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Kewaunee Scientific Reports Record Sales for Second Quarter

Tuesday, November 27, 2012 4:26 PM


STATESVILLE, N.C., Nov. 27, 2012 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported sales and earnings for its second quarter ended October 31, 2012.

Sales for the quarter were a record $31,185,000, up 20% from sales of $25,962,000 in the second quarter last year. Net earnings for the quarter were $649,000, or $0.25 per diluted share, as compared to a net loss of $125,000, or $0.05 per diluted share, in the second quarter last year. Earnings for the quarter were favorably impacted by the increase in sales and reduced manufacturing, overhead, and administrative costs.

Domestic sales for the quarter were $25,684,000, up 8% from sales of $23,826,000 in the second quarter last year. Demand for privately-funded projects continued to hold up relatively well during the quarter, while opportunities for publicly-funded projects remained well below pre-recession levels as state and local governments continued to receive significantly lower funding for capital projects.

International sales for the quarter were $5,502,000, up 157% from $2,136,000 in the second quarter last year, as several large international projects shipped during the quarter. The Company continues to see increased opportunities for sales and orders in the growing Asia and Middle East laboratory markets through its strengthened and broadened international dealer network.

The order backlog increased to a record $90.8 million at October 31, 2012, up from $78.0 million at October 31, 2011, as the Company continued to strengthen its market position.

Sales for the six months ended October 31, 2012 were $57,868,000, up 11% over sales of $52,283,000, in the same period last year.  Domestic sales were $48,312,000, up 2% over sales of $47,222,000 in the same period last year.  International sales were $9,556,000, up 89% from sales of $5,061,000 in the same period last year. Net earnings for the six months ended October 31, 2012 were $1,283,000, or $0.50 per diluted share, as compared to a net loss of $103,000, or $0.04 per diluted share, in the same period last year.

The Company's balance sheet continues to be strong. Cash on hand was $6.5 million at the end of the quarter, as compared to $4.1 million at the end of the same period last year.  Working capital was $24.2 million, as compared to $21.5 million at the end of the same period last year. Short-term borrowings under the Company's $15 million bank line of credit were $5.7 million, as compared to $7.3 million at the end of the same period last year. Total bank borrowings and capital lease obligations were $9.3 million, as compared to $11.2 million at the end of the same period last year, and the debt-to-equity ratio was .30-to-1, as compared to .36-to-1 at the end of the same period last year.

"I am pleased with our progress in a number of important areas," said William A. Shumaker, Kewaunee's Chief Executive Officer. "Sales, earnings, and incoming orders were very strong for the quarter. We also made good progress in improving the quality of our order backlog, as we shipped several large direct contract projects from the backlog with less favorable product mixes and margins. This bodes well for earnings and margins going forward, as these type orders are generally being replaced in our backlog with orders received through our dealer organization, which typically have a more favorable product mix and are more profitable. I am confident this progress will continue in the second half of the year. It should be noted that third quarter is historically our slowest due to the holidays and the construction cycle.

"We continue to see positive results from our strengthened dealer network. Our dealers are ahead of their order booking goals for the fiscal year, and they continue to provide us increased bidding opportunities and orders. Working in partnership with them, we are also making excellent progress with laboratory planners and architects to strengthen our relationships and increase their preference for the Kewaunee brand.

"I should note that one of our directors, Patrick L. McCrory, has been elected Governor of North Carolina and will be resigning from the Kewaunee Board when he takes office in January 2013. Since joining our Board in May 2009, Pat has served the Company and our stockholders well, as he shared unique insights and perspectives obtained through his impressive career in the private sector and as a seven-term Mayor of Charlotte. The entire Board of Directors is grateful to Pat for his leadership and guidance."

Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Laboratory furniture products include both steel and wood cabinetry, fume hoods, adaptable modular systems, moveable workstations, biological safety cabinets, and epoxy resin counters and sinks. Healthcare furniture products include laminate casework, storage systems, and related products for healthcare applications. Technical furniture products include column systems, slotted-post systems, pedestal systems, and stand-alone benches.

The Company's corporate headquarters are located in Statesville, North Carolina. Three manufacturing facilities are located in Statesville, NC serving the domestic and international markets.  One manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company has subsidiaries in Singapore and India. Kewaunee Scientific's website is located at http://www.kewaunee.com.

Certain statements in this release constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, economic, competitive, governmental, and technological factors affecting the Company's operations, markets, products, services, and prices.


Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)










Three Months Ended   


Six Months Ended


October 31


October 31


2012


2011


2012


2011









Net sales                                                 

$31,185


$25,962


$57,868


$52,283

Cost of products sold                                 

25,958


22,117


47,398


44,250

Gross profit                                               

5,227


3,845


10,470


8,033

Operating expenses                                    

4,013


4,005


8,151


7,960

Operating earnings (loss)                            

1,214


(160)


2,319


73

Other income                                              

108


36


176


35

Interest expense                                       

(101)


(128)


(215)


(223)









Earnings (loss) before income taxes                

1,221


(252)


2,280


(115)

Income tax expense (benefit)                              

414


(96)


785


(67)









Net earnings (loss)                                       

807


(156)


1,495


(48)









Less: net earnings (loss) attributable to








     the noncontrolling interest                         

158


(31)


212


55









Net earnings (loss) attributable to








     Kewaunee Scientific Corporation             

$649


$(125)


$1,283


$(103)









Net earnings (loss) per share attributable to








     Kewaunee Scientific Corporation stockholders








           Basic                                               

$0.25


$(0.05)


$0.50


$(0.04)

           Diluted                                              

$0.25


$(0.05)


$0.50


$(0.04)









Weighted average number of common








       shares outstanding








           Basic                                               

2,587


2,579


2,584


2,579

           Diluted                                           

2,601


2,579


2,592


2,579


 


Condensed Consolidated Balance Sheets

(in thousands)






October 31


April 30


2012


2012


(unaudited)



Assets

Cash and cash equivalents                                      

$5,878


$6,188

Restricted cash                                                         

639


704

Receivables, less allowances                                  

24,868


23,244

Inventories                                                                 

12,424


11,760

Prepaid expenses and other current assets                  

2,510


1,702

   Total current assets                                                

46,319


43,598

Net property, plant and equipment                              

14,758


15,346

Other assets                                                              

5,420


5,192

Total Assets                                                               

$66,497


$64,136


Liabilities and Equity

Short-term borrowings                                                

$5,694


$6,816

Current obligations under capital leases and long-term debt       

200


236

Accounts payable                                                          

11,226


8,848

Other current liabilities                                                   

5,013


4,340

   Total current liabilities                                          

22,133


20,240

Other non-current liabilities                                            

11,756


12,238

   Total liabilities                                                            

33,889


32,478

Noncontrolling interest                                                   

2,211


2,147

Kewaunee Scientific Corporation equity                           

30,397


29,511

   Total equity                                                                 

32,608


31,658

Total Liabilities and Equity                                           

$66,497


$64,136

 

Contact:

D. Michael Parker


704/871-3290

 

SOURCE Kewaunee Scientific Corporation

(Source: PR Newswire )
(Source: Quotemedia)

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