STATESVILLE, N.C., Aug. 31,
2023 /PRNewswire/ -- Kewaunee Scientific Corporation
(NASDAQ: KEQU) today announced results for its first quarter ended
July 31, 2023.
Fiscal Year 2024 First Quarter Results:
Sales during the first quarter of fiscal year 2024 were
$49,839,000, a decrease of 0.6%
compared to sales of $50,123,000 from
the prior year's first quarter. Pre-tax earnings for the quarter
were $3,412,000 compared to a pre-tax
loss of $340,000 for the prior year
quarter. Net earnings were $2,474,000
compared to a net loss of $747,000
for the prior year quarter. EBITDA1 for the quarter
was $4,305,000 compared to
$275,000 for the prior year quarter.
Diluted earnings per share was $0.86
compared to a diluted loss per share of ($0.27) in the prior year quarter.
The Company's order backlog was $140.8 million on July 31, 2023, as compared to $174.0 million on July 31, 2022, and $147.9 million on April 30, 2023.
Domestic Segment - Domestic sales for the quarter were
$35,420,000, a decrease of 5.5% from
sales of $37,468,000 in the prior
year quarter. The decrease in Domestic sales was predominantly
related to the elimination of installation revenue related to the
Company's decision to no longer sell directly to end
users, which typically included installation
services. Domestic segment net income was $2,711,000 compared to $98,000 in the prior year quarter. Domestic
segment EBITDA was $4,578,000
compared to $711,000 for the prior
year quarter. Domestic segment profitability improved versus the
prior year quarter because of the strategic go-to-market decisions
made in the previous year to stop selling direct, as well as
improved manufacturing productivity and cost containment
actions.
International Segment - International sales for the
quarter were $14,419,000, an increase
of 13.9% from sales of $12,655,000 in
the prior year quarter due to the continued delivery of several
large projects awarded in prior periods. International segment net
income was $469,000 compared to
$687,000 in the prior year's quarter.
International segment EBITDA was $670,000 compared to $1,051,000 for the prior year quarter. EBITDA for
the quarter was reduced by $316,000
when compared to the previous year period primarily
due to a change in the Corporate cost allocation methodology after
completing an updated transfer pricing study.
Corporate Segment – Corporate segment pre-tax net loss
was $1,004,000 for the quarter, as
compared to a pre-tax net loss of $1,532,000 in the prior year period. Corporate
segment EBITDA for the quarter was ($943,000) compared to corporate segment EBITDA
of ($1,487,000) for the prior year
quarter. The improved EBITDA was driven by the Corporate cost
allocation methodology change discussed above.
Total cash on hand on July 31,
2023 was $21,568,000, as
compared to $13,815,000 on
April 30, 2023. The increase in cash
was primarily from improved operating performance. Working capital
was $49,291,000, as compared to
$48,266,000 at the end of the first
quarter last year and $47,867,000 on
April 30, 2023. The Company had
short-term debt of $5,054,000 as of
July 31, 2023, as compared to
$3,587,000 on April 30, 2023. Long-term debt was $28,846,000 on July 31,
2023, as compared to $29,007,000 on April 30,
2023. The Company's debt-to-equity ratio on July 31, 2023 was 1.05-to-1, as compared to
1.08-to-1 on April 30, 2023.
"Fiscal year 2024 commenced with an outstanding financial
performance for Kewaunee," said Thomas D.
Hull III, Kewaunee's President and Chief Executive Officer.
"This performance was driven by the investments that we have been
making in the Company's domestic operations in continuous
improvement, 5-S and cost containment programs, coupled with the
capital refreshment program executed over the past year. These
capabilities, along with solid customer demand, resulted in a very
strong operating performance during the quarter."
"Kewaunee's international business remains strong as the
team remains focused on delivering a number of large, multi-year
projects that were previously awarded."
"We are operating more efficiently based on our ability to
focus solely on supporting our dealer and distribution partners
domestically while continuing to provide turnkey solutions in the
international markets. Looking forward, this improved focus,
combined with a strong global management team, a healthy order
backlog, improved manufacturing capabilities, and markets that
continue to prioritize investment in projects requiring products
Kewaunee designs and manufactures positions the Company
well."
