Contact UsConnect with us:
SDS Search
KMG Chemical
KMG Reports Fourth Quarter and Full Year 2018 Financial Results

Investor News

Printer Friendly Version View printer-friendly version
« Back
KMG Reports Fourth Quarter and Full Year 2018 Financial Results

FORT WORTH, Texas, Oct. 01, 2018 (GLOBE NEWSWIRE) -- KMG (NYSE: KMG), a global provider of specialty chemicals and performance materials, today announced financial results for the fourth fiscal quarter and fiscal year ended July 31, 2018.

2018 Fourth Quarter Financial Highlights

  • Sales grew to a record $122.4 million, an increase of 27% compared to the same quarter last year.  
  • GAAP diluted earnings per share was $1.13, up 163% compared to $0.43 per diluted share in the fourth quarter of fiscal 2017.
  • Adjusted diluted earnings per share1 increased to a record $1.26 compared to $0.69 per share reported in the fourth quarter of fiscal 2017.
  • GAAP net income rose 237% to $18.0 million compared to $5.3 million in last year’s fourth quarter.
  • Adjusted EBITDA2 increased to $31.1 million, from $20.6 million in the fourth quarter of fiscal 2017.

2018 Fiscal Year Financial Highlights

  • Sales increased 40% year-over-year to a record $465.6 million.
  • GAAP diluted earnings per share was a record $4.29, up from $1.92 in fiscal 2017.
  • Adjusted diluted earnings per share was a record $4.33, up 91% from the prior year.
  • GAAP net income rose 174% from the prior year to a record $64.8 million.
  • Adjusted EBITDA grew to a record $119.5 million, an increase of 99% from the prior year’s $60.2 million.

Recent Merger Announcement

On August 15, 2018, Cabot Microelectronics Corporation and KMG Chemicals, Inc. announced a definitive agreement under which Cabot Microelectronics will acquire KMG Chemicals in a cash and stock transaction with a total enterprise value of approximately $1.6 billion. Under the terms of the agreement, KMG shareholders will be entitled to receive, per KMG share, $55.65 in cash and 0.2000 of a share of Cabot Microelectronics common stock.

Due to the pending transaction with Cabot Microelectronics, KMG is not hosting a conference call in conjunction with its fourth quarter and full year 2018 earnings release and does not expect to do so for future quarters. Completion of the transaction is subject to approval by KMG’s shareholders and other customary closing conditions. The transaction is expected to close by the end of the current calendar year.

“Fiscal 2018 was a year of progress, growth and continued strong performance for KMG,” said Chris Fraser, KMG chairman and CEO. “We again achieved record financial results, with fiscal 2018 sales exceeding the top end of our upwardly revised guidance range and fiscal 2018 adjusted EBITDA at the high end of our forecast. We also achieved record earnings per share of $4.29 on a GAAP basis. Throughout the year, we further strengthened our diverse and market-leading businesses and continued to enhance our efficiency across our global operations.”

Mr. Fraser concluded, “Over the past five years, KMG’s adjusted EBITDA and adjusted earnings per share have increased approximately fourfold, a period of sustained growth and progress that culminated in an outstanding fiscal 2018 year. I would like to thank our exceptional employees whose dedication, passion and teamwork have driven our growth and success for more than two decades. On behalf of our entire organization, I sincerely thank our investors for placing their confidence and trust in KMG.”

Consolidated results

Fourth Quarter
Dollars in thousands, except EPS
Fiscal 2018   Fiscal 2017
  As Reported Adjusted As Reported Adjusted
  (GAAP) (non-GAAP)3 (GAAP) (non-GAAP)4
Net sales $122,394   $122,394   $96,260   $96,260  
Operating income   22,362     26,870     10,245     14,628  
Operating margin   18.3%     22.0%     10.6%     15.2%  
Net income   18,009     20,199     5,338     8,535  
Diluted earnings per share $1.13   $1.26   $ 0.43   $0.69  


Fiscal Year ended July 31
Dollars in thousands, except EPS
Fiscal 2018   Fiscal 2017
  As Reported Adjusted As Reported Adjusted
  (GAAP) (non-GAAP)5 (GAAP) (non-GAAP)6
Net sales $465,556   $465,556   $333,442   $333,442  
Operating income   88,125     102,617     37,333     43,300  
Operating margin   18.9%     22.0%     11.2%     13.0%  
Net income   64,841     65,404     23,633     27,859  
Diluted earnings per share $ 4.29   $4.33   $1.92   $ 2.27  

