KEWAUNEE SCIENTIFIC CORP /DE/FALSE000005552900000555292024-09-112024-09-11



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 11, 2024
 
 
Kewaunee Scientific Corporation
(Exact name of registrant as specified in its charter)
 
Delaware 0-5286 38-0715562
(State or other jurisdiction of
incorporation or organization)		 (Commission File
Number)		 (IRS Employer
Identification No.)
2700 West Front Street
Statesville, NC 28677
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (704) 873-7202
N/A
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $2.50 par value
KEQUThe Nasdaq Global Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
 
 





Item 2.02 Results of Operations and Financial Condition
On September 11, 2024, Kewaunee Scientific Corporation issued a press release announcing its financial results for the first quarter of fiscal year 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
  Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 KEWAUNEE SCIENTIFIC CORPORATION
                             (Registrant)
Date: September 11, 2024 By/s/ Donald T. Gardner III
 Donald T. Gardner III
 Vice President, Finance
Chief Financial Officer





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Kewaunee Scientific Reports
Results for First Quarter of Fiscal Year 2025

Exchange:    NASDAQ (KEQU)                Contact:    Donald T. Gardner III
                                    704/871-3274

STATESVILLE, N.C. September 11, 2024 – PRNewswire / Kewaunee Scientific Corporation (NASDAQ: KEQU) today announced results for its first quarter ended July 31, 2024.

Fiscal Year 2025 First Quarter Results:

Sales during the first quarter of fiscal year 2025 were $48,393,000, a decrease of 2.9% compared to sales of $49,839,000 from the prior year's first quarter. Pre-tax earnings for the quarter were $2,430,000 compared to $3,412,000 for the prior year quarter, a decrease of 28.8%. Net earnings were $2,193,000 compared to net earnings of $2,474,000 for the prior year quarter. EBITDA1 for the quarter was $3,325,000 compared to $4,305,000 for the prior year quarter. Diluted earnings per share was $0.74 compared to diluted earnings per share of $0.86 in the prior year quarter.

The Company’s order backlog was $159.4 million on July 31, 2024, as compared to $140.8 million on July 31, 2023, and $155.6 million on April 30, 2024.

Domestic Segment - Domestic sales for the quarter were $35,523,000, an increase of 0.3% from sales of $35,420,000 in the prior year quarter. Domestic segment net earnings was $2,871,000 compared to $2,711,000 in the prior year quarter. Domestic segment EBITDA was $4,738,000 compared to $4,578,000 for the prior year quarter. Domestic segment volumes were similar to the prior year quarter with demand remaining stable across all end-markets.

International Segment - International sales for the quarter were $12,870,000, a decrease of 10.7% from sales of $14,419,000 in the prior year quarter. International segment net earnings was $463,000 compared to $469,000 in the prior year quarter. International segment EBITDA was $696,000 compared to $670,000 for the prior year quarter. The decline in sales is attributable to customer construction site delays in India which pushed out the timing of deliveries.

Corporate Segment – Corporate segment pre-tax net loss was $1,992,000 for the quarter, as compared to a pre-tax net loss of $1,004,000 in the prior year quarter. Corporate segment EBITDA for the quarter was ($2,109,000) compared to corporate segment EBITDA of ($943,000) for the prior year quarter. The change in EBITDA was driven by an increase in professional service fees during the quarter that are unrelated to the core business and the net change in Corporate cost allocation methodology across our business segments.

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.

CORPORATE OFFICES ● P. O. BOX 1842, STATESVILLE, NORTH CAROLINA 28687-1842 ● 2700 WEST FRONT STREET, STATESVILLE, NORTH CAROLINA 28677-2927
PHONE 704-873-7202 ● FAX 704-873-1275

Total cash on hand on July 31, 2024 was $25,186,000, as compared to $25,938,000 on April 30, 2024. Working capital was $56,012,000, as compared to $49,291,000 at the end of the first quarter last year and $56,037,000 on April 30, 2024.

The Company had short-term debt of $3,627,000 as of July 31, 2024, as compared to $3,099,000 on April 30, 2024. Long-term debt was $28,293,000 on July 31, 2024, as compared to $28,479,000 on April 30, 2024. The building lease from the Company's December 2021 sale-leaseback transaction accounts for $27,958,000 of the long-term debt on July 31, 2024 and $28,133,000 of the long-term debt on April 30, 2024. Long-term debt, net of the sale-leaseback transaction, was $335,000 on July 31, 2024 as compared to $346,000 on April 30, 2024. The Company’s debt-to-equity ratio on July 31, 2024 was 0.68-to-1, as compared to 0.70-to-1 on April 30, 2024. The Company's debt-to-equity ratio, net of the sale-leaseback transaction, on July 31, 2024 was 0.19-to-1, as compared to 0.20-to-1 on April 30, 2024.

"Our financial performance for the first quarter of fiscal year 2025 was solid," said Thomas D. Hull III, Kewaunee's President and Chief Executive Officer. "Domestic segment operating performance was improved when compared to last year's first quarter as our manufacturing loadings remain at a consistent level. Site delays in India on multiple projects impacted our ability to ship products and deliver services leading to a slightly down quarter when compared to the prior year first quarter."

"Looking ahead, our backlog remains strong and quoting for new projects remains high, providing a line of sight to another strong year for the Company."



EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA Reconciliation

Quarter Ended July 31, 2023DomesticInternationalCorporateConsolidated
Net Earnings (Loss)$2,711 $469 $(706)$2,474 
Add/(Less):
Interest Expense380 36 14 430 
Interest Income— (213)(1)(214)
Income Taxes913 282 (298)897 
Depreciation and Amortization574 96 48 718 
EBITDA$4,578 $670 $(943)$4,305 
Quarter Ended July 31, 2024DomesticInternationalCorporateConsolidated
Net Earnings (Loss)$2,871 $463 $(1,141)$2,193 
Add/(Less):
Interest Expense441 21 10 472 
Interest Income— (174)(173)(347)
Income Taxes764 279 (851)192 
Depreciation and Amortization662 107 46 815 
EBITDA$4,738 $696 $(2,109)$3,325 
Professional Fees
— — 7302730 
Adjusted EBITDA$4,738 $696 $(1,379)$4,055 

2 Professional fees not related to our core business


Adjusted Consolidated Statement of Operations Reconciliation
 Three Months Ended
July 31,
 As Reported 2024
Professional Fees
Adjusted
2024		2023
Net sales$48,393 $—$48,393$49,839 
Cost of products sold35,905 —35,90537,925 
Gross profit12,488 —12,48811,914 
Operating expenses9,913 73039,1838,106 
Operating profit2,575 7303,3053,808 
Pension expense— — — (41)
Other income, net327 —32775 
Interest expense(472)—(472)(430)
Profit before income taxes2,430 730 3,1603,412 
Income tax expense192 153  4345897 
Net earnings2,238 5772,8152,515 
Less: Net earnings attributable to the non-controlling interest45 —4541 
Net earnings attributable to Kewaunee Scientific Corporation$2,193 $577$2,770$2,474 
Net earnings per share attributable to Kewaunee Scientific Corporation stockholders
Basic$0.77 $0.20 $0.97 $0.87 
Diluted$0.74 $0.19 $0.93 $0.86 
3 Professional fees not related to our core business
4 Estimated tax impact of professional fees not related to our core business


About Non-GAAP Measures

The Company includes non-GAAP financial measures such as adjusted net earnings and adjusted net earnings per share, in the information provided with this press release as supplemental information relating to its operating results. Adjusted net earnings represents GAAP net earnings adjusted for professional fees not related to its core business and the corresponding tax impact. This financial information is not in accordance with, or an alternative for, GAAP-compliant financial information and may be different from the operating or non-GAAP financial information used by other companies. The Company believes that this presentation of adjusted net earnings and adjusted net earnings per share provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations.

EBITDA and Segment EBITDA are calculated as net earnings (loss), less interest expense and interest income, income taxes, depreciation, and amortization. Adjusted EBITDA and Adjusted Segment EBITDA are calculated as EBITDA or Segment EBITDA less the impact of the professional fees not related to the Company's core business that were incurred during FY25, as discussed in more detail above. We believe EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA allow management and investors to compare our performance to other companies on a consistent basis without regard to depreciation and amortization or the costs incurred related to our one-time pension termination transaction executed during fiscal year 2024, which can vary significantly between companies depending upon many factors. EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA are not calculations based upon generally accepted accounting principles, and the method for calculating EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA can vary among companies. The amounts included in the EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA calculations, however, are derived from amounts included in the historical consolidated statements of operations. EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted 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, and 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 fiscal year ended April 30, 2024, 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.



Kewaunee Scientific Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
($ and shares in thousands, except per share amounts)

 Three Months Ended
July 31,
 20242023
Net sales$48,393 $49,839 
Cost of products sold35,905 37,925 
Gross profit12,488 11,914 
Operating expenses9,913 8,106 
Operating profit2,575 3,808 
Pension expense— (41)
Other income, net327 75 
Interest expense(472)(430)
Profit before income taxes2,430 3,412 
Income tax expense192 897 
Net earnings2,238 2,515 
Less: Net earnings attributable to the non-controlling interest45 41 
Net earnings attributable to Kewaunee Scientific Corporation
$2,193 $2,474 
Net earnings per share attributable to Kewaunee Scientific Corporation stockholders
Basic$0.77 $0.87 
Diluted$0.74 $0.86 
Weighted average number of common shares outstanding
Basic2,849 2,860 
Diluted2,967 2,885 




Kewaunee Scientific Corporation
Condensed Consolidated Balance Sheets
($ in thousands)

July 31, 2024April 30, 2024
 (Unaudited)
Assets
Cash and cash equivalents$24,211 $23,267 
Restricted cash975 2,671 
Receivables, less allowances43,545 45,064 
Inventories19,285 20,679 
Prepaid expenses and other current assets4,683 5,136 
Total Current Assets92,699 96,817 
Net Property, Plant and Equipment17,112 17,649 
Right of use assets6,944 7,454 
Deferred income taxes8,091 7,401 
Other assets7,172 5,445 
Total Assets$132,018 $134,766 
Liabilities and Stockholders' Equity
Short-term borrowings$3,627 $3,099 
Current portion of lease obligations2,144 2,234 
Current portion of financing liability731 713 
Accounts payable20,619 23,262 
Other Current Liabilities9,566 11,472 
Total Current Liabilities36,687 40,780 
Long-term portion of lease obligations5,333 5,669 
Long-term portion of financing liability27,227 27,420 
Other non-current liabilities5,258 4,688 
Total Liabilities74,505 78,557 
Kewaunee Scientific Corporation Equity56,023 54,760 
Non-controlling interest1,490 1,449 
Total Stockholders' Equity57,513 56,209 
Total Liabilities and Stockholders' Equity$132,018 $134,766 

v3.24.2.u1
Cover
Sep. 11, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Sep. 11, 2024
Entity Registrant Name KEWAUNEE SCIENTIFIC CORP /DE/
Entity Incorporation, State or Country Code DE
Entity File Number 0-5286
Entity Tax Identification Number 38-0715562
Entity Address, Address Line One 2700 West Front Street
Entity Address, City or Town Statesville
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28677
City Area Code 704
Local Phone Number 873-7202
Title of 12(b) Security Common Stock, $2.50 par value
Trading Symbol KEQU
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000055529
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