Kewaunee Scientific (US:KEQU)2023-03-10 16:39Financial Performance - Net sales for the three months ended January 31, 2023, increased to $60,821,000, a 49.6% increase from $40,633,000 in the same period of 2022[10] - Gross profit for the three months ended January 31, 2023, was $10,330,000, compared to $5,622,000 in the prior year, representing an 83.5% increase[10] - Operating profit for the three months ended January 31, 2023, was $2,304,000, a significant recovery from an operating loss of $868,000 in the same period of 2022[10] - Net earnings attributable to Kewaunee Scientific Corporation for the three months ended January 31, 2023, were $723,000, compared to a net loss of $1,319,000 in the same period of 2022[10] - Basic earnings per share for the three months ended January 31, 2023, was $0.26, compared to a loss per share of $0.47 in the same period of 2022[10] - Net earnings for the nine months ended January 31, 2023, were $265,000, a significant improvement from a net loss of $5,675,000 in the same period of 2022[20] - Revenue for the nine months ended January 31, 2023, was $165,508,000, up from $119,157,000 in the same period of 2022, representing an increase of approximately 39%[30] - Revenues from external customers for the three months ended January 31, 2023, were $60,821,000, a 49.7% increase from $40,633,000 in the same period of 2022[60] - Domestic segment generated revenues of $111,593,000 for the nine months ended January 31, 2023, compared to $89,128,000 for the same period of 2022, reflecting a 25.2% increase[60] Assets and Liabilities - Total assets as of January 31, 2023, increased to $121,786,000 from $118,773,000 as of April 30, 2022[17] - Cash and cash equivalents increased to $13,047,000 as of January 31, 2023, compared to $4,433,000 as of April 30, 2022[17] - Total liabilities as of January 31, 2023, were $85,448,000, up from $82,593,000 as of April 30, 2022[17] - Total cash, cash equivalents, and restricted cash increased to $18,416,000 as of January 31, 2023, compared to $6,894,000 at April 30, 2022[27] - The closing balance of contract liabilities (deferred revenue) was $5,062,000 as of January 31, 2023, up from $3,529,000 at April 30, 2022[31] - The company had outstanding short-term borrowings of $3,000,000 under its Revolving Credit Facility as of January 31, 2023, with remaining borrowing capacity of $11,300,000[38] - The Company had working capital of $47,348,000 at January 31, 2023, compared to $49,272,000 at April 30, 2022[73] Operating Expenses - The company’s operating expenses for the three months ended January 31, 2023, were $8,026,000, an increase from $6,490,000 in the same period of 2022[10] - Operating expenses for the three months ended January 31, 2023 were $8,026,000, or 13.2% of sales, down from 16.0% in the comparable period of the prior year[67] - Operating cash paid to settle lease liabilities was $1,652,000 for the nine months ended January 31, 2023, compared to $1,515,000 for the same period in 2022[49] Cash Flow - Cash flows from operating activities resulted in a net cash outflow of $3,547,000 for the nine months ended January 31, 2023, compared to a net cash outflow of $1,087,000 in the prior year[20] - The Company used cash of $3,547,000 during the nine months ended January 31, 2023, primarily for decreases in accounts payable and other accrued expenses[75] Tax and Compensation - The effective tax rate for the three months ended January 31, 2023, was 46.7%, compared to (45.0)% for the same period of 2022[55] - The Company recorded stock-based compensation expense of $332,000 for the three months ended January 31, 2023, up from $109,000 in the same period of 2022[54] - The effective income tax rate for the three months ended January 31, 2023 was 46.7%, compared to (45.0)% for the comparable period of the prior year[69] - The Company recognized a net periodic pension expense of $18,000 for the three months ended January 31, 2023, compared to a net income of $(88,000) for the same period in 2022[58] Inventory and Sales - Inventory decreased to $21,412,000 as of January 31, 2023, from $23,796,000 at April 30, 2022, reflecting a reduction of approximately 10%[32] - Domestic sales for the quarter were $36,134,000, up 22.4% from $29,531,000 in the comparable period of the prior year[63] - International sales for the quarter were $24,687,000, up 122.4% from $11,102,000 in the comparable period of the prior year[63] - The gross profit margin for the three months ended January 31, 2023 was 17.0%, compared to 13.8% in the comparable quarter of the prior year[66] Other Financial Information - The Company entered into a Sale-Leaseback Arrangement with a financing liability carrying value of $28,923,000 as of January 31, 2023, net of debt issuance costs[46] - The initial monthly rent under the Lease Agreement is approximately $158,000, with annual increases of about 2%[43] - Total minimum liability payments related to the financing liability amount to $44,393,000, with imputed interest of $15,470,000[48] - The Company's order backlog was $153.2 million at January 31, 2023, compared to $138.1 million at January 31, 2022[65] - The Company reported capital expenditures of $1,562,000 for the nine months ended January 31, 2023, compared to $1,222,000 in the same period of 2022[20] - Kewaunee Scientific Corporation signed a Credit and Security Agreement on December 19, 2022, with Mid Cap Funding IV Trust and various lenders[84] - The certifications of the Chief Executive Officer and Chief Financial Officer were completed in accordance with the Sarbanes-Oxley Act of 2002[84] - The report was signed on behalf of Kewaunee Scientific Corporation by Donald T. Gardner III, Vice President, Finance and Chief Financial Officer, on March 10, 2023[87]