Core Insights - Kewaunee Scientific Corporation reported a significant increase in sales for the second quarter of fiscal year 2026, with total sales reaching $70.1 million, a 46.8% increase from $47.8 million in the same quarter of the previous year [2] - Despite the sales growth, pre-tax earnings decreased by 12.2% to $3.5 million, and net earnings fell to $2.4 million compared to $3.0 million in the prior year quarter [2] - The company’s order backlog was $192.9 million as of October 31, 2025, showing an increase from $184.4 million a year earlier, but a decrease from $214.6 million as of April 30, 2025 [3] Domestic Segment - Domestic sales increased by 51.7% to $55.2 million from $36.4 million in the prior year quarter [4] - Net earnings for the domestic segment were $3.6 million, down from $4.5 million in the previous year [4] - EBITDA for the domestic segment was $6.7 million, slightly down from $6.8 million in the prior year quarter, impacted by lower manufacturing volumes in laboratory construction [4] International Segment - International sales rose by 31.0% to $14.9 million from $11.4 million in the prior year quarter [5] - Net earnings for the international segment increased to $641,000 from $356,000 in the previous year [5] - EBITDA for the international segment improved to $860,000 from $592,000 in the prior year quarter, driven by the delivery of large projects booked in prior periods [5] Corporate Segment - The corporate segment reported a pre-tax net loss of $2.5 million, compared to a loss of $2.4 million in the prior year [6] - Corporate segment EBITDA improved to ($1.8 million) from ($2.5 million) in the previous year, aided by the exclusion of prior year costs related to the acquisition of Nu Aire, Inc. [6] - Ongoing strategic investments in the corporate platform are aimed at supporting future growth [6] Financial Position - Total cash on hand was $13.7 million as of October 31, 2025, down from $17.2 million on April 30, 2025 [7] - Working capital increased to $67.8 million from $60.0 million a year earlier [7] - Short-term debt was $4.9 million, and long-term debt decreased to $58.2 million from $60.7 million on April 30, 2025 [8] Management Commentary - The CEO noted expected volatility in project delivery timelines but expressed confidence in strong quoting and booking activity, reflected in the robust backlog, particularly in the domestic segment [9][10] - The acquisition of Nu Aire is seen as a strategic move to diversify and enhance the company's laboratory solutions offerings [10]

Core Viewpoint - Kewaunee Scientific Corporation's stock has significantly underperformed the market despite strong financial results for the first quarter of fiscal 2026, raising concerns among investors about future performance [1][13][14] Earnings & Revenue Performance - The company reported first-quarter fiscal 2026 sales of $71.1 million, a 46.9% increase from $48.4 million in the prior-year quarter [2] - Net earnings rose 41.1% to $3.1 million from $2.2 million a year ago [2] - Diluted earnings per share grew 40.5% to $1.04 from 74 cents in the same quarter last year [2] - EBITDA nearly doubled to $6.3 million from $3.3 million in the prior-year period [2] Domestic and International Sales - Domestic sales soared 53% to $54.4 million, while international sales advanced 30.2% to $16.8 million [4] - Domestic segment net earnings increased to $4.7 million compared to $2.9 million a year ago [4] - International earnings improved to $0.6 million from $0.5 million [4] Order Backlog and Working Capital - The company's order backlog stood at $205 million as of July 31, 2025, up from $159.4 million a year earlier [3] - Working capital rose to $66.7 million from $56 million a year earlier [5] - Total cash on hand increased to $20.4 million at quarter-end from $17.2 million in April 2025 [5] Debt Metrics - Short-term debt declined to $4.3 million from $4.8 million in April [5] - Long-term debt eased to $60.3 million from $60.7 million [5] - The debt-to-equity ratio improved to 0.94-to-1 from 0.99-to-1 three months earlier [5] Management Commentary - CEO Thomas D. Hull III noted that strong quarterly results were achieved amid challenging market conditions [6] - The company expects uneven quarterly performance through fiscal 2026 due to volatility in project delivery timelines [6][11] Strategic Focus - Management reiterated its commitment to growth through organic means and acquisitions, supported by investments in people, processes, and technology [7] - The integration of Nu Aire's results significantly boosted domestic sales and earnings [8][12] Corporate Segment Performance - The corporate segment continued to weigh on consolidated results, with a pre-tax net loss of $3.1 million compared to a $2 million loss a year ago [9] - Corporate segment EBITDA was negative $2.3 million, reflecting higher compliance costs and ongoing investments [9] Future Outlook - Management expects unadjusted EBITDA for fiscal 2026 to surpass that of fiscal 2025 [10] - Despite anticipated pressure on near-term earnings due to strategic investments, leadership remains confident in long-term growth prospects [11]

Core Insights - Kewaunee Scientific Corporation reported a strong financial performance for the first quarter of fiscal year 2026, with significant increases in sales, earnings, and EBITDA compared to the prior year [2][9]. Financial Performance - Sales for the first quarter were $71,104,000, a 46.9% increase from $48,393,000 in the same quarter last year [2]. - Pre-tax earnings rose to $3,920,000, up 61.3% from $2,430,000 in the prior year [2]. - Net earnings increased to $3,093,000 compared to $2,193,000 in the previous year [2]. - EBITDA for the quarter was $6,320,000, compared to $3,325,000 in the prior year [2]. Segment Performance - Domestic sales reached $54,352,000, a 53.0% increase from $35,523,000 in the prior year [4]. - International sales were $16,752,000, reflecting a 30.2% increase from $12,870,000 in the previous year [5]. - The domestic segment's net earnings were $4,722,000, up from $2,871,000 in the prior year [4]. - The international segment's net earnings increased to $643,000 from $463,000 in the previous year [5]. Order Backlog - The company's order backlog was $205.0 million as of July 31, 2025, compared to $159.4 million on July 31, 2024, and $214.6 million on April 30, 2025 [3]. Corporate Segment - The corporate segment reported a pre-tax net loss of $3,058,000, compared to a loss of $1,992,000 in the prior year [6]. - Corporate segment EBITDA was ($2,311,000), slightly worse than ($2,109,000) in the previous year [6]. Cash and Debt Position - Total cash on hand was $20,441,000, up from $17,164,000 on April 30, 2025 [7]. - Short-term debt decreased to $4,294,000 from $4,773,000 on April 30, 2025 [8]. - Long-term debt was $60,269,000, down from $60,730,000 on April 30, 2025 [8]. Management Commentary - The CEO noted solid performance despite challenging market conditions and indicated expectations of volatility in project delivery timelines for the remainder of fiscal year 2026 [9]. - The company is focused on both organic and inorganic growth, with strategic investments in people, processes, and technology to support future growth [9].