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KEWAUNEE SCIENTIFIC CORP /DE/ (KEQU)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $67.167M, up 43.6% YoY; GAAP diluted EPS was $0.45 vs $0.85 YoY due to Nu Aire acquisition-related costs and purchase accounting; adjusted diluted EPS was $1.09, with adjusted pre-tax earnings $3.789M and adjusted EBITDA $5.728M .
  • Order backlog reached $221.6M (vs $152.3M YoY and $155.6M Apr 30, 2024), reinforcing multi-sector demand; management highlighted a robust $222M backlog and strong domestic positioning .
  • Domestic segment sales rose 63.6% YoY to $51.976M, aided by Nu Aire integration; International grew 1.2% YoY to $15.191M but remained pressured by India customer site delays .
  • Capital allocation: Board amended the share repurchase program, authorizing up to an additional 100,000 shares; repurchases resumed on Feb 28, 2025, providing a potential stock support catalyst .
  • No formal quantitative guidance was issued; management aims for a strong FY2025 finish and emphasized supply chain resiliency and diversified sourcing to mitigate tariffs and disruptions .

What Went Well and What Went Wrong

What Went Well

  • Record backlog underscores demand durability across life sciences, industrial, healthcare, pharmacy, education, petrochemical, and government research; “Kewaunee's backlog stands at a robust $222 million” and supports a strong FY finish .
  • Domestic segment performance: sales rose to $51.976M (+63.6% YoY), segment EBITDA increased to $5.249M, with benefits from higher manufacturing volumes and Nu Aire integration .
  • Transparent non-GAAP reporting and acquisition integration details (adjusted pre-tax earnings $3.789M; adjusted EBITDA $5.728M; adjusted diluted EPS $1.09), aiding investor assessment of underlying performance .

What Went Wrong

  • GAAP profitability compressed on acquisition, integration, and purchase accounting fees: pre-tax earnings down 63.7% YoY to $1.275M; consolidated EBITDA fell to $3.734M from $4.414M YoY .
  • International segment softness: net earnings declined to $0.476M (vs $0.923M YoY) and segment EBITDA fell to $0.760M (vs $1.676M YoY), with India construction site delays impacting billings .
  • Leverage increased post-acquisition: long-term debt rose to $65.819M (from $28.479M Apr 30, 2024), debt-to-equity increased to 1.29x (0.84x net of sale-leaseback), tightening financial flexibility near term .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025Consensus (Q3 2025)
Revenue ($M)$46.778 $47.764 $67.167 N/A (unavailable via S&P Global)
Gross Profit ($M)$12.029 $13.952 $18.379 N/A
Operating Profit ($M)$3.806 $4.434 $2.250 N/A
EBITDA ($M)$4.414 $4.883 $3.734 N/A
Pre-tax Earnings ($M)$3.515 $3.931 $1.275 N/A
Diluted EPS (GAAP)$0.85 $1.01 $0.45 N/A
Adjusted Diluted EPS$0.85 $1.41 $1.09 N/A

Note: S&P Global Wall Street consensus estimates for KEQU Q3 FY2025 were unavailable at time of analysis.

Margins (Calculated from reported data)

MarginQ3 2024Q2 2025Q3 2025
Gross Margin %25.7% (=12.029/46.778) 29.2% (=13.952/47.764) 27.4% (=18.379/67.167)
EBIT Margin %8.1% (=3.806/46.778) 9.3% (=4.434/47.764) 3.3% (=2.250/67.167)
EBITDA Margin %9.4% (=4.414/46.778) 10.2% (=4.883/47.764) 5.6% (=3.734/67.167)

Segment Performance

Segment MetricQ1 2025Q2 2025Q3 2025
Domestic Sales ($M)$35.523 $36.409 $51.976
International Sales ($M)$12.870 $11.355 $15.191
Domestic Net Earnings ($M)$2.871 $4.524 $2.876
International Net Earnings ($M)$0.463 $0.356 $0.476
Domestic EBITDA ($M)$4.738 $6.838 $5.249
International EBITDA ($M)$0.696 $0.592 $0.760

