HOUSTON, Feb. 5, 2003 (PRIMEZONE) -- KMG Chemicals, Inc. (Nasdaq:KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that it expects earnings for the three months ended January 31, 2003 to be in the range of $.01 to $.02 per share. Earnings for the same quarter in fiscal 2002 were $.05 per share.
David Hatcher, chairman and president of KMG Chemicals, said, "The decline in earnings we are expecting for the second quarter of this fiscal year versus the same quarter last year was primarily a result of fixed, non-cash charges related to our MSMA facility. Although we did not operate the MSMA plant during the quarter while we worked down inventories, we still incurred the non-cash charges. Our operating plan for the year anticipated these fixed charges for MSMA in the second quarter, but assumed that they would be offset by increased wood treating chemicals revenues. However, sales of wood treating chemicals began to fall significantly behind plan beginning in November 2002, and continue to be behind plan. Until November we were tracking our plan numbers. We are not at all satisfied with these results and are addressing the situation."
With respect to the second half of this fiscal year, the company noted that the Rabon acquisition, which closed on December 30, 2002, has now been successfully integrated into its operations. "The selling season for Rabon pesticide products begins in our third fiscal quarter," continued Hatcher. "We anticipate seeing a significant contribution to revenues and earnings from Rabon during the second half of this fiscal year."
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. Its wholly owned subsidiary, KMG-Bernuth, Inc., is a global provider of products to the lumber treating and agricultural industries. 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.