Company Overview - Kewaunee Scientific (NASDAQ: KEQU) specializes in designing laboratory furniture and equipment [1] Market Sentiment - The stock has faced pessimism due to the arrival of the Department of Government Efficiency and proposals to cut the budget for the National Institutes of Health [1]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Kewaunee reported strong sales growth in Q4 and full year fiscal 2025, driven by the Nu Aire acquisition and higher volumes, with adjusted earnings showing substantial improvement despite GAAP declines due to prior-year non-recurring items [Fourth Quarter Fiscal Year 2025 Results](index=1&type=section&id=Fourth%20Quarter%20Fiscal%20Year%202025%20Results) In the fourth quarter of fiscal year 2025, Kewaunee reported a **significant 36.1% increase** in sales year-over-year, driven by higher volumes and the Nu Aire acquisition. While GAAP net earnings and EPS declined due to large, non-recurring tax benefits in the prior-year quarter, adjusted earnings, which exclude acquisition costs and prior-year anomalies, showed substantial growth. Adjusted pre-tax earnings rose **56.7%** and the order backlog remained strong at **$214.6 million** Q4 FY2025 vs Q4 FY2024 Performance (GAAP) (in millions) | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $77.1 million | $56.7 million | +36.1% | | Pre-Tax Earnings | $7.1 million | $1.3 million | +430.7% | | Net Earnings | $4.9 million | $11.0 million | -56.0% | | Diluted EPS | $1.63 | $3.71 | -56.1% | | EBITDA | $9.7 million | $2.3 million | +327.0% | - The **significant decrease** in GAAP Net Earnings and EPS is **primarily due to** two non-recurring items in the prior year's fourth quarter: a **one-time, non-cash pension termination expense and a substantial tax benefit from the release of a valuation allowance**[4](index=4&type=chunk) Q4 FY2025 vs Q4 FY2024 Performance (Adjusted) (in millions) | Metric | Q4 FY2025 (Adjusted) | Q4 FY2024 (Adjusted) | Change | | :--- | :--- | :--- | :--- | | Pre-Tax Earnings | $8.4 million | $5.4 million | +56.7% | | Net Earnings | $5.8 million | $4.6 million | +26.6% | | Diluted EPS | $1.95 | $1.55 | +25.8% | | EBITDA | $10.3 million | $6.3 million | +64.2% | - The company's order backlog was **$214.6 million** as of April 30, 2025, a **significant increase** from **$155.6 million** on April 30, 2024, indicating **strong future demand**[3](index=3&type=chunk) [Full Year Fiscal Year 2025 Results](index=3&type=section&id=Full%20Year%20Fiscal%20Year%202025%20Results) For the full fiscal year 2025, sales grew by **18.0%** to **$240.5 million**. Similar to the quarterly results, GAAP net earnings were lower than the prior year due to non-recurring items. However, on an adjusted basis, which excludes **$6.0 million** in costs related to the Nu Aire acquisition, pre-tax earnings increased by **21.5%** and adjusted diluted EPS rose to **$5.37** from **$4.19**, reflecting **strong underlying operational performance** Full Year FY2025 vs FY2024 Performance (GAAP) (in millions) | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $240.5 million | $203.8 million | +18.0% | | Pre-Tax Earnings | $14.8 million | $13.1 million | +12.7% | | Net Earnings | $11.4 million | $18.8 million | -39.2% | | Diluted EPS | $3.83 | $6.38 | -40.0% | | EBITDA | $21.6 million | $16.6 million | +29.8% | - Fiscal year 2025 results were **impacted by** **$6.0 million** in costs related to the **acquisition, integration, and purchase accounting for Nu Aire, which reduced pre-tax earnings**[17](index=17&type=chunk) Full Year FY2025 vs FY2024 Performance (Adjusted) (in millions) | Metric | FY2025 (Adjusted) | FY2024 (Adjusted) | Change | | :--- | :--- | :--- | :--- | | Pre-Tax Earnings | $20.8 million | $17.1 million | +21.5% | | Net Earnings | $16.0 million | $12.3 million | +29.8% | | Diluted EPS | $5.37 | $4.19 | +28.2% | | EBITDA | $26.5 million | $20.7 million | +28.4% | [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) The Domestic segment drove significant sales and profit growth, while the International segment saw mixed results due to project delays, and the Corporate segment reported losses from acquisition costs and the absence of prior-year benefits [Domestic Segment](index=2&type=section&id=Domestic%20Segment) The Domestic segment was the **primary growth engine** for the company in fiscal 2025. Sales surged **54.7%** in Q4 and **30.7%** for the full year, driven by higher manufacturing volumes and the strategic acquisition of Nu Aire. This