WI Biker
16 years ago
KMG Chemicals Names Ernest C. Kremling, II as New VP of Operations
Tuesday February 12, 8:30 am ET
HOUSTON--(BUSINESS WIRE)--KMG Chemicals, Inc. (NASDAQ: KMGB - News), a global provider of specialty chemicals in niche markets, today announced that Ernest C. Kremling, II recently joined the Company as the Vice President of Operations, a newly created position. Prior to joining KMG, Mr. Kremling spent 20 years with the Dow Chemical Company in various manufacturing roles, which included project management and plant and site leadership. During the course of his employment with Dow, he worked in Asia for several years and held positions of global responsibility that covered Asia, Europe and South America.
Source: KMG Chemicals, Inc.
· Ernest C. Kremling recently joined KMG Chemicals, Inc. as the Vice President of Operations. (Photo: Business Wire). View Multimedia Gallery
Neal Butler, President and CEO of KMG, commented, “Ernie brings a broad base of domestic and international experience with solid leadership skills which will prove valuable in ensuring KMG’s ability to continue to deliver double-digit earnings growth. Ernie will be responsible for global manufacturing and supply chain functions for all of the KMG businesses. As our business grows in both size and complexity, it is necessary to strengthen and improve the management talent in key roles, and Ernie represents a critical step in accomplishing this goal. We are extremely pleased to have him as a member of our leadership team.”
About KMG
KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to niche markets. The Company grows by acquiring and optimizing stable chemical product lines and businesses with established production processes. Its current operations are focused on the wood treatment, electronic, and agricultural chemical markets. For more information, visit the Company's web site at www.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.
MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5608206
Contact:
KMG Chemicals, Inc.
John V. Sobchak, 713-600-3814
Chief Financial Officer
jsobchak@kmgchemicals.com
www.kmgchemicals.com
or
Investor Relations Counsel:
The Equity Group Inc.
Melissa Dixon, 212-836-9613
MDixon@equityny.com
or
Linda Latman, 212-836-9609
LLatman@equityny.com
www.theequitygroup.com
stinkeye
17 years ago
I had KMGB in a research note....
I sent this to my readers on 5/17 when KMGB was $14.27. It was a research note on two ways to play the rails. PRPX was the other name mentioned in the note....
Here it is ...
~~~PASTE FROM 5/17~~~
[05/17/2007] All Aboard the Rails with Buffett and Icahn...
01:03:51am
2007-05-17
'Tis the season for money managers of all shapes and sizes to release their SEC 13F filings detaling their holdings for the first quarter. There are only a handful of investors in the World who move markets and sectors within the markets when their filings show a preference for a particular industry. Carl Icahn and Warren Buffett are of course firmly seated in said 'handful'.
What do the filings of these two investing guru's have in common? Railroads. Yep, perhaps one of the most boring, un-sexy, dirty sectors of the market has caught the eye of these two mavens. If it were anyone other than these two placing multi-billion dollar bets on rail, pundits would argue that rail is a terrible place to be in a slowing economy as rail is perhaps one of the most economy sensitive sectors in the market. They would also argue that with record fuel prices, margins will be squeezed. Margin pressure and reduced freight loads as our slower economy imports fewer goods from the Far East, don't make for a wise investment thesis the so-called experts would argue.
Let's be clear though, 'so-called' experts are trumped every time by anyone with the last name Icahn or Buffett. Now that their cards are on the table, pundits and market participants buy first and ask questions later. Not surprisingly, the value oriented Buffett sees some very healthy trends for the rail industry even in an economy that's growing below trend...
~~~PASTE~~~
May 16 (Bloomberg) -- Billionaire Carl Icahn bought a $122 million stake in CSX Corp., joining Warren Buffett and TCI Fund Management LLP in purchasing railroad shares.
Icahn held 2.68 million shares of Jacksonville, Florida- based CSX, the third-largest U.S. railroad, as of March 31, according to filings yesterday with the U.S. Securities and Exchange Commission. Buffett's Berkshire Hathaway Inc. and hedge fund TCI also detailed their purchases in the industry, which they disclosed in the past month.
