Thank you, Gerald. Good morning, everyone, and welcome to Kadant's First Quarter 2023 Earnings Call. With me on the call today is Jeff Powell, our President and Chief Executive Officer. Before we begin, let me read our safe harbor statement. Various remarks that we may make today about Kadant's future plans and expectations, financial and operating results and prospects are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent filings with the Securities and Exchange Commission. In addition, any forward-looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views or estimates change. During this webcast, we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our first quarter earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investors section of our website at www.kadant.com. Finally, I wanted to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call, we are referring to each of these measures as calculated on a diluted basis. With that, I'll turn the call over to Jeff Powell, who will give you an update on Kadant's business and future prospects. Following Jeff's remarks, I'll give an overview of our financial results for the quarter, and we will then have a Q&A session.

Thanks, Mike. Hello, everyone. Thank you for joining us this morning to review our first quarter results and discuss our business outlook for 2023. Q1 was an excellent start to 2023 with strong demand for aftermarket parts, which contributed to record bookings and a record adjusted EPS in the first quarter. Business activity was strong in most regions of the world, and new order activity was led by our Material Handling operating segment, along with solid growth in our Flow Control segment. As a result of new order activity, we ended the first quarter with record backlog. I'll provide more details on that when I review our operating segments. Overall, our healthy balance sheet and strong cash flow positions us well to capitalize on growth opportunities in 2023. Despite the dampening effect of foreign currency translation, we had solid increases across most financial metrics compared to Q1 of last year. As you can see on Slide 6, a notable highlight for the quarter was our record bookings performance. Bookings were $275 million, up 3% compared to our previous record in the same period last year. Excluding the negative impact of FX, organic bookings were up 7%. Q1 revenue increased 1% to $230 million compared to the same period last year. Excluding FX, organic revenue was up 5%. Our aftermarket parts revenue made up two-thirds of Q1 revenue and was up 4% to a record $152 million. Improved operating performance led to record adjusted EPS of $2.40 and adjusted EBITDA of $49 million, representing 21.1% of revenue. All our operating segments delivered excellent adjusted EBITDA margin performance despite inflationary pressures. Cash flow in Q1, which is historically a weaker quarter, increased 55% compared to the same period last year to $37 million, while free cash flow was $32 million. Next, I'd like to review our performance details on each operating segment. I'll begin with our Flow Control segment. Flow Control segment experienced a strong pickup in demand and set a new bookings record at $105 million. Both capital business and aftermarket parts demand boosted performance in the first quarter. Organic bookings, which exclude the effects from foreign currency translation, were up 8% compared to the same period last year. Q1 revenue performance was outstanding despite the headwinds from FX. Aftermarket parts revenue was a record and made up 73% of total Q1 revenue. Improved operating leverage led to an 11% increase in adjusted EBITDA compared to Q1 of 2022 and an adjusted EBITDA margin of 29.6%. As many of you know, the first quarter of the year is historically our strongest quarter in terms of bookings as our customers prepare for annual spring maintenance shutdowns. As a result, we expect subsequent quarterly bookings to moderate as the year progresses. That said, we do expect to deliver strong performance again this year in our Flow Control segment as our end markets remain healthy. Turning now to our Industrial Processing segment. We experienced softer yet still good demand for both capital and parts in the first quarter. Q1 bookings were down 9% compared to the strong prior year period, reflecting the more recent moderation of activity in the wood processing sector. Demand for parts and capital for our recycling systems was robust across all regions of the world. Revenue in this segment decreased 10% to $84 million in the first quarter compared to the same period last year. Excluding the negative impact of FX, organic revenue decreased 6%. Overall, we had a good start to the year with relatively strong activity in our wood processing product line. We expect business activity in the wood sector to moderate as the year progresses. In our Material Handling segment, we achieved our best performance since creating this segment with strong demand for our bulk material handling equipment leading to record bookings of $74 million in the first quarter. Demand in both Europe and North America for our high-performance baling systems was also notable in the first quarter. Revenue increased 19% to a record $57 million with significant contribution from capital shipments. Q1 organic revenue was up 21% compared to the same period last year. Improved operating performance drove adjusted EBITDA up 29% and boosted adjusted EBITDA margin to 22% of revenue. During the quarter, we booked a large capital order for North America's longest conveying line with a value of approximately $12 million. The 42-mile long conveyor incorporates our idler smart rolls and is designed to eliminate the need for truck transport, thereby eliminating the emissions associated with the transport of the bulk material. As we look to the second quarter of 2023 and the full year, our record backlog and ability to generate robust cash flows has us well positioned to capitalize on opportunities that may emerge as the year unfolds. We expect to deliver excellent financial performance again this year and are raising our full-year 2023 revenue and EPS guidance. Mike will discuss this in more detail.

