<PAGE>

           [LOGO]  KEWAUNEE/R/
                   Scientific Corporation






     [Background Photo of                         [Superimposed Photo of
     Laboratory Setting]                          Laboratory Workstation]
















     [Superimposed Photo of
     Laboratory Workstation]









                                                      1999 ANNUAL REPORT
<PAGE>

Corporate Profile
================================================================================

Kewaunee Scientific Corporation, a recognized leader in the design, manufacture,
and installation of scientific and technical furniture, provides innovative
products of high quality utilized in laboratories and computer facilities
worldwide. The Company's corporate headquarters are located in Statesville,
North Carolina. The Laboratory Products Group manufacturing facilities, also
located in Statesville, North Carolina, produce steel and wood laboratory
furniture, fume hoods, flexible systems, and worksurfaces. The Technical
Products Group manufacturing facility located in Lockhart, Texas produces
technical furniture including workstations, workbenches, computer enclosures,
and related accessories to support local area computer networks and for the
storage and assembly of computers and light electronics.


Product Feature
================================================================================

Kemresin Lite - This innovative (patent pending) premium work top exhibits a
full array of features supported by our many years of experience in
manufacturing Kemresin work tops. This unique product is the result of advanced
material technology and innovative engineering. A 1/4" modified epoxy resin
surface is affixed to an engineered substrate which provides a 1" thick work
top.

Desirable features include:
          .Renewable surface with conventional cleaning methods
          .Superior chemical resistance
          .Integral cast exposed edges and drip groove
          .Smooth, color blended seams
          .Five neutral colors compatible with today's interior design trends
          .Full line of integral sinks
          .Light-weight construction for ease of handling


                  [PHOTOS OF LABORATORY SETTINGS APPEAR HERE]


Kemresin Lite offers a viable work top alternative for varied markets and
customers. Research laboratories, schools and universities, and product testing
facilities can all benefit from this exciting new product developed and
manufactured exclusively by Kewaunee Scientific Corporation.
<PAGE>

Financial Highlights
================================================================================


Kewaunee Scientific Corporation

<TABLE>
<CAPTION>
                                                               Percent
$ in thousands, except per share data        1999       1998    Change
----------------------------------------------------------------------
<S>                                       <C>        <C>       <C>
Operating Data:

Net sales                                 $77,478    $73,037     + 6.1
----------------------------------------------------------------------
Gross profit                              $17,696    $17,437     + 1.5
----------------------------------------------------------------------
Operating expenses                        $12,315    $13,096     - 6.0
----------------------------------------------------------------------
Operating earnings                        $ 5,381    $ 4,341     +24.0
----------------------------------------------------------------------
Net earnings                              $ 3,396    $ 2,563     +32.5
----------------------------------------------------------------------
Net earnings per share
   Basic                                  $  1.40    $  1.07     +30.8
   Diluted                                $  1.38    $  1.06     +30.2
----------------------------------------------------------------------
Return on average equity                     16.5%      14.4%
----------------------------------------------------------------------
Cash dividends per share                  $  0.22    $  0.18     +22.2
----------------------------------------------------------------------

Year-end Data:

Net working capital                       $10,159    $ 9,566     + 6.2
----------------------------------------------------------------------
Total borrowings/long-term debt           $   939    $   -
----------------------------------------------------------------------
Stockholders' equity                      $22,032    $19,039     +15.7
----------------------------------------------------------------------
Book value per share                      $  9.04    $  7.89     +14.6
----------------------------------------------------------------------
Closing market price per share            $10.125    $12.625     -19.8
----------------------------------------------------------------------
</TABLE>


Table of Contents
================================================================================

 2   Letter to our Stockholders
 4   Product Profile
 6   Forward Looking Statement Disclosure
 6   Management's Discussion and Analysis
 8   Financial Statements and Notes
17   Reports of Independent Accountants and Management
18   Summary of Selected Financial Data
19   Quarterly Financial Data
20   Corporate Information

                                                                          Page 1
<PAGE>

Letter to our Stockholders

================================================================================

Fiscal year 1999 was an excellent year for Kewaunee, as we made progress on many
fronts.

Some of the key results include:
     .  Record earnings and sales
     .  Market acceptance of our new products
     .  Capital investments of $3.7 million
     .  Reduced manufacturing costs
     .  Increased manufacturing capacities
     .  Increased international representation
     .  Strengthened financial position

Net earnings for the year increased to $3,396,000, or $1.38 per diluted share,
up 32.5% over last year, while sales for the year increased 6.1% to $77,478,000.
Sales of laboratory furniture increased 8.0% over last year, as the marketplace
for these products remained strong. The increased sales of laboratory furniture
more than offset a 5.7% decline in technical furniture sales during the year
caused by a weaker technical furniture marketplace. Our unfilled sales order
backlog increased to $27.0 million at year-end, up from $24.9 million at the end
of last year.  Return on equity increased to 16.5% for the year, up from 14.4%
in fiscal year 1998.

Sales under our new Research Collection line of steel furniture and our new
Alpha System 2000 flexible furniture both exceeded our expectations for the
year, and continue to gain momentum. We made significant progress toward
increased market acceptance of our new innovative work top, Kemresin Lite, and
we have begun to see this product specified on certain projects.

Capital investments during the year increased to $3.7 million, and we plan to
spend slightly over $4 million in fiscal year 2000. Much of the investment
during the year was for computer-controlled production machinery. The
modernization of our steel plant in Statesville is progressing ahead of
schedule, and we expect to complete this program by April 30, 2000. We already
are experiencing significant improvements in productivity, reduced manufacturing
costs, and increased manufacturing capacity from these investments.

During the year, we increased our international representation through new
relationships in Singapore, England, and the Middle East. Although begun on a
modest scale early in the year, our joint venture in Singapore, Kewaunee Labway
Asia, has exceeded our early expectations. It was awarded several prestigious
projects during the year and recently won several more.

Our financial position continues to strengthen. Stockholders' equity increased
to $22.0 million at year-end, while book value per share increased to $9.04. Our
improved financial position allowed us to replace our expiring credit agreement
with a new, competitive $8 million agreement. The terms of the new agreement
provide more flexibility and support for our long-term growth and profitability.
Borrowings under this agreement were $939,000 at year-end.

As we look toward the future, we are pursuing three goals that I think are
critical to our long-term success: We must strive to be the "supplier of choice"
to our customers; Kewaunee must be a good place to work; and we must provide a
good investment return to our stockholders.

To be the supplier of choice, we must continue to provide superior products at
competitive prices and deliver when the customer wants them. We must also be
responsive to our customers' needs, serving as their partners in achieving their
goals. Our introduction of new products and our programs of capital investment
in our factories should assist us in achieving this goal.

Page 2
<PAGE>

We realize the importance of our associates to our long-term success. We know we
must offer competitive wages, and our benefit programs must be attractive.
Equally important, we believe each person's work should be satisfying and take
place in an atmosphere that is enjoyable, receptive and appreciative of new
ideas.

We must provide a good investment return to our stockholders. In spite of our
significant improvements during fiscal year 1999, our stock price at year-end
was lower than it was a year ago, primarily because of unfavorable conditions in
the equity markets for companies our size. However, if we continue to make the
progress we have over recent years, new investors and higher returns should
follow.

Looking forward, I think our prospects are excellent. With a continuing strong
marketplace, our introductions of new products, our cost reduction programs, and
our progress toward the goals discussed above, I feel Kewaunee is well-
positioned for increased sales, increased profits, and higher returns for our
stockholders.

