SEC Form 10-Q filed by Kewaunee Scientific Corporation

12/12/25 9:41:25 AM ET

Medical Specialities

Industrials

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

_________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 0-5286

_________________________

KEWAUNEE SCIENTIFIC CORPORATION

(Exact name of registrant as specified in its charter)

_________________________


Delaware						38-0715562
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

2700 West Front Street Statesville, North Carolina						28677-2927
(Address of principal executive offices)						(Zip Code)

Registrant's telephone number, including area code: (704) 873-7202

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol(s) Name of Exchange on which registered

Common Stock, $2.50 par value KEQU NASDAQ Global Market

_________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of December 9, 2025, the registrant had outstanding 2,866,384 shares of Common Stock.

KEWAUNEE SCIENTIFIC CORPORATION

INDEX TO FORM 10-Q

For The Quarterly Period Ended October 31, 2025


		Page Number
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Statements of Operations (unaudited) – Three and Six Months Ended October 31, 2025 and 2024	1
	Condensed Consolidated Statements of Comprehensive Earnings (unaudited) – Three and Six Months Ended October 31, 2025 and 2024	2
	Condensed Consolidated Statements of Stockholders' Equity (unaudited) – Three and Six Months Ended October 31, 2025 and 2024	3
	Condensed Consolidated Balance Sheets – October 31, 2025 (unaudited) and April 30, 2025	4
	Condensed Consolidated Statements of Cash Flows (unaudited) – Six Months Ended October 31, 2025 and 2024	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

PART II. OTHER INFORMATION
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURE		26

PART 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

($ and shares in thousands, except per share amounts)


	Three Months Ended October 31,				Six Months Ended October 31,
	2025		2024		2025		2024
Net sales	$	70,096	$	47,764	$	141,200	$	96,157
Cost of products sold	50,376		33,812		100,550		69,717
Gross profit	19,720		13,952		40,650		26,440
Operating expenses	15,613		9,518		31,733		19,431
Operating profit	4,107		4,434		8,917		7,009

Other income (expense), net	407		(61)		575		266
Interest expense	(1,061)		(442)		(2,119)		(914)
Profit before income taxes	3,453		3,931		7,373		6,361
Income tax expense	915		916		1,676		1,108
Net earnings	2,538		3,015		5,697		5,253
Less: Net earnings attributable to the non-controlling interest	93		7		159		52
Net earnings attributable to Kewaunee Scientific Corporation	$	2,445	$	3,008	$	5,538	$	5,201

Net earnings per share attributable to Kewaunee Scientific Corporation stockholders
Basic	$	0.85	$	1.05	$	1.94	$	1.82
Diluted	$	0.82	$	1.01	$	1.86	$	1.75
Weighted average number of common shares outstanding
Basic	2,866		2,872		2,859		2,861
Diluted	2,990		2,974		2,977		2,971

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Comprehensive Earnings

(Unaudited)

($ in thousands)


	Three Months Ended October 31,				Six Months Ended October 31,
	2025		2024		2025		2024
Net earnings	$	2,538	$	3,015	$	5,697	$	5,253
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(164)		(76)		(574)		(192)
Other comprehensive loss	(164)		(76)		(574)		(192)
Comprehensive earnings, net of tax	2,374		2,939		5,123		5,061
Less: Comprehensive income attributable to the non-controlling interest	93		7		159		52
Comprehensive earnings attributable to Kewaunee Scientific Corporation	$	2,281	$	2,932	$	4,964	$	5,009

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

($ in thousands, except per share amounts)


	Common Stock		Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Kewaunee Scientific Corporation Stockholders' Equity



















Balance at April 30, 2025	$	7,353	$	5,635	$	(3,647)	$	58,919	$	(3,803)	$	64,457
Net earnings attributable to Kewaunee Scientific Corporation	—		—		—		3,093		—		3,093
Other comprehensive loss	—		—		—		—		(410)		(410)
Stock-based compensation	68		(130)		—		—		—		(62)

Balance at July 31, 2025	$	7,421	$	5,505	$	(3,647)	$	62,012	$	(4,213)	$	67,078
Net earnings attributable to Kewaunee Scientific Corporation	—		—		—		2,445		—		2,445
Other comprehensive loss	—		—		—		—		(164)		(164)
Stock-based compensation	2		491		—		—		—		493

Balance at October 31, 2025	$	7,423	$	5,996	$	(3,647)	$	64,457	$	(4,377)	$	69,852


	Common Stock		Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Kewaunee Scientific Corporation Stockholders' Equity
















Balance at April 30, 2024	$	7,273	$	5,406	$	(2,051)	$	47,514	$	(3,382)	$	54,760
Net earnings attributable to Kewaunee Scientific Corporation	—		—		—		2,193		—		2,193
Other comprehensive loss	—		—		—		—		(116)		(116)
Stock-based compensation	80		(894)		—		—		—		(814)
Balance at July 31, 2024	$	7,353	$	4,512	$	(2,051)	$	49,707	$	(3,498)	$	56,023
Net earnings attributable to Kewaunee Scientific Corporation	—		—		—		3,008		—		3,008
Other comprehensive loss	—		—		—		—		(76)		(76)
Stock-based compensation	—		373		—		—		—		373
Balance at October 31, 2024	$	7,353	$	4,885	$	(2,051)	$	52,715	$	(3,574)	$	59,328

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

($ and shares in thousands, except per share amounts)


	October 31, 2025		April 30, 2025
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	12,594	$	14,942
Restricted cash	1,085		2,222
Receivables, less allowance; $492; $530, on each respective date	59,017		62,384
Inventories	35,499		32,849


Prepaid expenses and other current assets	5,445		5,966
Total Current Assets	113,640		118,363
Property, plant and equipment, at cost	74,223		71,983
Accumulated depreciation	(51,068)		(48,809)
Property, plant and equipment, net	23,155		23,174
Right of use assets	11,459		12,965
Deferred income taxes	3,831		3,994


Intangible assets, net	17,063		17,831
Goodwill	12,487		12,487
Other assets	7,440		5,840
Total Assets	$	189,075	$	194,654

Liabilities and Stockholders' Equity
Current Liabilities:
Short-term borrowings	$	1,117	$	986
Current portion of financing liability	827		788
Current portion of term loan	2,903		2,903
Current portion of financing lease liabilities	67		96
Current portion of operating lease liabilities	3,381		3,275
Accounts payable	22,660		27,033
Employee compensation and amounts withheld	7,616		9,209
Deferred revenue	4,342		6,073
Other accrued expenses	2,897		3,349
Total Current Liabilities	45,810		53,712
Long-term portion of financing liability	26,205		26,632
Long-term portion of seller notes	22,681		23,537
Long-term portion of term loan	8,960		10,412
Long-term portion of financing lease liabilities	318		149
Long-term portion of operating lease liabilities	7,274		8,797
Accrued pension and deferred compensation costs	4,544		3,708
Deferred income taxes	1,217		1,098
Other non-current liabilities	349		364
Total Liabilities	117,358		128,409
Commitments and Contingencies
Stockholders' Equity:
Common stock, $2.50 par value, Authorized – 5,000 shares; Issued – 2,969 shares; 2,941 shares; – Outstanding – 2,866 shares; 2,839 shares, on each respective date	7,423		7,353
Additional paid-in-capital	5,996		5,635
Retained earnings	64,457		58,919
Accumulated other comprehensive loss	(4,377)		(3,803)
Common stock in treasury, at cost, 103 shares; 103 shares, on each respective date	(3,647)		(3,647)
Total Kewaunee Scientific Corporation Stockholders' Equity	69,852		64,457
Non-controlling interest	1,865		1,788
Total Stockholders' Equity	71,717		66,245
Total Liabilities and Stockholders' Equity	$	189,075	$	194,654

