KEWAUNEE SCIENTIFIC CORP /DE/ false 0000055529 0000055529 2024-08-28 2024-08-28
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 2024
Kewaunee Scientific Corporation
(Exact name of registrant as specified in its charter)
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Delaware |
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0-5286 |
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38-0715562 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
of incorporation) |
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File Number) |
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Identification No.) |
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2700 West Front Street |
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Statesville, North Carolina |
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28677 |
(Address of principal executive offices) |
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Registrant’s telephone number, including area code: 704-873-7202
N/A
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $2.50 par value |
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KEQU |
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The Nasdaq Global Market |
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 |
Regulation FD Disclosure. |
Kewaunee Scientific Corporation (the “Company”) has posted an investor presentation and related script to the “Investor Information” section of the Company’s website at http://www.kewaunee.com/about/investor-information/. The presentation and related script are attached hereto as Exhibits 99.1 and 99.2. The information included in Exhibits 99.1 and 99.2 is incorporated by reference in this Item 7.01, and is deemed to be furnished, not filed, pursuant to Item 7.01 of Form 8-K. The presentation will be delivered during the Company’s Annual Meeting of Shareholders (the “Annual Meeting”), which is being conducted virtually at 11:00 a.m. Eastern time on August 28, 2024 via a live webcast which can be accessed at www.virtualshareholdermeeting.com/KEQU2024. A replay of the audio webcast of the Annual Meeting will be made available on the Company’s website for approximately one year.
The Company is making reference to non-GAAP financial information in both the presentation and the Annual Meeting. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached presentation, and will be included in the “Investor Information” section of the Company’s website at http://www.kewaunee.com/about/investor-information/.
Certain statements made in the attached presentation and related script constitute “forward-looking statements” within the meaning of the federal securities laws, including statements regarding the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future. Management believes that these forward-looking statements are reasonable. However, the Company cannot guarantee that its actual results will be consistent with the forward-looking statements and you should not place undue reliance on them. These statements are based on current expectations and speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. Important factors regarding the Company that may cause results to differ from expectations are included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2024, under Item 1A. “Risk Factors,” and in the Company’s other filings with the SEC.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits:
Exhibit No.
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
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(Registrant) Kewaunee Scientific Corporation |
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Date: August 28, 2024 |
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/s/ Donald T. Gardner III |
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Donald T. Gardner III |
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Vice President, Finance and Chief Financial Officer |
Exhibit 99.1 KEWAUNEE SCIENTIFIC CORPORATION NASDAQ: KEQU
Special Note Regarding Forward-Looking Statements Certain statements in
this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the Reform Act ). All statements other than statements of historical fact included in this Annual Report, including
statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as anticipate, estimate, expect, project, intend, plan, predict, believe and
similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important
factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to: competitive and general economic conditions,
including disruptions from government mandates, both domestically and internationally, as well as supplier constraints and other supply disruptions; changes in customer demands; technological changes in our operations or in our industry; dependence
on customers’ required delivery schedules; risks related to fluctuations in the Company’s operating results from quarter to quarter; risks related to international operations, including foreign currency fluctuations; changes in the legal
and regulatory environment; changes in raw materials and commodity costs; risks associated with our ability to identify and complete strategic acquisitions or to successfully integrate any businesses that we may acquire; acts of terrorism, war,