We appreciate the continued support of our stockholders, our associates, our
network of agencies and representatives, our national distributor VWR Scientific
Products, and our customers.

Sincerely,

/s/ Eli Manchester, Jr.

Eli Manchester, Jr.
President
Chief Executive Officer

July 1999


Earnings Before Income Taxes
    Millions of Dollars

   1997     1998     1999

   $2.2     $4.2     $5.6


Year-End Book Value Per Share
        DOLLARS

   1997     1998    1999

  $7.01    $7.89   $9.04


                                                                          Page 3
<PAGE>

Product Profile
================================================================================

Kewaunee provides innovative scientific and technical furniture for laboratories
and computer facilities worldwide. The photographs in this annual report
illustrate varied applications of our extensive product offering.

                       [PHOTO OF LABORATORY WORKSTATION]

Steel Research Collection - Two of our five styles are illustrated. The
laboratory on the left depicts Trademark, offering a traditional look of
straight lines and flat surfaces. Contour, distributed through VWR Scientific
Products, is featured below, with a softer look of rounded edges on the doors
and drawers. Our electrodeposition paint process, used exclusively by Kewaunee
in producing steel laboratory furniture and fumehoods, protects all steel
surfaces against the rigors of active laboratories.

                         [PHOTO OF MOBILE WORKSTATION]

Alpha System - Our mobile workstations provide a framework that can easily be
combined with cabinets, shelving, and worksurfaces to structure unlimited
configurations to meet individual needs.

                         [PHOTO OF LABORATORY SETTING]

                 [PHOTO OF LABORATORY WORKSTATION MADE OF WOOD]

Wood Signature Series - Four styles, manufactured to the highest standards of
construction, offer multiple choices of wood species, finishes, and door and
drawer appearances. Silhouette style casework was used in this educational
facility shown at left.

Page 4
<PAGE>

[PHOTO OF LABORATORY WORKSTATION]

Evolution - The rugged flexibility and intelligent design of Evolution furniture
allows the ability to modify standard components to meet exact needs in a
variety of environments.  The newly introduced E2 height-adjustable workstation
helps users address multi-shift, multi-function productivity issues and ADA
requirements.

[PHOTO OF LABORATORY DESK AND WORKSTATION]

Kemresin Work Tops - Patented Kemresin work tops are molded from modified epoxy
resin. In addition, our Kemresin Lite work top is durable, renewable, and
available in several designer colors. The chemical resistance of both products
is not confined to a surface coating, but is inherent in the formula.

[PHOTO OF LABORATORY FUME HOODS]

Supreme Air Series Fume Hoods - Our fume hoods assure reliable, efficient
operation at the highest levels of safety, and are subjected to stringent
testing procedures. A wide variety of models and comprehensive option packages
have been designed to enable fume hoods to be tailored for specific
requirements.

[PHOTO OF LABORATORY WORKSTATIONS]

Evolution for LANs - The highly modular and versatile design of Evolution for
LANs provides information technology customers an unmatched ability to organize
for productivity, integrated work areas, ease of access and security.  Open
racking, rack mounting, and secured enclosures offer housing solutions for
monitors, CPUs,  UPSs, back-up storage devices, modems, printers, file servers,
keyboards, documentation, and reference manuals.

Page 5
<PAGE>

Special Note Regarding Forward-Looking Statements
================================================================================

Certain statements in this annual report, including the Letter to Stockholders,
narrative text, captions and Management's Discussion and Analysis of Financial
Condition and Results of Operations, constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could significantly impact results or
achievements expressed or implied by such forward-looking statements. These
factors include, but are not limited to, economic, competitive, governmental,
and technological factors, including year 2000 compliance activities of the
Company and third parties, affecting the Company's operations, markets,
products, services, and prices. The cautionary statements made pursuant to the
Reform Act herein and elsewhere by the Company should not be construed as
exhaustive or as any admission regarding the adequacy of disclosures made by the
Company prior to the effective date of the Reform Act. The Company cannot always
predict what factors would cause actual results to differ materially from those
indicated by the forward-looking statements.  In addition, readers are urged to
consider statements that include the terms "believes," "belief," "expects,"
"plans," "objectives," "anticipates," "intends," or the like to be uncertain and
forward-looking.

Management's Discussion and Analysis
================================================================================

Results of Operations.  Fiscal year 1999 sales increased to $77.5 million, up
6.1% from fiscal year 1998 sales of $73.0 million. Assisted by a robust U.S.
economy and a continuing healthy laboratory furniture marketplace, sales of
laboratory furniture increased 8.0% over the prior year, with unit sales
increases and moderate price increases realized in each of this segment's major
product lines.  Sales of technical furniture decreased 5.7% from the prior year,
as sales in this segment were adversely affected by a weaker marketplace during
the year. Fiscal year 1998 sales increased 17.9% from fiscal year 1997 sales of
$62.0 million. The sales increase for the 1998 fiscal year resulted primarily
from increased unit sales of laboratory furniture in the Company's new Research
Collection line of steel furniture, Evolution for LANs workstations, and epoxy
resin worksurfaces.  Sales for 1998 were also favorably impacted by moderate
price increases on the Company's other products. The Company's unfilled sales
order backlog increased to $27.0 million at April 30, 1999, up from $24.9
million at April 30, 1998, and $24.2 million at April 30, 1997.

Gross profit represented 22.8% of sales in fiscal year 1999; 23.9% of sales in
fiscal year 1998; and 22.5% of sales in fiscal year 1997. The gross profit
margin in fiscal year 1999 was unfavorably affected by start-up costs associated
with several new products, a weaker technical furniture marketplace, and a
change in the product sales mix. The improved gross profit margin for fiscal
year 1998 resulted primarily from significantly higher profit margins achieved
on sales of contract-bid laboratory furniture, and to a lesser extent, on an
improved product sales mix.

Operating expenses were $12.3 million in fiscal year 1999; $13.1 million in
fiscal year 1998; and $11.5 million in fiscal year 1997. As a percent of sales,
these expenses were 15.9%, 17.9%, and 18.6%, respectively. The most significant
factor in the decline in operating expenses in fiscal year 1999 was a reduction
in sales commissions, as more of the Company's orders were sold directly to
dealers for resale. Significant reductions were also achieved in bad debts
expense, legal costs, and other administrative costs. The increase in operating
expenses in fiscal year 1998 was primarily attributable to increased sales and
marketing costs, including sales commissions associated with the increase in
sales.

Other income was $325,000, $45,000 and $41,000 in fiscal years 1999, 1998 and
1997, respectively. Other income in fiscal year 1999 included income of $295,000
recorded in the fourth quarter of the year resulting from a litigation
settlement with certain suppliers for overcharges in earlier years. Interest
expense was $96,000, $149,000 and $344,000 in fiscal years 1999, 1998 and 1997,
respectively. The decrease in interest expense for fiscal years 1999 and 1998
resulted primarily from lower levels of borrowings during each year under the
Company's revolving credit facility and, to a lesser extent, lower interest
rates paid.

The Company recorded income tax expense of $2.2 million, and $1.7 million, or
39.5% of pretax earnings, in fiscal years 1999 and 1998, respectively. The
Company recorded a net income tax benefit of $97,000 in fiscal year 1997, as the
favorable impact of adjustments eliminating the valuation allowance on deferred
tax assets exceeded income tax expense associated with that year's earnings.

