EX-99.1 2 d271909dex991.htm EX-99.1 EX-99.1

Exhibit 99.1



Kewaunee Scientific Reports

Results for Second Quarter of Fiscal Year 2022



   NASDAQ (KEQU)         Contact:      Donald T. Gardner III


STATESVILLE, N.C. December 16, 2021 – PRNewswire / Kewaunee Scientific Corporation (NASDAQ: KEQU) today announced results for its second quarter ended October 31, 2021.

Fiscal Year 2022 Second Quarter Results:

Sales during the second quarter of fiscal year 2022 were $39,031,000, relatively flat compared to sales of $39,000,000 from the prior year second quarter. Pre-tax loss for the quarter was $2,887,000 compared to a pre-tax loss of $362,000 for the prior year period. The Company experienced significantly higher raw material costs in the second quarter, which increased approximately $2,112,000, net of surcharges, when compared to the prior year period. These material cost increases, which could not be passed along to customers due to the fixed nature of the Company’s contracts, as well as supply chain and labor constraints resulting from COVID-19, resulted in a net loss of $3,100,000 compared to a net loss of $180,000 for the prior year period. EBITDA1 for the quarter was ($2,116,000) compared to $353,000 for the prior year period. Diluted loss per share was ($1.11), as compared to diluted loss per share of ($0.07) in the prior year second quarter.

The Company’s order backlog was $139.7 million on October 31, 2021, increasing from $96.0 million at October 31, 2020, and $114.5 million at April 30, 2021. This is the highest order backlog in the Company’s history. This includes a significant award received by our team in India during the quarter from Laurus Synthesis (http://laurussynthesis.com), a subsidiary of Laurus Labs. A separate press release will be issued today by the Company that will provide greater detail about this project.

Domestic Segment - Domestic sales for the quarter were $29,934,000, an increase of 4.0% from sales of $28,772,000 in the prior year period. Domestic segment net loss was $2,095,000 compared to net earnings of $168,000 in the prior year period. Domestic segment EBITDA was ($1,480,000) compared to $1,189,000 for the prior year period. The year over year sales increase was driven by $1,213,000 of surcharges, which only partially offset $3,325,000 of gross raw material cost increases experienced during the quarter. Raw material cost increases accelerated in the quarter across virtually all categories with the most significant year-over-year increases in epoxy resin (increase of 236%) and cold rolled carbon steel (increase of 101%).



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.




International Segment - International sales for the quarter were $9,097,000, a decrease of 11.1% from sales of $10,228,000 in the prior year period. Performance across our International markets remained similar to that of recent quarters with the India market remaining strong and the ASEAN and Middle East markets continuing to remain soft as a result of COVID-19. International segment net income was $365,000 compared to $465,000 in the prior year period. International segment EBITDA was $594,000 compared to $775,000 for the prior year period.

Corporate Segment – Corporate segment net loss was $1,370,000 for the quarter, as compared to $813,000 in the prior year period. Corporate segment EBITDA for the quarter was ($1,230,000), a favorable increase of 23.6% from corporate segment EBITDA of ($1,611,000) for the prior year period. The primary driver of the improved EBITDA was the favorable impact from pension accounting as a result of the recovery of the plan assets at fiscal year-end 2021 when compared to fiscal year-end 2020.

Total cash on hand on October 31, 2021 was $5,532,000, as compared to $5,731,000 at April 30, 2021. Working capital was $23,049,000, as compared to $28,530,000 at the end of the second quarter last year and $26,276,000 at April 30, 2021. Short-term debt was $13,695,000 on October 31, 2021, as compared to $6,828,000 at April 30, 2021, and long-term debt was $102,000 on October 31, 2021 as compared to $112,000 at April 30, 2021. The Company’s debt-to-equity ratio on October 31, 2021 was .59-to-1, as compared to .39-to-1 at April 30, 2021.

“The market for the Company’s products remains strong, and I could not be more proud of Kewaunee’s Associates for persevering through a number of headwinds that have affected the business during our most recent quarter,” said Thomas D. Hull III, Kewaunee’s President and Chief Executive Officer. “We were successful in continuing to grow our backlog, reporting a record high for the second consecutive quarter. In response to this favorable market demand, we have been focused on restoring and expanding manufacturing capacity we had to reduce last year because of COVID-19. Though it’s been challenging due to the tight labor market, we made progress during the quarter in adding new Associates who will contribute to sustained manufacturing volume increases during the second half of our fiscal year.”

“Much of the product manufactured during the quarter was priced during the peak of weak demand due to COVID-19, which was also before raw material inflation began because of the global supply chain crisis. These orders had fixed contracts that prevented the Company from passing along and recovering the unprecedented increases in raw material costs that have occurred. Looking forward, surcharges have been implemented on all new orders which will result in our revenue being better aligned with our costs in the second half of the current fiscal year.”