governmental action, natural disasters and other Force Majeure events. The cautionary statements made pursuant to the Reform Act herein and elsewhere by us should not be construed as exhaustive. We cannot always predict what factors would cause
actual results to differ materially from those indicated by the forward-looking statements. Over time, our actual results, performance, or achievements will likely differ from the anticipated results, performance or achievements that are expressed
or implied by our forward-looking statements, and such difference might be significant and harmful to our stockholders' interest. Many important factors that could cause such a difference are described under the caption Risk Factors, in Item 1A of
the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2024, which you should review carefully. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly
disclaims any obligation, to update any forward- looking statements, whether as a result of new information, future events or otherwise. These reports are available on our investor relations website at www.kewaunee.com and on the SEC website at
www.sec.gov. Kewaunee Scientific Corporation | NASDAQ: KEQU 2
About Non-GAAP Measures The following slides include non-GAAP financial
measures such as adjusted net earnings and adjusted net earnings per share as supplemental information relating to Kewaunee’s operating results. Adjusted net earnings represent GAAP net earnings adjusted for net pension settlement expenses and
the impact of a valuation allowance release. This financial information is not in accordance with, or an alternative fact for, GAAP-compliant financial information and may be different from the operating or non- GAAP financial information used by
other companies. The Company believes that this presentation of adjusted net earnings and adjusted net earnings per share provides useful information to investors regarding certain additional financial and business trends relating to its financial
condition and results of operations. EBITDA is calculated as net earnings (loss), less interest expense and interest income, income taxes, depreciation, and amortization. Adjusted EBITDA is calculated as EBITDA less the impact of the one-time costs
incurred for the pension termination enacted during FY24. We believe EBITDA and Adjusted EBITDA allow management and investors to compare our performance to other companies on a consistent basis without regard to depreciation and amortization or the
costs incurred related to our one- time pension termination transaction executed during fiscal year 2024, which can vary significantly between companies depending upon many factors. EBITDA and Adjusted EBITDA are not calculations based upon
generally accepted accounting principles, and the method for calculating EBITDA and Adjusted EBITDA can vary among companies. The amounts included in the EBITDA and Adjusted EBITDA calculations, however, are derived from amounts included in the
historical consolidated statements of operations. EBITDA and Adjusted EBITDA should not be considered as alternatives to net earnings (loss) or operating earnings (loss) as an indicator of the Company’s operating performance, or as an
alternative to operating cash flows as a measure of liquidity. Kewaunee Scientific Corporation | NASDAQ: KEQU 3
Introduction Agenda Annual Shareholder Meeting • Kewaunee
Scientific Overview • Fiscal Year 2024 Review • Strategic Direction and Outlook • Q&A 4
Kewaunee Overview 5
Kewaunee’s History 6
The Human Spirit Driving Innovation Forward The human desire to discover
has fueled a century of remarkable progress. Here's a glimpse into some of the groundbreaking discoveries that have shaped the modern era. Harnessing the Power A Giant Leap for Taking Flight The Digital Revolution of the Atom Mankind 1700s-1800s
1900s 1900s Early 1900s The splitting of the atom The Wright Brothers' first flight The moon landing in 1969 The invention of the computer unlocked unimaginable energy, in 1903 shattered the marked an extraordinary feat chip ignited the digital
paving the way for nuclear power boundaries of human mobility, of human ingenuity, pushing revolution, forever transforming and sparking the development of forever changing the way we the frontiers of scientific communication, information advanced
technologies. travel and explore. exploration. access, and innovation. 7
WHY IS INNOVATION IMPORTANT IN LAB A History of Laboratory Spaces
DESIGN? Modern labs have evolved to become dynamic arenas where discoveries are made, ideas are exchanged, and innovation thrives. They are also key tools for recruiting research funding and top talent. These amazing spaces serve as the epicenter of
scientific exploration, providing the Early Labs Specialized Labs Modern Labs Future tools and resources necessary to th th th th th st (15 -17 Centuries) (18 -19 Centuries) (20 -21 Centuries) Labs push known boundaries and harness innovation.
• Simple rooms • Larger and more Inspiring and As laboratories equipped with basic specialized labs with collaborative continue to evolve, Modern labs can also foster a sense tools and materials. areas for different environments.
