and independent sales agents and distributors depending on the market and product being sold.
−Removed: Technical service personnel, product specialists, and independent sales agents and distributors are utilized in certain markets and with certain product lines.
+Added: We market and sell our engineered products, services, and systems to process industries using a combination of direct sales, independent sales agents, and distributors depending on the market and product being sold.
+Added: Technical service personnel, product specialists, and other subject matter experts are utilized in certain markets and with certain product lines.
Our application expertise is complemented by a consultative selling approach to ensure we meet the needs of our customers.
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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.
−Removed: Approximately a quarter of our Material Handling segment revenue in 2022 was generated by sales of conveying equipment under the Link-Belt® name.
+Added: Approximately 31% of our Material Handling segment revenue in 2023 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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Industrial Processing Segment
−Removed: Our Industrial Processing segment is subject to seasonal variations, with demand for our wood processing products tending to be greater during the building and timber harvesting season, which generally occurs in the second and third quarters in North America.
+Added: Our Industrial Processing segment is subject to seasonal variations, with demand for our wood processing products tending to be greater during the building season, which generally occurs in the second and third quarters in North America.
Material Handling Segment
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Human Capital Resources
+Added: At Kadant, our culture is based on responsible and safe practices, supported by an engaged and empowered workforce.
+Added: We believe that our employees are the core of our business, and we devote significant time and resources to their training and development.
+Added: For more information, please reference our Corporate Sustainability Report, which is available at www.kadant.com.
+Added: We maintain a safety-first culture grounded on the premise of eliminating workplace incidents, risks and hazards.
+Added: We have created and implemented processes to help eliminate safety events by reducing their frequency and severity.
+Added: Our commitment to safety is reinforced by our robust safety program and training.
Talent, Development, Diversity and Inclusion
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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.
+Added: Subsequent to year-end 2023, with the acquisitions of Key Knife and KWS, we added approximately 300 full-time employees in North America.
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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– Leave and wellness benefits.
−Removed: We maintain a safety-first culture grounded on the premise of eliminating workplace incidents, risks and hazards.
−Removed: We have created and implemented processes to help eliminate safety events by reducing their frequency and severity.
−Removed: Our commitment to safety is reinforced by our robust safety program and training.
−Removed: 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.
−Removed: For more information, please reference our Corporate Sustainability Report, which is available at www.kadant.com.
Available Information
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Flynn has been our senior vice president since August 2022 and provides strategic management support, including management of special projects.
−Removed: 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
−Removed: line, which is part of our Material Handling segment.
+Added: 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.
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He previously had responsibility for our fiber-based products business from July 2019 to November 2021.
−Removed: Colwell previously served as the president of Kadant Carmanah Design, a division of our subsidiary Kadant Canada Corp., from 2013 to 2019.
+Added: Colwell previously served as the president of Kadant Carmanah Design (Carmanah), a division of our subsidiary Kadant Canada Corp., from 2013 to 2019.
Carmanah, which is part of our wood processing business, designs and manufactures equipment for the oriented strand board industry.
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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.