Thank you, Jeff. I'll start with some key financial metrics from our first quarter. Gross margins were 44.4% in the first quarter 2023, up 100 basis points compared to 43.4% in the first quarter 2022. This increase was principally due to higher margins achieved on the mix of capital projects, especially in our Industrial Processing segment. Also contributing to the improved gross margin was a higher overall percentage of parts and consumables revenue, which represented 66% of revenue in the first quarter 2023 compared to 65% in the prior year. SG&A expenses were $58.6 million in the first quarter 2023, a decrease of $0.6 million compared to $59.2 million in the first quarter 2022. We had a favorable foreign currency translation effect of $1.8 million, which lowered SG&A expenses in the first quarter 2023. In the first quarter of 2022, we had $0.8 million in acquisition-related costs and a $0.6 million indemnification asset reversal. Excluding these items, SG&A expenses were up $2.6 million or 4% compared to the first quarter 2022, primarily due to increased compensation expenses as well as travel-related costs. As a percentage of revenue, SG&A expense decreased to 25.5% in the first quarter 2023 compared to 26.1% in the prior year period. Our effective tax rate in the first quarter was 25.7%, which included tax benefits related to the vesting of equity awards, which lowered the effective tax rate by 90 basis points. Our GAAP EPS decreased 32% to $2.40 in the first quarter compared to $3.53 in the first quarter 2022, which included a $1.30 gain on the sale of one of our Chinese facilities related to a relocation plan. Our adjusted EPS was up 5% to a record $2.40, which exceeded the high end of our guidance range by $0.20, predominantly due to higher-than-anticipated revenue, especially in our Material Handling segment. Adjusted EBITDA increased 6% to $48.6 million compared to $45.8 million in the first quarter 2022, driven by strong performance in our Flow Control and Material Handling segments, which both had record adjusted EBITDA. As a percentage of revenue, adjusted EBITDA increased to 21.1% compared to 20.2% in the first quarter of 2022. Both operating and free cash flow increased 55% in the first quarter of 2023 to $36.9 million and $32.4 million, respectively. Our operating cash flow of $36.9 million in the first quarter of 2023 represents the highest quarterly cash flow since the fourth quarter of 2021. Historically, the first quarter has been a weak quarter for operating cash flows. This represents a strong start for 2023 with both operating and free cash flow being our highest first quarter performance. We had several notable non-operating uses of cash in the first quarter of 2023. We paid down debt by $20.8 million, paid $4.5 million for capital expenditures, paid a $3 million dividend on our common stock and paid $3.9 million in tax withholding payments related to the vesting of stock awards. Capital expenditures of $4.5 million in the first quarter of 2023 included $0.2 million related to our facility project in China. We estimate this project will incur construction costs of $8 million to $9 million for the remainder of 2023 with a projected move to the new facility in the second half of the year. Let me turn next to our EPS results for the quarter. In the first quarter 2023, both GAAP and adjusted EPS were $2.40. In the first quarter 2022, GAAP EPS was $3.53 and adjusted EPS was $2.28. Our EPS in the first quarter 2022 included a $1.30 gain on the sale of one of our Chinese facilities related to a relocation plan, $0.04 in acquisition-related costs and a $0.01 impairment charge. As shown in the chart, the increase of $0.12 in adjusted EPS in the first quarter 2023 compared to the first quarter 2022 consists of the following: $0.17 due to higher gross margin percentage and $0.09 due to higher revenue. These increases were partially offset by $0.06 due to higher interest expense, $0.05 due to a higher tax rate and $0.03 due to higher operating expenses. Collectively, included in all the categories I just mentioned was an unfavorable foreign currency translation effect of $0.09 in the first quarter 2023 compared to the first quarter of last year due to the strengthening of the U.S. dollar. Looking at our liquidity metrics on Slide 15. Our cash conversion days, which we calculate by taking days in receivables plus days in inventory and subtracting days in accounts payable, increased to 136 at the end of the first quarter 2023 compared to 104 at the end of the first quarter 2022. Our average cash conversion days over the last 8 quarters has been 118 days. Our cash conversion days at the end of the first quarter of 2023 is above average compared to the prior year period, which was below average. The 32-day increase in cash conversion days was driven by a higher number of days in inventory, especially in our Industrial Processing segment, where businesses are working to fulfill orders from their record backlog. Working capital as a percentage of revenue was 15.6% in the first quarter of 2023 compared to 10.8% in the first quarter 2022. The increase in this metric was driven by a $36 million increase in inventory to fulfill orders in our backlog and the reclassification of a $15 million note receivable related to our China relocation project from long-term to short-term. Our net debt, that is debt less cash, decreased $25 million or 21% sequentially to $96 million at the end of the first quarter 2023. With our debt pay down in the first quarter, we were able to further lower our leverage ratio calculated in accordance with our credit agreement to 0.64 at the end of the first quarter 2023 compared to 0.74 at the end of 2022. At the end of the first quarter 2023, we had $233 million of borrowing capacity available under our revolving credit facility, which matures in November of 2027. Our lower leverage ratio and increased borrowing capacity has us well positioned to act on future investment opportunities. Now I'll turn to our guidance for 2023. As a result of our strong start to the year, we are increasing our full-year revenue guidance to $910 million to $935 million from $900 million to $925 million. And we are increasing our adjusted EPS guidance for the full-year to $8.90 to $9.15 from $8.80 to $9.05. The adjusted EPS guidance excludes $0.08 estimated relocation costs associated with one of our facilities in China. Our revenue guidance for the second quarter of 2023 is $230 million to $235 million, and our adjusted EPS guidance is $2.05 to $2.15, which excludes $0.04 of estimated relocation costs. As always, I'll caution here that there could be some choppiness and variability in our quarterly results due to several factors, including the variability of order flow and the timing of capital shipments. In addition, other risks that could impact our guidance include Central Bank's policy responses to inflation, geopolitical tensions, strengthening of the U.S. dollar and lingering supply chain issues. We continue to anticipate gross margins for 2023 will be 42% to 43%. This implies gross margins in the remaining quarters will be in the 42% range, with the second quarter gross margins projected to come in at the low end of the 42% range as the mix is expected to be more heavily weighted toward capital in the first quarter of 2023. As a percentage of revenue, we still anticipate SG&A will be approximately 24% to 25% and R&D expense will be approximately 1.5% of revenue in 2023. We expect our tax rate for the remaining quarters will be approximately 27%. We continue to expect depreciation and amortization to be approximately $34 million to $35 million. And we continue to anticipate CapEx spending in 2023 will be approximately $32 million to $34 million, which includes $8 million to $9 million related to our facility project in China.

