10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 31, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission file number: 001-35577

KMG CHEMICALS, INC.

(Exact name of registrant as specified in its charter)

Texas	75-2640529
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9555 W. Sam Houston Parkway S., Suite 600

Houston, Texas 77099

(Address of principal executive offices, including zip code)

(713) 600-3800

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE EXCHANGE ACT:

Title of Each Class	Name of each Exchange on which Registered
Common Stock, $.01 par value	The New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE EXCHANGE ACT:

Title of Each Class Name of each Exchange on which Registered

None

Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by a check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	¨	Accelerated Filer	x
Non-Accelerated Filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the closing price of $18.41 on The Nasdaq Global Market as of the last business day of our most recently completed second fiscal quarter (January 31, 2012) was $144,276,000.

As of October 12, 2012, there were 11,412,400 shares of the registrant’s common stock, par value $0.01, per share outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The proxy statement pertaining to our annual meeting of shareholders is incorporated by reference in Part III of this report.

Explanatory Note

The sole purpose of this Amendment No. 1 to KMG Chemicals, Inc.’s Annual Report on Form 10-K for the period ended July 31, 2012, filed with the Securities and Exchange Commission dated October 15, 2012 (the “Form 10-K”), is to furnish Exhibit 101 to the Form 10-K in accordance with Rule 405(a)(2) of Regulation S-T. Exhibit 101 consists of the interactive data files that were not included with the Form 10-K as allowed by the 30-day grace period of the first period in which financial statement detail tagging is required.

This Amendment No. 1 does not otherwise change or update the disclosures set forth in the Form 10-K as originally filed, and does not otherwise reflect events occurring after the original filing of the Form 10-K.

Pursuant to Rule 406T of Regulation S-T, the interactive data files contained in Exhibit 101 are not deemed filed or part of a registration statement of prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

1

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K

(a) The financial statements and financial statement schedules filed as part of this report in Item 8 are listed in the Index to Financial Statements contained in that item.

(b) The following documents are filed as exhibits. Documents marked with an asterisk (*) are management contracts or compensatory plans, and portions of documents marked with a dagger (†) have been granted confidential treatment.

All exhibits other than Exhibit 101 were previously filed or furnished, as applicable, as an exhibit to the periodic or other reports of KMG Chemicals, Inc. including its Annual Report on Form 10-K (File No. 001-35577) filed with the SEC, and are incorporated in this report.

3.1	Restated and Amended Articles of Incorporation filed as Exhibit 3(i) to the company’s filed as Exhibit 3(i) to the company’s Form 10-QSB12G filed December 6, 1996, incorporated in this report.
3.2	Bylaws filed as Exhibit 3(ii) to the company’s Form 10-QSB12G filed December 6, 1996, incorporated in this report.
3.3	Articles of Amendment to Restated and Amended Articles of Incorporation, filed December 11, 1997 filed as Exhibit 3 to the company’s second quarter 1998 report on Form 10-QSB filed December 12, 1997, incorporated in this report.
4.1	Form of Common Stock Certificate filed as Exhibit 4.1 to the company’s Form 10-QSB12G filed December 6, 1996, incorporated in this report.
10.1†	Creosote Supply Agreement dated November 1, 1998 between Rütgers and the company filed as Exhibit 10.20 to the company’s second quarter 1999 report on Form 10-QSB filed March 12, 1999, incorporated in this report.
10.2*	1996 Stock Option Plan filed as Exhibit 10.4 to the company’s Form 10-QSB12G filed December 6, 1996, incorporated in this report.
10.3*	Employment Agreement with John V. Sobchak dated June 26, 2001 filed as Exhibit 10.26 to the company’s 2001 report on Form 10-K filed October 24, 2001, incorporated in this report.
10.4*	Employment Agreement with Roger C. Jackson dated August 1, 2002 filed as Exhibit 10.31 to the company’s 2003 report on Form 10-K filed October 23, 2003, incorporated in this report.
10.5*	Employment Agreement with J. Neal Butler dated March 8, 2004 filed as Exhibit 10.18 to the company’s 2004 report on Form 10-K filed October 15, 2004, and incorporated herein by reference.
10.6*	Supplemental Executive Retirement Plan dated effective August 1, 2001 filed as Exhibit 10.27 to the company’s 2001 report on Form 10-K filed October 24, 2001, incorporated in this report.
10.7*	2004 Long-Term Incentive Compensation Plan filed as Exhibit 10.21 to the company’s report on Form 10-Q filed December 15, 2004, incorporated in this report.
10.8*	Performance-Based Restricted Stock Agreement, Series 1 dated September 2, 2005 filed as Exhibit 10.28 to the company’s report on Form 8-K filed September 7, 2005.
10.9*	Performance-Based Restricted Stock Agreement, Series 2 dated September 2, 2005 filed as Exhibit 10.29 to the company’s report on Form 8-K filed September 7, 2005.
10.10†	Sales Agreement with Koppers, Inc. dated May 8, 2007, filed as Exhibit 10.34 to the company’s report on Form 10-Q filed June 5, 2007.
10.11	Amended and Restated Credit Agreement with Wachovia Bank, National Association dated December 31, 2007 initially filed as Exhibit 10.39 to the company’s report on Form 8-K filed January 7, 2008, and re-filed on March 12, 2010 to the company’s report on Form 10-Q, and incorporated herein by this reference.
10.12	Note Purchase Agreement with The Prudential Insurance Company of America dated December 31, 2007 filed as Exhibit 10.40 to the company’s report on Form 8-K filed January 7, 2008, and incorporated herein by this reference.
10.13†	Agreement with Acme Chemical Marketing, LLC dated February 14, 2008 filed as Exhibit 10.41, to the company’s report on Form 10-Q filed March 17, 2008, and incorporated herein.
10.14*	Executive Severance Plan, dated October 10, 2008, by and between the Company and its Eligible Employees filed as Exhibit 10.42, to the company’s report on Form 8-K filed October 13, 2008, and incorporated herein by this reference.

2

10.15	First Amendment to Amended and Restated Credit Agreement and Amended Pledge Agreement with Wachovia Bank, National Association dated effective January 30, 2009 filed as Exhibit 10.43, to the company’s report on Form 10-Q filed on March 12, 2009, and incorporated herein by this reference.
10.16	Amendment No. 1 to Note Purchase Agreement with The Prudential Insurance Company of America dated effective January 30, 2009 filed as Exhibit 10.44, to the company’s report on Form 10-Q filed on March 12, 2009, and incorporated herein by this reference.
10.17†	Purchase Agreement dated December 31, 2007 with Intel Corporation filed as Exhibit 10.45 to the company’s report on Form 8-K filed May 13, 2009, incorporated herein by this reference.
10.18*	2009 Long Term Incentive Plan of the Company, filed as Exhibit 10.46 to the company’s report on Form 10-K filed October 14, 2009 and incorporated herein by this reference.
10.19	Second Amendment to Amended and Restated Credit Agreement with Wachovia Bank, National Association dated March 18, 2010 filed as Exhibit 10.47, to the company’s report on Form 8-K filed on March 30, 2010, and incorporated herein by this reference.
10.20	Amendment No. 2 to Note Purchase Agreement and Limited Consent with The Prudential Insurance Company of America dated March 18, 2010 filed as Exhibit 10.48, to the company’s report on Form 8-K filed on March 30, 2010, and incorporated herein by this reference.
10.21	Third Amendment to Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, Bank of America, N.A., The Prudential Insurance Company of America, and Pruco Life Insurance Company dated November 23, 2011 filed as Exhibit 10.49, to the company’s report on Form 8-K filed on November 23, 2011, and incorporated herein by this reference.
10.22	Amendment No. 3 to Note Purchase Agreement and limited consent with The Prudential Insurance Company of America, and Pruco Life Insurance Company dated November 32, 2011 filed as Exhibit 10.50, to the company’s report on Form 8-K filed on November 23, 2011, and incorporated herein by this reference.
21.1	Subsidiaries of the company.
23.1	Consent of KPMG LLP.
23.2	Consent of UHY LLP.
31	Certificates under Section 302 the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and the Chief Financial Officer.
32	Certificates under Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and the Chief Financial Officer.
101.INS^	XBRL Instance Document
101.SCH^	XBRL Schema Document
101.CAL^	XBRL Calculation Linkbase Document
101.DEF^	XBRL Definition Linkbase Document
101.LAB^	XBRL Label Linkbase Document
101.PRE^	XBRL Presentation Linkbase Document

^ Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

3

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KMG CHEMICALS, INC.
By:	/s/ J. Neal Butler	Date: November 9, 2012
	J. Neal Butler, President, Chief Executive Officer and Director

Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ John V. Sobchak	Date: November 9, 2012
	John V. Sobchak, Vice President and Chief Financial Officer
By:	/s/ Jack M. North	Date: November 9, 2012
	Jack M. North, Controller and Chief Accounting Officer
By:	/s/ David L. Hatcher	Date: November 9, 2012
	David L. Hatcher, Director and Chairman of the Board
By:	/s/ Gerald G. Ermentrout	Date: November 9, 2012
	Gerald G. Ermentrout, Director
By:	/s/ Christopher T. Fraser	Date: November 9, 2012
	Christopher T. Fraser, Director
By:	/s/ George W. Gilman	Date: November 9, 2012
	George W. Gilman, Director
By:	/s/ John C. Hunter, III	Date: November 9, 2012
	John C. Hunter, III, Director
By:	/s/ Fred C. Leonard	Date: November 9, 2012
	Fred C. Leonard III, Director
By:	/s/ Stephen A. Thorington	Date: November 9, 2012
	Stephen A. Thorington, Director
By:	/s/ Karen A. Twitchell	Date: November 9, 2012
	Karen A. Twitchell, Director
By:	/s/ Richard L. Urbanowski	Date: November 9, 2012
	Richard L. Urbanowski, Director

4

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Summary of Significant Accounting Policies (Details Textual) (USD $)	12 Months Ended
	Jul. 31, 2012 Person Chemicals	Jul. 31, 2011 Person	Jul. 31, 2010
Summary of Significant Accounting Policies (Textual) [Abstract]
Percentage of accounts receivable for significant customer		13.00%
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Number of industrial wood treating chemicals products	2
Number of suppliers of Creosote	2
Number of customers representing a significant portion of accounts receivable	2	1
Write offs of accounts receivable allowance	$ 16,000	$ 414,000
Depreciation expense	6,500,000	6,300,000	5,600,000
Goodwill	3,778,000	3,778,000
Book overdrafts	0	2,900,000
Advertising costs	347,000	608,000	465,000
Foreign currency translation resulting in gain/loss	$ 3,100,000	$ 2,100,000
Percentage sales of total sales contributed by electronic chemicals	58.50%
First customer [Member]
Summary of Significant Accounting Policies (Textual) [Abstract]
Percentage of accounts receivable for significant customer	12.00%
Second customer [Member]
Summary of Significant Accounting Policies (Textual) [Abstract]
Percentage of accounts receivable for significant customer	17.00%

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Long-Term Obligations (Details Textual) (USD $)	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 31, 2010	Apr. 30, 2010	Jul. 31, 2012	Jul. 31, 2011
Long Term Obligations (Textual) [Abstract]
Debt instrument effective LIBOR Plus Rate			2.25%
Long-term debt			$ 24,000,000	$ 49,279,000
Long Term Obligations (Additional Textual) [Abstract]
Portion of term facility principal payment period			24 months
Principal payment per month	458,333	666,667
Fixed charge coverage ratio maximum			1.5
Fixed charge coverage ratio minimum			1.0
Ratio of funded debt to EBITDA maximum			3.0
Ratio of funded debt to EBITDA minimum			1.0
Maximum [Member]
Long Term Obligations (Textual) [Abstract]
Debt to capitalization ratio maximum			0.50
Note Purchase Agreement [Member]
Long Term Obligations (Textual) [Abstract]
Loan maturity date			Dec. 31, 2014
Note purchase agreement interest rate			7.43%
Long-term debt			20,000,000
Secured Debt Term Loan Facility [Member]
Long Term Obligations (Textual) [Abstract]
Loan maturity date			Dec. 31, 2012
Revolving Loan Facility [Member]
Long Term Obligations (Textual) [Abstract]
Loan maturity date			Dec. 31, 2016
Debt instrument variable rate			2.25%
Variable interest rate			LIBOR plus 2.25%
Loan Credit facility			4,000,000
Amount to be borrowed under revolving loan facility			60,000,000
Proceeds received on the sale of its animal health business			$ 10,000,000
Term loan facility [member]
Long Term Obligations (Textual) [Abstract]
Variable interest rate			LIBOR plus 2.00%

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Income Taxes (Details Textual) (USD $)	12 Months Ended			3 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010	Apr. 30, 2011 Italian Tax Authority [Member]
Income Taxes (Textual) [Abstract]
Adjustments proposed by the taxing authority of additional liability	$ 0	$ 0	$ 0	$ 1,600,000
Federal income tax rate	35.00%	35.00%	35.00%
Net operating losses carried forward	1,500,000	2,100,000
Undistributed earnings of Mexico subsidiary	5,600,000
Income tax benefit/(expense)	$ 221,000	$ (203,000)	$ (94,000)

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Segment Information (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Overhead expenses allocated to segment income
Total corporate overhead expense allocation	$ 9,760	$ 7,403	$ 7,187
Electronic chemicals [Member]
Overhead expenses allocated to segment income
Total corporate overhead expense allocation	5,354	4,066	4,065
Wood treating chemicals [Member]
Overhead expenses allocated to segment income
Total corporate overhead expense allocation	$ 4,406	$ 3,337	$ 3,122

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012
Future payments under certain contractual obligations
Operating leases, first year	$ 2,294
Operating leases, second year	1,864
Operating leases, third year	681
Operating leases, fourth year	603
Operating leases, fifth year	401
Operating leases, thereafter	288
Operating leases, total	6,131
Purchase obligation, first year	86,081
Purchase obligation, second year	59,337
Purchase obligation, third year	40,539
Purchase obligation, fourth year	38,008
Purchase obligation, fifth year	27,654
Purchase obligation, thereafter	14,924
Purchase obligation, total	266,543
Contractual obligation, first year	88,375
Contractual obligation, second year	61,201
Contractual obligation, third year	41,220
Contractual obligation, fourth year	38,611
Contractual obligation, fifth year	28,055
Contractual obligation, thereafter	15,212
Contractual obligation, total	$ 272,674

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Income Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Current Deferred Tax Assets
Bad debt expense		$ 67
Inventory	780	737
Accrued liabilities	460	419
Accrued bonus	710
Other	27
Less: valuation allowance
Total current deferred tax assets	1,977	1,223
Non-Current Deferred Tax Assets
Net operating loss	411	592
Difference in depreciable basis of property	745	701
Deferred compensation	690	553
Other	5
Less: valuation allowance
Total non-current deferred tax assets	1,851	1,846
Current Deferred Tax Liabilities
Prepaid assets	(560)	(504)
Non Current Deferred Tax Liabilities
Difference in amortization basis of intangibles	(2,440)	(2,027)
Difference in depreciable basis of property	(5,328)	(4,024)
Total non-current deferred tax liabilities	(7,768)	(6,051)
Net current deferred tax asset	1,417	719
Net non-current deferred tax liability	$ (5,917)	$ (4,205)

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Earnings Per Share (Tables)

12 Months Ended

Jul. 31, 2012

Earnings Per Share [Abstract]

Basic and diluted earnings per share

	Year Ended
	2012			2011		2010
	(Amounts in thousands, except per share data)
Income from continuing operations	$	14,315		$	9,418	$	15,177
Income/(loss) from discontinued operations		(490	)		311		153
Net income	$	13,825		$	9,729	$	15,330
Weighted average shares outstanding — basic		11,363			11,309		11,183
Dilutive effect of options/warrants and stock awards		165			180		239
Weighted average shares outstanding — diluted		11,528			11,489		11,422
Basic earnings per share
Basic earnings per share from continuing operations	$	1.26		$	0.83	$	1.36
Basic earnings per share on income/(loss) from discontinued operations		(0.04	)		0.03		0.01
Basic earnings per share	$	1.22		$	0.86	$	1.37
Diluted earnings per share
Diluted earnings per share from continuing operations	$	1.24		$	0.82	$	1.33
Diluted earnings per share on income/(loss) from discontinued operations		(0.04	)		0.03		0.01
Diluted earnings per share	$	1.20		$	0.85	$	1.34

