Fiscal Year 2004 News Releases

June 16, 2004 - KMG Chemicals Announces Acquisition of Trenton Sales, Inc. Assets
June 9, 2004 - KMG Chemicals Announces Acquisition of Ravap Product Line Assets
June 4, 2004 - KMG Chemicals Third Quarter Fiscal 2004 Results
March 11, 2004 - KMG Chemicals Hires Chief Operating Officer
March 5, 2004 - KMG Chemicals Second Quarter Fiscal 2004 Results
March 3, 2004 - KMG Chemicals, Inc. Declares Semi-Annual Cash Dividend
December 8, 2003 - KMG Chemicals Announces the Acquisition of Wood Protection Products' Assets
December 2, 2003 - KMG Chemicals First Quarter Fiscal 2004 Results
October 14, 2003 - KMG Chemicals Reports Fiscal Fourth Quarter and 2003 Results
August 22, 2003 - KMG Chemicals, Inc. Corrects Semi-Annual Cash Dividend Information
August 20, 2003 - KMG Chemicals Declares Semi-Annual Dividend

KMG CHEMICALS ANNOUNCES ACQUISITION OF TRENTON SALES, INC.  ASSETS

Acquisition of creosote distributor';s assets strengthens KMG's position in industrial wood treating chemicals.

HOUSTON, June 16, 2004 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its acquisition of the creosote distribution business of Trenton Sales, Inc.

"KMG is the largest commercial supplier of industrial wood treating chemicals in North America. Its products are sold to pressure treaters who produce treated utility poles, pilings and railroad crossties. This acquisition of Trenton Sales' assets further strengthens KMG's position in this important market," said David Hatcher, chairman and president of KMG.

The Trenton Sales asset purchase is expected to add almost $3 million to revenues in the first year and be accretive to earnings. "This is the third successful acquisition we have completed in the current fiscal year. All three acquisitions have been strategic and have offered superior returns. They will have a significant positive impact on results in the coming year and beyond," concluded Hatcher.

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 wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS ANNOUNCES ACQUISITION OF RAVAP PRODUCT LINE ASSETS

Acquisition broadens KMG's product portfolio serving poultry and livestock growers.

HOUSTON, June 9, 2004 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its acquisition of the Ravap insecticidal product line of Boehringer Ingelheim Vetmedica, Inc. The acquisition is effective as of June 8, 2004.

Ravap is an insecticide spray used by domestic poultry and livestock growers to protect animals from flies, ticks, lice and other pests. Tetrachlorvinphos ("Rabon") is the main active ingredient used in Ravap. KMG already offers the market a product portfolio consisting of Rabon oral larvicides and Rabon insecticidal powders. KMG is the only supplier of Rabon products to the agricultural markets in the United States.

David Hatcher, chairman and president of KMG, said, "Ravap is an important addition to our Rabon product line and broadens our product offering to poultry and livestock growers. We are committed to this segment of the agricultural market and we are encouraged by the potential for growth in this segment. Besides the opportunities we see domestically, we are also looking for partnerships to expand the growth of the Rabon product lines internationally."

Management expects the acquisition to add approximately $1 million in annualized revenues, and be immediately accretive to earnings The acquisition consists of inventory and intangible assets associated with the Ravap product line.

"This is the second acquisition we closed in this fiscal year. Our discipline, patience, and conservative approach to the acquisition process is bearing fruit," continued Hatcher. "Management believes we will close a third attractive acquisition in this fiscal year ending July 31, 2004."

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 wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS THIRD QUARTER FISCAL 2004 RESULTS

HOUSTON, June 4, 2004 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its unaudited financial results for the third fiscal 2004 quarter ended April 30, 2004.

For the third fiscal 2004 quarter, KMG reported net income of $651 thousand or $0.08 per diluted share, versus net income of $530 thousand or $0.07 per diluted share reported for the same quarter in fiscal 2003. Fiscal third quarter net sales were $12.4 million, up from $9.0 million during the year earlier period.

