What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-07-01 compared with 2021-07-15 · 171 added, 213 removed, 713 unchanged (35% of the section changed)

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Consolidated Financial Statements

Report s of Independent Registered Public Accounting Firm s

Report of Independent Registered Public Accounting Firm ( FORVIS, LLP , Charlotte, NC , PCAOB Firm No.

Consolidated Statements of Operations—Years ended April 30, 202 2 and 202 1

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Notes to Consolidated Financial Statements

Consent s of Independent Registered Public Accounting Firm s

Consent of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Kewaunee Scientific Corporation and subsidiaries (the “Company”) as of April 30, 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Kewaunee Scientific Corporation and subsidiaries (the “Company”) as of April 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the two years in the period ended April 30, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2022, in conformity with U.S.

generally accepted accounting principles.

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These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion .

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

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We determined that there are no critical audit matters.

/s/ Dixon Hughes Goodman LLP

/s/ FORVIS, LLP

(formerly, Dixon Hughes Goodman LLP)

We have served as the Company's auditor since 2020.

Charlotte, NC

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Kewaunee Scientific Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kewaunee Scientific Corporation and subsidiaries

(the Company) as of April 30, 2020, the related consolidated statements of income, comprehensive income,

stockholders' equity and cash flows for the year ended April 30, 2020, and the related notes (collectively referred to

as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all

material respects, the financial position of the Company at April 30, 2020, and the results of its operations and its cash

flows for the year ended April 30, 2020, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an

opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with

the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with

respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of

the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the

Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements,

whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also

included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis

for our opinion.

/s/ Ernst & Young LLP

We served as the Company's auditor from 2016 to 2020.

Charlotte, North Carolina

July 27, 2020

CONSOLIDATED STATEMENTS OF OPERATIONS

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Operating loss ( 2,608 ) ( 1,316 )

Pension expense ( 1,153 ) ( 454 )

Pension income (expense) 355 ( 1,153 )

Other income, net 400 241

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Foreign currency translation adjustments ( 186 ) ( 23 )

Change in unrecognized actuarial gain (loss) on pension obligations 6,044 ( 2,748 )

Change in fair value of cash flow hedges — 1

Change in unrecognized actuarial gain on pension obligations 21 6,044

Comprehensive income (loss), net of tax $ ( 6,168 ) $ 2,414

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Stock Retained

As Adjusted Accumulated

Earnings Accumulated

Comprehensive

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Net loss attributable to Kewaunee Scientific Corporation — — — ( 3,672 ) — ( 3,672 )

Other comprehensive expense — — — — ( 3,191 ) ( 3,191 )

Cash dividends paid, $ 0.38 per share

— — — ( 1,044 ) — ( 1,044 )

Stock options exercised, 2300 shares

1 ( 1 ) — — — —

Other comprehensive income — — — — 6,021 6,021

Stock based compensation 30 447 — — — 477

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Net loss attributable to Kewaunee Scientific Corporation — — — ( 6,126 ) — ( 6,126 )

Other comprehensive income — — — — 6,021 6,021

Other comprehensive loss — — — — ( 165 ) ( 165 )

Stock based compensation 68 676 — — — 744

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Income tax receivable — 955

Note receivable 13,457 —

Prepaid expenses and other current assets 6,164 4,372

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Right of use assets 7,573 9,279

Deferred income taxes — 336

Other assets 4,514 3,666

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Short-term borrowings $ 1,588 $ 6,828

Current portion of financing liability 575 —

Current portion of financing lease liability 126 21

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Total Current Liabilities 42,293 34,181

Long-term portion of financing liability 28,775 —

Long-term portion of financing lease liability 228 91

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Net loss $ ( 6,003 ) $ ( 3,607 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash (used) provided by operating activities:

Depreciation 2,769 2,687

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Other, net ( 3,096 ) ( 1,399 )

Net cash provided by operating activities 912 4,161

Net cash (used) provided by operating activities ( 7,885 ) 912

Cash Flows from Investing Activities

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Cash Flows from Financing Activities

Dividends paid — ( 1,044 )

Dividends paid to non-controlling interest in subsidiaries — ( 108 )

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Repayments on short-term borrowings ( 64,598 ) ( 60,096 )

Payments on long-term debt ( 19 ) ( 1,282 )

Net proceeds from exercise of stock options (including tax benefit) — ( 14 )

Net cash provided by (used in) financing activities 1,982 ( 7,458 )

Proceeds from sale-leaseback transaction 15,893 —

Proceeds from long-term debt 377 —

Repayments on long-term debt — ( 19 )

Net cash provided by financing activities 11,031 1,982

Effect of exchange rate changes on cash, net ( 75 ) 19

Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 516 ( 5,941 )

Increase in Cash, Cash Equivalents and Restricted Cash 1,163 516

Cash, Cash Equivalents and Restricted Cash at Beginning of Year 5,731 5,215

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The Company's products include steel, wood, and laminate furniture, fume hoods, biological safety cabinets, laminar flow and ductless fume hoods, adaptable modular and column systems, movable workstations and carts, epoxy resin worksurfaces, sinks and accessories and related design services.

The Company's sales are made through purchase orders and contracts submitted by customers, dealers and agents, a national stocking distributor, and competitive bids submitted by the Company and its subsidiaries located in Singapore, India, and China.

See Note 11 , Restructuring Costs for details on the closure of the Company's China operations in fiscal year 2020.

The Company's sales are made through purchase orders and contracts submitted by customers, dealers, its subsidiaries in Singapore and India, and a national stocking distributor.

See Note 12 , Restructuring Costs for details on the closure status of the Company's China operations.

The majority of the Company's products are sold to customers located in North America, primarily within the United States.

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Net sales by the Company's subsidiaries in the amounts of $ 42,024,000 and $ 36,434,000 were included in the consolidated statements of operations for fiscal years 2022 and 2021, respectively.

Reclassifications The Company reclassified certain amounts in the consolidated balance sheet for the period ended April 30, 2020 and the consolidated statements of cash flows for the year ended April 30, 2020 to conform to the current period presentation.