Business segment results

Electronic Chemicals Fourth Quarter   Fourth Quarter   Full Year   Full Year
Dollars in thousands Fiscal 2018   Fiscal 2017 Fiscal 2018   Fiscal 2017
  As Reported   As Reported As Reported   As Reported
  (GAAP)   (GAAP) (GAAP)   (GAAP)
Net sales $79,622   $71,792 302,023   $276,621
Operating income 11,678   9,132 46,554   35,285
Operating margin 14.7%   12.7% 15.4%   12.8%

For the fourth fiscal quarter, the Electronic Chemicals segment reported:

  • Sales of $79.6 million, up 10.9% from the fourth quarter of fiscal 2017. Product volume growth primarily drove the sales increase.  
  • Operating income of $11.7 million, up 27.8% from $9.1 million in the same period of fiscal 2017. Operating income increased primarily due to product volume growth and operating efficiencies. Operating margin improved to 14.7% compared to 12.7% in the prior-year period.
  • Adjusted EBITDA7 of $14.5 million compared to $12.9 million last year.

For the fiscal 2018 year, the Electronic Chemicals segment reported:

  • Sales of $302.0 million, an increase of 9.2% compared to the prior year. Product volume growth was the primary driver of the sales increase.
  • Operating income of $46.6 million, up 31.9% from $35.3 million in the prior year. Operating income increased due to product volume growth, a favorable product mix and operating efficiencies. Operating margin increased to 15.4% from 12.8% in the prior year.
  • Adjusted EBITDA8 of $57.2 million compared to $48.8 million in fiscal 2017.

Performance Materials
The Performance Materials segment consists of the pipeline performance business and the wood treating chemicals business.

Performance
Materials
Fourth Quarter   Fourth Quarter   Full Year   Full Year
Dollars in thousands Fiscal 2018   Fiscal 2017 Fiscal 2018   Fiscal 2017
  As Reported   As Reported As Reported   As Reported
  (GAAP)   (GAAP) (GAAP)   (GAAP)
Net sales $42,772   $24,468 $163,533   $56,821
Operating income 14,557   2,877 54,991   13,804
Operating margin 34.0%   11.8% 33.6%   24.3%

For the fourth fiscal quarter, the Performance Materials segment reported:

  • Sales of $42.8 million, up 75% from $24.5 million in the same period a year ago. Sales growth reflected a full quarter of contribution from Flowchem as compared to a partial quarter in Q4 2017, as well as product volume growth in the pipeline performance and wood treating chemicals businesses.
  • Operating income of $14.6 million, or 34.0% of sales, compared to $2.9 million, or 11.8% of sales, last year. The increase in operating income was due to a full quarter of contribution from Flowchem as compared to a partial quarter in Q4 2017, as well as product volume growth in the pipeline performance and wood treating chemicals businesses. Operating income in the fourth quarter of fiscal 2017 was dampened due to the step-up in basis for acquired Flowchem inventories totaling $3.7 million, as well as a $2.5 million increase in depreciation and amortization related to the acquisitions of Sealweld and Flowchem.
  • Adjusted EBITDA9 of $18.8 million compared to $10.1 million last year.

For the fiscal 2018 year, the Performance Materials segment reported:

  • Sales of $163.5 million, up 188% from the prior year. The sales increase was driven by full-year contributions from Sealweld and Flowchem, as well as product volume growth in the pipeline performance and wood treating chemicals businesses.
  • Operating income of $55.0 million, or 33.6% of sales, compared to $13.8 million, or 24.3% of sales, last year. Operating income improved due to higher sales and product volume growth in the pipeline performance and wood treating chemicals businesses. Operating income in fiscal 2017 was unfavorably impacted by a $3.7 million purchase price adjustment to acquired Flowchem inventories and a $2.7 million increase in depreciation and amortization.
  • Adjusted EBITDA10 of $71.8 million compared to $22.3 million last year.

