Statement and Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” requires that the Company record derivatives on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. The nature of the Company’s business activities involves the management of various financial and market risks, including those related to changes in interest rates. The Company may from time-to-time employ derivative financial instruments, such as interest rate swap contracts, to mitigate or eliminate certain of those risks. The Company does not enter into derivative instruments for speculative purposes. The Company had one interest rate swap agreement outstanding at OctoberJanuary 31, 2004.2005.

For the Company’s foreign subsidiaries, assets and liabilities are translated at exchange rates prevailing on the balance sheet date. Revenues and expenses are translated at weighted average exchange rates prevailing during the period and any resulting translation adjustments are reported separately in shareholders’ equity.

G.	Stock Options

H.Stock Options

The Company has not granted stock options to employees or directors since fiscal year 2003.2004. The Company accounts for stock options using the intrinsic value method. Under this method no compensation expense is recorded since the exercise price of the stock options is equal to the market price of the underlying stock on the grant date. Had compensation expense for the stock options issued been determined consistent with Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation,” net earnings (loss) and net earnings (loss) per share would have been reduced (increased) to the following pro forma amounts (in thousands, except per share data):

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

I.Pension Plans

The Company has non-contributory defined benefit pension plans covering substantially all salaried and hourly employees. Pension expense consisted of the following (in thousands):

No contributions were paid to the plan during the nine months ended January 31, 2005. Contributions of approximately $1 million are expected to be paid to the plans in the fourth quarter of the current year.

At the Company’s Board of Directors meeting of February 22, 2005, the Board approved amendments to the Company’s two defined benefit pension plans to suspend (“freeze”) benefits earned under each of the plans, effective April 30, 2005. The amendments to suspend benefits under the plans will result in an expense of approximately $28,000, all of which will be recorded in the fourth quarter of the current year.

Item 2. Management’s Discussion and Analysis

of Financial Condition and Results of Operations

The Company’s 2004 Annual Report to Stockholders contains management’s discussion and analysis of financial condition and results of operations at and for the year ended April 30, 2004. The following discussion and analysis describes material changes in the Company’s financial condition since April 30, 2004. The analysis of results of operations compares the three months and sixnine months ended OctoberJanuary 31, 20042005 with the comparable period of the prior fiscal year.

Results of Operations

The Company recorded sales of $18.4 millionSales for the three months ended October 31, 2004,quarter were $15,623,000, a declinedecrease of 24.7%27% from sales of $24.4 million for$21,454,000 in the comparablesame period of the priorlast year. Sales for the sixnine months ended OctoberJanuary 31, 20042005 were $38.7 million,$54,276,000, a declinedecrease of 20.5%23% from sales of $48.6 million$70,051,000 in the comparable period of the priorlast year. The order backlog was $38.6 million at October 31, 2004. This compares to order backlogs of $39.6 million at July 31, 2004 and $46.3 million at October 31, 2003.

Several issuesSales for the quarter were adversely affected theby a continuing soft marketplace for laboratory furniture marketplace during the quarter. Uncertainties surrounding the presidential election and its potential impact on the price of prescription drugsfurniture. Spending for new research projects by pharmaceutical companies continued to impactbe below levels of recent years. Additionally, the willingnessnumber of pharmaceutical companies to investprojects generally available in new research projects. Additionally, the marketplace was affectedreduced, or construction was delayed, by the significant increases in the cost of construction materials particularly steel. The resulting higher-than-planned construction costs delayedover the award date of many projects, as some customers were forced to reduce the scope of their projects to remain within budget. Reduced state budgets also adversely affected fundingpast year. Funding available for education construction projects. An increase inprojects also continued to be affected by reduced state spending budgets. However, order activity resultingfor the quarter increased over the two previous quarters, as activity in the marketplace showed some improvement after the Presidential election in November 2004. The order backlog at January 31, 2005 was $41.7 million, up from the resolution of the uncertainty surrounding the presidential election is not expected to begin to improve sales before the Company’s fourth quarter.$38.6 million at October 31, 2004.