Kewaunee remains of shared purpose and collective types of experiments. dedicated to energy. Adaptable workstations • No focus on • Efficient creating amazing enable scientists from diverse ergonomic design. • Specialized
furniture, • cross-functional spaces that drive disciplines to seamlessly interact, such as lab benches • open floor plans progress in diverse share ideas, and ignite valuable • Containment and fume hoods • adaptable
furniture fields and shape discussions. This collaborative spirit devices and other for easy the future of has the potential to push teams to technical equipment • Development of new configuration to scientific greater heights and drive had
yet to be scientific instruments groundbreaking discoveries that meet changing exploration. discovered. like microscopes and surpass the limitations of individual needs. telescopes. expertise. 8
COLLABORATION HUBS Why Do Spaces Matter? Modern laboratories are
designed to break down physical barriers and create a sense of community. Open floor plans and flexible furniture allow scientists from diverse disciplines SHIFTING LAB LANDSCAPES: The evolution of lab spaces reflects to easily interact, share
ideas, and spark new the changing nature of scientific research lines of inquiry. This collaborative spirit can lead to groundbreaking discoveries that transcend the limitations of individual expertise. FROM POTENT DRUG B A LLROOM INTEGRATED
CHEMISTRY HANDLING CONCEPT IN DEVICES HARNESSING TEAM ENERGY LABS TO NEXT-GEN A well-designed lab space fosters a sense of BIOLOGY LABS THERAPIES shared purpose and collective energy. Seeing As research delves The future of colleagues' research
unfold first-hand and into increasingly Early laboratories Modern drug laboratory spaces witnessing the collective pursuit of knowledge potent drugs, were often dominated discovery often may see a shift can be immensely motivating. This
collaborative laboratories require by benches and fume involves large-scale, energy can push teams to achieve greater towards integrated specialized heights and accelerate the pace of discovery. hoods, catering to the high-throughput devices that
containment needs of chemists. screening of combine multiple facilities with With the rise of potential drug functionalities into INSPIRING THE NEXT features like biology and genetics, candidates. This has a single, compact negative pressure
GENERATION labs have become led to the rise of unit. This would ventilation and more versatile, ballroom labs, vast optimize space Modern labs, with their cutting-edge technology advanced safety incorporating open spaces housing utilization, improve
and sleek aesthetics, can be incredibly inspiring protocols. This specialized automated robotics for young scientists. efficiency, and ensures the safety equipment like and high-capacity potentially lead to Witnessing the marvels of science
firsthand can of researchers and incubators, DNA equipment, ignite a passion for exploration and a desire to more streamlined the surrounding push the boundaries of knowledge. This sequencers, and facilitating the rapid workflows. environment.
inspiration is crucial for attracting and nurturing centrifuges. testing of numerous the next generation of scientific minds. compounds simultaneously. 9
Amazing Spaces Across Industries At Kewaunee, we believe in empowering
the scientific community with spaces that inspire, innovate, and integrate. Serving the forefront of life sciences, education, healthcare, industrial, petrochemical, and government research, we deliver unparalleled laboratory environments tailored
for every research and development endeavor. PROVIDING SOLUTIONS FOR § Life Sciences § Education § Healthcare § Industrial § Government § Petroleum 10
Discovery Russia Drives R&D UK $106 B $52 B South Korea $55 B China
Spending USA $551 B Japan Italy Taiwan Global R&D Spending is $886 B $182 B $36 B on the Rise. $32 B The United States and Germany India China are the top Brazil $143 B spenders on R&D, $65 B $37 B accounting for more than half of global
expenditures in 2022. However, middle- income countries are Global R&D expenditures have tripled from an estimated catching up, with R&D $726 billion in 2000 to an estimated $2.5 trillion in 2022. growth outpacing that of Increased
investment in discovery has been a key driver of the US. global progress, and R&D spending is expected to rise as technological advancements fuel new research. Top 10 countries *Anderson G; National Center for Science and Engineering Statistics
(NCSES). 2024. U.S. R&D Increased by $72 Billion in 2021 to $789 Billion; Estimate for 2022 contributed to more than Indicates Further Increase to $886 Billion. NSF 24-317. Alexandria, VA: National 80% of R&D Investment Science Foundation.
