Kewaunee Scientific Reports
Increased Sales and Earnings
For First Quarter
| Exchange: NASDAQ (KEQU) | | Contact: | D. Michael Parker |
| | | | 704/871-3290 |
STATESVILLE, N.C. August 25, 2009 — Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported increased sales and earnings for its first quarter ended July 31, 2009.
Net earnings for the quarter increased 9% to $1,071,000, or $0.42 per diluted share, from net earnings of $981,000, or $0.38 per diluted share, in the first quarter of the prior year. Earnings benefited from increased domestic sales volumes, lower manufacturing costs, and on-going cost savings initiatives, which more than offset the unfavorable impact of a softer Asian laboratory marketplace and higher pension costs.
Sales for the quarter increased 3% to $26,249,000, from sales of $25,395,000 in the first quarter of the prior year. Domestic operations sales increased 11% to $23,358,000, from sales of $21,013,000 in the first quarter last year. International operations sales, which continued to be impacted by a slowdown in construction activity, were $2,891,000, down from $4,382,000 in the first quarter last year. The Company’s order backlog remained strong, both domestic and international. The backlog was $60.7 million at July 31, 2009, up slightly from $60.4 million at July 31, 2008 and down slightly from the record level of $62.7 million at April 30, 2009.
The Company’s balance sheet remains strong. Bank borrowings and capital lease obligations totaled $6.6 million at July 31, 2009, as compared to $6.1 million at July 31, 2008. The debt-to-equity ratio was .22-to-1 at the end of the quarter, as compared to .21-to-1 at the end of the first quarter last year. The Company amended its $14 million unsecured bank credit facility during the quarter to extend the facility’s maturity date to July 31, 2012. Cash on hand was $3.5 million at the end of the quarter, as compared to $3.6 million at the end of the first quarter last year. Working capital was $18.8 million at July 31, 2009, up from $16.3 million at the end of the first quarter last year.
“Our excellent first quarter sales, earnings, and order backlog are reflective of our continuing emphasis on improvements in every aspect of our business,” said William A. Shumaker, President and Chief Executive Officer. “Continuing strategies to strengthen and expand our sales organizations, increase sales volumes, and reduce product and operational costs, continue to make us a stronger and more efficient company.
“Overall, the markets for our products are continuing to hold up well under the global economic slowdown. The domestic laboratory furniture marketplace continues to be healthy, particularly for larger construction projects where our bidding activity remains strong. We also continue to experience good overall bidding activity for smaller domestic laboratory projects, with the level of activity varying by geographic area and market segment. The international laboratory marketplace, while softer than last year, is providing an increasing number of opportunities. The full manufacturing capabilities and lower costs of our new plant in Bangalore, India, are making us more competitive in the Asian marketplace. Both the domestic and international markets remain highly-competitive.”
Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of scientific and technical furniture. The Company's corporate headquarters are located in Statesville, North Carolina. The Company’s manufacturing facilities are located in Statesville and Bangalore, India. The Company has subsidiaries in Singapore and Bangalore that serve the Asian and Middle East markets. 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 [unaudited]
(in thousands, except per share data)
| | | Three Months Ended | |
| | | July 31 | | | July 31 | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Net sales | | $ | 26,249 | | | $ | 25,395 | |
| Cost of products sold | | | 20,485 | | | | 20,044 | |
| | | | | | | | | |
| Gross profit | | | 5,764 | | | | 5,351 | |
| Operating expenses | | | 3,966 | | | | 3,586 | |
| | | | | | | | | |
| Operating earnings | | | 1,798 | | | | 1,765 | |
| Other expense | | | — | | | | (38 | ) |
| Interest expense | | | (41 | ) | | | (89 | ) |
| | | | | | | | | |
| Earnings before income taxes | | | 1,757 | | | | 1,638 | |
| Income tax expense | | | 589 | | | | 541 | |
| | | | | | | | | |
| Net earnings | | | 1,168 | | | | 1,097 | |
| Less: net earnings attributable to the noncontrolling interest | | | (97 | ) | | | (116 | ) |
| Net earnings attributable to Kewaunee Scientific Corporation | | $ | 1,071 | | | $ | 981 | |
| | | | | | | | | |
| Net earnings per share attributable to Kewaunee Scientific Corporation stockholders | | | | | | | | |
| Basic | | $ | 0.42 | | | $ | 0.38 | |
| Diluted | | $ | 0.42 | | | $ | 0.38 | |
| | | | | | | | | |
| Weighted average number of common shares outstanding (in thousands) | | | | | | | | |
| Basic | | | 2,556 | | | | 2,551 | |
| Diluted | | | 2,558 | | | | 2,570 | |
Condensed Consolidated Balance Sheets
(in thousands)
| | | July 31 | | | April 30 | |
| | | 2009 | | | 2009 | |
| | | [unaudited] | | | | |
| Assets | | | | | | |
| | | | | | | |
| Cash and cash equivalents | | $ | 3,044 | | | $ | 3,559 | |
| Restricted cash | | | 467 | | | | 456 | |
| Receivables, less allowances | | | 23,874 | | | | 24,526 | |
| Inventories | | | 9,348 | | | | 7,839 | |
| Prepaid expenses and other current assets | | | 1,497 | | | | 1,165 | |
| Total Current Assets | | | 38,230 | | | | 37,545 | |
| Net property, plant and equipment | | | 12,765 | | | | 11,369 | |
| Other assets | | | 3,969 | | | | 3,615 | |
| Total Assets | | $ | 54,964 | | | $ | 52,529 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
| Short-term borrowings | | $ | 6,229 | | | $ | 5,720 | |
| Current obligations under capital leases | | | 163 | | | | 220 | |
| Accounts payable | | | 9,041 | | | | 8,812 | |
| Other current liabilities | | | 3,994 | | | | 3,911 | |
| Total Current Liabilities | | | 19,427 | | | | 18,663 | |
| Other non-current liabilities | | | 6,151 | | | | 5,607 | |
| Total Liabilities | | | 25,578 | | | | 24,270 | |
| Noncontrolling interest | | | 1,442 | | | | 1,306 | |
| Kewaunee Scientific Corporation equity | | | 27,944 | | | | 26,953 | |
| Total Equity | | | 29,386 | | | | 28,259 | |
| Total Liabilities and Equity | | $ | 54,964 | | | $ | 52,529 | |
