Kewaunee Scientific Corp 10-Q for FY2021 Q3

Kewaunee Scientific Corp (KEQU)

10-Q 2021-03-12 For: 2021-01-31

Added on April 06, 2026

About this 10-Q

Kewaunee Scientific Corp filed this 10-Q on March 12, 2021, covering the quarter ended January 31, 2021 (FY2021 Q3).

Headline figures

Quarter ended January 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $33.34M; down 2.6% from $34.23M a year earlier
Net income: $81K; compared with a net loss of $1.92M a year earlier
Diluted EPS: $0.03; compared with -$0.70 a year earlier

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Delaware						38-0715562
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

2700 West Front Street Statesville, North Carolina						28677-2927
(Address of principal executive offices)						(Zip Code)


		Page Number
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Statements of Operations (unaudited) – Three and Nine Months Ended January 31, 202 1 and 20 20	1
	Condensed Consolidated Statements of Comprehensive Income and (Loss) (unaudited) – Three and Nine Months Ended January 31, 202 1 and 20 20	2
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three and Nine Months Ended Janu ary 31, 202 1 and 20 20	3
	Condensed Consolidated Balance Sheets – January 31, 202 1 (unaudited) and April 30, 2020	5
	Condensed Consolidated Statements of Cash Flows (unaudited) – Nine Months Ended January 31, 202 1 and 20 20	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16

PART II. OTHER INFORMATION
Item 6.	Exhibits	17
SIGNATURES		18


	Three Months Ended January 31,				Nine Months Ended January 31,
	2021		2020		2021		2020
Net sales	$	33,339	$	34,225	$	108,762	$	113,283
Cost of products sold	27,685		28,947		90,832		94,743
Gross profit	5,654		5,278		17,930		18,540
Operating expenses	6,030		7,350		18,593		19,875
Operating loss	(376)		(2,072)		(663)		(1,335)
Pension expense	(288)		(113)		(865)		(339)
Other income	51		84		171		382
Interest expense	(105)		(150)		(310)		(452)
Loss before income taxes	(718)		(2,251)		(1,667)		(1,744)
Income tax expense (benefit)	(813)		(350)		(989)		1,822
Net earnings (loss)	95		(1,901)		(678)		(3,566)
Less: Net earnings attributable to the noncontrolling interest	14		17		19		59
Net earnings (loss) attributable to Kewaunee Scientific Corporation	$	81	$	(1,918)	$	(697)	$	(3,625)

Net earnings (loss) per share attributable to Kewaunee Scientific Corporation stockholders
Basic	$	0.03	$	(0.70)	$	(0.25)	$	(1.32)
Diluted	$	0.03	$	(0.70)	$	(0.25)	$	(1.32)
Weighted average number of common shares outstanding
Basic	2,762		2,750		2,759		2,750
Diluted	2,789		2,750		2,759		2,750


	Three Months Ended January 31,				Nine Months Ended January 31,
	2021		2020		2021		2020
Net earnings (loss)	$	95	$	(1,901)	$	(678)	$	(3,566)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	31		(26)		(17)		(9)
Change in fair value of cash flow hedge	—		—		—		1
Other comprehensive income (loss)	31		(26)		(17)		(8)
Comprehensive income (loss), net of tax	126		(1,927)		(695)		(3,574)
Less: Comprehensive income attributable to the noncontrolling interest	14		17		19		59
Comprehensive income (loss) attributable to Kewaunee Scientific Corporation	$	112	$	(1,944)	$	(714)	$	(3,633)


	Common Stock		Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Kewaunee Scientific Corporation Stockholders’ Equity
Balance at April 30, 2020	$	6,885	$	3,360	$	(53)	$	37,821	$	(9,598)	$	38,415
Net loss attributable to Kewaunee Scientific Corporation	—		—		—		(598)		—		(598)
Other comprehensive loss	—		—		—		—		(13)		(13)
Stock based compensation	20		78		—		—		—		98
Balance at July 31, 2020	$	6,905	$	3,438	$	(53)	$	37,223	$	(9,611)	$	37,902
Net loss attributable to Kewaunee Scientific Corporation	$	—	$	—	$	—	$	(180)	$	—	$	(180)
Other comprehensive loss	—		—		—		—		(35)		(35)
Stock based compensation	—		143		—		—		—		143
Balance at October 31, 2020	$	6,905	$	3,581	$	(53)	$	37,043	$	(9,646)	$	37,830
Net earnings attributable to Kewaunee Scientific Corporation	$	—	$	—	$	—	$	81	$	—	$	81
Other comprehensive income	—		—		—		—		31		31
Stock based compensation	10		103		—		—		—		113
Balance at January 31, 2021	$	6,915	$	3,684	$	(53)	$	37,124	$	(9,615)	$	38,055


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	January 31, 2021		April 30, 2020
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	5,563	$	4,365
Restricted cash	540		850
Receivables, less allowance; $669; $606, on each respective date	30,091		28,062
Inventories	15,615		15,330
Income tax receivable	4,205		2,717
Prepaid expenses and other current assets	4,109		2,907
Total Current Assets	60,123		54,231
Property, plant and equipment, at cost	59,640		57,859
Accumulated depreciation	(43,429)		(41,587)
Net Property, Plant and Equipment	16,211		16,272
Right of use assets	9,715		9,312
Deferred income taxes	—		336
Other assets	3,560		3,778
Total Assets	$	89,609	$	83,929

