STATESVILLE, N.C., Dec. 3, 2013 /PRNewswire/ -- Kewaunee
Scientific Corporation (Nasdaq: KEQU) today reported sales and
earnings for its second quarter ended October 31, 2013.
Net earnings for the quarter were $725,000, or $0.28
per diluted share, as compared to net earnings of $649,000, or $0.25
per diluted share, in the second quarter last year. A favorable
product mix, lower operating costs, and the favorable impact of the
Company's previously reported buyout of the minority interest in
its principal international subsidiary more than offset the
unfavorable impact of lower sales during the quarter.
Sales for the quarter were $26,098,000, as compared to sales of $31,185,000 in the second quarter last year.
Domestic Operations sales were $22,061,000, as compared to sales of $25,683,000 in the second quarter last year. A
substantial portion of the decline in domestic sales was
anticipated as part of the previously reported strategy underway by
the Company to sell more laboratory projects through its dealer
network, with the Company providing the manufactured products and
the dealers providing related project management, installation and
other service activities. International Operations sales for the
quarter were $4,037,000, down from
$5,502,000 in the second quarter last
year. International Operations sales in the second quarter of the
prior year were increased by the shipments of several large
projects during that quarter.
The order backlog was $69.5
million at October 31, 2013,
as compared to $71.1 million at
July 31, 2013. Fewer laboratory construction projects of all
sizes, public and private, were available in the domestic
laboratory market during the quarter, as customers appeared
hesitant to move forward on projects because of ongoing political
and economic uncertainty. A decline in the domestic orders backlog
was substantially offset by an increase in international orders
backlog, as the Company continued to see good project opportunities
in its international markets.
Net earnings for the six months ended October 31, 2013 were
$2,312,000, or $0.89 per diluted share, as compared to net
earnings of $1,283,000, or
$0.50 per diluted share, in the same
period last year. Sales for the six months ended October 31, 2013 were $58,101,000, as compared to sales of $57,868,000, in the same period last year.
Domestic sales were $49,134,000, as
compared to sales of $48,312,000 in
the same period last year. International sales were
$8,967,000, as compared to sales of
$9,556,000 in the same period last
year.
Cash on hand was $5.9 million at
the end of the quarter, as compared to $6.5
million at the end of the same period last year.
Short-term borrowings under the Company's bank line of credit were
$2.5 million, as compared to
$5.3 million at the end of the same
period last year, and total bank borrowings were $7.5 million, as compared to $9.3 million. The debt-to-equity ratio was
.24-to-1, as compared to .30-to-1 at the end of the same period
last year. Working capital was $25.0
million, as compared to $24.2
million at the end of the same period last year.
"We had a good quarter, both internationally and domestically,"
said David M. Rausch, Kewaunee's
Chief Executive Officer. "Although sales and earnings were below
the pace of the past several quarters, a good portion of the sales
decline was related to our strategy to improve product mix and
margins. We also continue to make excellent progress in
strengthening our relationships with laboratory planners and
architects. Through this process we are gaining a better
understanding of their needs and desired products, which increases
their preference for the Kewaunee brand.
"Looking forward to the second half of our fiscal year, we
expect the domestic marketplace will continue to be challenging due
to the uncertainty in the economy and the resulting softening in
demand for our products. We continue to pursue new sales
opportunities, domestically and internationally, and maintain our
focus on cost savings initiatives throughout the organization. It
should be pointed out that our third quarter is normally the
slowest due to construction cycles and the large number of
holidays. The comparable third quarter of last year was an
exception to this norm, as several large international projects
shipped during that quarter."
Kewaunee Scientific Corporation is a recognized global leader in
the design, manufacture, and installation of laboratory,
healthcare, and technical 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. Healthcare furniture
products include laminate casework, storage systems, and related
products for healthcare applications. Technical furniture products
include column systems, slotted-post systems, pedestal systems, and
stand-alone benches.
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.
