-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LwydHcBhN/MChZtTyxJwV1aXcNAUjQdSyzjfLbyQ2UQLpRaCU0LJZF0cdiyYYFA+ K42w9ujmoRHUYuhRszHDkA== 0000950131-00-005342.txt : 20000927 0000950131-00-005342.hdr.sgml : 20000927 ACCESSION NUMBER: 0000950131-00-005342 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20000914 DATE AS OF CHANGE: 20000922 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEWAUNEE SCIENTIFIC CORP /DE/ CENTRAL INDEX KEY: 0000055529 STANDARD INDUSTRIAL CLASSIFICATION: 3821 IRS NUMBER: 380715562 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05286 FILM NUMBER: 723373 BUSINESS ADDRESS: STREET 1: 2700 W FRONT ST CITY: STATESVILLE STATE: NC ZIP: 28677 BUSINESS PHONE: 7048737202 MAIL ADDRESS: STREET 1: P O BOX 1842 STREET 2: P O BOX 1842 CITY: STATESVILLE STATE: NC ZIP: 28687-1842 FORMER COMPANY: FORMER CONFORMED NAME: KEWAUNEE SCIENTIFIC EQUIPMENT CORP /DE/ DATE OF NAME CHANGE: 19861216 FORMER COMPANY: FORMER CONFORMED NAME: KEWAUNEE MANUFACTURING CO DATE OF NAME CHANGE: 19680108 10-Q 1 0001.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 31, 2000 [_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to _____________ Commission file number 0-5286 KEWAUNEE SCIENTIFIC CORPORATION ------------------------------- (Exact name of registrant as specified in its charter) Delaware 38-0715562 ---------------------------- ---------- (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 2700 West Front Street Statesville, North Carolina 28677 ----------------------------- ----- (Address of principal executive offices) (Zip Code) (704) 873-7202 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _______ ----- As of August 31, 2000, the Registrant had outstanding 2,465,871 shares of Common Stock. Pages: This report, excluding exhibits, contains 14 pages numbered sequentially from this cover page. KEWAUNEE SCIENTIFIC CORPORATION INDEX TO FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JULY 31, 2000
Page Number ----------- PART I. FINANCIAL INFORMATION - - - ------------------------------ Item 1. Financial Statements Condensed Statements of Operations - Three months ended July 31, 2000 and 1999 3 Condensed Balance Sheets - July 31, 2000 and April 30, 2000 4 Condensed Statements of Cash Flows - Three months ended July 31, 2000 and 1999 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Review by Independent Accountants 11 Report of Independent Accountants 12 PART II. OTHER INFORMATION - - - --------------------------- Item 4. Submission of Matters to a Vote of Security Holders 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURE 14 - - - ---------
$$/FOLIO=(FORMAT=""a"",STARTING_FOLIO=3,POS=BOTTOM,QUAD=CENTER) Part 1. Financial Information Item 1. Financial Statements
Kewaunee Scientific Corporation Condensed Statements of Operations (Unaudited) Three months ended July ------------------------------------- 2000 1999 ------- -------- (in thousands, except per share data) Net sales $19,370 $20,065 Costs of products sold 15,692 15,435 ------- ------- Gross profit 3,678 4,630 Operating expenses 3,281 3,269 ------- ------- Operating earnings 397 1,361 Interest expense (47) (39) Other (expense) income, net (15) 148 ------- ------- Earnings before income taxes 335 1,470 Income tax expense 121 566 ------- ------- Net earnings $ 214 $ 904 ======= ======= Net earnings per share Basic $0.09 $0.37 Diluted $0.09 $0.37 Average number of common shares outstanding (in thousands) Basic 2,466 2,444 Diluted 2,491 2,469
See accompanying notes to condensed financial statements. Kewaunee Scientific Corporation Condensed Balance Sheets (in thousands)
July 31 April 30 2000 2000 -------- -------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 8 $ 9 Receivables, less allowance 16,604 17,993 Inventories 4,927 3,499 Deferred income taxes 1,151 1,151 Prepaid expenses and other current assets 592 380 -------- -------- Total current assets 23,282 23,032 -------- -------- Property, plant and equipment, at cost 34,152 33,242 Accumulated depreciation (20,304) (19,736) -------- -------- Net property, plant and equipment 13,848 13,506 -------- -------- Other assets 2,769 2,778 -------- -------- Total Assets $ 39,899 $ 39,316 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Short-term borrowings $ 2,981 $ 2,555 Accounts payable 5,853 5,412 Employee compensation and amounts withheld 1,404 1,352 Other accrued expenses 1,875 2,241 -------- -------- Total current liabilities 12,113 11,560 -------- -------- Deferred income taxes 944 944 Accrued employee benefit plan costs 1,665 1,677 Total Liabilities 14,722 14,181 -------- -------- Stockholders' equity: Common stock 6,550 6,550 Additional paid-in-capital 154 154 Retained earnings 19,393 19,351 Common stock in treasury, at cost (920) (920) -------- -------- Total stockholders' equity 25,177 25,135 -------- -------- Total Liabilities and Stockholders' Equity 39,899 39,316 ======== ========
See accompanying notes to condensed financial statements. 4 Kewaunee Scientific Corporation Condensed Statements of Cash Flows (Unaudited) (in thousands, except per share data)