Available at https://ncses.nsf.gov/pubs/nsf24317/. 11
Global Laboratory Furniture & Enclosure Market Outlook Global
Market Potential ($M) Market Growth from 2022 to 2027F ($M) Clean Bench & BSCs, $669, 26% 6.8% Clean Bench & BSCs, $998, 28% 2022 2027F 2027F Fume Lab Furniture & Fume Hoods, Lab Furniture Hoods, Fixtures, & Fixtures, $625, 24% $848,
24% $1,285, 50% $1,733, 48% 2022 2023F 2024F 2027F The current global laboratory furniture and enclosure market is at $2.6 Billion and is projected to reach $3.6 Billion, growing at a CAGR of 6.8% across the period (2022-2027). Lab Furniture &
Fixtures contribute nearly 50% of the market share followed by clean bench & BSCs (26%) and Fume Hoods (24%). By 2027, clean bench and BSCs segment is expected to grow by 2% reaching at a share of 28% from 26%. *Anderson G; National Center for
Science and Engineering Statistics (NCSES). 2024. U.S. R&D Increased by $72 Billion in 2021 to $789 Billion; Estimate for 2022 Indicates Further Increase to $886 Billion. NSF 24-317. Alexandria, VA: National Science Foundation. Available at
https://ncses.nsf.gov/pubs/nsf24317/. 12
WHY CHOOSE KEWAUNEE? Experience Serving Industry-Leading Leading Dealer
and Financial Experience Users In Multiple Portfolio Distribution Network Stability Founded in 1906, End-Use Markets Kewaunee offers Our global network of Kewaunee brings $203.8 Million total lab solutions experienced dealers The industries served
by over 118 years of in Revenue with a portfolio of stand ready with local Kewaunee continue to manufacturing products that meet expertise to simplify the invest in research and Strong balance excellence to every furniture need building process and
development, requiring sheet and every project. within the laboratory bring projects from Kewaunee products in backlog space. thought to finish with diverse markets. support at every stage. 13
FY 2024 Financial Review
HISTORICAL FINANCIALS Kewaunee Scientific Corporation | NASDAQ: KEQU
Consistent Revenue and Backlog Stable Annual Revenue Globally Revenue Backlog Domestic International $219.5M $203.8M $146.7M $173.9M $137.2M $168.9M $126.9M $155.6M $147.9M $72.8M $66.5M $42.0M FY2022 FY2023 FY2024 FY2022 FY2023 FY2024 15
Financial Review $ in thousands, excluding FY22 FY23 FY24 Pension
Valuation FY24 per share data Reported Reported Reported Settlement Allowance Adjusted Net Sales $168,872 $219,494 $203,755 $ - $ - $203,755 Operating Profit (2,608) 5,364 18,281 - - 18,281 % of Sales -1.5% 2.4% 9.0% 0.0% 0.0% 9.0% Pension, Interest
and Other 123 (866) (5,162) (4,019) - (1,143) Profit/(Loss) Before Tax (2,485) 4,498 13,119 (4,019) - 17,138 Income Tax Expense/(Benefit) 3,518 3,139 (5,938) (3,870) (6,583) 4,515 Net Earnings/(Loss) Before NCI (6,003) 1,359 19,057 (149) 6,583
12,623 Less: NCI 123 621 304 - - 304 Net Earnings/(Loss) $(6,126) $738 $18,753 $(149) $6,583 $12,319 Add/(Less): Interest Expense 632 1,734 1,799 1,799 Interest Income (399) (961) (1,093) (1,093) Income Taxes 3,518 3,139 (5,938) (3,870) (6,583)
4,515 Depreciation & Amortization 2,769 2,867 3,125 3,125 EBITDA $394 $7,517 $16,646 $(4,019) $ - $20,665 Earnings Per Share: Basic $(2.20) $0.26 $6.51 $(0.05) $2.29 $4.28 Diluted $(2.20) $0.25 $6.38 $(0.05) $2.24 $4.19 16
Strategic Direction and Outlook
Strategic Direction and Outlook OUR GUIDING PRINCIPLES We will be easy
to do business with. We will get closer to our customer(s). We will do everything with excellence. We will lead and not follow (we are innovators). 18
Thank You & Questions 19
Exhibit 99.2
KEWAUNEE ANNUAL SHAREHOLDER SPEECH AUGUST 28, 2024
Kewaunee Scientific Corporation
Annual Shareholder Speech
August 28, 2024
Good morning. I
would like to extend a warm welcome to our shareholders who have set aside time to join us today at Kewaunees 2024 annual shareholder meeting. This years meeting is again being conducted virtually, providing our shareholders with a more
accessible format in which to participate.
Before proceeding, a brief comment regarding forward-looking statements.
Additionally, please see the notice regarding any non-GAAP measures included in todays financial review.
Today, I will share with you highlights from our recently completed fiscal year, ended April 30, 2024, as well as an update on our outlook and strategic
direction.
