Breaking Down Kewaunee Scientific Corporation (KEQU) Financial Health: Key Insights for Investors

You're looking at Kewaunee Scientific Corporation (KEQU) and seeing a classic growth-by-acquisition story, but with a clear near-term debt risk you need to map out. The headline number is impressive: Q3 Fiscal Year 2025 sales jumped 43.6% year-over-year to $67,167,000, largely fueled by the strategic Nu Aire acquisition and strong domestic demand, pushing the order backlog to a robust $221.6 million. That's a huge line of sight. But here's the quick math on the flip side: the acquisition spiked long-term debt to $65,819,000 as of January 31, 2025, driving the debt-to-equity ratio up to 1.29-to-1, a significant jump from the prior year. The unadjusted GAAP diluted earnings per share (EPS) of just $0.45 in Q3, down from $0.85, shows exactly how integration costs are hitting the bottom line, even though the adjusted EPS was a solid $1.09. We need to look past the top-line growth and see if the integration-and that new debt load-actually pays off in sustained, high-quality earnings, especially with the International segment still facing customer site delays in India.

Revenue Analysis

You're looking for a clear picture of Kewaunee Scientific Corporation's (KEQU) sales engine, and the takeaway is this: the company delivered a strong fiscal year 2025, largely fueled by its domestic segment and a strategic acquisition, even with international headwinds. The key number is the annual revenue, which hit $240.47 million for the fiscal year ending April 30, 2025.

That $240.47 million figure represents an 18.02% year-over-year revenue growth compared to the fiscal year 2024's total of $203.76 million. Honestly, that's a solid jump, especially in a capital expenditure-driven market. This growth is defintely a result of both core demand and a significant portfolio expansion.

Primary Revenue Streams and Product Mix

Kewaunee Scientific Corporation operates by designing, manufacturing, and installing specialized laboratory, healthcare, and technical furniture and infrastructure products. Their revenue comes from two main channels, but the product mix is what really matters now.

The core business is built on essential lab infrastructure, but the product line got a serious boost in FY2025.

• Traditional Infrastructure: Steel and wood casework, fume hoods, adaptable modular systems, and epoxy resin work surfaces.
• Life Science Equipment: Biological safety cabinets, CO2 incubators, and ultralow freezers, primarily added through the Nu Aire acquisition.

The acquisition of Nu Aire, Inc., completed on November 1, 2024, was the biggest change to the revenue mix in fiscal year 2025. This move immediately expanded Kewaunee Scientific Corporation's reach into the high-growth life sciences and pharmaceutical sectors, directly contributing to the domestic segment's performance.

Segment Contribution and Growth Dynamics

The company reports revenue across two segments: Domestic and International. For the full fiscal year 2025, the Domestic segment was the dominant driver, but the international business still holds a substantial portion of the overall pie.

Here's the quick math on the full-year split:

What this estimate hides is the volatility in the International segment. While the full-year contribution was 29%, the segment faced a 30.1% decline in sales in the second quarter of FY2025 alone due to project delays. The long-term trend, however, is a strategic focus on expanding that worldwide customer base, as detailed in the Mission Statement, Vision, & Core Values of Kewaunee Scientific Corporation (KEQU).

So, the action item here is to watch the Domestic segment's ability to integrate Nu Aire and sustain its momentum, plus keep a very close eye on the International segment's ability to convert its backlog, which remains historically high, into realized revenue.

Profitability Metrics

You need a clear picture of Kewaunee Scientific Corporation (KEQU)'s earning power, and the latest figures show a story of strong domestic performance offsetting international headwinds and one-time costs. For the trailing twelve months (TTM) ended near November 2025, the company's profitability ratios are solid but still lag the broader industry, signaling room for operational improvement.

The key takeaway is that Kewaunee Scientific Corporation is generating a healthy gross profit (the money left after covering the direct costs of goods sold), but operating expenses and corporate one-offs are weighing on the final net income. This is a common challenge for companies in an expansion phase.

Profitability Ratios: KEQU vs. Industry

Comparing Kewaunee Scientific Corporation's TTM profitability ratios against the industry average is crucial. The TTM data, which gives us the most current full-year view near the end of 2025, shows a significant gap, which is where your analysis should focus.

• Gross Margin: Kewaunee Scientific Corporation's TTM Gross Margin is 29.37%.
• Operating Margin: The TTM Operating Margin is 7.6%.
• Net Profit Margin: The TTM Net Profit Margin stands at 4.68%.

Here's the quick math on how Kewaunee Scientific Corporation stacks up against its peers in the laboratory and technical furniture sector:

The gross margin difference is defintely the most striking. It suggests Kewaunee Scientific Corporation has either lower pricing power, higher raw material costs, or less efficient manufacturing processes compared to the industry benchmark. But still, a near 30% gross margin gives them a strong starting point to cover operating costs.