``The rail group has attracted a lot of attention in a year and a half that could've led to a lot of smart people looking into it,'' Tony Hatch, an independent rail analyst based in New York, said yesterday in an interview. ``This group has clearly changed in many ways and has been stronger about talking about how it's changed.''
CSX and companies such as Union Pacific Corp. and Burlington Northern Sante Fe Corp. are benefiting from a tightening in rail capacity starting in 2003 and rising Asian import volume, Hatch said. Buffett, Berkshire Hathaway's chairman, said earlier this month that higher fuel prices and deregulation are making rail carriers attractive investments.
``As oil prices go up, higher diesel fuel raises costs for rails, but it raises costs for its competitors -- truckers -- roughly by a factor of four,'' Buffett, 76, said at the company's May 5 annual meeting in Omaha, Nebraska.
~~~END PASTE~~~
Buffett summed up the fuel price angle highlighting that the truckers are much more sensitive to high diesel prices than the rails are. What this snippet didn't mention was that many of the rails have actually been able to recoup their fuel costs and then some by implementing aggressive fuel surcharge programs. So aggressive in fact that Congress actually looked into the matter late last year, but took no action other than to 'warn' the rail operators not to engage in such practices. Sure, that will work... (wink, wink).
Since it's not my job to highlight mega cap rails with single share prices that are several times more than I have in my wallet right now (my wife gave me a $10 to start the week and I still have $4 left...thank god for the value menu at McD's!) I thought I'd touch on a couple names that should see not only an increase in investor interest, but a healthy uptick in demand from the rail operators that are flush with cash and profits.
Portec Rail Products (PRPX) $11.71
Portec manufactures, supplies and distributes a range of railroad products, including rail joints, rail anchors, rail spikes, railway friction management products, railway wayside data collection and data management systems and freight car securement systems. They operate through four distinct segments...
Railway Maintenance Products Division (RMP)
The Railway Maintenance Products division offers track component and friction management products and services to railroads, transit systems, and railroad contractors; and wayside detection and operating asset data management systems. This segment offers products, such as standard and insulated rail joints, gauge plates, track mats, curve blocks, and jacking systems, as well as distributes and resells purchased track components and lubricants manufactured by third parties.
Shipping Systems Division (SSD)
The Company's SSD business segment engineers and sells load securement systems to the railroad industry. These systems secure a variety of products and lading onto freight cars. Most of the assembly work for SSD is performed at RMP's Huntington, West Virginia manufacturing plant, although some manufacturing is subcontracted to independent third parties.
Portec Rail Nova Scotia Company
Operationally in Montreal, Canada the Company produces rail anchors and rail spikes at its manufacturing plant in St. Jean, Quebec, primarily for the Canadian railroads, with some products exported to the United States and for other international customers. Rail anchors and rail spikes are devices used to secure rails to ties to restrain the movement of the rail tracks.
Portec Rail Products (UK) Ltd
In the UK, PRPX operates and serves its customers in two different markets. In the rail market, the Company's product lines include friction management products and services and track component products. Prior to December 2006, it produced railway lubrication products at its Wrexham, Wales location. As a result of a business restructuring during 2006, the Company closed the Wrexham, Wales location and moved the rail operations to Sheffield, England. It has recently sold the Wrexham property for $2million. During 2006, the Company announced a business reorganization plan, which consolidated its rail and material handling operations in the United Kingdom from four locations into two, one at the Company's Sheffield, England facility (rail) and the other at its Leicester, England facility (material handling).
As railroads build out thousands of miles of new track to handle the additional capacity they expect while taking share from truckers, PRPX looks well positioned to benefit with their track components. Relative to the rest of the sector, the stock is pretty cheap here. PRPX is trading at just over 1x sales and 2x book compared to it's peers in the rail industry that trade at over 2x sales and nearly 3x book value.
