Kewaunee Scientific Reports Results for Second Quarter
STATESVILLE, N.C., Dec. 5, 2017 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU) today reported results for its second quarter of fiscal year 2018, ended October 31, 2017.
Net earnings for the quarter increased 16.0% to $1,724,000, or $0.62 per diluted share, as compared to net earnings of $1,486,000, or $0.54 per diluted share, in the second quarter last year.
Sales for the quarter were $41,471,000, a 14.2% increase from sales of $36,329,000 in the prior year. Domestic sales for the quarter were $28,540,000, up 1.2% from sales of $28,211,000 in the second quarter of last year. International sales for the quarter were $12,931,000, up 59.3% from sales of $8,118,000 in the second quarter last year.
The increase in sales was the result of strength in the Company's International segment as the Company delivered a large order in the Middle East. This order is the largest single order in the Company's history and is being delivered, based on the Company's global manufacturing capabilities and reach. Domestic sales levels were similar to the prior year as dealer and distributor demand for the Company's products continues at record setting levels.
Kewaunee continues to win orders globally, with the Company's order backlog at $118.0 million at October 31, 2017, as compared to $101.1 million at October 31, 2016, and $113.5 million at April 30, 2017. This level of order backlog is a new record for Kewaunee.
The Company's balance sheet and financial condition remain strong. Unrestricted cash on hand was $11.8 million at the end of the quarter, as compared to $7.6 million at the end of the second quarter last year. Working capital was $34.2 million, as compared to $31.4 million at the end of the second quarter last year. Short-term debt and interest rate swaps were $7.7 million at the end of the quarter, as compared to $6.7 million at the end of the second quarter last year, and long-term debt was $1.8 million as compared to $3.1 million at the end of the second quarter last year. The debt-to-equity ratio at October 31, 2017 was .24-to-1, as compared to .25-to-1 at October 31, 2016.
"We had a solid second quarter and continue to secure new orders in the marketplace as evidenced by the strong growth in our order backlog. This is very encouraging as our quarterly sales performance was higher than the second quarter of the prior year. We remain focused on exceeding our customers' expectations as they continue to invest in projects that require the quality products and services we provide," said David M. Rausch, Kewaunee's President and Chief Executive Officer.
"Looking forward, our third quarter is typically our most challenging; however, we have a strong order backlog for the quarter and the remainder of the year. We have successfully increased our manufacturing capacity in anticipation of this demand and expect sales and earnings growth to continue through the balance of the fiscal year."
About Kewaunee Scientific
Founded in 1906, Kewaunee Scientific Corporation is a recognized global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Products include steel, wood, and laminate casework, fume hoods, adaptable modular systems, moveable workstations, stand-alone benches, biological safety cabinets, and epoxy resin worksurfaces and sinks.
The Company's corporate headquarters is located in Statesville, North Carolina. Direct sales offices are located in the United States, India, Singapore, and China. Three manufacturing facilities are located in Statesville serving the domestic and international markets, and one manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company's China headquarters and sales office are located in Shanghai, China. Kewaunee Scientific's website is located at http://www.kewaunee.com.
This press release contains statements that the Company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning these factors is contained in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Kewaunee Scientific Corporation
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Three months ended Six months ended
October 31, October 31,
----------- -----------
2017 2016 2017 2016
---- ---- ---- ----
Net sales $41,471 $36,329 $75,352 $73,608
Cost of products sold 33,560 29,225 60,620 59,365
------ ------ ------ ------
Gross profit 7,911 7,104 14,732 14,243
Operating expenses 5,256 4,816 10,389 9,894
----- ----- ------ -----
Operating earnings 2,655 2,288 4,343 4,349
Other income 177 119 345 238
Interest expense (89) (78) (148) (158)
Earnings before income taxes 2,743 2,329 4,540 4,429
Income tax expense 978 792 1,583 1,562
--- --- ----- -----
Net earnings 1,765 1,537 2,957 2,867
Less: net earnings attributable to
the noncontrolling interest 41 51 85 81
--- --- --- ---
Net earnings attributable to
Kewaunee Scientific Corporation $1,724 $1,486 $2,872 $2,786
====== ====== ====== ======
Net earnings per share attributable to
Kewaunee Scientific Corporation stockholders
Basic $0.64 $0.55 $1.06 $1.03
Diluted $0.62 $0.54 $1.04 $1.02
Weighted average number of common
shares outstanding
Basic 2,717 2,706 2,715 2,699
Diluted 2,776 2,729 2,766 2,718
Kewaunee Scientific Corporation
Condensed Consolidated Balance Sheets
(in thousands)
October 31, April 30,
2017 2017
---- ----
Assets (Unaudited)
------
Cash and cash equivalents $11,792 $12,506
Restricted Cash 1,392 1,435
Receivables, less allowances 33,245 29,889
Inventories 16,439 14,935
Prepaid expenses and other current assets 1,888 1,047
Total Current Assets 64,756 59,812
Net property, plant and equipment 14,061 14,027
Other assets 7,051 7,077
Total Assets $85,868 $80,916
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Liabilities and Equity
----------------------
Short-term borrowings and interest rate swaps $7,711 $3,591
Current portion of long-term debt 1,167 918
Accounts payable 14,364 11,995
Other current liabilities 7,268 10,423
Total Current Liabilities 30,510 26,927
Other non-current liabilities 10,040 10,732
Total Liabilities 40,550 37,659
Noncontrolling interest 381 374
Kewaunee Scientific Corporation equity 44,937 42,883
Total Equity 45,318 43,257
Total Liabilities and Equity $85,868 $80,916
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Contact: Thomas D. Hull III
(704) 871-3290
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SOURCE Kewaunee Scientific Corporation
