STATESVILLE, N.C., March 6,
2024 /PRNewswire/ -- Kewaunee Scientific
Corporation (NASDAQ: KEQU) today announced results for its third
quarter ended January 31, 2024.
Fiscal Year 2024 Third Quarter Results:
Sales during the third quarter of fiscal year 2024 were
$46,778,000, a decrease of 23.1%
compared to sales of $60,821,000 from
the prior year's third quarter. Pre-tax earnings for the quarter
were $3,515,000 compared to
$2,060,000 for the prior year
quarter, an increase of 70.6%. Net earnings were $2,521,000 compared to net earnings of
$723,000 for the prior year quarter.
EBITDA1 for the quarter was $4,414,000 compared to $2,683,000 for the prior year quarter. Diluted
earnings per share was $0.85 compared
to diluted earnings per share of $0.25 in the prior year quarter.
The Company's order backlog was $152.3
million on January 31, 2024,
as compared to $153.2 million on
January 31, 2023, and $147.9 million on April
30, 2023.
Domestic Segment - Domestic sales for the quarter were
$31,774,000, a decrease of 12.1% from
sales of $36,134,000 in the prior
year quarter. The decrease in Domestic sales was primarily due to
the reduction in non-product revenue related to the Company's
decision to stop selling directly to end users. This revenue
typically includes freight, installation services and buyouts.
Domestic segment net income was $2,633,000 compared to $417,000 in the prior year quarter. Domestic
segment EBITDA was $3,832,000
compared to $1,012,000 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 $15,004,000, a decrease
of 39.2% from sales of $24,687,000 in
the prior year quarter. International segment net income was
$923,000 compared to $1,561,000 in the prior year quarter.
International segment EBITDA was $1,676,000 compared to $2,385,000 for the prior year quarter. The
year-over-year decline in sales is attributable to the delivery of
two large projects during the prior year that were non-recurring,
one in Africa and one in
India. Absent this impact,
International segment performance remains strong as demand in the
international markets served by the Company remain robust.
Corporate Segment – Corporate segment pre-tax net loss
was $1,069,000 for the quarter, as
compared to a pre-tax net loss of $1,144,000 in the prior year quarter. Corporate
segment EBITDA for the quarter was ($1,094,000) compared to corporate segment EBITDA
of ($714,000) for the prior year
quarter. The change in EBITDA was driven primarily by the net
change in Corporate cost allocation methodology across our business
segments.
Total cash on hand on January 31,
2024 was $27,112,000, as
compared to $13,815,000 on
April 30, 2023. The increase in cash
was primarily from improved operating performance, as well as a
large customer advance payment received during the quarter for a
project in India. Working capital
was $54,014,000, as compared to
$47,348,000 at the end of the third
quarter last year and $47,867,000 on
April 30, 2023.
The Company had short-term debt of $3,184,000 as of January
31, 2024, as compared to $3,587,000 on April 30,
2023. Long-term debt was $28,655,000 on January 31,
2024, as compared to $29,007,000 on April 30,
2023. The building lease from the Company's December 2021 sale-leaseback transaction accounts
for $28,298,000 of the long-term debt
on January 31, 2024 and $28,774,000 of the long-term debt on April 30, 2023. Long-term debt, net of the
sale-leaseback transaction, was $357,000 on January 31,
2024 as compared to $233,000
on April 30, 2023. The Company's
debt-to-equity ratio on January 31,
2024 was 0.87-to-1, as compared to 1.08-to-1 on April 30, 2023. The Company's debt-to-equity
ratio, net of the sale-leaseback transaction, on January 31, 2024 was 0.25-to-1, as compared to
0.34-to-1 on April 30, 2023.
"Our financial performance for the third quarter of fiscal year
2024 was strong," said Thomas D. Hull
III, Kewaunee's President and Chief Executive Officer. "As
discussed in previous quarterly releases, we are realizing the
benefits of executing on our strategic objectives."
"While the third quarter can often be our softest quarter due to
the holiday schedule in the US as well as customers looking to wrap
up construction projects before the calendar-end, we did not
experience a significant slow-down in activity during the quarter.
This is a testament to our world-class dealer and distribution
network who continue to perform at a high level in response to
customer demand."
"Looking ahead, we remain optimistic about the future, with a
strong pipeline of projects, a sound strategy, and a commitment to
sustained financial performance."