PRPX earned $.48/share fully taxed last year and started 2007 off with an EPS of $.13/share besting Q1'06 by $.02. Revenues were up 18% year over year but the EPS was impacted by $.04/share of non-recurring costs related to the sale of the Wrexham location and SOX compliance. With a forward P/E of around 20 and a $.24/year dividend as a bonus, PRPX should print new highs as the railroad renaissance plays out this summer.
The other name I'm going to discuss in our railroad spotlight is a bit more obtuse in it's relationship to the rail industry....
KMG Chemicals (KMGB) $14.27
How many different industries can you play in one stock? Let's see....
Agricultural chemicals (fertilizer) ... one of the hottest spaces in the market
Hurricane Play ... a sector that will heat up and pop if we have an active storm season
Animal Health ... beef prices are escalating as feed prices soar...need to keep those cattle healthy
Railroad Maintenance ... rail operators building out new freight capacity and adding/repairing track
Believe it or not, all of those angles are present in little known KMGB. Here's the business description...
~~~PASTE~~~
KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates through purchasing product lines and acquiring companies that operate in the segment of the specialty chemical segment. The Company is involved principally in the manufacture and sale of specialty chemicals in niche markets through its wholly owned subsidiary, KMG-Bernuth, Inc. It sells the wood preserving chemicals, pentachlorophenol (penta) and creosote, to industrial customers who use these preservatives primarily to extend the useful life of utility poles and railroad crossties. Its agrochemicals include animal health pesticides and agricultural chemicals. The animal health pesticides are used on cattle, swine and poultry to protect these animals from flies and other pests. The agricultural chemicals include an herbicide used primarily for weed control in cotton and sugarcane fields and along highways. Sales made to customers in the United States were 97% of total revenues during the fiscal year ended July 31, 2006
~~~END PASTE~~~
That one paragraph covered all the industries KMGB sells into. Evidently, these are nice places to operate right now because KMGB just blew the doors off of any fiscal Q2 estimates anyone may have had for them...
~~~PASTE~~~
Second Quarter 2007 Highlights - versus second quarter of fiscal 2006
Net sales increased 25% to $19.5 million.
Net income more than doubled to $1.5 million or $0.13 per diluted share. Net earnings per diluted share was calculated on 20% more shares outstanding due to the issuance of 1.7 million shares in July of 2006 through a public offering.
First Half Financial Highlights - versus first half of fiscal 2006
Net sales increased 23% to $36.7 million.
Net income increased 116% to $3.0 million or $0.27 per diluted share. Net earnings per diluted share was calculated on 20% more shares outstanding due to the issuance of 1.7 million shares in July of 2006 through a public offering.
"Our solid results for the quarter were driven by strong results in our wood treating segments, as utilities and railroads continued maintenance on their infrastructures at a brisk pace, as well as greater contribution from our Animal Health business. Creosote sales increased 33% to $10.7 million during the second quarter over the previous year. Penta revenues were $6.2 million, versus $6.9 million in the second quarter of last year, due to greater than usual purchases by utilities during the 2006 period in the aftermath of Hurricane Katrina. We believe wood treating demand will continue to be strong for the balance of fiscal 2007. However, demand for creosote treated railroad ties has been at the very top of its historical range through 2007, and we believe that it will likely soften at some point in the future."
~~~END PASTE~~~
My guess is that the railroad tie business will remain at the top of its historical range for quite some time. Increased load factors are putting more stress everyday on an aging rail system in dire need of upgrade and maintenance. Remember too that an active hurricane season will positively impact KMGB also as utilities scramble for penta treated poles to restore power.
Management is also guiding for huge increases in revenue from their new livestock insecticide ear tag...
~~~PASTE~~~
Neal Butler, KMG's President and COO, stated "Our 2007 Ear Tag Marketing Program has been very successful with participation by 100% of our distributors. We are beginning to see follow-up orders as early shipments move to the field. We anticipate that AVENGER will become the leading insecticidal ear tag in this, its first year of introduction, and that revenues in our Animal Health segment will exceed $15 million for fiscal 2007, up from $8.7 million last year." Butler continued, "It is important to keep in mind that our Animal Health sales are seasonally weighted to the second half of our fiscal year. We have been building inventory and receivables associated with this segment of our business, and will continue to do so until our fourth fiscal quarter when payments are due and those receivables convert to cash."
