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Kewaunee Scientific Announces Results For Third Quarter And Quarterly Dividend

STATESVILLE, N.C., Feb. 25 /PRNewswire-FirstCall/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today announced results for its third quarter ended January 31, 2010.

Sales for the quarter were $21,814,000, down from sales of $26,023,000 in the same period last year.  Sales were affected by a soft market for small laboratory furniture projects, lower sales to international customers, and unusually bad weather which delayed the start of many construction projects.  The lower sales also reflect the typical slowdown in construction activity during the winter months, which did not occur last year.  Sales from domestic operations during the quarter were $19,081,000, down from sales of $22,498,000 in the same period last year.  Sales from international operations were $2,733,000, down from sales of $3,525,000 in the same period last year.

The order backlog increased to a record $65.5 million at January 31, 2010, up from $60.7 million at January 31, 2009, and $65.2 million at the end of last quarter.

Net earnings for the quarter were $621,000, or $0.24 per diluted share, down from $882,000, or $0.35 per diluted share, in the same period last year. Earnings were unfavorably impacted by lower sales and an after-tax increase in pension expense of $157,000, or $0.06 per diluted share, as compared to the third quarter last year.  The pension expense increase primarily resulted from last year's decline in the market value of pension investments.

"Despite the lower earnings, I am pleased with our progress during the quarter," said William A. Shumaker, President and Chief Executive Officer.  "The order backlog is strong at $65.5 million, and outstanding quotations are at record levels.  Quotation opportunities in the international marketplace have increased dramatically in recent months.  The international marketplace appears to show signs of recovery from the economic slowdown, and we expect to see improved results from our international operations in the fourth quarter.  Quotation activity also remains strong in the domestic marketplace for larger laboratory projects, although we expect our results in the short-term will continue to be impacted by changes to construction schedules and project delivery dates. All of our markets remain highly-competitive with aggressive pricing; however, we continue to successfully compete and win projects."

Sales for the nine months ended January 31, 2010 were $75,151,000, down from sales of $79,150,000 in the same period last year. Domestic sales for the nine months ended January 31, 2010 were $67,152,000, down from sales of $67,296,000 in the same period last year.  Sales from international operations were $7,999,000 for the nine months ended January 31, 2010, down from sales of $11,854,000 in the same period last year.

Net earnings for the nine months ended January 31, 2010 were $3,044,000, or $1.18 per diluted share, down from net earnings of $3,327,000, or $1.30 per diluted share, in the same period last year.  Earnings for the nine months were unfavorably impacted by an after-tax increase in pension expense of $470,000, or $0.18 per diluted share, as compared to the same period last year.  

The Company's financial condition continues to be strong. Bank borrowings and capital lease obligations decreased to $3,144,000 at January 31, 2010, down from $6,318,000 at January 31, 2009. Cash on hand was $2,443,000, as compared to 3,089,000 at the end of the same period last year. Working capital increased to $21,327,000 at the end of the quarter, up from $17,749,000 at the end of the same period last year.

"As I look forward, I am optimistic about Kewaunee's future," continued Mr. Shumaker.  "Our strategies to expand into new markets, introduce new products, and reduce costs are positioning Kewaunee well for long-term growth and success.  We also continue to expand our manufacturing capabilities, with the recently announced expansion of our Statesville facility following the move into our new, larger Bangalore factory last summer."

In other news, the Company announced today that its Board of Directors approved a cash dividend of ten cents per outstanding share to stockholders of record at the close of business on March 8, 2010, payable on March 22, 2010.

Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of scientific and technical furniture. The Company's corporate headquarters are located in Statesville, North Carolina. The Company's manufacturing facilities are located in Statesville and Bangalore, India. The Company has subsidiaries in Singapore and Bangalore that serve the Asian and Middle East 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.

    
    
                      Consolidated Statements of Operations
                      (in thousands, except per share data)
                                    (Unaudited)
    
    
                             Three Months Ended     Nine Months Ended
                                 January 31              January 31
                               2010       2009       2010       2009
                               ----       ----       ----       ----
    
    Net sales                $21,814    $26,023    $75,151    $79,150
    Cost of products sold     17,129     21,089     58,492     62,846
                              ------     ------     ------     ------
    Gross profit               4,685      4,934     16,659     16,304
    Operating expenses         3,663      3,440     11,605     10,884
                               -----      -----     ------     ------
    Operating earnings         1,022      1,494      5,054      5,420
    Other income (expense)        --          3         --        (36)
    Interest expense             (35)       (49)      (115)      (231)
                                 ---        ---       ----       ----
    
    Earnings before 
     income taxes                987      1,448      4,939      5,153
    Income tax expense           333        488      1,673      1,595
                                 ---        ---      -----      -----
    
    Net earnings                 654        960      3,266      3,558
    
    Less: net earnings
     attributable to
     the noncontrolling
     interest                     33         78        222        231
                                 ---        ---        ---        ---
    Net earnings attributable
     to Kewaunee Scientific
     Corporation                $621       $882     $3,044     $3,327
                                ====       ====     ======     ======
    
    Net earnings per
     share attributable
     to Kewaunee Scientific
     Corporation stockholders
               Basic           $0.24      $0.35      $1.19      $1.30
               Diluted         $0.24      $0.35      $1.18      $1.30
    Weighted average
     number of common shares
     outstanding (in 
     thousands)
               Basic           2,569      2,556      2,562      2,554
               Diluted         2,581      2,556      2,570      2,563
    
    
    
                   Condensed Consolidated Balance Sheets
                              (in thousands)
    
    
                                                  January 31  April 30
                                                     2010       2009
                                                     ----       ----
                                                  (unaudited)
    Assets
    ------
    Cash and cash equivalents                        $1,937    $3,559
    Restricted cash                                     506       456
    Receivables, less allowances                     23,007    24,526
    Inventories                                       7,924     7,839
    Prepaid expenses and other current assets         1,585     1,165
                                                      -----     -----
       Total current assets                          34,959    37,545
    Net property, plant and equipment                12,609    11,369
    Other assets                                      4,035     3,615
                                                      -----     -----
    Total Assets                                    $51,603   $52,529
                                                    =======   =======
    
    Liabilities and Stockholders' Equity
    Short-term borrowings                            $2,909    $5,720
    Current obligations under capital leases             96       220
    Accounts payable                                  6,082     8,812
    Other current liabilities                         4,545     3,911
                                                      -----     -----
       Total current liabilities                     13,632    18,663
                                                     ------    ------
    Other non-current liabilities                     6,672     5,607
                                                      -----     -----
       Total liabilities                             20,304    24,270
    Noncontrolling interest                           1,625     1,306
    Kewaunee Scientific Corporation equity           29,674    26,953
                                                     ------    ------
       Total equity                                  31,299    28,259
                                                     ------    ------
    Total Liabilities and Equity                    $51,603   $52,529
                                                    =======   =======
    
    
    
    Contact:               D. Michael Parker
                           704/871-3290
    

SOURCE Kewaunee Scientific Corporation

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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