Kewaunee Scientific (KEQU) Q2 2025 earnings summary

Executive summary

• Completed acquisition of Nu Aire, Inc. for $55 million, expanding product offerings and market reach; related expenses impacted Q2 results.

• Quarterly net sales decreased 5.3% year-over-year to $47.8 million, with domestic sales up 6.5% and international sales down 30.1%.

• Gross profit margin improved to 29.2% from 26.7% year-over-year, driven by manufacturing productivity and cost containment.

• Net earnings for the quarter were $3.0 million ($1.01 per diluted share), up from $2.7 million ($0.93 per diluted share) year-over-year.

• Order backlog reached a record $184.4 million, up from $146.3 million a year ago.

Financial highlights

• Six-month net sales were $96.2 million, down 4.1% year-over-year; domestic sales rose 3.3%, international sales fell 21.0%.

• Six-month net earnings were $5.2 million ($1.75 per diluted share), nearly flat year-over-year.

• EBITDA for Q2 FY2025 was $4.9 million, down from $5.7 million year-over-year; adjusted EBITDA was $6.4 million, excluding $1.5 million in acquisition-related fees.

• Operating expenses increased to $9.5 million for the quarter, mainly due to one-time acquisition and compliance costs.

• Working capital improved to $60.0 million, with a current ratio of 2.6 at quarter-end.

Outlook and guidance

• Healthy backlog, improved manufacturing, and Nu Aire acquisition position the company for growth.

• Demand visibility remains limited due to the company's role as a subcontractor and project timing.

• Focus remains on supporting domestic dealers and expanding turnkey international solutions.

• Nu Aire acquisition expected to expand capabilities and market reach, with financial impact beginning Q3 FY2025.