Kewaunee Scientific Corporation Announces Changes to Domestic Channel Strategy
Kewaunee Scientific Corporation (NASDAQ: KEQU) announced a strategic shift in its sales and distribution channels on January 5, 2022. The company will now collaborate exclusively with its largest dealer partners, Nycom and ISEC, to tap into new markets and enhance operational efficiency. This change aims to improve profitability and shareholder value by reducing inefficiencies from direct sales. Nycom will cover territories in New York, New Jersey, Delaware, and Pennsylvania, while ISEC will serve Illinois, Arkansas, and Oklahoma. This move signals Kewaunee's commitment to strengthening its manufacturing capabilities.
- Long-term agreements secured with major dealer partners Nycom and ISEC.
- Streamlined go-to-market strategy may reduce inefficiencies.
- Focus on improving manufacturing capabilities to enhance profitability.
- Adverse effects on profitability reported due to past direct sales inefficiencies.
STATESVILLE, N.C., Jan. 5, 2022 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU), a recognized global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products, today announced a change in its go-to-market channel strategy for the sale and distribution of its products. Kewaunee has historically sold products domestically through a network of dealers and distributors. In regions where those channel partners were insufficient to serve the market, Kewaunee has sold directly to general contractors or the end customer, capturing opportunities that otherwise might be missed. While Kewaunee's direct business has grown, it has also created inefficiencies that have adversely affected the profitability of the business.
Kewaunee is excited to announce it has secured long-term agreements with its two largest dealer partners, Nycom and ISEC, two of the premier specialty sub-contractors in the industry. Effective immediately, territories where Kewaunee has historically sold direct will be covered by Nycom and ISEC. This change in Kewaunee's go-to-market strategy will streamline the Company's focus on delivering high quality manufactured products. Nycom's expanded territory will now include New York, New Jersey, Delaware, and all of Pennsylvania. ISEC's expanded territory will include Illinois, Arkansas, and Oklahoma.
"Over the past year, Kewaunee conducted a comprehensive evaluation to optimize our go-to-market strategy," said Thomas D. Hull III, President and Chief Executive Officer of Kewaunee Scientific Corporation. "Through this process, we identified a significant opportunity to drive sustained profitability and shareholder value by further improving the performance of the Company's manufacturing capabilities while simultaneously securing long-term commitments from important channel partners to penetrate more deeply the markets into which we previously sold directly. This change will allow us to simplify our business, strengthen partner relationships, and focus on being a world class manufacturer to serve our dealers and distribution partners with excellence."
"As I have stated previously, I expect that global demand for Kewaunee's products and services will continue to increase as the world continues to rely on our industry as there is a continued effort to combat global health challenges. Kewaunee is well positioned to capitalize on future investments made in the pharmaceutical, biotechnology, health care, universities and other markets we serve."
About ISEC
An employee owned company for over 50 years, ISEC has delivered innovative science and technology solutions in world-class facilities across every marketplace. Through a national footprint of more than 1,500, highly trained professionals, our teams of specialists bring a solution driven competency that aids our customers in driving revenue through improved product production efficiencies, with a laser focus on employee safety. Our solutions have proven to help our valued customers drive revenue, while assisting in both talent recruiting and retention.
ISEC is committed to operational excellence, with a proven track record of success in project execution. We have developed dedicated, regional disciplines, all built to provide a world class experience including design, estimating, project management, operations & specialty equipment procurement. Our field supervision teams and ISEC employed installation crews are selected based on the project type matched to their individual experience levels and skills. "We Build For Life's Most Important Events" ISEC's website is located at: https://www.isecinc.com/
About Nycom
Nycom is a full-service Interiors Contractor specializing in Laboratory Construction, Architectural Woodwork and other Interior Products. With almost 40 years of experience, the Company is well-respected throughout the Mid-Atlantic and Southeastern United States for having superior products and services. Nycom's "best-in-class" capabilities in design, budgeting, engineering, managing and installation have allowed Nycom to be an integral part of numerous successful construction projects in the Educational, Life Science, Healthcare, Industrial and Pharmaceutical markets. The Company is headquartered in Richmond, Virginia with major offices in Raleigh, North Carolina and Atlanta, Georgia. (www.nycominc.com).
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, wood, and laminate 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. Direct 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 and Asian markets. Kewaunee Scientific's website is located at https://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 and the ongoing impact of the COVID-19 pandemic, including disruptions from government mandates, both domestically and internationally; 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; and 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 fiscal year ended April 30, 2021, 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
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SOURCE Kewaunee Scientific Corporation
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