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

($ in thousands)


	Six Months Ended October 31,
	2025		2024
Cash flows from operating activities:
Net earnings	$	5,697	$	5,253
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	3,129		1,621
Provision for credit losses	(31)		23
Stock-based compensation expense	1,082		691
Deferred income taxes	283		(1,079)
Accrued payment in kind ("PIK") interest	(935)		—
Amortization of deferred financing costs	188		—
Change in assets and liabilities:
Receivables	3,398		3,156
Inventories	(2,650)		2,019
Income tax receivable	(246)		—
Accounts payable and other accrued expenses	(6,433)		(3,907)
Deferred revenue	(1,732)		1,865
Other, net	(224)		(2,000)
Net cash provided by operating activities	1,526		7,642
Cash flows from investing activities:
Capital expenditures	(2,341)		(961)

Net cash used in investing activities	(2,341)		(961)
Cash flows from financing activities:

Dividends paid to non-controlling interest in subsidiaries	—		(161)

Repayments on term loan	(1,500)		—


Proceeds from short-term borrowings	3,356		64,117
Repayments on short-term borrowings	(3,225)		(66,410)

Payments on sale-leaseback financing transaction	(416)		(351)
Proceeds from long-term lease obligations	226		—
Payments on long-term lease obligations	(86)		(81)
Taxes paid related to net share settlement of equity awards	(671)		—


Net cash used in financing activities	(2,316)		(2,886)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(354)		(69)
(Decrease) increase in cash, cash equivalents and restricted cash	(3,485)		3,726
Cash, cash equivalents and restricted cash, beginning of period	17,164		25,938
Cash, cash equivalents and restricted cash, end of period	$	13,679	$	29,664

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Cash Flows (Cont'd)

(Unaudited)

($ in thousands)


	Six Months Ended October 31,
	2025		2024
Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest	$	1,940	$	914

See accompanying notes to Condensed Consolidated Financial Statements.

Kewaunee Scientific Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited)

A. Financial Information

The unaudited interim Condensed Consolidated Financial Statements of Kewaunee Scientific Corporation (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These interim Condensed Consolidated Financial Statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of these financial statements and should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's 2025 Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. The Condensed Consolidated Balance Sheet as of April 30, 2025 included in this interim period filing has been derived from the audited consolidated financial statements at that date, but does not include all of the information and related notes required by GAAP for complete financial statements.

The preparation of the interim Condensed Consolidated Financial Statements requires management to make certain estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.

B. Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. During the six months ended October 31, 2025 and twelve months ended April 30, 2025, the Company had cash deposits in excess of FDIC insured limits. The Company has not experienced any losses from such deposits. Restricted cash includes bank deposits of subsidiaries used for performance guarantees against customer orders.

The Company includes restricted cash along with the cash balance for presentation in the Condensed Consolidated Statements of Cash Flows. The reconciliation between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows is as follows (in thousands):


	October 31, 2025		April 30, 2025
Cash and cash equivalents	$	12,594	$	14,942
Restricted cash	1,085		2,222
Total cash, cash equivalents and restricted cash	$	13,679	$	17,164

C. Nu Aire Acquisition

On November 1, 2024 (the “Closing Date”), the Company completed the acquisition of Nu Aire, Inc. ("Nu Aire"), a leading manufacturer of equipment for a diverse range of laboratory and pharmacy environments, by acquiring all of the Nu Aire capital stock that was issued and outstanding as of the date of acquisition (the "Transaction"). The Transaction expands the Company's capabilities, allowing the combined organization to better meet the needs of end-users in laboratory furnishings and accelerates the Company's vision of becoming the market leader in the design and manufacturing of laboratory furniture and technical products essential for outfitting laboratories.

The Company purchased all the outstanding stock of Nu Aire for $55.0 million, subject to certain adjustments for debt, cash, transaction expenses, and net working capital resulting in aggregate acquisition consideration of $53.0 million as shown in the table below. $23.0 million of the purchase price payable at closing of the Transaction was funded pursuant to subordinated seller notes. The remaining purchase price payable at closing of the Transaction was paid in cash, which cash was funded, in part, through the Revolving Credit Facility (as defined in Note H, Long-term Debt and Other Credit Arrangements), and Term Loan (as defined in Note H, Long-term Debt and Other Credit Arrangements), provided to the Company by PNC Bank, National Association ("PNC").

The following table summarizes the aggregate acquisition consideration for Nu Aire:


($ in thousands)
Cash paid to Nu Aire	$	29,669
Subordinated Promissory Notes due to Nu Aire	23,000
Payment of Nu Aire transaction expenses	311
Purchase Price	$	52,980

The Transaction was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill arising from the Transaction is attributable to the value of the acquired assembled workforce and the premium paid.

The purchase price recorded for Nu Aire was allocated as follows:


($ in thousands)	Final Allocation As Adjusted
Assets acquired:
Cash and cash equivalents	$	1,245
Receivables	10,650
Inventories	15,522
Prepaid expenses and other current assets	852
Property, plant and equipment	7,349
Other intangible assets	18,600
Goodwill	12,487
Right of use assets	7,376
Other assets	7
Total assets acquired	74,088

Liabilities assumed:
Current portion of operating lease liabilities	(965)
Accounts payable	(4,318)
Employee compensation and amounts withheld	(2,642)
Deferred revenue	(935)
Other accrued expenses	(1,591)
Long-term portion of operating lease liabilities	(5,167)
Deferred income taxes	(5,490)
Total liabilities assumed	(21,108)
Aggregate acquisition consideration	$	52,980

The purchase price allocation was finalized as of July 31, 2025, within the measurement period, and no further adjustments will be made. During the year ended April 30, 2025, the Company recorded a $1.8 million measurement period adjustment to increase inventory as a result of revised capitalized variances related to work-in-progress as of the acquisition date, with a corresponding decrease to Goodwill, net of the tax impact. The net effect of these adjustments would have resulted in an insignificant decrease in cost of products sold recorded during the year ended April 30, 2025. The measurement period adjustments were recorded in our consolidated financial statements as of and for the year ended April 30, 2025.

The above fair values of assets acquired and liabilities assumed are based on the information that was available as of the reporting date. The fair values of the assets acquired and liabilities assumed were determined using the income and cost approaches. In many cases, the determination of the fair values required estimates about discount rates, future expected cash flows and other future events that are judgmental and subject to change. The fair value measurements were primarily based on

significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements. Intangible assets consisting of customer relationships, trade names and trademarks, and developed technology were valued using the multi-period excess earnings method ("MEEM"), or the relief from royalty ("RFR") method, both are forms of the income approach. A cost approach was applied for property, plant and equipment.

•Customer relationship intangible assets were valued using the MEEM method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue and profit attributable to the asset, customer attrition rates, applicable tax rate, and contributory asset charges, among other factors), the discount rate reflecting the risks inherent in the future cash flow stream, an assessment of the asset's life cycle and the tax amortization benefit, among other factors.

•The trade names and trademarks and developed technology intangible assets were valued using the RFR method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue attributable to the asset, applicable tax rate, royalty rate, and other factors such as technology related obsolescence rates), the discount rate, reflecting the risks inherent in the future cash flow stream, and the tax amortization benefit, among other factors.

•The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used for property, plant, and equipment. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the property, less an allowance for loss in value due to depreciation.