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Selected Quarterly Financial Data (Unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
SELECTED QUARTERLY FINANCIAL DATA
Net sales	$ 67,607	$ 66,579	$ 66,975	$ 71,539	$ 70,936	$ 61,899	$ 61,808	$ 60,953	$ 272,700	$ 255,596	$ 197,997
Gross Profit	20,643	20,606	17,141	18,675	16,945	16,765	17,296	17,054	77,065	68,060	66,723
Operating income	6,695	6,868	4,883	6,991	2,511	4,141	4,524	5,846	25,437	17,022	26,731
Income from continuing operations before income taxes	6,131	6,316	4,256	6,366	1,871	3,620	3,685	5,303	23,069	14,479	24,273
Net income	$ 3,863	$ 3,965	$ 2,462	$ 3,535	$ 1,182	$ 2,607	$ 2,424	$ 3,516	$ 13,825	$ 9,729	$ 15,330
Income per share from continuing operations
Basic earnings per share	$ 0.35	$ 0.34	$ 0.22	$ 0.34	$ 0.09	$ 0.21	$ 0.20	$ 0.33	$ 1.26	$ 0.83	$ 1.36
Diluted earnings per share	$ 0.34	$ 0.33	$ 0.22	$ 0.34	$ 0.09	$ 0.21	$ 0.20	$ 0.33	$ 1.24	$ 0.82	$ 1.33
Net income per share
Basic earnings per share	$ 0.34	$ 0.35	$ 0.22	$ 0.31	$ 0.10	$ 0.23	$ 0.21	$ 0.31	$ 1.22	$ 0.86	$ 1.37
Diluted earnings per share	$ 0.33	$ 0.34	$ 0.21	$ 0.31	$ 0.10	$ 0.23	$ 0.21	$ 0.31	$ 1.20	$ 0.85	$ 1.34

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Employee Benefit Plans (Details Textual) (USD $)	12 Months Ended
	Jul. 31, 2012 Age	Jul. 31, 2011	Jul. 31, 2010
Employee Benefit Plans (Textual) [Abstract]
Percent of contribution made under plan	3.00%	3.00%	3.00%
Contribution made under plan	$ 420,000	$ 393,000	$ 313,000
Period for retirement benefit supplemental to percentage of participant	10 years
Period equal to average basic salary at normal retirement	3 years
Normal retirement in earlier age	65
Minimum completion period at retirement age	10 years
Retirement age completion is credited service	60
Completion period at earlier retirement age	30 years
One executive has been designated as a participant resulted expenses	54,000	33,000	36,000
Liability under employee benefit plan	664,000	610,000
Employee benefit plan monthly payments	$ 5,531
Employee Benefit Plan monthly payments start period	2013-04

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Segment Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Assets
Total assets for reportable segments	$ 156,024				$ 160,846				$ 156,024	$ 160,846
Total assets for discontinued operations	467				10,461				467	10,461
Other current assets	3,627				7,529				3,627	7,529
Other assets	7,572				6,542				7,572	6,542
Total assets	167,690				185,378				167,690	185,378
Segment income from operations:
Total segment income from operations									29,014	20,971	31,386
Other corporate expense									(3,577)	(3,949)	(4,655)
Operating income	6,695	6,868	4,883	6,991	2,511	4,141	4,524	5,846	25,437	17,022	26,731
Interest income									1	1	5
Interest expense									(2,100)	(2,336)	(2,252)
Other expense, net									(269)	(208)	(211)
Income from continuing operations before income taxes	6,131	6,316	4,256	6,366	1,871	3,620	3,685	5,303	23,069	14,479	24,273
Sales
Net sales	67,607	66,579	66,975	71,539	70,936	61,899	61,808	60,953	272,700	255,596	197,997
Property, plant and equipment, net:
Property, plant and equipment, net	68,026				71,826				68,026	71,826
United States [Member]
Sales
Net sales									229,140	218,961	165,217
Property, plant and equipment, net:
Property, plant and equipment, Domicile	52,178				53,039				52,178	53,039
International [Member]
Sales
Net sales									43,560	36,635	32,780
Property, plant and equipment, net:
Property, plant and equipment, Foreign Countries	15,848				18,787				15,848	18,787
Reportable Segment [Member]
Sales
Net sales									272,485	255,596	197,997
All Other Segments [Member]
Sales
Net sales									$ 215

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jul. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Estimated useful lives of classes of assets

The estimated useful lives of classes of assets are as follows:

Asset Class	Life (Years)
Building	15 to 30
Plant	10 to 18
Equipment	3 to 15
Leasehold improvements	remaining life of the lease

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Intangible Assets (Details Textual) (USD $)	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Intangible Assets (Additional Textual) [Abstract]
Amortization expense	$ 548,000	$ 1,000,000	$ 1,100,000
Estimated amortization expense for fiscal years 2013	296,000
Estimated amortization expense for fiscal years 2014	289,000
Estimated amortization expense for fiscal years 2015	202,000
Estimated amortization expense for fiscal years 2016	29,000
Estimated amortization expense for fiscal years 2017	$ 29,000
Minimum [Member]
Intangible Assets (Textual) [Abstract]
Estimated useful lives of intangible assets	3 years
Maximum [Member]
Intangible Assets (Textual) [Abstract]
Estimated useful lives of intangible assets	15 years

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Inventories
Raw materials and supplies	$ 5,846	$ 7,475
Work in process	896	1,034
Supplies	1,405	1,405
Finished products	33,007	32,189
Less reserve for inventory obsolescence	(493)	(333)
Inventory, Net, Total	$ 40,661	$ 41,770

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Jul. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(Amounts in thousands, except per share data)
Year Ended July 31, 2012
Net sales	$	71,539	$	66,975	$	66,579	$	67,607
Gross profit		18,675		17,141		20,606		20,643
Operating income		6,991		4,883		6,868		6,695
Income from continuing operations before income taxes		6,366		4,256		6,316		6,131
Net income		3,535		2,462		3,965		3,863
Earnings Per share:
Income per share from continuing operations
- basic	$	0.34	$	0.22	$	0.34	$	0.35
- diluted		0.34		0.22		0.33		0.34
Net income per share
- basic		0.31		0.22		0.35		0.34
- diluted		0.31		0.21		0.34		0.33
Year Ended July 31, 2011
Net sales	$	60,953	$	61,808	$	61,899	$	70,936
Gross profit		17,054		17,296		16,765		16,945
Operating income		5,846		4,524		4,141		2,511
Income from continuing operations before income taxes		5,303		3,685		3,620		1,871
Net income		3,516		2,424		2,607		1,182
Earnings Per share:
Income per share from continuing operations
- basic	$	0.33	$	0.20	$	0.21	$	0.09
- diluted		0.33		0.20		0.21		0.09
Net income per share
- basic		0.31		0.21		0.23		0.10
- diluted		0.31		0.21		0.23		0.10

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Long-Term Obligations (Details 1)	12 Months Ended
	Jul. 31, 2012
Range One [Member]
Ratio of Funded Debt to EBITDA
Ratio of Funded Debt to EBITDA	2.75
Range Two [Member]
Ratio of Funded Debt to EBITDA
Ratio of Funded Debt to EBITDA	2.50
Range Three [Member]
Ratio of Funded Debt to EBITDA
Ratio of Funded Debt to EBITDA	2.25
Range Four [Member]
Ratio of Funded Debt to EBITDA
Ratio of Funded Debt to EBITDA	2.00
Range Five [Member]
Ratio of Funded Debt to EBITDA
Ratio of Funded Debt to EBITDA	1.75

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Discontinued Operations (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Net sales and income before income tax reported in discontinued operations
Revenue	$ 5,643	$ 10,760	$ 10,631
Income/(loss) from discontinued operations, before income taxes	$ (202)	$ 634	$ 247

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Stock-Based Compensation (Details 1) (USD $) In Thousands, except Share data, unless otherwise specified	Jul. 31, 2012
Stock option awards expected to vest
Fully vested and currently exercisable Options Outstanding	150,000
Expected to vest Options Outstanding	30,000
Total outstanding stock options Options Outstanding	180,000
Fully vested and currently exercisable Weighted-Average Exercise Price	$ 4.09
Expected to vest Weighted-Average Exercise Price	$ 4.37
Total outstanding stock options Weighted-Average Exercise Price	$ 4.13
Fully vested and currently exercisable Weighted-Average Remaining Contractual Term (years)	5 years 7 months 28 days
Expected to vest Weighted-Average Remaining Contractual Term (years)	11 years 1 month 10 days
Total outstanding stock options Weighted-Average Remaining Contractual Term (years)	6 years 6 months 26 days
Fully vested and currently exercisable Aggregate Intrinsic Value	$ 2,069
Expected to vest Aggregate Intrinsic Value	405
Total outstanding stock options Aggregate Intrinsic Value	$ 2,474

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Income Taxes (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Difference between actual tax provision
Income taxes at the federal statutory rate	$ 8,074	$ 5,068	$ 8,495
Effect of foreign operations	160	225	711
Change in valuation allowance		(627)	(882)
State income taxes, net of federal income tax effect	717	659	802
Other	(197)	(264)	(30)
Total	$ 8,754	$ 5,061	$ 9,096

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Summary of Significant Accounting Policies

12 Months Ended

Jul. 31, 2012

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General — KMG Chemicals, Inc. (the “Company”) is involved principally in the manufacture, formulation and distribution of specialty chemicals in carefully focused markets through its two wholly-owned subsidiaries, KMG Electronic Chemicals, Inc. (“KMG EC”) and KMG-Bernuth, Inc. (“KMG Bernuth”).

