FORT WORTH, Texas, June 09, 2017 (GLOBE NEWSWIRE) -- KMG (NYSE:KMG), a global provider of specialty chemicals, today announced financial results for the fiscal 2017 third quarter ended April 30, 2017.
2017 Third Quarter Financial Highlights
- GAAP diluted earnings per share was $0.49 compared to $0.53 per diluted share in the third quarter of fiscal 2016. In last year’s third quarter, KMG recorded a bargain purchase gain of $2.1 million, equivalent to $0.17 per diluted share, for the acquisition of NFC.
- Adjusted diluted earnings per share1 was $0.53 compared to $0.41 per share reported in the third quarter of last year.
- GAAP net income was $6.1 million compared to $6.4 million in last year’s third quarter. The decrease in net income from the prior period was due to the bargain purchase gain for the acquisition of NFC that benefited net income by $2.1 million in the third quarter of 2016.
- Adjusted net income2 was $6.5 million, up 31% from $4.9 million in the year-earlier period.
- Adjusted EBITDA3 was a record $14.0 million, up 24% from $11.2 million in the third quarter of fiscal 2016.
Chris Fraser, KMG chairman and chief executive officer, said, “KMG achieved another quarter of strong results, driven by continued growth in both our electronic chemicals and performance materials segments as well as a positive contribution from the acquisition of Sealweld. Consolidated sales grew 3% sequentially and 9% year-over-year to $81.6 million, while adjusted EBITDA improved to a record $14 million, reflecting increases in all businesses. As a result, adjusted EPS grew 29% to $0.53, marking our eleventh consecutive quarter of double-digit year-over-year growth in adjusted earnings per share.”
Mr. Fraser continued, “Third quarter sales in our electronic chemicals segment increased 4% from last year’s third quarter, excluding a $1.2 million foreign currency translation impact from the strengthening of the US dollar, but declined slightly, as anticipated, from the exceptionally strong level reported in the second quarter. Global semiconductor production trends remained favorable, and we benefited from our strategic initiatives to align our product offerings and global capabilities with our customers’ growing needs for purity, quality and reliability.
“Our performance materials segment generated sales of $13.5 million, a 58% increase from last year’s third quarter, driven by stronger demand for industrial lubricants and the contribution from Sealweld, which expanded our presence and customer reach in the pipeline services market. We also experienced good sales growth in our wood treating chemicals business, as severe weather stimulated demand for replacement utility poles treated with penta. Overall, segment operating income grew 48% from the prior year to $4.2 million, a record level for this segment.”
Mr. Fraser concluded, “Looking ahead, our acquisition of Flowchem remains on track to close in mid-June and we’re excited to join forces with Flowchem’s exceptional team. The addition of Flowchem will expand and strengthen our capabilities and product offering in the growing market for pipeline performance products and services, enabling us to more fully serve our pipeline customers throughout the world. Flowchem adds significant size, scale and diversity to our global operations, and will be substantially accretive to our EBITDA, margins and adjusted earnings per share.”