Operational Efficiency and Cost Management

The trend in profitability over time shows a company fighting to improve its core efficiency while managing external pressures. In the second quarter of fiscal year 2025 (Q2 FY2025), Kewaunee Scientific Corporation successfully expanded its gross margin to 29.2%, up from 26.7% in the prior year's quarter. This 2.5 percentage point jump is a clear sign of better cost management and pricing power in the Domestic segment.

However, this operational strength was masked by other factors. Specifically, Q2 FY2025 saw the consolidated operating income drop to $4.43 million from $5.11 million year-over-year. The main culprits were a 30.1% drop in International sales due to construction delays in India, plus elevated Corporate segment costs, which included $1.54 million in professional fees related to the Nu Aire acquisition.

The operational efficiency story is bifurcated: Domestic is strong, International is a drag. The Domestic segment's net earnings actually increased to $4.524 million in Q2 FY2025, up from $3.054 million in the prior year quarter. This shows the underlying business is healthy, but you need to watch how management integrates Nu Aire and stabilizes the International segment to see the consolidated margins improve. For a deeper dive into the company's financial structure, check out Breaking Down Kewaunee Scientific Corporation (KEQU) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

Kewaunee Scientific Corporation (KEQU) made a strategic shift in its capital structure during the 2025 fiscal year, moving to a notably higher reliance on debt to finance its growth, specifically the acquisition of Nu Aire, Inc. This is a classic example of using debt for a transformative, non-organic growth play. For the fiscal year ending April 30, 2025, Kewaunee Scientific Corporation's total debt was approximately $65.5 million, a significant jump from the prior year's structure.

This debt is split between short-term and long-term obligations. Short-term debt stood at $4,773,000, while long-term debt was the larger component at $60,730,000 as of April 30, 2025. The key takeaway here is that the debt is mostly long-term, which is less of an immediate liquidity concern, but still a substantial fixed obligation. The company's total stockholders' equity at the end of FY 2025 was $64,457,000.

The Debt-to-Equity (D/E) ratio for Kewaunee Scientific Corporation at the close of FY 2025 was approximately 1.17. This means the company was using about $1.17 of debt for every dollar of shareholder equity. To put this in perspective, the average D/E ratio for the broader Building Products & Equipment industry is closer to 0.67, making Kewaunee Scientific Corporation's leverage profile significantly higher than its peers.

This spike in leverage is directly tied to the acquisition of Nu Aire, Inc. on November 1, 2024. The financing for this deal introduced new debt instruments, including a $23,537,000 long-term seller note and a $10,412,000 long-term term loan, which significantly altered the balance sheet. This is a defintely a calculated risk: they are betting that the earnings from the acquired asset will more than cover the interest costs.

Kewaunee Scientific Corporation balances its financing by strategically using debt to fund large-scale, transformative projects like the Nu Aire acquisition, while relying on retained earnings and a relatively stable equity base for ongoing operations. The long-term debt also includes a substantial $26,632,000 from a December 2021 sale-leaseback transaction, which is essentially a form of asset-backed financing. Investors should note the upcoming maturity of the Revolving Credit Facility in December 2025, which will require either repayment or refinancing.

• Total Debt (FY25): $65.5 million.
• D/E Ratio (FY25): 1.17, above the industry benchmark of 0.67.
• New Debt: Driven by the Nu Aire acquisition, including a $23.5 million seller note.
• Near-Term Action: Revolving Credit Facility matures in December 2025.

For a deeper dive into the company's overall financial stability, you can read the full post: Breaking Down Kewaunee Scientific Corporation (KEQU) Financial Health: Key Insights for Investors

Liquidity and Solvency

You need to know if Kewaunee Scientific Corporation (KEQU) can cover its near-term obligations, especially after a major acquisition. The short answer is yes, the company's liquidity position remains strong, but the recent Nu Aire acquisition has dramatically shifted the cash flow profile and increased long-term debt.

A look at the key liquidity ratios for the 2025 fiscal year (FY2025) shows solid short-term financial health. These ratios tell us how easily Kewaunee Scientific Corporation can convert assets to cash to pay off debts coming due in the next year.

• Current Ratio: The Current Ratio for FY2025 stood at a healthy 2.32. This means the company has $2.32 in current assets (cash, receivables, inventory) for every dollar of current liabilities. Anything over 2.0 is generally considered very strong.
• Quick Ratio: The Quick Ratio, which strips out inventory (the least liquid current asset), was 1.63. This is still excellent, suggesting Kewaunee Scientific Corporation can cover its short-term debt even without selling any of its product inventory.

The company is defintely not struggling to pay its bills.

