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Tall Wood Buildings Not So Great, says Concrete Industry

Quebec Government's decision to allow the construction of taller wood buildings on the basis of a new wood industry construction guide that is not recognized by the National Building Code of Canada (NBCC) circumvents the exceptional building code approval process that exists to ensure the safety of all Canadians, says the Canadian Precast/Prestressed Concrete Institute.

Woodworking Industry News

Kewaunee Earnings Drop Even as Major Competitor Exits Market

Kewaunee Scientific, a laboratory furniture manufacturer, says net income dropped in the first quarter, because a major competitor left the market.

Architectural woodwork and lab furnishings firm Kewaunee Scientific (Nasdaq: KEQU) first quarter sales rose 2 percent to $31.1 million. "I also expect earnings to improve this fiscal year as the United States economy continues its recovery and the marketplace adjusts to the impact of the former competitor leaving the industry," says CEO David Rausch.

 

STATESVILLE, N.C., Aug. 25, 2015 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported results for its first quarter ended July 31, 2015.

Sales for the quarter were $31,089,000, a 2% increase from sales of $30,534,000 in the prior year. Domestic sales for the quarter were $24,315,000, up slightly from sales of $24,248,000 in the first quarter of last year. International sales for the quarter were $6,774,000, up 8% from sales of $6,286,000 in the first quarter last year.

Net earnings for the quarter were $940,000, or $0.35 per diluted share, as compared to net earnings of $1,234,000, or $0.47 per diluted share, in the first quarter last year. Earnings for the quarter were unfavorably impacted by the shipments of the remaining orders in the backlog that were bid in the prior year at extremely competitive pricing. This impact was due to a major competitor exiting the marketplace, and to a lesser extent, by a higher effective income tax rate.

In-coming orders for the Domestic business were strong during the quarter, as opportunities increased from the improving marketplace for laboratory furniture and scientific equipment in the United States. The Company continues to see and pursue new opportunities in the International markets, particularly in the growth markets of India and the Middle East, although the timing of international incoming orders continues its unevenness from quarter-to-quarter.

The order backlog was $86.7 million at July 31, 2015, as compared to $82.7 million at July 31, 2014, and $90.1 million at April 30, 2015. An increase in the Domestic backlog was offset by shipments of several large international orders during the quarter.

The Company's balance sheet and financial condition remain strong. Unrestricted cash on hand was $2.9 million at the end of the quarter, as compared to $4.4 million at the end of the first quarter last year. Cash of $888,000 was used during the current quarter for the final annual installment toward the purchase of the minority interest in one of the Company's Asia subsidiaries. Working capital was $28.5 million, as compared to $27.5 million at the end of the first quarter last year. Short-term debt and interest rate swaps were $4.9 million at the end of the quarter, as compared to $5.2 million at the end of the first quarter last year, and total bank borrowings and interest rate swaps were $9.0 million, as compared to $9.7 million at the end of the first quarter last year.

"In our Domestic business, incoming orders continued to be strong during the quarter, and profit margins improved over those of the past two quarters," said David M. Rausch, Kewaunee's President and Chief Executive Officer. "Our International business continues to see project opportunities globally from our expanded sales organization and the continued strengthening of the Kewaunee brand worldwide.

"Looking forward, I remain optimistic we will continue to experience sales growth in fiscal year 2016. I also expect earnings to improve this fiscal year as the United States economy continues its recovery and the marketplace adjusts to the impact of the former competitor leaving the industry. My optimism is also based on our strong order backlog and expectations that our International business will continue its long-term progress."

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, sales office, and assembly operation are located in Suzhou Industrial Park, 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.

Contact: D. Michael Parker
704/871-3290

Kewaunee Scientific Corporation

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

Three months ended

July 31,

2015

2014

Net sales

$ 31,089

$ 30,534

Cost of products sold

25,246

24,386

Gross profit

5,843

6,148

Operating expenses

4,319

4,348

Operating earnings

1,524

1,800

Other income

102

126

Interest expense

(92)

(81)

Earnings before income taxes

1,534

1,845

Income tax expense

571

585

Net earnings

963

1,260

Less: net earnings attributable to the noncontrolling interest

23

26

Net earnings attributable to Kewaunee Scientific Corporation

$ 940

$ 1,234

Net earnings per share attributable to

Kewaunee Scientific Corporation stockholders

Basic

$0.36

$0.47

Diluted

$0.35

$0.47

Weighted average number of common shares outstanding

Basic

2,630

2,620

Diluted

2,659

2,651

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

(in thousands)

July 31,

April 30,

2015

2015

Assets

(Unaudited)

Cash and cash equivalents

$ 2,899

$ 3,044

Restricted Cash

1,964

2,276

Receivables, less allowances

28,117

29,106

Inventories

13,970

12,745

Prepaid expenses and other current assets

2,521

1,591

Total Current Assets

49,471

48,762

Net property, plant and equipment

14,374

14,523

Other assets

6,231

6,205

Total Assets

$ 70,076

$ 69,490

Liabilities and Equity

Short-term borrowings and interest rate swaps

$ 4,901

$ 4,955

Current portion of long-term debt

421

421

Accounts payable

11,760

11,232

Other current liabilities

3,866

4,447

Total Current Liabilities

20,948

21,055

Other non-current liabilities

13,320

13,236

Total Liabilities

34,268

34,291

Noncontrolling interest

268

323

Kewaunee Scientific Corporation stockholders' equity

35,540

34,876

Total Equity

35,808

35,199

Total Liabilities and Stockholders's Equity

$ 70,076

$ 69,490

SOURCE Kewaunee Scientific Corporation

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Canadian News

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