Full Press Release Details
KEWAUNEE SCIENTIFIC ANNOUNCES THIRD QUARTER RESULTS AND QUARTERLY DIVIDEND
STATESVILLE, N.C., Feb. 22 /PRNewswire-FirstCall/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported results for its third quarter ended
January 31, 2005 and announced its regular quarterly dividend.
Sales for the quarter were $15,623,000, a decrease of 27% from sales of
$21,454,000 in the same period last year. A net loss of $742,000, or $0.30 per
diluted share, was reported for the quarter. This compares to net earnings of
$291,000, or $0.12 per diluted share, in the same period last year.
Sales for the quarter were adversely affected by the continuing soft
marketplace for laboratory furniture, although the marketplace appeared to show
improvement late in the quarter. Spending for new research projects by
pharmaceutical companies continued to be below levels of recent years.
Additionally, the number of projects generally available in the marketplace was
reduced, or construction has been delayed, by the significant increases in the
cost of construction materials over the past year. Funding available for
education construction projects also continued to be affected by reduced state
Order activity improved over the two previous quarters. The order backlog
increased to $41.7 million at January 31, 2005. The order backlog was $38.6
million at October 31, 2004 and $39.6 million at July 31, 2004.
Earnings for the quarter were adversely affected by low sales volumes,
extraordinarily higher costs for certain raw materials, particularly steel and
epoxy resin, reserves established for several project disputes, and cost
overruns on several completed projects. The impact of these items was partially
offset by reduced expenses resulting from the workforce reductions announced
last quarter and aggressive cost reduction activities.
"The business environment remained difficult during the quarter," said
William A. Shumaker, President and Chief Executive Officer of Kewaunee.
"However, as we anticipated, we have begun to see increased activity in the
marketplace since the Presidential election in November. With this improvement
expected to continue and our increased order backlog, we expect substantially
improved sales volume in the fourth quarter compared to the third quarter. In
view of this increased sales volume and with the number of unusual expenses that
affected our third quarter believed to be behind us, we expect a profitable
"Our balance sheet remains strong," Mr. Shumaker continued. "Total debt was
$4.7 million at January 31, 2005, down from $7.6 million at October 31, 2004,
while cash on hand increased to $1.1 million. Operations provided cash of $3.8
million during the quarter. Profits of our technical furniture business continue
to improve over the prior year as this market strengthens. Our subsidiaries in
Asia serving the rapidly-expanding Asian laboratory research market also
continue to grow and contribute nicely, though modestly, to our profits."
Sales for the nine months ended January 31, 2005 were $54,276,000, a
decrease of 23% from sales of $70,051,000 in the comparable period last year. A
net loss of $441,000, or $0.18 per diluted share, was reported for the nine
months. This compares to net earnings of $1,170,000, or $.47 per diluted share,
in the comparable period last year.
The Company also announced today that its Board of Directors approved a cash
dividend of seven cents per outstanding share to stockholders of record at the
close of business on March 4, 2005, payable on March 18, 2005.
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.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Condensed Consolidated Balance Sheets
------------ ------------
Cash and cash equivalents $ 1,128 $ 1,167
Receivables, less allowances 18,756 24,987
Inventories 3,953 4,285
Prepaid expenses and other current assets 1,291 1,097
Total current assets 25,128 31,536
Net property, plant and equipment 10,729 11,362
Other assets 6,513 7,563
Total Assets $ 42,370 $ 50,461
Liabilities and Stockholders' Equity
Short-term borrowings $ 3,263 $ 6,996
Current portion of long-term debt 1,169 1,118
Accounts payable 5,189 6,924
Other current liabilities 2,535 3,881
Total current liabilities 12,156 18,919
Long-term debt 257 931
Other non-current liabilities 4,153 3,820
Total stockholders' equity 25,804 26,791
Total Liabilities and Stockholders' Equity $ 42,370 $ 50,461
Contact: D. Michael Parker
SOURCE Kewaunee Scientific Corporation
/CONTACT: D. Michael Parker of Kewaunee Scientific Corporation,
/Web site: http://www.kewaunee.com /