STATESVILLE, N.C., Sept. 8, 2021 /PRNewswire/ -- PRNewswire /
Kewaunee Scientific Corporation (NASDAQ: KEQU) today announced
results for its first quarter ended July 31,
2021.
Fiscal Year 2022 First Quarter Results:
Sales during the first quarter of fiscal year 2022 were
$39,493,000, an increase of 8.4%, as
compared to sales of $36,423,000 from
the prior year first quarter. Pre-tax loss for the quarter
was $1,056,000 compared to a pre-tax
loss of $587,000 for the prior year
period. The Company experienced higher raw material costs in
the first quarter of approximately $1,651,000, net of surcharges, when compared to
the prior year period, as well as supplier constraints resulting
from COVID-19 and other supply disruptions. Net loss was
$1,345,000 compared to a loss of
$598,000 for the prior year period.
EBITDA1 for the quarter was ($342,000) compared to $137,000 for the prior year period. Diluted loss
per share was ($0.48), as compared to
diluted loss per share of ($0.22) in
the prior year first quarter.
The Company's order backlog was $120.6
million on July 31, 2021,
increasing from $101.2 million at
July 31, 2020, and $114.5 million at April
30, 2021. This is the highest order backlog in the
Company's history.
Domestic Segment - Domestic sales for the quarter were
$29,663,000, a decrease of 1.3% from
sales of $30,058,000 in the prior
year period. Domestic segment net loss was $209,000 compared to net earnings of $993,000 in the prior year period. Domestic
segment EBITDA was $399,000 compared
to $1,605,000 for the prior year
period, as raw material input costs increased compared to the prior
year period and were partially offset by surcharges implemented
during the quarter for those shipments where we were not restricted
by the fixed nature of our contracts with our customers.
International Segment - International sales for the
quarter were $9,830,000, an increase
of 54.4% from sales of $6,365,000 in
the prior year period. International sales were stronger when
compared to the prior year due to strong demand in the current year
period, coupled with reduced COVID-19 restrictions on construction
site access, and reduced prevalence of government mandated
shut-downs in India that had
significantly impacted the prior period. International segment net
income was $375,000 compared to
$124,000 in the prior year period.
International segment EBITDA was $647,000 compared to $165,000 for the prior year period.
Corporate Segment – Corporate segment net loss was
$1,511,000 for the quarter, as
compared to $1,715,000 in the prior
year period. Corporate segment EBITDA for the quarter was
($1,388,000), a favorable increase of
15.0% from corporate segment EBITDA of ($1,633,000) for the prior year period. The
primary driver of the decrease in corporate expenses was the
favorable impact from pension accounting as a result of the
recovery of the plan assets at fiscal year-end 2021 when compared
to fiscal year-end 2020.
Total cash on hand on July 31,
2021 was $5,467,000, as
compared to $5,731,000 at
April 30, 2021. Working capital
was $25,709,000, as compared to
$27,818,000 at the end of the first
quarter last year and $26,276,000 at
April 30, 2021. Short-term debt
was $8,854,000 on July 31, 2021, as compared to $6,828,000 at April 30,
2021, and long-term debt was $108,000 on July 31,
2021 as compared to $112,000
at April 30, 2021. The Company's
debt-to-equity ratio on July 31, 2021
was .44-to-1, as compared to .39-to-1 at April 30, 2021.
"Challenging conditions remained during our first quarter, as
some economies attempted to re-open while the Delta variant of
COVID-19 spread across the globe," said Thomas D. Hull III, Kewaunee's President and
Chief Executive Officer. "Escalating raw material costs continue to
negatively impact our profitability, with our first quarter
experiencing a negative impact to our profitability of
approximately $1.7M when compared to
the prior period. We have implemented surcharges on new
orders to offset broad based price increases for basic materials;
however, the impact of these surcharges will lag behind what has
been an immediate impact of rising commodity prices."
