KMG Chemicals Inc (KMG) has reported a 63.01 percent jump in profit for the quarter ended Jan. 31, 2017. The company has earned $6.49 million, or $0.53 a share in the quarter, compared with $3.98 million, or $0.33 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $7.02 million, or $0.57 a share compared with $4.81 million or $0.40 a share, a year ago.
Revenue during the quarter grew 11.59 percent to $79.07 million from $70.86 million in the previous year period. Gross margin for the quarter contracted 38 basis points over the previous year period to 39.46 percent. Total expenses were 88.57 percent of quarterly revenues, down from 91.34 percent for the same period last year. This has led to an improvement of 277 basis points in operating margin to 11.43 percent.
Operating income for the quarter was $9.04 million, compared with $6.14 million in the previous year period.
However, the adjusted operating income for the quarter stood at $9.86 million compared to $7.42 million in the prior year period. At the same time, adjusted operating margin improved 199 basis points in the quarter to 12.47 percent from 10.47 percent in the last year period.
Chris Fraser, KMG chairman and chief executive officer, said, "Driven by broad-based strength across our global operations, KMG achieved outstanding results in the second quarter of fiscal 2017. In what is typically a slower seasonal quarter, KMG's sales grew 3% sequentially and 12% year-over-year to $79.1 million, and GAAP net income increased 63% year-over-year to $6.5 million. As a result, adjusted EBITDA grew 18% from the prior-year period to $13.1 million, and adjusted earnings per share was a record $0.57." Additionally, segment operating income and margins both reached record levels in the second quarter, underscoring our enhanced operational efficiency and continued focus on cost improvements."
For financial year 2017, KMG Chemicals Inc expects revenue to be in the range of $315 million to $320 million.
Operating cash flow improves significantly
KMG Chemicals Inc has generated cash of $19.42 million from operating activities during the first half, up 37.78 percent or $5.33 million, when compared with the last year period. The company has spent $5.06 million cash to meet investing activities during the first six months as against cash outgo of $6 million in the last year period.
Cash flow from financing activities was $4.21 million for the first six months as against cash outgo of $6.69 million in the last year period.
Cash and cash equivalents stood at stood at $30.59 million as at Jan. 31, 2017.
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