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Fiscal Year 2006 News ReleasesThe Company's fiscal year-end is July 31.
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KMG CHEMICALS ANNOUNCES EXERCISE OF OVER-ALLOTMENT OPTIONHOUSTON, TX - July 21, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that the underwriters of its recent public offering have exercised their over-allotment option in full to purchase an additional 420,000 shares of common stock. Including the over-allotment shares, the offering consisted of 1,710,000 shares from KMG, 1,263,735 from David Hatcher, Chairman and CEO and 246,265 from Valves Incorporated of Texas, whose President is Fred C. Leonard, an outside director of KMG, at the public offering price of $7.00 per share, before underwriting discounts or commissions. Upon completion of the offering and exercise of the over-allotment option, as of July 21, 2006, KMG had 10,532,856 shares outstanding. KMG currently intends to use the net proceeds of this offering for working capital, to fund future acquisitions and for general corporate purposes. Boenning & Scattergood, Inc. served as lead book-running manager of the offering and Sterne, Agee & Leach, Inc. acted as co-manager. A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission (File No. 333-133901). Copies of the final prospectus relating to the offering may be obtained from Boenning & Scattergood, Inc. at 4 Tower Bridge 200 Barr Harbor Drive, Suite 300 West Conshohocken, PA 19428 or Sterne, Agee & Leach, Inc. at 800 Shades Creek Parkway, Suite 700 Birmingham, Alabama 35209. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. About KMG 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. 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. 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. Contacts: Investor Relations Counsel: KMG CHEMICALS NAMED TO THE 2006 FORTUNE SMALL BUSINESS LIST OF AMERICA'S 100 FASTEST GROWING SMALL COMPANIESHOUSTON, TX - July 10, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that it has been included on FORTUNE Small Business' FSB 100 list of the fastest growing small public companies in America, ranking #86. The list appears in the July/August issue of the magazine and is currently available at www.fsb.com. To compile the list, FORTUNE Small Business asked financial research firm Zacks to rank public companies with revenues less than $200 million and a stock price of more than $1, based on their percentage growth in earnings, revenue, and stock performance over the past three years. Banks and real estate firms were excluded. David Hatcher, Chairman and CEO of KMG, stated, "We are proud of the Company's financial record, which was the basis for KMG's inclusion in the list. The acknowledgment of the Company's success and growth is certainly gratifying, and all of us at KMG share in this recognition." About KMG 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. 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. 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. Contacts: John V. Sobchak Investor Relations Counsel: KMG CHEMICALS ANNOUNCES PRICING OF PUBLIC OFFERINGHOUSTON, TX - June 30, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that a public offering of 2,800,000 shares of its common stock has been priced at $7.00 per share, before underwriting discounts or commissions. The offering consists of 1,500,000 shares from KMG, 1,087,984 from David Hatcher, Chairman and CEO and 212,016 from Valves Incorporated of Texas, whose President is Fred C. Leonard, an outside director of KMG. KMG and the selling shareholders have granted the underwriters an option to purchase up to an additional 420,000 shares solely to cover over-allotments, if any. A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission (File No. 333-133901). The transaction is expected to close on July 6, 2006, subject to customary closing conditions. KMG currently intends to use the net proceeds of this offering for working capital, to fund future acquisitions and for general corporate purposes. Boenning & Scattergood, Inc. served as lead book-running manager of the offering and Sterne, Agee & Leach, Inc. acted as co-manager. Copies of the final prospectus relating to the offering may be obtained from Boenning & Scattergood, Inc. at 4 Tower Bridge 200 Barr Harbor Drive, Suite 300 West Conshohocken PA 19428 or Sterne, Agee & Leach, Inc. at 800 Shades Creek Parkway, Suite 700 Birmingham, Alabama 35209. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. About KMG 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. 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. 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. Contacts: John V. Sobchak Investor Relations Counsel: KMG CHEMICALS REPORTS STRONG RESULTS FOR ITS THIRD QUARTER AND YEAR-TO-DATE; NINE-MONTH NET INCOME UP 51% ON 23% SALES GROWTHHOUSTON, TX - June 9, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced unaudited financial results for the third quarter and nine-month period ended April 30, 2006. Third Quarter Financial Highlights - versus fiscal 2005 third quarter
Nine-month Financial Highlights - versus first nine months of fiscal 2005