There was no impact to the consolidated statements of operations or statements of stockholders' equity for fiscal year 2020.

Reclassifications The Company reclassified certain amounts in the Condensed Consolidated Balance Sheet as of April 30, 2021 and the Condensed Consolidated Statements of Cash Flows for the period ended April 30, 2021 to conform to the current year presentation.

There was no impact to the Condensed Consolidated Statements of Operations or Condensed Consolidated Statement of Stockholders' Equity.

Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less.

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The Company has not experienced any losses from such deposits.

In accordance with ASU 2016-18, Statement of Cash Flows:

Restricted Cash, the Company includes restricted cash along with the cash balance for presentation in the consolidated statements of cash flows.

The Company includes restricted cash along with the cash balance for presentation in the consolidated statements of cash flows.

The reconciliation between the consolidated balance sheet and the consolidated statement of cash flows at April 30 is as follows:

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Restricted Cash Restricted cash includes bank deposits of subsidiaries used for performance guarantees against customer orders.

Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount owed by the customer, net of allowances for estimated doubtful accounts.

Accounts Receivable and Allowance for Doubtful Accounts Receivables are stated at the amount owed by the customer, net of allowances for estimated doubtful accounts.

The Company evaluates the collectability of its trade accounts receivable based on a number of factors.

In circumstances where management is aware of a customer's inability to meet its financial obligations to the Company, or a project dispute makes it unlikely that all of the receivable owed by a customer will be collected, a specific reserve for bad debts is estimated and recorded to reduce the recognized receivable to the estimated amount the Company believes will ultimately be collected.

In addition to specific customer identification of potential bad debts, a general reserve for bad debts is estimated and recorded based on past loss history and an overall assessment of past due trade accounts receivable amounts outstanding.

In addition to specific customer identification of potential bad debts, a reserve for bad debts is estimated and recorded based on past loss history and an overall assessment of past due trade accounts receivable amounts outstanding.

Accounts are written off when it is clearly established that the receivable is a bad debt.

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Balance at end of year $ 357 $ 636

Unbilled Receivables Accounts receivable include unbilled receivables that represent amounts earned which have not yet been billed in accordance with contractually stated billing terms.

The amount of unbilled receivables at April 30, 2021 and 2020 was $ 6,929,000 and $ 6,131,000 , respectively.

Inventories During fiscal year 2019, the Company elected to change the method of accounting for the inventory of its Domestic segment from the LIFO method to the FIFO method.

Inventories at the Company's international subsidiaries had previously been and continue to be measured on the FIFO method.

Unbilled Receivables Accounts receivable include unbilled receivables that represent amounts earned which have not yet been billed in accordance with contractually stated billing terms, excluding retention, which is included in other assets.

The amount of unbilled receivables, net of unbilled retention, at April 30, 2022 and 2021 was $ 9,287,000 and $ 5,716,000 , respectively.

Inventories The Company's inventories are valued at the lower of cost or net realizable value under the first-in, first-out ("FIFO") method.

Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation.

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There were no impairments in fiscal years 2022 or 2021.

Other Assets Other assets at April 30, 2021 and 2020 included $ 2,649,000 and $ 2,485,000 , respectively, of assets held in a trust account for non-qualified benefit plans and $ 108,000 and $ 87,000 , respectively, of cash surrender values of life insurance policies.

Other Assets Other assets at April 30, 2022 and 2021 included $ 1,293,000 and $ 1,213,000 , respectively, of unbilled retainage, $ 2,480,000 and $ 2,649,000 , respectively, of assets held in a trust account for non-qualified benefit plan, and $ 110,000 and $ 108,000 , respectively, of cash surrender values of life insurance policies.

Life insurance policies are recorded at the amount that could be realized under the insurance contract as of the date of the Company's consolidated balance sheets with the change in cash surrender or contract value being recorded as income or expense during each period.

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Actual results could differ from these estimates.

Significant estimates impacting the accompanying consolidated financial statements include the allowance for uncollectible accounts receivable, inventory valuation, self-insurance reserves, and pension liabilities.

Significant estimates impacting the accompanying consolidated financial statements include the allowance for uncollectible accounts receivable, self-insurance reserves, and pension liabilities.

Variable Interest Entity 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 (the “Property”) located at 2700 West Front Street in Statesville, North Carolina (the “Sale Agreement”) in exchange for $ 30,275,000 in sales proceeds, $ 14,864,000 of which was payable in redeemable preferred shares in CAI Investments Medical Products I Parent, LLC ("Parent"), a Delaware limited liability company and an affiliate of Buyer.

The redemption feature on the preferred shares is personally guaranteed by a shareholder and manager of Buyer and its affiliates.

At April 30, 2022, the carrying value of the redeemable preferred shares was $ 13.5 million.

As of June 22, 2022, the Company had fully redeemed all shares and converted the Note Receivable to cash.

The transfer of title was initially conditioned upon a 30-day acceptance period to permit Buyer to examine and evaluate the Property.

The Sale Agreement was subsequently finalized on March 24, 2022 to complete Buyer’s purchase of the Property and to coincide with a 20-year lease, effective on such date between the Company and CAI Investments Medical Products I Master Lessee LLC (“Lessor”), an affiliate of Buyer, for the Property (the "Lease Agreement").

At the same time, the Buyer and its affiliates formed a new, debt-financed affiliate CAI Investments Medical Products I, DST (“Trust”) and contributed the Property

to the Trust.

According to the terms of the contemporaneous lease, the Trust leased the Property to its affiliated Lessor, which in turn sub-leased the Property to the Company (together with the Sale Agreement, the “Sale-Leaseback Arrangement”).

For additional information on the accounting for the Sale-Leaseback Arrangement, refer to Note 5 , Sale-Leaseback Financing Transaction .

The Company concluded as of April 30, 2022 that Parent and its direct affiliates, including the Trust, are designed primarily to acquire and manage the Property and constitute a variable interest entity because the Trust, wholly-owned through Parent’s subsidiaries, lacks sufficient equity on its own to finance its operations.

