STATESVILLE, N.C., June 28,
2023 /PRNewswire/ -- Kewaunee Scientific Corporation
(NASDAQ: KEQU) today announced results for its fourth quarter and
its fiscal year ended April 30,
2023.
Fiscal Year 2023 Fourth Quarter Results:
Sales during the fourth quarter of fiscal year 2023 were
$53,986,000, an increase of 8.6%
compared to sales of $49,715,000 from
the prior year's fourth quarter. The increase was a result of
higher international segment sales when compared to the prior
period due to the continued delivery of several large projects
awarded over the course of the past eighteen months.
Pre-tax earnings for the quarter were $2,322,000 compared to $2,345,000 for the prior year period. Net
earnings for the quarter were $1,005,000 compared to a net loss of $362,000 for the prior year. EBITDA1
for the quarter was $3,307,000
compared to $2,969,000 for the prior
year period. Diluted earnings per share were $0.34, as compared to a diluted loss per share of
$0.13 in the prior year's fourth
quarter.
Domestic Segment - Domestic sales for the quarter were
$35,123,000, a decrease of 6.9% from
sales of $37,720,000 in the prior
year period. Net earnings for the domestic segment were
$2,402,000 compared to $2,380,000 in the prior year period. Domestic
segment EBITDA was $2,991,000
compared to $2,957,000 for the prior
year period. During the fourth quarter, the Company fulfilled most
of the outstanding performance obligations for the remaining direct
orders in its order backlog, the majority of which were priced and
executed prior to the broad-based inflation experienced during the
previous fiscal year.
International Segment - International sales for the
quarter were $18,863,000, an increase
of 57.3% from sales of $11,995,000 in
the prior year period. This increase in sales was due to the
continued delivery of several large projects awarded over the
course of the past eighteen months. Net income for the
international segment was $1,106,000
compared to $1,020,000 in the prior
year period. International segment EBITDA was $1,546,000 compared to $1,456,000 for the prior year period. EBITDA for
the quarter was reduced by $293,000,
when compared to the previous year period due to a change in the
Corporate cost allocation methodology after completing a revised
transfer pricing study.
Corporate Segment – Corporate segment net loss was
$2,503,000 for the quarter, as
compared to $3,762,000 in the prior
year period. Corporate segment EBITDA loss for the quarter was
$1,230,000, a favorable improvement
of 14.8% from corporate segment EBITDA loss of $1,444,000 for the prior year period. The
improved EBITDA was driven by the Corporate cost allocation
methodology change discussed above, partially offset by higher
pension-related expenses.
The Company's order backlog was $147.9
million on April 30, 2023,
decreasing from $153.2 million on
January 31, 2023 and $173.9 million on April
30, 2022. This change in backlog is principally driven by
the substantial completion of the previously announced Dangote Oil
project in Lagos, Nigeria during
the fiscal year and a reduction in market demand within the ASEAN
marketplace. The Company's order backlog for the United States and Indian markets finished
the year similar to prior year levels as order rates in these
markets remain strong.
"Kewaunee delivered one of the best quarters in the Company's
history as our Associates finished fiscal year 2023 on a high
note," said Thomas D. Hull III,
Kewaunee's President, and Chief Executive Officer. "Profitability
improved throughout the year as our teams continued to operate the
business with excellence."
"Our domestic team remained focused on supporting our dealer and
distribution partners, concluding a year of significant transition.
We have materially completed our remaining performance obligations
for the previously discussed direct projects, which were priced and
awarded prior to the broad-based inflation experienced during the
prior fiscal year. We continue to encourage and support our dealer
and distribution partners' investment in their organizations so
they can better serve their respective territories and we can grow
our businesses together. We ended the year well positioned with a
strong go-to-market strategy, a healthy order backlog, and a robust
opportunity pipeline."
"Our international team has been awarded several large,
high-profile projects over the past two years. The fourth quarter
of fiscal year 2023 was very strong. This resulted in a significant
increase in sales when compared to the prior year quarter. The
international team wrapped up what was a record year for both sales
and earnings for the segment during the fourth quarter. I could not
be prouder of how the team performed during the year."
Fiscal Year 2023 Full Year Results:
Sales during fiscal year 2023 were $219,494,000, an increase of 30.0% compared to
sales of $168,872,000 from the prior
year. Pre-tax earnings for the fiscal year were $4,498,000 compared to a pre-tax loss of
$2,485,000 for the prior year. Net
earnings for the fiscal year were $738,000, compared to a net loss of $6,126,000 for the prior year. EBITDA for the
fiscal year was $7,517,000 compared
to $394,000 for the prior fiscal
year. Diluted earnings per share was $0.25, as compared to a loss per share of
$2.20 in the prior fiscal year.