EBITDA and Segment EBITDA Reconciliation
Quarter Ended July
31, 2022
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
98
|
|
$
687
|
|
$
(1,532)
|
|
$
(747)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
31
|
|
353
|
|
384
|
Interest
Income
|
|
—
|
|
(110)
|
|
(356)
|
|
(466)
|
Income
Taxes
|
|
—
|
|
379
|
|
—
|
|
379
|
Depreciation and
Amortization
|
|
613
|
|
64
|
|
48
|
|
725
|
EBITDA
|
|
$
711
|
|
$
1,051
|
|
$
(1,487)
|
|
$
275
|
|
|
|
|
|
|
|
|
|
Quarter Ended July
31, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,711
|
|
$
469
|
|
$
(706)
|
|
$
2,474
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
380
|
|
36
|
|
14
|
|
430
|
Interest
Income
|
|
—
|
|
(213)
|
|
(1)
|
|
(214)
|
Income
Taxes
|
|
913
|
|
282
|
|
(298)
|
|
897
|
Depreciation and
Amortization
|
|
574
|
|
96
|
|
48
|
|
718
|
EBITDA
|
|
$
4,578
|
|
$
670
|
|
$
(943)
|
|
$
4,305
|
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 consolidated 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 and wood casework, fume hoods,
adaptable modular systems, moveable workstations, stand-alone
benches, biological safety cabinets, and epoxy resin work surfaces
and sinks.
The Company's corporate headquarters are located in Statesville, North Carolina. 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, Asian, and African 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, 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; acts of terrorism, war, governmental action, and 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, 2023, 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.
|
|
|
|
|
|
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.
|
Kewaunee Scientific Corporation
|
Condensed Consolidated Statements of Operations
(Unaudited)
|
($ and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
Three months ended
|
|
|
July 31,
|
|
|
2023
|
|
2022
|
Net sales
|
|
$
49,839
|
|
$
50,123
|
Cost of products
sold
|
|
37,925
|
|
43,927
|
Gross profit
|
|
11,914
|
|
6,196
|
Operating
expenses
|
|
8,106
|
|
6,592
|
Operating profit
(loss)
|
|
3,808
|
|
(396)
|
Pension
expense
|
|
(41)
|
|
(27)
|
Other income,
net
|
|
75
|
|
467
|
Interest
expense
|
|
(430)
|
|
(384)
|
Profit (loss) before
income taxes
|
|
3,412
|
|
(340)
|
Income tax
expense
|
|
897
|
|
379
|
Net earnings
(loss)
|
|
2,515
|
|
(719)
|
Less: net earnings
attributable to the noncontrolling interest
|
|
41
|
|
28
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
|
$
2,474
|
|
$
(747)
|
|
|
|
|
|
Net earnings (loss) per
share attributable to
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
Basic
|
|
$0.87
|
|
($0.27)
|
Diluted
|
|
$0.86
|
|
($0.27)
|
|
|
|
|
|
Weighted average number
of common shares outstanding
|
|
|
|
|
Basic
|
|
2,860
|
|
2,807
|
Diluted
|
|
2,885
|
|
2,807
|
|
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation
|
Condensed Consolidated Balance
Sheets
|
($ in thousands)
|
|
|
|
|
|
|
|
July 31,
|
|
April 30,
|
|
|
2023
|
|
2023
|
Assets
|
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
|
$
12,699
|
|
$
8,078
|
Restricted
cash
|
|
8,869
|
|
5,737
|
Receivables, less
allowances
|
|
42,461
|
|
46,081
|
Inventories
|
|
22,126
|
|
21,889
|
Prepaid expenses and
other current assets
|
|
7,365
|
|
6,135
|
Total Current Assets
|
|
93,520
|
|
87,920
|
Net property, plant and
equipment
|
|
17,339
|
|
16,402
|
Right of use
assets
|
|
8,612
|
|
9,170
|
Other assets
|
|
5,347
|
|
5,406
|
Total Assets
|
|
$
124,818
|
|
$
118,898
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Short-term
borrowings
|
|
$
5,054
|
|
$
3,587
|
Current portion of
lease obligations
|
|
1,998
|
|
2,052
|
Current portion of
financing liability
|
|
659
|
|
642
|
Accounts
payable
|
|
22,140
|
|
23,599
|
Other current
liabilities
|
|
14,378
|
|
10,173
|
Total Current Liabilities
|
|
44,229
|
|
40,053
|
Long-term portion of
lease obligations
|
|
6,788
|
|
7,284
|
Long-term portion of
financing liability
|
|
27,958
|
|
28,132
|
Other non-current
liabilities
|
|
5,303
|
|
4,944
|
Total Liabilities
|
|
84,278
|
|
80,413
|
Kewaunee Scientific
Corporation equity
|
|
39,430
|
|
37,409
|
Noncontrolling
interest
|
|
1,110
|
|
1,076
|
Total Stockholders' Equity
|
|
40,540
|
|
38,485
|
Total Liabilities and
Stockholders' Equity
|
|
$
124,818
|
|
$
118,898
|
Contact:
|
Donald T. Gardner
III
|
|
704/871-3274
|
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SOURCE Kewaunee Scientific Corporation