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Kewaunee's Net Sales Increase Y/Y, Earnings Decline in Q2
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Shares of Kewaunee Scientific Corporation (KEQU - Free Report) have declined 1.3% since reporting results for the second quarter of fiscal 2026. This compares with the S&P 500 index’s 0.7% return over the same time frame. Over the past month, the stock has declined 4.5% against the S&P 500’s 3% growth.
Earnings & Revenue Performances
For the quarter ended Oct. 31, 2025, Kewaunee reported net sales of $70.1 million, representing a 46.8% increase from $47.8 million in the year-ago period. Despite the sharp rise in revenues, profitability declined year over year. Net earnings attributable to Kewaunee were $2.4 million, down from $3 million a year earlier, while diluted earnings per share fell to 82 cents from $1.01.
Pre-tax earnings declined 12.2% year over year to $3.5 million. EBITDA, a non-GAAP measure, increased to $5.8 million from $4.9 million in the prior-year quarter, reflecting improved operating scale and contributions from acquisitions despite margin pressure.
Kewaunee Scientific Corporation Price, Consensus and EPS Surprise
Order backlog stood at $192.9 million as of Oct. 31, 2025, compared with $184.4 million a year earlier, though it declined sequentially from $214.6 million at the end of fiscal 2025. The backlog remains near historically high levels, particularly within the Domestic segment. On the balance sheet, total cash on hand was $13.7 million, down from $17.2 million at April 30, 2025, while working capital improved year over year to $67.8 million from $60 million.
Long-term debt declined to $58.2 million from $60.7 million at the fiscal year-end, and the company’s debt-to-equity ratio improved to 0.88-to-1 from 0.99-to-1, signaling gradual balance-sheet strengthening in the quarter.
Segmental performance was mixed. Domestic sales increased 51.7% year over year to $55.2 million, driven partly by the inclusion of Nu Aire, Inc., which delivered strong quarterly results. However, the domestic segment’s net earnings declined to $3.6 million from $4.5 million a year earlier due to lower manufacturing volumes in the laboratory construction portion of the business. International sales rose 31% year over year to $14.9 million, supported by the continued delivery of large projects booked in prior periods. International segment net earnings improved to $0.6 million from $0.4 million, and segment EBITDA increased accordingly.
Management Commentary
Management emphasized that project delivery timing remained volatile during the quarter, consistent with expectations outlined in prior communications. President and chief executive officer Thomas D. Hull III noted that while volatility began to materialize in the fiscal second quarter, quoting and booking activity remained strong, helping sustain a robust backlog.
He highlighted Nu Aire’s performance as a key offset to weakness in the legacy construction-driven business, underscoring the rationale behind recent diversification efforts. Management reiterated confidence in the underlying demand for the company’s laboratory products and in the markets it serves despite near-term execution variability.
Factors Influencing Headline Numbers
Significant year-over-year revenue growth was driven by higher sales volumes across both Domestic and International segments, with the Nu Aire acquisition providing a notable incremental contribution.
However, profitability was pressured by lower manufacturing volumes in portions of the Domestic business tied to laboratory construction activity, along with higher operating expenses related to integration and corporate investments. Interest expenses increased year over year, also weighing on net income and earnings per share. These factors combined to produce strong top-line growth but weaker bottom-line results compared with the prior-year quarter.
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Management reiterated expectations for continued volatility in project delivery timing through the balance of the fiscal year but expressed confidence that backlog levels would remain strong through year-end. The company indicated that current quoting activity supports expectations for sustained demand into fiscal 2027. Management also pointed to early repayment of seller notes as a positive development that strengthens the balance sheet and positions the company for potential acquisitions.
Other Developments
The quarter reflected the ongoing integration of Nu Aire, Inc., which was acquired on Nov. 1, 2024. Integration-related professional and other fees continued to affect reported results, though at lower levels than in the prior year. No additional acquisitions, divestitures or major restructuring activities were announced during the quarter beyond continued integration efforts and strategic investments in the corporate platform aimed at supporting growth.