The Company evaluated its lease arrangement and redeemable preferred shares in Parent as variable interests.

The Company is not the primary beneficiary of Parent or its affiliates because the Company does not direct the activities that most significantly impact the economic performance of Parent and its affiliated Trust (e.g., property management, maintenance and budget oversight, residual ownership and price exposure to changes in the fair value of the Property, etc.).

Further, the Company’s redeemable preferred shares in Parent do not provide the Company with a controlling financial interest in Parent or its affiliates.

The Company’s redeemable preferred shares generally provide the Company with the same, non-majority right as other voting interests in Parent and the Buyer and its affiliates retain the substantive right to unilaterally “kick out” the Company by redeeming the Company’s preferred shares at any time.

The Company concluded it should not consolidate Parent or its affiliates under the variable interest model or the voting interest model of ASC 810.

The Company has no requirement to fund losses or finance future operations of the Buyer or its affiliates.

The Company recorded the redeemable preferred shares in Parent and its affiliates as a Note Receivable on its Consolidated Balance Sheet, rather than as an investment in preferred equity, due to the mandatory redemption feature of the preferred shares.

The Note Receivable is classified as held to maturity at amortized cost, subject to impairment.

The Company’s maximum exposure to the Buyer and its affiliates as of April 30, 2022 was limited to the Company’s lease payments and right to use the Property as well as to the carrying value of the redeemable preferred shares.

Fair Value of Financial Instruments A financial instrument is defined as cash equivalents, evidence of an ownership interest in an entity, or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instrument from another party.

The Company's financial instruments consist primarily of cash and equivalents, mutual funds, cash surrender value of life insurance policies, term loans and short-term borrowings.

The Company's financial instruments consist primarily of cash and equivalents, mutual funds, cash surrender value of life insurance policies, a note receivable and corresponding sale-leaseback financing liability, term loans and short-term borrowings.

The carrying value of these assets and liabilities approximate their fair value.

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Cash surrender value of life insurance policies (1)

— 1,458 — 1,458

Total $ 1,299 $ 1,458 $ — $ 2,757

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The Company adjusts insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns.

Income Taxes In accordance with ASC 740, "Income Taxes," the Company uses the liability method in measuring the provision for income taxes and recognizing deferred tax assets and liabilities on the consolidated balance sheets.

Income Taxes In accordance with ASC 740, "Income Taxes" ("ASC 740"), the Company uses the liability method in measuring the provision for income taxes and recognizing deferred income tax assets and liabilities on the consolidated balance sheets.

ASC 740 clarifies the financial statement recognition threshold and measurement attribute of a tax position taken or expected to be taken in a tax return.

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ASC 740 only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the taxing authorities.

The Company did not have any significant uncertain tax positions at April 30, 2021 and 2020.

The Company did not have any significant uncertain tax positions at April 30, 2022 or 2021.

Research and Development Costs Research and development costs are charged to cost of products sold in the periods incurred.

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Advertising costs for the years ended April 30, 2022 and 2021 were $ 175,000 and $ 174,000 , respectively.

Derivative Financial Instruments The Company records derivatives on the consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships.

The nature of the Company's business activities involves the management of various financial and market risks, including those related to changes in interest rates.

The Company does not enter into derivative instruments for speculative purposes.

In May 2013, the Company entered into an interest rate swap agreement whereby the interest rate payable by the Company on $ 2,600,000 of outstanding long-term debt was effectively converted to a fixed interest rate of 4.37 % for the period beginning August 1, 2017 and ending May 1, 2020 .

In May 2013, the Company entered into an interest rate swap agreement whereby the interest rate payable by the Company on $ 1,218,000 of outstanding long-term debt was effectively converted to a fixed interest rate of 3.07 % for the period beginning November 3, 2014 and ending May 1, 2020 .

The Company entered into these interest rate swap arrangements to mitigate future interest rate risk associated with its long-term debt and has designated these as cash flow hedges.

The Company terminated the interest rate swap arrangements in conjunction with the payoff of the outstanding long-term debt in September 2019.

(See Note 4 , Long-term Debt and Other Credit Arrangements .)

Foreign Currency Translation The financial statements of subsidiaries located in India and China, and of Kewaunee Scientific Corporation Singapore Pte.

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Weighted average common shares outstanding—diluted 2,786 2,760

Accounting for Stock Options and Other Equity Awards Compensation costs related to stock options and other stock awards granted by the Company are charged against operating expenses during their vesting period, under ASC 718, "Compensation—Stock Compensation." The Company granted 95,861 RSUs under the 2017 Omnibus Incentive Plan in fiscal year 2021 and 39,781 RSUs in fiscal year 2020.

Accounting for Stock Options and Other Equity Awards Compensation costs related to stock options and other stock awards granted by the Company are charged against operating expenses during their vesting period, under ASC 718, "Compensation—Stock Compensation." Forfeitures are accounted for in the period in which the awards are forfeited.

The Company granted 67,750 RSUs under the 2017 Omnibus Incentive Plan in fiscal year 2022 and 95,861 RSUs in fiscal year 2021.

There were no stock options granted during fiscal years 2022 and 2021.

(See Note 7 , Stock Options and Share-Based Compensation )

New Accounting Standards In February 2016, the FASB issued ASU 2016-02, "Leases." This guidance establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.

Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.

This guidance became effective for fiscal years, and interim periods within those years, beginning after December 15, 2018.

The Company adopted this standard effective May 1, 2019.

The adoption of ASU 2016-02 resulted in the recognition of ROU assets and corresponding lease liabilities on the Company's consolidated financial position.

See Note 8 , Leases, Commitments and Contingencies , for additional information on the adoption of this standard.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which replaces the current incurred loss method used for determining credit losses on financial assets, including trade receivables, with an expected credit loss method.

New Accounting Standards In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which replaces the current incurred loss method used for determining credit losses on financial assets, including trade receivables, with an expected credit loss method.