The Company believes that the information provided a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities and considers the purchase price allocation finalized as of July 31, 2025, within the measurement period.

The amounts allocated to intangible assets are as follows:

($ in thousands)

Fair Value

Estimated Useful Life

Customer relationships

9,800

10 years

Trade names and trademarks

4,900

indefinite

Developed technology

3,900

7 years

Intangible assets acquired

18,600

The operating results for Nu Aire, which include $19.4 million in revenue and $1.1 million in net earnings for the three months ended October 31, 2025 and $39.1 million in revenue and $1.8 million of net earnings for the six months ended October 31, 2025, are reflected in the accompanying Consolidated Statements of Operations.

The following unaudited supplemental pro forma combined financial information presents the Company's results of operations for the three and six months ended October 31, 2024 as if the acquisition of Nu Aire had occurred on May 1, 2023. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company's operating results that may have actually occurred had the acquisition of Nu Aire been completed on May 1, 2023. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies, or other synergies that may be associated with the Transaction, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of Nu Aire.


	Three Months Ended October 31,				Six Months Ended October 31,
($ in thousands, except per share amounts)	2025		2024		2025		2024
	(actual)		(pro forma)		(actual)		(pro forma)
Net sales	$	70,096	$	66,933	$	141,200	$	132,381
Net earnings	2,445		2,696		5,538		6,969
Net earnings per share attributable to Kewaunee Scientific Corporation stockholders:
Basic	$	0.85	$	0.94	$	1.94	$	2.44
Diluted	$	0.82	$	0.91	$	1.86	$	2.35

D. Revenue Recognition

The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. The majority of the Company's revenues are recognized over time as the customer receives control as the Company performs work under a contract. However, a portion of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract.

Disaggregated Revenue

A summary of net sales transferred to customers over time and at a point in time for the periods ended October 31, 2025 and October 31, 2024 is as follows (in thousands):


	Three Months Ended
	October 31, 2025						October 31, 2024
	Domestic		International		Total		Domestic		International		Total
Over Time	$	32,911	$	14,872	$	47,783	$	35,123	$	11,355	$	46,478
Point in Time	22,313		—		22,313		1,286		—		1,286
Total	$	55,224	$	14,872	$	70,096	$	36,409	$	11,355	$	47,764


	Six Months Ended
	October 31, 2025						October 31, 2024
	Domestic		International		Total		Domestic		International		Total
Over Time	$	65,624	$	31,624	$	97,248	$	69,512	$	24,225	$	93,737
Point in Time	43,952		—		43,952		2,420		—		2,420
Total	$	109,576	$	31,624	$	141,200	$	71,932	$	24,225	$	96,157

Contract Balances

The closing balances of contract assets included $14,064,000 in accounts receivable at October 31, 2025. The opening balance of contract assets arising from contracts with customers included $12,693,000 in accounts receivable at April 30, 2025. The closing and opening balances of contract liabilities included in deferred revenue arising from contracts with customers were $4,342,000 at October 31, 2025 and $6,073,000 at April 30, 2025. The timing of revenue recognition, billings and cash collections results in accounts receivable, unbilled receivables, and deferred revenue which are disclosed in the Condensed Consolidated Balance Sheets and in the Notes to the Condensed Consolidated Financial Statements. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Unbilled receivables represent amounts earned which have not yet been billed in accordance with contractually stated billing terms and are included in receivables on the Condensed Consolidated Balance Sheets. Receivables are recorded when the right to consideration becomes unconditional and the Company has a right to invoice the customer. Deferred revenue relates to payments received in advance of performance under the contract. Deferred revenue is recognized as revenue as (or when) the Company performs under the contract. Approximately 40% and 100% of the contract liability balances at April 30, 2025 and October 31, 2025, respectively, are expected to be recognized as revenue during the respective succeeding 12 months, with the remaining balance primarily related to international operations, which generally have longer delivery and collection cycles.

E. Inventories

The Company measures inventories using the first-in, first-out method at the lower of cost or net realizable value. Inventories consisted of the following (in thousands):


	October 31, 2025		April 30, 2025
Finished products	$	5,921	$	5,543
Work in process	6,938		3,784
Raw materials	22,640		23,522
Total	$	35,499	$	32,849

The Company's International subsidiaries' inventories were $2,556,000 at October 31, 2025 and $2,845,000 at April 30, 2025 and are included in the above table.

F. Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash and equivalents, mutual funds, a sale-leaseback financing liability, term loans, seller notes, and short-term borrowings. The carrying value of these assets and liabilities approximates their fair value. The following tables summarize the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2025 and April 30, 2025 (in thousands):


	October 31, 2025
Financial Assets	Level 1		Level 2		Total
Trading securities held in non-qualified compensation plans (1)	$	2,488	$	—	$	2,488
Cash surrender value of life insurance policies (1)	—		1,557		1,557
Total	$	2,488	$	1,557	$	4,045
Financial Liabilities
Non-qualified compensation plans (2)	$	—	$	4,545	$	4,545
Total	$	—	$	4,545	$	4,545


	April 30, 2025
Financial Assets	Level 1		Level 2		Total
Trading securities held in non-qualified compensation plans (1)	$	1,861	$	—	$	1,861
Cash surrender value of life insurance policies (1)	—		1,403		1,403
Total	$	1,861	$	1,403	$	3,264
Financial Liabilities
Non-qualified compensation plans (2)	$	—	$	3,708	$	3,708
Total	$	—	$	3,708	$	3,708

(1)The Company maintains two non-qualified compensation plans which include investment assets in a rabbi trust. These assets consist of marketable securities, which are valued using quoted market prices multiplied by the number of shares owned, and life insurance policies, which are valued at their cash surrender value.

(2)Plan liabilities are equal to the individual participants' account balances and other earned retirement benefits.

G. Goodwill and Other Intangible Assets

In connection with the Nu Aire Acquisition, on November 1, 2024, the Company recorded goodwill of $14.2 million on its Condensed Consolidated Balance Sheet. During the year ended April 30, 2025, the Company recorded a $1.8 million measurement period adjustment to increase inventory as a result of revised capitalized variances related to work-in-progress as of the acquisition date, with a corresponding decrease to Goodwill, net of the tax impact. See Note C, Nu Aire Acquisition for additional information. No impairment losses on goodwill were recorded during the six months ended October 31, 2025. The ending balance of goodwill at October 31, 2025 and April 30, 2025 was approximately $12.5 million.

Also in connection with the Nu Aire Acquisition, the Company recorded other intangible assets on November 1, 2024 of $18.6 million on its Condensed Consolidated Balance Sheet. See Note C, Nu Aire Acquisition for additional information. The gross carrying amount and accumulated amortization of the Company's intangible assets other than goodwill as of October 31, 2025 and April 30, 2025 were as follows:


		October 31, 2025
($ in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	10 years	$	9,800	$	(980)	$	8,820
Trade names and trademarks	indefinite	4,900		—		4,900
Developed technology	7 years	3,900		(557)		3,343
Total		$	18,600	$	(1,537)	$	17,063


		April 30, 2025
($ in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	10 years	$	9,800	$	(490)	$	9,310
Trade names and trademarks	indefinite	4,900		—		4,900
Developed technology	7 years	3,900		(279)		3,621
Total		$	18,600	$	(769)	$	17,831

Expected future amortization expense related to intangible assets, net as of October 31, 2025, excluding trade names and trademarks, are as follows:


($ in thousands)
Remainder of fiscal 2026	$	769
2027	1,537
2028	1,537
2029	1,537
2030	1,537
Thereafter	5,246
Total	$	12,163

H. Long-term Debt and Other Credit Arrangements

The components of the Company's long-term debt at October 31, 2025 and April 30, 2025, excluding lease, deferred financing costs of $0.7 million and $0.8 million related to the debt at each respective date, and sale-leaseback-related activity, as presented on the Condensed Consolidated Balance Sheet were as follows:


($ in thousands)	October 31, 2025		April 30, 2025
PNC Loan Agreement	$	12,250	$	13,750
Seller Notes	23,000		23,935
Total long-term debt	$	35,250	$	37,685

Current portion of long-term debt	$	3,000	$	3,000
Non-current portion of long-term debt	32,250		34,685
Total long-term debt	$	35,250	$	37,685

See Note J, Leases, for more information on any long-term debt related to the Company's lease portfolio and Note I, Sale-Leaseback Financing Transaction, for more information on any long-term debt related to the Company's sale-leaseback financing transaction.

