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Item 8. Financial Statements and Supplementary Data

2025-07-02 compared with 2024-06-28 · 330 added, 136 removed, 692 unchanged (40% of the section changed)

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Notes to Consolidated Financial Statements

Consent of Independent Registered Public Accounting Firm

Report Of Independent Registered Public Accounting Firm

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Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Acquired Intangible Assets

As described in Note 4 to the financial statements, on November 1, 2024, the Company acquired Nu Aire, Inc.

The acquisition was accounted for using the acquisition method of accounting, which requires, among other things, that identifiable assets acquired be recognized at their fair values as of the acquisition date.

Such acquired assets included customer relationships and trade names and trademarks, which were valued using valuation models and methods.

We identified the Company’s fair value estimate of customer relationships and trade names and trademarks as a critical audit matter.

The principal considerations for that determination included the level of subjectivity, judgment, and audit effort involved in evaluating management’s fair value estimates, particularly assumptions related to the forecasted revenues and cash flows, attrition rate, discount rate, and market-based royalty rate.

The primary procedures we performed to address this critical audit matter included the following:

• We obtained an understanding of management’s process for determining the fair value measurements of customer relationships and trade names and trademarks.

• We evaluated forward-looking assumptions, such as the forecasted revenues and cash flows, attrition rate, discount rate, and market-based royalty rate used by management, by performing procedures that included, but were not limited to, comparisons to industry and historical performance data, and sensitivity analysis to assess their reasonableness.

• Utilizing internal valuation specialists, we evaluated the significant assumptions and methods used in developing the fair value estimates of customer relationships and trade names and trademarks, including:

◦ We evaluated the appropriateness of the valuation models and methodologies used by management in making the estimate.

◦ We evaluated the reasonableness of the key assumptions used by management related to the revenue and cash flow projections and attrition.

◦ We developed an independent calculation of the discount rate for comparison with the rate used by management.

◦ We reperformed the calculation of the fair value of customer relationships and trade names and trademarks to test the accuracy of management’s valuation models.

/s/ Forvis Mazars, LLP

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Atlanta, Georgia

June 28, 2024

CONSOLIDATED STATEMENTS OF OPERATIONS

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Operating earnings

Pension expense

17,759 18,281

Pension expense

Other income, net 240 814

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Earnings before income taxes

Income tax (benefit) expense

14,785 13,119

Income tax expense (benefit)

3,202 ( 5,938 )

11,583 19,057

net earnings attributable to the non-controlling interest 178 304

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Stock based compensation 189 347 — — — 536

Purchase of Treasury Stock, 66,191 shares

— — ( 1,998 ) — — ( 1,998 )

Balance at April 30, 2024 $ 7,273 $ 5,406 $ ( 2,051 ) $ 47,514 $ ( 3,382 ) $ 54,760

Net earnings attributable to Kewaunee Scientific Corporation

Other comprehensive income — — — — 60 60

— — — 11,405 — 11,405

Other comprehensive loss

— — — — ( 421 ) ( 421 )

Stock based compensation 80 229 — — — 309

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— — ( 1,596 ) — — ( 1,596 )

Balance at April 30, 2024 $ 7,273 $ 5,406 $ ( 2,051 ) $ 47,514 $ ( 3,382 ) $ 54,760

Balance at Balance at April 30, 2025 $ 7,353 $ 5,635 $ ( 3,647 ) $ 58,919 $ ( 3,803 ) $ 64,457

The accompanying Notes are an integral part of these Consolidated Financial Statements.

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Deferred income taxes 3,994 7,401

Intangible assets, net

Other assets 5,840 5,445

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Current portion of financing liability 788 713

Current portion of term loan

Current portion of financing lease liabilities 96 111

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Long-term portion of financing liability 26,632 27,420

Long-term portion of seller note

Long-term portion of term loan

Long-term portion of financing lease liabilities 149 235

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Adjustments to reconcile net earnings to net cash used by operating activities:

Depreciation 3,125 2,867

Depreciation and amortization

Provision for credit losses

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Provision for deferred income taxes ( 2,202 ) ( 7,127 )

Change in assets and liabilities:

Accrued payment in kind ("PIK") interest

Amortization of deferred financing costs

Change in assets and liabilities (net of effect of acquisition):

Receivables ( 6,738 ) 741

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Other, net 20 286

Net cash provided by (used in) operating activities

Net cash provided by operating activities

14,783 19,564

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Capital expenditures ( 2,166 ) ( 4,373 )

Purchase of business, net of cash acquired

Net cash used in investing activities ( 30,901 ) ( 4,373 )

Cash Flows from Financing Activities

Dividends paid to non-controlling interest in subsidiaries ( 261 ) —

Proceeds from term loan

Repayments on term loan

Proceeds from short-term borrowings 73,483 148,061

Repayments on short-term borrowings ( 75,595 ) ( 148,549 )