top-line growth translated into **improved profitability** for both the quarter and the full year Domestic Segment Performance (in millions) | Period | Sales | % Change (YoY) | Net Earnings | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Q4 FY2025 | $55.5 million | +54.7% | $5.1 million | +49.5% | | Full Year FY2025 | $179.4 million | +30.7% | $15.4 million | +30.2% | - The **improvement in domestic sales and profitability** was **driven by higher manufacturing volumes and the incorporation of Nu Aire's results** following the acquisition[10](index=10&type=chunk)[19](index=19&type=chunk) [International Segment](index=2&type=section&id=International%20Segment) The International segment experienced **mixed results**. In Q4, sales increased by **3.9%** as customer site delays that had previously hampered performance began to ease, allowing for increased deliveries. However, for the full fiscal year, sales decreased by **8.2%** and profitability slightly declined, reflecting the cumulative impact of these project delays throughout the year International Segment Performance (in millions) | Period | Sales | % Change (YoY) | Net Earnings | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Q4 FY2025 | $21.7 million | +3.9% | $1.6 million | +41.2% | | Full Year FY2025 | $61.1 million | -8.2% | $2.9 million | -5.0% | - The full-year decrease in sales and profitability was **primarily impacted by customer site delays that pushed out the timing of deliveries and billings**[20](index=20&type=chunk) [Corporate Segment](index=2&type=section&id=Corporate%20Segment) The Corporate segment reported a **net loss** of **$1.9 million** for Q4 and **$6.9 million** for the full fiscal year, a **stark contrast** to the net earnings reported in the prior year. This was driven by a combination of factors: the **absence of significant one-time tax benefits and pension adjustments** that boosted prior-year results, and the **incurrence of new costs** in the current year related to the Nu Aire acquisition and Sarbanes-Oxley compliance readiness Corporate Segment Net Earnings (Loss) (in millions) | Period | FY2025 Net Loss | FY2024 Net Earnings | | :--- | :--- | :--- | | Q4 | ($1.9 million) | $6.5 million | | Full Year | ($6.9 million) | $3.9 million | - The variance from the prior year is due to two main factors: 1) The prior year included **large non-recurring transactions** (pension and tax benefits) 2) The current year includes **professional service fees for the Nu Aire acquisition and Sarbanes-Oxley 404(b) compliance costs**[12](index=12&type=chunk)[21](index=21&type=chunk) [Financial Condition and Management Outlook](index=2&type=section&id=Financial%20Condition%20and%20Management%20Outlook) The company's financial position reflects the Nu Aire acquisition, with increased debt and improved working capital, as management expresses confidence in continued organic and inorganic growth strategies [Working Capital and Debt](index=4&type=section&id=Working%20Capital%20and%20Debt) As of April 30, 2025, the company's financial position reflects the Nu Aire acquisition. Cash on hand decreased to **$17.2 million**, primarily to fund the transaction. Both short-term and long-term debt increased significantly, raising the debt-to-equity ratio to **0.99-to-1** from **0.70-to-1** in the prior year. Despite the higher leverage, working capital improved to **$64.7 million** Key Balance Sheet Items (as of April 30) (in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Cash on Hand | $17.2 million | $25.9 million | -33.8% | | Working Capital | $64.7 million | $56.0 million | +15.4% | | Total Debt (Short & Long) | $65.5 million | $31.6 million | +107.4% | | Debt-to-Equity Ratio | 0.99-to-1 | 0.70-to-1 | Increased | - The decrease in cash and **increased** in debt were **primarily related to the completion of the Nu Aire acquisition**[22](index=22&type=chunk)[23](index=23&type=chunk) [Management Commentary and Strategic Outlook](index=2&type=section&id=Management%20Commentary%20and%20Strategic%20Outlook) Management expressed strong satisfaction with the fiscal year's "**exceptional performance**," citing a **robust backlog** and the **successful execution of its strategy**. The acquisition of Nu Aire is highlighted as a **significant step** in the company's growth journey, bringing **complementary strengths and a shared vision for laboratory innovation**. Looking ahead, Kewaunee plans to **continue pursuing both organic and inorganic growth**, leveraging its strong culture and