PNC Loan Agreement

As noted in Note C, Nu Aire Acquisition, the Company entered into a Loan Agreement (the “Loan Agreement”) with PNC on November 1, 2024. The loans governed by the Loan Agreement include (i) a $20.0 million committed senior secured revolving line of credit facility (the “Revolving Credit Facility”), which contains an option to increase the facility upon request by the Company and approval by PNC, in its discretion, by an additional $10.0 million; and (ii) a $15.0 million term loan (the “Term Loan”). The Revolving Credit Facility and Term Loan mature on November 1, 2029. The Revolving Credit Facility and the Term Loan can be paid at any time without penalty.

For the Revolving Credit Facility, the interest rate will be selected by the Company at each advance from one of two options. Option one is a base rate option. Option 2 is a daily secured overnight financing rate. There is an unused fee of 0.15% to 0.25%, determined by the ratio of senior debt to the Company’s EBITDA, of the unused daily balance of the Revolving Credit Facility. For the Term Loan, the principal will be paid in 60 substantially equal monthly installments over the term of the Loan Agreement. Interest will be paid at the same time and calculated on the outstanding principal balance at an interest rate equal to the rate under Option 2 of the Revolving Credit Facility. The borrowing rate on the Term Loan was 5.78% as of October 31,

2025, as compared to 5.96% as of April 30, 2025. The Company recorded interest expense of $216,000 and $441,000 related to the Term Loan for the three and six months ended October 31, 2025, respectively.

At October 31, 2025 and April 30, 2025, no advances were outstanding under the Revolving Credit Facility. Amounts available under the Revolving Credit Facility were $20.0 million at October 31, 2025 and April 30, 2025.

On December 4, 2025, the Company entered into a First Amendment to its Loan Agreement with PNC. See Note Q, Subsequent Events, for more details.

The Loan Agreement has customary reporting covenants. The principal financial covenants require that (1) the Company maintain on a consolidated basis a ratio of senior funded indebtedness to EBITDA of not more than 2.50 to 1.00 and (2) a fixed charge coverage ratio of at least 1.20 to 1.00. The Loan Agreement also contains covenants prohibiting under certain circumstances (1) the incurrence of certain indebtedness, (2) the granting of security interests by the Company to persons other than PNC, (3) the delivery of guaranties for debts of third parties, and (4) certain transactions not in the ordinary course of business. At October 31, 2025 and April 30, 2025, the Company was in compliance with all of the financial covenants under the Loan Agreement.

Seller Notes

As noted in Note C, Nu Aire Acquisition, $23.0 million of the aggregate purchase price paid in the Nu Aire Acquisition was paid by the issuance of subordinated seller notes (the "Seller Notes") entered into by the Company on November 1, 2024. The Seller Notes will accrue interest at 8% per annum and will mature on November 1, 2027, at which time the outstanding principal amount and all unpaid accrued interest will become due and payable by the Company. The Company accrued $905,000 in PIK interest for the six-month period ended October 31, 2025 and $935,000 for the fiscal year ended April 30, 2025. The Company made a payment of $1,840,000 during the three-month period ended October 31, 2025 for its accrued PIK interest. The Company's PIK interest balance as of October 31, 2025 was zero.

The Seller Notes may be prepaid, in full or in part, any time without prepayment penalty, premium, or other fee; subject, however, to each seller’s obligation not to accept any prepayment under the Seller Notes until all Secured Claims (as defined in the Seller Notes) have been paid to PNC. The Company’s obligations under the Seller Notes are secured by a security agreement entered into between the Company and each shareholder of Nu Aire immediately prior to the completion of the acquisition (the "Sellers"), pursuant to which the Sellers have the option to cause the Company to issue shares of the Company’s common stock to the Sellers, solely upon the occurrence of an event of default.

The rights of the Sellers to receive payments under the Seller Notes are subordinate to the rights of PNC under the Loan Agreement pursuant to a separate subordination agreement that the Sellers entered into with PNC on November 1, 2024 in connection with the Transaction.

On December 4, 2025, the Company completed payment of its Seller Notes. See Note Q, Subsequent Events, for more details.

Mid Cap Revolving Credit Facility

On September 30, 2024, the Company terminated the Company's previous revolving credit facility with Mid Cap Funding IV Trust (the "Mid Cap Revolving Credit Facility"). At the time of termination, there was a $3.0 million balance outstanding under the Mid Cap Revolving Credit Facility, which was paid off in full as part of the termination. The Company incurred $0.5 million in related expenses as a result of the termination.

International Subsidiaries Short-Term Borrowings

The Company's International subsidiaries had a balance outstanding of $1,117,000 in short-term borrowings related to overdraft protection and short-term loan arrangements at October 31, 2025. The Company's International subsidiaries had a balance outstanding at April 30, 2025 of $986,000 in short-term borrowings related to overdraft protection and short-term loan arrangements.

I. Sale-Leaseback Financing Transaction

On December 22, 2021, the Company entered into an Agreement for Purchase and Sale of Real Property with CAI Investments Sub-Series 100 LLC, a Nevada limited liability company (the "Buyer"), for the Company’s headquarters and manufacturing facilities located at 2700 West Front Street in Statesville, North Carolina (the "Sale Agreement").

The Sale Agreement was finalized on March 24, 2022 and coincided with the Company and CAI Investments Medical Products I Master Lessee LLC ("Lessor") entering into a lease agreement. The lease arrangement is for a 20-year term, with four renewal options of five years each. Under the terms of the lease agreement, the Company’s initial basic rent is approximately $158,000 per month, with annual increases of approximately 2% each year of the initial term.

The Company accounted for the Sale-Leaseback Arrangement as a financing transaction as the lease agreement was determined to be a finance lease due to the significance of the present value of the lease payments, using a discount rate of 4.75% to reflect the Company’s incremental borrowing rate, compared to the fair value of the leased property as of the lease commencement date. In measuring the lease payments for the present value analysis, the Company elected the practical expedient to combine the lease component (the leased facilities) with the non-lease component (property management provided by the Buyer/Lessor) into a single lease component.

The presence of a finance lease indicates that control of the property has not transferred to the Buyer/Lessor and, as such, the transaction was deemed a failed sale-leaseback and accounted for as a financing arrangement. As a result of this determination, the Company is viewed as having received the sale proceeds from the Buyer/Lessor in the form of a hypothetical loan collateralized by its leased facilities. The hypothetical loan is payable as principal and interest in the form of “lease payments” to the Buyer/Lessor. As such, the Company will not derecognize the property from its books for accounting purposes until the lease ends. No gain or loss was recognized under GAAP related to the Sale-Leaseback Arrangement.