The gross profit margin for the three months ended OctoberJanuary 31, 20042005 was 19.3%13.0% of sales, as compared to 16.8%17.3% of sales in the comparable quarter of the prior year. The gross profit margin for the sixnine months ended OctoberJanuary 31, 20042005 was 17.9%16.5%, as compared to 15.9%16.3% in the comparable period of the prior year. The improvedgross profit margin for the current quarter was adversely affected by manufacturing inefficiencies resulting from the low sales and cost overruns on several completed projects. Additionally, gross profit margins for the three and six monthseach of the current year resulted from improvements in manufacturing costs and efficiencies, partially offsetperiods were adversely affected by higher costs in the

current year for raw materials, particularly steel as well as higher energy costs.

To further reduce costs, significant reductions in the Statesville workforce were made during the quarter, in both the hourly and administrative areasepoxy resin. The impact of the Company. The reductions, which involved approximately 18% of the Statesville workforce, included 58 permanent employees and 42 temporary employees. Annual savings associated with the reductions are estimated at $3.6 million, of which $774,000 relates to operating expenses. All associated termination benefits, which totaled $31,488, were expensed during the current quarter. Additionally, a number ofabove items was partially offset by continuing cost cutting initiatives were implemented during the quarter that are expected to further reduce manufacturing and raw material costs.reduction activities.

Operating expenses for the three months ended OctoberJanuary 31, 20042005 were $3.3$3.0 million, or 17.8%19.4% of sales, as compared to $3.3$3.2 million, or 13.6%14.9% of sales, in the comparable period of the prior year. Operating expenses for the sixnine months ended OctoberJanuary 31, 20042005 were $6.3$9.3 million, or 16.3%17.2% of sales, as compared to $6.3$9.5 million, or 13.0%13.6% of sales, in the comparable period of the prior year.

Operating expenses for the current year reflect a decline in sales commissions of $196,000 and $458,000 for the three and nine months ended January 31, 2005, respectively, as compared to the same periods last year. The decline in sales commissions was primarily attributable to the lower sales volumes. Operating expenses also benefited from continuing cost reduction activities, including reduced salaries and benefits of $269,000 and $361,000 for the three and nine months ended January 31, 2005, respectively, resulting from the workforce reduction made during the second quarter of the current year. These expense reductions were partially offset by increases in bad debt expense over the prior year comparable periods of $139,000 and $454,000 for the three and nine months ended January 31, 2005, respectively. The increase in operating expenses as a percent of sales for each of the current year periods resulted as operating expense levels remained relatively flat as sales declined. As comparedexpenses were not reduced in proportion to the prior year periods, operating expenses included increasesdecline in bad debt expense of $199,000 and $315,000 for the three months and six months ended October 31, 2004, respectively.sales.

Operating earningslosses of $293,000$993,000 and $623,000$370,000 were recorded for the three months and sixnine months ended OctoberJanuary 31, 2004,2005, respectively, compared to $783,000operating earnings of $512,000 and $1.4 million$1,897,000 recorded for the comparable periodperiods of the prior year.

Interest expense was $84,000, and $170,000$254,000 for the three months and sixnine months ended OctoberJanuary 31, 2004,2005, respectively, compared to $83,000$71,000 and $161,000$232,000 for the same periods of the prior year. The impacts of increased borrowing rates for each of the three and six monthsperiods of the current year were substantially offset by lower levels of borrowings.

Other expense was $46,000$47,000 and other income was $3,000$44,000 in the three months and sixnine months ended OctoberJanuary 31, 2004,2005, respectively, compared to other expenseincome of $47,000$14,000 and other income of $149,000$163,000 for the comparable periods of the prior year. Other income for the nine months of the prior year was increased by $295,000 in the first quarter of the prior yearfrom a payment received from the resolution of a

disputed claim for laboratory furniture sold by the Company several years earlier.