Three months ended July ----------------------- 2000 1999 ------- ------- Cash flows from operating activities: Net earnings $ 214 $ 904 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation 562 502 Provision for bad debts 33 32 Decrease (increase) in receivables 1,356 (1,048) Decrease (increase) in inventories (1,428) (564) Increase (decrease) in accounts payable and other current liabilities 127 (414) Other, net (212) 84 ------- ------- Net cash provided by (used in) operating activities 652 (672) ------- ------- Cash flows from investing activities: Capital Expenditures (907) (525) ------- ------- Net cash used in investing activities (907) (525) ------- ------- Cash flows from financing activities: Net increase in short-term borrowings 426 1,310 Dividends paid (172) (146) Proceeds from exercise of stock options - 33 ------- ------- Net cash provided by financing activities 254 1,197 ------- ------- Decrease in cash and cash equivalents (1) 0 Cash and cash equivalents, beginning of period 9 8 ------- ------- Cash and cash equivalents, end of period $ 8 $ 8 ======= =======
See accompanying notes to condensed financial statements. 5 Kewaunee Scientific Corporation Notes to Condensed Financial Statements (unaudited) A. Financial Information --------------------- The unaudited interim condensed financial statements of Kewaunee Scientific Corporation (the "Company" or "Kewaunee") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. These interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company's 2000 Annual Report to Stockholders. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. In the opinion of management, the interim condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. B. Inventories ----------- Inventories consisted of the following (in thousands): July 31, 2000 April 30,2000 ------------- ------------- Finished products $1,117 $ 673 Work in process 1,333 932 Raw materials 2,477 1,894 ------ ------ $4,927 $3,499 ====== ====== C. Balance Sheet ------------- The Company's April 30, 2000 condensed balance sheet as presented herein is derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. 6 D. Segment Information ------------------- The following table shows net sales and profits by business segment for three months ended July 31, 2000 and 1999.
Laboratory Technical Products Products Corporate Total -------- -------- --------- ----- Three months ended July 31, 2000 ------------- Revenues from external customers $14,259 $5,111 -- $19,370 Intersegment revenues -- 114 (114) -- Segment profit (loss) (193) 684 (156) 335 Three months ended July 31, 1999 - - - ------------- Revenues from external customers $16,384 $3,681 -- $20,065 Intersegment revenues -- 63 (63) -- Segment profit 1,103 337 30 1,470
7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's 2000 Annual Report to Stockholders contains management's discussion and analysis of financial condition and results of operations at and for the year ended April 30, 2000. The following discussion and analysis describes material changes in the Company's financial condition since April 30, 2000. The analysis of results of operations compares the three months ended July 31, 2000 with the comparable period of the prior fiscal year. Results of Operations - - - --------------------- The Company recorded sales of $19.4 million for the three months ended July 31, 2000, down 3.5% from sales of $20.1 million for the comparable period of the prior year. The sales decrease for the current quarter resulted primarily from decreased sales of laboratory products, partially offset by increased sales of technical products. The lower sales of laboratory products during the quarter reflect a continuing softness in the industrial research market, including a slowdown in new laboratory construction projects. Sales of laboratory products were also adversely affected by several unexpected production problems in the Company's Statesville facility, which delayed the manufacturing and completion of several orders until after the end of the quarter. The Company's gross profit margin for the three months ended July 31, 2000 was 19.0%, compared to 23.1% for the comparable period of the prior year. The decrease in the gross profit margin for the quarter resulted primarily from differences in the product sales mix for the two periods, and to a lesser extent, from increased employee medical costs. Operating expenses for the three months ended July 31, 2000 were $3.3 million, relatively unchanged from the comparable period of the prior year. As a percent of sales, operating expenses for the three months ended July 31, 2000 were 16.9% of sales, as compared to 16.3% of sales for the comparable period of the prior year. The increase in operating expenses as a percent of sales was primarily attributable to increased sales commissions resulting from the change in the product sales mix, partially offset by a decrease in administrative expenses. Operating earnings of $397,000 were recorded for the three months ended July 31, 2000, as compared to $1.4 million recorded in the comparable period of the prior year. Interest expense was $47,000 for the three months ended July 31, 2000, compared to $39,000 for the comparable period of the prior year. The increase in interest expense for the current quarter resulted primarily from higher levels of debt under the Company's revolving credit facility. Other expense was $15,000 for the three months ended July 31, 2000, compared to other income of $148,000 for the comparable period of the prior year. Other income of $140,000 was recorded in the comparable period of the prior year resulting from a litigation settlement with certain suppliers. 