channel partnerships - The company's strategy of **investing in its product portfolio, manufacturing assets, and dealer relationships continues to drive performance improvement and market momentum**[13](index=13&type=chunk) - The acquisition of Nu Aire, Inc. is a **key strategic move to combine two market leaders with complementary strengths and a common vision for laboratory innovation**[24](index=24&type=chunk) - Despite **industry instability from geopolitical uncertainty and supply chain disruptions**, management states Kewaunee has **responded with resilience and views uncertainty as an opportunity**[24](index=24&type=chunk) - The company expects to **continue to grow both organically and inorganically**, **positioning itself as a trusted partner for business owners looking for stewardship and continuity**[24](index=24&type=chunk)[25](index=25&type=chunk) [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) Detailed reconciliations of non-GAAP measures provide clarity on core operational performance, while condensed consolidated financial statements reflect significant asset and liability increases due to the Nu Aire acquisition [Reconciliation of Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides detailed reconciliations for non-GAAP metrics, including Adjusted EBITDA and Adjusted Net Earnings. These adjustments are **crucial** for understanding the company's **core operational performance** by removing the **distorting effects** of one-time events. For fiscal 2025, adjustments primarily remove costs related to the Nu Aire acquisition. For fiscal 2024, adjustments remove the impact of a pension termination and a large valuation allowance release - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Earnings to provide investors with a **clearer view of business trends by excluding items like acquisition fees (FY25) and pension settlement costs (FY24)**[29](index=29&type=chunk)[30](index=30&type=chunk) FY2025 Consolidated EBITDA Reconciliation (in millions) | Metric | Amount | | :--- | :--- | | Net Earnings | $11.4 million | | Add: Interest, Taxes, D&A | $10.2 million | | **EBITDA** | **$21.6 million** | | Add: Professional & Other Fees | $4.9 million | | **Adjusted EBITDA** | **$26.5 million** | FY2025 Adjusted Net Earnings Reconciliation (in millions) | Metric | Amount | | :--- | :--- | | Net Earnings (As Reported) | $11.4 million | | Add: Professional & Other Fees (Net of Tax) | $4.6 million | | **Adjusted Net Earnings** | **$16.0 million** | [Condensed Consolidated Financial Statements](index=11&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements provide the **official GAAP results**. The Statement of Operations **confirms** the **18%** year-over-year revenue growth to **$240.5 million**. The Balance Sheet **clearly shows** the impact of the Nu Aire acquisition, with **Total Assets increasing** from **$134.8 million** to **$194.7 million**, **driven by** the addition of **$17.8 million** in intangible assets and **$12.5 million** in goodwill. Correspondingly, **Total Liabilities rose** from **$78.6 million** to **$128.4 million**, **largely due to** increased long-term debt to finance the deal Condensed Consolidated Statement of Operations (Full Year) (in millions) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Sales | $240.5 million | $203.8 million | | Gross Profit | $68.9 million | $52.1 million | | Operating Profit | $17.8 million | $18.3 million | | Net Earnings Attributable to KEQU | $11.4 million | $18.8 million | Condensed Consolidated Balance Sheet (as of April 30) (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Current Assets | $118.4 million | $96.8 million | | Total Assets | $194.7 million | $134.8 million | | Total Current Liabilities | $53.7 million | $40.8 million | | Total Liabilities | $128.4 million | $78.6 million | | Total Stockholders' Equity | $66.2 million | $56.2 million | [Company Information and Disclosures](index=9&type=section&id=Company%20Information%20and%20Disclosures) Kewaunee Scientific, a **global leader** in laboratory furniture, expanded its portfolio with the acquisition of Nu Aire, a key manufacturer of biological safety cabinets, while cautioning investors on forward-looking statements due to various market and integration risks [About Kewaunee Scientific and Nu Aire](index=9&type=section&id=About%20Kewaunee%20Scientific%20and%20Nu%20Aire) Kewaunee Scientific, founded in 1906, is a **global leader** in designing and manufacturing laboratory furniture and technical