Exhibit 99.1
KEWAUNEE SCIENTIFIC ANNOUNCES THIRD QUARTER RESULTS AND QUARTERLY DIVIDEND
STATESVILLE, N.C., Feb. 22 /PRNewswire-FirstCall/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported results for its third quarter ended
January 31, 2006.
Sales for the quarter were $17,724,000, an increase of 13% over sales of
$15,623,000 in the same period last year. A net loss of $555,000, or $0.22 per
diluted share, was reported for the quarter. This compares to a net loss of
$742,000, or $0.30 per diluted share, in the same period last year. The order
backlog at January 31, 2006 was $35.5 million. This compares to a backlog of
$35.2 million at the beginning of the quarter and $41.7 million at January 31,
2005.
A number of factors adversely affected earnings for the quarter. An
unexpected cost of $230,000 was incurred when the Company's installation
subcontractor on a large project was unable to complete the installation.
Additionally, energy costs increased 66%, or $205,000, over the same period last
year. The third quarter is traditionally the Company's weakest quarter for sales
and earnings, and these costs made the quarter even more difficult.
As expected, costs and manufacturing disruptions associated with the
completion of three significant cost improvement projects in the Company's
Statesville plants adversely impacted results for the quarter. A new $1.8
million finishing system was installed in the Wood Plant. This more efficient
system required an entire new layout of the finishing and assembly areas of the
facility. This system is now performing well, our Associates have been trained,
and the Company should benefit from reduced costs beginning in our fourth
quarter. Other projects completed during the quarter included a new automated
folding machine in the Metal Plant at a cost of $900,000 and new continuous
casting machine in the Resin Plant at a cost of $256,000, both of which are
installed and performing well.
The Company's financial condition remains strong. Cash on hand at the end of
the quarter was $1.3 million and working capital was $11.5 million, while total
debt was $7.1 million. Book value per share was $10.41 at January 31, 2006.
"The unexpected costs associated with replacing a subcontractor and a
further significant jump in energy costs made the third quarter especially
difficult," said William A. Shumaker, President and Chief Executive Officer of
Kewaunee. "However, we believe our fourth quarter will have increased sales and
be profitable. We continue to make progress in reducing our costs for the
long-term. The capital projects in our plants completed during the quarter will
allow us to reduce our operating costs, and we continue to make good progress in
reducing our raw material costs by finding alternative vendors and more
competitive pricing. The domestic marketplace for our laboratory products
continues to be reasonably healthy, although pricing remains extremely
competitive. Our international subsidiaries in Asia serving the
rapidly-expanding Asian laboratory research market continue to grow and
contribute nicely to our sales and profits."
Sales for the nine months ended January 31, 2006 were $60,351,000, an
increase of 11% over sales of $54,276,000 in the comparable period last year.
Net earnings for the nine months were $447,000, or $0.18 per diluted share,
including a net gain of $540,000, or $0.22 per diluted share, from the sale of
our former Lockhart, Texas property in the first quarter. A net loss of
$441,000, or $0.18 per diluted share, was reported in the comparable period last
year.
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 March 6, 2006, payable on March 20, 2006.
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. 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.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
3 Months Ended 9 Months Ended
January 31 January 31
------------------------ -------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales $ 17,724 $ 15,623 $ 60,351 $ 54,276
Cost of products sold 15,278 13,586 51,034 45,310
Gross profit 2,446 2,307 9,317 8,966
Operating expenses 3,079 3,030 8,952 9,336
Operating earnings (loss) (633) (993) 365 (370)
Other income (expense) 3 (36) 883 4
Interest expense (112) (84) (317) (254)
Earnings (loss) before income taxes (742) (1,113) 931 (620)
Income tax expense (benefit) (268) (382) 326 (227)
Earnings (loss) before
minority interests (474) (731) 605 (393)
Minority interests 81 11 158 48
Net earnings (loss) $ (555) $ (742) $ 447* $ (441)
Net earnings (loss) per share
Basic $ (0.22) $ (0.30) $ 0.18 $ (0.18)
Diluted $ (0.22) $ (0.30) $ 0.18 $ (0.18)
Weighted average number of common
shares outstanding (in thousands)
Basic 2,492 2,492 2,492 2,491
Diluted 2,494 2,493 2,493 2,495
* Includes a non-recurring after-tax gain on the sale of property in the amount
of $540,000, or $.22 per diluted share.
Condensed Consolidated Balance Sheets
(in thousands)
January 31 April 30
2006 2005
----------- ----------
(unaudited)
Assets
Cash and cash equivalents $ 890 $ 225
Restricted cash 381 379
Receivables, less allowances 19,103 21,683
Inventories 6,539 3,542
Prepaid expenses and
other current assets 1,338 951
Total current assets 28,251 26,780
Net property, plant and equipment 11,161 10,730
Other assets 7,602 8,702
Total Assets $ 47,014 $ 46,212
Liabilities and
Stockholders' Equity
Short-term borrowings $ 6,244 $ 3,778
Current portion of long-term debt 93 931
Current obligations under
capital leases 220 111
Accounts payable 6,873 8,558
Other current liabilities 3,310 3,021
Total current liabilities 16,740 16,399
Other non-current liabilities 4,342 3,824
Total stockholders' equity 25,932 25,989
Total Liabilities and
Stockholders' Equity $ 47,014 $ 46,212
Contact: D. Michael Parker
704/871-3290
SOURCE Kewaunee Scientific Corporation
-0- 02/22/2006
/CONTACT: D. Michael Parker of Kewaunee Scientific Corporation,
+1-704-871-3290/
/Web site: http://www.kewaunee.com /
(KEQU)