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Order Backlog ($M)$159.4 $184.4 $221.6
Cash on Hand ($M)$25.186 $29.664 $12.335
Working Capital ($M)$56.012 $59.965 $58.441
Short-term Debt ($M)$3.627 $0.805 $1.131
Long-term Debt ($M)$28.293 $28.047 $65.819
LT Debt ex Sale-leaseback ($M)$0.335 $0.265 $38.215
Debt-to-Equity (x)0.68 0.59 1.29 (0.84 ex leaseback)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025None providedNone providedMaintained (no formal guidance)
Margins/OpEx/TaxFY2025None providedNone providedMaintained (no formal guidance)
Capital Allocation – Share Repurchase AuthorizationOngoing11,176 shares remaining authorized as of Mar 12, 2025 Up to additional 100,000 shares authorized; repurchases resumed Feb 28, 2025 Raised

Earnings Call Themes & Trends

Note: No earnings call transcript located for Q3 FY2025; trends tracked from press releases.

TopicPrevious Mentions (Q2 & Q1)Current Period (Q3)Trend
Backlog and demandBacklog $184.4M (Q2); $159.4M (Q1); domestic demand strong; international delays Backlog $221.6M; robust multi-sector demand Improving backlog; stable demand
International (India) site delaysNoted delays impacting deliveries (Q1, Q2) Continued delays impacting billings Persisting headwind
Nu Aire acquisitionAnnounced; fees incurred (Q2) First quarter with Nu Aire integrated (Domestic segment); acquisition/integration costs detailed Integration underway; near-term costs
Supply chain resiliency/tariffsNot emphasized in Q1/Q2 PRsEmphasis on diversified sourcing; mitigation of supply disruptions and tariffs Strengthened positioning
SOX 404(b) readiness costsElevated corporate costs in Q1/Q2 Continued costs noted in Corporate segment Ongoing cost pressure
Capital returnsProgram existed; paused during acquisition (Q2 narrative) Authorization increased; repurchases resumed Feb 28, 2025 Positive for capital allocation narrative

Management Commentary

  • “Kewaunee delivered another strong quarter, demonstrating once again our positive momentum… Our strategy to emphasize investments in our manufacturing assets, while strengthening our dealer and distribution relationships is working.” — Thomas D. Hull III, President & CEO .
  • “In India, where our backlog is at a record high, revenue has been slowed due to construction site delays… This will result in favorable revenue and earnings for us.” — Thomas D. Hull III .
  • “Over the past five years, we have taken deliberate steps to strengthen our supply chain… mitigating against supply chain disruptions, tariffs, and other external challenges.” — Thomas D. Hull III .
  • “To provide greater transparency… reconciliation from EBITDA to adjusted EBITDA… post-integration of the Nu Aire acquisition.” .

Q&A Highlights

  • No Q3 FY2025 earnings call transcript or Q&A was available in the document set; the company released results via press release and 8-K .

Estimates Context

  • S&P Global consensus estimates for KEQU Q3 FY2025 (revenue, EPS, EBITDA) were unavailable at the time of retrieval, limiting beat/miss analysis vs Street expectations. Coverage may be limited given company size; comparison will be updated if estimates become available [GetEstimates attempt failed; no values].

Key Takeaways for Investors

  • Revenue expanded 43.6% YoY to $67.167M, but GAAP profitability compressed due to acquisition/integration and purchase accounting; adjusted EPS of $1.09 highlights underlying earnings power post Nu Aire integration .
  • Domestic segment is the growth engine (sales +63.6% YoY to $51.976M), supported by Nu Aire and higher manufacturing volumes; International remains constrained by India site delays .
  • Backlog reached a record $221.6M, providing visibility into FY2025/early FY2026 execution across diversified end markets; management tone was confident on pipeline conversion .
  • Leverage increased following Nu Aire; long-term debt $65.819M and debt-to-equity 1.29x (0.84x ex sale-leaseback) warrant monitoring; cash on hand declined to $12.335M as integration proceeds .
  • Share repurchases resumed with an additional 100,000 shares authorized, offering potential near-term support to the equity if liquidity permits and valuation is attractive .
  • Margins: gross margin improved sequentially vs Q2 2025 remains above prior year, but EBIT and EBITDA margins compressed in Q3 due to acquisition-related costs; adjusted figures show stronger underlying profitability trajectory .
  • Absent formal guidance, watch for timing of India project billings, Nu Aire integration milestones, corporate cost normalization (SOX 404(b)), and capital allocation cadence as near-term stock drivers .