Consolidated results
| Third quarter Dollars in thousands, except EPS | Fiscal 2017 | Fiscal 2016 | |||||||||||
| As Reported | Adjusted | As Reported | Adjusted | ||||||||||
| (GAAP) | (non-GAAP)4 | (GAAP) | (non-GAAP)5 | ||||||||||
| Net sales | $ | 81,616 | $ | 81,616 | $ | 75,168 | $ | 75,168 | |||||
| Operating income | 9,367 | 10,001 | 7,029 | 8,032 | |||||||||
| Operating margin | 11.5 | % | 12.3 | % | 9.4 | % | 10.7 | % | |||||
| Net income | $ | 6,067 | $ | 6,479 | 6,362 | 4,944 | |||||||
| Diluted earnings per share | $ | 0.49 | $ | 0.53 | $ | 0.53 | $ | 0.41 | |||||
| Nine months ended April 30 Dollars in thousands, except EPS | Fiscal 2017 YTD | Fiscal 2016 YTD | |||||||||||
| As Reported | Adjusted | As Reported | Adjusted | ||||||||||
| (GAAP) | (non-GAAP)6 | (GAAP) | (non-GAAP)7 | ||||||||||
| Net sales | $ | 237,182 | $ | 237,182 | $ | 222,677 | $ | 222,677 | |||||
| Operating income | 27,087 | 28,671 | 20,486 | 23,369 | |||||||||
| Operating margin | 11.4 | % | 12.1 | % | 9.2 | % | 10.5 | % | |||||
| Net income | 18,293 | 19,323 | 14,932 | 14,736 | |||||||||
| Diluted earnings per share | $ | 1.50 | $ | 1.58 | $ | 1.25 | $ | 1.24 | |||||
Business segment results
| Electronic Chemicals | Third Quarter | Third Quarter | Nine Months | Nine Months | |||||||||
| Dollars in thousands | Fiscal 2017 | Fiscal 2016 | Fiscal 2017 | Fiscal 2016 | |||||||||
| As Reported | As Reported | As Reported | As Reported | ||||||||||
| (GAAP) | (GAAP) | (GAAP) | (GAAP) | ||||||||||
| Net sales | $ | 68,141 | $ | 66,637 | $ | 204,829 | $ | 195,239 | |||||
| Operating income | 8,509 | 8,183 | 26,153 | 23,927 | |||||||||
| Operating margin | 12.5 | % | 12.3 | % | 12.8 | % | 12.3 | % | |||||
For the third fiscal quarter, the Electronic Chemicals segment reported:
- Sales of $68.1 million, up 2.3% from the third quarter of fiscal 2016. Excluding a foreign currency translation impact of $1.2 million, sales increased 4.0% year-over-year to $69.3 million. Product volume growth primarily drove the Q3 sales increase.
- Operating income of $8.5 million, up 4.0% from $8.2 million in the same period of fiscal 2016. Operating income increased primarily due to product volume growth and operating efficiencies. Operating margin improved to 12.5% compared to 12.3% in the prior-year period.
- Adjusted EBITDA8 of $11.5 million compared to $10.7 million last year.
Performance Materials
The Performance Materials segment, previously called Other Chemicals, consists of the wood treating chemicals business and the industrial lubricants business.
| Performance Materials | Third Quarter | Third Quarter | Nine Months | Nine Months | |||||||||
| Dollars in thousands | Fiscal 2017 | Fiscal 2016 | Fiscal 2017 | Fiscal 2016 | |||||||||
| As Reported | As Reported | As Reported | As Reported | ||||||||||
| (GAAP) | (GAAP) | (GAAP) | (GAAP) | ||||||||||
| Net sales | $ | 13,475 | $ | 8,531 | $ | 32,353 | $ | 27,437 | |||||
| Operating income | 4,224 | 2,853 | 10,927 | 9,421 | |||||||||
| Operating margin | 31.4 | % | 33.4 | % | 33.8 | % | 34.3 | % | |||||
For the third fiscal quarter, the Performance Materials segment reported:
- Sales of $13.5 million, up 58% versus $8.5 million in the same period a year ago. Sales increased due to higher sales of industrial lubricants, the contribution from Sealweld and increased wood treating chemicals sales.
- Operating income of $4.2 million, or 31.4% of sales, compared to $2.9 million, or 33.4% of sales, last year. The increase in operating income was due to higher volume in the industrial lubricants business, including the contribution from Sealweld, and higher volume in the wood treating chemicals business. Segment operating margins declined 200 basis points, reflecting product sales mix and higher raw materials costs.
- Adjusted EBITDA9 of $4.8 million versus $3.2 million last year.
Conference call
Date: Friday, June 9, 2017
Time: 9:00 a.m. ET
Dial in: 877-789-6981 or 541-797-2420
Participant passcode: 32739092
The conference call will be webcast live via the “Investors” section of the Company’s website at http://kmgchemicals.com.
If you are unable to listen live, the conference call will be archived on the KMG website. A telephone replay of the call will also be available for one week, starting at 12:00 p.m. ET on June 9, 2017. To access the call, dial 855-859-2056 (domestic) or 404-537-3406 (international) using participant passcode 32739092.
