STATESVILLE, N.C., July 8, 2021 /PRNewswire/ -- Kewaunee
Scientific Corporation (NASDAQ: KEQU) today announced results for
its fourth quarter and its fiscal year ended April 30,
2021.
Fiscal Year 2021 Fourth Quarter Results:
Sales during the fourth quarter of fiscal year 2021 were
$38,707,000, an increase of 13.0%, as
compared to sales of $34,257,000 from
the prior year fourth quarter. Pre-tax loss for the quarter
was $950,000 compared to a pre-tax
loss of $1,122,000 for the prior year
period. The Company experienced significantly higher raw
material costs in the fourth quarter of approximately $769,000 when compared to the prior year period.
This was due to supply disruptions with key raw materials for our
resin product, as well as capacity constraints for steel and
related inputs which were temporarily halted in response to the
COVID-19 pandemic. Net loss was $2,975,000 compared to a loss of $1,062,000 for the prior year period. EBITDA[1]
for the quarter was ($302,000)
compared to ($458,000) for the prior
year period. Tax expense was unfavorably impacted by
$1.4 million in the fourth quarter
when compared to the prior year period as the Company finalized its
annual tax provision, which reduced the net operating loss
carryback allowances made available under the Coronavirus Aid,
Relief, and Economic Security Act ("CARES Act") signed into law on
March 27, 2020. Diluted loss per
share was ($1.08), as compared to
diluted loss per share of ($0.39) in
the prior year fourth quarter.
The Company's order backlog was $114.5
million on April 30, 2021,
increasing from $103.0 million at
January 31, 2021, and $100.9 million at April
30, 2020.
Domestic Segment - Domestic sales for the quarter were
$27,139,000, a decrease of 1.4% from
sales of $27,533,000 in the prior
year. Domestic sales were relatively flat when compared to
the prior year period as the moderated pace of construction
activity resulting from the COVID-19 pandemic continued throughout
the quarter. Domestic segment net loss was $56,000 compared to $401,000 in the prior year. Domestic segment
EBITDA was ($34,000) compared to
$402,000 for the prior year period as
raw material input costs surged during the quarter and were not
able to be passed along to customers as a result of the fixed
nature of our contracts.
International Segment - International sales for the
quarter were $11,568,000, an increase
of 72.0% from sales of $6,724,000 in
the prior year. International sales were stronger when
compared to the prior year period as several projects pushed to
complete before government mandated shut-downs and closure of
project sites went into effect in India due to a national surge in COVID-19
cases. International segment net income was $961,000 compared to $702,000 in the prior year. International segment
EBITDA was $1,529,000 compared to
$309,000 for the prior year period,
driven by the increased sales in the Indian market when compared to
the same period in the prior year.
1 EBITDA is a non-GAAP financial measure. See the
table below for a reconciliation of EBITDA and segment EBITDA to
net earnings (loss), the most directly comparable GAAP measure.
Corporate Segment – Corporate segment net loss was
$3,880,000 for the quarter, as
compared to $1,363,000 from the prior
year. Corporate segment EBITDA for the quarter was ($1,797,000), an unfavorable decrease of 53.7%
from corporate EBITDA of ($1,169,000)
for the prior year period. The primary drivers of the
increase were higher compensation expense and higher pension
expense in the most recent period compared to the prior year
period.
Fiscal Year 2021 Full Year Results:
Sales during fiscal year 2021 were $147,469,000, relatively flat from sales of
$147,540,000 in the prior year.
During fiscal year 2021, both of the Company's operating
segments were negatively impacted by the COVID-19 pandemic, which
resulted in government mandated shutdowns, a slowdown in project
awards, closure of project sites, and delays in manufacturing
products.
Pre-tax loss for the fiscal year was $2,617,000, a decrease of 8.7% compared to a
pre-tax loss of $2,866,000 for the
prior period. The net loss for the fiscal year was
$3,672,000, or ($1.33) per diluted share, as compared to net
loss of $4,687,000, or ($1.70) per diluted share, for the year ended
April 30, 2020. EBITDA for the year
was $171,000 compared to ($207,000) for the prior year.
