STATESVILLE, N.C., March 10, 2021 /PRNewswire/ -- Kewaunee
Scientific Corporation (NASDAQ: KEQU) today reported results for
its third quarter of fiscal year 2021, ended January 31,
2021.
Sales for the quarter were $33,339,000, a 2.6% decrease from sales of
$34,225,000 in the prior year third
quarter. Pre-tax loss for the quarter was $718,000 compared to a loss of $2,251,000 for the prior year period. Net
earnings improved for the quarter to $81,000, or $0.03
per diluted share, as compared to a loss of $1,918,000, or ($0.70) per diluted share, for the quarter ended
January 31, 2020. A tax
benefit in the amount of $989,000 was
recorded in the period based on the provisions in the Coronavirus
Aid, Relief, and Economic Security (CARES) Act ("the Act") signed
into law on March 27, 2020. The
Act allows companies with a net operating loss arising in a taxable
year beginning in 2018, 2019, or 2020 to carry the loss back to
each of the five preceding tax years. EBITDA1 for
the quarter was ($17,000) compared to
($1,551,000) for the prior year
period. The Company's order backlog was $103 million on January
31, 2021, as compared to $101
million at April 30, 2020 and
$93 million at January 31,
2020.
Domestic Segment
Domestic sales for the quarter were $25,066,000, a decrease of 6.1% from sales of
$26,699,000 in the third quarter of
last year. Net losses for the Domestic segment were
$184,000 compared to a net loss of
$552,000 for the prior year
period. Domestic segment EBITDA was $800,000 compared to ($294,000) for the prior year period.
Domestic sales declined during the period when compared to the
prior year period due to continued delays in construction projects
due to the coronavirus pandemic. Domestic segment EBITDA improved
as compared to the prior year period due to actions taken to reduce
operating expenses and improve manufacturing productivity.
International Segment
International sales for the quarter were $8,273,000, up 9.9% from sales of $7,526,000 in the third quarter last
year. Net earnings for the International segment were
$499,000 compared to break even, zero
earnings, for the prior year period. International segment
EBITDA was $695,000 compared to
$515,000 for the prior year
period. The increase in sales and profitability resulted from
strong international demand coupled with reduced COVID-related
restrictions in certain markets that allowed access to project
sites, resulting in higher billings during the current period.
Corporate Segment
Corporate expenses for the quarter were $1,613,000, a decrease of 15.0% from corporate
expenses of $1,897,000 for the prior
year period. The primary drivers of a decrease in corporate
expenses were lower expenses for professional services as well as
certain non-recurring expenses recorded in the prior year period
related to an organizational restructuring. These reductions
were offset by higher pension expense in the current period
compared to the prior year period.
Liquidity and Managed Working Capital
Cash on hand was $6,103,000 at the
end of the quarter, as compared to $5,215,000 at April 30,
2020. Working capital was $28,510,000 at January 31,
2021, as compared to $27,171,000 at April 30,
2020. Short-term debt was $4,493,000 at the end of the quarter, as compared
to $4,719,000 at April 30, 2020. The debt-to-equity ratio at
January 31, 2021 was .37-to-1, as compared to .36-to-1 at
April 30, 2020.
"Our third quarter is traditionally the Company's slowest
quarter due to reduced construction activity in the US as well as
fewer manufacturing days within the quarter. I am extremely
proud of how the Kewaunee team managed the business during the
quarter, navigating the challenges presented by the coronavirus,
while making continued progress to position the Company to
capitalize on what I expect will be a long-term increase in demand
for the products and services that Kewaunee provides," said
Thomas D. Hull III, Kewaunee's
President and Chief Executive Officer.
"When you review our third quarter financial performance, it is
evident that our team delivered improved gross profit and operating
earnings on lower sales when compared to the prior year period.
This was made possible because of the hard work that our Associates
are undertaking to fundamentally improve how the Company operates.
I believe these actions will translate into sustained improvements
to our financial performance."
"The Company's financial position and liquidity also remain
strong, and our backlog closed the quarter at the highest level in
the past two years. A headwind I see as I look forward is
rapidly escalating raw material costs which are negatively
impacting industry earnings in the near-term. We are
monitoring this closely and are taking steps to mitigate negative
impacts to our gross margins to the extent possible."
"Looking to the fourth quarter, I expect our performance to
continue to improve based on our cost structure, operating
performance, and current booking activity. As the economy
begins to re-open from coronavirus related restrictions, I
anticipate project awards to accelerate and the pace of
construction to increase, resulting in demand for Kewaunee's
products."
