Kewaunee Scientific Reports Results for Second Quarter

Dec 08, 2015, 17:25 ET from Kewaunee Scientific Corporation

STATESVILLE, N.C., Dec. 8, 2015 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported results for its second quarter ended October 31, 2015.

Sales for the quarter were $31,037,000, a 2.6% increase from sales of $30,258,000 in the prior year. Domestic sales for the quarter were $26,279,000, up 11.2% from sales of $23,629,000 in the second quarter of last year. International sales for the quarter were $4,758,000, down 28.2% from sales of $6,629,000 in the second quarter last year.

Net earnings for the quarter were $695,000, or $0.26 per diluted share, as compared to net earnings of $1,202,000, or $0.45 per diluted share, in the second quarter last year. Earnings for the quarter were lower in comparison as a result of particularly strong International sales due to the timing of a shipment of a large order during the second quarter of last year. Earnings were also unfavorably impacted by non-recurring costs related to the retirement of a key executive.

The order backlog was $92.4 million at October 31, 2015, as compared to $84.5 million at October 31, 2014, and $86.7 million at July 31, 2015.  Incoming orders for the Domestic business were strong during the quarter, as opportunities increased from the improving marketplace for laboratory furniture and scientific equipment in the United States. The Company continues to see and pursue new opportunities in the International markets, although the timing of international incoming orders continues its unevenness from quarter-to-quarter. 

The Company's balance sheet and financial condition remain strong. Unrestricted cash on hand was $3.3 million at the end of the quarter, as compared to $4.9 million at the end of the second quarter last year. Working capital was $29.0 million, as compared to $27.9 million at the end of the second quarter last year. Short-term debt and interest rate swaps were $5.5 million at the end of the quarter, as compared to $0.9 million at the end of the second quarter last year, and total bank borrowings and interest rate swaps were $9.5 million, as compared to $5.3 million at the end of the second quarter last year.

"Improving conditions in the Domestic marketplace resulted in strong incoming orders for the quarter," said David M. Rausch, Kewaunee's President and Chief Executive Officer.  "For our International business, a large order shipped in the second quarter of last year adversely affected the year-over-year comparison with this quarter; however, our expanded sales organization and continued strengthening of the Kewaunee brand worldwide enable us to take advantage of numerous International opportunities where we are involved in the design and quote process."

"Looking forward, I remain optimistic we will continue to experience sales growth in fiscal year 2016. Going forward, I expect earnings to continue to improve through the balance of the fiscal year as we focus on improving our productivity and delivering cost reductions. We expect the domestic laboratory casework marketplace will continue to be strong with improved demand for both new construction and renovation projects. My optimism is also based on our strong order backlog and expectations that our International business will continue its long-term progress."

About Kewaunee Scientific Founded in 1906, Kewaunee Scientific Corporation is a recognized global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Products include steel, wood, and laminate casework, fume hoods, adaptable modular systems, moveable workstations, stand-alone benches, biological safety cabinets, and epoxy resin worksurfaces and sinks.

The Company's corporate headquarters is located in Statesville, North Carolina. Direct sales offices are located in the United States, India, Singapore, and China. Three manufacturing facilities are located in Statesville serving the domestic and international markets, and one manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company's China headquarters, sales office, and assembly operation are located in Suzhou Industrial Park, China. Kewaunee Scientific's website is located at http://www.kewaunee.com.

This press release contains statements that the Company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning these factors is contained in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:   

Thomas D. Hull III

(704) 871-3290

 

Kewaunee Scientific Corporation

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

Three months ended

Six months ended

 October 31,

October 31,

2015

2014

2015

2014

Net sales

$    31,037

$    30,258

$    62,126

$    60,792

Cost of products sold

25,505

24,436

50,751

48,822

Gross profit

5,532

5,822

11,375

11,970

Operating expenses

4,403

3,950

8,722

8,298

Operating earnings

1,129

1,872

2,653

3,672

Other income

85

125

187

251

Interest expense

(61)

(102)

(153)

(183)

Earnings before income taxes

1,153

1,895

2,687

3,740

Income tax expense

446

667

1,017

1,252

Net earnings

707

1,228

1,670

2,488

Less: net earnings attributable to

    the noncontrolling interest

12

26

35

52

Net earnings attributable to 

    Kewaunee Scientific Corporation

$         695

$      1,202

$      1,635

$      2,436

Net earnings per share attributable to

    Kewaunee Scientific Corporation stockholders

       Basic

$        0.26

$        0.46

$        0.62

$        0.93

       Diluted

$        0.26

$        0.45

$        0.61

$        0.92

Weighted average number of common

shares outstanding

       Basic

2,671

2,626

2,650

2,623

       Diluted

2,690

2,659

2,674

2,655

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

(in thousands)

October 31,

April 30,

2015

2015

Assets

(Unaudited)

Cash and cash equivalents

$      3,274

$      3,044

Restricted Cash

1,679

2,276

Receivables, less allowances

28,572

29,106

Inventories

13,740

12,745

Prepaid expenses and other current assets

2,142

1,591

    Total Current Assets

49,407

48,762

Net property, plant and equipment

14,557

14,523

Other assets

6,234

6,205

Total Assets

$    70,198

$    69,490

Liabilities and Equity

Short-term borrowings and interest rate swaps

$      5,529

$      4,955

Current portion of long-term debt

421

421

Accounts payable

9,654

11,232

Other current liabilities

4,797

4,447

    Total Current Liabilities

20,401

21,055

Other non-current liabilities

13,325

13,236

    Total Liabilities

33,726

34,291

Noncontrolling interest

274

323

Kewaunee Scientific Corporation equity

36,198

34,876

    Total Equity

36,472

35,199

Total Liabilities and Equity

$    70,198

$    69,490

 

SOURCE Kewaunee Scientific Corporation



RELATED LINKS

http://www.kewaunee.com