KEQU Kewaunee Scientific Corporation

STATESVILLE, N.C., Feb. 26 /PRNewswire-FirstCall/ -- Kewaunee Scientific Corporation (NASDAQ:KEQU) today announced results for its third quarter ended January 31, 2009. Net earnings for the quarter increased to $882,000, or $0.35 per diluted share, up 10% from $802,000, or $0.31 per diluted share, in the same period last year. Earnings benefited from the higher sales volume, solid operational performances throughout the Company, and the stabilization of costs for key raw materials and energy. Net earnings for the nine months ended January 31, 2009 were $3,327,000, or $1.30 per diluted share, up 24% from net earnings of $2,688,000, or $1.05 per diluted share, in the same period last year. Sales for the quarter were $26,023,000, up 19% over sales of $21,883,000 in the same period last year. Sales benefited from continuing higher levels of new orders and the record order backlog. Sales for the nine months ended January 31, 2009 were $79,150,000, up 17% from sales of $67,394,000 in the same period last year. Sales from domestic operations during the quarter were $22,498,000, up 27% from the same period last year. Domestic sales for the nine months ended January 31, 2009 were $67,296,000, an increase of 21% from the same period last year. Sales from international operations were $3,525,000, down 17% from the same period last year. The decline resulted primarily from a softer Singapore laboratory furniture market. International sales for the nine months ended January 31, 2009 were $11,854,000, up 2% from the same period last year. The order backlog at January 31, 2009 was $60.7 million, up from $58.8 million at January 31, 2008, and down slightly from $61.6 million at the end of the previous quarter. The domestic marketplace for laboratory furniture products provided an extremely high number of opportunities during the quarter, and the Company had one of the strongest quarters of quotation activity in its history. Although some slowing of activity in the Asian laboratory marketplace was noted during the quarter, the Company closed two significant orders in Asia that added to the order backlog. The Company's financial condition continues to be strong. Bank borrowings and capital lease obligations were $6,318,000 at January 31, 2009, up from $4,243,000 at January 31, 2008, with the increase primarily the result of receivables associated with the increase in sales. Cash on hand was $3,089,000, as compared to $2,882,000 at the end of the same period last year. Working capital was $17,749,000 at the end of the quarter, up from $14,671,000 at the end of the same period last year. "I am pleased with the Company's strong performance during the third quarter," said William A. Shumaker, President and Chief Executive Officer. "Our strategic efforts over the past several years to make Kewaunee a more efficient Company are working well. We have not yet noticed any significant impact from the global economic slowdown on our business or opportunities in the domestic laboratory furniture marketplace, but we remain keenly aware of this serious situation. We are diligently pursuing a number of strategies that will help position the Company in case of an economic downturn in our industry and, at the same time, make the Company even stronger when the economy rebounds. "We believe the Company is on track for a good fourth quarter. Sales should benefit from our strong order backlog, and earnings should benefit from lower costs for some of our key raw materials and our on-going cost reduction activities. We expect aggressive competitive pricing will continue, and probably accelerate, in the coming months." The Company also announced today that its Board of Directors approved a cash dividend of eight cents per outstanding share to stockholders of record at the close of business on March 12, 2009, payable on March 26, 2009. Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of scientific and technical furniture. The Company's corporate headquarters and domestic manufacturing facilities are located in Statesville, North Carolina. The Company has subsidiaries in Singapore and Bangalore, India that serve the Asian and Middle East markets. 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. Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended January 31 January 31 2009 2008 2009 2008 ---- ---- ---- ---- Net sales $26,023 $21,883 $79,150 $67,394 Cost of products sold 21,089 17,064 62,846 52,759 ------ ------ ------ ------ Gross profit 4,934 4,819 16,304 14,635 Operating expenses 3,440 3,293 10,884 9,811 ----- ----- ------ ----- Operating earnings 1,494 1,526 5,420 4,824 Other income (expense) 3 (6) (36) (2) Interest expense (49) (86) (231) (302) ---- ---- ----- ----- Earnings before income taxes 1,448 1,434 5,153 4,520 Income tax expense 488 421 1,595 1,391 --- --- ----- ----- Earnings before minority interests 960 1,013 3,558 3,129 Minority interests 78 211 231 441 -- --- --- --- Net earnings $882 $802 $3,327 $2,688 ==== ==== ====== ====== Net earnings per share Basic $0.35 $0.32 $1.30 $1.07 Diluted $0.35 $0.31 $1.30 $1.05 Weighted average number of common shares outstanding (in thousands) Basic 2,556 2,543 2,554 2,523 Diluted 2,556 2,576 2,563 2,551 Condensed Consolidated Balance Sheets (in thousands) January 31 April 30 2009 2008 ---- ---- (unaudited) Assets Cash and cash equivalents $2,691 $3,784 Restricted cash 398 480 Receivables, less allowances 24,723 20,087 Inventories 7,678 6,984 Prepaid expenses and other current assets 1,359 1,847 ----- ----- Total current assets 36,849 33,182 Net property, plant and equipment 11,601 11,825 Other assets 5,064 5,599 ----- ----- Total Assets $53,514 $50,606 ======= ======= Liabilities and Stockholders' Equity Short-term borrowings $5,815 $4,551 Current obligations under capital leases 268 323 Accounts payable 8,211 8,929 Other current liabilities 4,806 3,459 ----- ----- Total current liabilities 19,100 17,262 Other non-current liabilities 5,295 6,397 Total stockholders' equity 29,119 26,947 ------ ------ Total Liabilities and Stockholders' Equity $53,514 $50,606 ======= ======= Contact: D. Michael Parker 704/871-3290 DATASOURCE: Kewaunee Scientific Corporation CONTACT: D. Michael Parker, +1-704-871-3290 Web Site: http://www.kewaunee.com/

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