KMG Chemicals, Inc. (KMG) has reported a 4.64 percent fall in profit for the quarter ended Apr. 30, 2017. The company has earned $6.07 million, or $0.49 a share in the quarter, compared with $6.36 million, or $0.53 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.48 million, or $0.53 a share compared with $4.94 million or $0.41 a share, a year ago.

Revenue during the quarter grew 8.58 percent to $81.62 million from $75.17 million in the previous year period. Gross margin for the quarter expanded 104 basis points over the previous year period to 39.83 percent. Total expenses were 88.52 percent of quarterly revenues, down from 90.65 percent for the same period last year. This has led to an improvement of 213 basis points in operating margin to 11.48 percent.

Operating income for the quarter was $9.37 million, compared with $7.03 million in the previous year period.

However, the adjusted operating income for the quarter stood at $10 million compared to $8.03 million in the prior year period. At the same time, adjusted operating margin improved 157 basis points in the quarter to 12.25 percent from 10.69 percent in the last year period.

Chris Fraser, KMG chairman and chief executive officer, said, "KMG achieved another quarter of strong results, driven by continued growth in both our electronic chemicals and performance materials segments as well as a positive contribution from the acquisition of Sealweld. Consolidated sales grew 3% sequentially and 9% year-over-year to $81.6 million, while adjusted EBITDA improved to a record $14 million, reflecting increases in all businesses. As a result, adjusted EPS grew 29% to $0.53, marking our eleventh consecutive quarter of double-digit year-over-year growth in adjusted earnings per share."

The company has spent $23.92 million cash to meet investing activities during the nine month period as against cash outgo of $13.95 million in the last year period.

The company has spent $3.14 million cash to carry out financing activities during the nine month period as against cash outgo of $12.22 million in the last year period.

Cash and cash equivalents stood at $14.10 million as on Apr. 30, 2017, up 33.67 percent or $3.55 million from $10.55 million on Apr. 30, 2016.

Working capital increases

KMG Chemicals, Inc. has recorded an increase in the working capital over the last year. It stood at $60.08 million as at Apr. 30, 2017, up 24.74 percent or $11.91 million from $48.16 million on Apr. 30, 2016. Current ratio was at 2.42 as on Apr. 30, 2017, up from 2.07 on Apr. 30, 2016.

Cash conversion cycle (CCC) has increased to 35 days for the quarter from 31 days for the last year period. Days sales outstanding went up to 23 days for the quarter compared with 20 days for the same period last year.

Days inventory outstanding has decreased to 35 days for the quarter compared with 38 days for the previous year period. At the same time, days payable outstanding went down to 23 days for the quarter from 28 for the same period last year.