Net earnings increased to $3.4 million, or $1.38 per diluted share, in fiscal
year 1999, from $2.6 million, or $1.06 per diluted share, in fiscal year 1998.
Net earnings were $2.3 million, or $.95 per diluted share, in fiscal year 1997.

Liquidity and Capital Resources.  Historically, the Company's principal sources
of liquidity have been funds generated from operating activities, supplemented
as needed by the Company's credit facility. The Company believes that these
sources will be sufficient to support ongoing business levels, including capital
expenditures.

Operating activities provided cash of $1.3 million, $3.4 million, and $4.2
million in fiscal years 1999, 1998, and 1997, respectively, primarily from
earnings in each of these years. Working capital increased to $10.2 million at
April 30, 1999,

Page 6
<PAGE>

from $9.6 million at April 30, 1998, and the ratio of current assets to current
liabilities increased to 1.9-to-1 at April 30, 1999 from 1.8-to-1 at April 30,
1998. The improvement in working capital resulted as operating earnings for the
year plus depreciation expense exceeded funds used for capital expenditures and
cash dividends paid.

In January 1999, the Company entered into a new credit facility with another
lender replacing the Company's previous revolving credit facility. The new
facility allows the Company to borrow up to $3 million under a two-year
unsecured revolving credit component and up to $5 million under a seven-year
equipment loan component. At April 30, 1999, advances of $939,000 were
outstanding under the revolving credit loan. No advances were outstanding under
the equipment loan component.

Capital expenditures of $3.7 million, $1.5 million, and $1.2 million in fiscal
years 1999, 1998, and 1997, respectively, were primarily funded by cash provided
by operating activities. Capital expenditures of approximately $4.2 million are
planned for fiscal year 2000, primarily for the purchase of production
machinery. Fiscal year 2000 expenditures are expected to be funded primarily by
cash provided by operating activities during the year supplemented as needed by
borrowings under the credit facility.

In the third quarter of fiscal year 1999, the Company increased its quarterly
cash dividend to six cents per share from five cents per share. Dividends in the
amount of five cents per share were declared and paid in the last two quarters
of fiscal year 1998, and dividends in the amount of four cents per share were
declared and paid in the first two quarters of that year. The Company plans to
pay future dividends in line with the Company's actual and anticipated future
operating results.

Year 2000. Kewaunee Scientific Corporation understands the importance of being
prepared for the year 2000. The scope of the Company's Y2K readiness effort has
included: (1) evaluating information technology such as hardware and software;
(2) investigating other systems or embedded technology contained in various
manufacturing, environmental and safety systems, and facilities; (3) assessing
the readiness of key third parties, including suppliers and utility vendors; and
(4) determining the need for contingency plans, and developing such plans if
considered appropriate.

The Company established project teams to address the Y2K issue. Through the
efforts of the individuals on these teams, key components in both information
technology systems and in non-IT systems were inventoried and assessed for
compliance, and plans were implemented for any required system modifications or
replacements. The majority of the Company's major business systems were Y2K
compliant as of the beginning of fiscal year 1999, and planned upgrades during
fiscal year 1999 made the remainder of the major business systems Y2K compliant.
Remediation and testing activities were substantially completed during the 1999
fiscal year, and are scheduled to be fully completed by September 30, 1999.
Members of the Y2K project teams have monitored progress of remediation and
performed testing for key components. Progress has also been closely monitored
by senior management.

The Company is in contact with suppliers and other third parties to assure no
interruption occurs concerning Y2K compliance issues. Inquiries were made to all
suppliers, with the highest priority placed on suppliers that are critical to
the business.  For those suppliers that were either determined to be critical to
the business or those that were not considered to be making sufficient progress
in becoming Y2K compliant in a timely manner, the Company is currently assessing
various potential risks and whether contingency plans are appropriate.

While the Company does not anticipate a major interruption of its business
activities because of the Y2K issue, the greatest exposure to risk will most
likely be associated with a supplier rather than due to an internal failure.
Although actions described above have been performed to address third party
issues, the Company is not able to require compliance actions by such parties,
and the Company is not in a position to identify or avoid all possible
scenarios. The Company's assessment of whether contingency plans are necessary
will continue through calendar year 1999 as the Company learns more about the
preparation and vulnerabilities of third parties. If considered necessary, such
plans will be put in place prior to December 30, 1999. Due to the large number
of variables involved, the Company cannot provide an estimate of potential
damages related to possible Y2K failures. The Company's expenditures related to
Y2K compliance are expected to be less than $100,000, and substantially all of
the expenditures were made in fiscal year 1999 and reflected in the financial
statements for that year.

Recent Accounting Standards. In fiscal year 1999, the Company adopted SFAS No.
130 "Reporting Comprehensive Income"; SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information"; and SFAS No. 132 "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 130,
which is solely a financial statement presentation standard, relates to non-
owner changes included in equity and had no impact on the Company's financial
statements. SFAS No. 131 establishes standards for the way public business
enterprises report information about operating segments in annual financial
statements and in interim financial reports issued to stockholders. The Company
has provided the disclosures needed to conform with its requirements in Note 8
of the Financial Statements. SFAS No. 132 only modifies the financial
disclosures related to the Company's pension and postretirement benefit
obligations and does not impact the measurement of such obligations.


                                                                          Page 7
<PAGE>

Statements of Operations
===============================================================================

<TABLE>
<CAPTION>
Kewaunee Scientific Corporation                            Years Ended April 30

$ and shares in thousands, except per share data      1999       1998      1997
-------------------------------------------------------------------------------
<S>                                                <C>        <C>       <C>
Net sales                                          $77,478    $73,037   $61,961
Costs of products sold                              59,782     55,600    47,996
-------------------------------------------------------------------------------
Gross profit                                        17,696     17,437    13,965
Operating expenses                                  12,315     13,096    11,496
-------------------------------------------------------------------------------
Operating earnings                                   5,381      4,341     2,469
Other income, net                                      325         45        41
Interest expense                                       (96)      (149)     (344)
-------------------------------------------------------------------------------
Earnings before income taxes                         5,610      4,237     2,166
Income tax expense (benefit)                         2,214      1,674       (97)
-------------------------------------------------------------------------------
Net earnings                                       $ 3,396    $ 2,563   $ 2,263
===============================================================================

Net earnings per share
  Basic                                            $  1.40    $  1.07   $  0.96
  Diluted                                          $  1.38    $  1.06   $  0.95
===============================================================================
Weighted average number of
  common shares outstanding
  Basic                                              2,432      2,386     2,366
  Diluted                                            2,464      2,423     2,391
===============================================================================
</TABLE>

<TABLE>
<CAPTION>
Statements of Stockholders' Equity
=======================================================================================================

Kewaunee Scientific Corporation                                                    Years Ended April 30

