Kewaunee Scientific (KEQU) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended January 31, 2024, were $46,778,000, a decrease of 23.2% compared to $60,821,000 in the same period of 2023[10] - Gross profit increased to $12,029,000 for the three months ended January 31, 2024, compared to $10,330,000 in the same period of 2023, reflecting a gross margin improvement[10] - Operating profit for the three months ended January 31, 2024, was $3,806,000, up 65.3% from $2,304,000 in the same period of 2023[10] - Net earnings attributable to Kewaunee Scientific Corporation for the three months ended January 31, 2024, were $2,521,000, compared to $723,000 in the same period of 2023, representing a significant increase[10] - Basic net earnings per share for the three months ended January 31, 2024, were $0.87, up from $0.26 in the same period of 2023[10] - Comprehensive earnings attributable to Kewaunee Scientific Corporation for the three months ended January 31, 2024, were $2,481,000, compared to $617,000 in the same period of 2023[13] - Net earnings for the nine months ended January 31, 2024, were $7,878,000, a significant increase from $265,000 in the same period of 2023[20] - Revenues for the three months ended January 31, 2024, were $46,778,000, a decrease of 23.2% from $60,821,000 in the prior year[64] - Domestic sales for the quarter were $31,774,000, down 12.1% from $36,134,000 in the prior year, primarily due to the reduction in non-product revenue[64] - International sales for the quarter were $15,004,000, down 39.2% from $24,687,000 in the prior year, attributed to the delivery of large projects in the previous year[64] - Net earnings for the three months ended January 31, 2024, were $2,521,000, or $0.85 per diluted share, compared to $723,000, or $0.25 per diluted share in the prior year[73] Assets and Liabilities - Total current assets increased to $96,156,000 as of January 31, 2024, compared to $87,920,000 as of April 30, 2023[18] - Total assets rose to $126,305,000 as of January 31, 2024, compared to $118,898,000 as of April 30, 2023[18] - Total liabilities increased slightly to $80,963,000 as of January 31, 2024, from $80,413,000 as of April 30, 2023[18] - Stockholders' equity for Kewaunee Scientific Corporation increased to $44,083,000 as of January 31, 2024, compared to $37,409,000 as of April 30, 2023[18] - Cash, cash equivalents, and restricted cash at the end of the period totaled $27,112,000, up from $18,416,000 at the end of the previous year[20] - The company reported a total of $10,248,000 in deferred revenue as of January 31, 2024, compared to $4,097,000 at April 30, 2023, indicating a significant increase in contract liabilities[31] - The company had $3,000,000 outstanding under its Revolving Credit Facility as of January 31, 2024, with a borrowing capacity of $9,300,000[35] - The company’s inventories totaled $21,845,000 as of January 31, 2024, slightly down from $21,889,000 at April 30, 2023[32] - The company’s international subsidiaries reported inventories of $2,869,000 as of January 31, 2024, compared to $2,740,000 at April 30, 2023[32] - As of January 31, 2024, the carrying value of the financing liability was $28,298,000, a decrease from $28,774,000 as of April 30, 2023[41] - Remaining future cash payments related to the financing liability total $42,471,000, with $485,000 due in the remainder of 2024[42] Operating Expenses and Cash Flow - Operating expenses for the three months ended January 31, 2024, were $8,223,000, or 17.6% of sales, compared to $8,026,000, or 13.2% of sales in the prior year[68] - Net cash provided by operating activities was $18,419,000, compared to a cash outflow of $3,547,000 in the prior year[20] - Operating cash paid to settle lease liabilities was $1,930,000 for the nine months ended January 31, 2024, up from $1,652,000 in the same period of 2023[43] Tax and Compensation - The effective tax rate was 27.9% for the three months ended January 31, 2024, compared to 46.7% for the same period in 2023[53] - The Company recorded stock-based compensation expense of $241,000 for the three months ended January 31, 2024, compared to $332,000 for the same period in 2023[50] - The effective income tax rate for the three months ended January 31, 2024, was 27.9%, significantly lower than 46.7% in the prior year[71] - The company expects to contribute approximately $750,000 to its non-contributory defined benefit pension plans in 2024[77] Share Repurchase Program - The Company repurchased 27,033 shares of common stock for approximately $745,000 during the three months ended January 31, 2024[47] - The total remaining purchase authorization for the share repurchase program was 70,544 shares as of January 31, 2024[47] - The company adopted a share repurchase program on August 31, 2023, authorizing the repurchase of up to 100,000 shares of common stock, which commenced on September 1, 2023[86] - During the three months ended January 31, 2024, the company repurchased a total of 27,033 shares at an average price of $25.98 per share[86] - 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 stock[85] - The company cannot guarantee that the share repurchase program will enhance long-term stockholder value or mitigate the dilutive effect of employee equity awards[85] Management and Controls - The company's management evaluated the effectiveness of disclosure controls and procedures as of January 31, 2024, concluding they were adequate and effective[82] - There were no significant changes in the company's internal control over financial reporting during the most recent fiscal quarter[83] - The company has not experienced any material changes to its risk factors since the last annual report filed on April 30, 2023[84] - The company has not reported any unregistered sales of equity securities during the reporting period[86] Future Outlook - The company is focusing on supporting its dealers and distribution partners while improving manufacturing capabilities, positioning itself well for future demand[79] - The order backlog was $152.3 million at January 31, 2024, slightly down from $153.2 million at January 31, 2023[66] - The company’s financial condition and operating results may be affected by various risks, including competitive conditions and changes in customer demands[84]