Kewaunee Scientific Reports Results for Third Quarter of Fiscal Year 2022
Kewaunee Scientific Corporation (NASDAQ: KEQU) reported a third-quarter net loss of $1.319 million for the period ending January 31, 2022, a significant drop from a net gain of $81,000 year-over-year. Sales increased 21.3% to $40.633 million amidst challenges, including a cyber attack, COVID-19 disruptions, supply chain issues, and rising material costs. The company recorded an EBITDA loss of $117,000 compared to a loss of $17,000 in the prior year. The order backlog stands at $138.1 million, with a $17.3 million contract awarded by Dangote Oil Refinery.
- Sales increased by 21.3% year-over-year to $40.633 million.
- International sales rose 34.2% to $11.102 million.
- A $17.3 million contract awarded for laboratory equipment.
- Order backlog increased to $138.1 million, up from $114.5 million.
- Net loss of $1.319 million compared to a net gain of $81,000 last year.
- Pre-tax loss of $887,000, wider than the previous year's loss.
- Increased operational challenges due to COVID-19 and supply chain issues.
- EBITDA loss of $117,000 compared to the prior year's loss.
STATESVILLE, N.C., March 9, 2022 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU) today announced results for its third quarter ended January 31, 2022.
Fiscal Year 2022 Third Quarter Results:
Sales during the third quarter of fiscal year 2022 were
Overall, these negative factors resulted in a pre-tax loss for the quarter of
The Company's order backlog was
Domestic Segment - Domestic sales for the quarter were
International Segment - International sales for the quarter were
Corporate Segment – Corporate segment pre-tax net loss was
Total cash on hand on January 31, 2022 was
"Kewaunee announced a significant shift in its commercial strategy during the quarter whereby Kewaunee would no longer be selling directly in certain territories where dealer coverage has historically been insufficient," said Thomas D. Hull III, Kewaunee's President and Chief Executive Officer. "Kewaunee announced in December 2021 that updated dealer agreements had been executed with Nycom and ISEC, two of the premier specialty sub-contractors in the industry. Kewaunee's greatest opportunity to drive sustained profitability and shareholder value will come from further improving the performance of the Company's manufacturing capabilities. This change allows us to simplify our business, focus solely on being a world class manufacturer, and continue serving our dealers and distribution partners with excellence."
"This strategic change, as well as the continued progress in strengthening our backlog, positions the Company well to capitalize on future investments made in the pharmaceutical, biotechnology, health care, higher education, and the other markets we serve. While the third quarter was indeed a challenge on multiple fronts, Kewaunee's Associates continue to overcome the persistent headwinds that have existed for some time because of COVID-19 and the myriad of other external economic challenges that continue to impact our industry. Kewaunee is well positioned, and we will continue to make investments in our capacity to capitalize on future opportunities."
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. |
EBITDA and Segment EBITDA Reconciliation
Quarter Ended January 31, 2021 | Domestic | International | Corporate | Consolidated | ||||
Net Earnings (Loss) | $ (184) | $ 499 | $ (234) | $ 81 | ||||
Add/(Less): | ||||||||
Interest Expense | — | 1 | 104 | 105 | ||||
Interest Income | — | (49) | — | (49) | ||||
Income Taxes | 390 | 176 | (1,379) | (813) | ||||
Depreciation and Amortization | 594 | 68 | (3) | 659 | ||||
EBITDA | $ 800 | $ 695 | $ (1,512) | $ (17) | ||||
Quarter Ended January 31, 2022 | Domestic | International | Corporate | Consolidated | ||||
Net Earnings (Loss) | $ (305) | $ 573 | $ (1,587) | $ (1,319) | ||||
Add/(Less): | ||||||||
Interest Expense | — | 8 | 150 | 158 | ||||
Interest Income | — | (47) | (4) | (51) | ||||
Income Taxes | 50 | 264 | 85 | 399 | ||||
Depreciation and Amortization | 602 | 76 | 18 | 696 | ||||
EBITDA | $ 347 | $ 874 | $ (1,338) | $ (117) | ||||
