STATESVILLE, N.C., Sept. 11,
2024 /PRNewswire/ -- Kewaunee Scientific Corporation
(NASDAQ: KEQU) today announced results for its first quarter ended
July 31, 2024.
Fiscal Year 2025 First Quarter Results:
Sales during the first quarter of fiscal year 2025 were
$48,393,000, a decrease of 2.9%
compared to sales of $49,839,000 from
the prior year's first quarter. Pre-tax earnings for the quarter
were $2,430,000 compared to
$3,412,000 for the prior year
quarter, a decrease of 28.8%. Net earnings were $2,193,000 compared to net earnings of
$2,474,000 for the prior year
quarter. EBITDA1 for the quarter was $3,325,000 compared to $4,305,000 for the prior year quarter. Diluted
earnings per share was $0.74 compared
to diluted earnings per share of $0.86 in the prior year quarter.
The Company's order backlog was $159.4
million on July 31, 2024, as
compared to $140.8 million on
July 31, 2023, and $155.6 million on April
30, 2024.
Domestic Segment - Domestic sales for the quarter
were $35,523,000, an increase of 0.3%
from sales of $35,420,000 in the
prior year quarter. Domestic segment net earnings was $2,871,000 compared to $2,711,000 in the prior year quarter. Domestic
segment EBITDA was $4,738,000
compared to $4,578,000 for the prior
year quarter. Domestic segment volumes were similar to the prior
year quarter with demand remaining stable across all
end-markets.
International Segment - International sales for the
quarter were $12,870,000, a decrease
of 10.7% from sales of $14,419,000 in
the prior year quarter. International segment net earnings was
$463,000 compared to $469,000 in the prior year quarter. International
segment EBITDA was $696,000 compared
to $670,000 for the prior year
quarter. The decline in sales is attributable to customer
construction site delays in India
which pushed out the timing of deliveries.
Corporate Segment – Corporate segment pre-tax net
loss was $1,992,000 for the quarter,
as compared to a pre-tax net loss of $1,004,000 in the prior year quarter. Corporate
segment EBITDA for the quarter was ($2,109,000) compared to corporate segment EBITDA
of ($943,000) for the prior year
quarter. The change in EBITDA was driven by an increase in
professional service fees during the quarter that are unrelated to
the core business and the net change in Corporate cost allocation
methodology across our business segments.
Total cash on hand on July 31,
2024 was $25,186,000, as
compared to $25,938,000 on
April 30, 2024. Working capital was
$56,012,000, as compared to
$49,291,000 at the end of the first
quarter last year and $56,037,000 on
April 30, 2024.
The Company had short-term debt of $3,627,000 as of July 31,
2024, as compared to $3,099,000 on April 30,
2024. Long-term debt was $28,293,000 on July 31,
2024, as compared to $28,479,000 on April 30,
2024. The building lease from the Company's December 2021 sale-leaseback transaction accounts
for $27,958,000 of the long-term debt
on July 31, 2024 and $28,133,000 of the long-term debt on April 30, 2024. Long-term debt, net of the
sale-leaseback transaction, was $335,000 on July 31,
2024 as compared to $346,000
on April 30, 2024. The Company's
debt-to-equity ratio on July 31, 2024
was 0.68-to-1, as compared to 0.70-to-1 on April 30, 2024. The
Company's debt-to-equity ratio, net of the sale-leaseback
transaction, on July 31, 2024 was
0.19-to-1, as compared to 0.20-to-1 on April
30, 2024.
"Our financial performance for the first quarter of fiscal year
2025 was solid," said Thomas D. Hull
III, Kewaunee's President and Chief Executive Officer.
"Domestic segment operating performance was improved when compared
to last year's first quarter as our manufacturing loadings remain
at a consistent level. Site delays in India on multiple projects impacted our
ability to ship products and deliver services leading to a slightly
down quarter when compared to the prior year first quarter."
"Looking ahead, our backlog remains strong and quoting for new
projects remains high, providing a line of sight to another strong
year for the Company."
______________________________
|
1 EBITDA is
a non-GAAP financial measure. See the table below for a
reconciliation of EBITDA and segment EBITDA to net earnings (loss),
the most directly comparable GAAP measure.
