Company: KEQU
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0000055529-25-000040
Chunk: 33

Company: KEWAUNEE SCIENTIFIC CORP /DE/
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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ire on November 1, 2024, along with improved manufacturing productivity and ongoing cost-containment initiatives.

Operating expenses for the three months ended July 31, 2025 were $16,120,000, or 22.7% of sales, as compared to $9,913,000, or 20.5% of sales, in the comparable period of the prior year. The increase in operating expenses for the three months ended July 31, 2025 was largely related to the acquisition of Nu Aire. The increase in operating expenses from the comparable period was also impacted by increases in international operating expenses of $392,000 and SG&A wages, benefits, incentive and stock-based compensation of $182,000.

Interest expense was $1,058,000 for the three months ended July 31, 2025, as compared to $472,000 for the comparable period of the prior year. The changes in interest expense were due to changes in the levels of bank and other borrowings and interest rates.

Income tax expense of $761,000 and $192,000 were recorded for the three months ended July 31, 2025 and 2024, respectively. The effective income tax rate for the three months ended July 31, 2025 was 19.4%, as compared to 7.9% for the three months ended July 31, 2024. The effective tax rate for the current three month period reflects the impact of foreign operations which are taxed at different rates than the U.S. tax rate of 21%, combined with expected current year tax expense for the Company's domestic operations. In addition, the income tax expense recorded for the three months ended July 31, 2025 was favorably impacted by a discrete tax benefit of $303,000 resulting from the issuance of stock through the vesting of restricted stock units during the first quarter. On July 4, 2025, the U.S. government enacted Public Law No. 119-21, commonly known as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses. Since OBBBA was enacted on July 4, 2025, its full impact is not reflected in the Company's Condensed Consolidated Financial Statements for the three months ended July 31, 2025. The Company is evaluating the provisions to assess potential effects on its effective tax rate, deferred tax assets and liabilities, and future cash tax obligations. See Note