UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT | |||||
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) | November 27, 2012 | ||||
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Kewaunee Scientific Corporation (Exact name of registrant as specified in its charter) | |||||
Delaware (State or other jurisdiction of incorporation) |
0-5286 (Commission File Number) |
38-0715562 (I.R.S. Employer Identification No.) | |||
2700 West Front Street Statesville, North Carolina (Address of principal executive offices) |
28677 (Zip Code) | ||||
Registrant’s telephone number, including area code 704-873-7202 | |||||
N/A (Former name or former address, if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On November 27, 2012, Kewaunee Scientific Corporation issued a press release announcing its financial results for the second quarter ended October 31, 2012. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
Exhibit No.
99.1 Press Release of Kewaunee Scientific Corporation dated November 27, 2012
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Item 2.02 of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
(Registrant) | |||
Kewaunee Scientific Corporation | |||
Date: November 27, 2012 | /s/ D. Michael Parker | ||
D. Michael Parker Senior Vice President, Finance | |||
Chief Financial Officer |
Kewaunee Scientific Reports Record Sales for Second Quarter
STATESVILLE, N.C., Nov. 27, 2012 /PRNewswire/ -- Kewaunee Scientific Corporation (Nasdaq: KEQU) today reported sales and earnings for its second quarter ended October 31, 2012.
Sales for the quarter were a record $31,185,000, up 20% from sales of $25,962,000 in the second quarter last year. Net earnings for the quarter were $649,000, or $0.25 per diluted share, as compared to a net loss of $125,000, or $0.05 per diluted share, in the second quarter last year. Earnings for the quarter were favorably impacted by the increase in sales and reduced manufacturing, overhead, and administrative costs.
Domestic sales for the quarter were $25,684,000, up 8% from sales of $23,826,000 in the second quarter last year. Demand for privately-funded projects continued to hold up relatively well during the quarter, while opportunities for publicly-funded projects remained well below pre-recession levels as state and local governments continued to receive significantly lower funding for capital projects.
International sales for the quarter were $5,502,000, up 157% from $2,136,000 in the second quarter last year, as several large international projects shipped during the quarter. The Company continues to see increased opportunities for sales and orders in the growing Asia and Middle East laboratory markets through its strengthened and broadened international dealer network.
The order backlog increased to a record $90.8 million at October 31, 2012, up from $78.0 million at October 31, 2011, as the Company continued to strengthen its market position.
Sales for the six months ended October 31, 2012 were $57,868,000, up 11% over sales of $52,283,000, in the same period last year. Domestic sales were $48,312,000, up 2% over sales of $47,222,000 in the same period last year. International sales were $9,556,000, up 89% from sales of $5,061,000 in the same period last year. Net earnings for the six months ended October 31, 2012 were $1,283,000, or $0.50 per diluted share, as compared to a net loss of $103,000, or $0.04 per diluted share, in the same period last year.
The Company's balance sheet continues to be strong. Cash on hand was $6.5 million at the end of the quarter, as compared to $4.1 million at the end of the same period last year. Working capital was $24.2 million, as compared to $21.5 million at the end of the same period last year. Short-term borrowings under the Company's $15 million bank line of credit were $5.7 million, as compared to $7.3 million at the end of the same period last year. Total bank borrowings and capital lease obligations were $9.3 million, as compared to $11.2 million at the end of the same period last year, and the debt-to-equity ratio was .30-to-1, as compared to .36-to-1 at the end of the same period last year.
"I am pleased with our progress in a number of important areas," said William A. Shumaker, Kewaunee's Chief Executive Officer. "Sales, earnings, and incoming orders were very strong for the quarter. We also made good progress in improving the quality of our order backlog, as we shipped several large direct contract projects from the backlog with less favorable product mixes and margins. This bodes well for earnings and margins going forward, as these type orders are generally being replaced in our backlog with orders received through our dealer organization, which typically have a more favorable product mix and are more profitable. I am confident this progress will continue in the second half of the year. It should be noted that third quarter is historically our slowest due to the holidays and the construction cycle.
"We continue to see positive results from our strengthened dealer network. Our dealers are ahead of their order booking goals for the fiscal year, and they continue to provide us increased bidding opportunities and orders. Working in partnership with them, we are also making excellent progress with laboratory planners and architects to strengthen our relationships and increase their preference for the Kewaunee brand.