                                           Additional                                        Total
$ in thousands, except per     Common       Paid-in      Retained        Treasury        Stockholders'
share data                     Stock        Capital      Earnings         Stock             Equity
-------------------------------------------------------------------------------------------------------
<S>                            <C>        <C>            <C>              <C>             <C>
Balance at April 30, 1996      $6,550        $116        $ 9,361          $(1,512)        $14,515
Net earnings                                               2,263                -           2,263
Cash dividends declared,
 $.08 per share                     -           -           (189)               -            (189)
Purchase of treasury
 stock, 125 shares                  -           -              -               (3)             (3)
-------------------------------------------------------------------------------------------------------
Balance at April 30, 1997      $6,550        $116        $11,435          $(1,515)        $16,586
-------------------------------------------------------------------------------------------------------
Net earnings                        -           -          2,563                -           2,563
Cash dividends declared,
 $.18 per share                     -           -           (430)               -            (430)
Stock options exercised,
 48,875 shares                      -          28              -              292             320
-------------------------------------------------------------------------------------------------------
Balance at April 30, 1998      $6,550        $144        $13,568          $(1,223)        $19,039
-------------------------------------------------------------------------------------------------------
Net earnings                        -           -          3,396                -           3,396
Cash dividends declared,
 $.22 per share                     -           -           (535)               -            (535)
Stock options exercised,
 21,500 shares                      -           4              -              128             132
-------------------------------------------------------------------------------------------------------
Balance at April 30, 1999      $6,550        $148        $16,429          $(1,095)        $22,032
-------------------------------------------------------------------------------------------------------
</TABLE>

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

Page 8
<PAGE>

Balance Sheets
===============================================================================

<TABLE>
<CAPTION>
Kewaunee Scientific Corporation                                       April 30

ASSETS    $ and shares in thousands, except per share data     1999       1998
-------------------------------------------------------------------------------
<S>                                                       <C>         <C>
Current Assets
Cash and cash equivalents                                   $     8    $ 1,809
Receivables, less allowance - $387 (1999); $656 (1998)       17,231     13,819
Inventories                                                   2,940      3,710
Deferred income taxes                                         1,026      1,240
Prepaid expenses and other current assets                       626        275
-------------------------------------------------------------------------------
Total Current Assets                                         21,831     20,853
-------------------------------------------------------------------------------
Property, Plant and Equipment
Land                                                            109        109
Buildings and improvements                                   13,556     13,428
Machinery and equipment                                      16,637     13,526
-------------------------------------------------------------------------------
Property, plant and equipment                                30,302     27,063
Accumulated depreciation                                    (18,177)   (17,029)
-------------------------------------------------------------------------------
Net Property, Plant and Equipment                            12,125     10,034
-------------------------------------------------------------------------------
Other Assets                                                  2,079        979
-------------------------------------------------------------------------------
Total Assets                                                $36,035    $31,866
===============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------
Current Liabilities
Short-term borrowings                                       $   939    $   -
Accounts payable                                              6,566      6,209
Employee compensation and amounts withheld                    1,973      2,439
Other accrued expenses                                        2,194      2,639
-------------------------------------------------------------------------------
Total Current Liabilities                                    11,672     11,287
-------------------------------------------------------------------------------
Deferred Income Taxes                                         1,074        809
Accrued Employee Benefit Plan Costs                           1,257        731
-------------------------------------------------------------------------------
Total Liabilities                                            14,003     12,827
-------------------------------------------------------------------------------
Commitments and Contingencies (Note 7)

Stockholders' Equity
Common stock, $2.50 par value
 Authorized- 5,000 shares; Issued- 2,620 shares               6,550      6,550
Additional paid-in-capital                                      148        144
Retained earnings                                            16,429     13,568
Common stock in treasury, at cost
 184 shares (1999); 205 shares (1998)                        (1,095)    (1,223)
-------------------------------------------------------------------------------
Total Stockholders' Equity                                   22,032     19,039
-------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                 $ 36,035   $ 31,866
===============================================================================
</TABLE>
The accompanying Notes are an integral part of these Financial Statements.

                                                                          Page 9
<PAGE>

Statements of Cash Flows
================================================================================
<TABLE>
<CAPTION>
Kewaunee Scientific Corporation                              Years Ended April 30

$ in thousands                                          1999      1998       1997
----------------------------------------------------------------------------------
<S>                                                  <C>        <C>       <C>
Cash Flows from Operating Activities
Net earnings                                         $ 3,396    $ 2,563   $ 2,263
Adjustments to reconcile net earnings
  to net cash provided by operating activities:
    Depreciation                                       1,565      1,312     1,515
    Bad debt provision                                    16        301       298
    Deferred income tax expense (benefit)                479        316    (  617)
    Decrease (increase) in receivables                (3,428)    (1,253)       50
    Decrease (increase) in inventories                   770      1,764    (  733)
    (Decrease) increase in accounts
     payable and accrued expenses                     (  554)     1,115       816
    Other, net                                        (  903)       843       578
----------------------------------------------------------------------------------
Net cash provided by operating activities              1,341      3,433     4,170
----------------------------------------------------------------------------------
Cash Flows from Investing Activities

Capital expenditures                                  (3,678)    (1,520)   (1,163)
----------------------------------------------------------------------------------
Net cash used in investing activities                 (3,678)    (1,520)   (1,163)
----------------------------------------------------------------------------------
Cash Flows from Financing Activities

Dividends paid                                        (  535)    (  430)   (  189)
Net (decrease) increase in short-term borrowings         939          -    (2,320)
Proceeds from exercise of stock options
  (including tax benefit)                                132        320)        -
Repayment of long-term debt                                -          -    (  508)
----------------------------------------------------------------------------------
Net cash provided by (used in) financing activities      536     (  110)   (3,017)
----------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents      (1,801)     1,803    (   10)

Cash and Cash Equivalents at Beginning of Year         1,809          6        16
----------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year              $    8     $1,809)   $    6
==================================================================================
Supplemental Disclosure of
  Cash Flow Information
    Interest paid                                     $   82     $  144    $  311
    Income taxes paid                                  2,321      1,518        58
==================================================================================
</TABLE>

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

Page 10
<PAGE>

Notes to Financial Statements
================================================================================

Note 1 -- Summary of Significant Accounting Policies.  Kewaunee Scientific
Corporation (the "Company") is a manufacturer of scientific laboratory and
technical workstations, including wood and steel laboratory furniture, fume
hoods, worksurfaces, sinks, and other accessories. Sales are made through
purchase orders and contracts submitted by customers, the Company's dealers and
agents, a national distributor, and competitive bids submitted by the Company.
The majority of the Company's products are sold to customers located in North
America, primarily within the United States. The majority of the Company's
products are used in chemistry, physics, biology, and other general science
laboratories in the industrial, commercial, educational, governmental, and
healthcare markets.

Cash and Cash Equivalents. Cash and cash equivalents consist of cash on hand and
highly liquid investments with original maturities of three months or less.

Inventories. Inventories are valued at the lower of cost or market. Cost has
been determined using the last-in, first-out (LIFO) method for all inventories.

Property, Plant and Equipment. Property, plant and equipment are stated at cost.
Depreciation is determined for financial reporting purposes, principally on the
straight-line method over the estimated useful lives of the individual assets
or, for leaseholds, over the terms of the related leases, if shorter. Straight-
line and accelerated methods of depreciation have been used for income tax
purposes.  The lives, by category, generally are as follows:  buildings and
improvements, 10-40 years; leasehold improvements, 10 years; furniture, fixtures
and office equipment, 3-5 years; computer equipment, 3-5 years; factory
machinery and vehicles, 5-10 years. Management reviews the carrying value of
property, plant and equipment for impairment whenever changes in circumstances
or events indicate that such carrying value may not be recoverable.

Use of Estimates. The presentation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
Significant estimates impacting the accompanying financial statements relate to
the allowance for uncollectible accounts receivable, inventory valuation, and
pension liabilities.