This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022.

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The adoption of this standard did not have a significant impact on the Company's consolidated financial position or results of operations.

In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This guidance provides the Company with an option to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act ("2017 Tax Act") from accumulated other comprehensive income to retained earnings.

This guidance became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The Company adopted this standard effective May 1, 2019 and did not elect to reclassify tax effects as a result of tax reform;

therefore, the adoption did not have a significant impact on the Company's consolidated financial position or results of operations.

In March 2018, the FASB issued ASU 2018-09, "Compensation - Stock Compensation ("Topic 718"):

Improvements to Employee Share-Based Payment Accounting" ("ASU 2018-09").

This ASU makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation, and the financial statement presentation of excess tax benefits or deficiencies.

ASU 2018-09 also clarifies the statement of cash flows presentation for certain components of share-based awards.

The standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.

The Company adopted this standard effective May 1, 2019.

The adoption of this standard did not have a significant impact on the Company's consolidated financial position or results of operations.

In August 2018, the FASB issued ASU 2018-13, "Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC Topic 820.

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Note 2 - Revenue Recognition

The Company adopted Accounting Standards Codification 606 - Revenue from Contracts with Customers ("ASC 606") on May 1, 2018 using the modified retrospective approach and elected to reassess revenue recognition under ASC 606 for only those contracts open as of the adoption date.

The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer.

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Installation services can be, and often are, performed by third parties and thus may be distinct from the Company's products.

Installation services create or

enhance assets that the customer controls as the installation services are provided.

Installation services create or enhance assets that the customer controls as the installation services are provided.

As such, revenue from installation services is recognized over time, as the installation services are performed using the cost input method, as there is a direct relationship between the Company's inputs and the transfer of control by means of the performance of installation services to the customer.

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Practical Expedients Used

ASC 606 permits the use of practical expedients under certain conditions.

The Company has elected the following practical expedients allowed under ASC 606:

• Under the modified retrospective approach, the Company elected to reassess revenue recognition under ASC 606 for only those contracts open as of the adoption date.

The Company has elected the following practical expedients:

• The portfolio approach was applied in evaluating the accounting for the cost of obtaining a contract.

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Contract Balances

The closing and opening balances of contract assets included in accounts receivable arising from contracts with customers were $ 6,929,000 at April 30, 2021 and $ 6,131,000 at April 30, 2020.

The closing balances of contract assets included $ 9,287,000 in accounts receivable and $ 1,293,000 in other current assets at April 30, 2022.

The opening balance of contract assets arising from contracts with customers included $ 5,716,000 in accounts receivable and $ 1,213,000 in other assets at April 30, 2021.

The closing and opening balances of contract liabilities included in deferred revenue arising from contracts with customers were $ 3,529,000 at April 30, 2022 and $ 3,123,000 at April 30, 2021.

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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.

During the twelve months ended April 30, 2021, changes in contract assets and liabilities were not materially impacted by any other factors.

Deferred revenue is recognized as revenue as the Company performs under the contract.

During the fiscal year ended April 30, 2022, changes in contract assets and liabilities were not materially impacted by any other factors.

Approximately 100 % of the contract liability balance at April 30, 2022 is expected to be recognized as revenue during fiscal year 2023.

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Total inventories $ 23,796 $ 16,517

At April 30, 2021 and 2020, the Company's international subsidiaries' inventories were $ 2,560,000 and $ 2,136,000 , respectively, measured using the FIFO method at the lower of cost or net realizable value and are included in the above tables.

At April 30, 2022 and 2021, the Company's international subsidiaries' inventories were $ 2,811,000 and $ 2,560,000 , respectively, measured using the lower of cost or net realizable value under the FIFO method and are included in the above tables.

Note 4— Long-term Debt and Other Credit Arrangements

On May 6, 2013, the Company entered into a credit and security agreement (the "Loan Agreement") consisting of a $ 20 million revolving credit facility ("Line of Credit") which matured on May 1, 2018 and was extended to March 1, 2021 on March 12, 2018, a term loan in the amount of $ 3,450,000 which matured on May 1, 2020 ("Term Loan A") and a term loan in the amount of $ 1,550,000 which matured on May 1, 2020 (Term Loan B and together with Term Loan A, the "Term Loans").

On June 19, 2019, the Company entered into a Security Agreement pursuant to which the Company granted a security interest in substantially all of its assets to secure its obligations under the Loan Agreement.

In September 2019, the Company paid off Term Loan A and Term Loan B and terminated the related interest rate swap agreements.

On December 13, 2019, the Company entered into an amendment to the Loan Agreement and the Line of Credit to effect a change to an asset based lending arrangement based on eligible accounts receivable and inventory, with the available amount not to exceed $ 20 million through January 31, 2020, and

with such maximum amount reduced to $ 15 million thereafter.

This amendment replaced the prior financial covenants with new financial covenants, including minimum monthly liquidity and EBITDA requirements.

This amendment replaced the prior financial covenants with new

financial covenants, including minimum monthly liquidity and EBITDA requirements.

Additionally, a requirement for the repatriation of foreign cash and restrictions on the payment of dividends were added.

At April 30, 2020, the Company was not in compliance with all of the financial covenants under the revolving credit facility.

On July 20, 2020, the Company entered into an amendment to the Loan Agreement and Line of Credit which effected changes in certain financial covenants set forth in the Loan Agreement and included a waiver of the non-compliance.

On January 28, 2021, the Company entered into another amendment which effected changes (i) extending the maturity date under the Credit Agreement and Revolving Note from February 1, 2021 to May 3, 2021;

(ii) establishing a minimum EBITDA covenant for the fiscal quarter ending April 30, 2021 of $ 1,000,000 , determined for the four-quarter period then ending;

and (iii) revising the covenant regarding delivery of financial projections to the Bank to, among other things, provide projections for the next succeeding fiscal year.

and (ii) modifying existing covenants.