"Our commercial teams continue to be active in the marketplace,
growing the Company's backlog at the end of the first quarter to a
record high. We have seen a recent acceleration of order
awards within the domestic market which is encouraging. I am
watching closely to see if this velocity is sustained which would
bode well for the remainder of our fiscal 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.
|
EBITDA and Segment EBITDA Reconciliation
Quarter Ended July
31, 2020
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
993
|
|
$
124
|
|
$
(1,715)
|
|
$
(598)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
-
|
|
77
|
|
77
|
Interest
Income
|
|
-
|
|
(49)
|
|
(1)
|
|
(50)
|
Income
Taxes
|
|
-
|
|
21
|
|
-
|
|
21
|
Depreciation and
Amortization
|
|
612
|
|
69
|
|
6
|
|
687
|
EBITDA
|
|
$
1,605
|
|
$
165
|
|
$
(1,633)
|
|
$
137
|
|
|
|
|
|
|
|
|
|
Quarter Ended July
31, 2021
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(209)
|
|
$
375
|
|
$
(1,511)
|
|
$
(1,345)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
1
|
|
105
|
|
106
|
Interest
Income
|
|
-
|
|
(46)
|
|
(1)
|
|
(47)
|
Income
Taxes
|
|
-
|
|
251
|
|
-
|
|
251
|
Depreciation and
Amortization
|
|
608
|
|
66
|
|
19
|
|
693
|
EBITDA
|
|
$
399
|
|
$
647
|
|
$
(1,388)
|
|
$
(342)
|
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, as well as
supplier constraints and other supply disruptions; 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, 2021, 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
|
|
|
July
31,
|
|
|
2021
|
|
2020
|
Net sales
|
|
$
39,493
|
|
$
36,423
|
Cost of products
sold
|
|
33,819
|
|
30,542
|
Gross
profit
|
|
5,674
|
|
5,881
|
Operating
expenses
|
|
6,765
|
|
6,157
|
Operating
loss
|
|
(1,091)
|
|
(276)
|
Pension income
(expense)
|
|
89
|
|
(288)
|
Other income,
net
|
|
52
|
|
54
|
Interest
expense
|
|
(106)
|
|
(77)
|
Loss before income
taxes
|
|
(1,056)
|
|
(587)
|
Income tax
expense
|
|
251
|
|
21
|
Net loss
|
|
(1,307)
|
|
(608)
|
Less: net earnings
(loss) attributable to the noncontrolling interest
|
|
38
|
|
(10)
|
Net loss attributable
to Kewaunee Scientific Corporation
|
|
$
(1,345)
|
|
$
(598)
|
|
|
|
|
|
Net loss per share
attributable to
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
Basic
|
|
($0.48)
|
|
($0.22)
|
Diluted
|
|
($0.48)
|
|
($0.22)
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
Basic
|
|
2,777
|
|
2,756
|
Diluted
|
|
2,777
|
|
2,756
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
($ in
thousands)
|
|
|
|
|
|
|
|
July
31,
|
|
April
30,
|
|
|
2021
|
|
2021
|
Assets
|
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
|
$
4,985
|
|
$
5,206
|
Restricted
cash
|
|
482
|
|
525
|
Receivables, less
allowances
|
|
34,932
|
|
34,095
|
Inventories
|
|
17,852
|
|
16,517
|
Prepaid expenses and
other current assets
|
|
3,718
|
|
4,114
|
Total Current Assets
|
|
61,969
|
|
60,457
|
Net property, plant
and equipment
|
|
15,772
|
|
15,982
|
Right of use
assets
|
|
8,838
|
|
9,279
|
Other
assets
|
|
3,720
|
|
3,666
|
Total
Assets
|
|
$
90,299
|
|
$
89,384
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Short-term
borrowings
|
|
$
8,854
|
|
$
6,828
|
Current portion of
lease obligations
|
|
1,371
|
|
1,369
|
Accounts
payable
|
|
17,487
|
|
16,780
|
Other current
liabilities
|
|
8,548
|
|
9,204
|
Total Current Liabilities
|
|
36,260
|
|
34,181
|
Long-term portion of
lease obligations
|
|
7,509
|
|
7,951
|
Other non-current
liabilities
|
|
6,190
|
|
5,765
|
Total Liabilities
|
|
49,959
|
|
47,897
|
Kewaunee Scientific
Corporation Stockholders' equity
|
|
40,058
|
|
41,241
|
Noncontrolling
interest
|
|
282
|
|
246
|
Total Stockholders' Equity
|
|
40,340
|
|
41,487
|
Total Liabilities and
Stockholders' Equity
|
|
$
90,299
|
|
$
89,384
|
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SOURCE Kewaunee Scientific Corporation