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. Such
factors, risks, uncertainties and assumptions include, but are not
limited to, competitive and general economic conditions,
both domestically and internationally; changes in customer demands;
dependence on customers' required delivery schedules; risks
related to fluctuations in the Company's operating results from
quarter to quarter; risks related to international operations,
including foreign currency fluctuations; changes in the
legal and regulatory environment; changes in raw materials and
commodity costs; and acts of terrorism, war, governmental action,
natural disasters and other Force Majeure events. Additional
information concerning these and other 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.
Kewaunee
Scientific Corporation
|
Consolidated
Statements of Operations (Unaudited)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
October
31,
|
|
October
31,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net sales
|
|
|
$
26,098
|
|
$
31,185
|
|
$
58,101
|
|
$
57,868
|
Cost of products
sold
|
|
21,205
|
|
25,958
|
|
46,632
|
|
47,398
|
Gross
profit
|
|
|
4,893
|
|
5,227
|
|
11,469
|
|
10,470
|
Operating
expenses
|
|
3,759
|
|
4,013
|
|
7,903
|
|
8,151
|
Operating
earnings
|
|
1,134
|
|
1,214
|
|
3,566
|
|
2,319
|
Other
income
|
|
90
|
|
108
|
|
170
|
|
176
|
Interest
expense
|
|
(72)
|
|
(101)
|
|
(160)
|
|
(215)
|
Earnings before
income taxes
|
|
1,152
|
|
1,221
|
|
3,576
|
|
2,280
|
Income tax
expense
|
|
406
|
|
414
|
|
1,213
|
|
785
|
Net
earnings
|
|
|
746
|
|
807
|
|
2,363
|
|
1,495
|
Less: net earnings
attributable to
|
|
|
|
|
|
|
|
|
the noncontrolling interest
|
|
21
|
|
158
|
|
51
|
|
212
|
Net earnings
attributable to
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation
|
|
$
725
|
|
$
649
|
|
$
2,312
|
|
$
1,283
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share attributable to
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
Basic
|
|
|
$
0.28
|
|
$
0.25
|
|
$
0.89
|
|
$
0.50
|
Diluted
|
|
|
$
0.28
|
|
$
0.25
|
|
$
0.89
|
|
$
0.50
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common
|
|
|
|
|
|
|
|
|
shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2,606
|
|
2,587
|
|
2,601
|
|
2,584
|
Diluted
|
|
|
2,633
|
|
2,601
|
|
2,618
|
|
2,592
|
|
|
|
|
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
|
|
April 30,
|
|
|
|
|
|
2013
|
|
2013
|
Assets
|
|
|
|
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
|
|
|
$
5,284
|
|
$
5,811
|
Restricted
Cash
|
|
|
|
603
|
|
691
|
Receivables, less
allowances
|
|
|
|
20,450
|
|
25,884
|
Inventories
|
|
|
|
|
13,174
|
|
13,203
|
Prepaid expenses and
other current assets
|
|
|
|
1,863
|
|
1,641
|
Total Current Assets
|
|
|
|
41,374
|
|
47,230
|
Net property, plant
and equipment
|
|
|
|
15,038
|
|
15,098
|
Other
assets
|
|
|
|
|
6,831
|
|
6,414
|
Total
Assets
|
|
|
|
|
$
63,243
|
|
$
68,742
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Short-term borrowings
and interest rate swap
|
|
|
|
$
2,719
|
|
$
6,997
|
Current portion of
long-term debt
|
|
|
|
421
|
|
200
|
Accounts
payable
|
|
|
|
8,247
|
|
10,406
|
Other current
liabilities
|
|
|
|
4,940
|
|
4,512
|
Total Current Liabilities
|
|
|
|
16,327
|
|
22,115
|
Other non-current
liabilities
|
|
|
|
15,351
|
|
12,934
|
Total Liabilities
|
|
|
|
31,678
|
|
35,049
|
Noncontrolling
interest
|
|
|
|
205
|
|
2,017
|
Kewaunee Scientific
Corporation equity
|
|
|
|
31,360
|
|
31,676
|
Total Equity
|
|
|
|
31,565
|
|
33,693
|
Total Liabilities and
Equity
|
|
|
|
$
63,243
|
|
$
68,742
|
|
|
|
|
|
|
|
|
Contact: D. Michael Parker
704/871-3290
SOURCE Kewaunee Scientific Corporation