Kewaunee Scientific Reports Record Sales and Earnings for First Quarter

STATESVILLE, N.C., Aug. 27, 2013 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported record sales and earnings for its first quarter ended July 31, 2013.

Net earnings for the quarter were $1,587,000 or $0.61 per diluted share, up from net earnings of $634,000, or $0.25 per diluted share, in the first quarter of the prior year. Sales for the quarter were $32,003,000, up 19.9% from sales of $26,683,000 in the first quarter last year. Earnings for the quarter benefited from higher sales and earnings from both Domestic and International Operations, as well as the favorable impact of the Company's buyout of the minority ownership in its principal international subsidiary.

During the quarter, the Company purchased the 49% minority ownership of its subsidiary, Kewaunee Labway Asia Pte. Ltd. The purchase of this additional ownership increased net earnings for the quarter by $140,000, or $0.05 per diluted share. Through its headquarters in Singapore and its subsidiary in India, Kewaunee Labway Asia serves as the Company's international center for sales and installation of laboratory furniture products and fume hoods.

Domestic Operations sales for the quarter were $27,073,000, up 19.6% from sales of $22,629,000 in the first quarter last year. Sales benefited from strong order activity from the Company's dealer network and a strong backlog of orders with customer ship dates during the quarter. In the domestic markets, increased activity for mid-size private sector laboratory construction projects more than offset fewer large projects and continued soft demand for publicly funded wood projects. The Company continues to increase market share, although pricing remains very competitive in all of its market segments.

International Operations sales for the quarter were $4,930,000, up 21.6% from sales of $4,054,000 in the first quarter last year. The Company continues to see good opportunities in the international markets, particularly in the growth markets of India, the Middle East, and Singapore.

The order backlog was $71.1 million at July 31, 2013, as compared to $80.2 million at April 30, 2013. The lower order backlog reflects several factors, including the composition of the Domestic backlog, which continues to transition to a higher percentage of orders received through the Company's dealer organization. These orders typically remain in the backlog for a shorter duration. The backlog also reflects the manufacturing and shipment of a large International project during the quarter that had been in the backlog for an extended period due to construction project delays. The Company continues to aggressively pursue laboratory project opportunities, both domestically and internationally.

The Company balance sheet and financial condition remain strong. Cash on hand was $5.0 million at the end of the quarter, as compared to $8.4 million at the end of the first quarter last year. Working capital was $24.8 million, as compared to $24.0 million at the end of the first quarter last year. Borrowings under the Company's revolving credit facility were $4.9 million at the end of the quarter, as compared to $6.1 million at the end of the first quarter last year, and total bank borrowings were $9.8 million, as compared to $9.7 million at the end of the first quarter last year.

In May 2013, the Company changed its corporate banking relationship and moved to a larger credit facility that provides increased limits and flexibility to better handle the Company's projected future cash needs. The new facility provides for a 3-year revolving credit facility that allows outstanding advances of up to $20 million, as compared to the previous limit of $15 million, and new 7-year term debt of $5 million, which replaced outstanding term debt of $3.5 million.

"We had an excellent quarter, both domestically and internationally," said David M. Rausch, Kewaunee's President and Chief Executive Officer.  "During the quarter, the Company substantially benefited from the favorable timing of several projects. I also am extremely pleased with the performance achieved throughout our organization. In Statesville where Domestic sales were up nearly 20% over the prior year, our Metal Plant and Epoxy Resin Plant produced record shipments, while maintaining high levels of quality and productivity. Our International Operations also had an excellent quarter with sales up nearly 22% over the prior year. Despite these much higher volumes, our Associates continued to do an excellent job in controlling operating costs.

"Looking forward, the Company expects physical year 2014 to perform favorably over fiscal year 2013, although typically we experience variations in results from quarter-to-quarter due to our customers' construction schedules."

Kewaunee Scientific Corporation is a recognized global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Laboratory furniture products include both steel and wood cabinetry, fume hoods, adaptable modular systems, moveable workstations, biological safety cabinets, and epoxy resin counters and sinks. Healthcare furniture products include laminate casework, storage systems, and related products for healthcare applications. Technical furniture products include column systems, slotted-post systems, pedestal systems, and stand-alone benches.

The Company's corporate headquarters are located in Statesville, North Carolina. Three manufacturing facilities are located in Statesville, NC serving the domestic and international markets.  One manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company has subsidiaries in Singapore and India. Kewaunee Scientific's website is located at http://www.kewaunee.com.

Certain statements in this release constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, economic, competitive, governmental, and technological factors affecting the Company's operations, markets, products, services, and prices.

Contact:

D. Michael Parker


704/871-3290

 






Kewaunee Scientific Corporation

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)








Three months ended



July 31,



2013


2012

Net sales


$    32,003


$    26,683

Cost of products sold


25,427


21,440

Gross profit


6,576


5,243

Operating expenses


4,144


4,138

Operating earnings


2,432


1,105

Other income


80


68

Interest expense


(88)


(114)

Earnings before income taxes


2,424


1,059

Income tax expense


807


371

Net earnings


1,617


688

Less: net earnings attributable to the noncontrolling interest


30


54

Net earnings attributable to Kewaunee Scientific Corporation


$      1,587


$         634






Net earnings per share attributable to





    Kewaunee Scientific Corporation stockholders





       Basic


$0.61


$0.25

       Diluted


$0.61


$0.25






Weighted average number of common shares outstanding





       Basic


2,596


2,581

       Diluted


2,618


2,584











Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

(in thousands)








July 31,


April 30,



2013


2013

Assets


(Unaudited)



Cash and cash equivalents


$4,408


$5,811

Restricted Cash


619


691

Receivables, less allowances


24,752


25,884

Inventories


12,334


13,203

Prepaid expenses and other current assets


2,076


1,641

    Total Current Assets


44,189


47,230

Net property, plant and equipment


14,995


15,098

Other assets


6,675


6,414

Total Assets


$65,859


$68,742






Liabilities and Equity





Short-term borrowings and interest rate swap


$5,101


$6,997

Current portion of long-term debt


455


200

Accounts payable


8,234


10,406

Other current liabilities


5,626


4,512

    Total Current Liabilities


19,416


22,115

Other non-current liabilities


15,433


12,934

    Total Liabilities


34,849


35,049

Noncontrolling interest


224


2,017

Kewaunee Scientific Corporation equity


30,786


31,676

    Total Equity


31,010


33,693

Total Liabilities and Equity


$65,859


$68,742
















 

SOURCE Kewaunee Scientific Corporation



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