About KMG
KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to select markets. The Company grows by acquiring and optimizing stable chemical product lines and businesses with established production processes. For more information, visit the Company's website at http://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.
1 Non-U.S. GAAP measure. See Table 2 for reconciliation.
2 Non-U.S. GAAP measure. See Table 2 for reconciliation.
3 Non-U.S. GAAP measure. See Tables 1 and 1A for reconciliation.
4 Non-U.S. GAAP measure. See Tables 2 and 2A for reconciliation.
5 Non-U.S. GAAP measure. See Tables 2 and 2A for reconciliation.
6 Non-U.S. GAAP measure. See Tables 2 and 2A for reconciliation.
7 Non-U.S. GAAP measure. See Tables 2 and 2A for reconciliation.
8 Non-U.S. GAAP measure. See Tables 1 and 1A for reconciliation.
9 Non-U.S. GAAP measure. See Tables 1 and 1A for reconciliation.
| KMG CHEMICALS, INC. AND SUBSIDIARIES | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| April 30, | April 30, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Net sales | $ | 81,616 | $ | 75,168 | $ | 237,182 | $ | 222,677 | |||||||||
| Cost of sales | 49,106 | 46,010 | 143,787 | 136,026 | |||||||||||||
| Gross profit | 32,510 | 29,158 | 93,395 | 86,651 | |||||||||||||
| Distribution expenses | 9,457 | 9,177 | 28,329 | 28,125 | |||||||||||||
| Selling, general and administrative expenses | 13,616 | 12,575 | 37,909 | 36,512 | |||||||||||||
| Restructuring charges | 70 | 377 | 70 | 1,398 | |||||||||||||
| Realignment charges | − | − | − | 130 | |||||||||||||
| Operating income | 9,367 | 7,029 | 27,087 | 20,486 | |||||||||||||
| Other (expense) income | |||||||||||||||||
| Interest expense, net | (301 | ) | (201 | ) | (650 | ) | (605 | ) | |||||||||
| Gain on purchase of NFC | − | 2,069 | − | 2,069 | |||||||||||||
| Other, net | 144 | (375 | ) | 88 | (243 | ) | |||||||||||
| Total other (expense) income, net | (157 | ) | 1,493 | (562 | ) | 1,221 | |||||||||||
| Income before income taxes | 9,210 | 8,522 | 26,525 | 21,707 | |||||||||||||
| Provision for income taxes | (3,143 | ) | (2,160 | ) | (8,232 | ) | (6,775 | ) | |||||||||
| Net income | $ | 6,067 | $ | 6,362 | $ | 18,293 | $ | 14,932 | |||||||||
| Earnings per share: | |||||||||||||||||
| Net income per common share basic | $ | 0.51 | $ | 0.54 | $ | 1.54 | $ | 1.27 | |||||||||
| Net income per common share diluted | $ | 0.49 | $ | 0.53 | $ | 1.50 | $ | 1.25 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 11,888 | 11,729 | 11,884 | 11,714 | |||||||||||||
| Diluted | 12,303 | 11,990 | 12,236 | 11,923 | |||||||||||||
| KMG CHEMICALS, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands, except for share and per share amounts) | ||||||
| April 30, | July 31, | |||||
| 2017 | 2016 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 14,097 | $ | 12,428 | ||
| Accounts receivable | ||||||
| Trade, net of allowances of $105 at April 30, 2017 and $210 at July 31, 2016 | 39,098 | 33,324 | ||||
| Other | 3,230 | 5,572 | ||||
| Inventories, net | 38,868 | 37,401 | ||||
| Prepaid expenses and other | 7,105 | 6,623 | ||||
| Total current assets | 102,398 | 95,348 | ||||
| Property, plant and equipment, net | 81,725 | 79,739 | ||||
| Goodwill | 24,648 | 22,228 | ||||
| Intangible assets, net | 38,508 | 33,906 | ||||
| Restricted cash | − | 1,000 | ||||
| Other assets, net | 5,152 | 4,807 | ||||
| Total assets | $ | 252,431 | $ | 237,028 | ||
| Liabilities & stockholders’ equity | ||||||
| Current liabilities | ||||||
| Accounts payable | $ | 25,867 | $ | 26,418 | ||
| Accrued liabilities | 12,265 | 11,252 | ||||
| Employee incentive accrual | 4,190 | 5,999 | ||||
| Total current liabilities | 42,322 | 43,669 | ||||
