STATESVILLE, N.C., June 26, 2024 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ:KEQU) today announced results for its fourth quarter and its fiscal year ended April 30, 2024. Fiscal Year 2024 Fourth Quarter Results: Sales during the fourth quarter of fiscal year 2024 were $56,702,000, an increase of 5% compared to sales of $53,986,000 from the prior year's fourth quarter. Pre-tax earnings for the quarter were $1,347,000 compared to $2,322,000 for the prior year quarter. Net earnings for the quarter were $11,026,000 compared to net earnings of $1,005,000 for the prior year quarter. Diluted earnings per share was $3.71 compared to diluted earnings per share of $0.34 in the prior year quarter. EBITDA1 for the quarter was $2,265,000 compared to $3,307,000 for the prior year quarter. During the fourth quarter of the fiscal year, two non-recurring transactions were recorded that impacted reported earnings and EBITDA which management believes should be considered when analyzing our financial results. A detailed discussion of these transactions is included in the Corporate segment commentary below. Excluding the two non-recurring transactions, adjusted pre-tax earnings for the quarter were $5,366,000 compared to $2,322,000 for the prior year quarter, an increase of 131%. Adjusted net earnings for the quarter were $4,592,000 compared to net earnings of $1,005,000 for the prior year quarter. Adjusted diluted earnings per share was $1.55 compared to diluted earnings per share of $0.34 in the prior year quarter. Adjusted EBITDA for the quarter was $6,284,000 compared to $3,307,000 for the prior year quarter. See below for a reconciliation of these non-GAAP measures to the most comparable GAAP measures. The Company's order backlog was $155.6 million on April 30, 2024, increasing from $152.3 million on January 31, 2024, and $147.9 million on April 30, 2023. Domestic Segment - Domestic sales for the quarter were $35,859,000, an increase of 2.1% from sales of $35,123,000 in the prior year quarter. Domestic segment net earnings were $3,410,000 compared to $2,402,000 in the prior year quarter. Domestic segment EBITDA was $5,506,000 compared to $2,991,000 for the prior year quarter. Domestic segment profitability improved versus the prior year's quarter because of the strategic go-to-market decisions made in the previous year to stop selling direct, as well as improved manufacturing productivity and cost containment actions. Non-recurring adjustments did not affect Domestic segment performance. International Segment - International sales for the quarter were $20,843,000, an increase of 10.5% from sales of $18,863,000 in the prior year quarter. International segment net earnings were $1,138,000 compared to $1,106,000 in the prior year quarter. International segment EBITDA was $1,734,000 compared to $1,546,000 for the prior year quarter. Activity across the Company's international markets remains strong, with the Indian market continuing to be very active. Non-recurring adjustments did not affect International segment performance. Corporate Segment – Corporate segment net earnings were $6,478,000 for the quarter, as compared to a net loss of ($2,503,000) in the prior year quarter. Corporate segment EBITDA loss for the quarter was ($4,975,000) compared to corporate segment EBITDA loss of ($1,230,000) for the prior year quarter. As mentioned above, two transactions were recorded in our financial statements during the fourth quarter of the fiscal year which are non-recurring in nature. First, the Company successfully annuitized its 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 Company's Balance Sheet. This loss was then amortized through the Company's Statement of Operations in accordance with pension accounting guidance. By annuitizing the pension obligation, the Company has eliminated all future responsibility for the plan. Terminating the pension resulted in a one-time, non-cash expense and reduction to EBITDA in the quarter of $4,019,000, related to the accumulated accounting losses that were being amortized from the Balance Sheet. Concurrently, upon the settlement of the pension plan, the Company released $3,870,000 in accumulated deferred tax benefits, previously suspended in accumulated other comprehensive income. This amount does not constitute a future tax deduction; instead, it represents a one-time book tax benefit that increased net earnings for the quarter. Going forward, the Company has no future obligation for the pension, as the assets and liabilities were transferred to the annuity provider and will realize a reduction in costs associated with maintaining and managing the pension plan. The second non-recurring adjustment recorded related to the partial release of the Company's valuation allowance. During fiscal 2020, in accordance with GAAP guidance, the Company determined that its deferred tax assets were not likely to be realized. As a result, a valuation allowance was recorded as a reserve against those assets and income tax expense was recognized. At the end of fiscal 2024, the Company re-evaluated this position, determining that the majority of the deferred tax assets are now more likely than not to be realized. Accordingly, the majority of the valuation allowance has been reversed, resulting in a $6,583,000 tax benefit being recorded during the fourth quarter of the fiscal year. This amount does not constitute a future tax deduction; instead, it represents a one-time book tax benefit that increased net earnings for the quarter. Excluding these two non-recurring transactions, Corporate segment adjusted EBITDA loss for the quarter was ($956,000) compared to Corporate segment EBITDA loss of ($1,230,000) for the prior year quarter. This adjustment removes the one-time, non-cash expense of $4,019,000 for the deferred accounting losses related to the Company's pension plan which were being amortized from the Company's Balance Sheet. The tax impacts related to the two non-recurring transactions were already excluded as part of the unadjusted EBITDA calculation. Fiscal Year 2024 