Company: KEQU
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0000055529-25-000040
Chunk: 28

Company: KEWAUNEE SCIENTIFIC CORP /DE/
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 28
---
 2024, respectively. The effective tax rate was 19.4% and 7.9% for the three months ended July 31, 2025 and July 31, 2024, respectively. The effective tax rate for the current three month period reflects the impact of foreign operations which are taxed at different rates than the U.S. tax rate of 21%, combined with expected current year tax expense for the Company's domestic operations. In addition, the income tax expense recorded for the 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 quarter.In August 2019, the Company revoked its indefinite reinvestment of foreign unremitted earnings position in compliance with ASC 740 "Income Taxes" and terminated its indefinite reinvestment of unremitted earnings assertion for the Singapore and Kewaunee Labway India Pvt. Ltd. international subsidiaries. The Company has a deferred tax liability of $1,549,000 and $1,507,000 for the withholding tax related to Kewaunee Labway India Pvt. Ltd. as of July 31, 2025 and April 30, 2025, respectively. On July 4, 2025, the U.S. government enacted Public Law No. 119-21, commonly known as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses, including modifications and extensions of certain Tax Cuts and Jobs Act provisions, domestic research and development cost expensing, extension of 100% bonus depreciation, limitations on interest expense deductions, and adjustments to certain Inflation Reduction Act incentives. Since the OBBBA was enacted on July 4, 2025, its full impact is not reflected in the Company's Condensed Consolidated Financial Statements for the 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. The Company will recognize any required adjustments once the analysis is complete and impacts can be reasonably quantified.

16

O. Segment Information

In accordance with ASC 280, Segment Reporting, the Company's operations are classified into two business segments: Domestic and International. The Domestic business segment principally designs, manufactures, and installs scientific and technical furniture, including steel and wood laboratory cabinetry, fume hoods