KEWAUNEE SCIENTIFIC CORP /DE/FALSE000005552900000555292024-03-062024-03-06



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 6, 2024
 
 
Kewaunee Scientific Corporation
(Exact name of registrant as specified in its charter)
 
Delaware 0-5286 38-0715562
(State or other jurisdiction of
incorporation or organization)		 (Commission File
Number)		 (IRS Employer
Identification No.)
2700 West Front Street
Statesville, NC 28677
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (704) 873-7202
N/A
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $2.50 par value
KEQUThe Nasdaq Global Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
 
 





Item 2.02 Results of Operations and Financial Condition
On March 6, 2024, Kewaunee Scientific Corporation issued a press release announcing its financial results for the third quarter of fiscal year 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
  Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 KEWAUNEE SCIENTIFIC CORPORATION
                             (Registrant)
Date: March 6, 2024 By/s/ Donald T. Gardner III
 Donald T. Gardner III
 Vice President, Finance
Chief Financial Officer





image_0a.jpg

Kewaunee Scientific Reports
Results for Third Quarter of Fiscal Year 2024

Exchange:    NASDAQ (KEQU)                Contact:    Donald T. Gardner III
                                    704/871-3274

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
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 OFFICES ● P. O. BOX 1842, STATESVILLE, NORTH CAROLINA 28687-1842 ● 2700 WEST FRONT STREET, STATESVILLE, NORTH CAROLINA 28677-2927
PHONE 704-873-7202 ● FAX 704-873-1275

($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."



EBITDA and Segment EBITDA Reconciliation

Quarter Ended January 31, 2023DomesticInternationalCorporateConsolidated
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 Amortization595 66 48 709 
EBITDA$1,012 $2,385 $(714)$2,683 
Quarter Ended January 31, 2024DomesticInternationalCorporateConsolidated
Net Earnings (Loss)$2,633 $923 $(1,035)$2,521 
Add/(Less):
Interest Expense321 72 18 411 
Interest Income— (220)(97)(317)
Income Taxes220 796 (34)982 
Depreciation and Amortization658 105 54 817 
EBITDA$3,832 $1,676 $(1,094)$4,414 
Year to Date January 31, 2023DomesticInternationalCorporateConsolidated
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 Amortization1,805 194 143 2,142 
EBITDA$2,811 $5,104 $(3,705)$4,210 
Year to Date January 31, 2024DomesticInternationalCorporateConsolidated
Net Earnings (Loss)$8,398 $1,917 $(2,588)$7,727 
Add/(Less):
Interest Expense1,024 143 46 1,213 
Interest Income— (638)(120)(758)
Income Taxes2,365 2,257 (728)3,894 
Depreciation and Amortization1,853 302 150 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,
 2024202320242023
Net sales$46,778 $60,821 $147,053 $165,508 
Cost of products sold34,749 50,491 109,642 140,281 
Gross profit12,029 10,330 37,411 25,227 
Operating expenses8,223 8,026 24,688 22,564 
Operating profit3,806 2,304 12,723 2,663 
Pension expense(41)(18)(122)(53)
Other income, net161 210 384 756 
Interest expense(411)(436)(1,213)(1,190)
Profit before income taxes3,515 2,060 11,772 2,176 
Income tax expense982 962 3,894 1,911 
Net earnings2,533 1,098 7,878 265 
Less: Net earnings attributable to the non-controlling interest12 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
Basic2,893 2,830 2,885 2,822 
Diluted2,965 2,911 2,927 2,822 




Kewaunee Scientific Corporation
Condensed Consolidated Balance Sheets
($ in thousands)

January 31, 2024April 30, 2023
 (Unaudited)
Assets
Cash and cash equivalents$21,312 $8,078 
Restricted cash5,800 5,737 
Receivables, less allowances41,109 46,081 
Inventories21,845 21,889 
Prepaid expenses and other current assets6,090 6,135 
Total Current Assets96,156 87,920 
Net Property, Plant and Equipment17,492 16,402 
Right of use assets7,827 9,170 
Other assets4,830 5,406 
Total Assets$126,305 $118,898 
Liabilities and Stockholders' Equity
Short-term borrowings$3,184 $3,587 
Current portion of lease obligations2,166 2,052 
Current portion of financing liability695 642 
Accounts payable19,083 23,599 
Other Current Liabilities17,014 10,173 
Total Current Liabilities42,142 40,053 
Long-term portion of lease obligations5,988 7,284 
Long-term portion of financing liability27,603 28,132 
Other non-current liabilities5,230 4,944 
Total Liabilities80,963 80,413 
Kewaunee Scientific Corporation Equity44,083 37,409 
Non-controlling interest1,259 1,076 
Total Stockholders' Equity45,342 38,485 
Total Liabilities and Stockholders' Equity$126,305 $118,898 

v3.24.0.1
Cover
Mar. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Mar. 06, 2024
Entity Registrant Name KEWAUNEE SCIENTIFIC CORP /DE/
Entity Incorporation, State or Country Code DE
Entity File Number 0-5286
Entity Tax Identification Number 38-0715562
Entity Address, Address Line One 2700 West Front Street
Entity Address, City or Town Statesville
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28677
City Area Code 704
Local Phone Number 873-7202
Title of 12(b) Security Common Stock, $2.50 par value
Trading Symbol KEQU
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000055529
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