Kewaunee Scientific Announces
Improved First Quarter Results
Exchange: NASDAQ (KEQU) Contact: D. Michael Parker
704/871-3290
STATESVILLE, N.C. August 26, 2008 -- Kewaunee Scientific Corporation (Nasdaq:
KEQU) today announced results for its first quarter ended July 31, 2008.
Net earnings for the quarter increased 46% to $981,000, or $0.38 per diluted
share, from net earnings of $674,000, or $0.27 per diluted share, in the first
quarter of the prior year. Earnings benefited from increased domestic and
international sales volumes, solid manufacturing performances in all three
Statesville plants, and on-going cost savings initiatives. The favorable impact
of these items more than offset higher prices during the quarter for certain raw
materials, particularly steel and resin, and for energy and transportation.
Sales for the quarter were a record $25,395,000, up 22% from sales of
$20,784,000 in the first quarter of the prior year, as the global marketplace
for the Company's products remained strong. Domestic operations sales increased
17% over the comparable period of the prior year to $21,013,000, while
international operations sales increased 58% to $4,382,000. The order backlog
increased to a record $60.4 million at July 31, 2008, up from $58.7 million at
April 30, 2008, and $54.7 million at July 31, 2007.
"All aspects of our operations performed well during the first quarter," said
William A. Shumaker, President and Chief Executive Officer. "With continuing
healthy demand for our products, our strong order backlog, improved operational
performance, and growing international opportunities, we feel Kewaunee is on
track for a good year. Our on-going improvement continues to be challenged,
however, by higher prices for certain raw materials and by higher energy and
transportation costs. To date, we have been successful in moderating the impact
of these increases on our bottom line, as we have implemented strategies to
increase sales volumes, increase sales prices when possible, and reduce energy
consumption and costs. We will continue to diligently pursue these and other
strategies as we progress through this challenging year."
The Company's balance sheet remains strong. Bank borrowings and capital lease
obligations totaled $6.1 million at July 31, 2008, as compared to $5.3 million
at July 31, 2007. 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. Cash
on hand was $3.6 million at the end of the quarter, as compared to $2.2 million
at the end of the first quarter last year. Working capital was $16.3 million at
July 31, 2008, up from $13.0 million at the end of the comparable period last
year.
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.
[see financial information on back of page]
Consolidated Statements of Operations [unaudited]
(in thousands, except per share data)
Three Months Ended
July 31 July 31
2008 2007
-------- --------
Net sales $ 25,395 $ 20,784
Cost of products sold 20,044 16,521
-------- --------
Gross profit 5,351 4,263
Operating expenses 3,586 3,148
-------- --------
Operating earnings 1,765 1,115
Other income (expense) (38) 3
Interest expense (89) (110)
-------- --------
Earnings before income taxes 1,638 1,008
Income tax expense 541 312
-------- --------
Earnings before minority interests 1,097 696
Minority interests in subsidiaries 116 22
-------- --------
Net earnings $ 981 $ 674
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Net earnings per share
Basic $ 0.38 $ 0.27
Diluted $ 0.38 $ 0.27
Weighted average number of common
shares outstanding (in thousands)
Basic 2,551 2,502
Diluted 2,570 2,521
Condensed Consolidated Balance Sheets
(in thousands)
July 31 April 30
2008 2008
------- --------
[unaudited]
Assets
- ------
Cash and cash equivalents $ 3,131 $ 3,784
Restricted cash 439 480
Receivables, less allowances 22,969 20,087
Inventories 7,310 6,984
Prepaid expenses and other current assets 1,246 1,847
------- --------
Total current assets 35,095 33,182
Net property, plant and equipment 12,042 11,825
Other assets 5,573 5,599
------- --------
Total Assets $52,710 $ 50,606
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Liabilities and Stockholders' Equity
- ------------------------------------
Short-term borrowings $ 5,707 $ 4,551
Current obligations under capital leases 291 323
Accounts payable 8,928 8,929
Other current liabilities 3,845 3,459
------- --------
Total current liabilities 18,771 17,262
Other non-current liabilities 6,346 6,397
Total stockholders' equity 27,593 26,947
------- --------
Total Liabilities and Stockholders' Equity $52,710 $ 50,606
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