Kewaunee Scientific Corporation (KEQU) has reported a 58.92 percent plunge in profit for the quarter ended Jan. 31, 2017. The company has earned $0.34 million, or $0.13 a share in the quarter, compared with $0.83 million, or $0.31 a share for the same period last year. Revenue during the quarter dropped 6.29 percent to $30.37 million from $32.41 million in the previous year period. Gross margin for the quarter contracted 36 basis points over the previous year period to 16.57 percent. Total expenses were 98.54 percent of quarterly revenues, up from 96.77 percent for the same period last year. That has resulted in a contraction of 178 basis points in operating margin to 1.46 percent.
Operating income for the quarter was $0.44 million, compared with $1.05 million in the previous year period.
"I am extremely pleased with our order backlog, which is a record for Kewaunee, and a strong foundation for future quarters," said David M. Rausch, Kewaunee's president and chief executive officer. "We were awarded another large $8.4M order in the third quarter with City University of New York, NYCCT New Academic Building. This award as well as the $18.5M contract awarded in the second quarter for the Kuwait University Sabah Al-Salem University City at the College of Science continues to affirm Kewaunee's leadership in the global laboratory furniture and fume hood marketplace."
Working capital increases
Kewaunee Scientific Corporation has recorded an increase in the working capital over the last year. It stood at $31.83 million as at Jan. 31, 2017, up 7.75 percent or $2.29 million from $29.54 million on Jan. 31, 2016. Current ratio was at 2.56 as on Jan. 31, 2017, up from 2.29 on Jan. 31, 2016. Cash conversion cycle (CCC) has decreased to 75 days for the quarter from 96 days for the last year period. Days sales outstanding were almost stable at 82 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 29 days for the quarter compared with 51 days for the previous year period. At the same time, days payable outstanding went down to 36 days for the quarter from 37 for the same period last year.
Debt comes down significantly
Kewaunee Scientific Corporation has recorded a decline in total debt over the last one year. It stood at $5.10 million as on Jan. 31, 2017, down 45.83 percent or $4.31 million from $9.41 million on Jan. 31, 2016. Total debt was 6.93 percent of total assets as on Jan. 31, 2017, compared with 12.92 percent on Jan. 31, 2016. Debt to equity ratio was at 0.13 as on Jan. 31, 2017, down from 0.26 as on Jan. 31, 2016. Interest coverage ratio deteriorated to 6.23 for the quarter from 12.61 for the same period last year.
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