___________________________
|
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
January 31, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
417
|
|
$
1,561
|
|
$
(1,255)
|
|
$
723
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
53
|
|
383
|
|
436
|
Interest
Income
|
|
—
|
|
(147)
|
|
—
|
|
(147)
|
Income
Taxes
|
|
—
|
|
852
|
|
110
|
|
962
|
Depreciation and
Amortization
|
|
595
|
|
66
|
|
48
|
|
709
|
EBITDA
|
|
$
1,012
|
|
$
2,385
|
|
$
(714)
|
|
$
2,683
|
|
|
|
|
|
|
|
|
|
Quarter Ended
January 31, 2024
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,633
|
|
$
923
|
|
$
(1,035)
|
|
$
2,521
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
321
|
|
72
|
|
18
|
|
411
|
Interest
Income
|
|
—
|
|
(220)
|
|
(97)
|
|
(317)
|
Income
Taxes
|
|
220
|
|
796
|
|
(34)
|
|
982
|
Depreciation and
Amortization
|
|
658
|
|
105
|
|
54
|
|
817
|
EBITDA
|
|
$
3,832
|
|
$
1,676
|
|
$
(1,094)
|
|
$
4,414
|
|
|
|
|
|
|
|
|
|
Year to Date January
31, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
1,006
|
|
$
3,405
|
|
$
(4,678)
|
|
$
(267)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
113
|
|
1,077
|
|
1,190
|
Interest
Income
|
|
—
|
|
(409)
|
|
(357)
|
|
(766)
|
Income
Taxes
|
|
—
|
|
1,801
|
|
110
|
|
1,911
|
Depreciation and
Amortization
|
|
1,805
|
|
194
|
|
143
|
|
2,142
|
EBITDA
|
|
$
2,811
|
|
$
5,104
|
|
$
(3,705)
|
|
$
4,210
|
|
|
|
|
|
|
|
|
|
Year to Date January
31, 2024
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
8,398
|
|
$
1,917
|
|
$
(2,588)
|
|
$
7,727
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
1,024
|
|
143
|
|
46
|
|
1,213
|
Interest
Income
|
|
—
|
|
(638)
|
|
(120)
|
|
(758)
|
Income
Taxes
|
|
2,365
|
|
2,257
|
|
(728)
|
|
3,894
|
Depreciation and
Amortization
|
|
1,853
|
|
302
|
|
150
|
|
2,305
|
EBITDA
|
|
$
13,640
|
|
$
3,981
|
|
$
(3,240)
|
|
$
14,381
|
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.
Kewaunee Scientific
Corporation Condensed Consolidated Statements of
Operations (Unaudited) ($ and shares in
thousands, except per share amounts)
|
|
|
Three Months
Ended January
31,
|
|
Nine Months
Ended January
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
$
46,778
|
|
$
60,821
|
|
$ 147,053
|
|
$ 165,508
|
Cost of products
sold
|
34,749
|
|
50,491
|
|
109,642
|
|
140,281
|
Gross profit
|
12,029
|
|
10,330
|
|
37,411
|
|
25,227
|
Operating
expenses
|
8,223
|
|
8,026
|
|
24,688
|
|
22,564
|
Operating
profit
|
3,806
|
|
2,304
|
|
12,723
|
|
2,663
|
Pension
expense
|
(41)
|
|
(18)
|
|
(122)
|
|
(53)
|
Other income,
net
|
161
|
|
210
|
|
384
|
|
756
|
Interest
expense
|
(411)
|
|
(436)
|
|
(1,213)
|
|
(1,190)
|
Profit before income
taxes
|
3,515
|
|
2,060
|
|
11,772
|
|
2,176
|
Income tax
expense
|
982
|
|
962
|
|
3,894
|
|
1,911
|
Net earnings
|
2,533
|
|
1,098
|
|
7,878
|
|
265
|
Less: Net earnings
attributable to the non-controlling interest
|
12
|
|
375
|
|
151
|
|
532
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
$
2,521
|
|
$
723
|
|
$
7,727
|
|
$
(267)
|
|
|
|
|
|
|
|
|
Net earnings (loss) per
share attributable to Kewaunee Scientific
Corporation stockholders
|
|
|
|
|
|
|
|
Basic
|
$
0.87
|
|
$
0.26
|
|
$
2.68
|
|
$
(0.09)
|
Diluted
|
$
0.85
|
|
$
0.25
|
|
$
2.64
|
|
$
(0.09)
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
2,893
|
|
2,830
|
|
2,885
|
|
2,822
|
Diluted
|
2,965
|
|
2,911
|
|
2,927
|
|
2,822
|
Kewaunee Scientific
Corporation Condensed Consolidated Balance
Sheets ($ in thousands)
|
|
|
January 31,
2024
|
|
April 30,
2023
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
21,312
|
|
$
8,078
|
Restricted
cash
|
5,800
|
|
5,737
|
Receivables, less
allowances
|
41,109
|
|
46,081
|
Inventories
|
21,845
|
|
21,889
|
Prepaid expenses and
other current assets
|
6,090
|
|
6,135
|
Total Current
Assets
|
96,156
|
|
87,920
|
Net Property, Plant and
Equipment
|
17,492
|
|
16,402
|
Right of use
assets
|
7,827
|
|
9,170
|
Other assets
|
4,830
|
|
5,406
|
Total Assets
|
$
126,305
|
|
$
118,898
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Short-term
borrowings
|
$
3,184
|
|
$
3,587
|
Current portion of
lease obligations
|
2,166
|
|
2,052
|
Current portion of
financing liability
|
695
|
|
642
|
Accounts
payable
|
19,083
|
|
23,599
|
Other Current
Liabilities
|
17,014
|
|
10,173
|
Total Current
Liabilities
|
42,142
|
|
40,053
|
Long-term portion of
lease obligations
|
5,988
|
|
7,284
|
Long-term portion of
financing liability
|
27,603
|
|
28,132
|
Other non-current
liabilities
|
5,230
|
|
4,944
|
Total
Liabilities
|
80,963
|
|
80,413
|
Kewaunee Scientific
Corporation Equity
|
44,083
|
|
37,409
|
Non-controlling
interest
|
1,259
|
|
1,076
|
Total Stockholders'
Equity
|
45,342
|
|
38,485
|
Total Liabilities and
Stockholders' Equity
|
$
126,305
|
|
$
118,898
|
Contact:
|
Donald T. Gardner
III
|
|
704/871-3274
|
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SOURCE Kewaunee Scientific Corporation