Kewaunee Scientific (KEQU) - 2026 Q1 - Quarterly Results

Fiscal Year 2026 First Quarter Highlights Kewaunee Scientific reported strong Q1 FY2026 results with significant sales and earnings growth, improved financial position, and positive segment performance, driven by the Nu Aire acquisition Consolidated Financial Performance Kewaunee Scientific reported strong consolidated results for Q1 FY2026, with significant increases in sales, pre-tax earnings, net earnings, and EBITDA compared to the prior year, driven by the Nu Aire acquisition and improved operational efficiency Consolidated Financial Highlights | Metric | Q1 FY2026 ($ in thousands) | Q1 FY2025 ($ in thousands) | Change (%) | | :----- | :------------------------- | :------------------------- | :--------- | | Sales | $71,104 | $48,393 | 46.9% | | Pre-tax Earnings | $3,920 | $2,430 | 61.3% | | Net Earnings | $3,093 | $2,193 | 41.1% | | EBITDA | $6,320 | $3,325 | 90.1% | | Diluted EPS | $1.04 | $0.74 | 40.5% | | Order Backlog (July 31, 2025) ($ million) | $205.0 | $159.4 (July 31, 2024) | 28.6% | | Order Backlog (April 30, 2025) ($ million) | $205.0 | $214.6 | -4.5% | Segment Performance Overview Both Domestic and International segments showed strong sales and earnings growth, while the Corporate segment experienced an increased pre-tax net loss due to strategic investments in its platform Domestic Segment The Domestic segment achieved significant sales and earnings growth, driven by the Nu Aire acquisition and operational improvements Domestic Segment Financials | Metric | Q1 FY2026 ($ in thousands) | Q1 FY2025 ($ in thousands) | Change (%) | | :----- | :------------------------- | :------------------------- | :--------- | | Sales | $54,352 | $35,523 | 53.0% | | Net Earnings | $4,722 | $2,871 | 64.5% | | EBITDA | $7,576 | $4,738 | 59.9% | - Growth was driven by the incorporation of Nu Aire's results, steady manufacturing volumes, improved productivity, and cost management actions[4] International Segment The International segment experienced strong sales and earnings growth due to reduced customer site delays International Segment Financials | Metric | Q1 FY2026 ($ in thousands) | Q1 FY2025 ($ in thousands) | Change (%) | | :----- | :------------------------- | :------------------------- | :--------- | | Sales | $16,752 | $12,870 | 30.2% | | Net Earnings | $643 | $463 | 38.9% | | EBITDA | $1,055 | $696 | 51.6% | - Increased deliveries and billings were a result of decreasing customer site delays experienced during most of the prior fiscal year[5] Corporate Segment The Corporate segment's pre-tax net loss increased due to strategic investments in its platform and higher compliance costs Corporate Segment Financials | Metric | Q1 FY2026 ($ in thousands) | Q1 FY2025 ($ in thousands) | Change | | :----- | :------------------------- | :------------------------- | :----- | | Pre-tax Net Loss | $3,058 | $1,992 | Increased Loss | | EBITDA | ($2,311) | ($2,109) | Increased Negative | - Increased costs in the current year period are related to strategic investments in the Corporate platform, including increased compliance costs for anticipated Sarbanes-Oxley 404(b) requirements and investments in people, processes, and technology to support future growth[7] Financial Position Snapshot The company improved its cash position and working capital while slightly reducing both short-term and long-term debt, leading to a lower debt-to-equity ratio compared to the previous quarter Key Financial Position Metrics | Metric | July 31, 2025 ($ in thousands) | April 30, 2025 ($ in thousands) | Change | | :----- | :----------------------------- | :----------------------------- | :----- | | Total Cash on Hand | $20,441 | $17,164 | Up $3,277 | | Working Capital | $66,662 | $64,651 | Up $2,011 | | Short-term Debt | $4,294 | $4,773 | Down $479 | | Long-term Debt | $60,269 | $60,730 | Down $461 | | Debt-to-Equity Ratio | 0.94-to-1 | 0.99-to-1 | Improved | | Debt-to-Equity Ratio (net of sale-leaseback) | 0.54-to-1 | 0.57-to-1 | Improved | Management Commentary and Business Outlook Management highlights solid Q1 performance, acknowledges project delivery volatility, and outlines strategic investments for long-term growth, expecting improved FY2026 unadjusted EBITDA CEO's Remarks and Outlook CEO Thomas D. Hull III highlighted solid Q1 performance despite challenging market conditions but anticipates uneven quarterly performance for FY2026 due to