Domestic Segment - Domestic sales for the fiscal year
were $111,035,000, a decrease of 3.5%
from sales of $115,103,000 in the
prior year. Domestic segment net income was $921,000 compared to $591,000 in the prior year. Domestic segment
EBITDA was $3,560,000 compared to
$3,547,000 for the prior year.
Domestic segment EBITDA as a percentage of sales improved
when compared to the prior year period due to actions taken to
reduce operating expenses and improve manufacturing
productivity. Operating costs were unfavorably impacted
throughout the year due to additional COVID-related expenses,
increased raw materials costs that could not be passed along to
customers, and expenses related to strategic initiatives.
These initiatives include investments in the Company's front-end
technology infrastructure and the re-capitalization of certain
aspects of our manufacturing operations.
International Segment - International sales for the
fiscal year were $36,434,000, an
increase of 12.3% from sales of $32,437,000 in the prior year. The
strength in international sales during the fiscal year was
principally driven by the Indian market. Activity in the
Middle East and ASEAN markets
slowed significantly during the fiscal year due to COVID-19
restrictions, impacting project completions and new project
awards. International Segment net income was $2,049,000 compared to a net loss of $602,000 in the prior year. International segment
EBITDA was $3,164,000 compared to
$1,801,000 for the prior year, driven
by the strength in the Indian market.
Corporate Segment – Corporate segment net loss was
$6,642,000 compared to $4,676,000 in the prior year. Corporate segment
EBITDA for the year was ($6,553,000),
an unfavorable decrease of 18.0% from corporate EBITDA of
($5,555,000) in the prior year.
The primary drivers of increased corporate expenses were
increases in professional fees, an increase in compensation
expense, and an increase in pension expense due to changes in
underlying valuation assumptions as of the prior fiscal year.
Total cash on hand on April 30,
2021 was $5,731,000, as
compared to $5,215,000 at
April 30, 2020. Working capital
was $26,276,000, as compared to
$27,171,000 at the end of the fourth
quarter last year. Short-term debt was $6,828,000 on April 30,
2021, as compared to $4,719,000 at April 30,
2020, and long-term debt was $112,000 on April 30,
2021 as compared to $132,000
at April 30, 2020. The Company's
debt-to-equity ratio on April 30,
2021 was .39-to-1, as compared to .36-to-1 at April 30,
2020.
"Our most recent fiscal year was a challenging year for Kewaunee
and our Associates as we combatted the challenges brought by
COVID-19," said Thomas D. Hull III,
Kewaunee's President and Chief Executive Officer. "The
pandemic resulted in significant uncertainty throughout the year
regarding the ability to deliver existing projects as well as the
timing of awards for new projects. Recognizing this, we
remained active in the marketplace, ending the year with our
strongest backlog since 2018, positioning the Company well for
fiscal year 2022.
"We made significant progress on several strategic initiatives,
including investing in domestic technology infrastructure and the
re-capitalization of certain aspects of domestic manufacturing
operations. We also launched a new product line focused on meeting
the needs of the growing healthcare storage markets
(www.everhutch.com), leveraging Kewaunee's strength as a fabricator
of high-quality products.
"As we look forward, I expect demand for the products and
services the Company provides globally will continue to increase
due to a renewed focus on being prepared to combat global health
challenges as we saw during this past year. I believe the Company
is well positioned to capitalize on future investments made in the
pharmaceutical, biotechnology, health care, education and other
markets served by the Company.
"In the near term, rapidly escalating raw material pricing will
be a headwind during the first half of fiscal year 2022 due to the
fixed nature of contracts we enter with customers. We have
taken steps to implement surcharges on new orders to offset broad
based price increases for basic materials including steel,
aluminum, hard woods, and resin products. The impact of these
surcharges will lag what has been an immediate impact of rising
commodity prices.
"As I close, I want to thank the Company's global Associates for
their commitment and dedication during this past year. The
pandemic provided the opportunity to show what we are made of as a
Company and our Associates have proven that our foundation is solid
and unshakeable."