As of October 31, 2025, the carrying value of the financing liability was $27,032,000, net of $561,000 in debt issuance costs, of which $827,000 was classified as current on the Condensed Consolidated Balance Sheet with $26,205,000 classified as long-term. As of April 30, 2025, the carrying value of the financing liability was $27,420,000, net of $589,000 in debt issuance costs, of which $788,000 was classified as current on the Consolidated Balance Sheet with $26,632,000 classified as long-term. The monthly lease payments are split between a reduction of principal and interest expense using the effective interest rate method. Interest expense associated with the financing arrangement was $306,000 and $315,000 for the three months ended October 31, 2025 and October 31, 2024, respectively. Interest expense associated with the financing arrangement was $614,000 and $632,000 for the six months ended October 31, 2025 and October 31, 2024, respectively.

The Company will continue to depreciate the building down to zero over the 20-year assumed economic life of the property so that at the end of the lease term, the remaining carrying amount of the financing liability will equal the carrying amount of the land of $41,000.

Remaining future cash payments related to the financing liability as of October 31, 2025 are as follows:


($ in thousands)
Remainder of fiscal 2026	$	1,006
2027	2,049
2028	2,090
2029	2,132
2030	2,175
Thereafter	29,560
Total Minimum Liability Payments	39,012
Imputed Interest	(11,980)
Total	$	27,032

J. Leases

The Company recognizes lease assets and lease liabilities reflecting the rights and obligations created by operating type leases for real estate and equipment in both the U.S. and internationally and financing leases for vehicles and IT equipment in the U.S. At October 31, 2025 and April 30, 2025, right-of-use assets totaled $11,459,000 and $12,965,000, respectively. Operating cash paid to settle lease liabilities was $2,165,000 and $1,334,000 for the six months ended October 31, 2025 and October 31, 2024, respectively. The Company's leases have remaining lease terms of up to 6 years. In addition, some of the leases may include options to extend the leases for up to 5 years or options to terminate the leases within 1 year. Operating lease expense was $1,599,000 and $3,058,000 for the three and six months ended October 31, 2025, inclusive of period cost for short-term leases, not included in lease liabilities, of $474,000 and $893,000. Operating lease expense was $878,000 and $1,760,000 for the three and six months ended October 31, 2024, respectively, inclusive of period cost for short-term leases, not included in lease liabilities, of $202,000 and $426,000.

At October 31, 2025, the weighted average remaining lease term for the capitalized operating leases was 3.6 years and the weighted average discount rate was 6.2%. For the financing leases, the weighted average remaining lease term was 4.9 years and the weighted average discount rate was 7.6%. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of those lease payments. The Company uses the implicit rate when readily determinable.

Future minimum lease payments under non-cancelable leases as of October 31, 2025 were as follows:


($ in thousands)	Operating		Financing
Remainder of fiscal 2026	$	2,068	$	47
2027	3,468		94
2028	2,474		94
2029	2,107		94
2030	1,629		94
Thereafter	157		38
Total Minimum Lease Payments	11,903		461
Imputed Interest	(1,248)		(76)
Total	$	10,655	$	385

K. Stockholders' Equity

Common Stock

The Company is authorized to issue 5,000,000 shares of Common Stock, par value of $2.50 per share. Holders of the Company's Common Stock are entitled to one vote per share. As of October 31, 2025 and April 30, 2025, there were approximately 2,866,000 and 2,839,000 shares, respectively, of Common Stock outstanding. The Company has not declared or paid any dividends with respect to its Common Stock during the three and six months ended October 31, 2025. The declaration and payment of any future dividends is at the discretion of the Board of Directors and will depend upon many factors, including the Company's earnings, capital requirements, investment and growth strategies, financial conditions, the terms of the Company's indebtedness, which contains provisions that could limit the payment of dividends in certain circumstances, and other factors that the Board of Directors may deem to be relevant.

Share Repurchase Program

On August 31, 2023, the Board of Directors of the Company adopted a share repurchase program with authorization to repurchase up to 100,000 shares. There is no expiration date and currently, management has no plans to terminate this program.

On March 12, 2025, the Board of Directors amended the existing share repurchase program to authorize the repurchase of up to an additional 100,000 shares of the Company's common stock (as amended, the "Program"). The Program does not have a specified expiration date and the timing and amount of any repurchase under this Program will be determined by the Company's management at its discretion based upon its ongoing assessment of the capital needs of the business, the market price of the Company's common stock, and general market conditions. The Company did not purchase any shares under its share repurchase program during the three and six months ended October 31, 2025. As of October 31, 2025, the total remaining purchase authorization was 100,603 shares.

L. Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding during the year. Diluted earnings per share reflects the assumed exercise of outstanding options and the conversion of restricted stock units ("RSUs") under the Company's various stock compensation plans, except when RSUs and options have an antidilutive effect. There were no antidilutive RSUs and options outstanding at October 31, 2025. There were no antidilutive RSUs and options outstanding at October 31, 2024. The following is a reconciliation of basic to diluted weighted average common shares outstanding (in thousands):


	Three Months Ended		Six Months Ended
	October 31, 2025	October 31, 2024	October 31, 2025	October 31, 2024
Basic	2,866	2,872	2,859	2,861
Dilutive effect of stock options and RSUs	124	102	118	110
Weighted average common shares outstanding - diluted	2,990	2,974	2,977	2,971

M. Stock Options and Stock-based Compensation

The Company recognizes compensation costs related to stock options and other stock awards granted by the Company as operating expenses over their vesting period.

In August 2023, the stockholders approved the 2023 Omnibus Incentive Plan ("2023 Plan"), which enables the Company to grant equity-based awards, with potential recipients including directors, consultants, and employees. This plan replaces the 2017 Omnibus Incentive Plan ("2017 Plan"). All outstanding equity granted under the 2017 Plan remain subject to, and will be settled under, the 2017 Plan. At the date of approval of the 2023 Plan, there were 64,633 shares available for new awards under the 2017 Plan, and 168,791 shares available for issuance under equity awards outstanding under the 2017 Plan. These shares that were available for new awards and any shares subject to outstanding awards under the 2017 Plan that subsequently cease to be subject to such awards are available under the 2023 Plan. The 2023 Plan also increased the total number of shares reserved for issuance under the Company's equity compensation plans by 310,000, for a total of 374,633 shares initially reserved for issuance under the 2023 Plan. At October 31, 2025, there were 290,636 shares available for future issuance under the 2023 Plan.

In June 2025, the Company granted 72,728 RSUs under the 2023 Plan. These RSUs include both a service and a performance component, vesting over a three-year period. The recognized expense is based upon the vesting period for service criteria and estimated attainment of the performance criteria at the end of the three-year period, based on the ratio of cumulative days of service to total days over the three-year period. The Company recorded stock-based compensation expense of $454,000 and $885,000 during the three and six months ended October 31, 2025, respectively, with the remaining estimated stock-based compensation expense of $3,290,000 to be recorded over the remaining vesting periods. The Company recorded stock-based compensation expense of $373,000 and $691,000 during the three and six months ended October 31, 2024, respectively. Director's fees paid with shares of common stock in lieu of cash in accordance with Director compensation guidelines were $218,000 for the six months ended October 31, 2025, of which $197,000 was included in stock-based compensation.