For the nine months ended April 30, 2004, net income was $829 thousand or $0.11 per diluted share, down from $1.2 million or $0.15 per diluted share for the same period last year. Net sales were $29.3 million compared to $23.3 million last year.

At the end of the third fiscal 2004 quarter, KMG had total assets of $38.5 million and long-term debt of $8.9 million. The company had $1.0 million of cash and cash equivalents at the end of the quarter.

"Third quarter results were significantly improved versus the previous quarter, as well as the same period last year," David Hatcher, chairman and president of KMG Chemicals said. "On a year-to-year basis, sales increased in all of our product groups during the third quarter. Management feels the business is on an upswing and is expecting fourth quarter operating results to be a great deal better than last year. The initiatives previously undertaken by management are beginning to produce positive results."

The company acquired the assets of Wood Protection Products, a distributor of pentachlorophenol ("penta") solutions, during the previous fiscal quarter. Penta is sold to industrial wood treaters to protect utility poles from mold, mildew, fungus and insects. "The Wood Protection Products transaction was a strategic acquisition that strengthened KMG's position in this important market. It has proved to be accretive to earnings and cash flow and should add $6 million in annual revenue. We expect to announce additional successes in our acquisition program within the next couple of weeks," concluded Hatcher.

KMG Chemicals, Inc. Selected Financial Data
(In thousands, except share data)
(UNAUDITED)
  Three Months Ending Nine Months Ending
  April 30 April 30
  2004 2003 2004 2003
Net sales $12,424 $ 8,979 $29,333 $23,321
Gross profit 3,696 2,815 8,671 7,589
Pre-tax income 1,050 803 1,338 1,765
Net income 651 530 829 1,165
Earnings per diluted share $0.08 0.07 $0.11 0.15
Weighted average diluted shares outstanding 7,704,343 7,547,362 7,640,924 7,549,829
Net working capital 8,685 10,406 8,685 10,406
Total assets> 38,453 32,981 38,453 32,981
Long-term debt 8,912 5,813 8,912 5,813
Shareholders' equity 23,646 22,216 23,646 22,216

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 products to the wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS HIRES CHIEF OPERATING OFFICER:

Critical addition to management team strengthens operations

HOUSTON, March 11, 2004 -- KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals to carefully focused markets, announced that J. Neal Butler has joined the company as vice president and chief operating officer. Butler brings over 25 years of experience in the chemicals industry to KMG.

Butler is an important addition to the executive team who will lead the company in growing and optimizing its day-to-day operations, as well as identifying and incorporating future strategic acquisitions.

David Hatcher, chairman and president of KMG, said, "We are pleased to have Neal join the KMG management team. His broad experience in the chemical industry is a valuable asset. Neal will be a big contributor to our future success and to our growth in shareholder value."

Butler brings extensive domestic and international experience to KMG. Most recently, he was CEO and president of Naturize BioSciences, which specializes in biological treatments for turf, crop and plant care in the agricultural, golf course and homeowner markets. From 1998 to 2000, he was stationed at Zeneca Agrochemicals' global headquarters in the United Kingdom as a manager in strategic planning with the Global Product Management Team and later led Zeneca's US/Canada Horticulture division with $250 million in sales. Prior to that, he served as vice president and general manager of the Americas Division of ISK Biosciences, a $500 million manufacturer and marketer of agricultural and specialty chemicals that was purchased by Zeneca Agrochemicals in 1998. In addition to leading ISK Biosciences growth in the Americas, he was a member of the Japanese parent companys global strategy team based in Osaka, Japan.

Prior to ISK, Butler was employed by Diamond Shamrock and then Fermenta ASC in various sales, product management and division manager positions. Butler is a graduate of Auburn University with a degree in biology and has completed the Senior Executive MBA Program at Columbia University. He has served on a number of industry, association and university boards in the United States.