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Kewaunee's Net Sales Increase Y/Y, Earnings Decline in Q2
Shares of Kewaunee Scientific Corporation (KEQU - Free Report) have declined 1.3% since reporting results for the second quarter of fiscal 2026. This compares with the S&P 500 index’s 0.7% return over the same time frame. Over the past month, the stock has declined 4.5% against the S&P 500’s 3% growth.
Earnings & Revenue Performances
For the quarter ended Oct. 31, 2025, Kewaunee reported net sales of $70.1 million, representing a 46.8% increase from $47.8 million in the year-ago period. Despite the sharp rise in revenues, profitability declined year over year. Net earnings attributable to Kewaunee were $2.4 million, down from $3 million a year earlier, while diluted earnings per share fell to 82 cents from $1.01.
Pre-tax earnings declined 12.2% year over year to $3.5 million. EBITDA, a non-GAAP measure, increased to $5.8 million from $4.9 million in the prior-year quarter, reflecting improved operating scale and contributions from acquisitions despite margin pressure.
Kewaunee Scientific Corporation Price, Consensus and EPS Surprise
Kewaunee Scientific Corporation price-consensus-eps-surprise-chart | Kewaunee Scientific Corporation Quote
Other Key Business Metrics
Order backlog stood at $192.9 million as of Oct. 31, 2025, compared with $184.4 million a year earlier, though it declined sequentially from $214.6 million at the end of fiscal 2025. The backlog remains near historically high levels, particularly within the Domestic segment. On the balance sheet, total cash on hand was $13.7 million, down from $17.2 million at April 30, 2025, while working capital improved year over year to $67.8 million from $60 million.
Long-term debt declined to $58.2 million from $60.7 million at the fiscal year-end, and the company’s debt-to-equity ratio improved to 0.88-to-1 from 0.99-to-1, signaling gradual balance-sheet strengthening in the quarter.
Segmental performance was mixed. Domestic sales increased 51.7% year over year to $55.2 million, driven partly by the inclusion of Nu Aire, Inc., which delivered strong quarterly results. However, the domestic segment’s net earnings declined to $3.6 million from $4.5 million a year earlier due to lower manufacturing volumes in the laboratory construction portion of the business. International sales rose 31% year over year to $14.9 million, supported by the continued delivery of large projects booked in prior periods. International segment net earnings improved to $0.6 million from $0.4 million, and segment EBITDA increased accordingly.
Management Commentary
Management emphasized that project delivery timing remained volatile during the quarter, consistent with expectations outlined in prior communications. President and chief executive officer Thomas D. Hull III noted that while volatility began to materialize in the fiscal second quarter, quoting and booking activity remained strong, helping sustain a robust backlog.
He highlighted Nu Aire’s performance as a key offset to weakness in the legacy construction-driven business, underscoring the rationale behind recent diversification efforts. Management reiterated confidence in the underlying demand for the company’s laboratory products and in the markets it serves despite near-term execution variability.
Factors Influencing Headline Numbers
Significant year-over-year revenue growth was driven by higher sales volumes across both Domestic and International segments, with the Nu Aire acquisition providing a notable incremental contribution.
However, profitability was pressured by lower manufacturing volumes in portions of the Domestic business tied to laboratory construction activity, along with higher operating expenses related to integration and corporate investments. Interest expenses increased year over year, also weighing on net income and earnings per share. These factors combined to produce strong top-line growth but weaker bottom-line results compared with the prior-year quarter.
View
Management reiterated expectations for continued volatility in project delivery timing through the balance of the fiscal year but expressed confidence that backlog levels would remain strong through year-end. The company indicated that current quoting activity supports expectations for sustained demand into fiscal 2027. Management also pointed to early repayment of seller notes as a positive development that strengthens the balance sheet and positions the company for potential acquisitions.
Other Developments
The quarter reflected the ongoing integration of Nu Aire, Inc., which was acquired on Nov. 1, 2024. Integration-related professional and other fees continued to affect reported results, though at lower levels than in the prior year. No additional acquisitions, divestitures or major restructuring activities were announced during the quarter beyond continued integration efforts and strategic investments in the corporate platform aimed at supporting growth.