On April 27, 2021, the Company entered into another amendment which effected changes (i) extending the maturity date under the Credit Agreement and Revolving Note from May 3, 2021 to July 30, 2021;

and (ii) revising the minimum EBITDA covenant to permit EBITDA to be increased by (a) scheduled one-time non-recurring addbacks in an amount not to exceed $ 250,000 , and (b) solely for the four-quarter period ending April 30, 2021, a one-time addback in an amount not to exceed $ 600,000 for non-cash, stock-based compensation paid by the Company.

These amendments did not change the amount of availability under the revolving credit facility.

At April 30, 2021, the Company was in compliance with all the financial covenants under its revolving credit facility.

and (ii) revising existing covenants.

On July 30, 2021, the Company entered into another amendment which effected changes (i) extending the maturity date under the Credit Agreement and Revolving Note from July 30, 2021 to April 30, 2022;

(ii) removing the minimum EBITDA covenant;

(iii) in addition to the existing Minimum Monthly Liquidity requirement as of the end of each calendar month of not less than $ 2,000,000 , adding an additional covenant that the Company will maintain Supplemental Liquidity as of the first day of each calendar month not less than (a) during the period from August 1, 2021 through December 31, 2021, $ 1,000,000 and (b) thereafter $ 1,500,000 ;

and (iv) restating the Credit Agreement to reflect all amendments to date.

On March 11, 2022, the Company entered into another Amendment, the effectiveness of which was conditioned upon the consummation of the Sale-Leaseback Arrangement, described in Note 5 , Sale-Leaseback Financing Transaction below, which occurred on March 24, 2022.

The Amendment effected changes (i) amending and replacing the $ 15,000,000 line of credit with a $ 7,500,000 line of credit;

(ii) providing for the removal of liens on property of the Company previously existing pursuant to the terms of the Credit Agreement;

(iii) changing the interest rate under the Credit Agreement;

(iv) consenting to the consummation of the Sale-Leaseback Arrangement;

and (v) restating the Credit Agreement to reflect all amendments to date.

Effective as of April 29, 2022, the Company entered into another amendment which effected changes (i) reducing the amount available under the line of credit from $ 7,500,000 to $ 4,715,823 ;

(ii) extending the maturity date under the Credit Agreement and Revolving Note from April 30, 2022 to May 31, 2022;

and (iii) adding a cash collateral agreement whereby the Company shall deliver to the Bank cash in the amount of 105 % of the outstanding issued Letters of Credit on or before May 23, 2022, which amount shall be deposited in, and maintained in, a blocked, non-interest-bearing deposit account at the Bank.

As of May 27, 2022, the Company entered into an additional amendment which effected changes (i) further reducing the amount available under the line of credit from $ 4,715,823 to $ 3,000,000 ;

(ii) extending the maturity date under the Credit Agreement and Revolving Note from May 31, 2022 to June 30, 2022;

and (iii) permanently reducing the maximum aggregate principal amount committed under the line of credit.

At April 30, 2022, there were advances of $ 1.6 million and $ 716,000 in letters of credit outstanding, leaving $ 2.4 million available under the Line of Credit.

1 unchanged sentence

Monthly interest payments under the Line of Credit were payable at the greater of the Daily One Month LIBOR interest rate, or 0.75 %, plus 4.0 %.

At April 30, 2021, there were bank guarantees issued by foreign banks outstanding to customers in the amount of $ 3.2 million, $ 61,000 , $ 18,000 , $ 9,000 and $ 257,000 , and with expiration dates in fiscal years 2022, 2023, 2024, 2025 and 2027, respectively, collateralized by a $ 6.0 million corporate guarantee and certain assets of the Company's subsidiaries in India.

At April 30, 2022, there were bank guarantees issued by foreign banks outstanding to customers in the amounts of $ 8.2 million, $ 111,000 , $ 9,000 , $ 3,000 and $ 249,000 , and with expiration dates in fiscal years 2023, 2024, 2025, 2026 and 2027, respectively, collateralized by a $ 6.0 million corporate guarantee and certain assets of the Company's subsidiaries in India.

At April 30, 2022, the Company was in compliance with all the financial covenants under its revolving credit facility.

At April 30, 2021, there were advances of $ 6.8 million and $ 704,000 in letters of credit outstanding under the Line of Credit.

The borrowing rate at that date was 4.75 %.

At April 30, 2020, there were foreign bank guarantees outstanding to customers in the amount of $ 1.6 million, $ 297,000 and $ 74,000 with expiration dates in fiscal years 2021, 2022, and 2023, respectively, collateralized by a $ 6.0 million corporate guarantee and certain assets of the Company's subsidiaries in India.

At April 30, 2021, there were foreign bank guarantees outstanding to customers in the amounts of $ 3.2 million, $ 61,000 , $ 18,000 , $ 9,000 and $ 257,000 with expiration dates in fiscal years 2022, 2023, 2024, 2025 and 2027, respectively, collateralized by a $ 6.0 million corporate guarantee and certain assets of the Company's subsidiaries in India.

On June 27, 2022, the Company terminated the Credit Agreement with Wells Fargo, National Bank.

At the time of termination, there were no borrowings under the Credit Agreement, and the Company will not incur any material termination penalties as a result of the termination.

Note 5— Sale-Leaseback Financing Transaction

On December 22, 2021, the Company entered into the Sale Agreement with the Buyer for the Company’s headquarters and manufacturing facilities located at 2700 West Front Street in Statesville, North Carolina.

The Sale Agreement was finalized on March 24, 2022 and coincided with the Company and the Buyer entering into the Lease Agreement.

The Sale-Leaseback Arrangement is repayable over 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 with the Buyer in accordance with ASC 842 as the Lease Agreement was determined to be a finance lease.

The Company concluded the Lease Agreement met the

qualifications to be classified as 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 must be accounted for as a financing arrangement.

As a result of this determination, the Company is viewed as having received the sales 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.

