STATESVILLE, N.C., March 2, 2011 /PRNewswire/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today announced results for its third
quarter ended January 31, 2011.
Sales for the quarter were $22,568,000, up 3.5% from sales of $21,814,000 in the same period last year. Net
earnings were $86,000, or
$0.03 per diluted share, down from
$621,000, or $0.24 per diluted share, in the same period last
year.
Sales for the quarter were unfavorably affected when customers
made changes to product designs and delivery dates for several
significant orders, including one large international order, that
delayed the start of manufacturing and shipments until late in the
quarter and into the fourth quarter. Sales also reflect a
continuing softness in the domestic marketplace for small and
mid-sized laboratory projects.
The customer changes in product requirements and delivery dates
had a two-fold impact on earnings for the quarter, as delays in
shipments reduced sales revenue, and changes in factory production
schedules increased manufacturing costs. Earnings were also
impacted by continued aggressive pricing in all of the Company's
markets, an unfavorable product mix, and higher prices paid for
epoxy resin raw materials, which are petroleum-based products.
Sales from domestic operations were $19,108,000, relatively flat from sales of
$19,081,000 in the same period last
year. Sales from international operations increased to
$3,460,000, from sales of
$2,733,000 in the same period last
year. The order backlog increased to $68.2
million at January 31, 2011,
up from $66.0 million at October 31, 2010 and $65.5
million at January 31, 2010.
"The third quarter was more difficult than expected," said
William A. Shumaker, President and Chief Executive Officer.
"The manufacturing and shipment delays resulting from
customer changes and the unfavorable product mix brought unexpected
operational challenges. We have adjusted our manufacturing
schedules, and the orders that were delayed are now being
manufactured and are scheduled for shipment in the fourth
quarter.
"In the domestic marketplace, larger laboratory furniture
projects have continued to hold up relatively well during the
economic slowdown, and bidding activity for these projects
continues to remain at a high level. On the other hand, a sustained
improvement in the number of smaller laboratory projects has not
materialized. Opportunities in the international marketplace have
continued to improve for some time now, and the Company is very
active in quoting these projects.
"We have begun to see benefits from our recently expanded epoxy
resin facility in Statesville, as
production of these products increased significantly during the
quarter. Other initiatives continued to make good progress, as we
successfully closed several orders in the quarter for our new
product lines of biological safety cabinets, casework and millwork
for the healthcare industry, and specialty safety cabinets.
"Regarding the fourth quarter, with the delayed orders now
shipping and the product mix improved, we expect sales and earnings
will be much improved over the third quarter and more in line with
the first two quarters of the current fiscal year."
Sales for the nine months ended January
31, 2011 were $73,051,000,
down 2.8% from sales of $75,151,000
in the same period last year. Domestic sales for the nine months
were $62,324,000, down from sales of
$67,152,000 in the same period last
year. Sales from international operations were $10,727,000 for the nine months, up from sales of
$7,999,000 in the same period last
year. Net earnings for the nine months ended January 31, 2011 were $1,598,000, or $0.62 per diluted share, down from net earnings
of $3,044,000, or $1.18 per diluted share, in the same period last
year.
The Company's financial condition continues to be strong. Cash
on hand was $2,704,000 at
January 31, 2011, as compared to
$2,443,000 at January 31, 2010. Working capital was
$21,341,000, up slightly from
$21,327,000 at January 31, 2010. Short term borrowings under the
bank line of credit were $696,000,
down from $2,909,000 at January 31, 2010. Total bank borrowings and
capital lease obligations were $4,752,000, up from $3,144,000 at January 31,
2010.
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
January
31
|
Nine Months
Ended
January
31
|
|
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
|
|
|
|
Net sales
|
$22,568
|
$21,814
|
$73,051
|
$75,151
|
|
Cost of products sold
|
18,405
|
17,129
|
58,472
|
58,492
|
|
Gross profit
|
4,163
|
4,685
|
14,579
|
16,659
|
|
Operating expenses
|
4,007
|
3,663
|
11,953
|
11,605
|
|
Operating earnings
|
156
|
1,022
|
2,626
|
5,054
|
|
Other expense
|
1
|
--
|
--
|
--
|
|
Interest income
(expense)
|
17
|
(35)
|
(105)
|
(115)
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
174
|
987
|
2,521
|
4,939
|
|
Income tax expense
|
49
|
333
|
792
|
1,673
|
|
|
|
|
|
|
|
Net earnings
|
125
|
654
|
1,729
|
3,266
|
|
|
|
|
|
|
|
Less: net earnings attributable
to
|
|
|
|
|
|
the noncontrolling
interest
|
39
|
33
|
131
|
222
|
|
Net earnings attributable
to
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
$86
|
$621
|
$1,598
|
$3,044
|
|
|
|
|
|
|
|
Net earnings per share
attributable to
|
|
|
|
|
|
Kewaunee
Scientific Corporation stockholders
|
|
|
|
|
|
Basic
|
$0.03
|
$0.24
|
$0.62
|
$1.19
|
|
Diluted
|
$0.03
|
$0.24
|
$0.62
|
$1.18
|
|
Weighted average number of
common
|
|
|
|
|
|
shares outstanding
(in thousands)
|
|
|
|
|
|
Basic
|
2,576
|
2,569
|
2,574
|
2,562
|
|
Diluted
|
2,592
|
2,581
|
2,583
|
2,570
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
(in
thousands)
|
|
|
|
|
|
|
January
31
|
April
30
|
|
|
2011
|
2010
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$2,160
|
$1,722
|
|
Restricted cash
|
544
|
544
|
|
Receivables, less
allowances
|
21,056
|
26,169
|
|
Inventories
|
10,521
|
8,350
|
|
Prepaid expenses and other
current assets
|
1,831
|
1,797
|
|
Total current
assets
|
36,112
|
38,582
|
|
Net property, plant and
equipment
|
16,697
|
13,815
|
|
Other assets
|
4,383
|
4,224
|
|
Total Assets
|
$57,192
|
$56,621
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term borrowings
|
$696
|
$4,872
|
|
Current obligations under
capital leases
|
81
|
82
|
|
Current portion of long-term
debt
|
200
|
--
|
|
Accounts payable
|
8,415
|
9,540
|
|
Other current
liabilities
|
5,379
|
4,003
|
|
Total current
liabilities
|
14,771
|
18,497
|
|
Other non-current
liabilities
|
9,879
|
6,452
|
|
Total
liabilities
|
24,650
|
24,949
|
|
Noncontrolling
interest
|
1,349
|
1,239
|
|
Kewaunee Scientific Corporation
equity
|
31,193
|
30,433
|
|
Total equity
|
32,542
|
31,672
|
|
Total Liabilities and
Equity
|
$57,192
|
$56,621
|
|
|
|
|
Contact:
|
D. Michael Parker
|
|
|
704/871-3290
|
|
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|
SOURCE Kewaunee Scientific Corporation