The Company continued to experience strong sales of its wood treating chemicals. Penta revenues were up 27% to $6.5 million in the third quarter and 37% to $20.3 million in the first nine months of fiscal 2006, driven by greater demand from utilities for treated poles. Creosote sales increased 29% to $9.0 million in the third quarter and 11% to $23.4 million in the year-to-date period. As previously stated, after being negatively impacted by disruptions in operations caused by the 2005 hurricanes, KMG's creosote volume returned to pre-hurricane levels at the end of the first quarter of fiscal 2006; the demand for creosote from major railroads remains strong. Sales of KMG's animal health pesticides were $3.9 million in the 2006 third quarter versus $1.7 million the same period last year, and $4.8 million in the 2006 nine-month period versus $3.0 million in the comparable 2005 period. Approximately $1.2 million of the $2.2 million third quarter increase in the segment's sales is due to the Company's February 2006 acquisition of the U.S.-based animal health pesticide business of Boehringer Ingelheim. Neal Butler, President and COO of KMG, commented, "All of our business areas have performed well thus far this year and have exceeded our expectations. The recent expansion of our penta plant in Matamoros, Mexico, which added 30% more capacity, was integral to that segment's growth. Penta demand remains strong, as does the market for creosote. We are progressing with the integration of our most recent acquisition, which will not have a material impact on fiscal 2006 earnings due to the distribution agreement in place with the seller, but this animal insecticide business should contribute substantially to fiscal 2007 earnings." David Hatcher, Chairman and CEO of KMG, stated, "We are extremely pleased with our third quarter and year-to-date results. During the quarter, net income grew at more than twice the rate of sales due to increased sales of higher margin penta products and from improved creosote pricing." Mr. Hatcher continued, "We have always stated that our shareholders should expect year-over-year growth in sales and earnings, which management strives to deliver, but we do not manage the Company on a quarter-by-quarter basis. While we anticipate growth in the final quarter of fiscal 2006, investors should not expect the growth levels achieved in the third quarter. Based on our strong results for the first nine months of fiscal 2006, we remain confident that we will achieve our goal of double-digit EPS growth for fiscal year 2006. Additionally, we remain enthusiastic about the Company's prospects for 2007 and beyond, and are firmly focused on executing our proven growth strategy."
About KMG 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. . 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. 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. Contacts: John V. Sobchak Investor Relations Counsel: KMG CHEMICALS ANNOUNCES PROPOSED PUBLIC OFFERING OF COMMON STOCKHOUSTON, TX - May 8, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that it has filed a registration statement with the Securities and Exchange Commission for a public offering of 3,000,000 shares of its common stock. Of the shares being offered, 1,500,000 are being offered by KMG, 1,260,000 are being offered by David L. Hatcher, KMG's Chairman & CEO, and 240,000 are being offered by Valves Incorporated of Texas, whose president is Fred C. Leonard, an outside director of KMG. The shares that Mr. Hatcher intends to sell represent approximately 23% of his stock in KMG. After the completion of the offering, he would still own approximately 4,130,000 shares, or about 40% of KMG's outstanding common stock, after giving effect to the offering. The underwriters will have an option to purchase up to an additional 450,000 shares of common stock from KMG and the selling shareholders to cover over-allotments, if any. KMG intends to use the net proceeds of this offering to provide capital for its acquisition program, for working capital and other general corporate purposes. Boenning & Scattergood, Inc. is serving as lead book-running manager of the offering and Sterne, Agee & Leach, Inc. is acting as co-manager. When available, copies of the preliminary prospectus relating to the offering may be obtained from Boenning & Scattergood, Inc. at 4 Tower Bridge 200 Barr Harbor Drive, Suite 300 West Conshohocken, PA 19428 or Sterne, Agee & Leach, Inc. at 800 Shades Creek Parkway, Suite 700 Birmingham, Alabama 35209. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. About KMG 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. 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. 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. Contacts: John V. Sobchak Counsel: The Equity Group Inc. KMG CHEMICALS SHARES TO BEGIN TRADING ON THE NASDAQ NATIONAL MARKET, MONDAY MAY 1STHOUSTON, TX - April 27, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that its common stock, which has been trading on the NASDAQ Capital Market, will begin trading on the NASDAQ National Market effective Monday May 1, 2006. KMG's trading symbol will remain "KMGB." According to David Hatcher, Chairman and CEO of KMG, "Listing on the NASDAQ National Market is an important step for our Company. KMG's stock will be eligible for purchase by a broader range of investment management funds, and will able to be purchased on margin. Additionally, the NASDAQ National Market listing will afford wider exposure to KMG." About KMG 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 Investor Relations Counsel: KMG CHEMICALS SECOND QUARTER NET INCOME UP 62% ON 25% SALES GROWTHHOUSTON, TX - March 6, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced unaudited financial results for the second quarter and six-month period ended January 31, 2005. Second Quarter Financial Highlights - versus fiscal 2005 second quarter
