KEWAUNEE SCIENTIFIC REPORTS RESULTS
NET EARNINGS FOR YEAR INCREASE 104%,
SALES INCREASE 9.9%
Exchange: NASDAQ (KEQU) Contact: D. Michael Parker
704/871-3290
STATESVILLE, N.C. June 24, 2008 Kewaunee Scientific Corporation (Nasdaq:
KEQU) today reported results for its fiscal year and fourth quarter ended April
30, 2008.
Net earnings for the year increased 104% to $3,134,000, or $1.23 per diluted
share, up from net earnings of $1,540,000, or $0.62 per diluted share, in the
prior year. Earnings benefited from a strong performance from the Company's
domestic operations, improved profit margins, and continued growth of its
international operations.
Sales for the year increased 9.9% to $89,510,000, up from sales of $81,441,000
in the prior year. Incoming orders were strong throughout the year, both
domestic and international. The order backlog was a record year-end level of
$58.7 million at April 30, 2008, up from $51.1 million at April 30, 2007. Sales
from domestic operations increased to $73,768,000, up 10.8% from the prior year.
Sales from international operations increased to $15,742,000, up 6.0% from the
prior year.
"We made progress in a number of important areas in fiscal year 2008," said
William A. Shumaker, President and Chief Executive Officer. "We are particularly
pleased with the performance of our domestic operations, which were successful
in increasing sales over all major product lines, building up our order backlog
to record levels, and reducing manufacturing costs. Our international operations
continued to execute well, with continued growth in sales, earnings, and order
backlog during the year. In addition to operational accomplishments, our
Statesville operations successfully moved to a new comprehensive ERP business
management system late in the fourth quarter, and we successfully completed our
project to become Sarbanes-Oxley Section 404 compliant.
"Our continued successes in fiscal year 2008 have made us a much stronger
Company and keeps us on a solid track for long-term success and profitability,"
continued Mr. Shumaker. "Looking toward fiscal year 2009, we begin the year with
a strong order backlog, good operating momentum, and healthy marketplaces for
our products, both domestically and internationally. Like many businesses, we
are challenged these days with extraordinary escalations in prices of raw
materials, particularly steel and epoxy resin, energy, and transportation costs.
We are aggressively pursuing strategies to minimize these increases."
The Company's financial condition further strengthened during the year. Working
capital increased to $15.9 million at April 30, 2008, up from $12.3 million at
the end of the prior year. Cash on hand at the end of the year increased to $4.3
million, up from $2.6 million at the end of the prior year. Bank borrowings and
capital lease obligations were $5.0 million at year-end, as compared to $4.3
million at the end of the prior year, and the debt-to-equity ratio was .19-to-1
at year-end, as compared to .18-to-1 at the end of the prior year.
Net earnings for the fourth quarter were $446,000, or $.17 per diluted share, as
compared to net earnings of $517,000, or $.21 per diluted share, in the prior
year. Sales for the fourth quarter were $22,116,000, down slightly from sales of
$22,721,000 in the same quarter of the prior year. Sales from domestic
operations for the quarter were flat with the same quarter of the prior year,
while sales from international operations declined slightly. Shipments and
earnings were unfavorably impacted by inefficiencies and expenses associated
with the Company's conversion during the quarter to a new comprehensive ERP
system which incorporated all of the Company's business management systems.
As recently announced, the Company increased its quarterly cash dividend to
eight cents per outstanding share, up from seven cents per share declared in the
previous quarter.
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 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
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Year Ended
April 30 April 30
2008 2007 2008 2007
------- ------- ------- -------
(Unaudited)
Net sales $22,116 $22,721 $89,510 $81,441
Cost of products sold 17,579 18,467 70,338 66,355
------- ------- ------ -------
Gross profit 4,537 4,254 19,172 15,086
Operating expenses 3,748 3,363 13,559 11,728
------- ------- ------ -------
Operating earnings 789 891 5,613 3,358
Other income 49 20 47 53
Interest expense 8 (146) (294) (670)
------- ------- ------ -------
Earnings before income taxes 846 765 5,366 2,741
Income tax expense 342 289 1,733 902
------- ------- ------ -------
Earnings before minority interests 504 476 3,633 1,839
Minority interests in subsidiaries (58) 41 (499) (299)
------- ------- ------- -------
Net earnings $ 446 $ 517 $ 3,134 $ 1,540
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Net earnings per share
Basic $ 0.17 $ 0.21 $ 1.24 $ 0.62
Diluted $ 0.17 $ 0.21 $ 1.23 $ 0.62
Weighted average number of common shares
outstanding (in thousands)
Basic 2,551 2,494 2,530 2,493
Diluted 2,577 2,502 2,557 2,495
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 30 April 30
2008 2007
-------- --------
ASSETS
Cash and cash equivalents $ 3,784 $ 2,231
Restricted cash 480 372
Receivables, less allowances 20,561 19,061
Inventories 6,984 5,869
Prepaid expenses and other current assets 1,847 981
------- -------
Total current assets 33,656 28,514
Net property, plant and equipment 11,825 11,255
Other assets 5,599 5,471
------- -------
Total Assets $51,080 $45,240
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $ 4,551 $ 3,489
Current obligations under capital leases 323 360
Accounts payable 8,929 8,437
Other current liabilities 3,933 3,897
------- -------
Total current liabilities 17,736 16,183
Other non-current liabilities 6,397 5,009
Total stockholders' equity 26,947 24,048
------- -------
Total Liabilities and Stockholders' Equity $51,080 $45,240
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