Exhibit 99.1
KEWAUNEE SCIENTIFIC REPORTS RESULTS FOR YEAR AND FOURTH QUARTER
STATESVILLE, N.C., June 15 /PRNewswire-FirstCall/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported results for its fiscal year and
fourth quarter ended April 30, 2005. Sales for the year were $73,481,000, a
decrease of 22% from sales of $94,700,000 in the prior year. A net loss of
$147,000, or $0.06 per diluted share, was reported for the year, as compared
to net earnings of $1,462,000, or $0.59 per diluted share, reported for the
prior year.
The marketplace for laboratory products was soft during most of the year.
Several factors, which have been previously discussed, slowed purchase orders
and construction, including uncertainties surrounding the November
presidential election and the resulting hesitancy of pharmaceutical companies
to invest in new projects. Due to the long lead-time between project approvals
and the time laboratory furniture is needed, manufacturing and shipping
activities for laboratory products have only recently begun to strengthen.
Higher construction costs during the year reduced the number of laboratory
projects generally available in the marketplace, or delayed construction, as
it was common for project budgets to be reexamined because of higher than
expected project costs. Following several strong years, spending for
laboratory construction for education science buildings slowed significantly
during the year due to the higher construction costs, as well as reductions in
state funds available for these projects. The Company's order backlog was
$40.6 million at April 30, 2005, as compared to $43.1 million at April 30,
2004.
Earnings for the year were adversely affected by lower sales volumes and
significant increases in cost of certain raw materials. The most significant
increases were for steel and epoxy resin which increased the Company's costs
for the year by an estimated $1.4 million, or 1.9% of sales. Efforts to pass
on these added costs to the Company's customers during the year were met with
only limited success due to the very competitive pricing environment in which
the Company operates.
Aggressive activities to reduce overhead and material costs and improve
manufacturing efficiencies were successful and are continuing. These
improvements increased the gross profit margin on sales to 17.0% for the year,
up from 16.6% in the prior year, despite the significant increases in raw
material costs. Operating expenses for the year declined to $12.7 million from
$13.5 million in the prior year, primarily due to the workforce reduction made
during the year.
"Fiscal year 2005 was an extremely challenging and disappointing year,"
said William A. Shumaker, President and Chief Executive Officer of Kewaunee.
"Our successful efforts to aggressively reduce costs throughout the Company
were overshadowed by the impact of the lower sales volumes from the softer
marketplace and the unprecedented increases in the cost of raw materials.
"Looking forward, we expect fiscal year 2006 to be a much better and
profitable year," Mr. Shumaker continued. "Although the laboratory furniture
marketplace and the technical furniture marketplace did not improve as rapidly
as we expected, recent indications are they have stabilized and will continue
their gradual improvement. At the same time, we are confident of continued
success in our cost reduction efforts and recent indications are that
pressures on raw material prices are subsiding. We recently increased our
investment in our Asian subsidiaries to take advantage of growth opportunities
in the international marketplace.
"We ended the year with a strong balance sheet," Mr. Shumaker continued. "
Total debt was $5.1 million at year-end, down from $9.0 million at April 30,
2004. Operations provided cash of $3.1 million for the year."
Sales for the fourth quarter ended April 30, 2005 were $19,205,000, a 22%
decrease from sales of $24,649,000, in the same period last year, but a 23%
increase over the third quarter. Net earnings for the quarter were $294,000,
or $.12 per diluted share, including an income tax benefit of $261,000. This
compares to net earnings of $292,000, or $.11 per diluted share, in the fourth
quarter last year. Earnings for the quarter were impacted by the lower sales
volumes and higher raw material costs, partially offset by an improvement in
the gross profit margin to 18.3% of sales from 17.3% of sales in the same
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 manufacturing facilities are located in
Statesville, North Carolina. 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.
Contact: D. Michael Parker
704/871-3290
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
April 30 April 30
---------------------- ----------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(Unaudited)
Net sales $ 19,205 $ 24,649 $ 73,481 $ 94,700
Cost of products sold 15,687 20,385 60,997 79,011
Gross profit 3,518 4,264 12,484 15,689
Operating expenses 3,363 3,963 12,699 13,491
Operating earnings (loss) 155 301 (215) 2,198
Other (expense) income (2) (13) 2 319
Interest expense (56) (69) (310) (301)
Earnings (loss) before
income taxes 97 219 (523) 2,216
Income tax (benefit)
expense (261) (37) (488) 621
Earnings (loss) before
minority interests 358 256 (35) 1,595
Minority interest in
subsidiaries (64) 36 (112) (133)
Net earnings (loss) $ 294 $ 292 $ (147) $ 1,462
Net earnings (loss)
per share
Basic $ 0.12 $ 0.11 $ (0.06) $ 0.59
Diluted $ 0.12 $ 0.11 $ (0.06) $ 0.59
Weighted average number
of common shares
outstanding (in thousands)
Basic 2,492 2,488 2,491 2,486
Diluted 2,492 2,507 2,495 2,497
Condensed Consolidated Balance Sheets
(in thousands)
April 30 April 30
2005 2004
--------- ---------
Assets
Cash and cash equivalents $ 225 $ 805
Restricted cash 379 362
Receivables, less allowances 21,683 24,987
Inventories 3,542 4,285
Prepaid expenses and other current assets 951 1,097
Total current assets 26,780 31,536
Net property, plant and equipment 10,730 11,362
Property held for sale 1,450 1,450
Other assets 7,252 6,113
Total Assets $ 46,212 $ 50,461
Liabilities and Stockholders' Equity
Short-term borrowings $ 3,778 $ 6,996
Current portion of long-term debt and
capital leases 1,042 1,118
Accounts payable 8,558 6,924
Other current liabilities 3,021 3,881
Total current liabilities 16,399 18,919
Long-term debt and capital leases 307 931
Other non-current liabilities 3,517 3,820
Total stockholders' equity 25,989 26,791
Total Liabilities and Stockholders' Equity $ 46,212 $ 50,461
SOURCE Kewaunee Scientific Corporation
-0- 06/15/2005
/CONTACT: D. Michael Parker of Kewaunee Scientific Corporation,
+1-704-871-3290/
/Web site: http://www.kewaunee.com /
_