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KEWAUNEE SCIENTIFIC CORPORATION
Kewaunee Scientific Announces
Significantly Improved Second Quarter Results
and Quarterly Dividend
Exchange: NASDAQ (KEQU) Contact: D. Michael Parker
704/871-3290
STATESVILLE, N.C., November 20, 2007 /PRNewswire-FirstCall/ -- Kewaunee
Scientific Corporation (Nasdaq: KEQU - News) today announced results for its
second quarter ended October 31, 2007 and the declaration of its quarterly
dividend.
Net earnings for the quarter were $1,212,000, or $0.47 per diluted share, up
113% from net earnings of $569,000, or $0.23 per diluted share, for the second
quarter of the prior year. Earnings benefited from a strong performance from the
Company's domestic operations, significantly improved profit margins, and
continued growth of its international operations.
Sales for the quarter were $24.7 million, up 15.6% from sales of $21.4 million
in the second quarter of the prior year. Sales from domestic operations
increased to $20.1 million, up 17.9% from the same period last year. Sales from
international operations increased to $4.6 million for the quarter, up 6.9% from
the same period last year.
Net earnings for the six months ended October 31, 2007 were $1.9 million, or
$0.74 per diluted share, an increase of 169% from net earnings for the same
period last year of $702,000, or $0.28 per diluted share. The gross profit
margin for the six-month period increased to 21.6% from 17.7% in the same period
last year. Sales for the six months ended October 31, 2007 were $45.5 million,
an increase of 11.9% from sales of $40.7 million in the same period last year.
Incoming orders remained strong during the quarter. The order backlog increased
for the fourth consecutive quarter to a record $54.9 million at October 31,
2007, which was slightly above the end of the previous quarter and up from $34.3
million at October 31, 2006.
The Company's balance sheet further strengthened during the quarter. Bank
borrowings and capital lease obligations declined to $3.0 million at October 31,
2007, down from $9.1 million at October 31, 2006. The debt-to-equity ratio was
..12-to-1 at the end of the quarter, down from .35-to-1 at the end of the same
period last year. Cash on hand was $1.8 million at the end of the quarter, as
compared to $1.0 million at the end of the same period last year. Working
capital was $14.0 million at October 31, 2007, up from $11.6 million at the end
of the same period last year.
The Company's international operations continued to execute well during the
quarter. To allow the Company to take advantage of rapidly growing sales
opportunities in Asia and the Middle East, during the quarter the Company's
Board of Directors approved the relocation and expansion of the Company's
manufacturing facility in Bangalore, India to a new much larger facility in the
Bangalore area.
"We remain optimistic about Kewaunee's long-term success and profitability, both
in the domestic and international markets," said William A. Shumaker, President
and Chief Executive Officer. "We look forward to building on the progress made
in our domestic operations, and we have high expectations for continued growth
in sales and earnings of our international operations, particularly after our
new manufacturing facility in Bangalore becomes operational early next fiscal
year. Regarding the remainder of our current fiscal year, we expect our
significant progress to continue."
The Company also announced today that its Board of Directors approved a cash
dividend of seven cents per outstanding share to stockholders of record at the
close of business on November 30, 2007, payable on December 14, 2007.
Kewaunee Scientific Corporation is a recognized leader in the design,
manufacture, and installation of scientific and technical furniture. The
Company's corporate headquarters and domestic manufacturing facilities are
located in Statesville, North Carolina. The Company also has subsidiaries in
Singapore and Bangalore, India that serve the Asian 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.
[see financial information on back of page]
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
October 31 October 31
2007 2006 2007 2006
---- ---- ---- ----
Net sales $ 24,727 $ 21,385 $ 45,511 $ 40,679
Cost of products sold 19,174 17,305 35,695 33,471
----------- ----------- ----------- -----------
Gross profit 5,553 4,080 9,816 7,208
Operating expenses 3,370 2,899 6,518 5,536
----------- ----------- ----------- -----------
Operating earnings 2,183 1,181 3,298 1,672
Other income 1 26 4 44
Interest expense (106) (195) (216) (382)
----------- ----------- ----------- -----------
Earnings before income taxes 2,078 1,012 3,086 1,334
Income tax expense 658 328 970 406
----------- ----------- ----------- -----------
Earnings before minority interests 1,420 684 2,116 928
Minority interests in subsidiaries 208 115 230 226
----------- ----------- ----------- -----------
Net earnings $ 1,212 $ 569 $ 1,886 $ 702
=========== =========== =========== ===========
Net earnings per share
Basic $ 0.48 $ 0.23 $ 0.75 $ 0.28
Diluted $ 0.47 $ 0.23 $ 0.74 $ 0.28
Weighted average number of common
shares outstanding (in thousands)
Basic 2,522 2,492 2,512 2,492
Diluted 2,554 2,492 2,538 2,493
Condensed Consolidated Balance Sheets
(in thousands)
October 31 April 30
2007 2007
----------- -----------
(unaudited)
Assets
- ------
Cash and cash equivalents $ 1,351 $ 2,231
Restricted cash 445 372
Receivables, less allowances 20,169 19,061
Inventories 6,421 5,869
Prepaid expenses and other current assets 1,209 981
----------- -----------
Total current assets 29,595 28,514
Net property, plant and equipment 11,416 11,255
Other assets 6,011 5,471
----------- -----------
Total Assets $ 47,022 $ 45,240
=========== ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Short-term borrowings $ 2,336 $ 3,489
Current obligations under capital leases 351 360
Accounts payable 8,423 8,437
Other current liabilities 4,469 3,897
----------- -----------
Total current liabilities 15,579 16,183
----------- -----------
Obligations under capital leases 310 476
Other non-current liabilities 5,073 4,533
Total stockholders' equity 26,060 24,048
----------- -----------
Total Liabilities and Stockholders' Equity $ 47,022 $ 45,240
=========== ===========