|
EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment
EBITDA Reconciliation
Quarter Ended July
31, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,711
|
|
$
469
|
|
$
(706)
|
|
$
2,474
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
380
|
|
36
|
|
14
|
|
430
|
Interest
Income
|
|
—
|
|
(213)
|
|
(1)
|
|
(214)
|
Income
Taxes
|
|
913
|
|
282
|
|
(298)
|
|
897
|
Depreciation and
Amortization
|
|
574
|
|
96
|
|
48
|
|
718
|
EBITDA
|
|
$
4,578
|
|
$
670
|
|
$
(943)
|
|
$
4,305
|
|
|
|
|
|
|
|
|
|
Quarter Ended July
31, 2024
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,871
|
|
$
463
|
|
$
(1,141)
|
|
$
2,193
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
441
|
|
21
|
|
10
|
|
472
|
Interest
Income
|
|
—
|
|
(174)
|
|
(173)
|
|
(347)
|
Income
Taxes
|
|
764
|
|
279
|
|
(851)
|
|
192
|
Depreciation and
Amortization
|
|
662
|
|
107
|
|
46
|
|
815
|
EBITDA
|
|
$
4,738
|
|
$
696
|
|
$
(2,109)
|
|
$
3,325
|
Professional Fees
|
|
—
|
|
—
|
|
7302
|
|
730
|
Adjusted
EBITDA
|
|
$
4,738
|
|
$
696
|
|
$
(1,379)
|
|
$
4,055
|
____________________
|
2
Professional fees not related to our core business
|
Adjusted Consolidated Statement of Operations
Reconciliation
|
Three Months
Ended
July
31,
|
|
As Reported
2024
|
Professional
Fees
|
Adjusted
2024
|
2023
|
Net sales
|
$
48,393
|
$
—
|
$
48,393
|
$ 49,839
|
Cost of products
sold
|
35,905
|
—
|
35,905
|
37,925
|
Gross profit
|
12,488
|
—
|
12,488
|
11,914
|
Operating
expenses
|
9,913
|
7303
|
9,183
|
8,106
|
Operating
profit
|
2,575
|
730
|
3,305
|
3,808
|
Pension
expense
|
—
|
—
|
—
|
(41)
|
Other income,
net
|
327
|
—
|
327
|
75
|
Interest
expense
|
(472)
|
—
|
(472)
|
(430)
|
Profit before income
taxes
|
2,430
|
730
|
3,160
|
3,412
|
Income tax
expense
|
192
|
1534
|
345
|
897
|
Net earnings
|
2,238
|
577
|
2,815
|
2,515
|
Less: Net earnings
attributable to the non-controlling interest
|
45
|
—
|
45
|
41
|
Net earnings
attributable to Kewaunee Scientific Corporation
|
$
2,193
|
$
577
|
$
2,770
|
$
2,474
|
|
|
|
|
|
Net earnings per share
attributable to Kewaunee Scientific Corporation
stockholders
|
|
|
|
|
Basic
|
$
0.77
|
$
0.20
|
$
0.97
|
$
0.87
|
Diluted
|
$
0.74
|
$
0.19
|
$
0.93
|
$
0.86
|
___________________
|
3
Professional fees not related to our core business
|
4 Estimated
tax impact of professional fees not related to our core
business
|
About Non-GAAP Measures
The Company includes non-GAAP financial measures such as
adjusted net earnings and adjusted net earnings per share, in the
information provided with this press release as supplemental
information relating to its operating results. Adjusted net
earnings represents GAAP net earnings adjusted for professional
fees not related to its core business and the corresponding tax
impact. This financial information is not in accordance with, or an
alternative for, GAAP-compliant financial information and may be
different from the operating or non-GAAP financial information used
by other companies. The Company believes that this presentation of
adjusted net earnings and adjusted net earnings per share provides
useful information to investors regarding certain additional
financial and business trends relating to its financial condition
and results of operations.
EBITDA and Segment EBITDA are calculated as net earnings (loss),
less interest expense and interest income, income taxes,
depreciation, and amortization. Adjusted EBITDA and Adjusted
Segment EBITDA are calculated as EBITDA or Segment EBITDA less the
impact of the professional fees not related to the Company's core
business that were incurred during FY25, as discussed in more
detail above. We believe EBITDA, Segment EBITDA, Adjusted EBITDA,
and Adjusted Segment EBITDA allow management and investors to
compare our performance to other companies on a consistent basis
without regard to depreciation and amortization or the costs
incurred related to our one-time pension termination transaction
executed during fiscal year 2024, which can vary significantly
between companies depending upon many factors. EBITDA, Segment
EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA are not
calculations based upon generally accepted accounting principles,
and the method for calculating EBITDA, Segment EBITDA, Adjusted
EBITDA, and Adjusted Segment EBITDA can vary among companies. The
amounts included in the EBITDA, Segment EBITDA, Adjusted EBITDA,
and Adjusted Segment EBITDA calculations, however, are derived from
amounts included in the historical consolidated statements of
operations. EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted
Segment EBITDA should not be considered as alternatives to net
earnings (loss) or operating earnings (loss) as an indicator of the
Company's operating performance, or as an alternative to operating
cash flows as a measure of liquidity.
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. The
Company's products include steel and wood casework, fume hoods,
adaptable modular systems, moveable workstations, stand-alone
benches, biological safety cabinets, and epoxy resin work surfaces
and sinks.