About KMG
KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals and performance materials for the semiconductor, industrial wood preservation, and pipeline and energy markets. 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 Tables 1 and 1A for reconciliation.
3 Non-U.S. GAAP measure. See Tables 2 and 2A 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 1 and 1A 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.
10 Non-U.S. GAAP measure. See Tables 1 and 1A for reconciliation.


 
 
KMG CHEMICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 
  Three Months Ended   Year Ended
  July 31,   July 31,
  2018   2017   2018   2017
Net sales $122,394     $96,260     $465,556     $333,442  
Cost of sales   70,959       59,518       267,895       203,304  
Gross profit   51,435       36,742       197,661       130,138  
               
Distribution expenses   9,247       9,989       36,439       38,318  
Selling, general and administrative expenses   15,961       12,279       57,900       50,188  
Amortization of intangible assets   3,860       4,279       15,123       4,279  
Restructuring charges   5       (50 )     74       20  
Operating income   22,362       10,245       88,125       37,333  
Other (expense) income              
Interest expense, net   (4,196 )     (4,167 )     (21,529 )     (4,817 )
Loss on the extinguishment of debt   (342 )     (353 )     (6,710 )     (353 )
Derivative fair value gain   338         5,576    
Other, net   (86 )     190       (1,063 )     279  
Total other (expense) income, net   (4,286 )     (4,330 )     (23,726 )     (4,891 )
               
Income before income taxes   18,076       5,915       64,399       32,442  
Provision for income taxes   (67 )     (577 )     442       (8,809 )
Net income   18,009     $5,338       64,841     $23,633  
Earnings per share:              
Net income per common share basic $1.16     $0.45     $4.41     $1.99  
Net income per common share diluted $1.13     $0.43     $4.29     $1.92  
               
Weighted average shares outstanding:              
Basic   15,507       11,890       14,708       11,885  
Diluted   15,994       12,436       15,111       12,286  
 


 
KMG CHEMICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share amounts)
 
  July 31, July 31,
   2018   2017 
     
Assets    
Current assets    
Cash and cash equivalents $24,436   $20,708   
Accounts receivable    
Trade, net of allowances of $219 at July 31, 2018 and $263 at July 31, 2017   61,895     51,168  
Other   9,943     6,168  
Inventories, net   54,218     46,482  
Prepaid expenses and other   4,807     8,617  
Total current assets   155,299     133,143  
     
Property, plant and equipment, net   117,101     105,435  
Goodwill   233,204     224,391  
Intangible assets, net   300,457     320,401  
Other assets, net   12,373     9,061  
Total assets   818,434   $792,431  
     
Liabilities & stockholders’ equity    
Current liabilities    
Accounts payable $39,005   $29,570  
Accrued liabilities   12,524     12,456  
Employee incentive accrual   7,726     7,713  
Current portion of long-term debt   3,167  
Total current liabilities   59,255     52,906  
     
Long-term debt   306,119     523,102  
Deferred tax liabilities   32,129     37,944  
Other long-term liabilities   4,864     4,763  
Total liabilities   402,367     618,715  
     
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, 15,509,733 shares            
issued and outstanding at July 31, 2018 and 11,889,649 shares issued and            
outstanding at July 31, 2017   155     119  
Additional paid-in capital   222,371     42,535  
Accumulated other comprehensive loss   (10,321)     (9,712)  
Retained earnings   203,862     140,774  
Total stockholders’ equity   416,067     173,716  
Total liabilities and stockholders’ equity   818,434   $792,431  
 


 
KMG CHEMICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  Year Ended
  July 31,
  2018   2017
Cash flows from operating activities              
Net income $ 64,841     $ 23,633  
Adjustments to reconcile net income to net cash provided by
operating activities
             
Depreciation and amortization   29,948       16,964  
Loss on extinguishment of debt   6,710       353  
Amortization of loan costs included in interest expense   1,421       401  
Stock-based compensation expense   7,964       6,259  
Deferred income tax (benefit)/expense   (5,517 )     (1,090 )
Other   371       (1,028 )
Derivative fair value gain   (5,576 )      
Debt repricing transaction costs   607        
Changes in operating assets and liabilities              
Accounts receivable — trade   (11,039 )     (3,146 )
Accounts receivable — other   (2,221 )     254  
Inventories   (8,206 )     2,870  
Other current and noncurrent assets   (566 )     (1,500 )
Accounts payable   9,904       (1,096 )
Accrued liabilities and other   (666 )     2,049  
Net cash provided by operating activities   87,975       44,923  
               
