STATESVILLE, N.C., Dec. 2, 2010 /PRNewswire-FirstCall/ -- Kewaunee
Scientific Corporation (Nasdaq: KEQU) today announced the financial
results for its second quarter ended October
31, 2010.
Sales for the quarter were $25,625,000, the third consecutive quarter of
sales improvement over the immediately preceding quarter. As
compared to the same quarter last year, sales declined 5% from
sales of $27,088,000, reflecting a
continuing softness in the domestic marketplace for small and
mid-sized laboratory projects. Domestic sales were $22,269,000, down from $24,713,000 in the second quarter last year,
while international sales were $3,356,000, up from $2,375,000 in the second quarter last year.
Net earnings for the quarter were $855,000, or $0.33
per diluted share, a decrease from net earnings of $1,352,000, or $0.53 per diluted share, in the second quarter of
the prior year. Earnings were unfavorably impacted by lower
sales volume and continued aggressive pricing in all of the
Company's markets.
The order backlog was $66.0
million at October 31, 2010,
down slightly from $66.9 million at
July 31, 2010 and up from
$65.2 million at October 31, 2009.
The domestic marketplace for laboratory furniture remains
healthy, particularly for larger laboratory furniture projects. In
addition, the Company noticed an improvement in small and mid-sized
orders toward the end of the quarter. This was the first noticeable
improvement in this business category since the beginning of the
economic slowdown.
Sales for the six months ended October
31, 2010 were $50,483,000,
down 5% from sales of $53,337,000, in
the same period last year. Domestic operations sales were
$43,216,000, down from sales of
$48,071,000 in the same period last
year. International operations sales were $7,267,000, up from sales of $5,266,000 in the same period last year. Net
earnings for the six months were $1,512,000, or $0.59 per diluted share, down from net earnings
of $2,423,000, or $0.95 per diluted share, for the same period last
year.
"Progress was made during the quarter in a number of strategic
areas," said William A. Shumaker,
President and Chief Executive Officer. "The expansion of our
Statesville epoxy resin facility
was completed on schedule and within budget. We are now offering
additional colors and new countertop styles in response to customer
preferences. Our recent strategy to manufacture casework and
architectural millwork furniture for the growing healthcare market
continued to move forward, and we have received our first large
order for these products. We are particularly pleased with the
early success of our new biological safety cabinets. They
have been extremely well received in the marketplace, and we have
started shipping these products to customers.
"Regarding the marketplace, we continue to see many
opportunities, and we have a record number of outstanding
quotations on large laboratory projects, both domestic and
international. Decisions on most of these projects are
expected over the next six months, and I am optimistic the Company
will be successful in winning a significant number of them.
"Looking forward to the second half of the year, we expect our
progress to continue, with sales and earnings projected to improve
over the first half of this year. These expectations are based on a
number of factors, including scheduled delivery dates for orders in
our order backlog, a modest recovery in the global economy, sales
and earnings benefits from new products, and continuing increased
sales opportunities in the international marketplace."
The Company's balance sheet remains strong. Working capital was
$21,781,000 at October 31, 2010, up from $20,880,000 at October 31,
2009. Short term borrowings under the bank line of credit
were $4,147,000 at October 31, 2010, down from $5,370,000 at October 31,
2009. Total bank borrowings and capital lease obligations
were $8,273,000, as compared to
$5,647,000 at October 31, 2009, and the debt-to-equity ratio
was .26-to-1, as compared to .19-to-1 at October 31, 2009.
Cash on hand at October 31, 2010 was
$1,792,000, down from $3,057,000 at October 31,
2009.
Kewaunee Scientific Corporation is a recognized leader in the
design, manufacture, and installation of scientific and technical
furniture. The Company's corporate headquarters are located in
Statesville, North Carolina. The
Company's manufacturing facilities are located in Statesville and Bangalore, India. The Company has subsidiaries
in Singapore and Bangalore 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
|
Six Months
Ended
|
|
|
October
31
|
October
31
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Net sales
|
$25,625
|
$27,088
|
$50,483
|
$53,337
|
|
Cost of products sold
|
20,208
|
20,878
|
40,067
|
41,363
|
|
Gross profit
|
5,417
|
6,210
|
10,416
|
11,974
|
|
Operating expenses
|
4,045
|
3,976
|
7,946
|
7,942
|
|
Operating earnings
|
1,372
|
2,234
|
2,470
|
4,032
|
|
Other expense
|
--
|
--
|
(1)
|
--
|
|
Interest expense
|
(78)
|
(39)
|
(122)
|
(80)
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
1,294
|
2,195
|
2,347
|
3,952
|
|
Income tax expense
|
414
|
751
|
743
|
1,340
|
|
|
|
|
|
|
|
Net earnings
|
880
|
1,444
|
1,604
|
2,612
|
|
|
|
|
|
|
|
Less: net earnings attributable
to
|
|
|
|
|
|
the noncontrolling
interest
|
25
|
92
|
92
|
189
|
|
|
|
|
|
|
|
Net earnings attributable
to
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
$855
|
$1,352
|
$1,512
|
$2,423
|
|
|
|
|
|
|
|
Net earnings per share
attributable to
|
|
|
|
|
|
Kewaunee
Scientific Corporation stockholders
|
|
|
|
|
|
Basic
|
$0.33
|
$0.53
|
$0.59
|
$0.95
|
|
Diluted
|
$0.33
|
$0.53
|
$0.59
|
$0.95
|
|
|
|
|
|
|
|
Weighted average number of
common
|
|
|
|
|
|
shares
outstanding (in thousands)
|
|
|
|
|
|
Basic
|
2,573
|
2,560
|
2,573
|
2,558
|
|
Diluted
|
2,578
|
2,571
|
2,578
|
2,564
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
(in thousands)
|
|
|
October
31
|
April
30
|
|
|
2010
|
2010
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$1,248
|
$1,722
|
|
Restricted cash
|
544
|
544
|
|
Receivables, less
allowances
|
26,993
|
26,169
|
|
Inventories
|
9,058
|
8,350
|
|
Prepaid expenses and other
current assets
|
2,203
|
1,797
|
|
Total current
assets
|
40,046
|
38,582
|
|
Net property, plant and
equipment
|
16,338
|
13,815
|
|
Other assets
|
4,398
|
4,224
|
|
Total Assets
|
$60,782
|
$56,621
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term borrowings
|
$4,147
|
$4,872
|
|
Current obligations under
capital leases
|
80
|
82
|
|
Current portion of long-term
debt
|
200
|
--
|
|
Accounts payable
|
9,211
|
9,540
|
|
Other current
liabilities
|
4,627
|
4,003
|
|
Total current
liabilities
|
18,265
|
18,497
|
|
Other non-current
liabilities
|
9,869
|
6,452
|
|
Total
liabilities
|
28,134
|
24,949
|
|
Noncontrolling
interest
|
1,353
|
1,239
|
|
Kewaunee Scientific Corporation
equity
|
31,295
|
30,433
|
|
Total equity
|
32,648
|
31,672
|
|
Total Liabilities and
Equity
|
$60,782
|
$56,621
|
|
|
|
|
Contact:
|
D. Michael
Parker
|
|
|
704/871-3290
|
|
|
|
SOURCE Kewaunee Scientific Corporation