At this time we will conduct a question-and-answer session.

Hey. Good morning, everyone.

Good morning.

Quick question here. On the Flow Control, you said 73% of revenue was aftermarket parts. Is that correct in this quarter?

Yes.

And how did that compare to last year? Do you have that handy?

See here. I think I have that rate in front of me, Gary. I'll come back to you on that one. I'll find it.

Okay. And I'd also – and you said it was 65% for industrial. I just would like to see where that was last year at that time too – at this time, too?

Last year, it was 72% for flow. And industrial, this year, we were 65%. Last year, it was 60%.

Okay. And then in the Industrial Processing side, was the majority of that revenue decrease really due to what you do on the wood products side versus recycling paper and paperboard?

Yes, it was. But I'd also note there, Gary, I mean, we did – first, a couple of things. It's a tough comp for us. I think we're going to have that frequently, especially in wood for 2023. But the other thing that happened, which is why I made that mention in my call notes about capital, the variability of when capital ships, is we had some projects that were scheduled to ship in the first quarter, and those who were moved to later quarters in the year. So had those shipped in the quarter, we really – we would have been flat organically on revenue.

You still have them?

Yes, still have them. This is normal course of things, especially – most especially, of course, on capital projects. They can get pulled in or moved out.

What often happens, Gary, is the site, there's a lot of civil construction work on the site that has to be completed before they can install our equipment. And the customers will often get behind their projects, and so they're not ready for the equipment to be installed. So that kind of dictates the delivery schedule.