Cash flows from investing activities              
Additions to property, plant and equipment   (23,654 )     (13,074 )
Purchase of Sealweld, net of cash acquired   (585 )     (16,599 )
Purchase of Flowchem, net of cash acquired         (495,000 )
Other investing activities   (988 )     (753 )
Proceeds from insurance claim   50       1,251  
Net cash used in investing activities   (25,177 )     (524,175 )
               
Cash flows from financing activities              
Proceeds from sale of common stock, net of issuance costs   175,637        
Principal payments on borrowings of term loan   (228,000 )     (10,000 )
Debt repricing transaction costs   (607 )      
Proceeds from term loan         550,000  
Borrowings under credit facility         17,000  
Deferred financing costs         (15,323 )
Net payments under credit facility         (52,800 )
Cash payments related to tax withholdings from stock-based awards   (3,729 )     (277 )
Payment of dividends   (1,753 )     (1,423 )
Other financing activities   32        
Net cash (used in)/provided by financing activities   (58,420 )     487,177  
               
Effect of exchange rate changes on cash   (650 )     (645 )
Net increase in cash, cash equivalents and restricted cash   3,728       7,280  
Cash, cash equivalents and restricted cash at beginning of period   20,708       13,428  
Cash, cash equivalents and restricted cash at end of period $ 24,436     $ 20,708  
 

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) Fourth Quarter
Fiscal 2018
Fourth Quarter
Fiscal 2017
Consolidated GAAP net income $18,009   $5,338  
Add back:    
Interest expense, net   4,196     4,167  
Loss on the extinguishment of debt   342     353  
Provision for income taxes   67     577  
Depreciation & amortization*   7,590     6,100  
Acquisition & integration expenses   1,266      
Derivative fair value gain   (338)      
Corporate relocation expense       405  
Restructuring charges, excluding accelerated depreciation   5     1  
Effect of purchase price accounting on acquired inventories valuation**       (50)  
Purchase price adjustment to inventories       3,674  
Consolidated adjusted EBITDA $31,137   $20,565  
 
* Includes depreciation related to restructuring and realignment included in non-cash restructuring and realignment charges on the statement of cash flows.
** Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories.


(in thousands) Year Ended
July 31, 2018
  Year Ended
July 31, 2017
 
Consolidated GAAP net income $64,841     $23,633  
Add back (deduct):        
Interest expense, net   21,529       4,817  
Income taxes   (442)       8,809  
Depreciation & amortization*   29,948       16,964  
Loss on the extinguishment of debt   6,710       353  
Derivative fair value gain   (5,576)        
Debt repricing transaction costs   607        
Acquisition & integration expenses   1,843       1,550  
Corporate relocation expense         370  
Restructuring & realignment charges,
excluding accelerated depreciation
  74       20  
Effect of purchase price accounting on acquired
inventories valuation**
        3,674  
Consolidated adjusted EBITDA $119,534     $60,190  
 
* Includes depreciation related to restructuring and realignment included in non-cash restructuring and realignment charges on the statement of cash flows.
** Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories.
 

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.

Fourth Quarter Fiscal 2018 Electronic   Performance      
(in thousands) Chemicals   Materials     Corporate     Total  
Operating Income (Loss) $11,678 $14,557   ($3,873)   $22,362  
Other income (expense), net   61   (72)     (75)     (86)  
Depreciation and amortization   2,727   4,325     538     7,590  
Acquisition & integration expenses   38     1,228     1,266  
Restructuring charges   5           5  
Adjusted EBITDA   14,471   18,848     (2,182)     31,137  
Corporate allocation   3,201   2,458     (5,659)      
Adjusted EBITDA excl. corporate allocation $17,672 $21,306   ($7,841)   $31,137  
 


Year Ended July 31, 2018   Electronic      Performance            
(in thousands)   Chemicals     Materials     Corporate     Total  
Operating Income (Loss) $46,554   $54,991     ($13,420)     $88,125  
Other income (expense), net   (555)     (112)     (396)     (1,063)  
Depreciation and amortization   11,145     16,743     2,060     29,948  
Acquisition & integration expenses       163     1,680     1,843  
Restructuring charges   74             74  
Debt repricing transaction costs           607     607  
Adjusted EBITDA   57,218     71,785     (9,469)     119,534  
Corporate allocation   12,304     8,351     (20,655)      
Adjusted EBITDA excl. corporate allocation $69,522   $80,136     ($30,124)     $119,534  
 


