Full Press Release Details
Kewaunee Scientific Announces Second Quarter Results
STATESVILLE, N.C., Nov. 22 /PRNewswire-FirstCall/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported results for its second quarter ended
October 31, 2004. Sales for the quarter were $18,365,000, a decline of 25%
from the same period last year. Net earnings for the quarter were $108,000,
or $0.04 per diluted share, as compared to net earnings of $418,000, or $0.17
per diluted share, in the same quarter last year.
Several issues adversely affected the laboratory furniture marketplace
during the quarter. Uncertainties surrounding the presidential election and its
potential impact on the price of prescription drugs continued to affect the
willingness of pharmaceutical companies to invest in new research projects.
Additionally, the marketplace was affected by significant increases in the cost
of construction materials, particularly for steel. The resulting
higher-than-planned construction costs delayed the award date of many projects,
as some customers were forced to reduce the scope of their project to remain
within budget. Reduced state budgets also adversely affected funding available
for education construction projects. The order backlog was $38.6 million at
October 31, 2004. This compares to order backlogs of $39.6 million at July 31,
2004 and $46.3 million at October 31, 2003.
In addition to the lower sales volumes, earnings for the current quarter
were adversely affected by higher costs for raw materials, particularly steel,
as well as higher energy costs. A number of actions were taken during the
quarter to reduce costs, including a significant workforce reduction in both the
hourly and administrative areas of the Company and tighter controls over
spending. Additionally, a number of plans were implemented to further reduce
manufacturing and raw material costs.
"With the presidential elections behind us and the economic recovery
projected to continue, we are optimistic that our customers will begin moving
forward on new and previously planned construction projects," said William A.
Shumaker, President and Chief Executive Officer of Kewaunee. "However, an
increase in order activity is not likely to improve sales until our fourth
"We continue to operate in a very difficult business environment," Mr.
Shumaker continued. "However, we are encouraged about sales opportunities with
new strategic partners to serve the rapidly growing healthcare market. The
Company is on schedule to meet its objective of beginning to provide products to
this market segment by the end of our fiscal year. We are also pleased that our
subsidiaries in Asia serving the international laboratory research market are
performing well. As has been previously reported, we believe the Company is
well-positioned for future growth in this rapidly- expanding Asian market."
Sales for the six months ended October 31, 2004 were $38,653,000, a decline
of 20% from the comparable period last year. Net earnings for the six months
were $301,000, or $0.12 per diluted share, as compared to net earnings of
$879,000, or $0.35 per diluted share, in the comparable period last year.
Kewaunee Scientific Corporation is a recognized leader in the design,
manufacture, and installation of scientific and technical furniture. The
Company's corporate headquarters and manufacturing facilities are located in
Statesville, North Carolina. Kewaunee Scientific's website is located at
Certain statements in this release constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could significantly impact results or achievements expressed
or implied by such forward-looking statements. These factors include, but are
not limited to, economic, competitive, governmental, and technological factors
affecting the Company's operations, markets, products, services, and prices.
Contact: D. Michael Parker
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
3 Months Ended 6 Months Ended
October 31 October 31
Net sales $18,365 $24,384 $38,653 $48,597
Cost of products sold 14,812 20,280 31,724 40,890
Gross profit 3,553 4,104 6,929 7,707
Operating expenses 3,260 3,321 6,306 6,322
Operating earnings 293 783 623 1,385
Other (expense) income (130) (130) (167) (12)
Earnings before income
taxes 163 653 456 1,373
Income tax expense 55 235 155 494
Net earnings $108 $418 $301 $879
Net earnings per share
Basic $0.04 $0.17 $0.12 $0.35
Diluted $0.04 $0.17 $0.12 $0.35
Weighted average number
Basic 2,492 2,486 2,491 2,485
Diluted 2,494 2,491 2,497 2,490
Condensed Consolidated Balance Sheets
Cash and cash equivalents $817 $1,167
Receivables, less allowances 23,539 24,987
Inventories 4,004 4,285
Prepaid expenses and other current assets 1,112 1,097
Total current assets 29,472 31,536
Net property, plant and equipment 10,742 11,362
Other assets 6,411 7,563
Total Assets $46,625 $50,461
Liabilities and Stockholders' Equity
Short-term borrowings $6,079 $6,996
Current portion of long-term debt 1,118 1,118
Accounts payable 5,087 6,924
Other current liabilities 3,326 3,881
Total current liabilities 15,610 18,919
Long-term debt 372 931
Other non-current liabilities 3,856 3,820
Total stockholders' equity 26,787 26,791
Total Liabilities and Stockholders' Equity $46,625 $50,461
SOURCE Kewaunee Scientific Corporation
/CONTACT: D. Michael Parker of Kewaunee Scientific Corporation,
/Web site: http://www.kewaunee.com /
CO: Kewaunee Scientific Corporation