Fair Value of Financial Instruments. The Company's financial instruments include
cash and cash equivalents, cash surrender value of life insurance policies, and
short-term borrowings. Management believes the carrying value of these assets
and liabilities approximate fair value.

Sales Recognition. Product sales are generally recognized at the date of
shipment. Service revenue for installation of product sold is recognized as the
work is performed. Accounts receivable includes retainage in the amounts of
$2,025,000 and $2,333,000 at April 30, 1999 and April 30, 1998, respectively, on
certain sales made under contractual agreements. Warranty costs are expensed as
incurred.

Credit Concentration. The Company's credit risk is generally not concentrated
with any one customer or industry, although the Company does enter into large
contracts with individual customers from time to time. The Company performs
credit evaluations of its customers.

Income Taxes. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. If it is more
likely than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is provided.

Advertising Costs. The Company expenses advertising costs as incurred, including
trade shows, training materials, sales samples, catalogs, and other related
expenses. Advertising costs for the years ended April 30, 1999, 1998, and 1997
were $913,000, $812,000, and $720,000, respectively.

Earnings Per Share. In fiscal year 1998, the Company adopted SFAS No. 128,
"Earnings Per Share."  Basic earnings per share is based on the weighted average
number of common shares outstanding during the year. Diluted earnings per share
reflect the assumed exercise and conversion of outstanding options under the
Company's stock option plans, except when options have an antidilutive effect.

Reclassifications. Certain prior year accounts have been reclassified to conform
with current year presentation.

                                                                         Page 11
<PAGE>

Recent Accounting Standards. In fiscal year 1999, the Company adopted SFAS No.
130 "Reporting Comprehensive Income"; SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information"; and SFAS No. 132 "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 130,
which is solely a financial statement presentation standard, relates to non-
owner changes included in equity and had no impact on the Company's financial
statements. SFAS No. 131 establishes standards for the way public business
enterprises report information about operating segments in annual financial
statements and in interim financial reports issued to stockholders. The Company
has provided the disclosures needed to conform with its requirements. SFAS No.
132 only modifies the financial disclosures related to the Company's pension and
postretirement benefit obligations and does not impact the measurement of such
obligations.

Note 2 -- Inventories. The Company's inventories at April 30 consisted of:
<TABLE>
<CAPTION>

          $ in thousands                 1999     1998
          ---------------------------------------------
          <S>                          <C>      <C>
          Finished goods               $  594   $1,020
          Work-in-process                 911    1,016
          Materials and components      1,435    1,674
          ---------------------------------------------
          Total inventories            $2,940   $3,710
          =============================================
</TABLE>

If inventories had been determined using the first-in, first-out (FIFO) method
at April 30, 1999 and 1998, reported inventories would have been $2.2 million
greater in each of these years.

Note 3 -- Credit Arrangements.  On January 6, 1999, the Company entered into a
new credit facility, replacing the Company's previous $8.5 million secured
revolving credit facility with another lender. The new facility allows the
Company to borrow up to $3 million under a two-year unsecured revolving credit
component and up to $5 million under a seven-year equipment loan component. All
advances under the equipment loan component must be made during the first two
years of the agreement and must be secured by qualifying machinery and
equipment.

The Company provides monthly interest payments under both components of the
facility calculated at the lower of (1) the LIBOR Market Index Rate plus 1.75%,
or (2) the lender's Prime Rate minus .75%. The borrowing rate was 6.65% at April
30, 1999. Beginning in the third year of the equipment loan, monthly principal
payments will be required in 60 equal installments. The equipment loan includes
financial covenants with respect to the Company's tangible net worth, funds flow
coverage, current ratio, and ratio of liabilities to tangible net worth.

At April 30, 1999, advances of $939,000 were outstanding under the revolving
credit loan. No advances were outstanding under the equipment loan.

Note 4 -- Income Taxes. The income tax expense (benefit) consisted of the
following:

<TABLE>
<CAPTION>

          $ in thousands                         1999      1998       1997
          -----------------------------------------------------------------
          <S>                                  <C>       <C>       <C>
          Current tax expense:
            Federal                            $1,417    $1,047    $   421
            State and local                       318       311         99
          -----------------------------------------------------------------
          Total current tax expense             1,735     1,358        520
          -----------------------------------------------------------------
          Deferred tax expense:
            Federal                            $  395    $  327    $   377
            State and local                        84       (11)        20
          -----------------------------------------------------------------
          Total deferred tax expense              479       316        397
          -----------------------------------------------------------------
          Decrease in valuation allowance
            on deferred tax assets                  -         -     (1,014)
          -----------------------------------------------------------------
          Net income tax expense (benefit)     $2,214    $1,674    $   (97)
          =================================================================
</TABLE>

Page 12
<PAGE>

The reasons for the differences between the above net income tax expense
(benefit) and the amounts computed by applying the statutory federal income tax
rates to earnings before income taxes are as follows:

<TABLE>
<CAPTION>
          $ in thousands                              1999     1998      1997
          -------------------------------------------------------------------
          <S>                                       <C>      <C>      <C>
          Income tax expense at statutory rate      $1,907   $1,441   $   736
          State and local taxes, net of federal
            income tax benefit                         266      198        78
          Decrease in valuation allowance
            on deferred tax assets                      -        -     (1,014)
          Other                                         41       35       103
          -------------------------------------------------------------------
          Net income tax expense (benefit)          $2,214   $1,674   $   (97)
          ===================================================================
</TABLE>

The 1997 decrease in the valuation allowance on deferred tax assets occurred as
continued profitability and an improved earnings outlook for the Company
provided positive evidence to support a reduction in the valuation allowance.

Significant items comprising the Company's deferred tax assets and liabilities
as of April 30 were as follows:
<TABLE>
<CAPTION>
          $ in thousands                                      1999      1998
          ------------------------------------------------------------------
          <S>                                                 <C>        <C>
          Deferred tax assets:
            Accrued employee benefit expenses              $   581    $  766
            Allowance for doubtful accounts                    168       272
            Inventory reserves and capitalized costs           234       243
            Other                                               43       128
          ------------------------------------------------------------------
          Total deferred tax assets                          1,026     1,409
          ------------------------------------------------------------------
          Deferred tax liabilities:
            Book basis in excess of tax basis
              of property, plant and equipment              (1,074)     (978)
          ------------------------------------------------------------------
          Total deferred tax liabilities                    (1,074)     (978)
          ------------------------------------------------------------------
          Net deferred tax assets (liabilities)            $   (48)   $  431
          ==================================================================
</TABLE>

Note 5 -- Stock Options. During fiscal year 1992, stockholders approved the 1991
Key Employee Stock Option Plan. During fiscal year 1997, stockholders approved
an amendment to increase the number of shares available for options under the
plan from 130,000 to 230,000. Options are granted at not less than the fair
market value at the date of grant. Options are exercisable in such installments,
for such terms (up to 10 years), and at such times, as the Board of Directors
may determine at the time of the grant. At April 30, 1999, there were 65,000
shares available for future grants under the plan.

During fiscal year 1994, the stockholders approved the 1993 Stock Option Plan
for Directors. This plan allows the Company to grant options on 40,000 shares of
the Company's common stock. Each non-employee director of the Company is
eligible to receive an option to purchase 5,000 shares of the Company's common
stock on the effective date of the plan or on the date of commencement of
service as a director. Options are exercisable in four equal, annual
installments and expire five years from the date of grant. Options are granted
at the fair market value at the date of grant. At April 30, 1999, there were
10,000 shares available for future grants under the plan.