Proceeds from sale-leaseback transaction — 13,629

Repayments on financing liability ( 642 ) ( 575 )

Proceeds from long-term debt 202 —

Repayments on long-term debt ( 88 ) ( 121 )

Payments on sale-leaseback financing transaction

( 772 ) ( 642 )

Proceeds from long-term lease obligations

Payment of deferred financing costs

Payments on lease obligations

( 101 ) ( 88 )

Purchase of Treasury Stock ( 1,596 ) ( 1,998 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

7,411 ( 3,014 )

Effect of exchange rate changes on cash, net ( 67 ) ( 54 )

Increase in Cash, Cash Equivalents and Restricted Cash 12,123 6,921

(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash

( 8,774 ) 12,123

Cash, Cash Equivalents and Restricted Cash at Beginning of Year 25,938 13,815

Cash, Cash Equivalents and Restricted Cash at End of Year $ 17,164 $ 25,938

The accompanying Notes are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)

Years Ended April 30

$ in thousands 2025 2024

Supplemental Disclosure of Cash Flow Information

Interest paid $ 1,799 $ 1,862

Income taxes paid $ 6,240 $ 3,158

Cash paid for:

Interest $ 3,374 $ 1,799

Income taxes $ 3,972 $ 6,240

Noncash investing and financing activities:

Change in debt related to seller note $ 23,000 $ —

Assets obtained under new operating leases $ 1,243 $ 200

$ 200 $ 3,902

Assets obtained under new finance leases $ 6 $ 204

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Note 1— Summary of Significant Accounting Policies

Kewaunee Scientific Corporation and subsidiaries (collectively the "Company") design, manufacture, and install laboratory, healthcare, and technical furniture products.

Kewaunee Scientific Corporation and subsidiaries (collectively the "Company") design, manufacture, and install laboratory, healthcare, and technical furniture and infrastructure products.

The Company's products include steel and wood casework, fume hoods, adaptable modular systems, moveable workstations, stand-alone benches, biological safety cabinets, and epoxy resin work surfaces and sinks.

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

The Company's acquisition of Nu Aire, Inc.

complements Kewaunee's existing portfolio through Nu Aire's biological safety cabinets, CO2 incubators, ultralow freezers, and other essential laboratory products.

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

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

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Technical products are used in facilities manufacturing computers and light electronics and by users of computer and networking furniture.

Principles of Consolidation The Company's consolidated financial statements include the accounts of Kewaunee Scientific Corporation and its international subsidiaries.

Principles of Consolidation The Company's consolidated financial statements include the accounts of Kewaunee Scientific Corporation and its subsidiaries.

A brief description of each subsidiary, along with the amount of the Company's controlling financial interests, as of April 30, 2025 is as follows:

(1) Nu Aire, Inc., a manufacturing and commercial sales operation in Plymouth, Minnesota, is 100 % owned by the Company;

(2) Kewaunee Labway Asia Pte.

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All intercompany balances, transactions, and profits have been eliminated.

Included in the consolidated financial statements are net assets of $ 18,547,000 and $ 16,786,000 at April 30, 2024 and 2023, respectively, of the Company's subsidiaries.

Included in the consolidated financial statements are net assets of $ 18,061,000 and $ 18,547,000 at April 30, 2025 and 2024, respectively, of the Company's International subsidiaries.

Net sales by the Company's subsidiaries in the amounts of $ 98,920,000 and $ 66,517,000 were included in the consolidated statements of operations for fiscal years 2025 and 2024, respectively.

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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, 2024 and 2023 was $ 11,840,000 and $ 13,459,000 , respectively.

The amount of unbilled receivables, excluding unbilled retention, at April 30, 2025 and 2024 was $ 12,693,000 and $ 11,840,000 , 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.

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Net property, plant and equipment $ 23,174 $ 17,649

The Company recorded depreciation expense of $ 3,990,000 and $ 3,125,000 for the fiscal years ended April 30, 2025 and 2024, respectively.

The Company reviews the carrying value of property, plant and equipment for impairment annually or whenever changes in circumstances or events indicate that such carrying value may not be recoverable.

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There were no impairments in fiscal years 2025 or 2024.

Other Assets Other assets at April 30, 2024 and 2023 included $ 312,000 and $ 1,191,000 , respectively, of unbilled retainage, $ 2,611,000 and $ 2,352,000 , respectively, of assets held in a trust account for non-qualified benefit plan, and $ 31,000 and $ 111,000 , 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.

Acquisition Accounting On November 1, 2024, the Company completed the acquisition of Nu Aire, Inc.

See Note 4 , Nu Aire Acquisition , for further details regarding the acquisition.

The acquisition 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.

The fair values of the assets acquired and liabilities assumed were preliminarily 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 were valued using the multi-period excess earnings method ("MEEM"), or the relief from royalty ("RFR") method, both are income-based approaches.

A cost approach was applied for property, plant, and equipment.

The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company's continuing review of matters related to the acquisition.

