STATESVILLE, N.C., Dec. 4, 2018 /PRNewswire/ -- Kewaunee Scientific
Corporation (NASDAQ: KEQU) today reported results for its second
quarter of fiscal year 2019, ended October 31, 2018.
Sales for the quarter were $37,278,000, a 10.1% decrease from sales of
$41,471,000 in the prior year second
quarter. Domestic sales for the quarter were $30,622,000, up 7.3% from sales of $28,540,000 in the second quarter of last
year. International sales for the quarter were $6,656,000, down 48.5% from sales of $12,931,000 in the second quarter last year.
Domestic sales increased year-over-year due to strength in the
Company's dealer and distribution channels as customers
continue to invest in laboratory projects that utilize
Kewaunee's products. As highlighted in the Company's first
quarter press release, Kewaunee's International segment delivered
an unusually large order in the Middle East during the prior year, which
adversely affects the operating performance comparison of the
International segment in the second quarter of the current fiscal
year. Also unfavorably impacting Kewaunee's International
segment sales performance was a significant year-over-year
decline in the exchange rate of the Indian rupee versus the US
dollar.
Pre-tax earnings for the quarter were $1,869,000 compared to $2,743,000 for the prior year period.
Pre-tax earnings were impacted by the year-over-year decline in
sales, the foreign exchange impact, as well as continued increases
in raw material and freight costs. Net earnings decreased
18.0% for the quarter to $1,414,000,
or $0.51 per diluted share, as
compared to net earnings of $1,724,000, or $0.62 per diluted share, for the quarter ended
October 31, 2017.
Kewaunee continues to win orders globally, with the Company's
order backlog at $101 million at
October 31, 2018, as compared to
$118 million at October 31, 2017, and $102
million at July 31, 2018. The Company has a
strong volume of outstanding quotations globally and expects to be
awarded significant projects over the balance of the fiscal
year.
The Company's balance sheet and financial condition remain
strong. Unrestricted cash on hand was $9.5
million at the end of the quarter, as compared to
$11.8 million at the end of the
second quarter last year. Working capital was $36.4 million, as compared to $34.2 million at the end of the second quarter
last year. Short-term debt and interest rate swaps were
$4.7 million at the end of the
quarter, as compared to $7.7 million
at the end of the second quarter last year, and long-term debt was
$822,000 as compared to $1.8 million at the end of the second quarter
last year. The debt-to-equity ratio at October 31, 2018 was
.14-to-1, as compared to .24-to-1 at October
31, 2017.
"Kewaunee's Domestic segment had a solid second quarter,
offset by softness in our International segment and higher raw
material costs," said David M.
Rausch, Kewaunee's President and Chief Executive
Officer. "Looking forward, we have a strong order
backlog and a large pipeline of outstanding quotations. We
also expect to see a continuation of the gains in operating
performance made during the second quarter. As the market leader,
Kewaunee will continue to drive its strategy of worldwide growth
through operational excellence to create value for its customers
and shareholders."
About Kewaunee Scientific
Founded in 1906, Kewaunee
Scientific Corporation is a recognized global leader in the design,
manufacture, and installation of laboratory, healthcare, and
technical furniture products. The Company's products include steel,
wood, and laminate casework, fume hoods, adaptable modular systems,
moveable workstations, stand-alone benches, biological safety
cabinets, and epoxy resin worksurfaces and sinks.
The Company's corporate headquarters are located in Statesville, North Carolina. Direct sales
offices are located in the United
States, India, Singapore, and China. Three manufacturing facilities are
located in Statesville serving the
domestic and international markets, and one manufacturing facility
is located in Bangalore, India
serving the local and Asian markets. The Company's China headquarters and sales office are
located in Shanghai, China.
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. Additional
information concerning these 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.
Contact: Thomas D. Hull
III
(704)
871-3290
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
($ and shares in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
October
31,
|
|
|
October
31,
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
Net sales
|
|
$
37,278
|
|
$
41,471
|
|
|
$
79,430
|
|
$
75,352
|
Cost of products
sold
|
|
29,505
|
|
33,560
|
|
|
64,183
|
|
60,620
|
Gross
profit
|
|
7,773
|
|
7,911
|
|
|
15,247
|
|
14,732
|
Operating
expenses
|
|
5,963
|
|
5,256
|
|
|
11,726
|
|
10,389
|
Operating
earnings
|
|
1,810
|
|
2,655
|
|
|
3,521
|
|
4,343
|
Other
income
|
|
150
|
|
177
|
|
|
314
|
|
345
|
Interest expense,
net
|
|
(91)
|
|
(89)
|
|
|
(182)
|
|
(148)
|
Earnings before
income taxes
|
|
1,869
|
|
2,743
|
|
|
3,653
|
|
4,540
|
Income tax
expense
|
|
415
|
|
978
|
|
|
783
|
|
1,583
|
Net
earnings
|
|
1,454
|
|
1,765
|
|
|
2,870
|
|
2,957
|
Less: net earnings
attributable to the noncontrolling interest
|
|
40
|
|
41
|
|
|
49
|
|
85
|
Net earnings
attributable to Kewaunee Scientific Corporation
|
|
$
1,414
|
|
$
1,724
|
|
|
$
2,821
|
|
$
2,872
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share attributable to
|
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$0.52
|
|
$0.64
|
|
|
$
1.03
|
|
$
1.06
|
Diluted
|
|
$0.51
|
|
$0.62
|
|
|
$
1.01
|
|
$
1.04
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,743
|
|
2,717
|
|
|
2,740
|
|
2,715
|
Diluted
|
|
2,800
|
|
2,776
|
|
|
2,802
|
|
2,766
|
|
|
|
|
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
|
|
April
30,
|
|
|
|
|
|
|
|
2018
|
|
2018
|
|
|
|
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
9,477
|
|
$
9,716
|
|
|
|
|
|
Restricted
cash
|
|
679
|
|
1,242
|
|
|
|
|
|
Receivables, less
allowances
|
|
29,785
|
|
32,660
|
|
|
|
|
|
Inventories
|
|
17,097
|
|
17,662
|
|
|
|
|
|
Prepaid expenses and
other current assets
|
|
3,251
|
|
2,224
|
|
|
|
|
|
Total Current Assets
|
|
60,289
|
|
63,504
|
|
|
|
|
|
Net property, plant
and equipment
|
|
14,868
|
|
14,661
|
|
|
|
|
|
Other
assets
|
|
5,439
|
|
6,193
|
|
|
|
|
|
Total
Assets
|
|
$
80,596
|
|
$
84,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
and interest rate swaps
|
|
$
4,658
|
|
$
3,885
|
|
|
|
|
|
Current portion of
long-term debt and lease obligations
|
|
1,184
|
|
1,167
|
|
|
|
|
|
Accounts
payable
|
|
10,726
|
|
14,754
|
|
|
|
|
|
Other current
liabilities
|
|
7,468
|
|
7,756
|
|
|
|
|
|
Total Current Liabilities
|
|
24,036
|
|
27,562
|
|
|
|
|
|
Other non-current
liabilities
|
|
7,177
|
|
9,275
|
|
|
|
|
|
Total Liabilities
|
|
31,213
|
|
36,837
|
|
|
|
|
|
Kewaunee Scientific
Corporation equity
|
|
48,920
|
|
47,059
|
|
|
|
|
|
Noncontrolling
interest
|
|
463
|
|
462
|
|
|
|
|
|
Total Stockholders' Equity
|
|
49,383
|
|
47,521
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
80,596
|
|
$
84,358
|
|
|
|
|
|
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SOURCE Kewaunee Scientific Corporation