First Half Financial Highlights - versus first half of fiscal 2005
Segment Performance Sales of creosote, an industrial wood preservative used by wood treaters that mainly process crossties for railroads, were $8.1 million in the second quarter, a 26% increase over the same quarter of last year. The greater creosote demand KMG experienced during the quarter largely offset hurricane-related sales disruptions in the first quarter. As a result, creosote sales for the first half of 2006 were essentially even with last year's period. With regard to KMG's insecticide product line, revenues declined $427,000 in the first six months of 2006 to $914,000 due to the timing of certain sales that the Company now expects to ship in its fiscal third quarter. Management anticipates strong performance from this product line in the balance of fiscal 2006. Revenues from MSMA, the Company's herbicide product, were relatively even with the second quarter of last year. The selling season for both of these product lines is mainly in the second half of KMG's fiscal year. Neal Butler, President and COO of KMG, commented, "Our Matamoros facility is consistently producing penta at 30% greater capacity due to the recent plant expansion. I am pleased to report that while we fulfilled our backlog of orders, there remains strong market demand for this product, which we will be able to meet. Additionally, the integration of our most recent acquisition is underway and has been progressing very well. As previously announced, the newly acquired animal insecticide business will not have a material impact on earnings in fiscal 2006 due to the distribution agreement in place with the seller, but it should be a significant contributor to the bottom-line in fiscal 2007." David Hatcher, Chairman and CEO of KMG, stated, "We are very pleased with the results for the quarter, which surpassed our expectations. Net income grew at a substantially faster rate than sales for the quarter due to a shift in our product mix towards higher margin penta sales, as well as the positive impact the June 2005 acquisition of penta assets has had on our business. Based on our strong results for the first half of 2006 and our outlook for the second half of the year, we are confident that we will achieve our goal of double-digit EPS growth for fiscal year 2006. Looking further ahead, we are optimistic about continued growth in 2007, especially considering our most recent acquisition. We remain committed to our growth strategy, a proven model for the Company, and believe it will continue to build value for our shareholders."
About KMG 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 Investor Relations Counsel: KMG CHEMICALS ACQUIRES ANIMAL INSECTICIDE ASSETS FROM BOEHRINGER INGELHEIM VETMEDICAExpected to Contribute Approximately $8 Million of Annual Revenues HOUSTON, TX - February 22, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that it acquired the U.S. based animal insecticide business of Boehringer Ingelheim Vetmedica, Inc. For a 23-week transition period ending July 31, 2006, Boehringer will be KMG's exclusive U.S. distributor for the acquired product line. "During that period, we expect the acquisition to add approximately $4 million of revenues, and to have a minor positive effect on earnings due to the terms of the transitional distribution agreement. However, KMG will begin managing the entire sales function for this business on August 1, 2006, the start of our 2007 fiscal year. We expect the acquired business to contribute annual revenues of approximately $8 million during fiscal 2007 and to be significantly accretive to earnings per share," said John Sobchak, CFO of KMG. The acquisition consists of:
Neal Butler, President and COO of KMG, stated, "The animal health sector of the agricultural chemicals market holds significant opportunity to contribute to KMG's continued growth. Combined with our Rabon/Ravap business, this acquisition provides KMG with an estimated 20% market share of the U.S. livestock and poultry insecticide business. Additionally, the purchase effectively provides us with an animal health platform upon which to further grow our presence in this market through continued prudent acquisitions." David Hatcher, Chairman and CEO of KMG Chemicals, commented, "This purchase invests most of our current cash position, including the remainder of the $6 million raised through the sale of common stock last April. In fiscal 2002, we established an objective of completing one or two acquisitions each year that would be immediately accretive to EPS; this transaction represents our sixth successful acquisition over that four-year time frame. We continue to pursue additional acquisitions that will have a meaningful positive impact to our bottom-line and enable us to capture a major position in attractive markets. Our pipeline remains very compelling and we are optimistic about our prospects for continued external growth. We continue to believe that our strategy will achieve attractive growth rates for our shareholders." About Boehringer Ingelheim Boehringer Ingelheim Vetmedica, Inc.