EBITDA and Segment EBITDA Reconciliation
Q4 Ended Apr 30,
2020
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(401)
|
|
$
702
|
|
$
(1,363)
|
|
$
(1,062)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
(19)
|
|
60
|
|
41
|
Interest
Income
|
|
-
|
|
(32)
|
|
(68)
|
|
(100)
|
Income
Taxes
|
|
138
|
|
(404)
|
|
202
|
|
(64)
|
Depreciation and
Amortization
|
|
665
|
|
62
|
|
-
|
|
727
|
EBITDA
|
|
$
402
|
|
$
309
|
|
$
(1,169)
|
|
$
(458)
|
|
|
|
|
|
|
|
|
|
Q4 Ended Apr 30,
2021
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(56)
|
|
$
961
|
|
$
(3,880)
|
|
$
(2,975)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
2
|
|
77
|
|
$
79
|
Interest
Income
|
|
|
|
(62)
|
|
(5)
|
|
$
(67)
|
Income
Taxes
|
|
(572)
|
|
560
|
|
1,991
|
|
$
1,979
|
Depreciation and
Amortization
|
|
594
|
|
68
|
|
20
|
|
682
|
EBITDA
|
|
$
(34)
|
|
$
1,529
|
|
$
(1,797)
|
|
$
(302)
|
|
|
|
|
|
|
|
|
|
FY2020
YTD
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
591
|
|
$
(602)
|
|
$
(4,676)
|
|
$
(4,687)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
7
|
|
486
|
|
493
|
Interest
Income
|
|
-
|
|
(350)
|
|
(75)
|
|
(425)
|
Income
Taxes
|
|
585
|
|
2,463
|
|
(1,290)
|
|
1,758
|
Depreciation and
Amortization
|
|
2,371
|
|
283
|
|
-
|
|
2,654
|
EBITDA
|
|
$
3,547
|
|
$
1,801
|
|
$
(5,555)
|
|
$
(207)
|
|
|
|
|
|
|
|
|
|
FY2021
YTD
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
921
|
|
$
2,049
|
|
$
(6,642)
|
|
$
(3,672)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
4
|
|
385
|
|
$
389
|
Interest
Income
|
|
-
|
|
(216)
|
|
(7)
|
|
$
(223)
|
Income
Taxes
|
|
245
|
|
1,063
|
|
(318)
|
|
$
990
|
Depreciation and
Amortization
|
|
2,394
|
|
264
|
|
29
|
|
2,687
|
EBITDA
|
|
$
3,560
|
|
$
3,164
|
|
$
(6,553)
|
|
$
171
|
About Non-GAAP Measures
EBITDA and Segment EBITDA are calculated as net earnings (loss),
less interest expense and interest income, income taxes,
depreciation, and amortization. We believe EBITDA and Segment
EBITDA allow management and investors to compare our performance to
other companies on a consistent basis without regard to
depreciation and amortization, which can vary significantly between
companies depending upon many factors. EBITDA and Segment
EBITDA are not calculations based upon generally accepted
accounting principles, and the method for calculating EBITDA and
Segment EBITDA can vary among companies. The amounts included
in the EBITDA and Segment EBITDA calculations, however, are derived
from amounts included in the historical statements of
operations. EBITDA and Segment EBITDA should not be
considered as alternatives to net earnings (loss) or operating
earnings (loss) as an indicator of the Company's operating
performance, or as an alternative to operating cash flows as a
measure of liquidity.
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, Saudi Arabia, and Singapore. 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. 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. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions, and other important factors that could
significantly impact results or achievements expressed or implied
by such forward-looking statements. Such factors, risks,
uncertainties and assumptions include, but are not limited to:
competitive and general economic conditions and the ongoing
impact of the COVID-19 pandemic, including disruptions from
government mandates, both domestically and internationally; changes
in customer demands; technological changes in our operations or in
our industry; 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. The cautionary statements
made pursuant to the Reform Act herein and elsewhere by us should
not be construed as exhaustive. We cannot always predict what
factors would cause actual results to differ materially from those
indicated by the forward-looking statements. Over time, our actual
results, performance, or achievements will likely differ from the
anticipated results, performance or achievements that are expressed
or implied by our forward-looking statements, and such difference
might be significant and harmful to our stockholders' interest.
Many important factors that could cause such a difference are
described under the caption "Risk Factors," in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended April 30, 2020, which you should review
carefully, and in our subsequent quarterly reports on Form 10-Q and
current reports on Form 8-K. These reports are available on our
investor relations website at www.kewaunee.com and on the SEC
website at www.sec.gov. 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.