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 products to the wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS SECOND QUARTER FISCAL 2004 RESULTS

HOUSTON, March 5, 2004 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its unaudited financial results for the second fiscal 2004 quarter ended January 31, 2004.

For the second fiscal 2004 quarter, KMG reported a net loss of $141 thousand or ($0.02) per diluted share, versus net income of  $153 thousand or $0.02 per diluted share reported for the same quarter in fiscal 2003. Fiscal second quarter net sales were $8.54 million, up from $6.3 million during the year earlier period.

For the first six months ended January 31, 2004, net income was $178 thousand or $.02 per diluted share, down from $635 thousand or $.08 per diluted share for the same period last year. Net sales were $16.9 million compared to $14.3 million last year.

At the end of the second fiscal 2004 quarter, KMG had total assets of $36.80 million and long-term debt of $9.44 million. The company had $1.38 million of cash and cash equivalents at the end of the quarter.

David Hatcher, chairman and president of KMG Chemicals said "Second quarter results were negatively impacted by one-time transition costs associated with our latest acquisition, as well as certain non-recurring legal and related expenses. A significant increase in our regulatory and product testing expenses was also realized in the second quarter, as critical projects for several products advanced simultaneously, and the accounting recognition of other annual expenses shifted relative to last year. Going forward, management continues to see signs of an improving business climate in the company's markets, which would ultimately have a positive impact the company's financial results."

On December 5, 2003, the company acquired the assets of Wood Protection Products, a distributor of pentachlorophenol ("penta") solutions. Penta is KMG's core product line and is sold to industrial wood treaters to protect utility poles from attack by mold, mildew, fungus and insects. Management expects the acquisition to add $6 million in annualized revenue and be significantly accretive to earnings in the current fiscal year, although certain costs related to the transition of the business into the company's operation adversely impacted profitability in the second quarter.

"The acquisition of Wood Protection Products" business in the second fiscal quarter was a strategic move for KMG that strengthened our position in the industrial wood treating market. KMG is currently the largest commercial supplier of industrial wood treating chemicals in North America. We are also very pleased with the performance of the Rabon product line acquired during the second fiscal quarter last year. We remain committed to this important segment of the agricultural chemicals market and are pursuing opportunities to expand our participation in it," continued Hatcher. The Rabon product line, acquired in December of 2002, protects livestock and poultry from flies and other pests.

 

KMG Chemicals, Inc.
Selected Financial Data
(In thousands, except share data
(UNAUDITED)
  Three Months Ending Six Months Ending
  January 31 January 31
  2004 2003 2004 2003
Net sales $8,537 $ 6,287 $16,909 $14,341
Gross profit 2,429 2,057 4,975 4,774
Pre-tax income (228) 231 287 962
Net income (141) 153 178 635
Earnings per diluted share ($.02) 0.02 $.02 0.08
Weighted average diluted shares outstanding 7,667,063 7,550,254 7,536,935 7,550,828
Working capital 8,574 8,530 8,574 8,530
Total assets 36,801 29,962 36,801 29,962
Long-term debt 9,437 4,503 9,437 4,503
Shareholders' equity> 22,892 21,953 22,892 21,953

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 products to the wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS, INC. DECLARES SEMI-ANNUAL CASH DIVIDEND

HOUSTON, March 3, 2004 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, announced that its Board of Directors has declared a semi-annual cash dividend of $0.03 per common share. It is payable on March 23, 2004 to shareholders of record as of March 15, 2004. The company's annual dividend rate is $0.06 per common share. As of January 31, 2004, there were approximately 7.55 million common shares outstanding.

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 wood 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS ANNOUNCES THE ACQUISITION OF WOOD PROTECTION PRODUCTS' ASSETS

Expected to add $6 million in annualized revenue and be immediately accretive to earnings

HOUSTON, December 8, 2003 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its acquisition of the assets of Wood Protection Products Inc. The acquisition is effective as of December 5, 2003.