products, with headquarters in Statesville, NC, and manufacturing facilities in the US and India. Its newly acquired subsidiary, Nu Aire, founded in 1971 and based in Plymouth, MN, is a leading manufacturer of biological safety cabinets and other essential lab equipment, which complements Kewaunee's existing product portfolio - Kewaunee Scientific is a **global leader** in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products, including casework, fume hoods, and modular systems[31](index=31&type=chunk) - The newly acquired subsidiary, Nu Aire, is a leading manufacturer of **complementary laboratory products** such as biological safety cabinets, CO2 incubators, and ultralow freezers[32](index=32&type=chunk) [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) This section contains a **standard safe harbor statement**, **cautioning investors** that any forward-looking statements in the press release are **subject to known and unknown risks and uncertainties**. These factors, which include economic conditions, customer demand, and risks related to the Nu Aire acquisition, **could cause actual results to differ materially from projections**. The company directs readers to its SEC filings for a **comprehensive list of risk factors** and **disclaims any obligation to update these statements** - The press release includes forward-looking statements concerning future financial conditions and results, which are **subject to significant risks and uncertainties**[34](index=34&type=chunk) - Key risks include the **ability to realize benefits from the Nu Aire acquisition**, **competitive and economic conditions**, **supply chain disruptions**, and **changes in customer demand**[34](index=34&type=chunk)

Core Viewpoint - Kewaunee Scientific Corporation reported mixed financial results for the third quarter of fiscal 2025, with significant revenue growth but a decline in profitability due to increased operating expenses and interest costs [2][3][5]. Financial Performance - Earnings per share for the third quarter were 45 cents, down 29.7% from 64 cents in the same quarter last year [2]. - Revenues increased to $67.2 million, a 43.6% rise from $46.8 million in the prior-year quarter, driven by strong domestic performance and the integration of the Nu Aire acquisition [2]. - Net earnings fell 46.3% to $1.4 million from $2.5 million in the same quarter last year [3]. Operating Expenses - Operating profit decreased 40.9% to $2.3 million from $3.8 million in the prior-year period, attributed to higher operating expenses which nearly doubled to $16.1 million, representing 24% of revenues [4]. - Interest expenses rose to $1.1 million from $411,000 in the previous year, contributing to a 63.7% decline in pre-tax earnings to $1.3 million from $3.5 million [5]. Domestic & International Segments - Domestic revenues grew 63.6% to $52 million, with net earnings increasing 9.2% to $2.9 million [6]. - International revenues were $15.2 million, up 1.2%, but faced challenges from project site delays, leading to a drop in net earnings to $476,000 [7]. Acquisition & Integration Impacts - The Nu Aire acquisition incurred $2.5 million in related costs, impacting pre-tax earnings; adjusted pre-tax earnings would have been $3.8 million, up 7.8% year over year [8]. - Adjusted EBITDA increased 29.8% to $5.7 million from $4.4 million, with adjusted diluted EPS at $1.09 compared to $0.85 last year [8]. Order Backlog & Financial Position - The order backlog increased 45.5% year over year to $221.6 million, attributed to sustained demand across various industries [10]. - Total debt rose significantly to $65.8 million from $28.5 million, driven by new debt financing related to the Nu Aire acquisition [11]. Management Commentary - CEO Thomas D. Hull III emphasized the company's focus on strengthening dealer and distribution relationships, which has driven positive momentum [12]. - The company is actively working with customers to ensure timely execution of projects once construction schedules resume [13]. Guidance & Strategic Outlook - Management reaffirmed its commitment to operational efficiency and growth initiatives, expressing confidence in the ability to capitalize on long-term market trends [14]. Other Developments - Kewaunee completed the Nu Aire acquisition on Nov. 1, 2024, enhancing its product portfolio with additional laboratory equipment [15]. - The company expanded its share repurchase program in March 2025, authorizing the repurchase of an additional 100,000 shares [16].