The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the Closing Date.

Goodwill and Intangible Assets, Net Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired as part of the Company's acquisition of Nu Aire.

The goodwill arising from the transaction is attributable to the value of the acquired assembled workforce and the premium paid.

Intangible assets, net consists of customer relationships, trade names and trademarks, and developed technology.

Intangible assets will be amortized on a straight-line basis over the relevant estimated

The Company will conduct its impairment analysis annually, or more frequently if the Company determines potential indicators of impairment exist.

There were no impairments in fiscal year 2025.

Other Assets Other assets at April 30, 2025 and 2024 included $ 0 and $ 312,000 , respectively, of unbilled retainage, and $ 3,263,000 and $ 2,611,000 , respectively, of assets held in a trust account for non-qualified benefit plan.

Use of Estimates The presentation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

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According to the terms of the 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").

The Company concluded 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 lacks sufficient equity on its own to finance its operations.

The Company concluded that Parent and its direct affiliates, including the Trust, are designed primarily to acquire and manage the Property and constituted a variable interest entity because the Trust lacked sufficient equity on its own to finance its operations.

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

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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, a sale-leaseback financing liability, term loans and short-term borrowings.

The Company's financial instruments consist primarily of cash and equivalents, mutual funds, a sale-leaseback financing liability, term loans and short-term borrowings.

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

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the

measurement date.

Expanded disclosures about instruments measured at fair value require the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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Deferred revenue consists of customer deposits and advance billings of the Company's products where sales have not yet been recognized.

Accounts receivable includes retainage in the amounts of $ 294,000 and $ 235,000 at April 30, 2024 and 2023, respectively.

Shipping and handling costs are included in cost of product sales.

Because of the nature and quality of the

Company's products, any warranty issues are determined in a relatively short period after the sale and are infrequent in nature, and as such, warranty costs are immaterial to the Company's consolidated financial position and results of operations and are expensed as incurred.

Because of the nature and quality of the Company's products, any warranty issues are determined in a relatively short period after the sale and are infrequent in nature, and as such, warranty costs are immaterial to the Company's consolidated financial position and results of operations and are expensed as incurred.

Credit Concentration The Company performs credit evaluations of its customers.

Revenues from three of the Company's domestic dealers represented in the aggregate approximately 45 % and 36 % of the Company's sales in fiscal years 2024 and 2023, respectively.

Revenues from two of the Company's domestic dealers and its national stocking distributor represented in the aggregate approximately 41 % and 42 % of the Company's sales in fiscal years 2025 and 2024, respectively.

Accounts receivable for two domestic customers represented approximately 26 % and 21 % of the Company's total accounts receivable as of April 30, 2025 and 2024, respectively.

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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.

Under AC 740, the Company evaluates the realization of all deferred income tax assets and determines if a valuation allowance is required on an annual basis.

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.

Under ASC 740, the Company evaluates the realization of all deferred income tax assets and determines if a valuation allowance is required on an annual basis.

Under ASC 740, the Company applies a more-likely-than-not recognition threshold for all tax uncertainties.

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There were no antidilutive RSUs and stock options outstanding at April 30, 2025.

There were 33,900 antidilutive RSUs and stock options outstanding at April 30, 2023.

There were no antidilutive RSUs and stock options outstanding at April 30, 2024.

The following is a reconciliation of basic to diluted weighted average common shares outstanding:

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Weighted average common shares outstanding—diluted 2,979 2,938

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 117,747 RSUs under the 2017 Omnibus Incentive Plan in fiscal year 2024 and 87,969 RSUs in fiscal year 2023.

Forfeitures are accounted for in the period in which the awards are forfeited.

The Company granted 62,326 RSUs under the 2023 Omnibus Incentive Plan in fiscal year 2025 and 117,747 RSUs in fiscal year 2024 under the 2017 Omnibus Incentive Plan.

There were no stock options granted during fiscal years 2025 and 2024.

(See Note 9 , Stock Options and Share-Based Compensation )

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.

The Company adopted this standard effective May 1, 2023.

Segment Reporting Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker ("CODM"), or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company's Chief Executive Officer ("CEO") is the Company's CODM.

In accordance with ASC 280, Segment Reporting , the Company determined that the CODM assesses the Company's operations and manages its businesses in two segments :

Domestic and International.

The Domestic segment consists of the Company's operations based out of Statesville, North Carolina, and Kewaunee's subsidiary, Nu Aire, Inc., based out of Plymouth, Minnesota.

The International segment consists of the foreign subsidiaries identified above.

We measure our 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.

Any non-allocated Corporate costs are shown separately in our segment reporting as presented in Note 14 , Segment Information .

See Note 14 , Segment Information .

for further segment financial data.

New Accounting Standards In November 2023, the FASB issued ASU 2023-07, " Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ," which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after

December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this standard effective May 1, 2024 for its fiscal year 2025 annual reporting and subsequent interim periods.