"I should note that one of our directors, Patrick L. McCrory, has been elected Governor of North Carolina and will be resigning from the Kewaunee Board when he takes office in January 2013. Since joining our Board in May 2009, Pat has served the Company and our stockholders well, as he shared unique insights and perspectives obtained through his impressive career in the private sector and as a seven-term Mayor of Charlotte. The entire Board of Directors is grateful to Pat for his leadership and guidance."
Kewaunee Scientific Corporation is a recognized leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. Laboratory furniture products include both steel and wood cabinetry, fume hoods, adaptable modular systems, moveable workstations, biological safety cabinets, and epoxy resin counters and sinks. Healthcare furniture products include laminate casework, storage systems, and related products for healthcare applications. Technical furniture products include column systems, slotted-post systems, pedestal systems, and stand-alone benches.
The Company's corporate headquarters are located in Statesville, North Carolina. Three manufacturing facilities are located in Statesville, NC serving the domestic and international markets. One manufacturing facility is located in Bangalore, India serving the local and Asian markets. The Company has subsidiaries in Singapore and India. Kewaunee Scientific's website is located at http://www.kewaunee.com.
Certain statements in this release constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.
Consolidated Statements of Operations | |||||||
(in thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
October 31 | October 31 | ||||||
2012 | 2011 | 2012 | 2011 | ||||
Net sales | $31,185 | $25,962 | $57,868 | $52,283 | |||
Cost of products sold | 25,958 | 22,117 | 47,398 | 44,250 | |||
Gross profit | 5,227 | 3,845 | 10,470 | 8,033 | |||
Operating expenses | 4,013 | 4,005 | 8,151 | 7,960 | |||
Operating earnings (loss) | 1,214 | (160) | 2,319 | 73 | |||
Other income | 108 | 36 | 176 | 35 | |||
Interest expense | (101) | (128) | (215) | (223) | |||
Earnings (loss) before income taxes | 1,221 | (252) | 2,280 | (115) | |||
Income tax expense (benefit) | 414 | (96) | 785 | (67) | |||
Net earnings (loss) | 807 | (156) | 1,495 | (48) | |||
Less: net earnings (loss) attributable to | |||||||
the noncontrolling interest | 158 | (31) | 212 | 55 | |||
Net earnings (loss) attributable to | |||||||
Kewaunee Scientific Corporation | $649 | $(125) | $1,283 | $(103) | |||
Net earnings (loss) per share attributable to | |||||||
Kewaunee Scientific Corporation stockholders | |||||||
Basic | $0.25 | $(0.05) | $0.50 | $(0.04) | |||
Diluted | $0.25 | $(0.05) | $0.50 | $(0.04) | |||
Weighted average number of common | |||||||
shares outstanding | |||||||
Basic | 2,587 | 2,579 | 2,584 | 2,579 | |||
Diluted | 2,601 | 2,579 | 2,592 | 2,579 |
Condensed Consolidated Balance Sheets | |||
(in thousands) | |||
October 31 | April 30 | ||
2012 | 2012 | ||
(unaudited) | |||
Assets | |||
Cash and cash equivalents | $5,878 | $6,188 | |
Restricted cash | 639 | 704 | |
Receivables, less allowances | 24,868 | 23,244 | |
Inventories | 12,424 | 11,760 | |
Prepaid expenses and other current assets | 2,510 | 1,702 | |
Total current assets | 46,319 | 43,598 | |
Net property, plant and equipment | 14,758 | 15,346 | |
Other assets | 5,420 | 5,192 | |
Total Assets | $66,497 | $64,136 | |
Liabilities and Equity | |||
Short-term borrowings | $5,694 | $6,816 | |
Current obligations under capital leases and long-term debt | 200 | 236 | |
Accounts payable | 11,226 | 8,848 | |
Other current liabilities | 5,013 | 4,340 | |
Total current liabilities | 22,133 | 20,240 | |
Other non-current liabilities | 11,756 | 12,238 | |
Total liabilities | 33,889 | 32,478 | |
Noncontrolling interest | 2,211 | 2,147 | |
Kewaunee Scientific Corporation equity | 30,397 | 29,511 | |
Total equity | 32,608 | 31,658 | |
Total Liabilities and Equity | $66,497 | $64,136 |
Contact: | D. Michael Parker |
704/871-3290 |