Fourth Quarter Fiscal 2017   Electronic   Performance      
(in thousands)   Chemicals   Materials     Corporate     Total  
Operating Income (Loss) $9,234 $2,877   ($1,866)   $10,245  
Other income (expense), net   397   (101)     (106)     190  
Depreciation and amortization   3,282   2,821     (3)     6,100  
Acquisition & integration expenses   12   819     (426)     405  
Effect of purchase price accounting on acquired inventories valuation     3,674         3,674  
Restructuring charges*         (50)     (50)  
Corporate relocation expense         1     1  
Adjusted EBITDA   12,924   10,090     (2,449)     20,565  
Corporate allocation   3,896   1,006     (4,902)      
Adjusted EBITDA excl. corporate allocation $16,820 $11,096   ($7,351)   $20,565  
*Excludes depreciation


Year Ended July 31, 2017 Electronic   Performance      
(in thousands) Chemicals   Materials     Corporate     Total
Operating Income (Loss) $35,317 $13,804   ($11,788)   $37,333
Other income (expense), net 659   (167)     (215)     277
Depreciation and amortization 12,772   4,192         16,964
Acquisition & integration expenses 20   819     712     1,550
Effect of purchase price accounting on acquired inventories valuation   3,674         3,674
Restructuring charges       20     20
Corporate relocation expense       370     370
Adjusted EBITDA 48,768   22,322     (10,900)     60,190
Corporate allocation 12,894   3,282     (16,176)    
Adjusted EBITDA excl. corporate allocation $61,662 $25,604   ($27,076)   $60,190
* Excludes depreciation
 

Table 2
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE

(in thousands) Three Months Ended
  July 31,
  2018   2017
Net income $18,009     $5,338  
Items impacting pre-tax income:      
Amortization of Flowchem intangible assets   3,237        
Loss on the extinguishment of debt   342       353  
Acquisition & integration expenses   1,266       405  
Amortization of debt discounts and financing costs   298        
Restructuring & realignment charges   5       (50)  
Derivative fair value gain   (338)        
Impact of the Tax Cuts and Jobs Act   (1,321)        
Corporate relocation expense         1  
Effect of purchase price accounting on acquired inventories valuation*         3,674  
Provision for income taxes**   (1,299)         (1,186)  
Adjusted net income $20,199     $8,535  
Adjusted diluted earnings per share $1.26     $ 0.69  
Weighted average diluted shares outstanding   15,994       12,436  
 
* Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories. Only 73% of the purchase price adjustment is deductible for income taxes and has therefore been included in the calculation of the tax-effect of the items impacting pre-tax income.
** For fiscal year 2018, represents the aggregate tax-effect assuming a 27% tax rate of the items impacting pre-tax income, which is our estimated U.S. statutory federal tax rate for fiscal year 2018 following the enactment of the Tax Cut and Jobs Act of 2017 in December 2017.  For the fiscal year ended 2017, represents the aggregate tax-effect of assuming a 35% tax rate of items impacting pre-tax income.


(in thousands) Year Ended
  July 31,
  2018   2017
Net income $64,841     $23,633  
Items impacting pre-tax income:      
Amortization of Flowchem intangible assets   12,575        
Loss on extinguishment of debt   6,710       353  
Acquisition & integration expenses   1,843       1,550  
Amortization of debt discounts and financing costs   1,421        
Debt repricing transaction costs   607        
Restructuring & realignment charges   74       20  
Derivative fair value gain   (5,576)        
Impact of the Tax Cuts and Jobs Act   (12,326)        
Corporate relocation expense         370  
Effect of purchase price accounting on acquired
inventories valuation*
        3,674  
Income taxes**   (4,765)         (1,741)  
Adjusted net income $65,404     $27,859  
Adjusted diluted earnings per share $4.33     $2.27  
Weighted average diluted shares outstanding   15,111       12,286  
 
* Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories. Only 73% of the purchase price adjustment is deductible for income taxes and has therefore been included in the calculation of the tax-effect of the items impacting pre-tax income.
** For fiscal year 2018, represents the aggregate tax-effect assuming a 27% tax rate of the items impacting pre-tax income, which is our estimated U.S. statutory federal tax rate for fiscal year 2018 following the enactment of the Tax Cut and Jobs Act of 2017 in December 2017.  For the fiscal year ended 2017, represents the aggregate tax-effect of assuming a 35% tax rate of items impacting pre-tax income.
 