There will be time for questions at the end of the presentation, and we will take as many as possible. If you are logged in as a shareholder
and have questions, you may submit them online during the presentation. Finally, all materials will be posted to the investor information section of our website for future reference.
Kewaunee is the leading designer and manufacturer of laboratory-grade technical furniture and ventilated products, with over 1,000 Associates serving
customers across North and South America, Asia, the Middle East, and Africa.
Kewaunees journey first began in 1906 in Kewaunee, Wisconsin, as a
manufacturer of caskets and other wood-based products. In time, the Company transitioned its focus to the laboratory, developing a line of products that were used to furnish spaces focused on research and development, which was beginning to be
prioritized by both the public and private sectors.
Over time, Kewaunee shifted its manufacturing footprint to Statesville, North Carolina and
established operations in burgeoning international markets. The Companys unique set of capabilities, developed over the course of its history, has allowed it to endure multiple economic cycles with resiliency.
The innate human desire for progress and quest for innovation have resulted in tremendous discoveries over
the past two centuries, propelling society forward. This momentum has then driven the need for scientific spaces equipped with the highest quality, laboratory-grade furniture and equipment. More specifically, these spaces require the types of
technical furniture that Kewaunee designs and manufactures.
As our societys needs progress and laboratories continue to evolve, Kewaunee remains
dedicated to creating amazing spaces that will drive advancements in diverse fields and shape the future of scientific exploration worldwide.
The first
laboratory spaces began to take shape in the 15th and 16th centuries with simple rooms equipped with basic tools and materials. These labs were often small and cluttered with furniture and equipment. While the concept of wooden benches emerged
during this time, there was no focus on ergonomic design, and containment devices and other technical equipment had yet to be discovered.
Our modern
concept of laboratory space began to take shape in universities and research institutions during the 18th and 19th centuries, with larger and more specialized labs that featured specific areas for different types of experiments. Specialized
furniture, such as lab benches and fume hoods, became common features, supporting the development of new scientific instruments like microscopes and telescopes.
In the early 20th century, there were still relatively few laboratories in industry, and the United
States depended on Germany and England for the bulk of its scientific furniture and equipment. The countrys entry into World War I placed tremendous importance on scientific and technological development, leading to significant focus on
advancements in the laboratory space over the next several decades.
As we fast-forward to today, we see that laboratories are now spaces meant to inspire
and foster collaboration. These labs are designed to be efficient and cross-functional, with open floor plans and adaptable furniture that allow for easy reconfiguration to meet changing needs.
Technological advancements have also taken center stage, with automated robotic equipment and computer simulations becoming integral to research. As more
investments have been poured into these kinds of spaces, modern labs have evolved beyond basic functionality to become dynamic arenas where discoveries are made, ideas are exchanged, and innovation thrives making them truly amazing spaces!
At Kewaunee, we believe in empowering the scientific community with spaces that inspire, innovate, and integrate. Serving the forefront of life sciences,
education, healthcare, industrial, petrochemical, and government research, we deliver unparalleled laboratory environments tailored for every research and development endeavor.
Our customers operate within multiple end-use markets that require high-quality laboratory furniture and technical
products to furnish their environments. These markets tend to enjoy a durable, long-term growth trend with consistent funding from private and public parties, driving demand for Kewaunees products.
Investment in research and development continues to be a tailwind fueling the global economys pursuit
of progress. Global R&D expenditures have tripled from an estimated $726 billion in 2000 to an estimated $2.5 trillion in 2022. Increased investment in discovery has been a key driver of global progress, and R&D spending is expected to
rise as technological advancements fuel new research.
According to the 2023 Lab Furniture and Enclosures Report published periodically by SEFA, the
market for laboratory technical furniture remains robust and is expected to grow as global investment in these special spaces continues.
With this
understanding of where this industry once was and where it is expected to go, Kewaunee is well-positioned as the brand of choice and market leader when furnishing todays amazing laboratory spaces.
We maintain this position by having what I believe are the best Associates and channel partners in the business. Together, we serve end-use customers in highly attractive, well-funded industries that are set to continue investing in spaces that require Kewaunees products and services.
Fiscal year 2024 was a tremendous year for Kewaunee.
