Business Context and Reporting Period
Company: Kewaunee Scientific Corporation
Filing Type: Form 10-K (Annual Report)
Period Ended: April 30, 1996
Industry: Manufacturer of scientific laboratory and technical workstations, equipment, and furniture (e.g., fume hoods, benches, glove boxes).
Operations: The company operates three plants in Statesville, North Carolina, and one in Lockhart, Texas. It employs 499 people. Sales are 100% derived from scientific laboratory products, sold primarily to industrial/commercial research labs, educational institutions, healthcare, and government entities.
Key Financial Metrics
Note: Specific revenue, profit, cash flow, and margin figures are incorporated by reference from the Annual Report to Stockholders and are not explicitly detailed in the provided text.
- Sales Backlog: $23.2 million as of April 30, 1996.
- Research & Development: $591,972 for the fiscal year ended April 30, 1996.
- Allowance for Doubtful Accounts: Ending balance of $561,000 (in thousands) as of April 30, 1996.
- Stockholders: Approximately 1,400 stockholders as of July 12, 1996.
- Outstanding Shares: 2,366,717 shares of Common Stock as of July 12, 1996.
- Market Value: Approximately $6,134,113 for non-affiliate voting stock as of July 12, 1996.
Material Changes vs. Prior Period
- Backlog Trend: Sales backlog decreased to $23.2 million in 1996, down from $24.1 million in 1995 and $25.3 million in 1994.
- R&D Spending: Increased to $591,972 in 1996, compared to $527,647 in 1995 and $490,481 in 1994.
- Customer Concentration: Sales to VWR Corporation (a distributor) represented 14% of total sales in 1996, down from 17% in 1995 and 13% in 1994.
- Allowance for Doubtful Accounts: The balance decreased from $624,000 in 1995 to $561,000 in 1996, with $186,000 charged to expenses and $249,000 in deductions (write-offs net of recoveries).
Outlook, Risks, and Management Commentary
- Outlook: Management expects the beginning backlog plus current orders to be sufficient for satisfactory operations in the coming year. They anticipate shipping more than 90% of the backlog scheduled for the current fiscal year.
- Operational Risks:
- Delivery Delays: Orders often require delivery at extended future dates for buildings not yet constructed. Delays in construction can cause shipment delays.
- Cost Volatility: Prices are quoted on a firm basis; the company bears the risk of labor and material cost increases between order receipt and delivery.
- Working Capital: The business requires significant working capital due to extended payment terms and retention amounts on building projects.
- Competition: The industry is highly competitive, with price, product performance, and customer service as principal factors. A substantial portion of business is based on competitive public bidding.
- Environmental: No material effect on earnings or competitive position from environmental compliance in the last three years; no material capital expenditures anticipated.
Investor Verification Checklist
- Verify the specific revenue, net income, and cash flow figures in the "Summary of Selected Financial Data" (incorporated by reference from the Annual Report, pp. 18-19).
- Confirm the details of the revolving credit facility secured by the company's land and buildings.
- Review the "Management's Discussion and Analysis" (incorporated by reference, pp. 6-7) for detailed explanations of the backlog decline and operational results.
- Assess the impact of the 14% sales concentration with VWR Corporation on future revenue stability.
- Check the "Quarterly Financial Data" (incorporated by reference, p. 20) for seasonal trends or recent performance shifts.