STATESVILLE, N.C., Sept. 8, 2020 /PRNewswire/ -- Kewaunee Scientific
Corporation (NASDAQ: KEQU) today reported results for its first
quarter of fiscal year 2021, ended July 31, 2020.
Sales for the quarter were $36,423,000, a 7.4% decrease from sales of
$39,336,000 in the prior year first
quarter. Pre-tax loss for the quarter was $587,000 compared to pre-tax earnings of
$665,000 for the prior year
period. Net earnings decreased 227% for the quarter to a loss
of $598,000, or ($0.22) per diluted share, as compared to net
earnings of $471,000, or $0.17 per diluted share, for the quarter ended
July 31, 2019. EBITDA for the quarter
was $137,000 compared to $1,300,000 for the prior year period. The
Company's order backlog was $101
million at July 31, 2020, as
compared to $101 million at
April 30, 2020 and $102 million at July 31, 2019.
Domestic Segment
Domestic sales for the quarter were $30,058,000, an increase of 2.6% from sales of
$29,287,000 in the first quarter of
last year. Net earnings for the Domestic Segment was
$993,000 compared to $1,395,000 for the prior year period.
Domestic segment EBITDA was $1,605,000 compared to $2,125,000 for the prior year period. While
sales increased slightly during the period when compared to the
prior year period, delays in project completion and access to
construction sites due to the coronavirus (COVID-19) pandemic
continued to impact the pace at which the segment was able to
operate during the quarter. Segment gross profit was
generally flat year-over-year, while an increase in operating
expenses, to support our strategic initiatives, unfavorably
impacted pre-tax earnings as compared to the prior year period.
International Segment
International sales for the quarter were $6,365,000, down 36.7% from sales of $10,049,000 in the first quarter last
year. Net earnings for the International Segment was
$124,000 compared to $420,000 for the prior year period.
International Segment EBITDA was $165,000 compared to $514,000 for the prior year period. The
decrease in sales and profitability was similarly attributable to
reduced access to construction sites and re-imposed government
mandated shut-downs in India
during the quarter due to COVID-19.
Corporate Expenses
Corporate expenses for the quarter were $1,715,000, an increase of 27.6% from corporate
expenses of $1,344,000 in the first
quarter of last year. The primary driver of increased
corporate expenses was an increase in pension expense due to
changes in underlying valuation assumptions as of April 30, 2020.
Liquidity and Managed Working Capital
Cash on hand was $4,825,000 at the
end of the quarter, as compared to $5,215,000 at April 30,
2020. Working capital was $27,818,000, as compared to $27,171,000 at April 30,
2020. Short-term debt was $8,524,000 at the end of the quarter, as compared
to $4,719,000 at April 30, 2020. The debt-to-equity ratio at
July 31, 2020 was .46-to-1, as compared to .36-to-1 at
April 30, 2020.
"We continue to manage the business in a manner to support our
customers and their evolving expectations due to the restrictions
that COVID-19 is placing on construction activity globally," said
Thomas D. Hull III, Kewaunee's
President and Chief Executive Officer. "During the first
quarter, limitations continued within our operations and across the
geographies we service due to continued government mandated
coronavirus restrictions. We did manage to maintain our
backlog throughout the quarter and we continue to see strong
activity in the marketplace from a planning, budgeting and bidding
perspective. This activity, however, is not yet translating
into awarded projects due to delays in the decision-making process.
I continue to believe that demand for laboratory furniture and
technical products will ultimately strengthen in the long-term, and
that Kewaunee is positioned well within the market to participate
when investments requiring our products arise."