The Company utilized treasury stock to satisfy the stock options exercised
during fiscal years 1999, 1998, and 1997. Stock option activity and weighted
average exercise price is summarized as follows:
<TABLE>
<CAPTION>
                                           1999                1998                 1997
                                    Options    Price    Options     Price     Options   Price
---------------------------------------------------------------------------------------------
<S>                                 <C>        <C>      <C>         <C>       <C>       <C>
Outstanding at beginning of year    110,250    $ 4.48   151,375     $3.69     176,500   $3.49
Granted                              35,750     12.00    24,500      8.13      26,000    3.88
Canceled                               -          -     (16,750)     4.50     (51,000)   5.22
Exercised                           (21,500)     3.25   (48,875)     3.88        (125)   2.31
---------------------------------------------------------------------------------------------
Outstanding at end of year          124,500    $ 6.85   110,250     $4.48     151,375   $3.69
=============================================================================================
Exercisable at end of year           46,304    $ 4.34    43,625     $3.90      66,750   $4.06
=============================================================================================
</TABLE>

                                                                         Page 13
<PAGE>

The options outstanding and weighted average exercise price within the following
price ranges at April 30, 1999 are as follows:

<TABLE>
<CAPTION>
     Exercise price range                                   $2.31 - $3.25    $3.87 - $4.62    $8.13 - $12.00
     -------------------------------------------------------------------------------------------------------
     <S>                                                        <C>              <C>              <C>
     Options outstanding                                        22,750           43,500           58,250
     Weighted average exercise price                             $2.68            $4.13           $10.50
     Weighted average remaining contractual life (years)          6.1              6.0              8.9
     -------------------------------------------------------------------------------------------------------
</TABLE>

The options exercisable and weighted average exercise price within the following
price ranges at April 30, 1999 are as follows:

<TABLE>
<CAPTION>
     Exercise price range                                   $2.31 - $3.25    $3.87 - $4.62    $8.13 - $12.00
     -------------------------------------------------------------------------------------------------------
     <S>                                                    <C>              <C>              <C>
     Options exercisable                                        11,425           29,250            5,629
     Weighted average exercise price                             $2.68            $4.26            $8.13
     -------------------------------------------------------------------------------------------------------
</TABLE>

Fair Value Disclosures. The Company applies APB Opinion No. 25 and its related
interpretations in accounting for its stock option plans. Accordingly, no
compensation cost has been recognized for these plans. Had compensation costs
for these plans been determined based on the fair value at the grant dates for
awards under the plans consistent with the method of SFAS No. 123, the Company's
net earnings and net earnings per share for fiscal years 1999, 1998, and 1997
would have been reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                1999     1998     1997
          ------------------------------------------------------------
          <S>                                 <C>      <C>      <C>
          Net earnings (in thousands)
          As reported                         $3,396   $2,563   $2,263
          Pro forma                            3,332    2,539    2,239
          ============================================================
          Net earnings per share - Basic
          As reported                         $ 1.40   $ 1.07   $ 0.96
          Pro forma                             1.37     1.06     0.95
          ============================================================
          Net earnings per share - Diluted
          As reported                         $ 1.38   $ 1.06   $ 0.95
          Pro forma                             1.35     1.05     0.94
          ============================================================
</TABLE>

The estimated weighted average fair value of options granted under the Company's
stock option plans was $5.91 in 1999, $3.96 in 1998, and $1.54 in 1997. The
options were valued using the Black-Scholes option-pricing model with the
following assumptions used for 1999, 1998, and 1997: dividend yield of 2.0%,
2.0%, and 4.0%; expected volatility of 52%, 49%, and 48%; risk-free interest of
5.20%, 6.27%, and 6.63%; and an expected life of 7.25 years.

Note 6 -- Retirement Benefits. The Company has non-contributory defined benefit
pension plans covering substantially all salaried and hourly employees. The
defined benefit plan for salaried employees provides pension benefits that are
based on each employee's years of service and average annual compensation during
the last 10 consecutive calendar years of employment. The benefit plan for
hourly employees provides benefits at stated amounts based on years of service.
The Company's funding policy is to make quarterly contributions to fund the
plans during the participant's working lifetime, which have met ERISA's funding
requirements. Plan assets consist primarily of common stocks, government
securities, and fixed-income funds.

The Company has a defined contribution plan covering substantially all salaried
and hourly employees. The plan provides benefits to all employees who have
attained age 21, completed six months of service, and who elect to participate.
The Company makes matching contributions equal to 50% of the qualifying employee
contribution, up to a maximum employer contribution of 2% of the participant's
compensation. Contributions by the Company in fiscal years 1999, 1998, and 1997
were $213,000, $197,000, and $185,000, respectively.

Page 14
<PAGE>

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

<TABLE>
<CAPTION>
          $ in thousands                                                        1999        1998
          ---------------------------------------------------------------------------------------
          <S>                                                                 <C>         <C>
          CHANGE IN BENEFIT OBLIGATIONS
          Benefit obligations, beginning of year                              $6,924      $5,745
            Service cost                                                         340         254
            Interest cost                                                        512         451
            Actuarial loss                                                       270         739
            Actual benefits paid                                                (272)       (265)
          ---------------------------------------------------------------------------------------
          Benefit obligations, end of year                                    $7,774      $6,924
          =======================================================================================

          CHANGE IN PLAN ASSETS
            Fair value of plan assets, beginning of year                      $6,396      $5,179
            Actual return on plan assets                                          51       1,284
            Actual company contributions                                         832         198
            Actual benefits paid                                                (272)       (265)
          ---------------------------------------------------------------------------------------
          Fair value of plan assets, end of year                              $7,007      $6,396
          =======================================================================================

          FUNDED STATUS AND PREPAID (ACCRUED)
            Funded status of plans                                            $ (767)     $ (528)
            Unrecognized net transition obligation                               (32)        (64)
            Unrecognized prior service cost                                       95         107
            Unrecognized net loss                                                916         134
          ---------------------------------------------------------------------------------------
          Prepaid (accrued) pension cost                                      $  212      $ (351)
          =======================================================================================

          AMOUNTS RECOGNIZED IN THE STATEMENT OF
          FINANCIAL POSITION
          ---------------------------------------------------------------------------------------
          Prepaid (accrued) pension cost                                      $  212      $ (351)
          =======================================================================================

          WEIGHTED-AVERAGE ASSUMPTIONS
            Discount rate, end of year                                          7.25%       7.25%
            Expected return on plan assets                                      9.00%       9.00%
            Rate of compensation increase                                       5.00%       5.00%
          =======================================================================================
</TABLE>

The components of the net periodic pension costs for each of the three
years ended April 30 are as follows:

<TABLE>
<CAPTION>
          NET PERIODIC PENSION COST                                  1999       1998        1997
          ---------------------------------------------------------------------------------------
          <S>                                                       <C>        <C>         <C>
            Service cost                                            $ 340      $ 254       $ 259
            Interest cost                                             512        451         412
            Expected return on plan assets                           (582)      (464)       (406)
            Amortization of transition asset                          (32)       (32)        (32)
            Amortization of prior service cost                         11         11          11
            Recognition of net loss                                    19         15          14
          ---------------------------------------------------------------------------------------
          Net periodic pension cost                                 $ 268      $ 235       $ 258
          =======================================================================================
</TABLE>

Note 7 -- Commitments and Contingencies. The Company is involved in certain
claims and legal proceedings in the normal course of business which management
believes will not have a material adverse effect on the financial condition or
results of operations of the Company.