Exchange: NASDAQ
(KEQU)
Contact: Donald T. Gardner
III
704/871-3274
Kewaunee
Scientific Corporation
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
($ and shares in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
April
30,
|
|
April
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
|
$
38,707
|
|
$
34,257
|
|
$
147,469
|
|
$
147,540
|
Cost of products
sold
|
|
32,644
|
|
29,370
|
|
123,476
|
|
124,113
|
Gross
profit
|
|
6,063
|
|
4,887
|
|
23,993
|
|
23,427
|
Operating
expenses
|
|
6,716
|
|
5,897
|
|
25,309
|
|
25,772
|
Operating
loss
|
|
(653)
|
|
(1,010)
|
|
(1,316)
|
|
(2,345)
|
Pension
expense
|
|
(288)
|
|
(114)
|
|
(1,153)
|
|
(454)
|
Other income,
net
|
|
70
|
|
43
|
|
241
|
|
426
|
Interest
expense
|
|
(79)
|
|
(41)
|
|
(389)
|
|
(493)
|
Loss before income
taxes
|
|
(950)
|
|
(1,122)
|
|
(2,617)
|
|
(2,866)
|
Income tax expense
(benefit)
|
|
1,979
|
|
(64)
|
|
990
|
|
1,758
|
Net loss
|
|
(2,929)
|
|
(1,058)
|
|
(3,607)
|
|
(4,624)
|
Less: Net earnings
attributable to the noncontrolling interest
|
|
$
46
|
|
4
|
|
65
|
|
63
|
Net loss attributable
to Kewaunee Scientific Corporation
|
|
$
(2,975)
|
|
$
(1,062)
|
|
$
(3,672)
|
|
$
(4,687)
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(1.08)
|
|
$
(0.39)
|
|
$
(1.33)
|
|
$
(1.70)
|
Diluted
|
|
$
(1.08)
|
|
$
(0.39)
|
|
$
(1.33)
|
|
$
(1.70)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
2,763
|
|
2,751
|
|
2,760
|
|
2,750
|
Diluted
|
|
2,763
|
|
2,751
|
|
2,760
|
|
2,750
|
|
|
|
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
30,
|
|
April
30,
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
5,206
|
|
$
4,365
|
|
|
|
|
Restricted
cash
|
|
525
|
|
850
|
|
|
|
|
Receivables, less
allowances
|
|
34,095
|
|
28,062
|
|
|
|
|
Inventories
|
|
16,517
|
|
15,330
|
|
|
|
|
Income tax
receivable
|
|
955
|
|
2,717
|
|
|
|
|
Prepaid expenses and
other current assets
|
|
3,159
|
|
2,907
|
|
|
|
|
Total Current Assets
|
|
60,457
|
|
54,231
|
|
|
|
|
Net property, plant
and equipment
|
|
15,982
|
|
16,272
|
|
|
|
|
Right of use
assets
|
|
9,279
|
|
9,312
|
|
|
|
|
Other
assets
|
|
3,666
|
|
4,114
|
|
|
|
|
Total
Assets
|
|
$
89,384
|
|
$
83,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
6,828
|
|
$
4,719
|
|
|
|
|
Current portion of
lease obligations
|
|
1,369
|
|
1,301
|
|
|
|
|
Accounts
payable
|
|
16,780
|
|
13,114
|
|
|
|
|
Other current
liabilities
|
|
9,204
|
|
7,926
|
|
|
|
|
Total Current Liabilities
|
|
34,181
|
|
27,060
|
|
|
|
|
Long-term portion of
lease obligations
|
|
7,951
|
|
7,893
|
|
|
|
|
Other non-current
liabilities
|
|
5,765
|
|
10,273
|
|
|
|
|
Total Liabilities
|
|
47,897
|
|
45,226
|
|
|
|
|
Kewaunee Scientific
Corporation stockholders' equity
|
|
41,241
|
|
38,415
|
|
|
|
|
Noncontrolling
interest
|
|
246
|
|
288
|
|
|
|
|
Total Stockholders' Equity
|
|
41,487
|
|
38,703
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
89,384
|
|
$
83,929
|
|
|
|
|
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SOURCE Kewaunee Scientific Corporation