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].
KEQU Reports Y/Y Earnings Decline in Q3 Despite Strong Sales Growth