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

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures," which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company will adopt this standard in fiscal year 2025.

The Company 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 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.

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

Note 2 - Revenue Recognition

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The Company believes this output method most reasonably reflects the Company's performance because it directly measures the value of the goods transferred to the customer.

For standardized products sold by the Company, revenue is recognized when control transfers, which is typically freight on board ("FOB") shipping point.

For standardized products sold by the Company, revenue is recognized when control transfers, which is typically freight on board shipping point.

All orders contain a standard warranty that warrants that the product is free from defects in workmanship and materials under normal use and conditions for a limited period of time.

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Contract Balances

The closing balances of contract assets included $ 11,840,000 in accounts receivable and $ 312,000 in other current assets at April 30, 2024.

The closing balances of contract assets included $ 12,693,000 in accounts receivable at April 30, 2025.

The opening balance of contract assets arising from contracts with customers included $ 11,840,000 in accounts receivable and $ 312,000 in other assets at April 30, 2024.

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During the fiscal year ended April 30, 2025, changes in contract assets and liabilities were not materially impacted by any other factors.

Approximately 100 % of the contract liability balance at April 30, 2024 is expected to be recognized as revenue during fiscal year 2025.

Approximately 40 % of the contract liability balance at April 30, 2025 is expected to be recognized as revenue during fiscal year 2026, with the remaining balance primarily related to international operations, which generally have longer delivery and collection cycles.

Note 3— Inventories

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At April 30, 2025 and 2024, the Company's international subsidiaries' inventories were $ 2,845,000 and $ 3,239,000 , respectively, measured using the lower of cost or net realizable value under the FIFO method and are included in the above tables.

Note 4— 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 6 , Long-term Debt and Other Credit Arrangements ), and Term Loan (as defined in Note 6 , 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 April 30, 2025 Consolidated Balance Sheet includes the assets and liabilities of Nu Aire, which have been measured at fair value as of the Closing Date.

The preliminary allocation of purchase price recorded for Nu Aire was as follows:

($ in thousands) Initial Allocation Measurement Period Adjustments

Assets acquired:

Cash and cash equivalents $ 1,245 $ — $ 1,245

10,650 — 10,650

13,744 1,778 15,522

Prepaid expenses and other current assets 852 — 852

Property, plant and equipment

7,349 — 7,349

Other intangible assets

18,600 — 18,600

Goodwill 14,150 ( 1,663 ) 12,487

Right of use assets 7,376 — 7,376

Other assets 7 — 7

Total assets acquired

73,973 115 74,088

Liabilities assumed:

Current portion of operating lease liabilities ( 965 ) — ( 965 )

Accounts payable ( 4,318 ) — ( 4,318 )

Employee compensation and amounts withheld ( 2,642 ) — ( 2,642 )

Deferred revenue ( 935 ) — ( 935 )

Other accrued expenses ( 1,591 ) — ( 1,591 )

Long-term portion of operating lease liabilities ( 5,167 ) — ( 5,167 )

Deferred income taxes

( 5,375 ) ( 115 ) ( 5,490 )

Total liabilities assumed

( 20,993 ) ( 115 ) ( 21,108 )

Preliminary aggregate acquisition consideration

$ 52,980 $ — $ 52,980

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 preliminary and are based on the information that was available as of the reporting date.

The fair values of the assets acquired and liabilities assumed were preliminarily 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.

Intangible assets consisting of customer relationships, trade names and trademarks, and developed technology were valued using the MEEM method, or the RFR method, both are income-based approaches.

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 intangibles 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 expects to complete the purchase price allocation as soon as practicable, but no later than one year from the Closing Date.

The amounts, based on preliminary valuations and subject to final adjustment, allocated to intangible assets are as follows:

($ in thousands) Preliminary 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

Since the Closing Date, the results of operations for Nu Aire of $ 37.8 million of revenue and $ 0.6 million of net earnings for the six months ended April 30, 2025, have been included within the accompanying Consolidated Statements of Operations.

The following unaudited supplemental pro forma combined financial information presents the Company's results of operations for the twelve months ended April 30, 2025 and 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.

Twelve Months Ended April 30,

($ in thousands, except per share amounts)

$ 276,696 $ 284,630

11,661 19,293

Net earnings per share attributable to Kewaunee Scientific Corporation stockholders:

$ 4.07 $ 6.70

$ 3.91 $ 6.57

Note 5— Goodwill & 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.

See Note 4 , Nu Aire Acquisition for additional information.

No impairment losses on goodwill were recorded during the six months ended April 30, 2025.

The ending balance of goodwill at April 30, 2025 was approximately $ 12.5 million after the impact of the measurement adjustment discussed in Note 4 , Nu Aire Acquisition .

See Note 4 , Nu Aire Acquisition , for further information.

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 4 , Nu Aire Acquisition for additional information.

