Kewaunee's Q2 Results: A Litmus Test for its Nu Aire Growth Strategy

STATESVILLE, NC – November 26, 2025 – Kewaunee Scientific Corporation (NASDAQ: KEQU) has slated December 10, 2025, as the release date for its second quarter fiscal 2026 financial results, an announcement that carries more weight than a typical quarterly update. For investors and industry analysts, these figures will serve as a critical mid-year report card on the company’s most significant strategic pivot in recent history: the acquisition of essential laboratory equipment manufacturer Nu Aire.

The upcoming report will offer the next concrete data set on whether the powerful momentum seen in the first quarter can be sustained. Following the November 2024 acquisition, Kewaunee has been in a period of transformation, moving from a legacy leader in laboratory furniture to an integrated provider of complete lab environments. The market is now looking for proof that the financial and strategic synergies promised by the merger are not just a first-quarter flash, but the foundation for a new era of growth.

The Nu Aire Effect on the Bottom Line

The initial impact of integrating Nu Aire has been undeniably potent. Kewaunee’s first-quarter fiscal 2026 results showed a dramatic 46.9% surge in sales to $71.1 million compared to the prior-year period. This top-line explosion was largely driven by the inclusion of Nu Aire’s product lines, which include high-demand items like biological safety cabinets, CO2 incubators, and ultralow freezers.

More importantly for long-term value, the acquisition has had a positive effect on profitability. For the full fiscal year 2025, which included a partial contribution from Nu Aire, Kewaunee's gross margin expanded by an impressive 310 basis points to 28.6%. Management attributed this directly to Nu Aire’s higher-margin product mix, coupled with internal productivity gains. This trend continued into Q1 FY26, with pre-tax earnings growing by 61.3% to $3.9 million.

However, this growth has not come without costs. The integration process itself is an investment. Kewaunee reported $2.3 million in acquisition-related expenses in fiscal 2025, with an additional $224,000 in integration costs hitting the corporate segment in the first quarter of fiscal 2026. The company’s corporate pre-tax loss widened in Q1, a direct result of building the necessary infrastructure to support the larger, more complex combined entity. Investors on December 10th will be carefully parsing the income statement to weigh the continued revenue and margin benefits against these scaling and integration expenses. A key question is whether the rate of sales growth will continue to significantly outpace the increase in operational overhead.

Supplying the Infrastructure for Global Innovation

Beyond the immediate financials, the Nu Aire acquisition strategically repositions Kewaunee within the broader global innovation economy. The company is no longer just providing the benches and casework for research facilities; it is now supplying the critical, high-tech equipment that sits on them. This makes Kewaunee a fundamental enabler for the booming life sciences, pharmaceutical, and advanced materials sectors—the very industries conducting the research that underpins the energy transition and next-generation technologies.

This expanded portfolio creates a powerful value proposition. For organizations building or retrofitting research facilities, Kewaunee now offers a more holistic, single-source solution. This move from a component supplier to an integrated solutions provider is crucial in a market that increasingly values efficiency and streamlined procurement. Nu Aire's established distribution partnerships and OEM relationships in Europe and China also grant Kewaunee access to new markets and customer segments, amplifying its global reach beyond its traditional strongholds.

The demand drivers for this sector remain robust. Increased public and private investment in biotechnology, clinical diagnostics, and semiconductor research necessitates the construction of advanced, compliant laboratory environments. Kewaunee, with its combined portfolio, is now better positioned than ever to capitalize on this secular trend, providing the essential "picks and shovels" for the 21st-century technological gold rush.

Global Strategy and Navigating Headwinds

While the domestic market has been a clear engine of growth, Kewaunee's international performance will also be under the microscope. After a challenging fiscal 2025 where international revenue fell 8.2% due to project delays in key markets like India, the segment showed a strong rebound in the first quarter of fiscal 2026 with a 30.2% sales increase. This suggests that the logistical and customer-side hurdles that previously hampered growth are beginning to ease.

The company’s manufacturing facility in Bangalore, India, remains a strategic asset, serving not only the local market but also acting as a hub for Asia and Africa. The upcoming Q2 results will provide further insight into whether this international recovery is solidifying into a consistent trend. The addition of Nu Aire’s international footprint, including its warehouse in the Netherlands, adds another layer to this global strategy, diversifying the company’s geographic risk and opening new revenue streams.

Despite the positive momentum, management has wisely cautioned about potential volatility. In its last earnings call, the company noted that while its order backlog remains at historically high levels—standing at a healthy $205.0 million at the end of July 2025—the timing of large projects can lead to "uneven results" from quarter to quarter. Factors such as unpredictable regulatory environments and customer construction schedules remain persistent risks. Investors will be looking for stability in the backlog figure and any updated management commentary on the visibility of its project pipeline for the remainder of the fiscal year.