Company: KEQU
Filing Date: 2025-03-14
Form Type: 10-Q
Source: 0000055529-25-000013
Chunk: 79

Company: KEWAUNEE SCIENTIFIC CORP /DE/
Filing Date: 2025-03-14
Form: 10-Q
Item: Part I, Item 2
Chunk 79
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000 or 16.8% of sales, in the comparable period of the prior year. The increase in operating expenses for the three months ended January 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 consulting and professional fees of $829,000, international operating expenses of $777,000, SG&A wages, benefits, incentive and stock-based compensation of $597,000, and corporate governance expenses of $264,000. The increase in operating expenses for the nine months ended January 31, 2025 was primarily due to the acquisition of Nu Aire, with additional impacts driven by increases in consulting and professional fees of $2,326,000, SG&A wages, benefits, incentive and stock-based compensation of $1,160,000, international operating expenses of $639,000, and corporate governance expenses of $632,000. The increases in consulting and professional fees for both the three- and nine-month periods were primarily attributed to costs associated with the acquisition and integration of Nu Aire and costs incurred related to Sarbanes-Oxley 404(b) compliance readiness.

Interest expense was $1,137,000 and $2,051,000 for the three and nine months ended January 31, 2025, respectively, as compared to $411,000 and $1,213,000, respectively, for the comparable periods 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 benefit of $108,000 and income tax expense of $982,000 were recorded for the three months ended January 31, 2025 and 2024, respectively. Income tax expense of $1,000,000 and $3,894,000 were recorded for the nine months ended January 31, 2025 and 2024, respectively. The effective income tax rate for the three and nine months ended January 31, 2025 was (8.5)% and 13.1%, as compared to 27.9% and 33.1% for the three and nine months ended January 31, 2024, respectively. The effective tax rate for the current three and nine months periods 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