STATESVILLE, N.C., Aug. 24, 2011 /PRNewswire/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported sales and earnings for
its first quarter ended July 31,
2011.
Sales for the quarter were $26,321,000, up 5.9% from sales of $24,858,000 in the first quarter last year. Net
earnings for the quarter were $22,000, or $0.01
per diluted share, down from net earnings of $657,000, or $0.25
per diluted share, in the first quarter of the prior year. Earnings
for the quarter were unfavorably impacted by lower selling prices
and higher costs paid for raw materials, particularly steel and
epoxy resin. Additionally, costs associated with the startup of
manufacturing for the Company's new laminate furniture product line
reduced after-tax earnings by approximately $188,000, or $0.07
per diluted share.
Domestic sales for the quarter were $23,396,000, up from sales of $20,948,000 in the first quarter last year. The
domestic marketplace for laboratory projects was generally
unchanged from recent quarters, as demand for larger projects
continued to hold up relatively well, while demand for small and
mid-sized laboratory projects remained well below pre-recession
levels. International sales for the quarter were $2,925,000, down from $3,910,000 in the first quarter last year.
Although not reflected in the sales figure, the recovery in
the international laboratory marketplace appears to be well
underway, as the Company is seeing and bidding increasing numbers
of opportunities in Asia and the
Middle East. The Company's
expanded and strengthened international sales representation is
helping the Company take early advantage of the recovery.
The order backlog grew to a record $69.7
million at July 31, 2011, up
from $65.7 million at April 30, 2011 and $66.9
million at July 31, 2010.
"Dramatic increases in raw material prices, particularly steel
and epoxy resin, which is petroleum-based, severely pressured
profit margins during the quarter," said Mr. Shumaker, President
and Chief Executive Officer. "Facing these higher costs, we
accelerated and expanded our cost reduction efforts throughout the
Company. We now have identified and put in place new initiatives
that are projected to reduce our annual costs by over $3 million. Savings related to many of these
initiatives will begin in the second quarter and are expected to
continue throughout the remainder of the fiscal year.
"Looking forward for the remainder of this fiscal year, we
expect earnings for the second quarter to be much improved over the
first quarter, although below last year's strong second quarter
results," Mr. Shumaker continued. "We also expect the second half
of the fiscal year to be much better than the first. Our
projections are based on an analysis of orders in the order
backlog, cost savings initiatives underway, increased sales
opportunities in the international marketplace, and sales and
earnings benefits from new products."
The Company continues to have a strong balance sheet. Working
capital was $22.1 million at
July 31, 2011, as compared to
$18.9 million at the end of the first
quarter last year. Cash on hand was $3.6
million at the end of the quarter, as compared to
$2.3 million at the end of the first
quarter last year. Short-term borrowings under the Company's
$14 million bank line of credit were
$8.7 million at the end of the
quarter, as compared to $7.5 million
at the end of the first quarter last year, and total bank
borrowings and capital lease obligations were $12.6 million, as compared to $7.7 million at the end of the first quarter last
year. The debt-to-equity ratio was .40-to-1 at the end of the
quarter, as compared to .25-to-1 at the end of the first quarter
last year.
Kewaunee Scientific Corporation is a recognized leader in the
design, manufacture, and installation of laboratory, technical and
laminate furniture products. Laboratory furniture products include
both steel and wood cabinetry, fume hoods, adaptable modular
systems, moveable workstations, biological safety cabinets and
epoxy resin counters and sinks. Technical furniture products
include column systems, slotted-post systems, pedestal systems and
stand-alone benches. Laminate furniture includes laminate casework,
systems and related products for educational, healthcare and
industrial applications.
The Company's corporate headquarters are located in Statesville, North Carolina. Three
manufacturing facilities are located in Statesville, NC serving the domestic and
international markets. One manufacturing facility is located
in Bangalore, India serving the
local and Asian markets. The Company has subsidiaries in
Singapore and India. 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.
Contact:
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D. Michael
Parker
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704/871-3290
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Consolidated
Statements of Operations [unaudited]
(in
thousands, except per share data)
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Three Months
Ended
|
|
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July
31
2011
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July
31
2010
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Net
sales
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$26,321
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$24,858
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|
Cost of products
sold
|
22,133
|
19,859
|
|
|
|
|
|
Gross
profit
|
4,188
|
4,999
|
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Operating
expenses
|
3,955
|
3,901
|
|
|
|
|
|
Operating
earnings
|
233
|
1,098
|
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Other
expense
|
(1)
|
--
|
|
|
|
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Interest
expense
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(95)
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(45)
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|
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Earnings
before income taxes
|
137
|
1,053
|
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Income tax
expense
|
29
|
329
|
|
|
|
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Net
earnings
|
108
|
724
|
|
Less: net earnings
attributable to
|
|
|
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the
noncontrolling interest
|
(86)
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(67)
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|
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Net earnings
attributable to
|
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Kewaunee Scientific Corporation
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$22
|
$657
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Net earnings per
share attributable to
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Kewaunee Scientific Corporation stockholders
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Basic
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$0.01
|
$0.26
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Diluted
|
$0.01
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$0.25
|
|
|
|
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Weighted average
number of common
|
|
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|
shares
outstanding
|
|
|
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Basic
|
2,579
|
2,573
|
|
Diluted
|
2,580
|
2,578
|
|
|
|
|
|
|
|
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Condensed
Consolidated Balance Sheets
(in
thousands)
|
|
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|
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July
31
2011
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April
30
2011
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Assets
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[unaudited]
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|
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Cash and cash
equivalents
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$2,652
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$2,402
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Restricted cash
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908
|
553
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Receivables, less
allowances
|
27,282
|
27,346
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Inventories
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10,261
|
10,466
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Prepaid expenses and other
current assets
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2,345
|
1,612
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Total Current
Assets
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43,448
|
42,379
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Net property, plant and
equipment
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16,202
|
16,575
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Other assets
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4,112
|
4,104
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Total Assets
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$63,762
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$63,058
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Liabilities and Stockholders'
Equity
|
|
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Short-term borrowings
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$8,672
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$6,588
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Current obligations under
capital leases and long-term debt
|
284
|
283
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|
Accounts payable
|
7,890
|
9,770
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Other current
liabilities
|
4,531
|
3,623
|
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Total Current
Liabilities
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21,377
|
20,264
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Other non-current
liabilities
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9,440
|
9,778
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Total
Liabilities
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30,817
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30,042
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Noncontrolling
interest
|
1,634
|
1,525
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Kewaunee Scientific Corporation
equity
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31,311
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31,491
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Total Equity
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32,945
|
33,016
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Total Liabilities and
Equity
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$63,762
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$63,058
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SOURCE Kewaunee Scientific Corporation