Liabilities and Stockholders’ Equity
Current Liabilities:
Short-term borrowings	$	4,493	$	4,719
Current portion of capital lease liability	21		19
Current portion of operating lease liabilities	1,352		1,282
Accounts payable	15,996		13,114
Employee compensation and amounts withheld	4,546		4,159
Deferred revenue	3,642		2,508
Other accrued expenses	1,563		1,259
Total Current Liabilities	31,613		27,060
Long-term portion of capital lease liability	97		113
Long-term portion of operating lease liabilities	8,276		7,780
Accrued pension and deferred compensation costs	10,298		9,303
Deferred income taxes	225		401
Other non-current liabilities	838		569
Total Liabilities	51,347		45,226
Commitments and Contingencies
Stockholders’ Equity:
Common stock, $2.50 par value, Authorized – 5,000 shares; Issued – 2,766 shares; 2,754 shares; – Outstanding – 2,763 shares; 2,751 shares, on each respective date	6,915		6,885
Additional paid-in-capital	3,684		3,360
Retained earnings	37,124		37,821
Accumulated other comprehensive loss	(9,615)		(9,598)
Common stock in treasury, at cost, 3 shares, on each date	(53)		(53)
Total Kewaunee Scientific Corporation Stockholders’ Equity	38,055		38,415
Noncontrolling interest	207		288
Total Stockholders’ Equity	38,262		38,703
Total Liabilities and Stockholders’ Equity	$	89,609	$	83,929


	Three Months Ended January 31, 2021						Three Months Ended January 31, 2020
	Domestic		International		Total		Domestic		International		Total
Over Time	$	24,198	$	8,273	$	32,471	$	25,107	$	7,526	$	32,633
Point in Time	868		—		868		1,592		—		1,592
	$	25,066	$	8,273	$	33,339	$	26,699	$	7,526	$	34,225


	Nine Months Ended January 31, 2021						Nine Months Ended January 31, 2020
	Domestic		International		Total		Domestic		International		Total
Over Time	$	81,206	$	24,866	$	106,072	$	83,292	$	25,713	$	109,005
Point in Time	2,690		—		2,690		4,278		—		4,278
	$	83,896	$	24,866	$	108,762	$	87,570	$	25,713	$	113,283


	January 31, 2021		April 30, 2020
Finished products	$	2,712	$	2,455
Work in process	1,826		1,921
Raw materials	11,077		10,954
	$	15,615	$	15,330


	January 31, 2021
Financial Assets	Level 1		Level 2		Total
Trading securities held in non-qualified compensation plans (1)	$	2,547	$	—	$	2,547
Cash surrender value of life insurance policies (1)	—		87		87
Total	$	2,547	$	87	$	2,634
Financial Liabilities
Non-qualified compensation plans (2)	$	—	$	3,059	$	3,059

Total	$	—	$	3,059	$	3,059


	Operating		Financing

Remainder of fiscal 2021	$	492	$	8
2022	2,023		32
2023	1,839		32
2024	1,480		32
2025	1,436		32
Thereafter	4,101		12
Total Minimum Lease Payments	$	11,371	$	148
Imputed Interest	(1,742)		(30)
Total	$	9,629	$	118


	Three Months Ended January 31,		Nine Months Ended January 31,
	2021	2020	2021	2020

Basic	2,762	2,750	2,759	2,750
Dilutive effect of stock options and RSUs	27	—	—	—
Weighted average common shares outstanding - diluted	2,789	2,750	2,759	2,750


	Three Months Ended January 31, 2021		Three Months Ended January 31, 2020

Service cost	$	0	$	0
Interest cost	181		208
Expected return on plan assets	(321)		(355)
Recognition of net loss	428		260
Net periodic pension expense	$	288	$	113


	Nine Months Ended January 31,
	2021		2020
Cash flows from operating activities:
Net loss	$	(678)	$	(3,566)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	2,005		1,927
Bad debt provision	60		321
Stock based compensation expense	385		241
Deferred income taxes	159		1,056
Change in assets and liabilities:
Receivables	(2,089)		5,530
Inventories	(285)		1,959
Income tax receivable	(1,488)		—
Accounts payable and other accrued expenses	3,843		(2,512)
Deferred revenue	1,134		201
Other, net	61		(546)
Net cash provided by operating activities	3,107		4,611
Cash flows from investing activities:
Capital expenditures	(1,944)		(1,371)
Net cash used in investing activities	(1,944)		(1,371)
Cash flows from financing activities:
Dividends paid	—		(1,045)
Dividends paid to noncontrolling interest in subsidiaries	(108)		(324)
Proceeds from short-term borrowings	49,298		44,958
Repayments on short-term borrowings	(49,524)		(50,454)
Payments on long-term debt and lease obligations	(14)		(1,277)
Net proceeds from exercise of stock options	(31)		(14)
Net cash used in financing activities	(379)		(8,156)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	104		(177)
Increase (decrease) in cash, cash equivalents and restricted cash	888		(5,093)
Cash, cash equivalents and restricted cash, beginning of period	5,215		11,156
Cash, cash equivalents and restricted cash, end of period	$	6,103	$	6,063


	KEWAUNEE SCIENTIFIC CORPORATION (Registrant)

Date: March 12, 2021	By	/s/ Donald T. Gardner III
		Donald T. Gardner III
		(As duly authorized officer and Vice President, Finance and Chief Financial Officer)


	Domestic Operations		International Operations		Corporate / Eliminations		Total
Three months ended January 31, 2021
Revenues from external customers	$	25,066	$	8,273	$	—	$	33,339
Intersegment revenues	463		550		(1,013)		—
Earnings (loss) before income taxes	$	206	$	689	$	(1,613)	$	(718)
Three months ended January 31, 2020
Revenues from external customers	$	26,699	$	7,526	$	—	$	34,225
Intersegment revenues	302		659		(961)		—
Earnings (loss) before income taxes	$	(867)	$	513	$	(1,897)	$	(2,251)



10.1						Tenth Amendment to Credit and Security Agreement dated as of January 28, 2021 .
31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
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101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document