Working Capital and Debt Trends

The trend in working capital (Current Assets minus Current Liabilities) throughout FY2025 was positive, signaling improved operational efficiency and financial flexibility. At the end of the second quarter of FY2025 (October 31, 2024), working capital had improved to $59,965,000, up from $56,037,000 at the start of the fiscal year. By the third quarter (January 31, 2025), it was $58,441,000. This upward trend, even with the integration costs of the Nu Aire acquisition, is a strong indicator of management's focus on capital efficiency. Plus, short-term debt saw a significant decrease, dropping from $3.1 million to just $805,000 by October 31, 2024, which is a great move for immediate liquidity.

Here's a quick look at the working capital position:

Cash Flow: The Nu Aire Impact

The cash flow statement for FY2025 tells a story dominated by the strategic acquisition of Nu Aire. Operating Cash Flow (OCF), which is cash generated from the core business, was a solid $14.78 million for the full fiscal year. This shows the underlying business is generating sufficient cash from sales and operations. However, the Investing Cash Flow was a significant outflow of -$30.9 million, primarily driven by the cash used for the acquisition. This is normal for a company executing a growth strategy.

On the financing side, the acquisition led to a large increase in long-term debt, which rose to $65,819,000 by January 31, 2025. Management has been clear that a top capital allocation priority is now servicing and paying down the debt assumed with the Nu Aire purchase. You can read more about the company's long-term strategy here: Mission Statement, Vision, & Core Values of Kewaunee Scientific Corporation (KEQU).

Near-Term Risks and Opportunities

The primary liquidity risk stems from the reduced cash on hand, which fell from $25,938,000 at the end of FY2024 to $12,335,000 by January 31, 2025, due to the acquisition. This is a temporary concern, though, as the strong OCF and high backlog of $184.4 million as of October 31, 2024, provide a clear runway for future cash generation. The opportunity here is that the acquisition is expected to generate sustained cash flow and deliver value, which will quickly replenish the cash reserves and help pay down that new debt. The underlying operational cash generation is sound, so the liquidity risk is manageable.

Valuation Analysis

You're looking at Kewaunee Scientific Corporation (KEQU) and wondering if the current price is a deal or a trap. Honestly, the valuation picture is mixed, suggesting the market is defintely pricing in the company's strong revenue growth but also its recent acquisition-related costs. The analyst consensus is a clear Hold right now, which is a signal to pause and look closely at the multiples.

As of November 2025, Kewaunee Scientific Corporation's stock closed near $39.46. The stock has experienced a wild ride over the last 52 weeks, with a high of $71.33 and a low of $30.33, reflecting significant volatility. Still, the price has increased by 7.78% over the last 12 months, which shows a positive long-term price trend despite the recent dip.

Here's the quick math on the key valuation multiples based on the most recent 2025 fiscal year data:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is around 9.08 to 10.12, which looks low compared to the broader market and suggests the stock is potentially undervalued on a historical earnings basis. But the forward P/E, which uses estimated future earnings, jumps to about 18.71. This forward multiple is considered in the 'Fair zone' when compared to the company's five-year average of 12.17.
• Price-to-Book (P/B) Ratio: The P/B is currently around 1.73. This is actually 11.73% higher than the five-year average of 1.55, indicating that investors are paying a bit of a premium relative to the company's net assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is where the valuation looks stretched. The current EV/EBITDA is 14.03. What this estimate hides is that this multiple falls within the 'Overvalued' range when benchmarked against the company's five-year average of 8.10. The Nu Aire acquisition costs in FY2025 certainly impacted the EBITDA, but the market is clearly valuing the enterprise highly.

The company does not currently pay a dividend, so the dividend yield is 0%. This means your return will come purely from capital appreciation, not income. The payout ratio is technically 18.40% based on a dividend coverage metric, but since there is no dividend, you can ignore that for now.

The consensus from the street is a firm Hold. This stems from the conflicting signals: strong sales growth of 43.6% in Q3 FY2025, plus a huge order backlog of $221.6 million, but net earnings were pressured by the acquisition and integration costs, dropping from $2.5 million to $1.4 million in the same quarter. The market is waiting to see how quickly Kewaunee Scientific Corporation can translate that massive backlog into clean, profitable earnings now that the acquisition dust has settled.

For a deeper dive into the operational side, check out the full post: Breaking Down Kewaunee Scientific Corporation (KEQU) Financial Health: Key Insights for Investors.

Your next step should be to track the Q4 FY2025 and Q1 FY2026 earnings reports to see if the adjusted EBITDA figures-which exclude those one-time acquisition costs-start to justify that high EV/EBITDA multiple. That's the real tell.

Risk Factors

You're looking at Kewaunee Scientific Corporation (KEQU) and seeing a record backlog of $214.6 million as of April 30, 2025, but that doesn't mean the path ahead is smooth. As an analyst, I see near-term execution risks and a shift in the company's financial profile that demand attention. The biggest risks right now are tied to the Nu Aire acquisition and persistent international market delays.