project delivery timeline volatility. The company is focused on strategic investments for sustainable long-term growth, expecting better unadjusted EBITDA for FY2026 than FY2025 despite near-term pressure on earnings - Domestic and International segments delivered solid financial performance in Q1 despite challenging market conditions (uncertain government policy, evolving tariff structures, geopolitical upheaval)[10] - Overall backlog remains near historically high levels, but volatility in project delivery timelines is expected to cause uneven quarterly performance for the balance of fiscal year 2026, likely starting in Q2[10] - Kewaunee is focused on organic and inorganic growth, making strategic investments in people, processes, and technology, which will place pressure on near-term earnings but position the company for rapid and sustained long-term growth[10] - Despite anticipated uneven quarterly performance and increasing strategic investment, the company expects to deliver better unadjusted EBITDA in fiscal year 2026 than in fiscal year 2025[10] Non-GAAP Financial Measures This section provides reconciliations for non-GAAP measures like EBITDA and adjusted net earnings, clarifying their calculation and purpose as supplemental financial information EBITDA and Segment EBITDA Reconciliation This section provides a detailed reconciliation of Net Earnings (Loss) to EBITDA and Adjusted EBITDA for consolidated and segment levels for Q1 FY2026 and Q1 FY2025, highlighting adjustments for interest, taxes, depreciation, amortization, and professional/other fees related to the Nu Aire acquisition and integration Consolidated EBITDA and Adjusted EBITDA Reconciliation | Metric (Consolidated) | Q1 FY2026 ($ in thousands) | Q1 FY2025 ($ in thousands) | | :-------------------- | :------------------------- | :------------------------- | | Net Earnings | $3,093 | $2,193 | | Interest Expense | $1,058 | $472 | | Interest Income | ($141) | ($347) | | Income Taxes | $761 | $192 | | Depreciation and Amortization | $1,549 | $815 | | EBITDA | $6,320 | $3,325 | | Professional & Other Fees | $224 | $730 | | Adjusted EBITDA | $6,544 | $4,055 | - Professional and other fees in Q1 FY2025 related to the Nu Aire acquisition, while Q1 FY2026 fees related to the integration of Nu Aire[11] Adjusted Consolidated Statement of Operations Reconciliation This reconciliation adjusts the consolidated statement of operations for Q1 FY2026 and Q1 FY2025 to exclude professional and other fees related to the Nu Aire integration, providing adjusted net earnings and diluted EPS figures Adjusted Consolidated Statement of Operations | Metric (Consolidated) | As Reported 2025 ($ in thousands) | Professional & Other Fees 2025 ($ in thousands) | Adjusted 2025 ($ in thousands) | Adjusted 2024 ($ in thousands) | | :-------------------- | :-------------------------------- | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $71,104 | $— | $71,104 | $48,393 | | Gross profit | $20,930 | $— | $20,930 | $12,488 | | Operating expenses | $16,120 | $224 | $15,896 | $9,183 | | Operating profit | $4,810 | $224 | $5,034 | $3,305 | | Profit before income taxes | $3,920 | $224 | $4,144 | $3,160 | | Income tax (benefit) expense | $761 | $49 | $810 | $345 | | Net earnings attributable to Kewaunee Scientific Corporation | $3,093 | $175 | $3,268 | $2,770 | | Diluted EPS | $1.04 | $0.06 | $1.10 | $0.93 | - Adjustments for professional and other fees in Q1 FY2026 (including estimated tax impact) relate to the integration of the newly acquired subsidiary, Nu Aire[12] Explanation of Non-GAAP Measures This section clarifies the company's use of non-GAAP financial measures like adjusted net earnings, adjusted EPS, EBITDA, and Adjusted EBITDA, explaining their calculation and purpose as supplemental information for investors to understand financial and business trends, while emphasizing they are not GAAP alternatives - Adjusted net earnings and adjusted net earnings per share are GAAP net earnings adjusted for professional and other fees related to the integration of Nu Aire, Inc., and the corresponding tax impact[13] - EBITDA and Segment EBITDA are calculated as net earnings (loss), less interest expense and interest income, income taxes, depreciation, and amortization[14] - Adjusted EBITDA and Adjusted Segment EBITDA further exclude professional and other fees related to Nu Aire integration[14] - These non-GAAP measures provide useful information