“We believe the worst of the impact of the timing lag between increased raw material costs and the associated surcharge implementation is behind us. Based on this, we expect improved financial performance in the second half of this fiscal year and into our fiscal 2023. While November’s previously disclosed cyber-attack resulted in a temporary shut-down of our operations, we rebounded quickly and continue to ramp production levels in response to strong demand.”





EBITDA and Segment EBITDA Reconciliation


Quarter Ended October 31, 2020

   Domestic     International     Corporate     Consolidated  

Net Earnings (Loss)

   $ 168     $ 465     $ (813   $ (180



Interest Expense

     —         1       127       128  

Interest Income

     —         (56     (1     (57

Income Taxes

     427       306       (930     (197

Depreciation and Amortization

     594       59       6       659  














   $ 1,189     $ 775     $ (1,611   $ 353  

Quarter Ended October 31, 2021

   Domestic     International     Corporate     Consolidated  

Net Earnings (Loss)

   $ (2,095   $ 365     $ (1,370   $ (3,100



Interest Expense

     —         8       124       132  

Interest Income

     —         (45     (1     (46

Income Taxes

     —         195       —         195  

Depreciation and Amortization

     615       71       17       703  














   $ (1,480   $ 594     $ (1,230   $ (2,116

Year to Date October 31, 2020

   Domestic     International     Corporate     Consolidated  

Net Earnings (Loss)

   $ 1,161     $ 589     $ (2,528   $ (778



Interest Expense

     —         1       204       205  

Interest Income

     —         (105     (2     (107

Income Taxes

     427       327       (930     (176

Depreciation and Amortization

     1,206       128       12       1,346  














   $ 2,794     $ 940     $ (3,244   $ 490  

Year to Date October 31, 2021

   Domestic     International     Corporate     Consolidated  

Net Earnings (Loss)

   $ (2,304   $ 740     $ (2,881   $ (4,445



Interest Expense

     —         9       229       238  

Interest Income

     —         (91     (2     (93

Income Taxes

     —         446       —         446  

Depreciation and Amortization

     1,223       137       36       1,396  














   $ (1,081   $ 1,241     $ (2,618   $ (2,458





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. 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 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.



Kewaunee Scientific Corporation

Condensed Consolidated Statements of Operations (Unaudited)

($ and shares in thousands, except per share amounts)


     Three months ended
October 31,
    Six months ended
October 31,
     2021     2020     2021     2020  

Net sales

   $ 39,031     $ 39,000     $ 78,524     $ 75,423  

Cost of products sold

     35,434       32,605       69,253       63,147  













Gross profit

     3,597       6,395       9,271       12,276  

Operating expenses

     6,487       6,406       13,252       12,563  













Operating earnings (loss)

     (2,890     (11     (3,981     (287

Pension expense

     89       (289     178       (577

Other income

     46       66       98       120  

Interest expense

     (132     (128     (238     (205













Earnings (loss) before income taxes

     (2,887     (362     (3,943     (949

Income tax expense (benefit)

     195       (197     446       (176













Net loss

     (3,082     (165     (4,389     (773

Less: net earnings attributable to the noncontrolling interest

     18       15       56       5  













Net loss attributable to Kewaunee Scientific Corporation

   $ (3,100   $ (180   $ (4,445   $ (778













Net loss per share attributable to Kewaunee Scientific Corporation stockholders



   ($ 1.11   ($ 0.07   ($ 1.60   ($ 0.28


   ($ 1.11   ($ 0.07   ($ 1.60   ($ 0.28

Weighted average number of common shares outstanding



     2,789       2,759       2,783       2,757  


     2,789       2,759       2,783       2,757  

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

($ in thousands)


     Oct 31,
     April 30,
Assets    (Unaudited)         

Cash and cash equivalents

   $ 4,715      $ 5,206  

Restricted cash

     817        525  

Receivables, less allowances

     37,069        32,882  


     18,120        16,517  

Income tax receivable

     774        955  

Prepaid expenses and other current assets

     5,325        4,372  







Total Current Assets

     66,820        60,457  

Net property, plant and equipment

     15,515        15,982  

Right of use assets

     8,454        9,279  

Other assets

     3,504        3,666  







Total Assets

   $ 94,293      $ 89,384  






Liabilities and Stockholders’ Equity      

Short-term borrowings

   $ 13,695      $ 6,828  

Current portion of lease obligations

     1,378        1,369  

Accounts payable

     20,228        16,780  

Other current liabilities

     8,470        9,204  







Total Current Liabilities

     43,771        34,181  

Long-term portion of lease obligations

     7,111        7,951  

Other non-current liabilities

     6,108        5,765  







Total Liabilities

     56,990        47,897  

Kewaunee Scientific Corporation equity

     37,005        41,241  

Noncontrolling interest

     298        246  







Total Stockholders’ Equity

     37,303        41,487  







Total Liabilities and Stockholders’ Equity

   $ 94,293      $ 89,384