STATESVILLE, N.C., March 3, 2020 /PRNewswire/ -- Kewaunee Scientific
Corporation (NASDAQ: KEQU) today reported results for its third
quarter of fiscal year 2020, ended January 31, 2020.
Sales for the quarter were $34,225,000, a 5.7% increase from sales of
$32,372,000 in the prior year third
quarter. Domestic sales for the quarter were $26,699,000, up 5.9% from sales of $25,217,000 in the third quarter of last
year. International sales for the quarter were $7,526,000, up 5.2% from sales of $7,155,000 in the third quarter last year. The
increase in Domestic sales was a result of increased activity in
the Company's dealer and distribution sales channels. International
sales increased year-over-year as a result of continued deliveries
of a large order in the Middle
East market.
Pre-tax loss for the quarter was $2,251,000 compared to a profit of $35,000 for the prior year period. Profitability
was negatively impacted during the quarter by a restructuring that
was initiated and substantially completed within the quarter,
higher operating costs due to equipment down-time and a lighter
manufacturing load in the quarter. Profitability was also
negatively impacted by a strategic order in the Middle East that the Company aggressively
secured over two years ago at lower than normal margins. The
Company also elected to close its China operations, resulting in a one-time
charge in the quarter for exiting the Chinese market.
Net earnings for the third quarter were a loss of $1,918,000, or $0.70 per diluted share, as compared to a loss of
$22,000, or $0.01 per diluted share, for the third quarter
ended January 31, 2019.
The Company's order backlog was $93
million at January 31, 2020,
as compared to $101 million at
April 30, 2019 and $96 million at January
31, 2019. The Company continues to have a strong
volume of outstanding quotations globally and is aggressively
pursuing these projects.
Total cash on hand was $6.1
million at the end of the quarter, as compared to
$11.4 million at the end of the third
quarter last year. Working capital was $27.7
million, as compared to $36.1
million at the end of the third quarter last year.
Short-term debt and interest rate swaps were $4.0 million at the end of the quarter, as
compared to $5.1 million at the end
of the third quarter last year. There was no long-term debt at
January 31, 2020 compared to
$1,556,000 at the end of the third
quarter last year. The debt-to-equity ratio at January 31, 2020 was .35-to-1, as compared to
.14-to-1 at January 31,
2019.
"Looking forward, we continue to focus on improving
profitability through both short and long term actions. These
activities included the restructuring plans initiated and
substantially completed during this quarter as well as a multi-year
plan to invest in our manufacturing capabilities and information
technology platform to improve our competitiveness." said
Thomas D. Hull III, Kewaunee's
President and Chief Executive Officer. "For purposes of our
fourth quarter, we are working to ensure that the Company's
manufacturing volume is sufficient to operate our facilities
efficiently, which in turn will drive an improvement in
profitability."
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. 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
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
($ and shares in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
NIne months
ended
|
|
|
January
31,
|
|
January
31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
|
$
34,225
|
|
$
32,372
|
|
$
113,283
|
|
$
111,802
|
Cost of products
sold
|
|
28,947
|
|
27,142
|
|
94,743
|
|
91,325
|
Gross
profit
|
|
5,278
|
|
5,230
|
|
18,540
|
|
20,477
|
Operating
expenses
|
|
7,350
|
|
5,232
|
|
19,875
|
|
16,810
|
Operating earnings
(loss)
|
|
(2,072)
|
|
(2)
|
|
(1,335)
|
|
3,667
|
Other
income
|
|
(29)
|
|
113
|
|
43
|
|
279
|
Interest expense,
net
|
|
(150)
|
|
(76)
|
|
(452)
|
|
(258)
|
Earnings (loss)
before income taxes
|
|
(2,251)
|
|
35
|
|
(1,744)
|
|
3,688
|
Income tax
expense
|
|
(350)
|
|
20
|
|
1,822
|
|
803
|
Net earnings
(loss)
|
|
(1,901)
|
|
15
|
|
(3,566)
|
|
2,885
|
Less: net earnings
attributable to the noncontrolling interest
|
|
17
|
|
37
|
|
59
|
|
86
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
$
(1,918)
|
|
$
(22)
|
|
$
(3,625)
|
|
$
2,799
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share attributable to
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
|
|
Basic
|
|
($0.70)
|
|
($0.01)
|
|
$
(1.32)
|
|
$
1.02
|
Diluted
|
|
($0.70)
|
|
($0.01)
|
|
$
(1.32)
|
|
$
1.00
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
2,750
|
|
2,744
|
|
2,750
|
|
2,741
|
Diluted
|
|
2,750
|
|
2,794
|
|
2,750
|
|
2,799
|
Kewaunee
Scientific Corporation
|
Condensed
Consolidated Balance Sheets
|
($ in
thousands)
|
|
|
|
|
|
|
|
January
31,
|
|
April
30,
|
|
|
2019
|
|
2019
|
Assets
|
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(Unaudited)
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|
|
Cash and cash
equivalents
|
|
$
3,554
|
|
$
10,647
|
Restricted
cash
|
|
2,509
|
|
509
|
Receivables, less
allowances
|
|
27,409
|
|
33,259
|
Inventories
|
|
15,246
|
|
17,206
|
Prepaid expenses and
other current assets
|
|
4,503
|
|
3,736
|
Total Current Assets
|
|
53,221
|
|
65,357
|
Net property, plant
and equipment
|
|
15,905
|
|
16,462
|
Right of use
assets
|
|
11,130
|
|
-
|
Other
assets
|
|
4,105
|
|
5,404
|
Total
Assets
|
|
$
84,361
|
|
$
87,223
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Short-term borrowings
and interest rate swaps
|
|
$
4,017
|
|
$
9,513
|
Current portion of
long-term operating lease obligations
|
|
2,088
|
|
-
|
Current portion of
long-term debt and financing lease obligations
|
|
19
|
|
1,184
|
Accounts
payable
|
|
11,661
|
|
15,190
|
Other current
liabilities
|
|
7,711
|
|
6,846
|
Total Current Liabilities
|
|
25,496
|
|
32,733
|
Long-term portion of
operating lease obligations
|
|
8,887
|
|
-
|
Other non-current
liabilities
|
|
7,029
|
|
6,787
|
Total Liabilities
|
|
41,412
|
|
39,520
|
Kewaunee Scientific
Corporation equity
|
|
42,649
|
|
47,100
|
Noncontrolling
interest
|
|
300
|
|
603
|
Total Stockholders' Equity
|
|
42,949
|
|
47,703
|
Total Liabilities and
Stockholders' Equity
|
|
$
84,361
|
|
$
87,223
|
Contact:
|
Donald T. Gardner
III
|
|
(704)
871-3274
|
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SOURCE Kewaunee Scientific Corporation