to investors for comparing performance consistently across companies, but should not be considered alternatives to GAAP net earnings or operating cash flows[13][14] Company Overview Kewaunee Scientific, a global leader in laboratory furniture, recently acquired Nu Aire, a key manufacturer of biological safety cabinets, expanding its product portfolio and market reach About Kewaunee Scientific Founded in 1906, Kewaunee Scientific Corporation is a global leader in designing, manufacturing, and installing laboratory, healthcare, and technical furniture products, with manufacturing facilities in the US and India and sales offices worldwide - Kewaunee Scientific Corporation, founded in 1906, is a global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products[15] - Products 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[15] - Headquarters in Statesville, NC, with sales offices in the US, India, Saudi Arabia, and Singapore, and manufacturing facilities in Statesville (3) and Bangalore, India (1)[15] About Nu Aire Nu Aire, acquired by Kewaunee Scientific, is a leading manufacturer of biological safety cabinets, CO2 incubators, ultralow freezers, and other essential laboratory products, complementing Kewaunee's portfolio, with headquarters and manufacturing in Minnesota - Nu Aire, founded in 1971 and newly acquired by Kewaunee Scientific, is a leading manufacturer of biological safety cabinets, CO2 incubators, ultralow freezers, and other essential laboratory products[16] - Headquarters and manufacturing facilities are in Plymouth, Minnesota, with additional manufacturing in Long Lake, Minnesota, and partnerships in the Netherlands and China[16] Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, outlining various risks and uncertainties that could cause actual results to differ materially from projections Risks and Disclaimers This section contains a standard disclaimer regarding forward-looking statements, outlining various known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from projections, including those related to the Nu Aire acquisition, economic conditions, customer demands, and international operations. The company disclaims any obligation to update these statements - The press release contains 'forward-looking statements' subject to known and unknown risks, uncertainties, assumptions, and other important factors that could significantly impact results[17][18] - Factors include the ability to realize benefits from the Nu Aire acquisition, competitive and economic conditions, supply disruptions, changes in customer demands, technological changes, dependence on delivery schedules, international operation risks (e.g., currency fluctuations), regulatory changes, raw material costs, and Force Majeure events[18] - The company assumes no obligation to update any forward-looking statements[18] Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated statements of operations and balance sheets for the specified periods, detailing key financial performance and position Statements of Operations This section presents the unaudited condensed consolidated statements of operations for the three months ended July 31, 2025, and 2024, detailing net sales, cost of products sold, gross profit, operating expenses, and net earnings Condensed Consolidated Statements of Operations | Metric ($ in thousands) | July 31, 2025 | July 31, 2024 | | :-------------------- | :------------ | :------------ | | Net sales | $71,104 | $48,393 | | Cost of products sold | $50,174 | $35,905 | | Gross profit | $20,930 | $12,488 | | Operating expenses | $16,120 | $9,913 | | Operating profit | $4,810 | $2,575 | | Profit before income taxes | $3,920 | $2,430 | | Net earnings attributable to Kewaunee Scientific Corporation | $3,093 | $2,193 | | Diluted EPS | $1.04 | $0.74 | Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of July 31, 2025, and April 30, 2025, detailing assets, liabilities, and stockholders' equity, showing changes in cash, receivables, and debt Condensed Consolidated Balance Sheets | Metric ($ in thousands) | July 31, 2025 | April 30, 2025 | | :-------------------- | :------------ | :------------- | | Cash and cash equivalents | $19,489 | $14,942 | | Total Current Assets | $117,148 | $118,363 | | Total Assets | $193,486 | $194,654 | | Total Current Liabilities | $50,486 | $53,712 | | Total Liabilities | $124,617 | $128,409 | | Total Stockholders' Equity | $68,869 | $66,245 |