STATESVILLE, N.C.-- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported sales and earnings for its third quarter ended January 31, 2015.
Net earnings for the quarter were $484,000, or $0.18 per diluted share, as compared to net earnings of $604,000, or $0.22 per diluted share, in the third quarter last year. Earnings for the quarter reflect lower domestic sales and an unfavorable product mix, partially offset by increased international sales.
For the nine months ended January 31, 2015, net earnings were $2,920,000, or $1.10 per diluted share, as compared to $2,916,000, or $1.11 share, in the comparable period last year.
Sales for the quarter were $27,754,000, an increase of 6.7% from sales of $26,013,000 in the third quarter last year. Domestic sales for the quarter were $20,025,000, a decline of 7.1% from sales of $21,544,000 in the third quarter last year. The domestic laboratory construction marketplace continued to be challenging during the quarter, particularly for educational laboratory construction projects, although increased bidding opportunities were experienced in certain geographic areas of the country as the overall economy continued its gradual improvement. International sales were $7,729,000, an increase of 73.0% from sales of $4,469,000 in the third quarter last year, as sales benefited from shipments of several large international orders received in earlier periods.
The order backlog was $78.0 million at January 31, 2015, down from $84.5 million at October 31, 2014, and up from $69.8 million at January 31, 2014.
Sales for the nine months ended January 31, 2015 were $88,546,000, an increase of 5.3% from sales of $84,114,000 in the comparable period last year. Domestic sales were $67,902,000, a decrease of 3.9% from sales of $70,678,000 in the comparable period last year. International sales were $20,644,000, an increase of 53.6% from sales of $13,436,000 in the comparable period last year.
Unrestricted cash on hand was $3.9 million at the end of the quarter, as compared to $6.7 million at the end of the same period last year. Short-term borrowings under the Company's bank line of credit were $798,000, as compared to $3.9 million at the end of the same period last year, and long-term debt was $4.3 million, as compared to $4.7 million. The debt-to-equity ratio was .14-to-1, as compared to .28-to-1 at the end of the same period last year. Working capital was $27.4 million, as compared to $25.5 million at the end of the same period last year.
"Historically, the third quarter is our most challenging quarter, and this was true again this year," commented David M. Rausch, Kewaunee's President and Chief Executive Officer. "However, our overall corporate performance met expectations. The continuing soft domestic educational laboratory construction market impacted sales and profit margins for the quarter. Additionally, our third quarter domestic business was impacted by both the concentration of the number of holidays and the weather conditions that affected construction project schedules. I am pleased with the sales and earnings performance of our International team, as several large international projects in our backlog shipped during the quarter. In addition, we experienced noticeable increases in orders and sales during this quarter from our expanding sales representation in Latin America.
"Looking forward, we expect sales and earnings for the fourth quarter to improve over the third quarter and be in line with results for the fourth quarter last year. Our outlook is based on scheduled ship dates for projects in our current order backlog, our recent observation that opportunities for educational laboratory construction projects have modestly improved, and our expectations that our international business will continue its 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 are 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.
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