Income tax expensesbenefits of $55,000$382,000 and $155,000$227,000 were recorded for the three months and sixnine months ended OctoberJanuary 31, 2004,2005, respectively, as compared to an income tax expense of $235,000$164,000 and $494,000$658,000 recorded for the comparable periods of the prior year. The effective tax rate was approximately 34.0% for the three and sixnine months ended OctoberJanuary 31, 20042005, and 36.0% for the three and sixnine months period ended OctoberJanuary 31, 2003.2004.

NetA net loss of $742,000, or $0.30 per diluted share, was reported for the three months ended January 31, 2005. A net loss of $441,000, or $0.18 per diluted share, was reported for the nine months ended January 31, 2005. This compares to net earnings of $108,000 and $301,000,$291,000, or $.04$0.12 per diluted share, and $.12net earnings of $1,170,000, or $.47 per diluted share, were recorded for the three months and six months ended October 31, 2004, respectively, as compared to net earnings of $418,000 and $879,000, or $.17 per diluted share and $.35 per diluted share for the comparable periods of the prior year.

Liquidity and Capital Resources

Historically, the Company’s principal sources of liquidity have been funds generated from operations, supplemented as needed by short-term borrowings. The Company believes that these sources, will be sufficient to support ongoing business levels, including capital expenditures, through the current fiscal year.year and fiscal year 2006.

The Company had working capital of $13.9$13.0 million at OctoberJanuary 31, 2004,2005, as compared to $12.6 million at April 30, 2004. The ratio of current assets to current liabilities was 1.9-to-1.02.1-to-1.0 at OctoberJanuary 31, 2004,2005, as compared to 1.7-to-1.0 at April 30, 2004. At OctoberJanuary 31, 2004,2005, advances of $6,079,000$3,263,000 were outstanding under the Company’s revolving credit bank loan, leaving available creditadvances under this line in the amount of $2,921,000. During the quarter, the$5,737,000. The term of this loan was extended tois through December 31, 2006.

At January 31, 2005, long-term debt of the Company included $1,211,000 of obligations under a bank note, of which $1,118,000 was due within one year and classified as a current liability in the balance sheet. The note includes certain covenants as to tangible net worth, funds flow coverage, current ratio and ratio of liabilities to tangible net worth. At January 31, 2005, the Company’s funds flow coverage ratio fell below the minimum required under the financial covenant at the beginning of the quarter because of the net loss reported by the Company in the third quarter. The bank has waived the funds flow coverage ratio requirement for the period ended January 31, 2005 and amended the ratio calculation for the period ending April 30, 2005 to lower the required ratio for that period. The Company expects to be in compliance with all covenants, as amended, under the note in future periods.

The Company’s operations provided cash of $1.9$5.7 million during the sixnine months ended OctoberJanuary 31, 2004,2005. The cash provided was primarily attributable to a $5.7 million decrease in receivables, which benefited from the lower sales volumes, and depreciation expense of $1.5 million. Cash was used by a $3.2 million reduction in accounts payable and other current liabilities, and the $441,000 net loss after taxes.

The Company’s operations used cash of $2.7 million during the nine months ended January 31, 2005, primarily due to a $6.6 million increase in accounts receivable and a decrease in accounts receivable. Cash of $890,000 was also received during the quarter from the cancellation of life insurance policies covering all salaried employees when these policies were replaced with a group term insurance plan. The favorable impact of these items was partially offset by the impact of a$3.2 million decrease in accounts payable and other current liabilities. The Company’s operations usedimpact of these items was partially offset by cash provided from net earnings after taxes of $2.2$1.2 million, during the six months ended October 31, 2003, primarily resulting fromdepreciation expense of $1.5 million, a significant increasedecrease in accounts receivableinventories of $1.4 million, and a decrease in accounts payable.

During the sixnine months ended OctoberJanuary 31, 2004,2005, the Company used cash of $417,000$674,000 in investing activities, primarily for purchases of production equipment. This compares to the use of $1.2 million$1,310,000 for similar investing activities in the same period of the prior year.