| Long-term debt | 34,000 | 35,800 | ||||
| Deferred tax liabilities | 9,434 | 9,948 | ||||
| Other long-term liabilities | 4,459 | 4,422 | ||||
| Total liabilities | 90,215 | 93,839 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ equity | ||||||
| Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued | − | − | ||||
| Common stock, $.01 par value, 40,000,000 shares authorized, 11,887,513 shares issued and outstanding at April 30, 2017 and 11,877,282 shares issued and outstanding at July 31, 2016 | 119 | 119 | ||||
| Additional paid-in capital | 40,557 | 36,553 | ||||
| Accumulated other comprehensive loss | (14,251 | ) | (12,047 | ) | ||
| Retained earnings | 135,791 | 118,564 | ||||
| Total stockholders’ equity | 162,216 | 143,189 | ||||
| Total liabilities and stockholders’ equity | $ | 252,431 | $ | 237,028 | ||
| KMG CHEMICALS, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
| (In thousands) | ||||||||
| Nine Months Ended | ||||||||
| April, 30 | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 18,293 | $ | 14,932 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 10,864 | 10,606 | ||||||
| Non-cash restructuring and realignment charges | − | 295 | ||||||
| Amortization of loan costs | 125 | 125 | ||||||
| Stock-based compensation expense | 4,280 | 3,659 | ||||||
| Allowance for excess and obsolete inventory | (27 | ) | 173 | |||||
| Gain on disposition of equipment | (200 | ) | − | |||||
| Gain on purchase of NFC | − | (2,069 | ) | |||||
| Deferred income tax benefit | (1,189 | ) | (219 | ) | ||||
| Excess tax benefit from stock-based awards | (694 | ) | − | |||||
| Other | (14 | ) | 28 | |||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable — trade | (3,172 | ) | 5,022 | |||||
| Accounts receivable — other | 2,253 | (2,515 | ) | |||||
| Inventories | 606 | 2,798 | ||||||
| Other current and noncurrent assets | (1,062 | ) | 541 | |||||
| Accounts payable | (1,282 | ) | (7,257 | ) | ||||
| Accrued liabilities and other | (1,444 | ) | 3,234 | |||||
| Net cash provided by operating activities | 27,337 | 29,353 | ||||||
| Cash flows from investing activities | ||||||||
| Additions to property, plant and equipment | (8,586 | ) | (11,377 | ) | ||||
| Purchase of NFC, net of cash acquired | − | (2,572 | ) | |||||
| Purchase of Sealweld, net of cash acquired | (16,584 | ) | − | |||||
| Proceeds − insurance claim | 1,247 | − | ||||||
| Net cash used in investing activities | (23,923 | ) | (13,949 | ) | ||||
| Cash flows from financing activities | ||||||||
| Borrowings under credit facility | 17,000 | 2,800 | ||||||
| Payments under credit facility | (18,800 | ) | (14,000 | ) | ||||
| Excess tax benefit from stock-based awards | − | 38 | ||||||
| Payment of dividends | (1,066 | ) | (1,053 | ) | ||||
| Cash payments related to tax withholdings from stock-based awards | (277 | ) | − | |||||
| Net cash used in financing activities | (3,143 | ) | (12,215 | ) | ||||
| Effect of exchange rate changes on cash | 398 | (160 | ) | |||||
| Net increase in cash, cash equivalents and restricted cash | 669 | 3,029 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 13,428 | 8,517 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 14,097 | $ | 11,546 | ||||
Reconciliation of GAAP financial measures to non-GAAP financial measures
KMG provides non-GAAP financial information to complement reported GAAP results. KMG believes that analysis of our financial performance would be enhanced by an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. We define adjusted EBITDA as earnings from operations before interest, taxes, depreciation, amortization, acquisition and integration expenses, restructuring and realignment charges and other relevant items.