Year to Date January 31, 2021 | Domestic | International | Corporate | Consolidated | ||||
Net Earnings (Loss) | $ 977 | $ 1,088 | $ (2,762) | $ (697) | ||||
Add/(Less): | ||||||||
Interest Expense | — | 2 | 308 | 310 | ||||
Interest Income | — | (154) | (2) | (156) | ||||
Income Taxes | 817 | 503 | (2,309) | (989) | ||||
Depreciation and Amortization | 1,800 | 196 | 9 | 2,005 | ||||
EBITDA | $ 3,594 | $ 1,635 | $ (4,756) | $ 473 | ||||
Year to Date January 31, 2022 | Domestic | International | Corporate | Consolidated | ||||
Net Earnings (Loss) | $ (2,609) | $ 1,313 | $ (4,468) | $ (5,764) | ||||
Add/(Less): | ||||||||
Interest Expense | — | 17 | 379 | 396 | ||||
Interest Income | — | (138) | (6) | (144) | ||||
Income Taxes | 50 | 710 | 85 | 845 | ||||
Depreciation and Amortization | 1,825 | 213 | 54 | 2,092 | ||||
EBITDA | $ (734) | $ 2,115 | $ (3,956) | $ (2,575) |
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, 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 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 and the ongoing impact of the COVID-19 pandemic, 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; and the ultimate impact on the Company of the cyber attack suffered on November 5, 2021. 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
Kewaunee Scientific Corporation Condensed Consolidated Statements of Operations (Unaudited) ($ and shares in thousands, except per share amounts) | |||||||
Three Months Ended January 31, | Nine Months Ended January 31, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net sales | $ 40,633 | $ 33,339 | $ 119,157 | $ 108,762 | |||
Cost of products sold | 35,011 | 27,685 | 104,264 | 90,832 | |||
Gross profit | 5,622 | 5,654 | 14,893 | 17,930 | |||
Operating expenses | 6,490 | 6,030 | 19,742 | 18,593 | |||
Operating loss | (868) | (376) | (4,849) | (663) | |||
Pension income (expense) | 88 | (288) | 266 | (865) | |||
Other income, net | 51 | 51 | 149 | 171 | |||
Interest expense | (158) | (105) | (396) | (310) | |||
Loss before income taxes | (887) | (718) | (4,830) | (1,667) | |||
Income tax expense (benefit) | 399 | (813) | 845 | (989) | |||
Net (loss) earnings | (1,286) | 95 | (5,675) | (678) | |||
Less: Net earnings attributable to the non-controlling interest | 33 | 14 | 89 | 19 | |||
Net (loss) earnings attributable to Kewaunee Scientific Corporation | $ (1,319) | $ 81 | $ (5,764) | $ (697) | |||
Net (loss) earnings per share attributable to Kewaunee Scientific | |||||||
Basic | $ (0.47) | $ 0.03 | $ (2.07) | $ (0.25) | |||
Diluted | $ (0.47) | $ 0.03 | $ (2.07) | $ (0.25) | |||
Weighted average number of common shares outstanding | |||||||
Basic | 2,790 | 2,762 | 2,785 | 2,759 | |||
Diluted | 2,790 | 2,789 | 2,785 | 2,759 |
Kewaunee Scientific Corporation Condensed Consolidated Balance Sheets ($ in thousands) | |||
January 31, | April 30, | ||
(Unaudited) | |||
Assets | |||
Cash and cash equivalents | $ 4,697 | $ 5,206 | |
Restricted cash | 805 | 525 | |
Receivables, less allowances | 35,053 | 32,882 | |
Inventories | 19,947 | 16,517 | |
Income tax receivable | 638 | 955 | |
Prepaid expenses and other current assets | 7,780 | 4,372 | |
Total Current Assets | 68,920 | 60,457 | |
Net Property, Plant and Equipment | 15,345 | 15,982 | |
Right of use assets | 8,006 | 9,279 | |
Other assets | 3,415 | 3,666 | |
Total Assets | $ 95,686 | $ 89,384 | |
Liabilities and Stockholders' Equity | |||
Short-term borrowings | $ 8,962 | $ 6,828 | |
Current portion of lease obligations | 1,486 | 1,369 | |
Accounts payable | 27,415 | 16,780 | |
Other Current Liabilities | 9,645 | 9,204 | |
Total Current Liabilities | 47,508 | 34,181 | |
Long-term portion of lease obligations | 6,803 | 7,951 | |
Other non-current liabilities | 5,195 | 5,765 | |
Total Liabilities | 59,506 | 47,897 | |
Kewaunee Scientific Corporation Equity | 35,847 | 41,241 | |
Non-controlling interest | 333 | 246 | |
Total Stockholders' Equity | 36,180 | 41,487 | |
Total Liabilities and Stockholders' Equity | $ 95,686 | $ 89,384 |
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SOURCE Kewaunee Scientific Corporation
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