Okay. And then lastly, in the Material Handling segment, you had some pretty good growth there. You said you booked a large capital order for a 42-mile conveyor. That's a huge conveyor. But I mean, was there any revenue in the quarter from that? Or was it all – was all the revenue – was the majority – well, was there any revenue in the quarter from that?

No, no, Gary. No revenue in the first quarter related to that.

Hi. Good morning.

Good morning.

You have Adi here filling in for Kurt Yinger today.

Hi, Adi.

Hey. And so first off, congrats on a great quarter in this environment. And I actually have three questions for you today, and the first one being in terms of the outlook for moderation in activity in the second half of the year, are you seeing tangible signs in terms of commentary from your customers? Or is it – or more recent booking activities to lead you that view? Or is it just more of a potentially conservative stance given the current environment?

Yes. Well, as you can see, the bookings in the first quarter were incredibly strong. There was even a big FX impact to that, so the bookings were even stronger than the $275 million in reality. So we experienced great activity, but we do – I think we do have concerns in the back half of the year because, as you know, the Central Banks and in particular the Federal Reserve Bank is working very hard to try to crush demand. And so I think we're being particularly cautious in the back half of the year because we don't have good visibility, and there's just a lot of noise and a lot of uncertainty out there. And so we're – we tend to be, as you know, a conservative organization anyway. And so we're just being cautious. But through the first quarter, of course, demand was exceptionally strong in really all of our businesses, all our segments across the world. So it's more just being cautious because of the unknown, I would say, at this point.

Okay. Yes. That makes sense. And another question about gross margin. So gross margins were quite strong relative to the full-year guide in Q1. Could you talk to how you expect that to trend over the balance of the year? And is some compression there primarily just related to your mix expectations around higher capital going forward?

Yes. Hi, Adi. You're exactly right. The first quarter for us, you will tend to see gross margins be pretty strong because it tends to be more – our first quarter tends to be more heavily weighted towards parts and consumables. As you saw for the first quarter of this year, it was 66%. And you're exactly right. As we go through the year, that mix is going to shift towards more capital. So this will be our strongest quarter for parts and consumables as a percent of revenue. And then that percentage will start to decrease as we ship more capital, and that is what's creating the pressure on gross margins. And that's why I was careful to call that out in the call to say, Hey, we started out with very strong gross margins. We anticipated that, and it fits the guidance that we gave of 42% to 43%. And as a result, on the go-forward quarters, you'll see margins kind of in that 42% range.

Okay. Yes. That makes sense. And just lastly on capital allocation. For the remainder of the year, how are you thinking about share repurchases versus dividends? And specifically, maybe if you could talk more about M&A, what kind of opportunity you're seeing out there? Are you more or less willing to be active on that front? Thank you. And good luck for next quarter.

Thank you. Yes. So as you know, we pay a dividend. Our goal is to try to increase it every year. But it tends to be something that the Board looks at every – kind of every quarter. As far as stock buybacks, while we have authorized buyback, we haven't purchased any shares for several years. We found that there have been good acquisition opportunities out there that we thought were better returns for us. And I would say that from an acquisition activity standpoint, last year was quite slow. I think many of the bankers would say their business was off about 50% last year. We certainly saw that. But this year, I think there's a lot more activity. There's a lot more discussions going on. So it does seem like deal flow is picking up this year. It's still early in the year, of course, but at least through the first quarter, I would say the activity level, the discussions, the number of deals coming to the market is up quite a bit from last year. So as you know, we tend to be opportunistic. We don't buy companies every year, but if we find good strategic fits, we will move on them. And of course, we've got the balance sheet and the debt capacity to do that.

Looks like there's no further questions. So at this time, I would like to turn it back over to Jeff Powell for closing remarks.

Thank you, Gerald. Before wrapping up the call today, I just wanted to leave you with a few takeaways. First quarter was an excellent start to 2023 with high demand for our parts and good project activity, which led to record bookings and record backlog. Although there are continuing economic headwinds, our employees around the globe continue to focus on meeting our customers' needs with innovative technologies and solutions that deliver long-term value to our stakeholders. Our financial health is excellent, and our ability to generate strong free cash flow has us well positioned to capitalize on growth opportunities. And we look forward to delivering exceptional value to our stakeholders again in 2023. With that, I want to thank you for joining the call today, and we look forward to updating you again next quarter.