STATESVILLE, N.C., Nov. 27, 2012 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported sales and earnings for its second quarter ended October 31, 2012.
Sales for the quarter were a record $31,185,000, up 20% from sales of $25,962,000 in the second quarter last year. Net earnings for the quarter were $649,000, or $0.25 per diluted share, as compared to a net loss of $125,000, or $0.05 per diluted share, in the second quarter last year. Earnings for the quarter were favorably impacted by the increase in sales and reduced manufacturing, overhead, and administrative costs.
Domestic sales for the quarter were $25,684,000, up 8% from sales of $23,826,000 in the second quarter last year. Demand for privately-funded projects continued to hold up relatively well during the quarter, while opportunities for publicly-funded projects remained well below pre-recession levels as state and local governments continued to receive significantly lower funding for capital projects.
International sales for the quarter were $5,502,000, up 157% from $2,136,000 in the second quarter last year, as several large international projects shipped during the quarter. The Company continues to see increased opportunities for sales and orders in the growing Asia and Middle East laboratory markets through its strengthened and broadened international dealer network.
The order backlog increased to a record $90.8 million at October 31, 2012, up from $78.0 million at October 31, 2011, as the Company continued to strengthen its market position.
Sales for the six months ended October 31, 2012 were $57,868,000, up 11% over sales of $52,283,000, in the same period last year. Domestic sales were $48,312,000, up 2% over sales of $47,222,000 in the same period last year. International sales were $9,556,000, up 89% from sales of $5,061,000 in the same period last year. Net earnings for the six months ended October 31, 2012 were $1,283,000, or $0.50 per diluted share, as compared to a net loss of $103,000, or $0.04 per diluted share, in the same period last year.
The Company's balance sheet continues to be strong. Cash on hand was $6.5 million at the end of the quarter, as compared to $4.1 million at the end of the same period last year. Working capital was $24.2 million, as compared to $21.5 million at the end of the same period last year. Short-term borrowings under the Company's $15 million bank line of credit were $5.7 million, as compared to $7.3 million at the end of the same period last year. Total bank borrowings and capital lease obligations were $9.3 million, as compared to $11.2 million at the end of the same period last year, and the debt-to-equity ratio was .30-to-1, as compared to .36-to-1 at the end of the same period last year.
"I am pleased with our progress in a number of important areas," said William A. Shumaker, Kewaunee's Chief Executive Officer. "Sales, earnings, and incoming orders were very strong for the quarter. We also made good progress in improving the quality of our order backlog, as we shipped several large direct contract projects from the backlog with less favorable product mixes and margins. This bodes well for earnings and margins going forward, as these type orders are generally being replaced in our backlog with orders received through our dealer organization, which typically have a more favorable product mix and are more profitable. I am confident this progress will continue in the second half of the year. It should be noted that third quarter is historically our slowest due to the holidays and the construction cycle.
"We continue to see positive results from our strengthened dealer network. Our dealers are ahead of their order booking goals for the fiscal year, and they continue to provide us increased bidding opportunities and orders. Working in partnership with them, we are also making excellent progress with laboratory planners and architects to strengthen our relationships and increase their preference for the Kewaunee brand.
"I should note that one of our directors, Patrick L. McCrory, has been elected Governor of North Carolina and will be resigning from the Kewaunee Board when he takes office in January 2013. Since joining our Board in May 2009, Pat has served the Company and our stockholders well, as he shared unique insights and perspectives obtained through his impressive career in the private sector and as a seven-term Mayor of Charlotte. The entire Board of Directors is grateful to Pat for his leadership and guidance."
Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Laboratory furniture products include both steel and wood cabinetry, fume hoods, adaptable modular systems, moveable workstations, biological safety cabinets, and epoxy resin counters and sinks. Healthcare furniture products include laminate casework, storage systems, and related products for healthcare applications. Technical furniture products include column systems, slotted-post systems, pedestal systems, and stand-alone benches.
The Company's corporate headquarters are located in Statesville, North Carolina. Three manufacturing facilities are located in Statesville, NC serving the domestic and international markets. One manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company has subsidiaries in Singapore and India. 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.Consolidated Statements of Operations(in thousands, except per share data)(Unaudited)Three Months EndedSix Months EndedOctober 31October 312012201120122011Net sales$31,185$25,962$57,868$52,283Cost of products sold25,95822,11747,39844,250Gross profit5,2273,84510,4708,033Operating expenses4,0134,0058,1517,960Operating earnings (loss)1,214(160)2,31973Other income1083617635Interest expense(101)(128)(215)(223)Earnings (loss) before income taxes1,221(252)2,280(115)Income tax expense (benefit)414(96)785(67)Net earnings (loss)807(156)1,495(48)Less: net earnings (loss) attributable tothe noncontrolling interest158(31)21255Net earnings (loss) attributable toKewaunee Scientific Corporation$649$(125)$1,283$(103)Net earnings (loss) per share attributable toKewaunee Scientific Corporation stockholdersBasic$0.25$(0.05)$0.50$(0.04)Diluted$0.25$(0.05)$0.50$(0.04)Weighted average number of commonshares outstanding Basic2,5872,5792,5842,579Diluted2,6012,5792,5922,579 Condensed Consolidated Balance Sheets(in thousands)October 31April 3020122012(unaudited)AssetsCash and cash equivalents$5,878$6,188Restricted cash639704Receivables, less allowances24,86823,244Inventories12,42411,760Prepaid expenses and other current assets2,5101,702Total current assets46,31943,598Net property, plant and equipment14,75815,346Other assets5,4205,192Total Assets$66,497$64,136Liabilities and EquityShort-term borrowings$5,694$6,816Current obligations under capital leases and long-term debt200236Accounts payable11,2268,848Other current liabilities5,0134,340 Total current liabilities22,13320,240Other non-current liabilities11,75612,238Total liabilities33,88932,478Noncontrolling interest2,2112,147Kewaunee Scientific Corporation equity30,39729,511Total equity32,60831,658Total Liabilities and Equity$66,497$64,136
D. Michael Parker704/871-3290
|SOURCE Kewaunee Scientific Corporation|
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