Though
down year over year, sales remained strong, reflecting consistent demand for Kewaunees products and services. Domestic sales during the fiscal year reflects a reduction in non-product revenue related to
the Companys decision to stop selling directly to end users. This revenue typically included freight, installation services, and buyouts. The year-over-year decrease in International sales was largely driven by a single large project delivered
during the prior fiscal year in Africa that was non-recurring. While sales did decrease year over year due to the reasons I just discussed, year-end retained earnings
and EBITDA generation exceeded the companys previous high watermark set in 2018, and the Companys order backlog maintained its exceptional health through year-end.
Strategic capital continued to be deployed within the business to upgrade obsolete equipment and improve existing capabilities, and the Companys balance
sheet improved greatly with a substantial increase in our cash position and the successful termination of the 2005 frozen pension plan.
These outstanding
results coincided with realizing the benefits of multiple strategic decisions made in recent years to create a more specialized focus for the Company. The market recognized these results as the year progressed, leading to a significant increase in
the Companys stock price and market capitalization, rewarding you, our shareholder.
Over the past few years, we have made and executed a series of decisions to invest in our core competency as
a designer and manufacturer of high-quality laboratory furniture and technical products.
We first transitioned multiple markets where we historically
contracted with customers on a direct basis to our dealer network. In doing so, we strengthened our relationships with our dealers, who are serving these territories at a high level, increasing our market share in these regions.
Second, we prioritized capital deployment within our manufacturing facilities, upgrading several aged pieces of equipment. These decisions resulted in the
incredible results detailed within our press release dated June 26, 2024, and discussed in our full-year results as well as our Form 10-K, which was filed with the SEC on June 28, 2024.
In discussing these results, its important to note the impact of two transactions that are non-recurring or one-time in nature that were recorded in the fourth quarter of fiscal year 2024.
The first was the annuitization of the
Companys pension obligation, which had been in a frozen state since 2005. For much of the time since 2005, plan liabilities exceeded plan assets, requiring periodic funding and the recording of an unrealized loss on the Companys Balance
Sheet. By annuitizing the pension obligation, the Company has eliminated all future responsibility for the plan and will realize a reduction in costs associated with maintaining and managing the pension plan.
The second non-recurring adjustment was related to the partial release of the Companys valuation allowance,
which resulted in a one-time book tax benefit that increased net earnings for the fourth quarter of the fiscal year.
We ended the fiscal year with a strong order backlog, and we continue to see solid bidding and quoting levels. Our backlog is further supported by the
stability of the markets we serve and our dealer and distribution partners continued investment in their businesses.
We are not without challenges
as inflation continues to roll through the economy, and we have recently seen signs of material costs beginning to escalate again. The contracts that our channel partners have with their customers tend to be fixed in nature, with very little ability
to pass along rapid changes in costs. We are also very closely tied to the new construction industry, which tends to be cyclical, with periods of expansion and contraction. We have enjoyed a period of strong global growth for lab spaces over the
past few years. Still, there is always a risk that funding for these spaces will slow.
With that being said, the strength of our backlog, combined with
our teams proactive concentration on the headwinds we face, positions the Company well for fiscal year 2025.
Our vision for Kewaunee remains to be the global supplier of choice with customers in the laboratory
furniture and infrastructure markets. In pursuing this vision, we continue to follow the principles that guide our actions:
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We will be easy to do business with; |
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We will get closer to our customers; |
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We will do everything with excellence; and |
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We will lead and not follow (we are innovators). |
As I close, I want to take a moment to thank the Companys global Associates for their commitment and hard work over the past year. I also want to thank
our many loyal customers, dealers, and our national stocking distributor for their support.
I would also like to thank our many shareholders for your
continued support. Kewaunees future is bright, and I am excited to continue building on our momentum in fiscal 2025.
Please note that Kewaunee will
be releasing earnings for the first quarter of the Companys fiscal year 2025 after the close of business on September 11, 2024.
We will now
open the floor for questions.
P.O. Box 1842 I Statesville, NC 28687 | Phone: (704) 873-7202 I Fax: (704) 873-1275 I www.kewaunee.com
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Kewaunee Scientific (NASDAQ:KEQU)
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