N. Income Taxes

Income tax expense of $915,000 and $1,676,000 was recorded for the three and six months ended October 31, 2025, respectively. Income tax expense of $916,000 and $1,108,000 was recorded for the three and six months ended October 31, 2024, respectively. The effective tax rate was 26.5% and 22.7% for the three and six months ended October 31, 2025, respectively. The effective tax rate was 23.3% and 17.4% for the three and six months ended October 31, 2024, respectively. The effective tax rate for the current three-month period reflects the impact of foreign operations which are taxed at different rates than the U.S. tax rate of 21%, combined with expected current year tax expense for the Company's domestic operations. In addition, the income tax expense recorded for the six months ended October 31, 2025 was favorably impacted by a discrete tax benefit of $303,000 resulting from the issuance of stock through the vesting of restricted stock units during the first quarter.

In August 2019, the Company revoked its indefinite reinvestment of foreign unremitted earnings position in compliance with ASC 740 "Income Taxes" and terminated its indefinite reinvestment of unremitted earnings assertion for the Singapore and Kewaunee Labway India Pvt. Ltd. international subsidiaries. The Company has a deferred tax liability of $1,609,000 and $1,507,000 for the withholding tax related to Kewaunee Labway India Pvt. Ltd. as of October 31, 2025 and April 30, 2025, respectively.

On July 4, 2025, the U.S. government enacted Public Law No. 119-21, commonly known as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses, including modifications and extensions of certain Tax Cuts and Jobs Act provisions, domestic research and development cost expensing, extension of 100% bonus depreciation, limitations on interest expense deductions, and adjustments to certain Inflation Reduction Act incentives. Since the OBBBA was enacted on July 4, 2025, its full impact is not reflected in the Company's Condensed Consolidated Financial Statements for the six months ended October 31, 2025. The Company is evaluating the provisions to assess potential effects on its effective tax rate, deferred tax assets and liabilities, and future cash tax obligations. The Company will recognize any required adjustments once the analysis is complete and impacts can be reasonably quantified.

O. Segment Information

In accordance with ASC 280, Segment Reporting, the Company's operations are classified into two business segments: Domestic and International. The Domestic business segment principally designs, manufactures, and installs scientific and technical furniture, including steel and wood laboratory cabinetry, fume hoods, flexible systems, worksurfaces, workstations, workbenches, and computer enclosures. On November 1, 2024, the Company completed its acquisition of Nu Aire, whose operating results are reflected in the Domestic Operations segment, expanding the Company's Domestic capabilities through its manufacturing of biological safety cabinets, CO2 incubators, ultralow freezers, and other essential laboratory products. See Note C, Nu Aire Acquisition, for further information. The International business segment, which consists of the Company's foreign subsidiaries, provides products and services, including facility design, detailed engineering, construction, and project management from the planning stage through testing and commissioning of laboratories.

The Company's Chief Operating Decision Maker ("CODM") is its CEO, who evaluates the performance of each segment and measures its segment profitability based on earnings before income taxes. Some Corporate expenses, such as those related to executive management, finance, etc., are allocated to the segments. Certain corporate expenses shown below are net of expenses that have been allocated to the business segments. We periodically review these allocations and adjust them based upon changes in business circumstance. Intersegment transactions are recorded at normal profit margins. All intercompany balances and transactions have been eliminated.

The following tables provide financial information by business segment and unallocated corporate expenses for the periods ended October 31, 2025 and 2024 (in thousands):


	Domestic Operations		International Operations		Corporate / Eliminations		Total
Three Months Ended October 31, 2025
Revenues from external customers	$	55,224	$	14,872	$	—	$	70,096
Intersegment revenues	321		652		(973)		—
Depreciation and amortization	1,459		99		22		1,580
Interest expense	311		10		740		1,061
Earnings (loss) before income taxes	4,944		1,024		(2,515)		3,453
Income tax expense (benefit)	1,347		290		(722)		915
Net earnings attributable to non-controlling interest	—		93		—		93
Net earnings (loss) attributable to Kewaunee Scientific Corporation	3,597		641		(1,793)		2,445
Segment assets	150,029		39,046		—		189,075
Expenditures for segment assets	1,529		41		—		1,570
Revenues (excluding intersegment) from customers in foreign countries	2,720		14,872		—		17,592

Three Months Ended October 31, 2024
Revenues from external customers	$	36,409	$	11,355	$	—	$	47,764
Intersegment revenues	157		474		(631)		—
Depreciation and amortization	660		103		43		806
Interest expense	413		19		10		442
Earnings (loss) before income taxes	5,765		610		(2,444)		3,931
Income tax expense (benefit)	1,241		247		(572)		916
Net earnings attributable to non-controlling interest	—		7		—		7
Net earnings (loss) attributable to Kewaunee Scientific Corporation	4,524		356		(1,872)		3,008
Segment assets	93,551		40,927		—		134,478
Expenditures for segment assets	640		43		—		683
Revenues (excluding intersegment) from customers in foreign countries	439		11,355		—		11,794


	Domestic Operations		International Operations		Corporate / Eliminations		Total
Six Months Ended October 31, 2025
Revenues from external customers	$	109,576	$	31,624	$	—	$	141,200
Intersegment revenues	406		1,691		(2,097)		—
Depreciation and amortization	2,887		195		47		3,129
Interest expense	624		23		1,472		2,119
Earnings (loss) before income taxes	10,779		2,167		(5,573)		7,373
Income tax expense (benefit)	2,460		724		(1,508)		1,676
Net earnings attributable to non-controlling interest	—		159		—		159
Net earnings (loss) attributable to Kewaunee Scientific Corporation	8,319		1,284		(4,065)		5,538
Segment assets	150,029		39,046		—		189,075
Expenditures for segment assets	2,200		141		—		2,341
Revenues (excluding intersegment) from customers in foreign countries	5,487		31,624		—		37,111

Six Months Ended October 31, 2024
Revenues from external customers	$	71,932	$	24,225	$	—	$	96,157
Intersegment revenues	270		1,822		(2,092)		—
Depreciation and amortization	1,322		210		89		1,621
Interest expense	854		40		20		914
Earnings (loss) before income taxes	9,400		1,397		(4,436)		6,361
Income tax expense (benefit)	2,005		526		(1,423)		1,108
Net earnings attributable to non-controlling interest	—		52		—		52
Net earnings (loss) attributable to Kewaunee Scientific Corporation	7,395		819		(3,013)		5,201
Segment assets	93,551		40,927		—		134,478
Expenditures for segment assets	836		125		—		961
Revenues (excluding intersegment) from customers in foreign countries	964		24,225		—		25,189

P. New Accounting Standards

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements for Income Tax Disclosures," which requires public business entities to, on an annual basis, (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. This ASU also provides for additional disclosure requirements to provide clarity for investors related to income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024. The Company will adopt this standard for its annual reporting in fiscal year 2026. The Company is evaluating the full extent of the potential impact of the adoption of this standard but does not expect the adoption of this standard to have a significant impact on the Company's consolidated financial position or results of operations.

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)," which requires public business entities to provide disclosure of additional information about certain identified costs and expenses on both an interim and annual basis. In January 2025, the FASB issued ASU 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40); Clarifying the Effective Date," which provided clarification regarding the effective dates of annual and interim disclosure requirements presented in ASU 2024-03. Upon consideration of the clarification in 2025-01, the guidance in ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning within annual reporting periods beginning after December 15, 2027. The Company will adopt this standard in fiscal year 2028 for annual disclosures and fiscal year 2029 for interim disclosures. The Company is evaluating the full extent of the potential impact of the adoption of this standard but does not expect the adoption of this standard to have a significant impact on the Company's consolidated financial position or results of operations.