The Company's corporate headquarters are located in Statesville, North Carolina. Sales offices are
located in the United States,
India, Saudi Arabia, and Singapore. 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, Asian, and African markets. 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. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions, and other important factors that could
significantly impact results or achievements expressed or implied
by such forward-looking statements. Such factors, risks,
uncertainties and assumptions include, but are not limited to:
competitive and general economic conditions, including disruptions
from government mandates, both domestically and internationally, as
well as supplier constraints and other supply disruptions; changes
in customer demands; technological changes in our operations or in
our industry; dependence on customers' required delivery schedules;
risks related to fluctuations in the Company's operating results
from quarter to quarter; risks related to international operations,
including foreign currency fluctuations; changes in the legal and
regulatory environment; changes in raw materials and commodity
costs; acts of terrorism, war, governmental action, and natural
disasters and other Force Majeure events. The cautionary statements
made pursuant to the Reform Act herein and elsewhere by us should
not be construed as exhaustive. We cannot always predict what
factors would cause actual results to differ materially from those
indicated by the forward-looking statements. Over time, our actual
results, performance, or achievements will likely differ from the
anticipated results, performance or achievements that are expressed
or implied by our forward-looking statements, and such difference
might be significant and harmful to our stockholders' interest.
Many important factors that could cause such a difference are
described under the caption "Risk Factors," in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended April 30, 2024, which you should review
carefully, and in our subsequent quarterly reports on Form 10-Q and
current reports on Form 8-K. These reports are available on our
investor relations website at www.kewaunee.com and on the SEC
website at www.sec.gov. 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.
Kewaunee Scientific
Corporation
Condensed
Consolidated Statements of Operations
(Unaudited)
($ and shares in
thousands, except per share amounts)
|
|
|
Three Months
Ended
July
31,
|
|
2024
|
|
2023
|
Net sales
|
$
48,393
|
|
$
49,839
|
Cost of products
sold
|
35,905
|
|
37,925
|
Gross profit
|
12,488
|
|
11,914
|
Operating
expenses
|
9,913
|
|
8,106
|
Operating
profit
|
2,575
|
|
3,808
|
Pension
expense
|
—
|
|
(41)
|
Other income,
net
|
327
|
|
75
|
Interest
expense
|
(472)
|
|
(430)
|
Profit before income
taxes
|
2,430
|
|
3,412
|
Income tax
expense
|
192
|
|
897
|
Net earnings
|
2,238
|
|
2,515
|
Less: Net earnings
attributable to the non-controlling interest
|
45
|
|
41
|
Net earnings
attributable to Kewaunee Scientific Corporation
|
$
2,193
|
|
$
2,474
|
|
|
|
|
Net earnings per share
attributable to Kewaunee Scientific Corporation
stockholders
|
|
|
|
Basic
|
$
0.77
|
|
$
0.87
|
Diluted
|
$
0.74
|
|
$
0.86
|
Weighted average number
of common shares outstanding
|
|
|
|
Basic
|
2,849
|
|
2,860
|
Diluted
|
2,967
|
|
2,885
|
Kewaunee Scientific
Corporation
Condensed
Consolidated Balance Sheets
($ in
thousands)
|
|
|
July 31,
2024
|
|
April 30,
2024
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
24,211
|
|
$
23,267
|
Restricted
cash
|
975
|
|
2,671
|
Receivables, less
allowances
|
43,545
|
|
45,064
|
Inventories
|
19,285
|
|
20,679
|
Prepaid expenses and
other current assets
|
4,683
|
|
5,136
|
Total Current
Assets
|
92,699
|
|
96,817
|
Net Property, Plant and
Equipment
|
17,112
|
|
17,649
|
Right of use
assets
|
6,944
|
|
7,454
|
Deferred income
taxes
|
8,091
|
|
7,401
|
Other assets
|
7,172
|
|
5,445
|
Total Assets
|
$
132,018
|
|
$
134,766
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Short-term
borrowings
|
$
3,627
|
|
$
3,099
|
Current portion of
lease obligations
|
2,144
|
|
2,234
|
Current portion of
financing liability
|
731
|
|
713
|
Accounts
payable
|
20,619
|
|
23,262
|
Other Current
Liabilities
|
9,566
|
|
11,472
|
Total Current
Liabilities
|
36,687
|
|
40,780
|
Long-term portion of
lease obligations
|
5,333
|
|
5,669
|
Long-term portion of
financing liability
|
27,227
|
|
27,420
|
Other non-current
liabilities
|
5,258
|
|
4,688
|
Total
Liabilities
|
74,505
|
|
78,557
|
Kewaunee Scientific
Corporation Equity
|
56,023
|
|
54,760
|
Non-controlling
interest
|
1,490
|
|
1,449
|
Total Stockholders'
Equity
|
57,513
|
|
56,209
|
Total Liabilities and
Stockholders' Equity
|
$
132,018
|
|
$
134,766
|
Contact:
|
Donald T. Gardner
III
|
|
704/871-3274
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/kewaunee-scientific-reports-results-for-first-quarter-of-fiscal-year-2025-302245693.html
SOURCE Kewaunee Scientific Corporation