Wood Protection Products is a distributor of pentachlorophenol ("penta") solutions, which are used by wood treaters to treat utility poles. Penta protects the utility poles from attack by mold, mildew, fungus, and insects. The acquisition includes Wood Protection Products' distribution and plant equipment along with its inventory and EPA product registrations. KMG will consolidate its liquid penta distribution operations at its facility in Tuscaloosa, Alabama.

David Hatcher, chairman and president of KMG, said, "This is a strategic acquisition for KMG that strengthens our position in our core business. We are committed to making this a seamless transition for our wood treating customers and plan to continue to build goodwill within this very important market segment."

Management anticipates that the acquisition should add approximately $6 million in annualized revenues, and that it would be immediately accretive to earnings. The purchase is being largely financed with a senior credit facility from KMG's long-time banking partner, SouthTrust Bank of Birmingham, Alabama.

"Management is continuing to pursue other attractive acquisition opportunities," continued Hatcher. "We still have sufficient financial capacity to further execute our acquisition strategy, and are considering alternative sources of capital for that time when we have optimally leveraged our balance sheet."

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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS FIRST QUARTER FISCAL 2004 RESULTS

HOUSTON, December 2, 2003- KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its unaudited financial results for the first fiscal 2004 quarter ended October 31, 2003.

For the first fiscal 2004 quarter net income was $0.32 million or $0.04 per diluted share, down from $0.48 million or $0.06 per diluted share reported for the same quarter in fiscal 2003. Fiscal first quarter net sales were $8.37 million, up from $8.05 million during the year earlier period. The results for the quarter included a $115 thousand one-time gain on the sale of certain securities that had the effect of adding $.01 to earnings per share.

At the end of the first fiscal 2004 quarter, KMG had total assets of $31.10 million and long-term debt of $4.12 million. The company had $4.21 million of cash and cash equivalents at the end of the quarter. Due to agricultural growing seasons, the company's earnings are typically skewed toward the latter part of the fiscal year.

David Hatcher, chairman and president of KMG Chemicals, said, "We continue to be challenged by high raw material prices that are putting pressure on our margins, but the situation now seems to have stabilized. Continued soft demand in the industrial wood treating market has postponed a rebound in that segment's sales. However, we are optimistic about the prospects for the company in general this fiscal year."

Besides working hard at improving the performance of our existing business, we are pursuing acquisitions that would be accretive to the company's profitability," continued Hatcher. "We are pleased to see that the combination of our experienced management team, a healthy cash position and a strong balance sheet is proving to be a good formula for growth."

 

KMG Chemicals, Inc.
Selected Financial Data
(UNAUDITED, and in thousands, except share data)

  Three Months Ended
October 31,
  2003 2002
Net sales $ 8,372 $ 8,054
Gross profit 2,546 2,716
Pre-tax income 515 731
Net income 319 483
Earnings per diluted share 0.04 0.06
Cash and cash equivalents 4,214 2,972
Total assets 31,097 27,296
Long-term debt 4,124 245
Shareholders' equity $23,068 $21,804
Weighted average diluted
shares outstanding
7,550 7,551

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 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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS REPORTS FISCAL FOURTH QUARTER AND 2003 RESULTS

HOUSTON, October 14, 2003 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced its unaudited financial results for the fiscal fourth quarter and year ended July 31, 2003.

Net income was $752 thousand or $.10 per diluted share in the fourth quarter, compared to $1.1 million or $.14 per diluted share in the same quarter of 2002. Fiscal fourth quarter net sales were $12.2 million, up from $10.0 million in the year earlier quarter.