Financial Performance - Sales for the quarter were $67,167,000, an increase of 43.5% from $46,778,000 in the comparable period of the prior year[92] - Domestic sales for the quarter were $51,976,000, up 63.6% compared to $31,774,000 in the prior year[92] - Gross profit margin for the three months ended January 31, 2025 was 27.4%, up from 25.7% in the comparable quarter of the prior year[95] - Net earnings for the three months ended January 31, 2025 were $1,354,000, or $0.45 per diluted share, down from $2,521,000, or $0.85 per diluted share in the prior year[101] - Operating expenses for the three months ended January 31, 2025 were $16,129,000, or 24.0% of sales, compared to $8,223,000, or 17.6% of sales in the prior year[97] - The effective income tax rate for the three months ended January 31, 2025 was (8.5)%, compared to 27.9% for the same period in the prior year[99] Acquisition and Investments - The acquisition of Nu Aire was completed for $55.0 million, enhancing the company's capabilities and market presence[87] - The company used net cash of $30,385,000 in investing activities during the nine months ended January 31, 2025, primarily for the acquisition of Nu Aire[105] Order Backlog and Working Capital - The company's order backlog was $221.6 million at January 31, 2025, compared to $152.3 million at January 31, 2024[94] - The company had working capital of $58,441,000 at January 31, 2025, compared to $56,037,000 at April 30, 2024[103]

Core Viewpoint - Kewaunee Scientific Corporation has amended its existing share repurchase program, allowing for the repurchase of an additional 100,000 shares of common stock, with no specified expiration date for the program [2][3]. Share Repurchase Program - The Board of Directors authorized the repurchase of up to an additional 100,000 shares under the existing program, which previously had 11,176 shares authorized for repurchase [2]. - The timing and amount of repurchases will be determined at the management's discretion based on capital needs, market price, and general market conditions [3]. - The program allows for various methods of repurchase, including open-market purchases and block trades, and can be suspended or discontinued at any time [3]. Capital Allocation Strategy - The company’s capital allocation strategy includes stock repurchases when management believes it will generate value [4]. - After reaching the maximum allowable repurchase under a prior credit agreement, the company paused repurchases to focus on acquiring Nu Aire, Inc., which was completed on November 1, 2024 [4]. - Share repurchases resumed on February 28, 2025, with the company confident in its strategic direction and market conditions [4]. Company Overview - Kewaunee Scientific Corporation, founded in 1906, is a global leader in designing, manufacturing, and installing laboratory and healthcare furniture products [5]. - The company operates manufacturing facilities in Statesville, North Carolina, and Bangalore, India, serving both domestic and international markets [5]. - The newly acquired subsidiary, Nu Aire, specializes in laboratory products such as biological safety cabinets and CO2 incubators, enhancing Kewaunee's product portfolio [6].

