Full Press Release Details
KEWAUNEE SCIENTIFIC REPORTS RESULTS FOR YEAR AND FOURTH QUARTER
STATESVILLE, N.C., June 21 /PRNewswire-FirstCall/ -- Kewaunee Scientific
Corporation (Nasdaq: KEQU) today reported results for its fiscal year and
fourth quarter ended April 30, 2006.
Sales for the year were $84,071,000, an increase of 14.4% from sales of
$73,481,000 in the prior year. Net earnings were $193,000, or $0.08 per diluted
share, as compared to a net loss of $147,000, or $0.06 per diluted share, for
the prior year. Excluding an after-tax gain of $540,000, or $0.22 per diluted
share, related to the sale of the Company's former Lockhart, Texas property, a
net loss for the year of $347,000, or $0.14 per diluted share, was incurred.
Domestic demand for laboratory furniture products continued its gradual
improvement during the year. Sales to domestic customers were $72,027,000, an
increase of 6.2% over the prior year. Although demand for these products
improved, prices remained very competitive.
Growth accelerated for the Company's Asian subsidiaries during the year.
International sales increased 113% to $12,044,000, of which $3,215,000 was for
products manufactured in Statesville. The Company continued to increase its
investment and representation in the Asian area to position itself for further
expansion in this rapidly growing laboratory research market.
The Company's order backlog was $36.4 million at April 30, 2006, as compared
to $40.6 million at April 30, 2005.
The Company continued its aggressive activities during the year to reduce
factory overhead, manufacturing costs, and material costs. Significant capital
cost improvement projects in each of the three Statesville plants were completed
during the third quarter of the year. Additionally, good progress was made in
reducing the prices paid for raw materials by continuing our diligent searching
for alternative vendors and more competitive pricing. The Company was successful
during the year in reducing operating expenses. Operating expenses declined to
14.5% of sales, or $12,175,000, from 17.3% of sales, or $12,699,000, in the
"Fiscal year 2006 was a difficult year, especially in the fourth quarter,"
said William A. Shumaker, President and Chief Executive Officer of Kewaunee.
"Improved demand for our products in the domestic marketplace, increased success
of our international businesses, and continued reductions of costs throughout
the Company were overshadowed by a number of factors that adversely affected
earnings. Domestic selling prices for laboratory products declined further
during the year, as manufacturers reacted to excess manufacturing capacity in
the marketplace. Costs of raw materials, energy, and transportation continued
their escalation that began in the prior year. As in the prior year, the Company
continued to have only limited success in its efforts to pass on these added
"We ended the year with a strong balance sheet," Mr. Shumaker continued.
"Working capital was $11.0 million at year-end. Stockholders' equity was $25.5
million, or $10.25 per share. Total debt was $9.1 million, resulting in a debt
to equity ratio of .35-to-1, while unrestricted cash on hand increased to
$929,000. We expect our balance sheet to further strengthen during the coming
year as we work toward improving our operating profits.
"Looking forward, we continue to face a number of uncertainties in this
highly-competitive marketplace. We will continue to implement our plans to
improve manufacturing efficiencies and reduce costs, which will allow us to
compete profitably in the domestic marketplace. We will also continue to
accelerate our investment and representation in our growing and profitable
international operations."
Sales for the fourth quarter ended April 30, 2006 were $23,720,000, an
increase of 23.5% from sales of $19,205,000, in the same period last year.
Domestic sales in the quarter were $18,253,000, an increase of 4.0% over the
prior year. International sales were extremely strong in the quarter, as sales
increased to $5,467,000, of which $1,310,000 was for products manufactured in
Statesville. International sales in the same period last year were $1,654,000,
of which $350,000 was for products manufactured in Statesville.
A net loss for the fourth quarter of $254,000, or $0.11 per diluted share,
was incurred. Earnings for the quarter were adversely affected by the various
negative factors discussed above, with selling margins particularly slim during
the quarter. Net earnings in the fourth quarter last year were $294,000, or $.12
per diluted share. Net earnings in that quarter were increased by an income tax
benefit of $261,000.
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. The Company also has subsidiaries in Singapore and
Bangalore, India that serve the Asian markets. Kewaunee Scientific's website is
located at http://www.kewaunee.com.
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
Consolidated Statements of Operations
(in thousands, except per share amounts)
*Includes a non-recurring after-tax gain on the sale of property in the
amount of $540,000, $.22 per diluted share.
Condensed Consolidated Balance Sheets
Cash and cash equivalents $ 929 $ 225
Restricted cash 399 379
Receivables, less allowances 23,199 21,683
Inventories 5,860 3,542
Prepaid expenses and other current assets 1,011 951
Total current assets 31,398 26,780
Net property, plant and equipment 11,163 10,730
Property held for sale -- 1,450
Other assets 7,911 7,252
Total Assets $ 50,472 $ 46,212
Liabilities and Stockholders' Equity
Short-term borrowings $ 8,216 $ 3,778
Current portion of long-term debt
and capital leases 260 1,042
Accounts payable 9,074 8,558
Other current liabilities 2,823 3,021
Total current liabilities 20,373 16,399