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Kewaunee Scientific Reports Results for Second Quarter

STATESVILLE, N.C., Dec. 5, 2017 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU) today reported results for its second quarter of fiscal year 2018, ended October 31, 2017.

Net earnings for the quarter increased 16.0% to $1,724,000, or $0.62 per diluted share, as compared to net earnings of $1,486,000, or $0.54 per diluted share, in the second quarter last year.

Sales for the quarter were $41,471,000, a 14.2% increase from sales of $36,329,000 in the prior year. Domestic sales for the quarter were $28,540,000, up 1.2% from sales of $28,211,000 in the second quarter of last year. International sales for the quarter were $12,931,000, up 59.3% from sales of $8,118,000 in the second quarter last year.

The increase in sales was the result of strength in the Company's International segment as the Company delivered a large order in the Middle East. This order is the largest single order in the Company's history and is being delivered, based on the Company's global manufacturing capabilities and reach. Domestic sales levels were similar to the prior year as dealer and distributor demand for the Company's products continues at record setting levels.

Kewaunee continues to win orders globally, with the Company's order backlog at $118.0 million at October 31, 2017, as compared to $101.1 million at October 31, 2016, and $113.5 million at April 30, 2017. This level of order backlog is a new record for Kewaunee.

The Company's balance sheet and financial condition remain strong. Unrestricted cash on hand was $11.8 million at the end of the quarter, as compared to $7.6 million at the end of the second quarter last year. Working capital was $34.2 million, as compared to $31.4 million at the end of the second quarter last year. Short-term debt and interest rate swaps were $7.7 million at the end of the quarter, as compared to $6.7 million at the end of the second quarter last year, and long-term debt was $1.8 million as compared to $3.1 million at the end of the second quarter last year. The debt-to-equity ratio at October 31, 2017 was .24-to-1, as compared to .25-to-1 at October 31, 2016.

"We had a solid second quarter and continue to secure new orders in the marketplace as evidenced by the strong growth in our order backlog. This is very encouraging as our quarterly sales performance was higher than the second quarter of the prior year. We remain focused on exceeding our customers' expectations as they continue to invest in projects that require the quality products and services we provide," said David M. Rausch, Kewaunee's President and Chief Executive Officer.

"Looking forward, our third quarter is typically our most challenging; however, we have a strong order backlog for the quarter and the remainder of the year. We have successfully increased our manufacturing capacity in anticipation of this demand and expect sales and earnings growth to continue through the balance of the fiscal year."

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. 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 is located in Statesville, North Carolina. Direct sales offices are located in the United States, India, Singapore, and China. 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. The Company's China headquarters and sales office are located in Shanghai, China. 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. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning these factors is contained in the Company's filings with the Securities and Exchange Commission. 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

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)














Three months ended


Six months ended




October 31,


October 31,




2017


2016


2017


2016

Net sales



$ 41,471


$ 36,329


$ 75,352


$ 73,608

Cost of products sold


33,560


29,225


60,620


59,365

Gross profit



7,911


7,104


14,732


14,243

Operating expenses


5,256


4,816


10,389


9,894

Operating earnings


2,655


2,288


4,343


4,349

Other income


177


119


345


238

Interest expense


(89)


(78)


(148)


(158)

Earnings before income taxes


2,743


2,329


4,540


4,429

Income tax expense


978


792


1,583


1,562

Net earnings



1,765


1,537


2,957


2,867

Less: net earnings attributable to









the noncontrolling interest


41


51


85


81

Net earnings attributable to









Kewaunee Scientific Corporation


$ 1,724


$ 1,486


$ 2,872


$ 2,786











Net earnings per share attributable to









Kewaunee Scientific Corporation stockholders







Basic



$ 0.64


$ 0.55


$ 1.06


$ 1.03

Diluted



$ 0.62


$ 0.54


$ 1.04


$ 1.02











Weighted average number of common









shares outstanding









Basic



2,717


2,706


2,715


2,699

Diluted



2,776


2,729


2,766


2,718

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

(in thousands)






October 31,


April 30,





2017


2017

Assets




(Unaudited)



Cash and cash equivalents



$ 11,792


$ 12,506

Restricted Cash



1,392


1,435

Receivables, less allowances



33,245


29,889

Inventories




16,439


14,935

Prepaid expenses and other current assets



1,888


1,047

Total Current Assets



64,756


59,812

Net property, plant and equipment



14,061


14,027

Other assets




7,051


7,077

Total Assets




$ 85,868


$ 80,916








Liabilities and Equity






Short-term borrowings and interest rate swaps


$ 7,711


$ 3,591

Current portion of long-term debt



1,167


918

Accounts payable



14,364


11,995

Other current liabilities



7,268


10,423

Total Current Liabilities



30,510


26,927

Other non-current liabilities



10,040


10,732

Total Liabilities



40,550


37,659

Noncontrolling interest



381


374

Kewaunee Scientific Corporation equity



44,937


42,883

Total Equity



45,318


43,257

Total Liabilities and Equity



$ 85,868


$ 80,916

Contact:

Thomas D. Hull III


(704) 871-3290

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SOURCE Kewaunee Scientific Corporation