In its electronic chemicals business, the Company sells high purity wet process chemicals to the semiconductor industry, and in the wood treating chemicals business the Company sells two industrial wood treating chemicals, pentachlorophenol (“penta”) and creosote. The Company operates its electronic chemicals business through KMG EC in North America and through KMG Italia, S.r.l. (“KMG Italia”), a subsidiary of KMG EC, in Europe and elsewhere. That business has facilities in Pueblo, Colorado, Hollister, California and Milan, Italy. The Company manufactures penta at its plant in Matamoros, Mexico through KMG de Mexico (“KMEX”), a Mexican corporation which is a wholly-owned subsidiary of KMG Bernuth. The Company sells its penta products in the United States and Canada. The Company has two main suppliers of creosote, which it sells throughout the United States. The electronic chemicals and wood treating businesses constitute two reportable segments that the Company considers of equal importance. Although the electronic chemicals segment has net sales of 58.5% of the total net sales for reportable segments, the two segments have approximately equal income from operations. See Note 13.

Principles of Consolidation — The consolidated financial statements include the accounts of KMG Chemicals, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications — Certain reclassifications of prior year amounts have been made to conform to current year presentation.

The consolidated balance sheet as of July 31, 2011 reflected a reclassification of certain accrued taxes payable to “Accounts receivable – other” to conform to the current period presentation. The current period presentation included a net receivable reflecting the offset of the respective tax receivable and tax payable associated with the same tax jurisdiction. This reclassification had no impact on the historical consolidated statements of income or retained earnings.

During the third quarter of fiscal year 2012, the Company sold its animal health business and the related results of operations are reported as discontinued operations in the consolidated statements of income. Previously reported amounts for each of the prior year periods presented have been adjusted for the effects of discontinued operations. See Note 12.

Cash and Cash Equivalents — The Company considers all investments with original maturities of three months or less when purchased to be cash equivalents. The Company reduces cash balances when checks are disbursed. Due to the time delay in checks clearing the banks, the Company reports a negative balance in its cash disbursement accounts as a current liability which is reflected as book overdraft in the consolidated balance sheets. The Company did not have a negative balance as of July 31, 2012.

Restricted Cash — Restricted cash includes cash balances which are legally or contractually restricted to use. The Company’s restricted cash as of July 31, 2012 includes proceeds that were placed in escrow in connection with the sale of the animal health business. See Note 12.

Fair Value of Financial Instruments — The carrying value of financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the relatively short maturity of these instruments. The fair value of the Company’s debt at July 31, 2012 and 2011 approximated its carrying value since the debt obligations bear interest at a rate consistent with market rates.

Accounts Receivable — The Company’s accounts receivable are primarily from wood-treating customers and from electronic chemical customers worldwide. The Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer’s financial condition. At July 31, 2012 there were two customers that represented approximately 12% and 17%, respectively, of the Company’s accounts receivable, and at July 31, 2011 there was one customer that represented approximately 13% of the Company’s accounts receivable.

The Company records an allowance for doubtful accounts to reduce accounts receivable when the Company believes an account may not be collected. A provision for bad debt expense is recorded to selling, general and administrative expenses. The amount of bad debt expense recorded each period and the resulting adequacy of the allowance at the end of each period are determined using a customer-by-customer analyses of accounts receivable balances each period and our assessment of future bad debt exposure. Historically, write offs of accounts receivable balances have been insignificant. The allowance was $16,000 and $414,000 at July 31, 2012 and 2011, respectively.

Inventories — Inventories are valued at the lower of cost or market. For certain products, cost is generally determined using the first-in, first-out (“FIFO”) method. For certain other products the Company utilizes a weighted-average cost. The Company records inventory obsolescence as a reduction in its inventory when considered unsellable.

Property, Plant, and Equipment — Property, plant, and equipment are stated at cost less accumulated depreciation and amortization. Major renewals and betterments are capitalized. Repairs and maintenance costs are expensed as incurred.

Depreciation for equipment commences once placed in service, and depreciation for buildings and leasehold improvements commences once they are ready for their intended use. Depreciable life is determined through economic analysis. Depreciation for financial statement purposes is provided on the straight-line method.

The estimated useful lives of classes of assets are as follows:

Asset Class	Life (Years)
Building	15 to 30
Plant	10 to 18
Equipment	3 to 15
Leasehold improvements	remaining life of the lease

Depreciation expense was approximately $6.5 million, $6.3 million and $5.6 million in fiscal years 2012, 2011 and 2010, respectively.

Intangible Assets — Identifiable intangible assets with a defined life are amortized using the straight-line method over the useful lives of the assets. Identifiable intangible assets of an indefinite life are not amortized. These assets are required to be tested for impairment at least annually. If this review indicates that impairment has occurred, the Company’s carrying value of intangibles will be adjusted to fair value. Based on an assessment of qualitative factors, in accordance with GAAP, it was determined that there were no events or circumstances that would lead the Company to a determination that is more likely than not that the fair value of the applicable assets was less than its carrying value as of July 31, 2012. Based on the impairment analysis performed as of July 31, 2012 and 2011 for intangible assets not subject to amortization, the Company concluded that an impairment charge was not necessary. It is the Company’s policy to expense costs as incurred in connection with the renewal or extension of its intangible assets.

Goodwill — The Company’s goodwill is associated with the wood treating chemicals segment. The carrying value of the Company’s goodwill is reviewed at least annually, and if this review indicates that it will not be recoverable the Company’s carrying value of goodwill will be adjusted to fair value. Based on an assessment of qualitative factors it was determined that there were no events or circumstances that would lead the Company to a determination that is more likely than not that the fair value of the applicable reporting unit was less than its carrying value as of July 31, 2012 and 2011. Accordingly, the Company determined that as of July 31, 2012 and 2011, goodwill was not impaired. As a result, there was no change in the carrying value of goodwill of $3.8 million as of July 31, 2012 and 2011.

Impairment of Long-Lived Assets — Long-lived assets, including property, plant and equipment, and intangible assets with defined lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If a trigger event indicates a possible impairment, the determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. The measurement of an impairment loss for long-lived assets, where management expects to hold and use the asset, are based on the asset’s estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value.

Book Overdraft — At July 31, 2011, the Company had a book overdraft of $2.9 million that represented the amount in excess of the bank balance that was necessary to fund checks that were paid but not yet cleared. GAAP requires that the book overdrafts be classified as a current liability on the consolidated balance sheets. For purposes of reporting cash flows, the Company reports the book overdrafts as a financing activity. There was no book overdraft as of July 31, 2012.

Revenue Recognition — The Company’s chemical products are sold in the open market and revenue is recognized when risk of loss and title to the products transfers to customers. In general, risk of loss transfers upon shipment to customers.

Cost of Sales — Cost of sales includes inbound freight charges, purchasing and receiving costs, inspection costs and internal transfer costs. In the case of products manufactured by the Company, direct and indirect manufacturing costs (including depreciation and amortization) and associated plant administrative expenses are included as well as laid-in cost of raw materials consumed in the manufacturing process. We include depreciation on our property, plant and equipment in cost of sales.

Distribution Expenses — These expenses include outbound freight, storage and handling expenses and other miscellaneous costs associated with product storage, handling and distribution.

Selling, General and Administrative Expenses — These expenses include selling expenses, corporate headquarters’ expenses, amortization of intangible assets and environmental regulatory support expenses.