The gross carrying amount and accumulated amortization of the Company's intangible assets other than goodwill as of April 30, 2025 were as follows:

April 30, 2025

($ in thousands) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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

The Company recorded amortization expense of $ 0.8 million for the fiscal year ended April 30, 2025.

Expected future amortization expense related to intangible assets, net as of April 30, 2025, excluding trade names and trademarks, are as follows:

($ in thousands)

Thereafter 5,246

Total $ 12,931

No impairment losses on intangible assets, net were recorded during the fiscal year ended April 30, 2025.

Note 6— Long-term Debt and Other Credit Arrangements

The components of the Company's long-term debt, excluding lease, deferred financing costs of $ 0.8 million related to the debt, and sale-leaseback related activity, as presented on the Condensed Consolidated Balance Sheet were as follows:

($ in thousands) April 30, 2025

PNC Loan Agreement $ 13,750

Seller Notes 23,935

Total long-term debt $ 37,685

Current portion of long-term debt $ 3,000

Non-current portion of long-term debt 34,685

Total long-term debt $ 37,685

See Note 12 , Leases, Commitments and Contingencies , for more information on any long-term debt related to the Company's lease portfolio and Note 7 , 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 4 , 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 two 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 commencing on November 1, 2024.

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 5.96 % as of April 30, 2025.

The Company recorded interest expense of $ 486,000 related to the Term Loan for the fiscal year ending April 30, 2025.

At April 30, 2025, no advances were outstanding under the Revolving Credit Facility.

Amounts available under the Revolving Credit Facility were $ 20,000,000 at April 30, 2025.

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 April 30, 2025, the Company was in compliance with all of the financial covenants under the Loan Agreement.

Future minimum payments under the PNC Loan Agreement for the fiscal years ending April 30 are as follows:

($ in thousands)

As noted in Note 4 , 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 $ 935,000 in PIK interest for the twelve months ended April 30, 2025.

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.

Mid Cap Revolving Credit Facility

On December 19, 2022, the Company entered into a Credit and Security Agreement (the "Credit Agreement") with Mid Cap Funding IV Trust, as agent (the "Agent"), and the lenders from time to time party thereto (collectively, the "Lenders").

The Credit Agreement provides for a secured revolving line of credit initially up to $ 15.0 million (the "Revolving Credit Facility").

Availability under the Revolving Credit Facility is subject to a borrowing base calculated in accordance with the terms of the Credit Agreement and on the basis of eligible accounts and inventory and certain other reserves and adjustments.

The Credit Agreement provided for a secured revolving line of credit initially up to $ 15.0 million (the "Mid Cap Revolving Credit Facility").

Availability under the Mid Cap Revolving Credit Facility was subject to a borrowing base calculated in accordance with the terms of the Credit Agreement and on the basis of eligible accounts and inventory and certain other reserves and adjustments.

Pursuant to the Credit Agreement, the Company granted to the Agent, for itself and the Lenders, a first priority security interest in all existing and future acquired assets owned by the Company.

Subject to the terms of the Credit Agreement, from time to time the Company may request that the initial revolving loan amount available under the Revolving Credit Facility be increased with additional tranches in minimum amounts of $ 1,000,000 , up to a maximum borrowing availability of $ 30.0 million.

The Agent and Lenders must consent to any such increase in their sole discretion.

The Revolving Credit Facility matures on December 19, 2025.

Except as set forth in the Credit Agreement, borrowings under the Revolving Credit Facility bear interest at a rate equal to Term SOFR (Secured Overnight Financing Rate) plus 4.10 %.

The Company is required to make monthly interest payments on the Revolving Credit Facility, with the entire principal payment due at maturity.

At April 30, 2024, there was $ 3,000,000 outstanding under the Revolving Credit Facility, with remaining borrowing capacity under the Revolving Credit Facility of $ 11,587,000 .

At April 30, 2023, there was $ 3,548,000 outstanding under the Revolving Credit Facility, with remaining borrowing capacity under the Revolving Credit Facility of $ 10,286,000 .

The borrowing rate under the Revolving Credit Facility was 9.54 % and 9.02 % as of April 30, 2024 and 2023, respectively.

The Company was in compliance with all financial covenants under its revolving credit facility at April 30, 2024 and 2023.

In addition, the Company's International subsidiaries had a balance outstanding of $ 99,000 and $ 39,000 in short-term borrowings related to overdraft protection and short-term loan arrangements at April 30, 2024 and 2023, respectively.

At April 30, 2024, there were foreign bank guarantees outstanding to customers in the amounts of $ 7.1 million, $ 435,000 , and $ 226,000 with expiration dates in fiscal years 2025, 2026, and 2027, respectively, collateralized by certain assets of the Company's subsidiaries in India.

Except as set forth in the Credit Agreement, borrowings under the Mid Cap Revolving Credit Facility bore interest at a rate equal to Term SOFR (Secured Overnight Financing Rate) plus 4.10 %.

The Company was required to make monthly interest payments on the Mid Cap Revolving Credit Facility, with the entire principal payment due at maturity.