The Company’s financing activities used cash of $1.8$5.1 million during the sixnine months ended OctoberJanuary 31, 2004. This included $917,0002005, with $3.7 million of this amount for the repayment of advances under the revolving credit loan,short-term borrowings. Additionally, $838,000 was used for long-term debt repayments and $523,000 was used for the payment of $559,000, and cash dividends paid of $349,000.dividends. Financing activities provided cash of $3.7$4.6 million in the same period of the prior year, whichyear. This included $3.3cash of $4.7 million receivedprovided from advances under the revolving credit loanshort-term borrowings and $1.2 million provided from an increase in long-term debt. For thatIn the prior year period, cash$801,000 was used for long-term debt repayments and $522,000 was used for the payment of $522,000 and cash dividends paid of $348,000.dividends.

In the third quarter of the current year, the Company began a project to upgrade its enterprise resource planning (ERP) software at an estimated project cost of $1.8 million. The Company has entered into a lease arrangement to fund the majority of the expected costs of the project, as such costs are incurred. Costs of $375,000 were incurred and funded under the lease arrangement during the third quarter ended January 31, 2005. The project is expected to be completed during the second quarter of fiscal year 2006.

Outlook for Remainder of Fiscal Year 2005

In addition to general economic factors affecting the Company and its markets, demand for the Company’s products is also dependent upon the number of laboratory construction projects planned and/or current progress in projects already under construction. The Company’s ability to predict future demand is very limited given, among other general economic factors affecting the Company and its markets, the Company’s role as subcontractor or supplier to dealers of subcontractors.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements in this report constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). 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. The cautionary statements made pursuant to the Reform Act herein and elsewhere by the Company should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by the Company prior to the effective date of the Reform Act. The Company cannot always predict what factors would cause actual results to differ materially from those indicated by the forward-looking statements. In addition, readers are urged to consider statements that include the terms “believes”, “belief”, “expects”, “plans”, “objectives”, “anticipates”, “intends” or the like to be uncertain and forward-looking.

REVIEW BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

A review of the interim financial information included in this Quarterly Report on Form 10-Q for the three months and sixnine months ended OctoberJanuary 31, 20042005 has been performed by PricewaterhouseCoopers LLP, the Company’s independent auditors. Their report on the interim financial information follows.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Kewaunee Scientific Corporation

Statesville, North Carolina

We have reviewed the accompanying condensed consolidated balance sheet of Kewaunee Scientific Corporation as of OctoberJanuary 31, 20042005 and April 30, 2004, and the related condensed consolidated statements of operations for each of the three and six-monthnine-month periods ended OctoberJanuary 31, 20042005 and OctoberJanuary 31, 20032004 and the condensed consolidated statement of cash flows for the six-monthnine-month periods ended OctoberJanuary 31, 20042005 and OctoberJanuary 31, 2003.2004. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements information for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of April 30, 2004, and the related consolidated statements of operations, of stockholder’s equity, and of cash flows for the year then ended (not presented herein), and in our report dated June 4, 2004 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of April 30, 2004, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

PricewaterhouseCoopers LLP

Charlotte, North Carolina

NovemberFebruary 22, 20042005

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There are no material changes to the disclosures made on this matter in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2004.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

An evaluation was performed under the supervision and the participation of the company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of OctoberJanuary 31, 2004.2005. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that, as of OctoberJanuary 31, 2004,2005, the Company’s disclosure controls and procedures were adequate and effective and designed to ensure that all material information required to be filed in this quarterly report is made known to them by others within the Company and its subsidiaries.

(b) Changes in internal controls

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to OctoberJanuary 31, 2004.2005. As no significant deficiencies or material weaknesses were found, no corrective actions were taken.

PART II. OTHER INFORMATION

The Company’s Annual Meeting of Stockholders was held on August 25, 2004. Information regarding the results of this meeting are incorporated by reference from the Company’s Report on Form 10-Q for the three months ended July 31, 2004.

(a) Exhibits

(b) Reports on Form 8-K

A Form 8-K was filed on August 26,November 24, 2004 with the Commission which included as an exhibit the Company’s Press Release announcing the financial results for the firstsecond quarter ended JulyOctober 31, 2004.

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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