As of April 30, 2022, the carrying value of the financing liability was $ 29,350,000 , net of $ 768,000 in debt issuance costs, of which $ 575,000 was classified as current on the Consolidated Balance Sheet with $ 28,775,000 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 $ 147,000 for the year ended April 30, 2022.

No gain or loss was recognized related to the Sale-Leaseback Arrangement under U.S.

GAAP for the fiscal year ended April 30, 2022.

The Company will 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 for the fiscal years ending April 30 are as follows:

($ in thousands)

Thereafter 35,958

Total Minimum Liability Payments 45,811

Imputed Interest ( 16,461 )

Total $ 29,350

Note 6— Income Taxes

1 unchanged sentence

The CARES Act includes a broad range of tax reform provisions affecting businesses, including permissible net operating losses ("NOLs") carrybacks up to five years , changes in business deductions limitations, and deferral of Social Security withholdings.

The Company expects that it will apply the NOL carryback provision of the CARES Act with respect to its estimated NOL for fiscal year 2021 to years that had higher enacted tax rates, and applied this provision to the NOL for fiscal year 2020, resulting in a tax benefit.

The Company applied the NOL carryback provision of the CARES Act with respect to its estimated NOL for fiscal year 2021 to years that had higher enacted tax rates.

The Company also applied the deferral of Social Security withholdings in accordance with the CARES Act;

these deferred withholdings are due in future periods.

Effective August 1, 2019, as previously stated, the Company elected to revoke the indefinite reinvestment of foreign unremitted earnings position set forth by ASC 740-30-25-17 for multiple foreign subsidiaries.

The Company recorded a tax withholding expense imposed by the India Income Tax Department of $ 226,000 and $ 1,964,000 for the years ended April 30, 2021 and 2020, respectively.

50% of these deferred withholdings were due and paid by December 31, 2021, with the remainder due December 31, 2022.

Effective August 1, 2019, the Company elected to revoke the indefinite reinvestment of foreign unremitted earnings position set forth by ASC 740-30-25-17 for multiple foreign subsidiaries.

As a result of this election, the Company recorded a tax withholding expense imposed by the India Income Tax Department of $ 240,000 and $ 226,000 for the years ended April 30, 2022 and 2021, respectively.

The Company's accounting policy with respect to the Global Intangible Low-Taxed Income ("GILTI") tax rules is that GILTI will be treated as a periodic charge in the year in which it arises.

The Company had no tax expense related to GILTI for the year ended April 30, 2021.

The Company had no tax expense related to GILTI for the years ended April 30, 2022 and 2021.

Income tax expense consisted of the following:

17 unchanged sentences

Effects of differing US and foreign tax rates 22 17

Rate reduction impact on deferred tax assets — ( 47 )

Tax on unrepatriated and repatriated foreign earnings — 226

Net operating loss carryback 118 ( 939 )

Effect of prior year true ups ( 42 ) 38

Impact of foreign subsidiary income (loss) to parent 67 ( 5 )

Net operating loss adjustment ( 286 ) 118

Impact of foreign subsidiary income to parent 74 67

Increase in valuation allowance 4,170 1,538

12 unchanged sentences

Net operating loss carryforwards 112 572

Proceeds on Sale Leaseback 7,215 —

Other 497 568

2 unchanged sentences

Book basis in excess of tax basis of property, plant and equipment ( 1,758 ) ( 1,596 )

Book basis in excess of tax basis of Sale Leaseback property ( 1,122 ) —

Prepaid pension ( 949 ) ( 847 )

APB 23 Assertion ( 976 ) ( 765 )

Debt Issuance Cost on Sale Leaseback ( 184 ) —

Other — ( 122 )

3 unchanged sentences

Deferred tax assets (liabilities) classified in the balance sheet:

Current $ — $ 336

Non-current ( 428 ) ( 307 )

Net deferred tax liabilities $ ( 428 ) $ ( 307 )

At April 30, 2021, the Company had deferred tax assets related to various federal, state and foreign deferred tax items, net operating loss carryforwards, and tax credit carryforwards in the amount of $ 5,754,000 .

The Company is required to evaluate the realization of the deferred tax asset and any requirement for a valuation allowance in accordance with ASC 740-10-30-2(b).

2 unchanged sentences

This guidance provides that the future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law.

At April 30, 2021, the Company had federal research and development tax credit carryforwards in the amount of $ 808,000 expiring beginning in 2041.

At April 30, 2021, the Company had foreign tax credit carryforwards in the amount of $ 638,000 , which are subject to a full valuation allowance, beginning to expire in 2028.

At April 30, 2021, the Company had $ 1,136,000 gross net operating losses in jurisdictions outside of the United States, of which $ 482,000 is set to expire in years 2022 to 2025.

At April 30, 2022, the Company had foreign tax credit carryforwards in the amount of $ 638,000 , which are subject to a full valuation allowance, and which begin to expire in 2028.

The Company files federal, state and local tax returns with statutes of limitation generally ranging from 3 to 4 years.

3 unchanged sentences

Note 7— Stock Options and Share-Based Compensation

The Company adopted ASU 2016-9, "Stock Compensation – Improvements to Employee Share-Based Payment Accounting" prospectively effective May 1, 2017.

The Company elected prospectively to account for forfeitures as they occur rather than apply an estimated rate to share-based compensation expense.

The Company's stockholders approved the 2017 Omnibus Incentive Plan ("2017 Plan") on August 30, 2017, which enables the Company to grant a broad range of equity, equity-related, and non-equity types of awards, with potential recipients including directors, consultants and employees.

5 unchanged sentences

At April 30, 2022 there were 147,509 shares available for future issuance.

Under the 2017 Plan, the Company recorded stock-based compensation expense in accordance with ASC 718 of $ 578,000 and $ 152,000 and deferred income tax benefit of $ 136,000 and $ 36,000 in fiscal years 2021 and 2020, respectively.

The RSUs include both a service and performance component vesting over a 3 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 3 year period based on the ratio of cumulative days incurred to total days over the 3 year period.