The strategic move to acquire Nu Aire, completed on November 1, 2024, is smart for expanding their containment solutions business, but it comes with a financial cost. Honestly, the integration fees and purchase accounting adjustments compressed GAAP profitability. In the third quarter of fiscal year 2025, GAAP pre-tax earnings fell 63.7% to just $1.275 million, down from $3.515 million in the prior year quarter. That's a significant hit to unadjusted earnings, even if the adjusted numbers look better.

The acquisition also changed Kewaunee Scientific Corporation's balance sheet dramatically. Long-term debt ballooned to $65.819 million as of January 31, 2025, up from $28.479 million on April 30, 2024. Here's the quick math: the debt-to-equity ratio jumped to 1.29-to-1. That higher leverage means less financial flexibility for the company to weather a downturn or fund future organic growth, defintely something to watch.

• Higher debt limits financial flexibility.
• Integration costs pressure near-term earnings.

Operationally, the international segment remains a major headache. Customer construction site delays in India have been a drag on performance, pushing out the timing of deliveries and billings. For the second quarter of fiscal year 2025, International sales dropped 30.1% to $11.355 million due to this issue. While the domestic segment is robust-sales rose 63.6% to $51.976 million in Q3 FY2025-the international softness shows Kewaunee Scientific Corporation is exposed to project-specific risks and geopolitical instability in its non-U.S. markets.

Also, don't overlook customer concentration. In fiscal year 2025, sales to just two domestic dealers and one national stocking distributor accounted for approximately 41% of the company's total sales. That's a lot of eggs in a few baskets. Losing a major customer or seeing a large project canceled would materially affect their financials.

The company is mitigating some external risks, though. Management has emphasized supply chain resiliency and diversified sourcing to counter potential tariff impacts and inflationary pressures on raw materials. The Nu Aire acquisition itself is a mitigation strategy, expanding their product portfolio into higher-margin containment solutions, which helps diversify their revenue stream against volatility in the core lab furniture market. If you want to dig deeper into the players behind the stock, check out Exploring Kewaunee Scientific Corporation (KEQU) Investor Profile: Who's Buying and Why?

The core action here is to monitor the debt-to-EBITDA ratio and the international segment's billings over the next two quarters. If the Nu Aire integration costs start to fade and the India projects finally ship, the leverage will look much more manageable against improved earnings.

Growth Opportunities

You're looking for a clear signal on Kewaunee Scientific Corporation (KEQU)'s forward trajectory, and the latest fiscal year 2025 data gives us exactly that: a significant growth acceleration driven by a smart, targeted acquisition. The company delivered a total revenue of $240.5 million, an impressive 18% surge from the prior year, largely fueled by its domestic segment. The key is understanding how they plan to sustain this momentum, especially with a record-high order book.

Honestly, the biggest lever Kewaunee Scientific Corporation pulled this year was the acquisition of Nu Aire, Inc. on November 1, 2024. This wasn't just about adding sales; it was a strategic move to create a more comprehensive 'total lab solutions' portfolio. Nu Aire brings high-margin, specialized laboratory equipment that Kewaunee Scientific Corporation didn't previously manufacture, which is defintely a game-changer for their market position.

The integration of Nu Aire strengthens Kewaunee Scientific Corporation's product offering and market reach by adding a second U.S. manufacturing hub in Minnesota. This immediately diversifies their domestic supply chain and expands their product catalog to include critical biosafety and containment devices, a high-growth area in life sciences. This means they can now outfit almost the entire lab, from the casework to the specialized equipment.

• Add biosafety cabinets and CO2 incubators.
• Strengthen position in containment solutions.
• Expand distribution network in under-penetrated regions.

Here's the quick math on what this means for the near-term outlook, based on the end of fiscal year 2025:

What this estimate hides is the continued challenge in the International Segment, which saw sales drop 8.2% to $61.1 million in fiscal year 2025, mostly due to customer site delays in India. Still, the company's long-term competitive advantage rests on its nearly 120 years of operational discipline and its strong foundation in the laboratory and healthcare markets. They are a recognized global leader in the design and manufacture of this specialized infrastructure. You can read more about their core philosophy here: Mission Statement, Vision, & Core Values of Kewaunee Scientific Corporation (KEQU).

Their strategic focus on strengthening relationships with their leading dealer and distribution network is key, especially since 41% of their fiscal year 2025 sales were concentrated in just two dealers and one national distributor. This channel strategy streamlines their business, letting them focus on being a world-class manufacturer while their partners penetrate the market deeper. The market is growing, driven by global investment in R&D, and Kewaunee Scientific Corporation is now better positioned to capture that demand. This is a very predictable business model when the backlog is this strong.

Next Step: Portfolio Managers should model a minimum of 15% revenue growth for FY2026, driven by the conversion of the current backlog, and Finance should monitor raw material cost fluctuations quarterly.