Advertising Costs — Our policy is to expense advertising costs as they are incurred. Advertising costs were approximately $347,000, $608,000 and $465,000 in fiscal years ended July 31, 2012, 2011 and 2010, respectively. These costs were primarily related to the animal health business which is reported as discontinued operations in the consolidated statements of income. See Note 12.

Shipping and Handling Costs — Shipping and handling costs are included in cost of sales and distribution expenses. Inbound freight charges and internal transfer costs are included in cost of sales. Product storage and handling costs and the cost of distributing products to the Company’s customers are included in distribution expenses.

Income Taxes — The Company files a consolidated United States federal income tax return, and for financial reporting purposes, provides income taxes for the differences between the financial statement carrying amounts of assets and liabilities and their tax bases in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes.”

Earnings Per Share — Basic earnings per common share amounts are calculated using the average number of common shares outstanding during each period. Diluted earnings per share assumes the issuance of restricted stock awards and the exercise of stock options having exercise prices less than the average market price during the period of the common stock, using the treasury stock method.

Foreign Currency Translation — The functional currency of the Company’s Mexico operations is the U.S. Dollar. As a result, monetary assets and liabilities for KMEX are re-measured to U.S. dollars at current rates at the balance sheet dates, income statement items are re-measured at the average monthly exchange rates for the dates those items were recognized, and certain assets (including plant and production equipment) are re-measured at historical exchange rates. Foreign currency transaction gains and losses are included in the statement of operations as incurred along with gains and losses from currency re-measurement. These gains and losses were nominal in fiscal years 2012, 2011 and 2010.

The functional currency of the Company’s KMG Italia subsidiary is the local currency (Euro). The translation adjustment resulting from currency translation of the local currency into the reporting currency (U.S. Dollar) is included as a separate component of stockholders’ equity. The assets and liabilities have been translated from Euros into U.S. Dollars using exchange rates in effect at the balance sheet dates. Results of operations have been translated using the average exchange rates during the year. Foreign currency translation resulted in a translation adjustment of $3.1 million and $2.1 million in fiscal years 2012 and 2011, respectively, each of which are included in accumulated other comprehensive loss in the consolidated balance sheets.

Stock-Based Compensation — The Company’s stock-based compensation expense is based on the fair value of the award measured on the date of grant. For stock option awards, the grant date fair value is measured using a Black-Scholes option valuation model. For stock awards, the Company’s stock price on the date of the grant is used to measure grant date fair value. For awards of stock which are based on a fixed monetary value the grant date fair value is based on the monetary value. Stock-based compensation costs are recognized as an expense over the requisite service period of the award using the straight-line method.

Recent Accounting Standards

The Company has considered all recently issued accounting standards updates and SEC rules and interpretive releases.

In July 2012, the Financial Accounting Standards Board (“FASB”) issued updated accounting guidance amending the method an entity uses to test indefinite-lived assets for impairment. Under previous guidance, an entity was required to test indefinite-lived assets for impairment on at least an annual basis, in two steps. First, an entity had to compare the fair value of the asset with its carrying amount. If the fair value of the asset was less than its carrying amount, then the second step of the test had to be performed to measure the amount of the impairment loss, if any. Under the updated guidance, an entity is not required to calculate the fair value of an asset, unless it determines that it is more likely than not that its fair value is less than its carrying amount. An entity has the option to first assess qualitative factors to determine whether it is more likely than not that an asset’s fair value is less than its carrying amount. Performing the two-step impairment test is unnecessary, when the asset’s fair value is determined to more likely than not be greater than its carrying amount. The updated guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual or interim indefinite-lived assets impairment tests performed prior to July 27, 2012, if an entity’s financial statements for the most recent annual period have not yet been issued. The Company early adopted the updated guidance for its annual impairment test for indefinite-lived assets performed as of July 31, 2012, which did not have a material impact on its financial statements. Based on the Company’s assessment, it was determined that it was more likely than not that the fair value of the Company’s indefinite-lived intangible assets was greater than the carrying amount based on our assessment and that there would be no impairment of the assets.

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Stock-Based Compensation (Details 2) (USD $)	Jul. 31, 2012	Feb. 27, 2012	Oct. 28, 2011	Oct. 11, 2011	Dec. 07, 2010	Mar. 17, 2010
Summary of the performance based stock awards granted
Maximum award (Shares)	333,616	500	25,500	98,311	103,298	106,007
Actual Shares Vested or Shares Projected to Vest	52,592	60	3,060	11,797	18,594	19,081
Series award one [Member]
Summary of the performance based stock awards granted
Date of Grant		Feb. 27, 2012	Oct. 28, 2011	Oct. 11, 2011	Dec. 07, 2010	Mar. 17, 2010
Maximum award (Shares)		300	15,300	58,987	61,980	63,605
Grant Date Fair Value		18.08	15.30	14.16	15.65	15.55
Measurement Period Ending		Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2012
Actual or Expected Percentage of Vesting		20.00%	20.00%	20.00%	30.00%	30.00%
Actual Shares Vested or Shares Projected to Vest		60	3,060	11,797	18,594	19,081
Series award two [Member]
Summary of the performance based stock awards granted
Date of Grant		Feb. 27, 2012	Oct. 28, 2011	Oct. 11, 2011	Dec. 07, 2010	Mar. 17, 2010
Maximum award (Shares)		200	10,200	39,324	41,318	42,402
Grant Date Fair Value		18.08	15.30	14.16	15.65	15.55
Measurement Period Ending		Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2012
Actual or Expected Percentage of Vesting		0.00%	0.00%	0.00%	0.00%	0.00%
Actual Shares Vested or Shares Projected to Vest

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Property, Plant and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Property, plant and equipment, net:
Land	$ 9,034	$ 10,081
Buildings and improvements	35,578	35,795
Equipment	45,924	44,098
Leasehold improvements	143	143
Property, plant and equipment, gross	90,679	90,117
Less accumulated depreciation and amortization	(28,824)	(24,388)
Property, plant and equipment, total	61,855	65,729
Construction-in-progress	6,171	6,097
Property, Plant and Equipment, Net, Total	$ 68,026	$ 71,826

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Income Taxes (Tables)

12 Months Ended

Jul. 31, 2012

Income Taxes [Abstract]

Geographical sources of income (loss) from continuing operations before income taxes

	2012		2011		2010
United States	$	21,789	$	13,716	$	22,342
Foreign		1,280		763		1,931
Income from continuing operations before income taxes	$	23,069	$	14,479	$	24,273

Components of income tax expense (benefit) from continuing operations

	2012			2011			2010
Current:
Federal	$	5,639		$	1,746		$	5,846
Foreign		686			513			487
State		1,071			719			959
		7,396			2,978			7,292
Deferred:
Federal		1,441			2,546			1,625
Foreign		(104	)		(648	)		17
State		21			185			162
		1,358			2,083			1,804
Total	$	8,754		$	5,061		$	9,096

The Company allocated income tax benefits of $221,000 and income tax expense of $203,000 and $94,000 to discontinued operations for the fiscal years ended July 31, 2012, 2011 and 2010, respectively.

Deferred tax assets and liabilities

	2012			2011
Deferred tax assets:
Current deferred tax assets:
Bad debt expense	$	—		$	67
Inventory		780			737
Accrued liabilities		460			419
Accrued bonus		710			—
Other		27			—
Total current deferred tax assets	$	1,977		$	1,223
Non-current deferred tax assets
Net operating loss	$	411		$	592
Difference in depreciable basis of property		745			701
Deferred compensation		690			553
Other		5			—
Total non-current deferred tax assets	$	1,851		$	1,846
Deferred tax liabilities:
Current deferred tax liabilities:
Prepaid assets	$	(560	)	$	(504	)
Non-current deferred tax liabilities:
Difference in amortization basis of intangibles	$	(2,440	)	$	(2,027	)
Difference in depreciable basis of property		(5,328	)		(4,024	)
Total non-current deferred tax liabilities		(7,768	)		(6,051	)
Net current deferred tax asset	$	1,417		$	719
Net non-current deferred tax liability	$	(5,917	)	$	(4,205	)

Difference between actual tax provision

	2012			2011			2010
Income taxes at the federal statutory rate	$	8,074		$	5,068		$	8,495
Effect of foreign operations		160			225			711
Change in valuation allowance		—			(627	)		(882	)
State income taxes, net of federal income tax effect		717			659			802
Other		(197	)		(264	)		(30	)
Total	$	8,754		$	5,061		$	9,096

