Kewaunee Scientific Corporation · NASDAQ:KEQU
Kewaunee Scientific — Q1 FY2020 Earnings Presentation
23 slides from Kewaunee Scientific's earnings presentation, Aug 28, 2019
Slide 1: Kewaunee Scientific Corporation
Exhibit 99.1 Kewaunee Scientific Corporation NASDAQ: KEQU encouraging new discovery…Worldwide 1 1Exhibit 99.1 Kewaunee Scientific Corporation NASDAQ: KEQU encouraging new discovery…Worldwide 1 1
Slide 2: Special Note Regarding Forward-Looking Statements
Special Note Regarding Forward-Looking Statements Certain statements in this document constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). All statements other than statements of historical fact included in this docume
Slide 3: Agenda
Agenda • Fiscal Year 2019 Review • Fiscal Year 2020 Q1 Results • Outlook • Q&A Kewaunee Scientific Corporation | NASDAQ: KEQU 3 3Agenda • Fiscal Year 2019 Review • Fiscal Year 2020 Q1 Results • Outlook • Q&A Kewaunee Scientific Corporation | NASDAQ: KEQU 3 3
Slide 4: Fiscal Year 2019 Review
Fiscal Year 2019 Review Kewaunee Scientific Corporation | NASDAQ: KEQU 4 4Fiscal Year 2019 Review Kewaunee Scientific Corporation | NASDAQ: KEQU 4 4
Slide 5: Financial Review
Fiscal Year 2019 Financial Review Sales ($m) Gross Profit ($m) $158 $160 $32 $147 $150 $30 $27 $25 $24 $139 $140 $129 $20 $130 $120 $10 $110 $100 $- 2016 2017 2018 2019 2016 2017 2018 2019 Pretax Earnings ($m) Diluted EPS $10 $1.90 $10 $2.00 $1.66 $1.42 $7 $1.50 $6 $5 $1.00 $0.55 $2 $0.50 $- $- 2016
Slide 6: Financial Review: Domestic Operating Segment
Fiscal Year 2019 Financial Review Designs, manufactures, and installs laboratory, healthcare, and technical furniture products Sold through dealers, and distribution channels as well as directly to the end-user Products manufactured in Statesville, North Carolina Kewaunee Domestic Operating Segment
Slide 7: Financial Review: Domestic Segment Sales
Fiscal Year 2019 Financial Review Domestic Operating Segment Sales ($Millions) $120 ü Up year-over-year as $117 activity in the $115 $115 $113 marketplace remained favorable. $110 ü Order mix across dealer, direct and distribution $105 $103 channels remained $100 consistent over the 2016 2017 2018 2
Slide 8: Domestic Segment Quarterly Sales
Fiscal Year 2019 Financial Review Domestic Operating Segment Quarterly Sales ($Millions) $40 ü Timing of orders did not $36 support effective loading $35 of facilities over the $31 balance of the fiscal year $30 resulting in unfavorable $25 $25 $25 labor and overhead cost and productivity. $20 Q1-FY
Slide 9: Domestic Segment Raw Material Impacts
Fiscal Year 2019 Financial Review Domestic Operating Segment ü Primary raw materials impacts: • Cold rolled steel and Stainless steel, ~ 12% cost increase • Epoxy resin raw material, ~40% cost increase Kewaunee Scientific Corporation | NASDAQ: KEQU 9 9Fiscal Year 2019 Financial Review Domestic Opera
Slide 10: Financial Review: International Operating Segment
Fiscal Year 2019 Financial Review Turn-key provider of total laboratory solution – design, manufacture, installation, maintenance Sold principally direct to end-users Products for international markets manufactured in Bangalore India and sourced from Statesville NC facility Kewaunee International Op
Slide 11: International Segment Annual Sales
Fiscal Year 2019 Financial Review International Operating Segment Annual Sales ($Millions) $45 $43 ü Sales down due to lack $40 of large Middle East order ($18M delivered $35 in FY 2018) $30 $30 ü Sales impacted by year- $26 $25 $25 over-year FX impact of INR vs. USD (~12%). $20 FY2016 FY2017 FY2018