The Company has entered into various operating lease agreements for machinery
and equipment. Most leases provide the Company with certain early cancellation
rights, as well as renewal and purchase options. Rent expense was $577,000,
$556,000, and $421,000 in fiscal years 1999, 1998, and 1997, respectively.

                                                                         Page 15
<PAGE>

Under the terms of these agreements, future minimum lease payments for the years
ended April 30 are as follows:

<TABLE>
<CAPTION>
          $ in thousands                                 Amount
          -----------------------------------------------------
          <S>                                            <C>
          2000                                           $  596
          2001                                              361
          2002                                              190
          2003                                              171
          2004                                              158
          Thereafter                                         31
          -----------------------------------------------------
          Total minimum lease payments                   $1,507
          =====================================================
</TABLE>

Note 8 -- Segment Information. The Company's operations are classified into two
business segments: laboratory products and technical products. The laboratory
products segment principally designs, manufactures, and installs steel and wood
laboratory furniture, worksurfaces, and fume hoods. The technical products
segment principally manufactures and sells technical furniture including
workstations, workbenches, computer enclosures, and related accessories to
support local area computer networks and for the storage and assembly of
computers and light electronics. Sales to individual foreign countries did not
exceed 1% of any segment sales.

Profits by business segment represent net revenues, less costs associated with
goods sold and operating expenses. Intersegment transactions are recorded at
normal profit margins with appropriate eliminations of intercompany profits.
Portions of corporate expenses are included in each segment. Unallocated
corporate expenses are included in the corporate column below. Corporate assets
include LIFO inventory reserve, fixed assets, deferred tax assets, prepaid
expenses, and cash surrender value of life insurance policies.

The following table shows net sales, profits, and other financial information by
business segment for the fiscal years ended April 30, 1999, 1998, and 1997 (in
thousands):

<TABLE>
<CAPTION>
                                                    Laboratory   Technical
                                                     Products     Products      Corporate      Total
                                                    -------------------------------------------------
     <S>                                            <C>          <C>            <C>           <C>
     Fiscal Year Ended April 30, 1999:
     ---------------------------------
     Revenues from external customers                  $67,633     $ 9,845       $    -       $77,478
     Intersegment revenues                                  -          424          (424)          -
     Depreciation                                        1,322         236             7        1,565
     Segment profit                                      5,239         567          (196)       5,610
     Segment assets                                     29,243       5,237         1,555       36,035
     Expenditures for segment fixed assets               3,524         154            -         3,678
     Net sales to customers in foreign countries         1,897       1,115            -         3,012

     Fiscal Year Ended April 30, 1998:
     ---------------------------------
     Revenues from external customers                  $62,598     $10,439       $    -       $73,037
     Intersegment revenues                                  -          782          (782)          -
     Depreciation                                        1,100         205             7        1,312
     Segment profit                                      3,696       1,315          (774)       4,237
     Segment assets                                     24,587       5,339         1,940       31,866
     Expenditures for segment fixed assets               1,261         259            -         1,520
     Net sales to customers in foreign countries           984       2,525            -         3,509

     Fiscal Year Ended April 30, 1997:
     ---------------------------------
     Revenues from external customers                  $53,671     $ 8,290       $    -       $61,961
     Intersegment revenues                                  -        1,057        (1,057)          -
     Depreciation                                        1,290         211            14        1,515
     Segment profit                                      1,873         978          (685)       2,166
     Segment assets                                     22,685       4,557          (243)      26,999
     Expenditures for segment fixed assets               1,047         109             7        1,163
     Net sales to customers in foreign countries         1,000         299            -         1,299
</TABLE>

Revenues from one customer of the Company represented 12%, 13%, and 14% of the
Company's total sales in fiscal years 1999, 1998, and 1997, respectively.

Page 16
<PAGE>

Report of Independent Accountants
================================================================================


To the Stockholders and Board of Directors of
Kewaunee Scientific Corporation

In our opinion, the accompanying balance sheets and the related statements of
operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Kewaunee Scientific Corporation
(the "Company") at April 30, 1999 and 1998 and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above. The financial statements of
the Company for the year ended April 30, 1997 were audited by other independent
accountants whose report dated June 4, 1997 expressed an unqualified opinion on
those statements.

PRICEWATERHOUSECOOPERS LLP
Charlotte, North Carolina
June 3, 1999


Management's Report on Financial Statements
================================================================================


To the Stockholders and Board of Directors of
Kewaunee Scientific Corporation

The financial statements and accompanying notes were prepared by management,
which is responsible for their integrity and objectivity. Management believes
the financial statements, which include amounts based on judgments and
estimates, fairly reflect the Company's financial position and operating
results, in accordance with generally accepted accounting principles. All
financial information in this annual report is consistent with the financial
statements.

Management maintains internal accounting control systems and related policies
and procedures designed to provide reasonable assurance that assets are
safeguarded, that transactions are properly recorded and executed in accordance
with management's authorization, and that accounting records may be relied upon
for the preparation of financial statements and other financial information. The
design, monitoring, and revision of internal accounting control systems involve,
among other things, management's judgment with respect to the relative cost and
expected benefits of specific control measures.

The Company's financial statements have been audited by independent accountants
who have expressed their opinion with respect to the fairness of those
statements. Their audits included consideration of the Company's internal
accounting control systems and related policies and procedures. They advise
management and the Audit Committee of significant matters resulting from their
audits.

D. Michael Parker
Vice President, Finance
Chief Financial Officer

                                                                         Page 17
<PAGE>

<TABLE>
<CAPTION>
Summary of Selected Financial Data
================================================================================


Kewaunee Scientific Corporation

$ and shares in thousands,
except per share data                                        1999      1998       1997       1996       1995
-------------------------------------------------------------------------------------------------------------
<S>                                                       <C>       <C>        <C>        <C>        <C>
Operating Statement Data:
Net sales                                                 $77,478   $73,037    $61,961    $57,559    $62,475
Costs of products sold                                     59,782    55,600     47,996     46,835     52,347
-------------------------------------------------------------------------------------------------------------
Gross profit                                               17,696    17,437     13,965     10,724     10,128
Operating expenses                                         12,315    13,096     11,496      9,827     10,901
-------------------------------------------------------------------------------------------------------------
Operating earnings (loss)                                   5,381     4,341      2,469        897       (773)
Other income, net                                             325        45         41        158        230
Interest expense                                              (96)     (149)      (344)      (694)      (554)
-------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes                         5,610     4,237      2,166        361     (1,097)
Income tax expense (benefit)                                2,214     1,674        (97)         -          -
-------------------------------------------------------------------------------------------------------------
Net earnings (loss)                                       $ 3,396   $ 2,563    $ 2,263    $   361    $(1,097)
=============================================================================================================
Weighted average shares outstanding
  Basic                                                     2,432     2,386      2,366      2,367      2,367
  Diluted                                                   2,464     2,423      2,391      2,372      2,367
=============================================================================================================
Per Share Data:
Net earnings (loss)
  Basic                                                   $  1.40   $  1.07    $  0.96    $  0.15    $ (0.46)
  Diluted                                                    1.38      1.06       0.95       0.15      (0.46)
Cash dividends                                               0.22      0.18       0.08          -          -
Year-end book value                                          9.04      7.89       7.01       6.13       5.98
=============================================================================================================
Balance Sheet Data:
Current assets                                            $21,831   $20,853    $16,465    $15,646    $18,430
Current liabilities                                        11,672    11,287      9,460     10,599     11,702
Net working capital                                        10,159     9,566      7,005      5,047      6,728
Net property, plant and equipment                          12,125    10,034      9,826     10,308     11,120
Total assets                                               36,035    31,866     26,991     26,504     30,074
Total borrowings/long-term debt                               939         -          -      2,648      5,445
Stockholders' equity                                       22,032    19,039     16,586     14,515     14,154
=============================================================================================================
Other Data:
Capital expenditures                                      $ 3,678   $ 1,520    $ 1,163    $   812    $   840
Year-end stockholders of record                               349       365        392        409        439
Year-end employees                                            643       619        560        499        575
=============================================================================================================
</TABLE>