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Property, Plant and Equipment (Tables)

12 Months Ended

Jul. 31, 2012

Property, Plant and Equipment [Abstract]

Property, plant, and equipment and related accumulated depreciation and amortization

	2012			2011
Land	$	9,034		$	10,081
Buildings and improvements		35,578			35,795
Equipment		45,924			44,098
Leasehold improvements		143			143
		90,679			90,117
Less accumulated depreciation and amortization		(28,824	)		(24,388	)
		61,855			65,729
Construction-in-progress		6,171			6,097
Property, plant and equipment, net	$	68,026		$	71,826

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Commitments and Contingencies (Details Textual) (USD $)	1 Months Ended	12 Months Ended
	Nov. 30, 2009	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Commitments and Contingencies (Textual) [Abstract]
Rent expenses related to operating leases		$ 2,300,000	$ 2,000,000	$ 2,000,000
FIFRA research and testing programs expenses		802,000	760,000	636,000
Unpaid sales tax before interest and penalties	819,000
Recorded reserve amount		372,000
Proposed adjustment from taxing authorities resulting additional income tax		$ 1,600,000

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Geographical sources of income (loss) from continuing operations before income taxes
United States									$ 21,789	$ 13,716	$ 22,342
Foreign									1,280	763	1,931
Income from continuing operations before income taxes	$ 6,131	$ 6,316	$ 4,256	$ 6,366	$ 1,871	$ 3,620	$ 3,685	$ 5,303	$ 23,069	$ 14,479	$ 24,273

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Intangible Assets (Tables)

12 Months Ended

Jul. 31, 2012

Intangible Assets [Abstract]

Intangible assets

	Number of Years
	Weighted Average		July 31, 2012
	Amortization Period		Original Cost		Accumulated Amortization			Carrying Amount
Intangible assets subject to amortization (range of useful life):
Creosote supply contract (10 years)		10.0	$	4,000	$	(4,000	)	$	—
Electronic chemicals-related contracts (3-8 years)		3.8		1,164		(1,053	)		111
Electronic chemicals-related trademarks and patents (10-15 years)		12.0		117		(46	)		71
Electronic chemicals—value of product qualifications (5 years)		5.0		1,300		(606	)		694
Total intangible assets subject to amortization		8.0	$	6,581	$	(5,705	)		876
Intangible assets not subject to amortization:
Creosote product registrations									5,339
Penta product registrations									8,765
Total intangible assets not subject to amortization									14,104
Total intangible assets, net								$	14,980
	Number of Years
	Weighted Average		July 31, 2011
	Amortization Period		Original Cost		Accumulated Amortization			Carrying Amount
Intangible assets subject to amortization (range of useful life):
Creosote supply contract (10 years)		10.0	$	4,000	$	(3,955	)	$	45
Electronic chemicals-related contracts (3-8 years)		3.8		1,164		(1,014	)		150
Electronic chemicals-related trademarks and patents (10-15 years)		12.0		117		(36	)		81
Electronic chemicals-value of product qualifications (5 years)		5.0		1,300		(347	)		953
Discontinued operations		17.6		6,529		(2,369	)		4,160
Total intangible assets subject to amortization		12.8	$	13,110	$	(7,721	)		5,389
Intangible assets not subject to amortization:
Creosote product registrations									5,339
Penta product registrations									8,765
Total intangible assets not subject to amortization									14,104
Total intangible assets, net								$	19,493

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Long-Term Obligations (Tables)

12 Months Ended

Jul. 31, 2012

Long-Term Obligations [Abstract]

Debt

	July 31, 2012		July 31, 2011
Senior Secured Debt:
Note Purchase Agreement, maturing on December 31, 2014, interest rate of 7.43%	$	20,000	$	20,000
Secured Debt: Term Loan Facility, maturing on December 31, 2012 (extinguished October 31, 2011)		—		11,333
Revolving Loan Facility, maturing on December 31, 2016, variable interest rates based on LIBOR plus 2.00% (2.25% at July 31, 2012)		4,000		17,946
Total debt		24,000		49,279
Current maturities of long-term debt		—		(8,000	)
Long-term debt, net of current maturities	$	24,000	$	41,279

Ratio of Funded Debt to EBITDA

Ratio of Funded Debt to EBITDA	Margin
Equal to or greater than 3.0 to 1.0		2.75	%
Equal to or greater than 2.5 to 1.0, but less than 3.0 to 1.0		2.50	%
Equal to or greater than 2.0 to 1.0, but less than 2.5 to 1.0		2.25	%
Equal to or greater than 1.5 to 1.0, but less than 2.0 to 1.0		2.00	%
Less than 1.5 to 1.0		1.75	%

Principal payments due under long-term debt agreements

Principal payments due under long-term debt agreements for the fiscal years ended July 31 are as follows (in thousands):

	Total		2013		2014		2015		2016		2017		Thereafter
Long-term debt	$	24,000	$	—	$	—	$	20,000	$	—	$	4,000	$	—

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Cash flows from operating activities
Net income	$ 13,825	$ 9,729	$ 15,330
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	7,018	7,354	6,711
Amortization of loan costs included in interest expense	124	109	95
Stock-based compensation expense	714	542	768
Bad debt expense		154	63
Inventory valuation adjustment	371	(94)	(104)
Gain on sale of animal health business	(90)
(Gain)/ Loss on disposal of property	99	112	(13)
Deferred income tax expense	929	2,083	1,804
Tax benefit from stock-based awards	(41)	(196)	(330)
Changes in operating assets and liabilities, net of effects of acquisition Accounts
Accounts receivable - trade	6,810	(5,909)	(9,293)
Accounts receivable - other	2,186	(1,370)	(1,084)
Inventories	(5,545)	(2,230)	(3,507)
Other current and non-current assets	(223)	(1,128)	(124)
Accounts payable	(2,801)	3,792	4,432
Accrued liabilities and other	1,873	(235)	200
Net cash provided by operating activities	25,249	12,713	14,948
Cash flows from investing activities
Additions to property, plant and equipment	(5,193)	(8,268)	(3,015)
Cash used in connection with General Chemical acquisition			(26,784)
Proceeds from sale of animal health business	10,203
Proceeds from sale of property	33	60	17
Change in restricted cash	(1,000)	201	105
Net cash provided by/(used in) investing activities	4,043	(8,007)	(29,677)
Cash flows from financing activities
Net borrowings/(payments) under revolving loan facility	(13,946)	(2,054)	20,000
Principal payments on borrowings on term loan	(11,333)	(8,000)	(6,958)
Proceeds from exercise of stock options and warrants	64	200	138
Tax benefit from stock-based awards	41	196	330
Book overdraft	(2,852)	2,852
Payment of dividends	(1,249)	(1,017)	(894)
Net cash provided by (used in) financing activities	(29,275)	(7,823)	12,616
Effect of exchange rate changes on cash	(210)	215	(333)
Net decrease in cash and cash equivalents	(193)	(2,902)	(2,446)
Cash and cash equivalents at the beginning of year	1,826	4,728	7,174
Cash and cash equivalents at end of year	1,633	1,826	4,728
Supplemental disclosures of cash flow information
Cash paid for interest	1,896	2,294	2,109
Cash paid for income taxes	$ 5,009	$ 4,387	$ 10,427

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Commitments and Contingencies (Tables)

12 Months Ended

Jul. 31, 2012

Commitments and Contingencies [Abstract]

Future payments under certain contractual obligations

	Total		2013		2014		2015		2016		2017		Thereafter
Operating leases	$	6,131	$	2,294	$	1,864	$	681	$	603	$	401	$	288
Purchase obligations (1)		266,543		86,081		59,337		40,539		38,008		27,654		14,924
Total	$	272,674	$	88,375	$	61,201	$	41,220	$	38,611	$	28,055	$	15,212

(1) Consists primarily of raw materials purchase contracts. These are typically not fixed price arrangements. The prices are based on the prevailing market prices.