Q. Subsequent Events

First Amendment to Loan Agreement

On December 4, 2025, the Company entered into a First Amendment to Loan Agreement ("First Amendment") with PNC Bank, National Association ("PNC"). The First Amendment amends the Loan Agreement, dated as of November 1, 2024 (the "Loan Agreement"), between the Company and PNC to, among other things, (i) permit the Company to repay in full the outstanding principal balances of the subordinated seller notes issued by the Company in connection with its acquisition of Nu Aire, Inc. ("Nu Aire") in November 2024 (collectively, the "Seller Notes"), together with all accrued but unpaid interest thereon (the "Seller Note Repayment"), (ii) provide for an additional $10.0 million term loan the proceeds of which are to be used by the Company to partially fund the Seller Note Repayment, and (iii) permit the Company to draw and use available funds under the revolving line of credit established by the Loan Agreement to partially fund the Seller Note Repayment.

Repayment of Seller Notes

On December 4, 2025, the Company completed the Seller Note Repayment. the Seller Notes were entered into on November 1, 2024 by and between the Company and each of the sellers (collectively, the "Sellers") in connection with the Company's acquisition of Nu Aire from the Sellers. The Seller Notes had an original outstanding principal balance of $23.0 million and accrued interest at 8% per annum. The Seller Notes were scheduled to mature on November 1, 2027. Pursuant to the terms of the Seller Notes, the Seller Notes could be prepaid, in full or in part, at any time without prepayment penalty, premium, or other fee. Upon completion of the Seller Note Repayment, all obligations, covenants, debts and liabilities of the Company under the Seller Notes were satisfied and discharged in full, and the Seller Notes and all other documents entered into in connection with the Seller Notes were terminated.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Company's 2025 Annual Report to Stockholders on Form 10-K contains management's discussion and analysis of the Company's financial condition and results of operations as of and for the fiscal year ended April 30, 2025. The following discussion and analysis describes material changes in the Company's financial condition since April 30, 2025. The analysis of results of operations compares the three and six months ended October 31, 2025 with the comparable period of the prior year.

Acquisition of Nu Aire, Inc.

On November 1, 2024, the Company completed an acquisition of Nu Aire. The Company purchased all of the outstanding capital stock of Nu Aire for $55.0 million, subject to certain customary adjustments for debt, cash, transaction expenses and net working capital. $23.0 million of the purchase price payable at closing of the Transaction was funded pursuant to subordinated seller notes. The remaining purchase price payable at closing of the Transaction was paid in cash, which cash was funded, in part, through the Revolving Credit Facility and Term Loan, provided to the Company by PNC Bank, National Association.

Nu Aire is renowned for its manufacturing of biological safety cabinets, airflow products, CO2 incubators, ultralow freezers, animal handling equipment, pharmacy compounding isolators, and related parts and accessories. Their products serve a diverse range of industries, including life sciences, healthcare, pharmacy, education, food and beverage, and industrial sectors.

The acquisition of Nu Aire presents a unique opportunity for the Company to combine its robust capabilities with a recognized market leader whose product portfolio and well-developed channel strategy complement the Company’s existing offerings. This acquisition expands the Company’s capabilities, allowing the combined organization to better meet the diverse needs of end-users in laboratory furnishings. Additionally, Nu Aire has established distribution partners in regions where the Company has not previously had a presence. This move accelerates the Company’s vision of becoming the market leader in the design and manufacturing of laboratory furniture and technical products essential for outfitting laboratories.

Critical Accounting Estimates

In the ordinary course of business, the Company may make estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our consolidated financial statements in conformity with generally accepted accounting principles in the United States of America. Actual results could differ significantly from those estimates. There have been no material changes to the Company's determination of its most critical accounting estimates, which are those that are most important to the portrayal of our financial condition and results of operations, and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain, from those described in Part II, Item 7 of the Company's 2025 Annual Report on Form 10-K under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" beyond those set forth below.

Results of Operations

Sales for the quarter were $70,096,000, an increase from sales of $47,764,000 in the comparable period of the prior year. Domestic sales for the quarter were $55,224,000, up 51.7% when compared to sales of $36,409,000 in the comparable period of the prior year. Domestic sales increased when compared to the prior year primarily due to the acquisition of Nu Aire, as discussed above, which closed on November 1, 2024 and was not part of the prior year comparable results. International sales for the quarter were $14,872,000, up 31.0% when compared to sales of $11,355,000 in the comparable period of the prior year. International sales increased when compared to the prior year period due to the continued delivery of large projects booked in prior periods, a trend that continues from the Company's first quarter fiscal year 2026 results.

Sales for the six months ended October 31, 2025 were $141,200,000, an increase from sales of $96,157,000 in the comparable period of the prior year. Domestic sales for the period were $109,576,000, up 52.3% from sales of $71,932,000 in the comparable period of the prior year. The increase in Domestic sales was due to the acquisition of Nu Aire, as discussed above, which was not part of the prior year comparable results. International sales for the period were $31,624,000, up 30.5% from sales of $24,225,000 in the comparable period of the prior year. The increase in International sales was primarily driven by the continued delivery of large projects booked in prior periods, as noted above.

The Company's order backlog was $192.9 million at October 31, 2025, as compared to $184.4 million at October 31, 2024, and $214.6 million at April 30, 2025.

The gross profit margin for the three months ended October 31, 2025 was 28.1% of sales, as compared to 29.2% of sales in the comparable quarter of the prior year. The gross profit margin for the six months ended October 31, 2025 was 28.8% of sales, as compared to 27.5% of sales in the comparable period of the prior year. The change in gross profit margin percentage for the three and six months ended October 31, 2025 was primarily driven by the acquisition of Nu Aire on November 1, 2024. Additionally, domestic segment profitability in the three months ended October 31, 2025 was also impacted by lower manufacturing volumes and reduced productivity across the laboratory construction portion of the business, offset by strength in the end-user containment portion of the business.

Operating expenses for the three months ended October 31, 2025 were $15,613,000, or 22.3% of sales, as compared to $9,518,000, or 19.9% of sales, in the comparable period of the prior year. Operating expenses for the six months ended October 31, 2025 were $31,733,000, or 22.5% of sales, as compared to $19,431,000, or 20.2% of sales, in the comparable period of the prior year. The increase in operating expenses for the three months ended October 31, 2025 was primarily due to the acquisition of Nu Aire. The increase in operating expenses was also impacted by increases in SG&A wages, benefits, incentive and stock-based compensation of $699,000 and international operating expenses of $397,000, partially offset by decreases in consulting and professional fees of $624,000. The increase in operating expenses for the six months ended October 31, 2025 was primarily due to the acquisition of Nu Aire. The increase in operating expenses was also impacted by increases in SG&A wages, benefits, incentive and stock-based compensation of $881,000 and international operating expenses of $789,000, partially offset by decreases in consulting and professional fees of $655,000.

Interest expense was $1,061,000 and $2,119,000 for the three and six months ended October 31, 2025, respectively, as compared to $442,000 and $914,000 for the comparable periods of the prior year. The changes in interest expense were due to changes in the levels of bank and other borrowings and interest rates.

