On June 26, 2024, Kewaunee Scientific Corp (KEQU, Financial) released its 8-K filing detailing the financial results for its fourth quarter and fiscal year ended April 30, 2024. Kewaunee Scientific Corp is engaged in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products, operating through Domestic and International segments. The company generates a majority of its revenue from the Domestic business segment.
Fourth Quarter Performance
Sales during the fourth quarter of fiscal year 2024 were $56.7 million, marking a 5% increase compared to $54.0 million in the prior year's fourth quarter. Pre-tax earnings for the quarter were $1.3 million, down from $2.3 million in the previous year. However, net earnings surged to $11.0 million from $1.0 million in the prior year quarter, translating to diluted earnings per share of $3.71 compared to $0.34.
EBITDA for the quarter was $2.3 million, down from $3.3 million in the prior year quarter. Adjusted pre-tax earnings, excluding two non-recurring transactions, were $5.4 million, a 131% increase from $2.3 million in the prior year quarter. Adjusted net earnings were $4.6 million, up from $1.0 million, and adjusted EBITDA was $6.3 million, compared to $3.3 million in the prior year quarter.
Segment Analysis
Domestic Segment: Domestic sales for the quarter were $35.9 million, a 2.1% increase from $35.1 million in the prior year quarter. Domestic segment net earnings were $3.4 million, up from $2.4 million, and EBITDA was $5.5 million, compared to $3.0 million in the prior year quarter. The improvement was attributed to strategic go-to-market decisions and enhanced manufacturing productivity.
International Segment: International sales for the quarter were $20.8 million, a 10.5% increase from $18.9 million in the prior year quarter. International segment net earnings were $1.1 million, slightly up from $1.1 million, and EBITDA was $1.7 million, compared to $1.5 million in the prior year quarter. The Indian market remained particularly active.
Corporate Segment: Corporate segment net earnings were $6.5 million, compared to a net loss of $2.5 million in the prior year quarter. Corporate segment EBITDA loss was $5.0 million, compared to a loss of $1.2 million in the prior year quarter. The segment was impacted by two non-recurring transactions: the annuitization of the company's pension obligation and the partial release of the company's valuation allowance.
Fiscal Year 2024 Performance
For the full fiscal year 2024, sales were $203.8 million, a 7.2% decrease from $219.5 million in the prior year. Pre-tax earnings were $13.1 million, up from $4.5 million, and net earnings were $18.8 million, compared to $0.7 million in the prior year. Diluted earnings per share were $6.38, compared to $0.25 in the prior fiscal year. EBITDA for the fiscal year was $16.6 million, up from $7.5 million in the prior year.
Excluding the two non-recurring transactions, adjusted pre-tax earnings for the fiscal year were $17.1 million, a 281% increase from $4.5 million in the prior year. Adjusted net earnings were $12.3 million, up from $0.7 million, and adjusted EBITDA was $20.7 million, compared to $7.5 million in the prior fiscal year.
Financial Position
Total cash on hand as of April 30, 2024, was $25.9 million, up from $13.8 million on April 30, 2023. Working capital was $56.0 million, compared to $47.9 million. Short-term debt was $3.1 million, down from $3.6 million, and long-term debt was $28.5 million, down from $29.0 million. The company's debt-to-equity ratio improved to 0.70-to-1 from 1.08-to-1.
Management Commentary
Fiscal year 2024 was a tremendous year for Kewaunee," said Thomas D. Hull III, Kewaunee's President and Chief Executive Officer. "The Company delivered strong financial results as we continue to realize the benefits of our strategic decisions made in recent years. These results have been recognized by the market, resulting in a significant increase in the Company's market capitalization during the year. This is a testament to the hard work and dedication of Kewaunee's global team who are focused on relentlessly delivering on our commitments to our customers."
We ended the fiscal year with an order backlog of $155.6 million, increasing from the prior year end. This positions us well for fiscal year 2025 as we continue to see bidding and quoting maintain solid levels. The strength of our order backlog indicates the stability of the markets we serve and our dealer and distribution partners' continued investment in serving our customers."
Conclusion
Kewaunee Scientific Corp (KEQU, Financial) demonstrated robust financial performance in the fourth quarter and fiscal year 2024, driven by strategic adjustments and improved operational efficiency. The company's strong order backlog and enhanced market position indicate a positive outlook for the upcoming fiscal year. Investors and stakeholders will be keen to monitor how Kewaunee leverages its strategic initiatives to sustain growth and profitability in the competitive furnishings, fixtures, and appliances industry.
Explore the complete 8-K earnings release (here) from Kewaunee Scientific Corp for further details.
