Kewaunee Scientific Corporation Reports Decline in Q1 Fiscal 2027 Financial Performance

Kewaunee Scientific Corporation reported a decline in financial performance for the first quarter of fiscal year 2027, with net sales of $66.3 million, down from $71.1 million in the same period last year. The decrease in revenue was primarily attributed to lower demand in the domestic laboratory construction market, particularly within the life sciences sector. The company's gross profit for the quarter was $19.6 million, resulting in a gross profit margin of 29.6%, slightly up from 29.4% in the prior year. Operating expenses increased to $16.5 million, representing 24.9% of sales, compared to 22.7% in the previous year.

Net earnings for the quarter were $1.7 million, or $0.58 per diluted share, a significant decrease from $3.1 million, or $1.04 per diluted share, reported in the same quarter of the previous year. The effective income tax rate rose to 28.0% from 19.4%, influenced by the mix of domestic and foreign earnings and a discrete benefit from the vesting of restricted stock units. The company’s order backlog stood at $169 million, a decrease from $205 million a year earlier, indicating a potential slowdown in future revenue generation.

In terms of operational developments, Kewaunee's Lab Products Group (LPG) segment generated $50.9 million in sales, down 6.4% from the previous year, while international sales fell by 7.8% to $15.5 million. The company noted that international sales were impacted by softer market conditions in India, although there was increased activity in the broader Asia-Pacific region. The company continues to focus on enhancing its competitive position through operational improvements and customer engagement, despite the challenging market conditions.

Kewaunee's liquidity position remains stable, with working capital of $56.7 million and a current ratio of 2.2-to-1.0 as of July 31, 2026. The company generated $2.0 million in cash from operating activities during the quarter, although it reported a net cash outflow of $2.5 million from financing activities, primarily due to servicing long-term debt and share repurchases. The company repurchased 14,290 shares for approximately $528,000 during the quarter, reflecting its ongoing share repurchase program.

Looking ahead, Kewaunee anticipates continued challenges due to geopolitical and economic uncertainties affecting project timelines. However, the company remains optimistic about customer engagement and quoting activity, which it believes will convert into project awards. Management is committed to executing its long-term strategy while remaining attentive to near-term market conditions, positioning the company for potential growth as market dynamics evolve.