At April 30, 2024, there was $ 3,000,000 outstanding under the Mid Cap Revolving Credit Facility, with remaining borrowing capacity under the Mid Cap Revolving Credit Facility of $ 11,587,000 .

The borrowing rate under the Mid Cap Revolving Credit Facility was 9.54 % as of April 30, 2024.

The Company was in compliance with all financial covenants under the Mid Cap Revolving Credit Facility at April 30, 2024.

On September 30, 2024, the Company terminated 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 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 $ 986,000 and $ 99,000 in short-term borrowings related to overdraft protection and short-term loan arrangements at April 30, 2025 and 2024, respectively.

At April 30, 2025, there were foreign bank guarantees outstanding to customers in the amounts of $ 8.1 million, $ 1.2 million, $ 450,000 , and $ 653,000 with expiration dates in fiscal years 2026, 2027, 2028, and 2029, respectively, collateralized by certain assets of the Company's subsidiaries in India.

At April 30, 2024, there were bank guarantees issued by foreign banks outstanding to customers in the amounts of $ 7.1 million, $ 435,000 , and $ 226,000 with expiration dates in fiscal years 2025, 2026, and 2027, respectively, collateralized by certain assets of the Company's subsidiaries in India.

15 unchanged sentences

The monthly lease payments are split between a reduction of principal and interest expense using the effective interest rate method.

expense associated with the financing arrangement was $ 1,287,000 and $ 1,316,000 for the years ended April 30, 2024 and 2023, respectively.

Interest expense associated with the financing arrangement was $ 1,255,000 and $ 1,287,000 for the years ended April 30, 2025 and 2024, respectively.

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 .

31 unchanged sentences

Effects of differing US and foreign tax rates 183 243

Non-deductible transaction costs

Effect of pension settlement

2 unchanged sentences

Increase (decrease) in valuation allowance

( 6,579 ) 1,667

Deferred taxes on unremitted earnings

10 unchanged sentences

Foreign tax credit carryforwards 638 638

Section 174 R&E Addback 2,303 1,558

Unrecognized actuarial loss, defined benefit plans — 1,064

Section 174 R&E

Warranty Accrual

Inventory reserves and capitalized costs 478 296

7 unchanged sentences

Book basis in excess of tax basis of sale leaseback property

Prepaid pension — ( 919 )

( 1,095 ) ( 1,028 )

Book basis in excess of tax basis of intangibles assets

APB 23 Assertion ( 1,507 ) ( 1,572 )

1 unchanged sentence

Debt Issuance Cost on sale leaseback

( 138 ) ( 142 )

Total deferred tax liabilities ( 12,358 ) ( 5,562 )

3 unchanged sentences

Deferred tax assets, non-current

$ 3,994 $ 7,401

Deferred tax liabilities, non-current

3 unchanged sentences

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).

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.

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.

The Company evaluates all available evidence, both positive and negative, to determine the amount of any required valuation allowance.

As of April 30, 2024, our deferred tax assets primarily related to proceeds on a prior sale leaseback and Section 174 research and expenditures addbacks.

As of April 30, 2025, our deferred tax assets primarily related to proceeds on a prior sale leaseback, Section 174 research and expenditures addbacks, and operating lease liabilities.

A valuation allowance of $ 933,000 and $ 926,000 was recorded against our net deferred tax asset balance as of April 30, 2025 and 2024, respectively.

For the year ended April 30, 2024, we recorded a net decrease in valuation allowance of $ 6,579,000 , as compared to a net increase of $ 1,667,000 for the year ended April 30, 2023, based on management's reassessment of the amount of its deferred tax assets that are more likely than not to be realized.

For the year ended April 30, 2025, we recorded a net increase in valuation allowance of $ 7,000 , as compared to a net decrease of $ 6,579,000 for the year ended April 30, 2024, based on management's reassessment of the amount of its deferred tax assets that are more likely than not to be realized.

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

10 unchanged sentences

At April 30, 2025, there were 357,472 shares available for future issuance under the 2023 Plan.

Under the 2023 Plan and the 2017 Plan, in the aggregate, the Company recorded stock-based compensation expense for employees of $ 1,018,000 and $ 845,000 and deferred income tax benefit of $ 223,000 and $ 199,000 in fiscal years 2024 and 2023, respectively.

The RSUs granted under the 2023 Plan and the 2017 Plan include grants with both a service and performance component vesting over a 3 year period and grants with only service components vesting over a 3 year period.

Under the 2023 Plan, the Company recorded stock-based compensation expense for employees of $ 1,441,000 and $ 1,018,000 and deferred income tax benefit of $ 337,000 and $ 223,000 in fiscal years 2025 and 2024, respectively.

The RSUs granted under the 2023 Plan include grants with both a service and performance component vesting over a 3 year period and grants with only service components 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 performance period based on the ratio of cumulative days incurred to total days over the performance period.