~~~END PASTE~~~
WI Biker
17 years ago
KMG CHEMICALS THIRD QUARTER NET INCOME UP 104% ON 33% SALES INCREASE
HOUSTON, TX – June 4, 2007 – KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced unaudited financial results for the third quarter and nine months ended April 30, 2007.
Third Quarter 2007 Highlights – versus Third Quarter of 2006
* Net sales increased 33% to $28.0 million.
* Net income increased 104% to $3.8 million or $0.34 per diluted share.
Nine-Month 2007 Highlights – versus First Nine Months of 2006
* Net sales increased 27% to $64.7 million.
* Net income increased 109% to $6.8 million or $0.62 per diluted share.
Net earnings per diluted share in the quarter and nine-month period were calculated on 18% more shares outstanding than the comparable periods of 2006 due to the issuance of 1.7 million shares in July of 2006 through a public offering.
As announced separately this morning, Neal Butler, President and COO, has been promoted to Chief Executive Officer, effective immediately. Commenting on the quarter, Mr. Butler stated, “We are extremely pleased with the results for the third quarter, which were driven by strength throughout each of our key segments. Sales of penta, an industrial wood preservative used to treat utility poles, increased 21% to $7.9 million, due to greater demand from utilities for treated poles. Sales of creosote, an industrial wood preservative used mainly for treating railroad crossties, grew 26% to $11.3 million. This growth was achieved as a result of improved pricing implemented to offset our increased costs to purchase creosote supplies. These results were realized despite lower volume stemming from adverse weather conditions and a delay in spring maintenance by major railroads.”
“Our Animal Health segment’s sales rose 96% to $7.6 million in the third quarter, primarily due to the successful launch of our new AVENGER® insecticide cattle ear tag. Animal Health generated 27% of KMG’s revenues in the quarter, up from 18% in the comparable period. Additionally, margins were up substantially in this segment versus the comparable quarter because we no longer sell these products under the transitional distribution agreement that was in place immediately after our acquisition of that business in February 2006. We expect this segment to continue to generate strong sales and margins, and be an increasingly significant contributor.”
Commenting on the Company’s Balance Sheet, John V. Sobchak, CFO, stated, “At the close of the third quarter, the Company had cash of $7.7 million and working capital of $26.4 million. Sales in our Animal Health and Agricultural Chemicals segments are heavily weighted towards the second half of our fiscal year. As a result, inventories increased from $10.0 million at the end of fiscal 2006 to $17.0 million at the end of this fiscal year’s second quarter, in advance of the selling season for these segments. Going into the fourth quarter, inventories have decreased to $15.7 million, while receivables have increased with the extended payment terms that are standard practice in these segments. Receivables were $16.6 million on April 30, 2007, up from $10.0 million at the end of the previous quarter. During the fourth quarter, inventories should continue to decrease, along with receivables, as we receive payments for these seasonal sales. Accordingly, we should see a significant increase in our cash balance at July 31, 2007 as compared to April 30, 2007.”
Mr. Butler concluded, “We are certainly pleased with the results achieved in the fiscal year-to-date, during which net income grew at a much faster pace than sales. Our penta and creosote segments continue to perform well, and we believe wood treating demand will continue to be strong for the balance of fiscal 2007. However, replacement rates for creosote treated rail ties are at the upper end of their normal range and we continue to anticipate some softening in demand for creosote in the future. Our Animal Health segment has well surpassed our original expectations. We anticipate this segment’s sales to exceed $15.0 million for the year, up from $8.7 million last year. With regard to external growth, we continue to actively pursue and evaluate potential acquisitions, seeking those that would: (1) be meaningful contributors to our earnings, (2) enable us to capture a significant position in attractive markets, and (3) meet defined financial criteria. Additionally, we are pursuing unique alliance opportunities in targeted market segments that meet these same objectives. We remain optimistic about KMG’s prospects for continued internal and external growth.”
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