KMG intends to continue to provide certain non-GAAP financial information and the appropriate reconciliation to GAAP in its financial results. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures. These non-GAAP measures should be viewed as a supplement to, and not a substitute for, U.S. GAAP measures of performance.
Table 1
RECONCILIATION OF CONSOLIDATED GAAP NET INCOME TO CONSOLIDATED ADJUSTED EBITDA
(in thousands)
| Third Quarter Fiscal 2017 | Third Quarter Fiscal 2016 | ||||
| Consolidated GAAP net income | $ | 6,067 | $ | 6,362 | |
| Add back: | |||||
| Interest expense | 301 | 201 | |||
| Income taxes | 3,143 | 2,160 | |||
| Depreciation & amortization* | 3,817 | 3,772 | |||
| Gain on purchase of NFC | — | (2,069 | ) | ||
| Acquisition & integration expenses | 562 | 233 | |||
| Corporate relocation expense | 2 | 393 | |||
| Restructuring charges, excluding accelerated depreciation | 70 | 187 | |||
| Consolidated adjusted EBITDA | $ | 13,962 | $ | 11,239 | |
| *Includes depreciation related to restructuring and realignment included in non-cash restructuring and realignment charges on the statement of cash flows. | |||||
| Nine Months Ended April 30, 2017 | Nine Months Ended April 30, 2016 | ||||
| Consolidated GAAP net income | $ | 18,293 | $ | 14,932 | |
| Add back (deduct): | |||||
| Interest expense | 650 | 605 | |||
| Income taxes | 8,232 | 6,775 | |||
| Depreciation & amortization* | 10,864 | 10,901 | |||
| Gain on purchase of NFC | — | (2,069 | ) | ||
| Acquisition & integration expenses | 1,145 | 233 | |||
| Corporate relocation expense | 369 | 1,122 | |||
| Restructuring & realignment charges, excluding accelerated depreciation | 70 | 1,233 | |||
| Consolidated adjusted EBITDA | $ | 39,623 | $ | 33,732 | |
| *Includes depreciation related to restructuring and realignment included in non-cash restructuring and realignment charges on the statement of cash flows. | |||||
Table 1A
RECONCILIATION OF OPERATING INCOME TO ADJUSTED EBITDA
Note that we do not allocate certain financial statement line items below operating income to our segments; as such, the reconciliations below only reflect the reconciliation of our operating income by segment to our non-GAAP measures.
| Third Quarter Fiscal 2017 | Electronic | Performance | ||||
| (in thousands) | Chemicals | Materials | Corporate | Total | ||
| Operating Income (Loss) | $ | 8,509 | 4,224 | (3,366 | ) | 9,367 |
| Other income (expense) | 99 | 33 | 12 | 144 | ||
| Depreciation and amortization | 2,857 | 549 | 411 | 3,817 | ||
| Acquisition & integration expenses | − | − | 562 | 562 | ||
| Restructuring charges | − | − | 70 | 70 | ||
| Corporate relocation expense | − | − | 2 | 2 | ||
| Adjusted EBITDA | 11,465 | 4,806 | (2,309 | ) | 13,962 | |
| Corporate allocation | 3,329 | 842 | (4,171 | ) | − | |
| Adjusted EBITDA excl. corporate allocation | 14,794 | 5,648 | (6,480 | ) | 13,962 | |
| Nine Months Ended April 30, 2017 | Electronic | Performance | ||||
| (in thousands) | Chemicals | Materials | Corporate | Total | ||
| Operating Income (Loss) | 26,153 | 10,927 | (9,993 | ) | 27,087 | |
| Other income (expense) | (88 | ) | 66 | 110 | 88 | |