Under the 2017 Plan, the Company recorded stock-based compensation expense of $ 701,000 and $ 578,000 and deferred income tax benefit of $ 165,000 and $ 136,000 in fiscal years 2022 and 2021, respectively.

The RSUs include grants with both a service and performance component vesting over a 3 year period and grants with only service components vesting over 2 and 3 year periods.

The recognized expense is based upon the vesting period for service criteria and estimated attainment of the performance criteria at the end of the performance period based on the ratio of cumulative days incurred to total days over the performance period.

The remaining estimated compensation expense of $ 760,000 will be recorded over the remaining vesting periods.

The fair value of each RSU granted to employees was estimated on the day of grant based on the weighted average price of the Company's stock reduced by the present value of the expected dividend stream during the vesting period using the risk-free interest rate.

The fair value of each RSU granted to employees was estimated on the date of grant based on the weighted average price of the Company's stock reduced by the present value of the expected dividend stream during the vesting period using the risk-free interest rate.

The Company issued new shares of common stock to satisfy RSUs that vested during fiscal year 2022.

10 unchanged sentences

At April 30, 2022, there were no shares available for future grants under the 2008 Plan.

The Company recorded stock-based compensation expense in accordance with ASC 718.

In order to determine the fair value of stock options on the date of grant, the Company applied the Black-Scholes option pricing model.

4 unchanged sentences

The stock-based compensation expense is recorded over the vesting period ( 4 years) for the options granted, net of tax.

Under the 2008 Plan, the Company recorded $ 15,000 and $ 58,000 of compensation expense and $ 3,000 and $ 14,000 of deferred income tax benefit in fiscal years 2021 and 2020, respectively.

Under the 2008 Plan, the Company recorded no compensation expense or deferred income tax benefit in fiscal year 2022, as compared to $ 15,000 of compensation expense and $ 3,000 of deferred income tax benefit in fiscal year 2021.

The Company issued new shares of common stock to satisfy options exercised during fiscal years 2022 and 2021.

19 unchanged sentences

Note 8— Accumulated Other Comprehensive Income (Loss)

The Company's other comprehensive income (loss) consists of unrealized gains and losses on the translation of the assets, liabilities, and equity of its foreign subsidiaries, changes in the fair value of its cash flow hedges, and additional minimum pension liability adjustments, net of income taxes.

The Company's other comprehensive income (loss) consists of unrealized gains and losses on the translation of the assets, liabilities, and equity of its foreign subsidiaries, and additional minimum pension liability adjustments, net of income taxes.

The before tax income (loss), related income tax effect, and accumulated balances are as follows:

$ in thousands Cash Flow

Hedges Foreign

$ in thousands Foreign

Adjustment Minimum

4 unchanged sentences

Foreign currency translation adjustment ( 23 ) — ( 23 )

Change in fair value of cash flow hedges 1 — — 1

Change in unrecognized actuarial loss on pension obligations — 6,044 6,044

Income tax effect ( 1 ) 1 844 844

Balance at April 30, 2021 ( 2,357 ) ( 1,220 ) ( 3,577 )

3 unchanged sentences

Note 9— Leases, Commitments and Contingencies

On May 1, 2019, the Company adopted Accounting Standards Update ("ASU") No.

2016-02, Leases, and all subsequently issued clarifying guidance.

ASU 2016-02 required the Company to recognize lease assets and lease liabilities with respect to the rights and obligations created by leased assets previously classified as operating leases.

Upon adoption, the Company elected to:

The Company recognizes lease assets and lease liabilities with respect to the rights and obligations created by leased assets previously classified as operating leases.

The Company elected to:

• Record the impact of adoption using a modified retrospective method with any cumulative effect as an adjustment to retained earnings (accumulated deficit) as opposed to restating comparative periods to reflect the effects of applying the new standard.

3 unchanged sentences

The Company has operating type leases for real estate and equipment in both the U.S.

and internationally and a financing lease for a truck in the United States.

and internationally and financing leases for equipment in the United States.

ROU assets totaled $ 7,573,000 and $ 9,279,000 at April 30, 2022 and 2021, respectively.

Operating cash paid to settle lease liabilities was $ 1,799,000 and $ 1,526,000 for the twelve months ended April 30, 2021 and 2020, respectively.

Operating cash paid to settle lease liabilities was $ 2,019,000 and $ 1,799,000 for the fiscal year ended April 30, 2022 and 2021, respectively.

The Company's leases have remaining lease terms of up to 8 years.

1 unchanged sentence

Operating lease expense was $ 3,067,000 for the twelve months ended April 30, 2022, inclusive of period cost for short-term leases, not included in lease liabilities, of $ 1,048,000 .

Operating lease expense was $ 2,441,000 for the twelve months ended April 30, 2020, inclusive of period cost for short-term leases, not included in lease liabilities, of $ 915,000 .

Operating lease expense was $ 2,854,000 for the fiscal year ended April 30, 2021, inclusive of period cost for short-term leases, not included in lease liabilities, of $ 1,055,000 .

At April 30, 2022, the weighted average remaining lease term for the capitalized operating leases was 5.8 years and the weighted average discount rate was 4.1 %.

At April 30, 2021, the weighted average remaining lease term for the capitalized operating leases was 5.9 years and the weighted average discount rate was 4.1 %.

For the financing lease, the remaining lease term was 4.3 years and the discount rate was 10.0 % at April 30, 2021 as compared to 5.3 years and 10.0 % at April 30, 2020.

For the financing leases, the weighted average remaining lease term was 3.8 years and the weighted average discount rate was 6.6 % at April 30, 2022 as compared to 4.3 years and 10.0 % at April 30, 2021.

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 lease payments.