For the 2003 fiscal year, net income was $1.9 million or $.25 per diluted share, down from $2.7 million or $.36 per diluted share in fiscal 2002. Net sales increased to $35.5 million in fiscal 2003, from $34.4 million in the prior year. The year-to-year decline in profitability was attributable to higher raw material costs for the production of pentachlorophenol; a shortfall in KMG's creosote supplies during the first three quarters of the fiscal year; and tighter margins for the company's MSMA herbicide used by cotton farmers. The decline in profitability was partially offset by profits from the company's new Rabon products, which were acquired in December 2002. Rabon is used by livestock and poultry growers for fly and pest control.

At the end of fiscal year 2003, the company's total assets had increased to $32.3 million from $28.9 million at the end of fiscal 2002. Long-term debt had increased to $4.3 million from $1.7 million over the same period. The increase in long-term debt was due to the funding of the Rabon acquisition in December. Cash and cash equivalents at fiscal year-end totaled approximately $1.5 million, versus $1.2 million at the prior year-end.

David Hatcher, Chairman and President of KMG Chemicals, said, "We are very displeased with the results for fiscal 2003, which followed disappointing results for fiscal 2002. Some internal management changes have already been implemented and we are ready to do whatever else is necessary to reverse this trend. In last year's earnings release, I stated that raw material cost increases would be our biggest hurdle in fiscal 2003. This turned out to be true. A price increase for penta was implemented in the fourth quarter, to help absorb our higher raw material costs for that product. As a result, we anticipate improved margins in fiscal 2004. Creosote sales improved markedly in the fourth quarter of 2003 as we worked out our supply shortfall situation, but not enough to offset the lower sales experienced in the first three quarters of the year."

Hatcher said,"Our Rabon acquisition was the bright spot for the year. KMG is now the only supplier of the active Rabon ingredient, tetrachlorvinphos, to agricultural formulators and distributors in North America. This is consistent with our strategy to be the number one or two player in each of the markets we serve. We believe there is an opportunity to expand the sales of our new Rabon products and we intend to focus significant attention on this initiative in the coming year." He added that the selling season for Rabon is weighted towards the company's fourth fiscal quarter, further skewing earnings towards the end of the fiscal year.

KMG Chemicals, Inc.
Financial Data (UNAUDITED)
  Three Months Ended Twelve Months Ended
  July 31 July 31
  2003 2002 2003 2002
Net sales $12,214,870 $9,986,140 $35,535,585 $34,438,034
Gross profit 3,702,617 3,526,290 11,291,219 12,041,080
Pre-tax income 1,216,634 1,736,326 2,981,853 4,329,898
Net income 752,121 1,076,469 1,917,164 2,684,537
Earnings per diluted share 0.10 0.14 0.25 0.36
Weighted average diluted shares outstanding 7,550,022 7,551,155 7,550,394 7,548,545
Working capital 9,910,215 9,106,866 9,910,215 9,106,866
Total assets 32,337,510 28,861,744> 32,337,510 28,861,744
Long-term debt 4,250,423 1,716,003 4,250,423 1,716,003
Shareholders' equity 23,028,709 21,520,650 23,028,709 21,520,650

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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS, INC. CORRECTS SEMI-ANNUAL CASH DIVIDEND INFORMATION

HOUSTON, August 22, 2003 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, today corrected information contained in its news release issued on August 20, 2003, which reported the company's semi-annual cash dividend. The correct dividend payment date should be September 19, 2003. This date was incorrectly stated as September 15 in the earlier release. The record date remains September 5, as previously reported.

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.

###

Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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KMG CHEMICALS DECLARES SEMI-ANNUAL CASH DIVIDEND

HOUSTON, August 20, 2003 - KMG Chemicals, Inc. (NASDAQ Small Cap: KMGB), a global provider of specialty chemicals in carefully focused markets, announced that its Board of Directors has declared a semi-annual cash dividend of $0.03 per common share. It is payable on September 15, 2003 to shareholders of record as of September 5, 2003. As of July 31, 2003, there were approximately 7.5 million common shares outstanding.

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.

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Company contact:
John V. Sobchak
Chief Financial Officer
(713) 600-3814
jsobchak@kmgchemicals.com
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