Table 2A
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

Fourth Quarter Fiscal 2018 KMG Chemicals, Inc.
Dollars in thousands, except EPS  
    Operating   Net   Diluted Earnings
Income   Margin   Income   Per Share
GAAP measure $22,362   18.3%     $18,009     $1.13
Amortization of Flowchem intangible assets   3,237   2.6%       2,363     0.15
Acquisition & integration expenses   1,266   1.0%       924     0.05
Restructuring & realignment charges   5   0.1%       4     0.00
Impact of the Tax Cuts and Jobs Act     0.0%       (1,321)     (0.08)
Loss on the extinguishment of debt     0.0%       250     0.02
Derivative fair value gain     0.0%       (247)     (0.02)
Amortization of debt discounts and financing costs     0.0%       217     0.01
Non-GAAP measure $26,870   22.0%     $20,199     $1.26


Year Ended July 31, 2018 KMG Chemicals, Inc.
Dollars in thousands, except EPS  
    Operating   Net   Diluted Earnings
Income   Margin   Income   Per Share
GAAP measure $88,125   18.9%     $64,841     $4.29
Amortization of Flowchem intangible assets   12,575   2.7%       9,181     0.61
Acquisition & integration expenses   1,843   0.4%       1,345     0.09
Restructuring & realignment charges   74   0.0%       54     0.01
Impact of the Tax Cuts and Jobs Act     0.0%       (12,326)     (0.82)
Loss on the extinguishment of debt     0.0%       4,899     0.32
Derivative fair value gain     0.0%       (4,070)     (0.27)
Amortization of debt discounts and financing costs     0.0%       1,037     0.07
Debt repricing transaction costs     0.0%       443     0.03
Non-GAAP measure $102,617   22.0%     $65,404     $4.33


Fourth Quarter Fiscal 2017 KMG Chemicals, Inc.
Dollars in thousands, except EPS  
    Operating   Net   Diluted Earnings
Income   Margin   Income   Per Share
GAAP measure $ 10,245     10.6%     $5,338     $0.43
Acquisition & integration expenses   405     0.4%       263     0.02
Loss on the extinguishment of debt   353     0.4%       230     0.02
Restructuring & realignment charges   (50)     (0.0%)       (32)     0.00
Corporate relocation expense   1     0.0%       1     0.00
Effect of purchase price accounting on acquired inventories valuation*   3,674     3.8%       2,735     0.22
Non-GAAP measure $14,628     15.2%     $8,535     $0.69
 
* Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories. Only 73% of the purchase price adjustment is deductible for income taxes and has therefore been included in the calculation of the tax-effect of the items impacting pre-tax income.


  KMG Chemicals, Inc.
Year Ended July 31, 2017  
Dollars in thousands, except EPS  
    Operating   Net   Diluted Earnings
Income   Margin   Income   Per Share
GAAP measure $37,333   11.2%     $23,633   $1.92
Acquisition & integration expenses   1,550   0.5%       1,008   0.08
Loss on the extinguishment of debt   353   0.1%       229   0.02
Restructuring & realignment charges   20   0.0%       13   0.01
Corporate relocation expense   370   0.1%       241   0.02
Effect of purchase price accounting on acquired inventories valuation*   3,674   1.1%       2,735   0.22
Non-GAAP measure $43,300   13.0%     $27,859   $2.27
 
* Higher costs of goods sold for our performance materials segment related to the fair value adjustment in purchase accounting for acquired inventories. Only 73% of the purchase price adjustment is deductible for income taxes and has therefore been included in the calculation of the tax-effect of the items impacting pre-tax income.
 
 
KMG Investor Relations
Eric Glover, 817-761-6006
eglover@kmgchemicals.com

KMG.png

Source: KMG Chemicals, Inc.