Domestic Segment - Domestic sales for the fiscal year
were $146,716,000, an increase of
15.7% from sales of $126,848,000 in
the prior year. This increase was primarily driven by the pricing
of new orders in response to higher raw material input costs.
Domestic segment net earnings were $3,408,000 compared to a net loss of $229,000 in the prior fiscal year. Domestic
segment EBITDA was $5,802,000
compared to $2,223,000 for the prior
year. Domestic segment profitability was negatively impacted during
the year by the completion of direct contracts which were priced
and awarded prior to the broad-based inflation experienced in the
prior fiscal year. Many of these direct contracts were delivered at
a loss for the Company.
International Segment - International sales for the
fiscal year were $72,778,000, an
increase of 73.2% from sales of $42,024,000 in the prior year. The increase in
sales was driven by the delivery of several large projects
throughout the fiscal year in India, Asia,
and Africa. International segment
net earnings were $4,511,000 compared
to $2,333,000 in the prior fiscal
year. International segment EBITDA was $6,650,000 compared to $3,571,000 for the prior year.
Corporate Segment – Corporate segment net loss was
$7,181,000 for the fiscal year, as
compared to $8,230,000 in the prior
fiscal year. Corporate segment EBITDA loss for the fiscal year was
$4,935,000, a favorable improvement
of 8.6% from corporate segment EBITDA loss of $5,400,000 for the prior year. The favorable
change in EBITDA was primarily driven by increased Corporate
allocations of $1,172,000 when
compared to the prior year due to the change in transfer pricing
methodology discussed above, partially offset by higher
pension-related expenses and higher operating expenses.
Total cash on hand on April 30,
2023 was $13,815,000, compared
to $6,894,000 on April 30, 2022. Working capital was $47,867,000, compared to $49,272,000 on April 30,
2022. Short-term debt was $3,587,000 on April 30,
2023, compared to $1,588,000
on April 30, 2022, and long-term debt
was $29,007,000 on April 30, 2023 compared to $29,704,000 on April 30,
2022. The Company's debt-to-equity ratio on April 30, 2023 was 1.08-to-1, compared to
1.07-to-1 on April 30, 2022.
"Our vision for Kewaunee is to be the global supplier of choice
with customers in the laboratory furniture and infrastructure
markets," said Thomas D. Hull III,
Kewaunee's President, and Chief Executive Officer. "In pursuing
this vision, we continue to follow the principles that guide our
actions:
- We will be easy to do business with;
- We will get closer to our customers;
- We will do everything with the highest quality; and
- We will lead and not follow (we are innovators)."
"Fiscal year 2023 was a transition year for Kewaunee as we
emerged from an extremely disruptive period over the past three
years dealing with a global pandemic, rapid broad-based inflation,
labor shortages and supply chain disruptions. A testament to the
character and drive of Kewaunee's leadership team and Associates is
that, while managing through these challenges, we continued to
invest in and evolve our business. The benefits of these decisions
began to appear as we moved through the year and our financial
performance steadily improved. Kewaunee ends fiscal year 2023 with
a strong global management team, a healthy backlog, improved
manufacturing capabilities, and end-use markets which continue to
prioritize investment in projects that require the products
Kewaunee designs and manufactures."
"Moving forward, Kewaunee will continue to invest in developing
world class manufacturing capabilities to support our dealer and
distribution partners in growing our businesses together. This
investment in our capabilities better positions Kewaunee to be the
brand of choice. Kewaunee's future is bright, and I am excited to
continue building on our momentum in fiscal 2024."
