Kewaunee Scientific Corp. Reports Operating Results (10-Q)
Kewaunee Scientific Corp. has a market cap of $35.61 million; its shares were traded at around $13.84 with a P/E ratio of 13.57 and P/S ratio of 0.36. The dividend yield of Kewaunee Scientific Corp. stocks is 2.89%.
Highlight of Business Operations: Sales for the three months ended October 31, 2010 were $25,625,000, a decrease of 5% from sales of $27,088,000 in the second quarter last year. The decline primarily resulted from a continuing softness in the domestic marketplace for small and mid-sized laboratory projects. Domestic sales were $22,269,000, down from $24,713,000 in the second quarter last year, while international sales were $3,356,000, up from $2,375,000 in the second quarter last year.
Sales for the six months ended October 31, 2010 were $50,483,000, down 5% from sales of $53,337,000, in the same period last year. Domestic operations sales were $43,216,000, down from sales of $48,071,000 in the same period last year. International operations sales were $7,267,000, up from sales of $5,266,000 in the same period last year.
Operating expenses for the three months ended October 31, 2010 were $4,045,000, or 15.8% of sales, as compared to $3,976,000, or 14.7% of sales, in the comparable period of the prior year. Operating expenses for the six months ended October 31, 2010 were $7,946,000, or 15.7% of sales, as compared to $7,942,000, or 14.9% of sales, in the comparable period of the prior year. The ratio of operating expenses to sales increased for the current year periods as operating expenses were relatively unchanged from the prior year periods while sales declined. Pension expense decreased $75,000 and $107,000 for the three and six months periods ended October 31, 2010, respectively, and incentive compensation expense decreased $52,000 and $211,000, respectively, for these periods. Those increases were offset by increases in various other operating expense categories.
Net earnings for the three months ended October 31, 2010 were $855,000, or $0.33 per diluted share, a decrease from net earnings of $1,352,000, or $0.53 per diluted share, in the second quarter of the prior year. Net earnings for the six months were $1,512,000, or $0.59 per diluted share, down from net earnings of $2,423,000, or $0.95 per diluted share, for the same period last year. Earnings for the three and six months periods of the current year were unfavorably impacted by lower sales volume and continued aggressive pricing in all of the Companys markets.
The Company had working capital of $21.8 million at October 31, 2010, compared to $20.1 million at April 30, 2010. The ratio of current assets to current liabilities was 2.2-to-1.0 at October 31, 2010, compared to 2.1-to-1.0 at April 30, 2010. At October 31, 2010, advances of $4,147,000 were outstanding under the Companys bank revolving credit facility, as compared to advances of $4,872,000 outstanding as of April 30, 2010. Total bank borrowings and capital lease obligations were $8,273,000 at October 31, 2010, as compared to $5,073,000 at April 30, 2010.
The Companys financing activities provided cash of $2,685,000 during the six months ended October 31, 2010. Cash provided was primarily from the proceeds from $4,000,000 in new long-term debt, partially offset by cash dividends paid of $514,000, and repayment of short-term borrowings of $725,000. The proceeds of the term loan are being used primarily to fund the expansion of the Companys Statesville, North Carolina manufacturing facilities. Financing activities used cash of $934,000 in the same period for the prior year, which included $461,000 for cash dividends, $144,000 for payments on obligations of capital leases, and repayment of short-term borrowings of $350,000.
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