HOUSTON, March 1, 2002 (PRIMEZONE) -- KMG Chemicals, Inc. (Nasdaq:KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its unaudited financial results for the second fiscal quarter ended January 31, 2002.
For the second fiscal 2002 quarter, net income was $0.386 million or $0.05 per diluted share, down from $0.609 million or $.08 per diluted share reported for the same quarter in 2001. Fiscal second quarter net sales were $7.6 million, down from $8.2 million in the year earlier period.
At the end of the second fiscal 2002-quarter, KMG had total assets of $26.1 million and long-term debt of $1.1 million. Long-term debt to total assets was 4.2 percent on January 31, 2002, and has decreased from 26.2 percent at the end of fiscal 1998. The company had approximately $1.7 million of cash and cash equivalents at January 31, 2002.
David Hatcher, chief executive officer and president of KMG Chemicals, said, "Both the second quarter and the first half of fiscal 2002 went according to our internal annual plan. However, we now expect the second half of fiscal 2002 to exceed our annual plan. These higher expectations are a result of two main factors:
-- We are seeing improvement in portions of our wood treating
chemicals business.
-- We continue to benefit from the cost control initiative which we
began in 2001, in anticipation of the current national economic
slowdown."
In spite of the recessionary environment, the company maintains strong and profitable positions in stable markets. Based on existing business, it anticipates that fiscal 2002 earnings will exceed fiscal 2001 earnings of $.35 per share. The current earnings per share estimate for the third quarter of fiscal 2002 is in the $0.09 to $0.10 range, up from the $.03 per share earned in the third quarter of fiscal 2001. Hatcher commented that because of the board's confidence in the company's improving performance, it elected to increase the cash dividend, as previously announced, by 12.5 percent to $0.045 annually.
The company's MSMA (agricultural herbicide) plant in Matamoros continues to produce on schedule for the upcoming spring planting in the domestic cotton markets. Production should be sufficient for all customer needs. The selling season for the Bueno(r) 6 herbicide occurs in the company's third and fourth fiscal quarters, so fiscal 2002 earnings will be skewed toward the second half of the fiscal year.
"We are continuing the aggressive acquisition initiative implemented at the beginning of this fiscal year," continued Hatcher. "We are greatly encouraged by the results thus far, and are actively pursuing several attractive opportunities. Our cash flow and strong balance sheet continue to provide us with a significant competitive advantage in the process."
KMG Chemicals, Inc.
Selected Financial Data
(In thousands, except share data)
(UNAUDITED)
Three Months Ending Six Months Ending
January 31 January 31
---------------------- ----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net sales $ 7,571 $ 8,193 $ 15,669 $ 16,495
Gross profit 2,553 2,938 5,189 6,085
Pre-tax income 622 982 1,305 2,513
Net income 386 609 809 1,558
EBITDA 935 1,253 1,927 2,986
Earnings per
diluted share(1) $ 0.05 $ 0.08 $ 0.11 $ 0.20
Weighted average
diluted shares
outstanding(1) 7,546,127 7,544,032 7,546,197 7,619,691
Working capital 5,785 7,564 5,785 7,564
Total assets 26,134 26,068 26,134 26,068
Long-term debt 1,086 2,094 1,086 2,094
Shareholders equity 20,097 18,129 20,097 18,129
(1) Restated for March 2001 stock dividend.
KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to carefully focused markets. The company grows by acquiring and managing stable chemical product lines and businesses with established production processes. Its wholly owned subsidiary, KMG Bernuth, Inc., is a global provider of wood preservation chemicals to the lumber treatment industry and herbicides to the agricultural industry. For more information, visit the company's Web site at www.kmgchemicals.com.
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, the impact of competitive services and pricing and general economic risks and uncertainties.