Kewaunee Scientific — First Quarter Fiscal Year 2027 Earnings Summary

Financial Performance

• Total sales for the quarter ended July 31, 2026, were $66,320,000, a 6.7% decrease compared to $71,104,000 in the prior year quarter.
• Pre-tax earnings were $2,560,000, down 34.7% from $3,920,000 in the prior year quarter.
• Net earnings attributable to Kewaunee Scientific Corporation were $1,706,000, down from $3,093,000 in the prior year quarter.
• Diluted earnings per share were $0.58, compared to $1.04 in the prior year quarter.
• Consolidated EBITDA was $4,525,000, down from $6,320,000 in the prior year quarter.
• Gross profit was $19,639,000 for the quarter, compared to $20,930,000 in the prior year quarter.
• Working capital was $56,716,000 as of July 31, 2026, down from $66,662,000 at the end of the first quarter last year.
• Total cash on hand was $10,261,000 as of July 31, 2026, compared to $11,617,000 on April 30, 2026.
• Short-term debt was $6,478,000 as of July 31, 2026, up from $5,904,000 on April 30, 2026.
• Long-term debt was $39,377,000 as of July 31, 2026, down from $40,851,000 on April 30, 2026.
• Long-term debt excluding the sale-leaseback financing obligation declined to $13.8 million from $15.1 million on April 30, 2026.
• The debt-to-equity ratio was 0.59-to-1 on July 31, 2026, compared to 0.61-to-1 on April 30, 2026.
• The debt-to-equity ratio net of the sale-leaseback transaction was 0.25-to-1 on July 31, 2026, compared to 0.26-to-1 on April 30, 2026.
• The effective tax rate was higher due to a greater mix of earnings from international operations relative to domestic operations.

Business Segments and Product Lines

• Lab Products Group (LPG) sales were $50,868,000, a 6.4% decrease from $54,352,000 in the prior year quarter.
• LPG segment net earnings were $3,889,000, down from $4,722,000 in the prior year quarter.
• LPG segment EBITDA was $6,585,000, down from $7,576,000 in the prior year quarter.
• LPG maintained profitability despite lower manufacturing volumes, supported by a stronger education market, disciplined cost management, and operating efficiencies.
• International segment sales were $15,452,000, a 7.8% decrease from $16,752,000 in the prior year quarter.
• International segment net earnings increased 23.5% to $794,000 from $643,000 in the prior year quarter.
• International segment EBITDA increased 13.9% to $1,202,000 from $1,055,000 in the prior year quarter.
• International profitability improvements were driven by a favorable mix of higher-margin projects.
• Corporate segment pre-tax net loss was $3,577,000, compared to a loss of $3,058,000 in the prior year quarter.
• Corporate segment EBITDA was ($3,262,000), compared to ($2,311,000) in the prior year quarter.
• The increase in corporate losses was primarily due to additional compensation expense from settling specific long-term incentive awards in cash rather than shares to reduce dilution.

Risks and Challenges

• Project award and release timelines remain extended amid broader geopolitical and economic uncertainty.
• The company faces challenging life sciences market conditions affecting manufacturing volumes in the LPG segment.
• Lower manufacturing volumes within the LPG segment negatively impacted sales, though mitigated by cost management.
• Forward-looking statements are subject to risks including competitive and general economic conditions, government mandates, supplier constraints, changes in customer demands, technological changes, and fluctuations in raw materials and commodity costs.
• Risks also include foreign currency fluctuations, changes in the legal and regulatory environment, and potential acts of terrorism, war, or natural disasters.

Management Commentary and Tone

• President and CEO Thomas D. Hull III expressed pleasure with the company's performance and continued execution of strategy.
• Management noted that quoting activity remains strong across markets, reinforcing confidence in underlying demand.
• Hull stated the company continues to perform well, strengthening its competitive position and outperforming the broader market.
• Management emphasized discipline in areas under their control, including serving customers, improving operations, and strengthening commercial capabilities.
• The company described itself as operating from a position of strength with a stronger, more diversified, and more resilient foundation for future growth.
• Management expressed confidence in the competitive position and excitement about the next phase of growth.

Other Key Points

• Order backlog increased to $169.0 million on July 31, 2026, from $165.9 million on April 30, 2026, and was $205.0 million on July 31, 2025.
• The Domestic reportable segment was renamed Lab Products Group ("LPG") during fiscal year 2026 to align with expanded business activities.
• The incremental compensation expense related to cash settlement of long-term incentive awards is not expected to recur.
• The company acquired Nu Aire, Inc. in November 2024, with integration fees related to this acquisition previously impacting Adjusted EBITDA calculations.
• The company maintains manufacturing facilities in Statesville, Minnesota, and Bangalore, India, with warehouse partnerships in the Netherlands and OEM partnerships in China.