Financial Performance - Sales for the third quarter of fiscal year 2025 were $67,167,000, a 43.6% increase from $46,778,000 in the prior year quarter[3] - Pre-tax earnings decreased by 63.7% to $1,275,000 compared to $3,515,000 in the prior year quarter[3] - Adjusted pre-tax earnings for the quarter were $3,789,000, an increase of 7.8% from $3,515,000 in the prior year quarter[4] - Kewaunee Scientific reported net sales of $67.167 million for the three months ended January 31, 2025, a 43.5% increase from $46.778 million in the same period of 2024[25] - Gross profit for the three months ended January 31, 2025, was $18.379 million, representing a 53% increase compared to $12.029 million in the prior year[25] - The company’s net earnings attributable to Kewaunee Scientific Corporation for the three months ended January 31, 2025, were $1.354 million, down 46.2% from $2.521 million in the same period of 2024[25] - Kewaunee Scientific's diluted earnings per share for the three months ended January 31, 2025, were $0.45, down from $0.85 in the same period of 2024[25] Sales Breakdown - Domestic sales increased by 63.6% to $51,976,000 from $31,774,000 in the prior year quarter[7] - International sales saw a modest increase of 1.2% to $15,191,000 compared to $15,004,000 in the prior year quarter[8] Assets and Liabilities - Total assets increased to $189.148 million as of January 31, 2025, compared to $134.766 million as of April 30, 2024, reflecting a growth of 40.4%[27] - Kewaunee Scientific's total liabilities rose to $127.027 million as of January 31, 2025, compared to $78.557 million as of April 30, 2024, marking a 61.7% increase[27] - Long-term debt increased to $65,819,000 from $28,479,000 on April 30, 2024, resulting in a debt-to-equity ratio of 1.29-to-1[11] Cash Flow - Total cash on hand decreased to $12,335,000 from $25,938,000 on April 30, 2024[10] - The company’s cash and cash equivalents decreased to $9.454 million as of January 31, 2025, from $23.267 million as of April 30, 2024[27] Strategic Initiatives - The acquisition of Nu Aire, completed on November 1, 2024, significantly impacted financial results, with $2,514,000 affecting pre-tax earnings[4] - The acquisition of Nu Aire is expected to enhance Kewaunee's product offerings in laboratory equipment, including biological safety cabinets and CO2 incubators[21] - Kewaunee's strategic focus includes investments in manufacturing assets and strengthening dealer relationships to drive future growth[12] Operational Challenges - Operating expenses for the three months ended January 31, 2025, were $16.129 million, significantly higher than $8.223 million in the same period of 2024, indicating a 96.5% increase[25] - The company anticipates potential risks from competitive conditions and supply chain disruptions affecting future performance[23] Order Backlog - The company's order backlog was $221.6 million, up from $152.3 million on January 31, 2024[5]

Core Insights - Kewaunee Scientific Corporation reported a strong sales increase of 43.6% in Q3 FY2025, reaching $67.17 million compared to $46.78 million in the same quarter last year [2] - Despite the sales growth, pre-tax earnings decreased by 63.7% to $1.28 million, and net earnings fell to $1.35 million from $2.52 million year-over-year [2][4] - The company completed the acquisition of Nu Aire, which significantly impacted financial results due to associated costs and integration efforts [3][6] Financial Performance - Sales for Q3 FY2025 were $67.17 million, a 43.6% increase from $46.78 million in Q3 FY2024 [2] - Pre-tax earnings were $1.28 million, down 63.7% from $3.52 million in the prior year [2] - Net earnings decreased to $1.35 million from $2.52 million year-over-year [2] - EBITDA for the quarter was $3.73 million, compared to $4.41 million in the prior year [2] Adjusted Financial Metrics - After adjusting for acquisition-related costs, adjusted pre-tax earnings were $3.79 million, up 7.8% from $3.52 million in the prior year [4] - Adjusted net earnings were $3.26 million compared to $2.52 million in the prior year [4] - Adjusted EBITDA for the quarter was $5.73 million, an increase from $4.41 million in the prior year [4] Segment Performance - Domestic sales increased by 63.6% to $51.98 million, with net earnings of $2.88 million compared to $2.63 million in the prior year [7] - International sales saw a modest increase of 1.2% to $15.19 million, but net earnings fell to $476,000 from $923,000 due to customer site delays [8] - The corporate segment reported a pre-tax net loss of $3.03 million, worsening from a loss of $1.07 million in the prior year [9] Order Backlog and Strategic Initiatives - The company's order backlog reached $221.6 million, up from $152.3 million a year ago, indicating strong demand [5][13] - The acquisition of Nu Aire is expected to enhance Kewaunee's product offerings and market position, particularly in the domestic segment [6][12] - Kewaunee emphasizes investments in manufacturing and strengthening dealer relationships to drive growth [12] Cash and Debt Position - Total cash on hand was $12.34 million, down from $25.94 million at the end of April 2024 [10] - Short-term debt decreased to $1.13 million, while long-term debt increased significantly to $65.82 million, reflecting the impact of the Nu Aire acquisition [11] Management Commentary - The CEO highlighted the company's operational performance and strategic focus on manufacturing investments and market leadership [12] - The company is committed to delivering strong results for the remainder of FY2025, with a focus on operational excellence and customer success [12][13]

Company Overview - Kewaunee Scientific Corporation, founded in 1906, is a global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products [2] - The company's product offerings include steel and wood casework, fume hoods, adaptable modular systems, moveable workstations, stand-alone benches, biological safety cabinets, and epoxy resin work surfaces and sinks [2] - Kewaunee's corporate headquarters is located in Statesville, North Carolina, with sales offices in the United States, India, Saudi Arabia, and Singapore [2] - The company operates three manufacturing facilities in Statesville and one in Bangalore, India, serving both domestic and international markets [2] Recent Developments - Kewaunee Scientific announced plans to release its third quarter fiscal year 2025 financial results on March 12, 2025, after the close of trading [1] - The newly acquired subsidiary, Nu Aire, specializes in manufacturing biological safety cabinets, CO2 incubators, ultralow freezers, and other essential laboratory products [3] - Nu Aire, founded in 1971, has its headquarters and manufacturing facilities in Plymouth, Minnesota, with additional capabilities in Long Lake, Minnesota, and a warehouse partnership in the Netherlands [3]

Group 1 - The article emphasizes the importance of investing in quality companies at reasonable valuations, focusing on long-term fundamentals that drive share prices [1] - The preferred investment approach is quality-growth, targeting a return of approximately 15% over the next five years with conservative assumptions to ensure a margin of safety [1] - Key characteristics of a quality company include sustained top-line growth, a profitable bottom line, a healthy balance sheet, free cash flow generation, high return on capital employed (ROCE), and an attractive potential market [1]

Sales Performance - Sales for the quarter were $47,764,000, a decrease of 3.3% from $50,436,000 in the comparable period of the prior year[86]. - Domestic sales increased by 6.5% to $36,409,000, while international sales decreased by 30.1% to $11,355,000 due to construction site delays in India[86]. Order Backlog - The Company's order backlog was $184.4 million at October 31, 2024, up from $146.3 million at October 31, 2023[89]. Profitability - Gross profit margin for the three months ended October 31, 2024 was 29.2%, an increase from 26.7% in the prior year[90]. - Net earnings for the three months ended October 31, 2024 were $3,008,000, or $1.01 per diluted share, compared to $2,732,000, or $0.93 per diluted share in the prior year[95]. Operating Expenses - Operating expenses for the three months ended October 31, 2024 were $9,518,000, or 19.9% of sales, compared to $8,359,000, or 16.6% of sales in the prior year[91]. Tax Rate - The effective income tax rate for the three months ended October 31, 2024 was 23.3%, down from 41.6% in the prior year[93]. Working Capital - The Company had working capital of $59,965,000 at October 31, 2024, compared to $56,037,000 at April 30, 2024[97]. Acquisition - The Company completed the acquisition of Nu Aire for $55.0 million, enhancing its capabilities in laboratory furnishings[82]. - The Company continues to focus on expanding its capabilities and presence domestically following the acquisition of Nu Aire[101].