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Acquisitions (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Jul. 31, 2010
Pro forma results of financial information
Revenue	$ 226,216
Operating income	28,366
Net income	$ 16,368
Earnings per share - basic	$ 1.46

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Long-Term Obligations (Details 2) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Maturities of Long-term Debt [Abstract]
2013
2014
2015	20,000
2016
2017	4,000
Thereafter
Long-term debt, net of current maturities	$ 24,000	$ 41,279

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Segment Information (Details Textual) (USD $)	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Segment Information (Additional Textual) [Abstract]
Number of reportable segments	2
Maximum Percentage of Revenue Generated From Other Customer			10.00%
Approximate deferred tax assets	467,000	644,000
Electronic chemicals [Member]
Segment Information (Textual) [Abstract]
Revenue generated from single external customer	19.00%	16.00%	18.00%
Wood treating chemicals [Member]
Segment Information (Textual) [Abstract]
Revenue generated from single external customer	12.00%	12.00%

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Current assets
Cash and cash equivalents	$ 1,633	$ 1,826
Accounts receivable
Trade, net of allowances of $16 at July 31, 2012 and $414 at July 31, 2011	28,933	36,410
Other	960	3,148
Inventories, net	40,661	41,770
Current deferred tax assets	1,417	726
Prepaid expenses and other	2,057	2,126
Total current assets	75,661	86,006
Property, plant and equipment, net	68,026	71,826
Deferred tax assets	1,129	1,176
Goodwill	3,778	3,778
Intangible assets, net	14,980	19,493
Restricted cash	1,000
Other assets, net	3,116	3,099
Total assets	167,690	185,378
Current liabilities
Accounts payable	21,855	24,899
Accrued liabilities	4,595	3,921
Book overdraft		2,852
Current deferred tax liabilities		7
Current maturities of long-term debt		8,000
Employee incentive accrual	2,227	1,103
Total current liabilities	28,677	40,782
Long-term debt, net of current maturities	24,000	41,279
Deferred tax liabilities	7,046	5,381
Other long-term liabilities	1,200	1,406
Total liabilities	60,923	88,848
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
Common stock, $.01 par value, 40,000,000 shares authorized, 11,405,808 shares issued and outstanding at July 31, 2012 and 11,318,941 shares issued and outstanding at July 31, 2011	114	113
Additional paid-in capital	26,022	25,256
Accumulated other comprehensive loss	(4,339)	(1,233)
Retained earnings	84,970	72,394
Total stockholders' equity	106,767	96,530
Total liabilities and stockholders' equity	$ 167,690	$ 185,378

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Income Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Current:
Federal	$ 5,639	$ 1,746	$ 5,846
Foreign	686	513	487
State	1,071	719	959
Total current	7,396	2,978	7,292
Deferred:
Federal	1,441	2,546	1,625
Foreign	(104)	(648)	17
State	21	185	162
Total deferred	1,358	2,083	1,804
Total	$ 8,754	$ 5,061	$ 9,096

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balance at Jul. 31, 2009	$ 70,977	$ 111	$ 23,084	$ (1,464)	$ 49,246
Beginning Balance, shares at Jul. 31, 2009		11,101
Cash dividends	(894)				(894)
Stock options/warrants exercised, shares		61
Stock options/warrants exercised, value	138		138
Restricted stock issued, shares		67
Restricted stock issued, value		1	(1)
Stock-based compensation expense	768		768
Tax benefit from stock-based awards	330		330
Net income	15,330				15,330
Gain/Loss on foreign currency translation	(1,871)			(1,871)
Ending Balance at Jul. 31, 2010	84,778	112	24,319	(3,335)	63,682
Ending Balance, shares at Jul. 31, 2010		11,229
Cash dividends	(1,017)				(1,017)
Stock options/warrants exercised, shares		50
Stock options/warrants exercised, value	200		200
Restricted stock issued, shares		40
Restricted stock issued, value		1	(1)
Stock-based compensation expense	542		542
Tax benefit from stock-based awards	196		196
Net income	9,729				9,729
Gain/Loss on foreign currency translation	2,102			2,102
Ending Balance at Jul. 31, 2011	96,530	113	25,256	(1,233)	72,394
Ending Balance, shares at Jul. 31, 2011		11,319
Cash dividends	(1,249)				(1,249)
Stock options/warrants exercised, shares		37
Stock options/warrants exercised, value	55		55
Restricted stock issued, shares		50
Restricted stock issued, value		1	(1)
Stock-based compensation expense	714		714
Tax benefit from stock-based awards	41		41
Other	(43)		(43)
Net income	13,825				13,825
Gain/Loss on foreign currency translation	(3,106)			(3,106)
Ending Balance at Jul. 31, 2012	$ 106,767	$ 114	$ 26,022	$ (4,339)	$ 84,970
Ending Balance, shares at Jul. 31, 2012		11,406

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Earnings Per Share (Details Textual)	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011 Maximum [Member]	Jul. 31, 2010 Maximum [Member]
Earnings Per Share (Textual) [Abstract]
Number of Shares potentially dilutive securities not included in the computation of diluted earnings per share	4,972	1,000	1,000

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Discontinued Operations (Tables)

12 Months Ended

Jul. 31, 2012

Discontinued Operations [Abstract]

Components of assets and liabilities related to the discontinued operations

Inventories	$	5,401
Prepaid commissions		65
Total current assets		5,466
Property, plant and equipment, net		191
Intangible assets, net		4,160
Total assets	$	9,817

Gain (loss) from discontinued operations before income taxes

Cash consideration	$	10,203
Less: net book value of assets sold as of February 29, 2012 and transaction costs		(10,113	)
Total pre-tax gain	$	90

Sales and income before income tax reported in discontinued operations

	2012			2011		2010
	(Amounts in thousands)
Revenue	$	5,643		$	10,760	$	10,631
Income (loss) before income taxes		(202	)		634		247

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Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2011
Components of assets and liabilities related to the discontinued operations
Inventories	$ 5,401
Prepaid commissions	65
Total current assets	5,466
Property, plant and equipment, net	191
Intangible assets, net	4,160
Total assets	$ 9,817

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Jul. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly results for the fiscal years ended July 31, 2012 and 2011 exclude the effect of discontinued operations, except for net income amounts. See note 12 for further detail on discontinued operations.

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(Amounts in thousands, except per share data)
Year Ended July 31, 2012
Net sales	$	71,539	$	66,975	$	66,579	$	67,607
Gross profit		18,675		17,141		20,606		20,643
Operating income		6,991		4,883		6,868		6,695
Income from continuing operations before income taxes		6,366		4,256		6,316		6,131
Net income		3,535		2,462		3,965		3,863
Earnings Per share:
Income per share from continuing operations
- basic	$	0.34	$	0.22	$	0.34	$	0.35
- diluted		0.34		0.22		0.33		0.34
Net income per share
- basic		0.31		0.22		0.35		0.34
- diluted		0.31		0.21		0.34		0.33
Year Ended July 31, 2011
Net sales	$	60,953	$	61,808	$	61,899	$	70,936
Gross profit		17,054		17,296		16,765		16,945
Operating income		5,846		4,524		4,141		2,511
Income from continuing operations before income taxes		5,303		3,685		3,620		1,871
Net income		3,516		2,424		2,607		1,182
Earnings Per share:
Income per share from continuing operations
- basic	$	0.33	$	0.20	$	0.21	$	0.09
- diluted		0.33		0.20		0.21		0.09
Net income per share
- basic		0.31		0.21		0.23		0.10
- diluted		0.31		0.21		0.23		0.10

Earnings per share amounts are computed independently for each quarter presented. Therefore, the sum of the quarterly earnings per share may not equal annual earnings per share.

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Segment Information (Tables)

12 Months Ended

Jul. 31, 2012

Segment Information [Abstract]

Revenues and Assets

	2012		2011		2010
	(Amounts in thousands)
Sales
Electronic chemicals	$	159,451	$	151,481	$	111,990
Wood treating		113,034		104,115		86,007
Total sales for reportable segments	$	272,485	$	255,596	$	197,997
Depreciation and amortization
Electronic chemicals	$	5,933	$	5,607	$	4,784
Wood treating		504		814		894
Discontinued operations		342		664		766
Other — general corporate		239		269		267
Total consolidated depreciation and amortization	$	7,018	$	7,354	$	6,711
Segment income from operations (1)
Electronic chemicals	$	13,392	$	6,205	$	8,379
Wood treating		15,622		14,766		23,007
Total segment income from operations	$	29,014	$	20,971	$	31,386
Capital expenditures
Electronic chemicals	$	4,493	$	7,359	$	29,066
Wood treating		393		354		482
Discontinued operations		—		17		64
Included in acquisition		—		—		(26,784	)
Other — general corporate		307		538		187
Total capital expenditures	$	5,193	$	8,268	$	3,015
Total assets
Electronic chemicals	$	111,144	$	114,929
Wood treating		44,880		45,917
Total assets for reportable segments	$	156,024	$	160,846

(1) Segment income from operations includes allocated corporate overhead expenses.

