Tuesday, specialty chemicals company KMG Chemicals, Inc. (KMGB), announcing preliminary earnings and sales expectations for the first quarter, said first quarter earnings are expected to be more than two and half times that of last year, helped by measures to improve supply chain and manufacturing efficiencies as well as initiatives to cut costs in fiscal 2009.
The company said it expects record first quarter earnings per share, significantly higher than $0.14 per share reported in the corresponding period last year.
Sales are expected to be approximately $49 million for the 2010 first quarter compared to $52 million in the first quarter last year. The company said its two largest businesses, Electronic Chemicals and Wood Treating Chemicals, performed well in the first quarter.
The company said sales at its Electronic Chemicals division have risen close to pre-recessionary levels due to seasonal increase in volume in advance of the Christmas selling season for electronic goods, and higher demand.
Neal Butler, president and chief executive officer of KMG said, "Sales in our Wood Treating segment remained strong in the current first quarter, but as expected, sales eased somewhat from the peaks of the fourth quarter of fiscal 2009, and may soften further during the remainder of fiscal 2010. Our first quarter is off-season for our Animal Health business, whose sales are more heavily weighted toward the second half of our fiscal year."
KMG said with reduced debt structure, untapped revolving credit facility and increasing cash position, it is well-positioned for its next acquisition, which the company expects to consummate in fiscal 2010.
KMGB is currently up $0.46 or 3.30% and trades at $14.40.
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