Full Year Results: Sales during fiscal year 2024 were $203,755,000 a decrease of 7.2% compared to sales of $219,494,000 from the prior year. Pre-tax earnings for the fiscal year were $13,119,000 compared to pre-tax earnings of $4,498,000 for the prior year. Net earnings for the fiscal year were $18,753,000, compared to net earnings of $738,000 for the prior year. Diluted earnings per share was $6.38, as compared to earnings per share of $0.25 in the prior fiscal year. EBITDA for the fiscal year was $16,646,000, compared to $7,517,000 for the prior year fiscal year. As discussed in the Company's fourth quarter results above, two non-recurring transactions were recorded in the fourth quarter that impacted reported earnings and EBITDA which management believes should be considered when analyzing our financial results. Excluding these two non-recurring transactions, adjusted pre-tax earnings for the fiscal year were $17,138,000 compared to $4,498,000 for the prior year, an increase of 281%. Adjusted net earnings for the fiscal year were $12,319,000 compared to net earnings of $738,000 for the prior year. Adjusted diluted earnings per share was $4.19 compared to diluted earnings per share of $0.25 in the prior fiscal year. Adjusted EBITDA for the fiscal year was $20,665,000 compared to $7,517,000 for the prior fiscal year. See below for a reconciliation of these non-GAAP measures to the most comparable GAAP measures. Domestic Segment - Domestic sales for the fiscal year were $137,238,000, a decrease of 6.5% from sales of $146,716,000 in the prior year. The decrease in Domestic sales was primarily due to the reduction in non-product revenue related to the Company's decision to stop selling directly to end users. This revenue typically includes freight, installation services, and buyouts. Domestic segment net earnings were $11,808,000 compared to $3,408,000 in the prior fiscal year. Domestic segment EBITDA was $19,146,000 compared to $5,802,000 for the prior year. Domestic segment profitability improved versus the prior year because of the strategic go-to-market decisions made in the previous year to stop selling direct, as well as improved manufacturing productivity and cost containment actions. Non-recurring adjustments did not affect Domestic segment results for fiscal year 2024. International Segment - International sales for the fiscal year were $66,517,000, a decrease of 8.6% from sales of $72,778,000 in the prior year. The decrease in sales was driven principally by a single large project delivered during the previous year in Africa that did not repeat. International segment net earnings were $3,055,000 compared to $4,511,000 in the prior fiscal year. International segment EBITDA was $5,715,000 compared to $6,650,000 for the prior year. The decrease in International segment profitability year over year was driven by lower sales as well as lower interest income on fixed deposits. Non-recurring adjustments did not affect International segment results for fiscal year 2024. Corporate Segment - Corporate segment net earnings was $3,890,000 for the fiscal year, as compared to net loss of ($7,181,000) in the prior fiscal year. This includes the impact of the reversal of the valuation allowance resulting in $10,453,000 in net earnings being recorded during the quarter. Corporate segment EBITDA loss for the fiscal year was ($8,215,000) as compared to Corporate segment EBITDA loss of ($4,935,000) for the prior year. Excluding the two non-recurring transactions discussed as part of the results of our fourth quarter Corporate segment results, Corporate segment adjusted EBITDA loss for the fiscal year was ($4,196,000) compared to Corporate segment EBITDA loss of ($4,935,000) for the prior year. Total cash on hand on April 30, 2024 was $25,938,000, as compared to $13,815,000 on April 30, 2023. The increase in cash was primarily from improved operating performance. Working capital was $56,037,000, as compared to $47,867,000 on April 30, 2023. The Company had short-term debt of $3,099,000 as of April 30, 2024, as compared to $3,587,000 on April 30, 2023. Long-term debt was $28,479,000 on April 30, 2024, as compared to $29,007,000 on April 30, 2023. The building lease from the Company's December 2021 sale-leaseback transaction accounts for $28,133,000 of the long-term debt on April 30, 2024 and $28,774,000 of the long-term debt on April 30, 2023. Long-term debt, net of the sale-leaseback transaction, was $346,000 on April 30, 2024 as compared to $233,000 on April 30, 2023. The Company's debt-to-equity ratio on April 30, 2024 was 0.70-to-1, as compared to 1.08-to-1 on April 30, 2023. The Company's debt-to-equity ratio, net of the sale-leaseback transaction, on April 30, 2024 was 0.20-to-1, as compared to 0.34-to-1 on April 30, 2023. "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." "We remain focused on Kewaunee's mission, which the Company has proudly pursued since its founding in 1906, which is to encourage new discovery worldwide." _______________ 1 EBITDA, Adjusted EBITDA adjusted net earnings, and adjusted net earnings per share are non-GAAP financial measures. See the tables below for a reconciliation of these non-GAAP measures to the most comparable GAAP measures.   EBITDA and Segment EBITDA Reconciliation Quarter Ended April 30, 2023 Domestic International Corporate Consolidated Net Earnings (Loss) $                  2,402 $                  1,106 $                (2,503) $                  1,005 Add/(Less): Interest Expense — 97 447 544 Interest Income — (194) (1) (195) Income Taxes — 449 779 1,228 Depreciation and Amortization 589 88 48 725 EBITDA $                  2,991 $                  1,546 $                (1,230) $                  3,307 Quarter Ended April 30, 2024 Domestic International Corporate Consolidated Net Earnings (Loss) $                  3,410 $                  1,138 $                  6,478 $                11,026 Add/(Less): Interest Expense 550 23 13 586 Interest Income — (211) (124) (335) Income Taxes 875 678 (11,385) (9,832) Depreciation and Amortization 671 106