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Kewaunee Scientific Announces First Quarter Results and Quarterly Dividend

STATESVILLE, N.C., Aug. 22 /PRNewswire-FirstCall/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today announced results for its first quarter ended July 31, 2007 and the declaration of its quarterly dividend.

Net earnings for the quarter were $674,000, or $0.27 per diluted share, as compared to net earnings of $133,000, or $0.05 per diluted share, for the first quarter of the prior year. Earnings continued to benefit from improved profit margins, increased manufacturing efficiencies, savings from alternate sources for raw materials and components, and other cost improvement initiatives.

Sales for the quarter were $20,784,000, an increase of 7.7% from sales of $19,294,000 in the prior year. Sales from domestic operations were $18,014,000, an increase of 8.0% from the prior year period. The domestic marketplace for laboratory products continued to be healthy during the quarter, particularly in the educational research market and for the larger laboratory projects. The marketplace for small and mid-size laboratory projects showed signs of improvement during the quarter, although it remains very price competitive. Sales from international operations were $2,770,000, an increase of 5.7% from the prior year period.

Incoming orders remained strong during the quarter. The order backlog increased to a record $54.7 million at July 31, 2007, up from $51.1 million at April 30, 2007, and $36.5 million at July 31, 2006.

"Our strategic efforts over the past several years to make Kewaunee a more efficient company are working well," said William A. Shumaker, President and Chief Executive Officer. "On-going investments in modern, computerized equipment, the implementation of 'Lean' manufacturing techniques, and the continuous pursuit of cost improvements are significantly reducing our costs and increasing profit margins. Our lower costs make us more competitive in the marketplace and strengthen our market position.

"We continue to have high expectations for growth in sales and profitability of our international operations. Although this business experienced somewhat modest sales growth in the first quarter, we expect our international operations to have a much better second quarter, as several significant international projects are scheduled for delivery and installation."

The Company's balance sheet remains strong. Bank borrowings and capital lease obligations totaled $5.3 million at July 31, 2007, down from $9.4 million at July 31, 2006. The debt-to-equity ratio was .21-to-1 at the end of the quarter, down from .37-to-1 at the end of the prior year period. Cash on hand was $2.2 million at the end of the quarter, as compared to $2.5 million at the end of the prior year period. Working capital was $13.0 million at July 31, 2007, up from $11.0 million at the end of the prior year period.

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 September 4, 2007, payable on September 18, 2007.

Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of scientific and technical furniture. The Company's corporate headquarters and domestic 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

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.

Consolidated Statements of Operations [unaudited]

(in thousands, except per share data)

Three Months Ended

July 31 July 31

2007 2006

Net sales $20,784 $19,294

Cost of products sold 16,521 16,166

Gross profit 4,263 3,128

Operating expenses 3,148 2,637

Operating earnings 1,115 491

Other income 3 18

Interest expense (110) (187)

Earnings before income taxes 1,008 322

Income tax expense 312 78

Earnings before minority interests 696 244

Minority interests in subsidiaries 22 111

Net earnings $674 $133

Net earnings per share

Basic $0.27 $0.05

Diluted $0.27 $0.05

Weighted average number of common

shares outstanding (in thousands)

Basic 2,502 2,492

Diluted 2,521 2,493

Condensed Consolidated Balance Sheets

(in thousands)

July 31 April 30

2007 2007

Assets [unaudited]

Cash and cash equivalents $1,791 $2,231

Restricted cash 396 372

Receivables, less allowances 18,868 19,061

Inventories 5,694 5,869

Prepaid expenses and other current

assets 1,368 981

Total current assets 28,117 28,514

Net property, plant and equipment 11,196 11,255

Other assets 5,586 5,471

Total Assets $44,899 $45,240

Liabilities and Stockholders' Equity

Short-term borrowings $4,556 $3,489

Current obligations under capital

leases 369 360

Accounts payable 7,107 8,437

Other current liabilities 3,134 3,897

Total current liabilities 15,166 16,183

Other non-current liabilities 4,943 5,009

Total stockholders' equity 24,790 24,048

Total Liabilities and Stockholders'

Equity $44,899 $45,240

Contact: D. Michael Parker


SOURCE Kewaunee Scientific Corporation
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