12 unchanged sentences

This plan was replaced by the 2017 Omnibus Plan with all outstanding options granted under the prior plan to remain subject to the prior plan.

The last grant of options, issued on August 31, 2016, under the prior plan will expire August 31, 2026.

The Company did not record any compensation expense related to outstanding stock options in fiscal years 2024 or 2023.

The Company did not record any

compensation expense related to outstanding stock options in fiscal years 2025 or 2024.

There were no options outstanding at April 30, 2025.

The Company issued new shares of common stock to satisfy options exercised during fiscal years 2025 and 2024.

7 unchanged sentences

Exercisable at end of year — $ — 24,700 $ 20.05

The number of options outstanding, exercisable, and their weighted average exercise prices were within the following ranges at April 30, 2024:

$ 15.85 -$ 23.62

Options outstanding 24,700

Weighted average exercise price $ 20.05

Weighted average remaining contractual life 1.68 years

Aggregate intrinsic value $ 386,584

Options exercisable 24,700

Weighted average exercise price $ 20.05

Aggregate intrinsic value 386,584

Note 10 - Stockholder's Equity

1 unchanged sentence

Holders of the Company's Common Stock are entitled to 1 vote per share.

At April 30, 2024, and April 30, 2023, there were approximately 2,839,000 and 2,830,000 shares, respectively, of Common Stock issued and outstanding.

At April 30, 2025, and April 30, 2024, there were approximately 2,839,000 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 fiscal year ended April 30, 2025.

4 unchanged sentences

During the fiscal year ended April 30, 2025, the Company repurchased 33,206 shares of the Company's common stock for approximately $ 1,594,000 , excluding other costs such as broker commissions and fees.

During the fiscal year ended April 30, 2024, the Company repurchased 66,191 shares of the Company's common stock for approximately $ 1,992,000 excluding other costs such as broker commissions and fees.

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.

As of April 30, 2025, the total remaining purchase authorization was 100,603 shares.

The following table summarizes share repurchase activity for the three months ended April 30, 2025:

8 unchanged sentences

(1) On August 31, 2023, the Board of Directors of Kewaunee Scientific Corporation (the "Company") adopted a share repurchase program with authorization to repurchase up to 100,000 shares of our Company's common stock, which commenced on September 1, 2023 and has no expiration date.

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 common stock (as amended, the "Program").

The share repurchase program is designed to help offset the impact of future share dilution from employee stock issuances.

3 unchanged sentences

(2) Excludes other costs such as broker commissions and fees.

Transactions that occurred under the share repurchase program prior to the fourth quarter of fiscal year 2024 are presented in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, in the corresponding interim report on Form 10-Q for the periods ended October 31, 2023 and January 31, 2024 , respectively.

Note 11 - Accumulated Other Comprehensive Income (Loss)

9 unchanged sentences

Change in unrecognized actuarial loss on pension obligations — 509 509

Balance at April 30, 2023 ( 2,833 ) ( 609 ) ( 3,442 )

Foreign currency translation adjustment ( 549 ) ( 49 ) ( 598 )

Change in unrecognized actuarial loss on pension obligations — 509 509

Settlement loss included in net income

3 unchanged sentences

Balance at April 30, 2024 ( 3,382 ) — ( 3,382 )

Foreign currency translation adjustment ( 421 ) — ( 421 )

Balance at April 30, 2025 $ ( 3,803 ) $ — $ ( 3,803 )

Note 12 - Leases, Commitments and Contingencies

8 unchanged sentences

ROU assets totaled $ 12,965,000 and $ 7,454,000 at April 30, 2025 and 2024, respectively.

Operating cash paid to settle lease liabilities was $ 2,594,000 and $ 2,278,640 for the fiscal year ended April 30, 2024 and 2023, respectively.

rating cash paid to settle lease liabilities was $ 3,394,000 and $ 2,594,000 for the fiscal year ended April 30, 2025 and 2024, respectively.

The Company's leases have remaining lease terms of up to 7 years.

13 unchanged sentences

2029 2,114 40

2030 1,635 40

Thereafter 164 20

2 unchanged sentences

Total $ 12,072 $ 245

In November 2023, the Company entered into a new lease that has not yet commenced as of April 30, 2024 with future minimum lease payments in aggregate of $ 681,000 that are not yet reflected on the Condensed Consolidated Balance Sheet.

In April 2025, the Company entered into a new lease that has not yet commenced as of April 30, 2025 with future minimum lease payments in aggregate of approximately $ 267,000 that are not yet reflected on the Condensed Consolidated Balance Sheet.

This lease is expected to commence in the second quarter of fiscal year 2026 with a lease term of 5 years.

8 unchanged sentences

The benefit plan for hourly employees provides benefits at stated amounts based on years of service as of April 30, 2005.