About KMG 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 Investor Relations Counsel: KMG CHEMICALS DECLARES SEMI-ANNUAL CASH DIVIDENDHOUSTON, TX - February 21, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that its Board of Directors has declared a semi-annual cash dividend of $0.0375 per common share. The dividend is payable on March 15, 2006 to shareholders of record as of March 1, 2006. As of January 31, 2006, there were approximately 8.8 million common shares outstanding. David Hatcher, Chairman and CEO of KMG Chemicals, commented, "We believe it is important to share the Company's profits with our shareholders, and are pleased to declare this cash dividend. The continuation and steady increase in KMG's dividend distribution illustrates the Board of Directors' confidence in the Company's prospects for the balance of fiscal 2006 and beyond." 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 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 Investor Relations Counsel: KMG CHEMICALS ADDS 30% CAPACITY TO PENTACHLOROPHENOL PLANTHOUSTON, TX - January 26, 2006 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that the expansion of its pentachlorophenol ("penta") plant in Matamoros, Mexico is fully operational. The expansion, an investment of approximately $1 million, adds a minimum of 30% more penta production capacity. Penta is currently manufactured and sold by KMG to wood treaters who use the product to treat utility poles that are then sold to electric and telecommunications companies. KMG is the only producer of penta in North America. Neal Butler, President and COO of KMG, stated, "We moved up the plant expansion by two months in response to greater penta demand from the restoration taking place in the wake of Hurricanes Katrina and Rita. While the plant has been operating at record production levels for several months, we are now operating at sufficiently high levels as to reduce our backlog of penta orders and ensure our ability to meet market demand going forward. For over 20 years, KMG has been a reliable source of quality penta to wood treaters supplying the utility pole market; we are more committed than ever to servicing this market." 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 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 Investor Relations Counsel: KMG CHEMICALS ANNOUNCES FIRST QUARTER RESULTSPlant Expansion Near Completion HOUSTON, TX - December 1, 2005 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced unaudited financial results for the first quarter ended October 31, 2005. First quarter net sales increased 6% to $14.4 million, while net income increased 2% to $686 thousand. Earnings per basic and diluted share were $0.08 and $0.07, respectively, versus $0.09 per basic and diluted share in the first quarter of fiscal 2005. Earnings per diluted share was calculated on 22% more shares outstanding than the first quarter of last year, principally due to a 1.2 million-share private equity placement in April 2005. During the first quarter, the Company began expensing stock options in accordance with FAS 123(R). The unvested portion of KMG's previously awarded options, along with its new Long-Term Incentive Plan, added non-cash G&A expense of $40,000 in the quarter. KMG closed the first quarter of fiscal 2006 with $10.0 million of cash and cash equivalents, working capital of $12.6 million, total assets of $61.9 million, shareholders' equity of $33.3 million and long-term debt of $17.2 million. Segment Performance Revenues from KMG's other industrial wood treating chemical, pentachlorophenol, increased 38% to $6.9 million as compared to the first quarter of 2005, due primarily to sales associated with the acquisition of penta assets formerly owned by Vulcan Chemicals, as well as greater demand from utilities in the aftermath of the hurricanes. Of note, the Company's penta plant operated at full capacity during the first quarter, and is currently in the final stages of an expansion that will increase penta production capacity significantly. The plant expansion was originally scheduled to be completed at the end of the second quarter, but was accelerated by two months in response to the increased demand generated by the hurricanes. The amortization of intangible assets associated with the Vulcan acquisition added more than $400,000 of non-cash G&A expense in the first quarter of 2006. KMG remains on-track to achieve the full projected annual benefit from the Vulcan acquisition in fiscal 2006, but as anticipated, the Vulcan acquisition had a small net positive impact on first quarter earnings for 2006 versus 2005. More specifically, the Company anticipates annual revenue contribution of at least $3 million from the acquisition, as well as greater operating efficiencies stemming from increased throughput at its penta plant. The Company's Rabon insecticide product line continued to perform well in its off-season, with revenue of $602,000 in the first quarter, a 72% increase over the first quarter of 2005. Revenues from KMG's herbicide product, MSMA, also were up in the off-season, increasing 24% over the first quarter of last year to $536,000. David Hatcher, Chairman and CEO of KMG Chemicals, commented, "Our first quarter performance was in line with our expectations. We are optimistic about the Company's prospects for the balance of fiscal 2006 and beyond. The additional penta production capacity coming on-line in the second quarter will enable us to realize the full benefits of our most recent acquisition. We believe we will achieve double-digit EPS growth in fiscal 2006 based on our existing product lines alone, despite the greater number of shares outstanding. As we have stated before, our earnings are skewed to the second half of our fiscal year. We anticipate good results for the next quarter and a strong second half. Additionally, our pipeline of acquisition prospects is the most exciting in the Company's history, and we are working hard to deliver continued long-term growth for our shareholders. We look forward to reporting on KMG's continued development."
