Kewaunee Scientific (US:KEQU)2023-12-08 16:36Financial Performance - Net sales for the three months ended October 31, 2023, were $50,436,000, a decrease of 7.8% compared to $54,564,000 for the same period in 2022[10] - Gross profit for the three months ended October 31, 2023, increased to $13,468,000, representing a gross margin of 26.7%, compared to $8,701,000 and a margin of 15.9% in the prior year[10] - Net earnings attributable to Kewaunee Scientific Corporation for the three months ended October 31, 2023, were $2,732,000, compared to a net loss of $243,000 in the same period last year[10] - Basic earnings per share for the three months ended October 31, 2023, were $0.94, compared to a loss per share of $0.09 in the prior year[10] - Operating profit for the six months ended October 31, 2023, was $8,917,000, significantly higher than $359,000 for the same period in 2022[10] - Net earnings for the six months ended October 31, 2023, were $5.345 million, a significant improvement from a net loss of $833,000 in the same period of 2022[23] - Total revenue for the six months ended October 31, 2023, was $100.275 million, a decrease of 4.0% from $104.687 million in the same period of 2022[33] - Domestic revenue for the six months ended October 31, 2023, was $69.605 million, down from $75.459 million in the previous year, representing a decline of 7.4%[33] - International revenue for the same period was $30.670 million, an increase of 4.9% from $29.228 million in 2022[33] - Revenues for the three months ended October 31, 2023, were $50,436,000, a decrease of 7.8% from $54,564,000 in the same period last year[64] - Domestic sales for the quarter were $34,185,000, down 10.0% from $37,991,000 in the prior year, primarily due to the reduction of installation revenue[64] - International sales for the quarter were $16,251,000, relatively flat compared to $16,573,000 in the prior year[64] Assets and Liabilities - Total assets as of October 31, 2023, were $121,708,000, an increase from $118,898,000 as of April 30, 2023[20] - Total liabilities decreased to $78,294,000 as of October 31, 2023, from $80,413,000 as of April 30, 2023[20] - Cash and cash equivalents increased to $13,722,000 as of October 31, 2023, compared to $8,078,000 as of April 30, 2023[20] - The company’s retained earnings increased to $33,967,000 as of October 31, 2023, from $28,761,000 as of April 30, 2023[20] - Cash, cash equivalents, and restricted cash at the end of the period totaled $21.711 million, up from $16.317 million at the end of the same period last year[23] - The Company had working capital of $52,144,000 at October 31, 2023, compared to $47,867,000 at April 30, 2023[75] Cash Flow and Expenditures - Net cash provided by operating activities increased to $8.919 million for the six months ended October 31, 2023, compared to a cash outflow of $586,000 in the prior year[23] - Capital expenditures for the six months ended October 31, 2023, were $2.919 million, compared to $919,000 in the prior year[23] - Operating cash paid to settle lease liabilities was $1,282,000 for the six months ended October 31, 2023, compared to $1,026,000 for the same period in 2022[46] Financing and Debt - The company had $5.0 million outstanding under its Revolving Credit Facility as of October 31, 2023, with a borrowing capacity of $7.4 million remaining[38] - The borrowing rate under the Revolving Credit Facility increased to 9.53% as of October 31, 2023, from 9.02% at the end of April 2023[38] - As of October 31, 2023, the carrying value of the financing liability was $28,459,000, down from $28,774,000 as of April 30, 2023[44] - Interest expense associated with the financing arrangement was $322,000 for the three months ended October 31, 2023, compared to $330,000 for the same period in 2022[44] - Remaining future cash payments related to the financing liability total $42,953,000, with $28,459,000 classified as the total liability after imputed interest[45] Tax and Compliance - The effective tax rate was 41.6% for the three months ended October 31, 2023, influenced by foreign operations and additional foreign tax expense of $534,000 related to India tax matters[56] - The effective income tax rate for the three months ended October 31, 2023, was 41.6%, compared to 125.0% in the prior year[70] - The Company has a deferred tax liability of $1,421,000 related to withholding tax for Kewaunee Labway India Pvt. Ltd. as of October 31, 2023[57] Shareholder Actions - The Company recorded stock-based compensation expense of $241,000 for the three months ended October 31, 2023, with an estimated remaining expense of $1,791,000 to be recorded over the vesting periods[53] - The Company has authorized a share repurchase program to buy back up to 100,000 shares, with 2,423 shares repurchased for approximately $44,000 during the three months ended October 31, 2023[50] - Kewaunee Scientific Corporation's share repurchase program was authorized to repurchase up to 100,000 shares, commencing on September 1, 2023, with no expiration date[87] - During October 2023, the company repurchased 2,423 shares at an average price of $18.00 per share, leaving 97,577 shares available for repurchase under the program[87] - The share repurchase program aims to offset future share dilution from employee stock issuances, but it does not obligate the company to acquire any specific amount of common stock[86] Operational Insights - The Company's order backlog was $146.3 million at October 31, 2023, down from $157.8 million at October 31, 2022[66] - The Company has not declared or paid any dividends during the three and six months ended October 31, 2023, with future dividends dependent on various factors[49] - There have been no material changes to the company's risk factors since the last annual report filed on June 30, 2023[85]