| Depreciation and amortization | 8,502 | 1,121 | 1,241 | 10,864 | ||
| Acquisition & integration expenses | − | − | 1,145 | 1,145 | ||
| Restructuring charges | − | − | 70 | 70 | ||
| Corporate relocation expense | − | − | 369 | 369 | ||
| Adjusted EBITDA | 34,567 | 12,114 | (7,058 | ) | 39,623 | |
| Corporate allocation | 9,987 | 2,527 | (12,514 | ) | − | |
| Adjusted EBITDA excl. corporate allocation | 44,554 | 14,641 | (19,572 | ) | 39,623 | |
| Third Quarter Fiscal 2016 | Electronic | Performance | |||||||||
| (in thousands) | Chemicals | Materials | Corporate | Total | |||||||
| Operating Income (Loss) | $ | 8,183 | $ | 2,853 | ($ | 4,007 | ) | $ | 7,029 | ||
| Other income (expense) | (401 | ) | 17 | 9 | (375 | ) | |||||
| Depreciation and amortization | 2,896 | 285 | 591 | 3,772 | |||||||
| Acquisition & integration expenses | — | — | 233 | 233 | |||||||
| Restructuring charges* | — | — | 187 | 187 | |||||||
| Corporate relocation expense | — | — | 393 | 393 | |||||||
| Adjusted EBITDA | 10,678 | 3,155 | (2,594 | ) | 11,239 | ||||||
| Corporate allocation | 2,818 | 992 | (3,810 | ) | — | ||||||
| Adjusted EBITDA excl. corporate allocation | $ | 13,496 | $ | 4,147 | ($ | 6,404 | ) | $ | 11,239 | ||
| *Excludes depreciation | |||||||||||
| Nine Months Ended April 30, 2016 | Electronic | Performance | ||||||||||
| (in thousands) | Chemicals | Materials | Corporate | Total | ||||||||
| Operating Income (Loss) | $ | 23,927 | $ | 9,421 | ($ | 12,862 | ) | $ | 20,486 | |||
| Other income (expense) | (75 | ) | (75 | ) | (93 | ) | (243 | ) | ||||
| Depreciation and amortization | 8,660 | 868 | 1,373 | 10,901 | ||||||||
| Acquisition & integration expenses | — | — | 233 | 233 | ||||||||
| Restructuring & realignment charges* | — | — | 1,233 | 1,233 | ||||||||
| Corporate relocation expense | — | — | 1,122 | 1,122 | ||||||||
| Adjusted EBITDA | 32,512 | 10,214 | (8,994 | ) | 33,732 | |||||||
| Corporate allocation | 7,779 | 2,573 | (10,352 | ) | — | |||||||
| Adjusted EBITDA excl. corporate allocation | $ | 40,291 | $ | 12,787 | ($ | 19,346 | ) | $ | 33,732 | |||
| * Excludes depreciation | ||||||||||||
Table 2
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE
(in thousands)
| Three Months Ended | |||||||
| April 30, | |||||||
| 2017 | 2016 | ||||||
| Net income | $ | 6,067 | $ | 6,362 | |||
| Items impacting pre-tax income: | |||||||
| Acquisition & integration expenses | 562 | 233 | |||||
| Corporate relocation expense | 2 | 393 | |||||
| Gain on purchase of NFC | − | (2,069 | ) | ||||
| Restructuring & realignment charges | 70 | 377 | |||||
| Income taxes* | (222 | ) | (352 | ) | |||
| Adjusted net income | $ | 6,479 | $ | 4,944 | |||
| Adjusted diluted earnings per share | $ | 0.53 | $ | 0.41 | |||
| Weighted average diluted shares outstanding | 12,303 | 11,990 | |||||
| * Represents the aggregate tax-effect assuming a 35% tax rate of the items impacting pre-tax income, except for the gain on the purchase of NFC, which is not a recognized gain for tax purposes. | |||||||
Table 2 (continued)
(in thousands)
| Nine Months Ended | |||||||
| April 30, | |||||||
| 2017 | 2016 | ||||||
