Kewaunee Scientific Reports Results for Second Quarter 2019

STATESVILLE, N.C., Dec. 4, 2018 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU) today reported results for its second quarter of fiscal year 2019, ended October 31, 2018.

Kewaunee Scientific Corporation (PRNewsFoto/Kewaunee Scientific Corporation)

Sales for the quarter were $37,278,000, a 10.1% decrease from sales of $41,471,000 in the prior year second quarter. Domestic sales for the quarter were $30,622,000, up 7.3% from sales of $28,540,000 in the second quarter of last year.  International sales for the quarter were $6,656,000, down 48.5% from sales of $12,931,000 in the second quarter last year.

Domestic sales increased year-over-year due to strength in the Company's dealer and distribution channels as customers continue to invest in laboratory projects that utilize Kewaunee's products.  As highlighted in the Company's first quarter press release, Kewaunee's International segment delivered an unusually large order in the Middle East during the prior year, which adversely affects the operating performance comparison of the International segment in the second quarter of the current fiscal year. Also unfavorably impacting Kewaunee's International segment sales performance was a significant year-over-year decline in the exchange rate of the Indian rupee versus the US dollar.

Pre-tax earnings for the quarter were $1,869,000 compared to $2,743,000 for the prior year period.  Pre-tax earnings were impacted by the year-over-year decline in sales, the foreign exchange impact, as well as continued increases in raw material and freight costs.  Net earnings decreased 18.0% for the quarter to $1,414,000, or $0.51 per diluted share, as compared to net earnings of $1,724,000, or $0.62 per diluted share, for the quarter ended October 31, 2017. 

Kewaunee continues to win orders globally, with the Company's order backlog at $101 million at October 31, 2018, as compared to $118 million at October 31, 2017, and $102 million at July 31, 2018.  The Company has a strong volume of outstanding quotations globally and expects to be awarded significant projects over the balance of the fiscal year.

The Company's balance sheet and financial condition remain strong. Unrestricted cash on hand was $9.5 million at the end of the quarter, as compared to $11.8 million at the end of the second quarter last year. Working capital was $36.4 million, as compared to $34.2 million at the end of the second quarter last year. Short-term debt and interest rate swaps were $4.7 million at the end of the quarter, as compared to $7.7 million at the end of the second quarter last year, and long-term debt was $822,000 as compared to $1.8 million at the end of the second quarter last year. The debt-to-equity ratio at October 31, 2018 was .14-to-1, as compared to .24-to-1 at October 31, 2017.

"Kewaunee's Domestic segment had a solid second quarter, offset by softness in our International segment and higher raw material costs," said David M. Rausch, Kewaunee's President and Chief Executive Officer.  "Looking forward, we have a strong order backlog and a large pipeline of outstanding quotations.  We also expect to see a continuation of the gains in operating performance made during the second quarter. As the market leader, Kewaunee will continue to drive its strategy of worldwide growth through operational excellence to create value for its customers and shareholders."

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, 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 are 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 and sales office are located in Shanghai, 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

Condensed Consolidated Statements of Operations (Unaudited)

($ and shares in thousands, except per share amounts)

                       

Three months ended

   

Six months ended

   

October 31,

   

October 31,

   

2018

 

2017

   

2018

 

2017

Net sales

 

$       37,278

 

$       41,471

   

$      79,430

 

$   75,352

Cost of products sold

 

29,505

 

33,560

   

64,183

 

60,620

Gross profit

 

7,773

 

7,911

   

15,247

 

14,732

Operating expenses

 

5,963

 

5,256

   

11,726

 

10,389

Operating earnings

 

1,810

 

2,655

   

3,521

 

4,343

Other income

 

150

 

177

   

314

 

345

Interest expense, net

 

(91)

 

(89)

   

(182)

 

(148)

Earnings before income taxes

 

1,869

 

2,743

   

3,653

 

4,540

Income tax expense

 

415

 

978

   

783

 

1,583

Net earnings

 

1,454

 

1,765

   

2,870

 

2,957

Less: net earnings attributable to the noncontrolling interest

 

40

 

41

   

49

 

85

Net earnings attributable to Kewaunee Scientific Corporation

 

$         1,414

 

$         1,724

   

$        2,821

 

$      2,872

                   

Net earnings per share attributable to

                 

    Kewaunee Scientific Corporation stockholders

                 

       Basic

 

$0.52

 

$0.64

   

$          1.03

 

$        1.06

       Diluted

 

$0.51

 

$0.62

   

$          1.01

 

$        1.04

                   

Weighted average number of common shares outstanding

                 

       Basic

 

2,743

 

2,717

   

2,740

 

2,715

       Diluted

 

2,800

 

2,776

   

2,802

 

2,766

                   

Kewaunee Scientific Corporation

       

Condensed Consolidated Balance Sheets

       

($ in thousands)

                               

October 31,

 

 April 30,

             

2018

 

2018

         

Assets

 

(Unaudited)

             

Cash and cash equivalents

 

$         9,477

 

$         9,716

         

Restricted cash

 

679

 

1,242

         

Receivables, less allowances

 

29,785

 

32,660

         

Inventories

 

17,097

 

17,662

         

Prepaid expenses and other current assets

 

3,251

 

2,224

         

    Total Current Assets

 

60,289

 

63,504

         

Net property, plant and equipment

 

14,868

 

14,661

         

Other assets

 

5,439

 

6,193

         

Total Assets

 

$       80,596

 

$       84,358

                             

Liabilities and Stockholders' Equity

                 

Short-term borrowings and interest rate swaps

 

$         4,658

 

$         3,885

         

Current portion of long-term debt and lease obligations

 

1,184

 

1,167

         

Accounts payable

 

10,726

 

14,754

         

Other current liabilities

 

7,468

 

7,756

         

    Total Current Liabilities

 

24,036

 

27,562

         

Other non-current liabilities

 

7,177

 

9,275

         

    Total Liabilities

 

31,213

 

36,837

         

Kewaunee Scientific Corporation  equity

 

48,920

 

47,059

         

Noncontrolling interest

 

463

 

462

         

    Total Stockholders' Equity

 

49,383

 

47,521

         

Total Liabilities and Stockholders' Equity

 

$       80,596

 

$       84,358

         

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/kewaunee-scientific-reports-results-for-second-quarter-300760336.html

SOURCE Kewaunee Scientific Corporation

   
Company Codes: NASDAQ-NMS:KEQU  

Back to news