Income tax expense of $915,000 and $916,000 were recorded for the three months ended October 31, 2025 and 2024, respectively. Income tax expense of $1,676,000 and $1,108,000 were recorded for the six months ended October 31, 2025 and 2024, respectively. The effective income tax rate for the three and six months ended October 31, 2025 was 26.5% and 22.7%, respectively, as compared to 23.3% and 17.4% for the three and six months ended October 31, 2024, respectively. The effective tax rate for the current three and six month periods reflects the impact of foreign operations which are taxed at different rates than the U.S. tax rate of 21%, combined with expected current year tax expense for the Company's domestic operations. In addition, the income tax expense recorded for the three months ended July 31, 2025 was favorably impacted by a discrete tax benefit of $303,000 resulting from the issuance of stock through the vesting of restricted stock units during the first quarter. On July 4, 2025, the U.S. government enacted Public Law No. 119-21, commonly known as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses. Since OBBBA was enacted on July 4, 2025, its full impact is not reflected in the Company's Condensed Consolidated Financial Statements for the three months ended July 31, 2025. The Company is evaluating the provisions to assess potential effects on its effective tax rate, deferred tax assets and liabilities, and future cash tax obligations. See Note N, Income Taxes, of the Notes to Condensed Consolidated Financial Statements for additional information.

Non-controlling interests related to the Company's subsidiaries not 100% owned by the Company decreased net earnings by $93,000 and $159,000 for the three and six months ended October 31, 2025, respectively, as compared to $7,000 and $52,000,

respectively, for the comparable period of the prior year. The change in the net earnings attributable to the non-controlling interest in the current period was due to changes in earnings (losses) of the subsidiaries in the related period.

Net earnings was $2,445,000, or $0.82 per diluted share, for the three months ended October 31, 2025, compared to net earnings of $3,008,000, or $1.01 per diluted share, in the prior year period. Net earnings was $5,538,000, or $1.86 per diluted share, for the six months ended October 31, 2025, compared to net earnings of $5,201,000, or $1.75 per diluted share, in the prior year period.

Liquidity and Capital Resources

Our principal sources of liquidity have historically been funds generated from operating activities, supplemented as needed by borrowings under our previous Mid Cap Revolving Credit Facility. The Company terminated the Mid Cap Revolving Credit Facility on September 30, 2024. In conjunction with the Nu Aire acquisition (see Note C, Nu Aire Acquisition for additional details), the Company entered into a new Revolving Credit Facility with PNC, which is available on an ongoing basis to supplement our sources of liquidity as needed. Additionally, certain machinery and equipment are financed by non-cancellable operating and financing leases. The Company believes that these sources will be sufficient to support ongoing business requirements in the current fiscal year, including capital expenditures.

The Company had working capital of $67,830,000 at October 31, 2025, compared to $64,651,000 at April 30, 2025. The ratio of current assets to current liabilities was 2.5-to-1.0 at October 31, 2025, compared to 2.2-to-1.0 at April 30, 2025.

The Company's operating activities provided cash of $1,526,000 during the six months ended October 31, 2025. Net cash provided by operating activities was primarily driven by operations and decreases in receivables of $3.4 million, partially offset by increases in inventories of $2.7 million, decreases in accounts payable and other accrued expenses of $6.4 million, and decreases in deferred revenue of $1.7 million. During the six months ended October 31, 2025, the Company used net cash of $2,341,000 in investing activities related to capital expenditures. The Company's financing activities used net cash of $2,316,000 during the six months ended October 31, 2025, primarily related to the servicing of the Company's long-term debt arrangements and the payment of employee taxes withheld for stock-based compensation. See Note H, Long-term Debt and Other Credit Arrangements, for more details. On December 4, 2025, the Company entered into a First Amendment to Loan Agreement with PNC and completed the Seller Note Repayment. See Note Q, Subsequent Events, for more details.

Outlook

The Company's ability to predict future demand for its products continues to be limited given its role as subcontractor or supplier to dealers for subcontractors. Demand for the Company's products is also dependent upon the number of laboratory construction projects planned and/or current progress in projects already under construction. The Company's earnings are also impacted by fluctuations in prevailing pricing for projects in the laboratory construction marketplace and costs of raw materials, including steel, wood, and epoxy resin.

Kewaunee's second quarter results for fiscal year 2026 align with the expectations previously communicated regarding volatility in project delivery timelines. However, the Company's quoting and booking activity remain strong, which is reflected in the Company's backlog, which remains near record levels.

The Company remains focused on growth, both organically and inorganically, and is committed to making strategic investments in the people, processes, and technology that will support and enable this growth in a sustainable manner. The Company is confident that these strategic investments and its healthy backlog position the Company well to handle any anticipated short-term headwinds and maintain the long-term health of the business.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

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 Annual Report, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to: our ability to realize the benefits anticipated as a result of the Nu Aire acquisition; competitive and general economic conditions, including disruptions from government mandates, both domestically and internationally, as well as supplier constraints and other supply disruptions; changes in customer demands; technological changes in our operations or in our industry; dependence on customers’ required delivery schedules; risks related to fluctuations in the Company’s operating results from quarter to quarter; risks related to international operations, including foreign currency fluctuations; changes in the legal and regulatory environment; changes in raw materials and commodity costs; acts of terrorism, war, governmental action, natural disasters and other Force Majeure events. The cautionary statements made pursuant to the Reform Act herein and elsewhere by us should not be construed as exhaustive. We cannot always predict what factors would cause actual results to differ materially from those indicated by the forward-looking statements. Over time, our actual results, performance, or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and harmful to our stockholders' interest. Many important factors that could cause such differences are described under the caption "Risk Factors" in Item 1A in the Company's 2025 Annual Report on Form 10-K and in Item 1A of Part II in this Quarterly Report on Form 10-Q, which you should review carefully. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There are no material changes to the disclosures made on this matter in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of October 31, 2025. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that, as of October 31, 2025, the Company's disclosure controls and procedures were adequate and effective and designed to ensure that all material information required to be filed in this quarterly report is made known to them by others within the Company and its subsidiaries.

(b) Changes in internal controls

In November 2024, the Company completed the acquisition of Nu Aire. The Company is in the process of integrating Nu Aire into its systems and control environment as of October 31, 2025. The Company believes it has taken the necessary steps to monitor and maintain appropriate internal control over financial reporting during this integration. Other than the impact of this business acquisition, there were no significant changes in the Company's internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the Company's 2025 Annual Report on Form 10-K under the heading "Risk Factors," any one or more of which could, directly or indirectly, cause the Company's actual financial condition and operating results to vary materially from its past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company's business, financial condition, operating results, and stock price. There have been no material changes to the Company's risk factors from those set forth in the Company's Annual Report on Form 10-K for the year ended April 30, 2025 as filed with the SEC on July 2, 2025 beyond those set forth below.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

The Company's share repurchase program was adopted on August 31, 2023. This program was subsequently amended on March 12, 2025 to authorize the repurchase of up to an additional 100,000 shares of the Company's common stock. The Company did not purchase any shares under its share repurchase program during the three and six months ended October 31, 2025. The share repurchase program had remaining authorization of 100,603 shares as of October 31, 2025.

Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers

Transactions in the Company's securities by its directors or executive officers are required to be made in accordance with its Insider Trading Policy, which, among other things, requires that the transaction be in accordance with applicable U.S. federal securities laws that prohibit trading while in the possession of material nonpublic information. Rule 10b5-1 under the Securities Exchange Act of 1934 provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information.

During the six months ended October 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed the Company of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K).

Item 6. Exhibits


10.1						First Amendment to Loan Agreement, dated December 4 , 2025, by and between Kewaunee Scientific Corporation and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 on the registrant's Current Report on Form 8-K filed on December 4 , 2025).
31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	KEWAUNEE SCIENTIFIC CORPORATION (Registrant)

Date: December 12, 2025	By	/s/ Donald T. Gardner III
		Donald T. Gardner III
		(As duly authorized officer and Vice President, Finance and Chief Financial Officer)

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