The change in projected benefit obligations and the change in fair value of plan assets for the non-contributory defined benefit pension plans for each of the years ended April 30 are summarized as follows:

The change in projected benefit obligations and the change in fair value of plan assets for the non-contributory defined benefit pension plans for the year ended April 30, 2024 is summarized as follows:

$ in thousands 2024

23 unchanged sentences

Discount rate N/A

Rate of compensation increase N/A N/A

Mortality table N/A Pri-2012

Projection scale N/A MP-2021

Year Ended April 30,

Rate of compensation increase N/A

Mortality table N/A

Projection scale N/A

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost 2024

1 unchanged sentence

Expected long-term return on plan assets N/A

Rate of compensation increase N/A N/A

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

Rate of compensation increase N/A

The components of the net periodic pension (income) expense for the fiscal year ended April 30, 2024 are as follows:

$ in thousands

5 unchanged sentences

Total net periodic pension expense plus special events

Plan assets by asset categories as of April 30, 2023 were as follows:

$ in thousands 2023

Asset Category Amount %

Equity Securities $ 12,724 72

Fixed Income Securities 4,845 27

Cash and Cash Equivalents 163 1

Totals $ 17,732 100

The following tables present the fair value of the assets in the Company's defined benefit pension plans at April 30, 2023:

Asset Category Level 1 Level 2 Level 3

Large Cap $ 7,326 $ — $ —

Small/Mid Cap 2,326 — —

International 1,743 — —

Emerging Markets 702 — —

Fixed Income 4,845 — —

Liquid Alternatives 627 — —

Cash and Cash Equivalents 163 — —

Totals $ 17,732 $ — $ —

Level 1 retirement plan assets include United States currency held by a designated trustee and equity funds of common and preferred securities issued by domestic and foreign corporations.

These equity funds are traded actively on exchanges and price quotes for these shares are readily available.

Defined Contribution Plan

The Company has a defined contribution plan covering substantially all domestic salaried and hourly employees.

The plan provides benefits to all employees who have attained age 21 , completed three months of service, and who elect to participate.

The plan provides that the Company make matching contributions equal to 100 % of the employee's qualifying contribution up to 3 % of the employee's compensation, and make matching contributions equal to 50 % of the employee's contributions between 3 % and 5 % of the employee's compensation, resulting in a maximum employer contribution equal to 4 % of the employee's compensation.

The Company's matching contributions were $ 957,000 and $ 932,000 for years ending April 30, 2024 and 2023.

Additionally, the plan provides that the Company may elect to make a non-matching contribution for participants employed by the Company on December 31 of each year.

The Company did not elect to make a non-matching contribution in fiscal years 2024 and 2023.

The Company has two defined contribution plans covering substantially all domestic salaried and hourly employees.

These plans provides benefits to all employees who meet minimum age and service requirements.

The Company's plans provide for matching contributions based on a percentage of the employee's eligible contributions.

Total matching contributions made by the Company for these plans were $ 1,177,000 and $ 957,000 for the years ending April 30, 2025 and 2024.

The Company's International subsidiaries also have a defined contribution plan for qualifying employees.

Under the International plan, employer contributions are made in accordance with plan rules.

Total contributions made by the Company for its International plan was $ 247,000 and $ 238,000 for the years ending April 30, 2025 and 2024.

Note 14 - Segment Information

The Company's operations are classified into two business segments:

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, casework, flexible systems, worksurfaces, workstations, workbenches, and computer enclosures.

The International business segment, which consists of the foreign subsidiaries identified in Note 1 , Summary of Significant Accounting Policies , provides the Company's products and services, including facility design, detailed engineering, construction, and project management from the planning stage through testing and commissioning of laboratories.

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 4 , Nu Aire Acquisition , for further information.The International business segment, which consists of the foreign subsidiaries identified in Note 1 , Summary of Significant Accounting Policies , provides the Company's 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 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.

Certain corporate expenses shown below are net of expenses that have been allocated to the business segments.

The following table shows revenues, earnings, and other financial information by business segment and unallocated corporate expenses for each of the years ended April 30:

3 unchanged sentences

Intersegment revenues 626 3,468 ( 4,094 ) —

Depreciation 2,524 408 193 3,125

Depreciation and amortization

4,166 420 173 4,759

Interest expense

1,492 71 1,651 3,214

Earnings (loss) before income taxes 19,923 4,712 ( 9,850 ) 14,785

10 unchanged sentences

Depreciation 2,524 408 193 3,125

Interest expense

1,574 166 59 1,799

Earnings (loss) before income taxes 15,048 6,295 ( 8,224 ) 13,119

5 unchanged sentences

Revenues (excluding intersegment) from customers in foreign countries 1,175 66,517 — 67,692

Consent Of Independent Registered Public Accounting Firm

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

333-274371, 333‑160276, 333‑176447, 333‑213413, and 333‑220389) of Kewaunee Scientific Corporation of our reports dated June 28, 2024, 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, 2024.

/s/ Forvis Mazars, LLP

Atlanta, Georgia

June 28, 2024

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