KMG Chemicals Inc. F1Q09 (Qtr End 10/31/08) Earnings Call Transcript

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2008-12-09 16:35:31.0

Tags: Raw Material, Price Increase, Puerto Rico, Call Transcript, Earnings, KMG Chemicals Inc., Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first call comes from Daniel Rizzo – Sidoti & Company.

Daniel Rizzo – Sidoti & Company

Just in terms of price increases, are you pretty much done? You said you caught up to raw material costs so I imagine that you're not going to be raising and give the current situation after raising prices in the near term. Is that true?

Neal Butler

There will probably be some minor price increases that we may see in the first of calendar year 2009 but basically there won't be any significant price increases going forward in this fiscal year.

Daniel Rizzo – Sidoti & Company

In terms of the Animal Health sales in Latin America and Mexico and Puerto Rico, are they still in the trial stages or has it advanced from there?

Neal Butler

The sales, I'll use Puerto Rico as an example, we actually have shipped the vast majority of our entire product line to Puerto Rico. We've had sprays, dust, the ear tags and the pour ons have all gone into Puerto Rico, so we actually have a full line of sales down there. The other markets in Latin America where we've actually shipped products to date have primarily been ear tags.

John Sobchak

One clarification, you had asked about the price increases and while we are pretty much done with price increases, those increases have not been fully manifested in the first quarter results.

Daniel Rizzo – Sidoti & Company

So you're going to see a little bit of that. We should see the remainder of that coming up in the next quarter.

John Sobchak

The results of previously enacted price increases, the improvement will still show up in subsequent quarters versus Q1.

Neal Butler

One other comment I would attach to that as well, there is a possibility that we may still see some increases on certain raw materials, some very specific raw materials where those increases do come through assuming that they do, we will increase prices to compensate for that.

Daniel Rizzo – Sidoti & Company

Could you give clarify on what those raw materials are?

Neal Butler

They would primarily be in the wood treatment areas.

Operator

Your next question comes from David Yuschak – SMH Capital.

David Yuschak – SMH Capital

It appears that the integration cost probably ran in this first quarter higher than you had talked about in the fourth quarter conference call. Is that right?

 

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