Kewaunee Scientific (KEQU) Q4 2026: Revenue Decline, Earnings Miss — Disappointing Quarter

Kewaunee Scientific Corporation (NASDAQ: KEQU) reported its fourth quarter results for fiscal year 2026, revealing a significant decline in revenue and earnings compared to the prior year. Sales for the quarter were $71,400,000, a decrease of $5,748,000 or -7.5% from $77,148,000 in Q4 2025. This decline is a concerning indicator for shareholders, as it reflects ongoing challenges in the operating environment.

Key Financial Metrics

• Fourth Quarter Sales: $71,400,000 (down $5,748,000 or -7.5% YoY)
• Pre-tax Earnings: $4,756,000 (down from $7,149,000 YoY)
• Net Earnings: $3,388,000 (down from $4,850,000 YoY)
• Diluted Earnings Per Share (EPS): $1.13 (down from $1.63 YoY)
• EBITDA: $6,520,000 (down from $9,671,000 YoY)

Analyst View

This quarter is disappointing for shareholders, primarily due to the notable drop in both revenue and net earnings. The decline in sales and profitability indicates that Kewaunee is facing significant headwinds, particularly in its Lab Products Group segment, which saw a decrease in sales of 2.0% year-over-year. The international segment also struggled, with a 21.3% drop in sales compared to the previous year.

Despite the challenges, Kewaunee's management remains optimistic about the company's long-term growth strategy, emphasizing the importance of disciplined capital allocation and operational execution. However, the immediate financial results suggest that the company is not yet reaping the benefits of its strategic initiatives, including the integration of Nu Aire.

Segment Performance

• Lab Products Group Segment:
  • Q4 Sales: $54,357,000 (down 2.0% YoY)
  • Net Earnings: $3,547,000 (down from $5,099,000 YoY)
  • EBITDA: $6,674,000 (down from $8,755,000 YoY)
• International Segment:
  • Q4 Sales: $17,043,000 (down 21.3% YoY)
  • Net Earnings: $1,483,000 (down from $1,607,000 YoY)
  • EBITDA: $2,055,000 (down from $2,427,000 YoY)
• Corporate Segment:
  • Q4 Net Loss: ($1,642,000) (improved from a loss of $1,856,000 YoY)
  • EBITDA Loss: ($2,209,000) (compared to a loss of $1,511,000 YoY)

Balance Sheet and Cash Flow

Kewaunee has made strides in improving its balance sheet, reducing long-term debt by approximately $20 million during the fiscal year. The company's debt-to-equity ratio improved to 0.61-to-1 from 0.99-to-1 in the prior year. However, total cash on hand decreased to $11,617,000 from $17,164,000 a year earlier, primarily due to the repayment of Seller Notes related to the Nu Aire acquisition.

Forward Guidance and Catalysts

Looking ahead, investors should monitor Kewaunee's ability to navigate the ongoing challenges in the laboratory construction market and the geopolitical uncertainties affecting its international operations. The company has a backlog of $165.9 million, which includes $118.8 million in the Lab Products Group and $47.1 million in the International segment. This backlog could provide a buffer against the current revenue decline if project timelines stabilize.

In conclusion, while Kewaunee Scientific has made progress in certain areas, the fourth quarter results indicate a need for improved execution and market conditions to restore shareholder confidence. Investors should keep an eye on the company's strategic initiatives and the potential recovery in the life sciences market as catalysts for future growth.

Note: The amounts in the following tables are in thousands/millions.

	Three Months Ended	Three Months Ended	Twelve Months Ended	Twelve Months Ended
	April 30, 2026	April 30, 2025	2026	April 30, 2025
Net sales	$ 71,400	$ 77,148	$ 281,999	$ 240,472
Cost of production sold	50,155	53,110	201,559	171,615
Gross profit	21,245	24,038	80,440	68,857
Operating expenses	16,029	15,538	63,725	51,098
Operating profit	5,216	8,500	16,715	17,759
Other income (expense)	171	-188	880	240
Interest expense	-631	-1,163	-3,862	-3,214
Profit before income taxes	4,756	7,149	13,733	14,785
Income tax expense	1,064	2,202	3,268	3,202
Net earnings	3,692	4,947	10,465	11,583
Less: Net earnings attributable to the non-controlling interest	304	97	847	178
Net earnings attributable to Kewaunee Scientific Corp.	$ 3,388	$ 4,850	$ 9,618	$ 11,405
Net earnings per share attributable to Kewaunee Scientific Corporation	$ 1.18	$ 1.70	$ 3.36	$ 3.98
Weighted average number of common shares outstanding	2,866	2,854	2,863	2,862

	April 30, 2026	April 30, 2025
Assets
Cash and cash equivalents	$ 9,950	$ 14,942
Restricted cash	1,667	2,222
Receivables, less allowances	58,738	62,384
Inventories	30,533	32,849
Prepaid expenses and other current assets	4,509	5,966
Total Current Assets	105,397	118,363
Net Property, Plant and Equipment	22,367	23,174
Right of use assets	10,791	12,965
Deferred income taxes	3,829	3,994
Intangible assets, net	16,294	17,831
Goodwill	12,487	12,487
Other assets	7,146	5,840
Total Assets	$ 178,311	$ 194,654
Liabilities and Stockholders' Equity
Short-term borrowings	$ 74	$ 986
Current portion of term loans	4,893	2,903
Current portion of lease obligations	3,845	3,371
Current portion of financing liability	867	788
Accounts payable	22,455	27,033
Other Current Liabilities	16,217	18,631
Total Current Liabilities	48,351	53,712
Long-term portion of lease obligations	6,569	8,946
Long-term portion of financing liability	25,765	26,632
Long-term portion of seller note	—	23,537
Long-term portion of term loans	14,804	10,412
Other non-current liabilities	6,010	5,170
Total Liabilities	101,499	128,409
Commitments and Contingencies
Stockholders' Equity
Kewaunee Scientific Corporation Equity	74,718	64,457
Non-controlling interest	2,094	1,788
Total Stockholders' Equity	76,812	66,245
Total Liabilities and Stockholders' Equity	$ 178,311	$ 194,654

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