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 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 Investor Relations Counsel: KMG CHEMICALS 2005 NET INCOME UP 73% ON 36% SALES INCREASEHOUSTON, TX - October 11, 2005 - KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced unaudited financial results for the fiscal fourth quarter and year ended July 31, 2005. Fiscal 2005 Financial Highlights - versus fiscal 2004
Fourth Quarter Financial Highlights - versus fiscal 2004 fourth quarter
The Company closed the year with total assets of $61.1 million, a 41% increase over $43.2 million a year earlier. Cash and cash equivalents on July 31, 2005 totaled approximately $8.8 million, up from $974 thousand at the end of last year. Long-term debt increased to $17.6 million from $11.2 million last year. In fiscal 2005, the Company acquired from Occidental Chemical pentachlorophenol assets formerly owned by Vulcan Chemicals. The acquisition was partially funded by a $10.0 million note payable to the seller, which accounted for the increase in the Company's long-term debt. The note is to be repaid over a five-year term and bears interest at a fixed 4% rate. David Hatcher, Chairman and CEO of KMG Chemicals, said, "We are very pleased with the 2005 financial results, which we achieved in the face of record high raw material prices. Sales were up in all product lines, with wood treating chemical sales particularly strong as we benefited from a full year's contribution from two acquisitions completed during fiscal 2004. Our acquisition program is continuing to deliver growth and build value for our shareholders. We completed a highly strategic acquisition in the fourth quarter of fiscal 2005 when we acquired pentachlorophenol assets from Occidental Chemical, which solidified our position as the largest commercial provider of industrial wood treating chemicals in North America. Fourth quarter earnings were unimpressive, but we anticipate attractive growth in fiscal 2006, principally in the second half of the year." Hatcher continued, "As I have stated previously, the variables most difficult to predict are our costs for raw materials, particularly chlorine and phenol, which are currently at all-time high levels. These feedstocks are commodity chemicals that historically have been quite cyclical. With this latest acquisition, KMG is positioned for significant bottom-line growth should these commodity chemical feedstocks return to their long-term average price levels. We anticipate, however, that these high raw material prices will continue through 2006, exerting pressure on our margins. Additionally, while our facilities were spared any serious damage by Hurricanes Katrina and Rita, we are continuing to incur additional expenses particularly related to maintaining the supply of wood treating chemicals to our customers in the aftermath of these disasters. These factors will impact results in fiscal 2006, particularly in the first quarter, during which EPS may be down slightly versus the first quarter of 2005. Still, we expect low double digit growth in EPS from our current business for 2006 overall." Hatcher concluded, "We finished fiscal 2005 with an $8.8 million cash position and a conservative debt level, after completing the biggest acquisition in the Company's history. We closed our first equity offering in April, raising $6.0 million and expanding the institutional ownership of our stock. We are well positioned to grow the Company with additional accretive acquisitions, and are hard at work to continue to implement that strategy."
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 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 Investor Relations Counsel: KMG CHEMICALS DECLARES SEMI-ANNUAL CASH DIVIDENDDividend increased to an annual amount of $.075 per share HOUSTON, TX - August 23, 2005 - KMG Chemicals, Inc. (NASDAQ:KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that its Board of Directors has declared a semi-annual cash dividend of $0.0375 per common share. It is payable on September 16, 2005 to shareholders of record as of August 31, 2005. As of July 31, 2005, there were approximately 8.8 million common shares outstanding. David Hatcher, Chairman and CEO said, "This increase demonstrates the Board's confidence in the Company's outlook, based on our strong results for the first nine months of fiscal 2005, and expectations for continued growth. Additionally, it represents a continuation of our policy of sharing our success with our shareholders through increased dividends." 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 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 Investor Relations Counsel: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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