EBITDA and Segment EBITDA Reconciliation
Quarter Ended July
31, 2019
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
1,395
|
|
$
420
|
|
$
(1,344)
|
|
$
471
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
7
|
|
160
|
|
167
|
Interest
Income
|
|
-
|
|
(149)
|
|
(2)
|
|
(151)
|
Income
Taxes
|
|
165
|
|
163
|
|
(159)
|
|
169
|
Depreciation and
Amortization
|
|
565
|
|
73
|
|
6
|
|
644
|
EBITDA
|
|
$
2,125
|
|
$
514
|
|
$
(1,339)
|
|
$
1,300
|
|
|
|
|
|
|
|
|
|
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
|
About Non-GAAP Measures
We calculate EBITDA and
Segment EBITDA as net earnings (loss), less interest expense and
interest income, income taxes, depreciation, and amortization. We
believe EBITDA and Segment EBITDA allow management and our
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 our method for
calculating EBITDA and Segment EBITDA can vary as compared to other
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 an alternative 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 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 rapidly evolving
COVID-19 pandemic including disruptions from government mandates,
both domestically and internationally; 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, 2020, 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.
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,
|
|
|
2020
|
|
2019
|
Net sales
|
|
$
36,423
|
|
$
39,336
|
Cost of products
sold
|
|
30,542
|
|
32,390
|
Gross
profit
|
|
5,881
|
|
6,946
|
Operating
expenses
|
|
6,157
|
|
6,170
|
Operating earnings
(loss)
|
|
(276)
|
|
776
|
Pension
expense
|
|
(288)
|
|
(113)
|
Other
income
|
|
54
|
|
169
|
Interest
expense
|
|
(77)
|
|
(167)
|
Earnings (loss)
before income taxes
|
|
(587)
|
|
665
|
Income tax
expense
|
|
21
|
|
169
|
Net earnings
(loss)
|
|
(608)
|
|
496
|
Less: net earnings
(loss) attributable to the noncontrolling interest
|
|
(10)
|
|
25
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
|
$
(598)
|
|
$
471
|
|
|
|
|
|
Net earnings (loss)
per share attributable to
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
Basic
|
|
($0.22)
|
|
$0.17
|
Diluted
|
|
($0.22)
|
|
$0.17
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
Basic
|
|
2,756
|
|
2,750
|
Diluted
|
|
2,756
|
|
2,771
|
|
|
|
|
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
($ in
thousands)
|
|
|
|
|
|
|
|
July
31,
|
|
April
30,
|
|
|
2020
|
|
2020
|
Assets
|
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
|
$
3,990
|
|
$
4,365
|
Restricted
cash
|
|
835
|
|
850
|
Receivables, less
allowances
|
|
30,897
|
|
28,062
|
Inventories
|
|
16,458
|
|
15,330
|
Prepaid expenses and
other current assets
|
|
6,298
|
|
5,624
|
Total Current Assets
|
|
58,478
|
|
54,231
|
Net property, plant
and equipment
|
|
16,508
|
|
16,272
|
Right of use
assets
|
|
8,828
|
|
9,312
|
Other
assets
|
|
3,364
|
|
4,114
|
Total
Assets
|
|
$
87,178
|
|
$
83,929
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Short-term
borrowings
|
|
$
8,524
|
|
$
4,719
|
Current portion of
lease obligations
|
|
1,276
|
|
1,301
|
Accounts
payable
|
|
14,091
|
|
13,114
|
Other current
liabilities
|
|
6,769
|
|
7,926
|
Total Current Liabilities
|
|
30,660
|
|
27,060
|
Long-term portion of
lease obligations
|
|
7,579
|
|
7,893
|
Other non-current
liabilities
|
|
10,758
|
|
10,273
|
Total Liabilities
|
|
48,997
|
|
45,226
|
Kewaunee Scientific
Corporation equity
|
|
37,902
|
|
38,415
|
Noncontrolling
interest
|
|
279
|
|
288
|
Total Stockholders' Equity
|
|
38,181
|
|
38,703
|
Total Liabilities and
Stockholders' Equity
|
|
$
87,178
|
|
$
83,929
|
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SOURCE Kewaunee Scientific Corporation