EBITDA and Segment EBITDA Reconciliation
Quarter Ended April
30, 2022
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,380
|
|
$
1,020
|
|
$
(3,762)
|
|
$
(362)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
13
|
|
223
|
|
236
|
Interest
Income
|
|
—
|
|
(59)
|
|
(196)
|
|
(255)
|
Income
Taxes
|
|
—
|
|
419
|
|
2,254
|
|
2,673
|
Depreciation and
Amortization
|
|
577
|
|
63
|
|
37
|
|
677
|
EBITDA
|
|
$
2,957
|
|
$
1,456
|
|
$
(1,444)
|
|
$
2,969
|
|
|
|
|
|
|
|
|
|
Quarter Ended April
30, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
2,402
|
|
$
1,106
|
|
$
(2,503)
|
|
$
1,005
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
97
|
|
447
|
|
544
|
Interest
Income
|
|
—
|
|
(194)
|
|
(1)
|
|
(195)
|
Income
Taxes
|
|
—
|
|
449
|
|
779
|
|
1,228
|
Depreciation and
Amortization
|
|
589
|
|
88
|
|
48
|
|
725
|
EBITDA
|
|
$
2,991
|
|
$
1,546
|
|
$
(1,230)
|
|
$
3,307
|
|
|
|
|
|
|
|
|
|
Fiscal Year to Date
April 30, 2022
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
(229)
|
|
$
2,333
|
|
$
(8,230)
|
|
$
(6,126)
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
30
|
|
602
|
|
632
|
Interest
Income
|
|
—
|
|
(197)
|
|
(202)
|
|
(399)
|
Income
Taxes
|
|
50
|
|
1,129
|
|
2,339
|
|
3,518
|
Depreciation and
Amortization
|
|
2,402
|
|
276
|
|
91
|
|
2,769
|
EBITDA
|
|
$
2,223
|
|
$
3,571
|
|
$
(5,400)
|
|
$
394
|
|
|
|
|
|
|
|
|
|
Fiscal Year to Date
April 30, 2023
|
|
Domestic
|
|
International
|
|
Corporate
|
|
Consolidated
|
Net Earnings
(Loss)
|
|
$
3,408
|
|
$
4,511
|
|
$
(7,181)
|
|
$
738
|
Add/(Less):
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
—
|
|
210
|
|
1,524
|
|
1,734
|
Interest
Income
|
|
—
|
|
(603)
|
|
(358)
|
|
(961)
|
Income
Taxes
|
|
—
|
|
2,250
|
|
889
|
|
3,139
|
Depreciation and
Amortization
|
|
2,394
|
|
282
|
|
191
|
|
2,867
|
EBITDA
|
|
$
5,802
|
|
$
6,650
|
|
$
(4,935)
|
|
$
7,517
|
About Non-GAAP Measures
EBITDA and Segment EBITDA are calculated as net earnings (loss),
less interest expense and interest income, income taxes,
depreciation, and amortization. We believe EBITDA and Segment
EBITDA allow management and investors to compare our performance to
other companies on a consistent basis without regard to
depreciation and amortization, which can vary significantly between
companies depending upon many factors. EBITDA and Segment EBITDA
are not calculations based upon generally accepted accounting
principles, and the method for calculating EBITDA and Segment
EBITDA can vary among companies. The amounts included in the EBITDA
and Segment EBITDA calculations, however, are derived from amounts
included in the historical statements of operations. EBITDA and
Segment EBITDA should not be considered as alternatives to net
earnings (loss) or operating earnings (loss) as an indicator of the
Company's operating performance, or as an alternative to operating
cash flows as a measure of liquidity.
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. The
Company's products include steel and wood casework, fume hoods,
adaptable modular systems, moveable workstations, stand-alone
benches, biological safety cabinets, and epoxy resin work surfaces
and sinks.
The Company's corporate headquarters are located in Statesville, North Carolina. Sales offices are
located in the United States,
India, Saudi Arabia, and Singapore. 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, Asian, and African markets. 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. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions, and other important factors that could
significantly impact results or achievements expressed or implied
by such forward-looking statements. Such factors, risks,
uncertainties and assumptions include, but are not limited to:
competitive and general economic conditions, including disruptions
from government mandates, both domestically and internationally, as
well as supplier constraints and other supply disruptions; changes
in customer demands; technological changes in our operations or in
our industry; dependence on customers' required delivery schedules;
risks related to fluctuations in the Company's operating results
from quarter to quarter; risks related to international operations,
including foreign currency fluctuations; changes in the legal and
regulatory environment; changes in raw materials and commodity
costs; acts of terrorism, war, governmental action, natural
disasters and other Force Majeure events. The cautionary statements
made pursuant to the Reform Act herein and elsewhere by us should
not be construed as exhaustive. We cannot always predict what
factors would cause actual results to differ materially from those
indicated by the forward-looking statements. Over time, our actual
results, performance, or achievements will likely differ from the
anticipated results, performance or achievements that are expressed
or implied by our forward-looking statements, and such difference
might be significant and harmful to our stockholders' interest.
Many important factors that could cause such a difference are
described under the caption "Risk Factors," in Item 1A of our
Annual Report on Form 10-K for the most recent fiscal year ended
April 30, which you should review
carefully, and in our subsequent quarterly reports on Form 10-Q and
current reports on Form 8-K. These reports are available on our
investor relations website at www.kewaunee.com and on the SEC
website at www.sec.gov. 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.