| Net income | $ | 18,293 | $ | 14,932 | |||
| Items impacting pre-tax income: | |||||||
| Acquisition & integration expenses | 1,145 | 233 | |||||
| Corporate relocation expense | 369 | 1,122 | |||||
| Gain on purchase of NFC | − | (2,069 | ) | ||||
| Restructuring & realignment charges | 70 | 1,528 | |||||
| Income taxes* | (554 | ) | (1,010 | ) | |||
| Adjusted net income | $ | 19,323 | $ | 14,736 | |||
| Adjusted diluted earnings per share | $ | 1.58 | $ | 1.24 | |||
| Weighted average diluted shares outstanding | 12,236 | 11,923 | |||||
| *Represents the aggregate tax-effect assuming a 35% tax rate of the items impacting pre-tax income. | |||||||
Table 2A
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
| Third Quarter Fiscal 2017 | KMG Chemicals, Inc. | ||||||||||
| Dollars in thousands, except EPS | |||||||||||
| Operating | Net | Diluted Earnings | |||||||||
| Income | Margin | Income | Per Share | ||||||||
| GAAP measure | $ | 9,367 | 11.5 | % | $ | 6,067 | $0.49 | ||||
| Acquisition & integration expenses | 562 | 0.7 | % | 365 | 0.03 | ||||||
| Restructuring & realignment charges | 70 | 0.1 | % | 46 | 0.01 | ||||||
| Corporate relocation expense | 2 | 0.0 | % | 1 | 0.00 | ||||||
| Non-GAAP measure | $ | 10,001 | 12.3 | % | $ | 6,479 | $0.53 | ||||
| Nine Months Ended April 30, 2017 | KMG Chemicals, Inc. | ||||||||||
| Dollars in thousands, except EPS | |||||||||||
| Operating | Net | Diluted Earnings | |||||||||
| Income | Margin | Income | Per Share | ||||||||
| GAAP measure | $ | 27,087 | 11.4 | % | $ | 18,293 | $1.50 | ||||
| Acquisition & integration expenses | 1,145 | 0.5 | % | 744 | 0.06 | ||||||
| Restructuring & realignment charges | 70 | 0.0 | % | 46 | 0.00 | ||||||
| Corporate relocation expense | 369 | 0.2 | % | 240 | 0.02 | ||||||
| Non-GAAP measure | $ | 28,671 | 12.1 | % | $ | 19,323 | $1.58 | ||||
| Third Quarter Fiscal 2016 | KMG Chemicals, Inc. | ||||||||||||
| Dollars in thousands, except EPS | |||||||||||||
| Operating | Net | Diluted Earnings | |||||||||||
| Income | Margin | Income | Per Share | ||||||||||
| GAAP measure | $ | 7,029 | 9.4 | % | $ | 6,362 | $0.53 | ||||||
| Acquisition & integration expenses | 233 | 0.3 | % | 151 | 0.01 | ||||||||
| Restructuring charges | 377 | 0.5 | % | 245 | 0.02 | ||||||||
| Gain on purchase of NFC | — | 0.0 | % | (2,069 | ) | (0.17) | |||||||
| Corporate relocation expense | 393 | 0.5 | % | 255 | 0.02 | ||||||||
| Non-GAAP measure | $ | 8,032 | 10.7 | % | $ | 4,944 | $0.41 | ||||||
| Nine Months Ended April 30, 2016 | KMG Chemicals, Inc. | ||||||||||||
| Dollars in thousands, except EPS | |||||||||||||
| Operating | Net | Diluted Earnings | |||||||||||
| Income | Margin | Income | Per Share | ||||||||||
| GAAP measure | $ | 20,486 | 9.2 | % | $ | 14,932 | $1.25 | ||||||
| Acquisition & integration expenses | 233 | 0.1 | % | 151 | 0.01 | ||||||||
| Restructuring & realignment charges | 1,528 | 0.7 | % | 993 | 0.09 | ||||||||
| Gain on purchase of NFC | — | 0.0 | % | (2,069 | ) | (0.17) | |||||||
| Corporate relocation expense | 1,122 | 0.5 | % | 729 | 0.06 | ||||||||
| Non-GAAP measure | $ | 23,369 | 10.5 | % | $ | 14,736 | $1.24 | ||||||