8 Income tax expense of $121,000 was recorded for the three months ended July 31, 2000, as compared to an income tax expense of $566,000 recorded for the comparable period of the prior year. The effective tax rate was 36.0% for the period ended July 31, 2000 and 38.5% for the period ended July 31, 1999. The lower effective tax rate reflects the impact of expected tax credits during the current year. Net earnings of $214,000, or $.09 per diluted share, was recorded for the three months ended July 31, 2000, compared to net earnings of $904,000, or $.37 per diluted share, for the comparable period of the prior fiscal year, as a result of the factors discussed above. Liquidity and Capital Resources - - - ------------------------------- Historically, the Company's principal sources of liquidity have been funds generated from operations, supplemented as needed by short-term borrowings. The Company believes that these sources, combined with financing available under the equipment loan component of the Company's credit facility, will be sufficient to support ongoing business levels, including capital expenditures through the current fiscal year. The Company had working capital of $11.2 million at July 31, 2000, as compared to $11.5 million at April 30, 2000. The ratio of current assets to current liabilities was 1.92-to-1 at July 31, 2000, as compared to 1.99-to-1 at April 30, 2000. At July 31, 2000, advances of $2,481,000 were outstanding under the Company's revolving credit loan, and advances of $500,000 were outstanding under the equipment loan component of the credit facility. The Company's operations provided cash of $652,000 during the three months ended July 31, 2000. The cash provided was primarily attributable to operating earnings, reduced by the net impact of a decrease in customer receivables and an increase in inventory. The Company's operations used cash of $672,000 during the three months ended July 31, 1999, primarily to support an increase in customer receivables and inventory. During the three months ended July 31, 2000, the Company used cash of $907,000 for capital expenditures, primarily production equipment, compared to the use of $525,000 for such expenditures in the comparable period of the prior year. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - - - -------------------------------------------------------------------------------- Certain statements in this report constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, economic, competitive, governmental, and technological factors affecting the Company's operations, markets, products, services, and prices. The cautionary statements made pursuant to the Reform Act herein and elsewhere by the Company should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by the Company prior to the effective date of the Reform Act. The Company 9 cannot always predict what factors would cause actual results to differ materially from those indicated by the forward-looking statements. In addition, readers are urged to consider statements that include the terms "believes", "belief", "expects", "plans", "objectives", "anticipates", "intends" or the like to be uncertain and forward-looking. 10 REVIEW BY INDEPENDENT ACCOUNTANTS --------------------------------- A review of the interim financial information included in this Quarterly Report on Form 10-Q for the three months ended July 31, 2000 has been performed by PricewaterhouseCoopers LLP, the Company's independent accountants. Their report on the interim financial information follows. 11 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Kewaunee Scientific Corporation Statesville, North Carolina We have reviewed the accompanying condensed balance sheet of Kewaunee Scientific Corporation as of July 31, 2000, and the related condensed statements of operations and of cash flows for the three-month period then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial information for it to be in conformity with generally accepted accounting principles. We previously audited in accordance with auditing standards generally accepted in the United States, the balance sheet as of April 30, 2000 and the related statements of operations, of stockholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated May 31, 2000 we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of April 30, 2000, is fairly stated in all material respects in relation to the balance sheet from which it has been derived. PricewaterhouseCoopers LLP Charlotte, North Carolina August 14, 2000 12 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on August 23, 2000. Each of the nominees for Class II directors was re-elected. The votes cast for and withheld from each such director were as follows: Director For Withheld -------- --- -------- John C. Campbell, Jr. 2,128,222 149,205 James T. Rhind 2,099,022 178,405 William A. Shumaker 2,116,778 160,649 Also, at the Annual Meeting of Stockholders, the stockholders approved the 2000 Key Employee Stock Option Plan. The proposal received 1,997,888 affirmative votes, 277,161 negative votes and 1,936 abstentions. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed with the Commission during the three months ended July 31, 2000. 13 SIGNATURE --------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KEWAUNEE SCIENTIFIC CORPORATION ------------------------------- (Registrant) Date: September 8, 2000 By /s/ D. Michael Parker ---------------------------------- D. Michael Parker Senior Vice President,Finance Chief Financial Officer 14 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS APR-30-2001 MAY-01-2000 JUL-31-2000 8 0 16,604 0 4,927 23,282 34,152 20,304 39,899 12,113 0 0 0 6,550 18,627 25,177 19,370 19,370 15,692 18,973 15 0 47 335 121 214 0 0 0 214 0.09 0.09
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