Slide 12: Financial Review: Corporate Costs
Fiscal Year 2019 Financial Review Corporate Costs ü $75M market cap threshold, required preparation for possible loss of “smaller reporting company” scaled compliance requirements ü Tax Reform Implementation ü Accounting changes (revenue recognition, inventory valuation, lease accounting, etc.) ü On
Slide 13: Fiscal Year 2020 Q1 Performance
Fiscal Year 2020 Q1 Performance Kewaunee Scientific Corporation | NASDAQ: KEQU 13 13Fiscal Year 2020 Q1 Performance Kewaunee Scientific Corporation | NASDAQ: KEQU 13 13
Slide 14: 2020 First Quarter
Fiscal Year 2020 First Quarter Sales ($m) Gross Profit ($m) $50 $45 $42.2 $10 $7.6 $39.3 $6.9 $40 $35 $5 $30 $25 $- FY 2019 Q1 FY 2020 Q1 FY 2019 Q1 FY 2020 Q1 Pretax Earnings ($m) Diluted EPS $3 $1.00 $1.9 $2 $0.53 $0.50 $1 $0.7 $0.17 $- $- FY 2019 Q1 FY 2020 Q1 FY 2019 Q1 FY 2020 Q1 Kewaunee Scien
Slide 15: Outlook
Outlook Kewaunee Scientific Corporation | NASDAQ: KEQU 15 15Outlook Kewaunee Scientific Corporation | NASDAQ: KEQU 15 15
Slide 16: Our Vision
Our Vision “To be the global supplier of choice with customers in the lab furniture and infrastructure markets.” Kewaunee Scientific Corporation | NASDAQ: KEQU 16 16 16Our Vision “To be the global supplier of choice with customers in the lab furniture and infrastructure markets.” Kewaunee Scientific
Slide 17: Our Core Values
Our Core Values Associates, our Foundation – Each and every Kewaunee Associate matters and we invest in them by encouraging development and growth through feedback, mentorship, reward, accountability, and continuing education. Safety and Quality in Everything - If we choose to do something, we are g
Slide 18: Kewaunee Management Team
Kewaunee Management Team Michael G. Rok Donald T. Gardner, III Lisa L. Ryan Kurt P. Rindoks B. Sathyamurthy Ryan S. Noble Elizabeth D. Phillips Kewaunee Scientific Corporation | NASDAQ: KEQU 18 18 18Kewaunee Management Team Michael G. Rok Donald T. Gardner, III Lisa L. Ryan Kurt P. Rindoks B. Sathya
Slide 19: Active in Multiple Sectors
HEALTH • Market includes life sciences, pharmaceutical, bio- technology and healthcare customers • Macro population and aging trends support continued investment in health related initiatives requiring laboratories Active in INDUSTRIAL • Market includes chemicals, petroleum, manufacturing and aerosp
Slide 20: Continued Global Growth Opportunity
Continued Global Growth 2020 Lab Furniture and Opportunity: Enclosure Global Market • According to the SEFA 5% Laboratory and Furniture Market Report, the overall market for laboratory furniture and enclosures is forecasted to 27% $1.6B Market 41% grow at a 5 year compound Opportunity annual growth
Slide 21: Outlook: Order Backlog
Outlook Order Backlog (millions) $130 $116 $114 $110 $102 $101 $101 $90 $70 $50 2016 2017 2018 2019 Q1-2020 Focused on increasing backlog through continued focus on winning with our channel partners. Kewaunee is positioned well to benefit from the projected growth in research and development spendin
Slide 22: Outlook: Near and Longer Term Priorities
Outlook 2018 Lab Furniture and Enclosure Global Market* • Near Term Priorities: ü Operate consistently at higher levels ü Do what we do well ü Strengthen our balance sheet • Longer Term Priorities: ü Expand product portfolio ü Penetrate underserved markets ü Evaluate outside opportunities Kewaunee S
Slide 23: Thank You
Thank You Kewaunee Scientific Corporation | NASDAQ: KEQU 23 23Thank You Kewaunee Scientific Corporation | NASDAQ: KEQU 23 23
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