Kewaunee Scientific Shows Impressive Growth in Q3 Fiscal Year 2025 Results

Kewaunee Scientific Reports Third Quarter Results for Fiscal Year 2025

STATESVILLE, N.C., March 12, 2025 – Kewaunee Scientific Corporation (NASDAQ: KEQU) has released its financial results for the third quarter, concluding January 31, 2025. The company experienced a remarkable surge in sales, with total revenues reaching $67.2 million, up from $46.8 million, marking a remarkable year-over-year increase of 43.6%.

Despite the impressive revenue growth, the company reported pre-tax earnings of $1.3 million, which reflects a 63.7% decline from $3.5 million in the same quarter last year. Net earnings fell to $1.4 million, down from $2.5 million. EBITDA also decreased from $4.4 million to $3.7 million over the same time period. The diluted earnings per share dropped significantly from $0.85 to $0.45, demonstrating the challenges despite the increased sales.

One of the crucial factors affecting the company's financial performance this quarter was the integration and acquisition costs associated with Nu Aire, Inc., which Kewaunee successfully acquired on November 1, 2024. The costs related to this transaction included professional fees and production accounting adjustments reflective of the new asset landscape within the company. The total impact of these costs on pre-tax earnings was $2.5 million and $2.0 million on EBITDA. When adjusting for these costs, Kewaunee saw its adjusted pre-tax earnings rise to $3.8 million, a modest increase of 7.8% compared to last year's numbers, and adjusted EBITDA jumping to $5.7 million from $4.4 million.

The current backlog of orders stood at a strong $221.6 million on January 31, 2025, a promising increase from $152.3 million at the same time last year, indicating solid future revenues. This robust backlog underscores the company’s high level of business and market stability despite challenges in the international segment, which faced delays due to customer site issues.

In examining performance across segments, domestic sales showed remarkable growth, reaching approximately $52 million—a 63.6% jump from $31.8 million in the prior year. Domestic segment EBITDA also reflected increased efficiency, estimated at $5.2 million, substantially above last year’s figures. Conversely, the international segment barely edged up with sales rising slightly by 1.2%, leading to decreased net earnings, attributed mainly to construction delays in India.

The corporate segment, however, reported an unfortunate pre-tax net loss of about $3 million, worsening from a loss of $1.1 million last year. This downturn is mainly due to increased professional fees associated with the recent acquisition and compliance readiness costs.

Cash on hand has decreased to $12.3 million from $26 million last April, underscoring the financial adjustments Kewaunee is making in light of its expansion and integration projects. As of the end of January, working capital was reported at $58.4 million, up from $54 million previously. The current financial leverage shows short-term debt has decreased while long-term debt has escalated due to acquisition needs.

Kewaunee’s President and CEO, Thomas D. Hull III, expressed confidence in the company’s trajectory. He noted that the ongoing investment in manufacturing assets and strengthening partnerships with distribution channels is yielding fruit in the domestic market.

Looking forward, Kewaunee aims to finish the fiscal year strong with key focus areas on operational excellence and enhancing customer engagement. The company is dedicated to maintaining its leadership position within various critical industries that support long-term economic and scientific growth. As they pursue growth in the fiscal year, strong fundamentals and a burgeoning backlog undeniably position Kewaunee Scientific to seize future opportunities effectively and generate significant shareholder value.

Kewaunee Scientific remains committed to transparency in its financial reporting. Detailed reconciliation of adjusted EBITDA showcases their aim for clarity and adaptability in navigating the financial landscape post-integration of Nu Aire.

With a record-high backlog, effective long-term initiatives, and strategic goals aligned with customer needs, Kewaunee Scientific's outlook remains robust as it heads toward the final phases of fiscal year 2025.