Company: KEQU
Filing Date: 2025-12-12
Form Type: 10-Q
Source: 0000055529-25-000054
Chunk: 29

Company: KEWAUNEE SCIENTIFIC CORP /DE/
Filing Date: 2025-12-12
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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 the performance criteria at the end of the three-year period, based on the ratio of cumulative days of service to total days over the three-year period. The Company recorded stock-based compensation expense of $454,000 and $885,000 during the three and six months ended October 31, 2025, respectively, with the remaining estimated stock-based compensation expense of $3,290,000 to be recorded over the remaining vesting periods. The Company recorded stock-based compensation expense of $373,000 and $691,000 during the three and six months ended October 31, 2024, respectively. Director's fees paid with shares of common stock in lieu of cash in accordance with Director compensation guidelines were $218,000 for the six months ended October 31, 2025, of which $197,000 was included in stock-based compensation.

N. Income Taxes

Income tax expense of $915,000 and $1,676,000 was recorded for the three and six months ended October 31, 2025, respectively. Income tax expense of $916,000 and $1,108,000 was recorded for the three and six months ended October 31, 2024, respectively. The effective tax rate was 26.5% and 22.7% for the three and six months ended October 31, 2025, respectively. The effective tax rate was 23.3%  and 17.4% for the three and six months ended October 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 six months ended October 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.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 $1,609,000 and $1,507,000 for the withholding tax related to Kewaunee Labway India Pvt. Ltd.