STATESVILLE, N.C., Feb. 26, 2019 /PRNewswire/ -- Kewaunee
Scientific Corporation (NASDAQ: KEQU) today reported results for
its third quarter of fiscal year 2019, ended January 31, 2019.
Sales for the quarter were $32,372,000, a 15.2% decrease from sales of
$38,190,000 in the prior year third
quarter. Domestic sales for the quarter were $25,217,000, down 15.2% from sales of
$29,734,000 in the third quarter of
last year. International sales for the quarter were
$7,155,000, down 15.4% from sales of
$8,456,000 in the third quarter last
year.
Domestic sales decreased year-over-year as the activity in the
marketplace slowed dramatically throughout the quarter. The
slowdown, felt across the Company's direct, dealer, and
distribution channels, reduced production below the rate necessary
to generate favorable financial results. International sales
decreased similarly, with strength in the Indian market being
offset by softness in the Middle
East and Asian markets. Also negatively impacting
Kewaunee's International segment performance was a year-over-year
decline in the exchange rate of the Indian rupee versus the US
dollar.
Pre-tax earnings for the quarter were $35,000 compared to $2,484,000 for the prior year period.
Pre-tax earnings were impacted by the year-over-year decline in
sales, increases in raw material costs and the previously mentioned
foreign exchange impact. Net earnings decreased 103% for the
quarter to a loss of ($22,000), or
($0.01) per diluted share, as
compared to net earnings of $883,000,
or $0.31 per diluted share, for the
quarter ended January 31, 2018.
The Company's order backlog is $96
million at January 31, 2019,
as compared to $101 million at
October 31, 2018 and $116 million at January
31, 2018. The Company continues to have a strong
volume of outstanding quotations globally and is aggressively
pursuing these projects.
The Company's balance sheet and financial condition remain
strong. Unrestricted cash on hand was $10.8
million at the end of the quarter, as compared to
$9.2 million at the end of the third
quarter last year. Working capital was $36.1
million, as compared to $36.2
million at the end of the third quarter last year.
Short-term debt and interest rate swaps were $5.1 million at the end of the quarter, as
compared to $4.8 million at the end
of the third quarter last year, and long-term debt was $526,000 as compared to $1.6 million at the end of the third quarter last
year. The debt-to-equity ratio at January 31, 2019 was
.14-to-1, as compared to .16-to-1 at January
31, 2018.
"The third quarter is traditionally the Company's softest
quarter as it falls around customers' calendar year-end as well as
the holidays. This quarter was especially challenging as expected
orders were delayed, resulting in our facilities being
under-utilized. The quarter was also impacted by substantially
higher raw material costs in steel and resin as compared to the
prior year third quarter.
There still remains a significant amount of activity for our
products and services both domestically and abroad; however,
economic and geopolitical uncertainty have caused many customers to
postpone awards as well as the start of new projects," said
David M. Rausch, Kewaunee's
President and Chief Executive Officer. "Looking forward, we
anticipate these trends will continue through the remainder of the
fiscal year and are making the necessary adjustments to return to
profitability in the fourth quarter."
In other news, the Company's Board of Directors declared a
quarterly cash dividend of nineteen
cents per outstanding share, payable on March 25, 2019 to stockholders of record at the
close of business on March 11,
2019.
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.
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
($ and shares in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
January
31,
|
|
|
January
31,
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
Net sales
|
|
$
32,372
|
|
$
38,190
|
|
|
$
111,802
|
|
$
113,542
|
Cost of products
sold
|
|
27,142
|
|
29,836
|
|
|
91,325
|
|
90,456
|
Gross
profit
|
|
5,230
|
|
8,354
|
|
|
20,477
|
|
23,086
|
Operating
expenses
|
|
5,305
|
|
5,971
|
|
|
17,031
|
|
16,360
|
Operating earnings
(loss)
|
|
(75)
|
|
2,383
|
|
|
3,446
|
|
6,726
|
Other
income
|
|
186
|
|
179
|
|
|
500
|
|
524
|
Interest expense,
net
|
|
(76)
|
|
(78)
|
|
|
(258)
|
|
(226)
|
Earnings before
income taxes
|
|
35
|
|
2,484
|
|
|
3,688
|
|
7,024
|
Income tax
expense
|
|
20
|
|
1,566
|
|
|
803
|
|
3,149
|
Net
earnings
|
|
15
|
|
918
|
|
|
2,885
|
|
3,875
|
Less: net earnings
attributable to the noncontrolling interest
|
|
37
|
|
35
|
|
|
86
|
|
120
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
$
(22)
|
|
$
883
|
|
|
$
2,799
|
|
$
3,755
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share attributable to
|
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
|
|
|
Basic
|
|
($0.01)
|
|
$0.32
|
|
|
$
1.02
|
|
$
1.38
|
Diluted
|
|
($0.01)
|
|
$0.31
|
|
|
$
1.00
|
|
$
1.35
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,744
|
|
2,722
|
|
|
2,741
|
|
2,717
|
Diluted
|
|
2,794
|
|
2,784
|
|
|
2,799
|
|
2,772
|
|
|
|
|
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
($ in
thousands)
|
|
|
|
|
|
|
|
January
31,
|
|
April
30,
|
|
|
2019
|
|
2018
|
Assets
|
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
|
$
10,771
|
|
$
9,716
|
Restricted
cash
|
|
606
|
|
1,242
|
Receivables, less
allowances
|
|
27,929
|
|
32,660
|
Inventories
|
|
16,672
|
|
17,662
|
Prepaid expenses and
other current assets
|
|
3,778
|
|
2,224
|
Total Current Assets
|
|
59,756
|
|
63,504
|
Net property, plant
and equipment
|
|
15,202
|
|
14,661
|
Other
assets
|
|
4,604
|
|
6,193
|
Total
Assets
|
|
$
79,562
|
|
$
84,358
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Short-term borrowings
and interest rate swaps
|
|
$
5,118
|
|
$
3,885
|
Current portion of
long-term debt and lease obligations
|
|
1,184
|
|
1,167
|
Accounts
payable
|
|
11,106
|
|
14,754
|
Other current
liabilities
|
|
6,298
|
|
7,756
|
Total Current Liabilities
|
|
23,706
|
|
27,562
|
Other non-current
liabilities
|
|
6,345
|
|
9,275
|
Total Liabilities
|
|
30,051
|
|
36,837
|
Kewaunee Scientific
Corporation equity
|
|
48,990
|
|
47,059
|
Noncontrolling
interest
|
|
521
|
|
462
|
Total Stockholders' Equity
|
|
49,511
|
|
47,521
|
Total Liabilities and
Stockholders' Equity
|
|
$
79,562
|
|
$
84,358
|
|
|
|
|
|
Contact:
|
Thomas D. Hull
III
|
|
(704)
871-3290
|
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SOURCE Kewaunee Scientific Corporation