Contact:
Donald T. Gardner III
704/871-3274
1 EBITDA is a non-GAAP financial measure. See the
table below for a reconciliation of EBITDA and segment EBITDA to
net earnings (loss), the most directly comparable GAAP measure.
Kewaunee Scientific Corporation
|
|
|
Consolidated Statements of
Operations
|
|
|
($ and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
April 30,
|
|
April 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
|
$
53,986
|
|
$
49,715
|
|
$
219,494
|
|
$
168,872
|
Cost of products
sold
|
|
43,625
|
|
40,388
|
|
183,906
|
|
144,652
|
Gross profit
|
|
10,361
|
|
9,327
|
|
35,588
|
|
24,220
|
Operating
expenses
|
|
7,660
|
|
7,086
|
|
30,224
|
|
26,828
|
Operating earnings
(loss)
|
|
2,701
|
|
2,241
|
|
5,364
|
|
(2,608)
|
Pension (expense)
income
|
|
(18)
|
|
89
|
|
(71)
|
|
355
|
Other income,
net
|
|
183
|
|
251
|
|
939
|
|
400
|
Interest
expense
|
|
(544)
|
|
(236)
|
|
(1,734)
|
|
(632)
|
Earnings (loss) before
income taxes
|
|
2,322
|
|
2,345
|
|
4,498
|
|
(2,485)
|
Income tax
expense
|
|
1,228
|
|
2,673
|
|
3,139
|
|
3,518
|
Net earnings
(loss)
|
|
1,094
|
|
(328)
|
|
1,359
|
|
(6,003)
|
Less: Net earnings
attributable to the non-controlling interest
|
|
89
|
|
34
|
|
621
|
|
123
|
Net earnings (loss)
attributable to Kewaunee Scientific Corporation
|
|
$
1,005
|
|
$
(362)
|
|
$
738
|
|
$
(6,126)
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per
share attributable to
|
|
|
|
|
|
|
|
|
Kewaunee Scientific Corporation stockholders
|
|
|
|
|
|
|
|
|
Basic
|
|
$0.36
|
|
($0.13)
|
|
$0.26
|
|
($2.20)
|
Diluted
|
|
$0.34
|
|
($0.13)
|
|
$0.25
|
|
($2.20)
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
2,830
|
|
2,790
|
|
2,824
|
|
2,786
|
Diluted
|
|
2,928
|
|
2,790
|
|
2,902
|
|
2,786
|
Kewaunee Scientific Corporation
|
Condensed Consolidated Balance
Sheets
|
($ in thousands)
|
|
|
|
|
|
|
|
April 30,
|
|
April 30,
|
|
|
2023
|
|
2022
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
8,078
|
|
$
4,433
|
Restricted
cash
|
|
5,737
|
|
2,461
|
Receivables, less
allowances
|
|
46,081
|
|
41,254
|
Inventories
|
|
21,889
|
|
23,796
|
Note
receivable
|
|
-
|
|
13,457
|
Prepaid expenses and
other current assets
|
|
6,135
|
|
6,164
|
Total Current Assets
|
|
87,920
|
|
91,565
|
Net property, plant and
equipment
|
|
16,402
|
|
15,121
|
Right of use
assets
|
|
9,170
|
|
7,573
|
Other assets
|
|
5,406
|
|
4,514
|
Total Assets
|
|
$
118,898
|
|
$
118,773
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Short-term
borrowings
|
|
$
3,587
|
|
$
1,588
|
Current portion of
financing lease liabilities
|
|
85
|
|
126
|
Current portion of
operating lease liabilities
|
|
1,967
|
|
1,319
|
Current portion of
financing liability
|
|
642
|
|
575
|
Accounts
payable
|
|
23,599
|
|
27,316
|
Other current
liabilities
|
|
10,173
|
|
11,369
|
Total Current Liabilities
|
|
40,053
|
|
42,293
|
Long-term portion of
financing lease liabilities
|
|
148
|
|
228
|
Long-term portion of
operating lease liabilities
|
|
7,136
|
|
6,179
|
Long-term portion of
financing liability
|
|
28,132
|
|
28,775
|
Other non-current
liabilities
|
|
4,944
|
|
5,118
|
Total Liabilities
|
|
80,413
|
|
82,593
|
Kewaunee Scientific
Corporation Equity
|
|
37,409
|
|
35,694
|
Non-controlling
interest
|
|
1,076
|
|
486
|
Total Stockholders' Equity
|
|
38,485
|
|
36,180
|
Total Liabilities and
Stockholders' Equity
|
|
$
118,898
|
|
$
118,773
|
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SOURCE Kewaunee Scientific Corporation