6 unchanged sentences

2026 1,221 71

2026 1,220 13

Thereafter 1,847 —

16 unchanged sentences

Interest cost 710 723

Actuarial (loss) gain ( 97 ) 2,769

Actuarial loss ( 2,218 ) ( 97 )

Actual benefits paid ( 1,412 ) ( 1,404 )

23 unchanged sentences

Rate of compensation increase N/A N/A

The components of the net periodic pension expense for each of the fiscal years ended April 30 are as follows:

The components of the net periodic pension (income) expense for each of the fiscal years ended April 30 are as follows:

$ in thousands 2022 2021

2 unchanged sentences

Recognition of net loss 539 1,714

Net periodic pension expense $ 1,153 $ 454

Net periodic pension (income) expense $ ( 355 ) $ 1,153

The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost during fiscal year 2023 is $ 660,000 .

1 unchanged sentence

The Company expects to make no contributions during fiscal year 2023.

There were $ 30,000 in contributions made to the plans in fiscal year 2021.

The Company made no contributions to the plans during fiscal year 2020.

There were no contributions made to the plans in fiscal year 2022.

The Company made $ 30,000 in contributions to the plans during fiscal year 2021.

The following benefit payments are expected to be paid from the benefit plans in the fiscal years ending April 30:

69 unchanged sentences

Earnings (loss) before income taxes ( 179 ) 3,585 ( 5,891 ) ( 2,485 )

Income tax expense (benefit) 245 1,063 ( 318 ) 990

Income tax expense 50 1,129 2,339 3,518

Net earnings attributable to non-controlling interest — 123 — 123

15 unchanged sentences

Note 12— Restructuring Costs

In December 2019, the Company initiated a restructuring, which included the addition of a new Vice President of Information Technology to lead the transformation and modernization of the Company's information systems, and a reduction in workforce primarily in its domestic operations to reduce operating expenses on an ongoing basis.

This restructuring plan, which included the closure of the Company's subsidiary in China, a commercial sales organization for the Company's products in China, was substantially completed as of April 30, 2020.

In fiscal year 2021, the Company incurred severance expenses in its international operations related to the closure of the China subsidiary of $ 25,000 .

In December 2019, the Company initiated a restructuring, which included the closure of the Company's subsidiary in China, a commercial sales organization for the Company's products in China, that was substantially completed as of April 30, 2020.

In fiscal year 2022, the legal closure of the Company's China subsidiary was delayed as a result of COVID-19-related shutdowns.

As a result, the Company incurred operating expenses of $ 28,000 in its international operations related to the closure of the China subsidiary.

The Company reflected all the expenses as operating expenses in the Consolidated Statement of Operations.

9 unchanged sentences

Gross profit 5,674 3,597 5,622 9,327

Net (loss) earnings ( 608 ) ( 165 ) 95 ( 2,929 )

net (loss) earnings attributable to the non-controlling interest ( 10 ) 15 14 46

Net (loss) earnings attributable to Kewaunee Scientific Corporation ( 598 ) ( 180 ) 81 ( 2,975 )

Net (loss) earnings per share attributable to Kewaunee Scientific Corporation

Net loss ( 1,307 ) ( 3,082 ) ( 1,286 ) ( 328 )

net earnings attributable to the non-controlling interest 38 18 33 34

Net loss attributable to Kewaunee Scientific Corporation ( 1,345 ) ( 3,100 ) ( 1,319 ) ( 362 )

Net loss per share attributable to Kewaunee Scientific Corporation

Basic ( 0.48 ) ( 1.11 ) ( 0.47 ) ( 0.13 )

Diluted ( 0.48 ) ( 1.11 ) ( 0.47 ) ( 0.13 )

Cash dividends paid per share — — — —

Fiscal Year 2021

1 unchanged sentence

Gross profit 5,881 6,395 5,654 6,063

Net earnings (loss) 496 ( 2,161 ) ( 1,901 ) ( 1,058 )

net earnings attributable to the non-controlling interest 25 17 17 4

Net earnings (loss) attributable to Kewaunee Scientific Corporation 471 ( 2,178 ) ( 1,918 ) ( 1,062 )

Net earnings (loss) per share attributable to Kewaunee Scientific Corporation

Net (loss) earnings ( 608 ) ( 165 ) 95 ( 2,929 )

net (loss) earnings attributable to the non-controlling interest ( 10 ) 15 14 46

Net (loss) earnings attributable to Kewaunee Scientific Corporation ( 598 ) ( 180 ) 81 ( 2,975 )

Net (loss) earnings per share attributable to Kewaunee Scientific Corporation

Basic ( 0.22 ) ( 0.07 ) 0.03 ( 1.08 )

Diluted ( 0.22 ) ( 0.07 ) 0.03 ( 1.08 )

Cash dividends paid per share 0.19 0.19 — —

The sum of the quarterly net earnings per share amounts does not necessarily equal net earnings per share for the year due to rounding.

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - DIXON HUGHES GOODMAN LLP

We consent to the incorporation by reference in the Registration Statements on Forms S-8 (No.

333-160276, No.

333-176447, No.

333-213413, and No.

333-220389), of Kewaunee Scientific Corporation of our reports dated July 15, 2021 with respect to the consolidated financial statements of Kewaunee Scientific Corporation, included in this Annual Report (Form 10-K) for the year ended April 30, 2021.

/s/ Dixon Hughes Goodman LLP

Charlotte, North Carolina

July 15, 2021

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - ERNST & YOUNG LLP

We consent to the incorporation by reference in the following Registration Statements on Form S-8 (No.

333-160276, No.

333-176447, No.

333-213413, and No.

333-220389), of our report dated July 27, 2020 with respect to the consolidated financial statements of Kewaunee Scientific Corporation, included in this Annual Report (Form 10-K) of Kewaunee Scientific Corporation for the year ended April 30, 2021.

/s/ Ernst & Young LLP

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Forms S‑8 (Nos.

333‑160276, 333‑176447, 333‑213413 and 333‑220389) of Kewaunee Scientific Corporation of our report dated July 1, 2022, with respect to the consolidated financial statements of Kewaunee Scientific Corporation, included in this Annual Report on Form 10‑K for the year ended April 30, 2022.

/s/ FORVIS, LLP

(Formerly, Dixon Hughes Goodman LLP )

Charlotte, North Carolina

July 15, 2021

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data