KMG Chemicals Q3 Profit Down - Quick Facts

(RTTNews) - KMG Chemicals Inc. (KMG), a provider of specialty chemicals to select markets, said that its net income for the third quarter ended April 30, 2014 declined to $1.23 million from last year's $2.87 million, with earnings per share decreasing to $0.11 from $0.25 in the same quarter last year.

Adjusted earnings per share, which excluded restructuring charges and integration expenses, was $0.20, compared to $0.25 in last year's third quarter.

But, net sales for the quarter grew to $84.44 million from last year's $59.93 million. The sales increase reflected the addition of the Ultra Pure Chemicals or UPC business, acquired in May 2013.

Fiscal 2014 consolidated net sales are forecast to approximate $350 million, benefiting from the acquisition of the UPC business.

Fiscal 2014 depreciation and amortization expense is forecast at less than $15 million. In addition to this amount, the company expects to incur approximately $3 million in non-cash restructuring charges, representing accelerated depreciation expense related to the closure of the Fremont facility and cessation of manufacturing operations in Milan.

Excluding non-cash accelerated depreciation expense, cumulative restructuring charges in fiscal 2014 and fiscal 2015 are forecast to total $7 million - $9 million. Starting in fiscal 2015, benefits to operating income resulting from the restructuring of $6 million-$8 million on an annualized basis are forecast. In addition, incremental capital expenditures of approximately $2 million are expected to be incurred to accomplish these plans.