KEWAUNEE SCIENTIFIC CORPORATION STATESVILLE, N.C., March 3, 2015 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported sales and earnings for its third quarter ended January 31, 2015.
Net earnings for the quarter were $484,000, or $0.18 per diluted share, as compared to net earnings of $604,000, or $0.22 per diluted share, in the third quarter last year. Earnings for the quarter reflect lower domestic sales and an unfavorable product mix, partially offset by increased international sales.
For the nine months ended January 31, 2015, net earnings were $2,920,000, or $1.10 per diluted share, as compared to $2,916,000, or $1.11 share, in the comparable period last year.
Sales for the quarter were $27,754,000, an increase of 6.7% from sales of $26,013,000 in the third quarter last year. Domestic sales for the quarter were $20,025,000, a decline of 7.1% from sales of $21,544,000 in the third quarter last year. The domestic laboratory construction marketplace continued to be challenging during the quarter, particularly for educational laboratory construction projects, although increased bidding opportunities were experienced in certain geographic areas of the country as the overall economy continued its gradual improvement. International sales were $7,729,000, an increase of 73.0% from sales of $4,469,000 in the third quarter last year, as sales benefited from shipments of several large international orders received in earlier periods.
The order backlog was $78.0 million at January 31, 2015, down from $84.5 million at October 31, 2014, and up from $69.8 million at January 31, 2014.
Sales for the nine months ended January 31, 2015 were $88,546,000, an increase of 5.3% from sales of $84,114,000 in the comparable period last year. Domestic sales were $67,902,000, a decrease of 3.9% from sales of $70,678,000 in the comparable period last year. International sales were $20,644,000, an increase of 53.6% from sales of $13,436,000 in the comparable period last year.
Unrestricted cash on hand was $3.9 million at the end of the quarter, as compared to $6.7 million at the end of the same period last year. Short-term borrowings under the Company's bank line of credit were $798,000, as compared to $3.9 million at the end of the same period last year, and long-term debt was $4.3 million, as compared to $4.7 million. The debt-to-equity ratio was .14-to-1, as compared to .28-to-1 at the end of the same period last year. Working capital was $27.4 million, as compared to $25.5 million at the end of the same period last year.
"Historically, the third quarter is our most challenging quarter, and this was true again this year," commented David M. Rausch, Kewaunee's President and Chief Executive Officer. "However, our overall corporate performance met expectations. The continuing soft domestic educational laboratory construction market impacted sales and profit margins for the quarter. Additionally, our third quarter domestic business was impacted by both the concentration of the number of holidays and the weather conditions that affected construction project schedules. I am pleased with the sales and earnings performance of our International team, as several large international projects in our backlog shipped during the quarter. In addition, we experienced noticeable increases in orders and sales during this quarter from our expanding sales representation in Latin America.
"Looking forward, we expect sales and earnings for the fourth quarter to improve over the third quarter and be in line with results for the fourth quarter last year. Our outlook is based on scheduled ship dates for projects in our current order backlog, our recent observation that opportunities for educational laboratory construction projects have modestly improved, and our expectations that our international business will continue its progress."
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. 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, Singapore, and China. 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. The Company's China headquarters, sales office, and assembly operation are located in Suzhou Industrial Park, China. 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. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning these factors is contained in the Company's filings with the Securities and Exchange Commission. 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
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Three months ended Nine months ended
January 31, January 31,
----------- -----------
2015 2014 2015 2014
---- ---- ---- ----
Net sales $27,754 $26,013 $88,546 $84,114
Cost of products sold 23,298 21,302 72,120 67,934
------ ------ ------ ------
Gross profit 4,456 4,711 16,426 16,180
Operating expenses 3,872 3,773 12,170 11,676
----- ----- ------ ------
Operating earnings 584 938 4,256 4,504
Other income 134 95 385 265
Interest expense (91) (116) (274) (276)
Earnings before income
taxes 627 917 4,367 4,493
Income tax expense 109 292 1,361 1,505
--- --- ----- -----
Net earnings 518 625 3,006 2,988
Less: net earnings
attributable to
the noncontrolling
interest 34 21 86 72
--- --- --- ---
Net earnings attributable
to
Kewaunee Scientific
Corporation $484 $604 $2,920 $2,916
==== ==== ====== ======
Net earnings per share
attributable to
Kewaunee Scientific Corporation stockholders
Basic $0.18 $0.23 $1.11 $1.12
Diluted $0.18 $0.22 $1.10 $1.11
Weighted average number of
common
shares outstanding
Basic 2,628 2,615 2,625 2,606
Diluted 2,659 2,645 2,656 2,627
Kewaunee Scientific Corporation
Condensed Consolidated Balance Sheets
(in thousands)
January 31, April 30,
2015 2014
---- ----
Assets (Unaudited)
------
Cash and cash
equivalents $3,863 $6,248
Restricted Cash 2,524 368
Receivables, less
allowances 25,062 23,473
Inventories 12,430 11,938
Prepaid expenses and
other current
assets 1,703 1,326
Total Current Assets 45,582 43,353
Net property, plant
and equipment 14,805 14,570
Other assets 5,063 4,794
Total Assets $65,450 $62,717
======= =======
Liabilities and
Equity
---------------
Short-term
borrowings and
interest rate swap $1,036 $3,150
Current portion of
long-term debt 421 421
Accounts payable 12,093 8,542
Other current
liabilities 4,680 4,050
Total Current
Liabilities 18,230 16,163
Other non-current
liabilities 11,028 12,330
Total Liabilities 29,258 28,493
Noncontrolling
interest 306 265
Kewaunee Scientific
Corporation equity 35,886 33,959
Total Equity 36,192 34,224
Total Liabilities
and Equity $65,450 $62,717
======= =======
Contact: D. Michael Parker
704/871-3290
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SOURCE Kewaunee Scientific Corporation