EBITDA and Segment EBITDA Reconciliation
Quarter Ended
January 31, 2020
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(552)
|
|
$
-
|
|
$
(1,366)
|
|
$
(1,918)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
12
|
|
138
|
|
150
|
Interest
Income
|
|
-
|
|
(66)
|
|
(2)
|
|
(68)
|
Income
Taxes
|
|
(315)
|
|
496
|
|
(531)
|
|
(350)
|
Depreciation and
Amortization
|
|
573
|
|
73
|
|
(11)
|
|
635
|
EBITDA
|
|
$
(294)
|
|
$
515
|
|
$
(1,772)
|
|
$
(1,551)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
January 31, 2021
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(184)
|
|
$
499
|
|
$
(234)
|
|
$
81
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
1
|
|
104
|
|
105
|
Interest
Income
|
|
-
|
|
(49)
|
|
-
|
|
(49)
|
Income
Taxes
|
|
390
|
|
176
|
|
(1,379)
|
|
(813)
|
Depreciation and
Amortization
|
|
594
|
|
68
|
|
(3)
|
|
659
|
EBITDA
|
|
$
800
|
|
$
695
|
|
$
(1,512)
|
|
$
(17)
|
|
|
|
|
|
|
|
|
|
Year to Date
January 31, 2020
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
992
|
|
$
(1,304)
|
|
$
(3,313)
|
|
$
(3,625)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
26
|
|
426
|
|
452
|
Interest
Income
|
|
-
|
|
(318)
|
|
(7)
|
|
(325)
|
Income
Taxes
|
|
447
|
|
2,867
|
|
(1,492)
|
|
1,822
|
Depreciation and
Amortization
|
|
1,706
|
|
221
|
|
-
|
|
1,927
|
EBITDA
|
|
$
3,145
|
|
$
1,492
|
|
$
(4,386)
|
|
$
251
|
|
|
|
|
|
|
|
|
|
Year to Date
January 31, 2021
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
977
|
|
$
1,088
|
|
$
(2,762)
|
|
$
(697)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
-
|
|
2
|
|
308
|
|
310
|
Interest
Income
|
|
-
|
|
(154)
|
|
(2)
|
|
(156)
|
Income
Taxes
|
|
817
|
|
503
|
|
(2,309)
|
|
(989)
|
Depreciation and
Amortization
|
|
1,800
|
|
196
|
|
9
|
|
2,005
|
EBITDA
|
|
$
3,594
|
|
$
1,635
|
|
$
(4,756)
|
|
$
473
|
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 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, 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 the 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.
______________________
|
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.
|
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
|
|
Nine months
ended
|
|
January
31,
|
|
January
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
33,339
|
|
$
34,225
|
|
$
108,762
|
|
$
113,283
|
Cost of products
sold
|
27,685
|
|
28,947
|
|
90,832
|
|
94,743
|
Gross
profit
|
5,654
|
|
5,278
|
|
17,930
|
|
18,540
|
Operating
expenses
|
6,030
|
|
7,350
|
|
18,593
|
|
19,875
|
Operating
loss
|
(376)
|
|
(2,072)
|
|
(663)
|
|
(1,335)
|
Pension
expense
|
(288)
|
|
(113)
|
|
(865)
|
|
(339)
|
Other
income
|
51
|
|
84
|
|
171
|
|
382
|
Interest
expense
|
(105)
|
|
(150)
|
|
(310)
|
|
(452)
|
Loss before income
taxes
|
(718)
|
|
(2,251)
|
|
(1,667)
|
|
(1,744)
|
Income tax expense
(benefit)
|
(813)
|
|
(350)
|
|
(989)
|
|
1,822
|
Net earnings
(loss)
|
95
|
|
(1,901)
|
|
(678)
|
|
(3,566)
|
Less: Net earnings
attributable to the noncontrolling interest
|
14
|
|
17
|
|
19
|
|
59
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
$
81
|
|
$
(1,918)
|
|
$
(697)
|
|
$
(3,625)
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share attributable to Kewaunee Scientific Corporation
stockholders
|
|
|
|
|
|
|
|
|
Basic
|
$
0.03
|
|
$
(0.70)
|
|
$
(0.25)
|
|
$
(1.32)
|
Diluted
|
$
0.03
|
|
$
(0.70)
|
|
$
(0.25)
|
|
$
(1.32)
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
2,762
|
|
2,750
|
|
2,759
|
|
2,750
|
Diluted
|
2,789
|
|
2,750
|
|
2,759
|
|
2,750
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
($ in
thousands)
|
|
|
|
|
|
January
31,
|
|
April
30,
|
|
2021
|
|
2020
|
Assets
|
(Unaudited)
|
|
|
Cash and cash
equivalents
|
$
5,563
|
|
$
4,365
|
Restricted
cash
|
540
|
|
850
|
Receivables, less
allowances
|
30,091
|
|
28,062
|
Inventories
|
15,615
|
|
15,330
|
Income tax
receivable
|
4,205
|
|
2,717
|
Prepaid expenses and
other current assets
|
4,109
|
|
2,907
|
Total Current Assets
|
60,123
|
|
54,231
|
Net property, plant
and equipment
|
16,211
|
|
16,272
|
Right of use
assets
|
9,715
|
|
9,312
|
Other
assets
|
3,560
|
|
4,114
|
Total
Assets
|
$
89,609
|
|
$
83,929
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Short-term
borrowings
|
$
4,493
|
|
$
4,719
|
Current portion of
lease obligations
|
1,373
|
|
1,301
|
Accounts
payable
|
15,996
|
|
13,114
|
Other current
liabilities
|
9,751
|
|
7,926
|
Total Current Liabilities
|
31,613
|
|
27,060
|
Long-term portion of
lease obligations
|
8,373
|
|
7,893
|
Other non-current
liabilities
|
11,361
|
|
10,273
|
Total Liabilities
|
51,347
|
|
45,226
|
Kewaunee Scientific
Corporation stockholders' equity
|
38,055
|
|
38,415
|
Noncontrolling
interest
|
207
|
|
288
|
Total Stockholders' Equity
|
38,262
|
|
38,703
|
Total Liabilities and
Stockholders' Equity
|
$
89,609
|
|
$
83,929
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/kewaunee-scientific-reports-results-for-third-quarter-of-fiscal-year-2021-301245034.html
SOURCE Kewaunee Scientific Corporation