Page 18
<PAGE>

Quarterly Financial Data (unaudited)
===============================================================================
<TABLE>
<CAPTION>
Selected quarterly financial data for fiscal years 1999 and 1998 were as follows:

$ in thousands,                       First      Second      Third      Fourth
 except per share data               Quarter    Quarter     Quarter     Quarter
---------------------------------------------------------------------------------
<S>                                 <C>        <C>         <C>         <C>
1999
Net sales                            $19,624    $19,253     $18,404     $20,197
Gross profit                           4,422      4,024       4,102       5,148
Net earnings                             766        605         635       1,390
Net earnings per share
 Basic                                  0.32       0.25        0.26        0.57
 Diluted                                0.31       0.25        0.26        0.56
Cash dividends per share                0.05       0.05        0.06        0.06
---------------------------------------------------------------------------------
1998
Net sales                            $17,662    $18,442     $17,333     $19,600
Gross profit                           4,138      3,953       4,343       5,003
Net earnings                             559        541         583         880
Net earnings per share
 Basic                                  0.24       0.23        0.24        0.37
 Diluted                                0.23       0.22        0.23        0.36
Cash dividends per share                0.04       0.04        0.05        0.05
---------------------------------------------------------------------------------
</TABLE>


Range of Market Prices
================================================================================

Kewaunee's common stock is traded in the NASDAQ/Over-the-Counter Market, under
the symbol KEQU. The following table sets forth the quarterly high and low
prices reported on the NASDAQ National Market System.
<TABLE>
<CAPTION>
                      First           Second          Third            Fourth
                     Quarter          Quarter        Quarter           Quarter
-------------------------------------------------------------------------------
<S>                  <C>              <C>            <C>               <C>
1999
High                 14 1/2           13             13 1/4            11 1/8
Low                   9 3/4            9 1/2         10                 9
Close                11 7/16          12 3/4         11 3/8            10 1/8
-------------------------------------------------------------------------------
1998
High                  7 5/8           13 3/4         13                14 1/4
Low                   5                7 1/4          9                 9 1/8
Close                 7 1/4           12 1/4         10 1/2            12 5/8
-------------------------------------------------------------------------------
</TABLE>
                                                                         Page 19
<PAGE>

Corporate Information
=============================================================================

Board of Directors

Margaret Barr Bruemmer (1)(2)(3)
 Attorney
 Milwaukee, WI

Wiley N. Caldwell (3)(4)
 Retired President
 W. W. Grainger, Inc.
 Kenilworth, IL

John C. Campbell, Jr. (1)(2)
 Private Consultant
 Arlington, TX

Kingman Douglass (2)(3)(4)
 Corporate Counselor
 Summerland, CA

Eli Manchester, Jr. (1)(3)
 President/CEO
 Kewaunee Scientific Corporation
 Statesville, NC

Thomas F. Pyle (3)(4)
 Chairman
 The Pyle Group, LLC
 Madison, WI

James T. Rhind (1)(4)
 Counsel to Bell, Boyd & Lloyd
 Attorneys
 Chicago, IL


(1) Executive Committee
(2) Audit Committee
(3) Financial/Planning Committee
(4) Compensation Committee

Corporate Offices

2700 West Front Street, Statesville, NC 28677-2927
P.O. Box 1842, Statesville, NC 28687-1842
Telephone: 704-873-7202

Executive Officers

Eli Manchester, Jr.
 President and Chief Executive Officer

William A. Shumaker
 Executive Vice President and
 Chief Operating Officer

D. Michael Parker
 Vice President, Finance,
 Chief Financial Officer,
 Treasurer, Secretary

James J. Rossi
 Vice President, Human Resources

T. Ronald Gewin
 Vice President and General Manager
 Technical Products Group

Kurt P. Rindoks
 Vice President, Engineering and
 General Manager Resin Materials Division
 Laboratory Products Group

        [PHOTO OF CORPORATE EXECUTIVE OFFICERS]

Corporate Executive Officers (left to right):
James J. Rossi; William A. Shumaker;  Eli Manchester, Jr.;
D. Michael Parker; Kurt P. Rindoks; T. Ronald Gewin


Employment Opportunities

Individuals interested in employment with Kewaunee Scientific Corporation should
contact the Vice President of Human Resources, Kewaunee Scientific Corporation,
P.O. Box 1842, Statesville, NC 28687-1842. Employment opportunities are also
listed on the Internet at http://www.kewaunee.com. Kewaunee Scientific
Corporation is an equal opportunity employer.


Page 20
<PAGE>

Stockholder Information

Financial Information

The Company's Form 10-K financial report, filed annually with the Securities and
Exchange Commission, may be obtained by stockholders without charge by writing
the Secretary of the Company, Kewaunee Scientific Corporation, P.O. Box 1842,
Statesville, NC 28687-1842.

Recent financial information is available on the Internet
at http://www.kewaunee.com.


Independent Accountants

PricewaterhouseCoopers LLP
Charlotte, NC

Notice of Annual Meeting

The Annual Meeting of Stockholders of Kewaunee Scientific Corporation will be
held in the 37th floor Annual Meeting Room at Harris Trust & Savings Bank,
Chicago, IL on August 25, 1999 at 10:00 a.m. Central Daylight Time.

Transfer Agent and Registrar

All stockholder inquiries, including transfer-related matters, should be
directed to:
ChaseMellon Shareholder Services, LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
800-288-9541
Internet at http://www.chasemellon.com

Product Information

Kewaunee Scientific Corporation products are available through a network of
sales representatives and a national stocking distributor.

For more information on the Company's laboratory products, contact the Marketing
Services Department in Statesville, North Carolina; telephone: 704-873-7202; on
the Internet at http://www.kewaunee.com; e-mail: marketing@kewaunee.com.

For more information on the Company's technical products, contact the Company's
Lockhart, Texas operations; telephone: 512-398-5292; on the Internet at
http://www.kewaunee.com; e-mail: marketing@kewaunee.com.

Trademarks

Advantage, Alpha, BasikBench, Discover, Evolution, Explorer, Kemresin, Kemrock,
Kemshield, Signature, Silhouette, Sturdilite, Supreme Air, TechStat, The
Research Collection, Trademark, and Visionaire are registered trademarks of
Kewaunee Scientific Corporation. FlexTech, and CFHS are pending trademarks of
Kewaunee Scientific Corporation.
<PAGE>








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