Overhead expenses allocated to segment income

	2012		2011		2010
	(Amounts in thousands)
Electronic chemicals	$	5,354	$	4,066	$	4,065
Wood treating		4,406		3,337		3,122
Total corporate overhead expense allocation	$	9,760	$	7,403	$	7,187

Reconciliation of total segment to consolidated amounts

	2012			2011			2010
	(Amounts in thousands)
Assets:
Total assets for reportable segments	$	156,024		$	160,846
Total assets for discontinued operations (1)		467			10,461
Other current assets		3,627			7,529
Other assets		7,572			6,542
Total assets	$	167,690		$	185,378
Sales:
Total sales for reportable segments	$	272,485		$	255,596		$	197,997
Other (2)		215			—			—
Net sales	$	272,700		$	255,596		$	197,997
Segment income from operations:
Total segment income from operations (3)	$	29,014		$	20,971		$	31,386
Other corporate expense (3)		(3,577	)		(3,949	)		(4,655	)
Operating income		25,437			17,022			26,731
Interest income		1			1			5
Interest expense		(2,100	)		(2,336	)		(2,252	)
Other expense, net		(269	)		(208	)		(211	)
Income from continuing operations before income taxes	$	23,069		$	14,479		$	24,273

Geographic data

	2012		2011		2010
	(Amounts in thousands)
Net sales:
United States	$	229,140	$	218,961	$	165,217
International		43,560		36,635		32,780
Net sales	$	272,700	$	255,596	$	197,997
Property, plant and equipment, net:
United States	$	52,178	$	53,039
International		15,848		18,787
Property, plant and equipment, net	$	68,026	$	71,826

(1) Includes approximately $467,000 and $644,000 of deferred tax assets as of July 31, 2012 and 2011, respectively. For fiscal year ended 2011 the remainder of assets was related to the animal health business sold in March 2012.

(2) Reflects fees from the transition services agreement in connection with the sale of the animal health business. See Note 12.

(3) Other corporate expense primarily represents employee stock-based compensation expenses and those expenses associated with the Company’s operation as a public entity such as board compensation, audit expense and fees related to the listing of our stock. The amounts presented include corporate overhead previously allocated to the animal health business. These amounts were not reallocated to the remaining segments.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jul. 31, 2012

Summary of Significant Accounting Policies [Abstract]

General

General — KMG Chemicals, Inc. (the “Company”) is involved principally in the manufacture, formulation and distribution of specialty chemicals in carefully focused markets through its two wholly-owned subsidiaries, KMG Electronic Chemicals, Inc. (“KMG EC”) and KMG-Bernuth, Inc. (“KMG Bernuth”).

In its electronic chemicals business, the Company sells high purity wet process chemicals to the semiconductor industry, and in the wood treating chemicals business the Company sells two industrial wood treating chemicals, pentachlorophenol (“penta”) and creosote. The Company operates its electronic chemicals business through KMG EC in North America and through KMG Italia, S.r.l. (“KMG Italia”), a subsidiary of KMG EC, in Europe and elsewhere. That business has facilities in Pueblo, Colorado, Hollister, California and Milan, Italy. The Company manufactures penta at its plant in Matamoros, Mexico through KMG de Mexico (“KMEX”), a Mexican corporation which is a wholly-owned subsidiary of KMG Bernuth. The Company sells its penta products in the United States and Canada. The Company has two main suppliers of creosote, which it sells throughout the United States.

Principles of Consolidation

Principles of Consolidation — The consolidated financial statements include the accounts of KMG Chemicals, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Reclassifications — Certain reclassifications of prior year amounts have been made to conform to current year presentation.

The consolidated balance sheet as of July 31, 2011 reflected a reclassification of certain accrued taxes payable to “Accounts receivable – other” to conform to the current period presentation. The current period presentation included a net receivable reflecting the offset of the respective tax receivable and tax payable associated with the same tax jurisdiction. This reclassification had no impact on the historical consolidated statements of income or retained earnings.

During the third quarter of fiscal year 2012, the Company sold its animal health business and the related results of operations are reported as discontinued operations in the consolidated statements of income. Previously reported amounts for each of the prior year periods presented have been adjusted for the effects of discontinued operations. See Note 12.

Cash and Cash Equivalents

Cash and Cash Equivalents — The Company considers all investments with original maturities of three months or less when purchased to be cash equivalents. The Company reduces cash balances when checks are disbursed. Due to the time delay in checks clearing the banks, the Company reports a negative balance in its cash disbursement accounts as a current liability which is reflected as book overdraft in the consolidated balance sheets. The Company did not have a negative balance as of July 31, 2012.

Restricted Cash

Restricted Cash — Restricted cash includes cash balances which are legally or contractually restricted to use. The Company’s restricted cash as of July 31, 2012 includes proceeds that were placed in escrow in connection with the sale of the animal health business. See Note 12.

Fair Value of Financial Instruments

Fair Value of Financial Instruments — The carrying value of financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the relatively short maturity of these instruments. The fair value of the Company’s debt at July 31, 2012 and 2011 approximated its carrying value since the debt obligations bear interest at a rate consistent with market rates.

Accounts Receivable

Accounts Receivable — The Company’s accounts receivable are primarily from wood-treating customers and from electronic chemical customers worldwide. The Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer’s financial condition. At July 31, 2012 there were two customers that represented approximately 12% and 17%, respectively, of the Company’s accounts receivable, and at July 31, 2011 there was one customer that represented approximately 13% of the Company’s accounts receivable.

The Company records an allowance for doubtful accounts to reduce accounts receivable when the Company believes an account may not be collected. A provision for bad debt expense is recorded to selling, general and administrative expenses. The amount of bad debt expense recorded each period and the resulting adequacy of the allowance at the end of each period are determined using a customer-by-customer analyses of accounts receivable balances each period and our assessment of future bad debt exposure. Historically, write offs of accounts receivable balances have been insignificant. The allowance was $16,000 and $414,000 at July 31, 2012 and 2011, respectively.

Inventories

Inventories — Inventories are valued at the lower of cost or market. For certain products, cost is generally determined using the first-in, first-out (“FIFO”) method. For certain other products the Company utilizes a weighted-average cost. The Company records inventory obsolescence as a reduction in its inventory when considered unsellable.

Property, Plant, and Equipment

Property, Plant, and Equipment — Property, plant, and equipment are stated at cost less accumulated depreciation and amortization. Major renewals and betterments are capitalized. Repairs and maintenance costs are expensed as incurred.

Depreciation for equipment commences once placed in service, and depreciation for buildings and leasehold improvements commences once they are ready for their intended use. Depreciable life is determined through economic analysis. Depreciation for financial statement purposes is provided on the straight-line method.

Intangible Assets

Intangible Assets — Identifiable intangible assets with a defined life are amortized using the straight-line method over the useful lives of the assets. Identifiable intangible assets of an indefinite life are not amortized. These assets are required to be tested for impairment at least annually. If this review indicates that impairment has occurred, the Company’s carrying value of intangibles will be adjusted to fair value. Based on an assessment of qualitative factors, in accordance with GAAP, it was determined that there were no events or circumstances that would lead the Company to a determination that is more likely than not that the fair value of the applicable assets was less than its carrying value as of July 31, 2012. Based on the impairment analysis performed as of July 31, 2012 and 2011 for intangible assets not subject to amortization, the Company concluded that an impairment charge was not necessary. It is the Company’s policy to expense costs as incurred in connection with the renewal or extension of its intangible assets.

Goodwill

Goodwill — The Company’s goodwill is associated with the wood treating chemicals segment. The carrying value of the Company’s goodwill is reviewed at least annually, and if this review indicates that it will not be recoverable the Company’s carrying value of goodwill will be adjusted to fair value. Based on an assessment of qualitative factors it was determined that there were no events or circumstances that would lead the Company to a determination that is more likely than not that the fair value of the applicable reporting unit was less than its carrying value as of July 31, 2012 and 2011. Accordingly, the Company determined that as of July 31, 2012 and 2011, goodwill was not impaired. As a result, there was no change in the carrying value of goodwill of $3.8 million as of July 31, 2012 and 2011.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets — Long-lived assets, including property, plant and equipment, and intangible assets with defined lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If a trigger event indicates a possible impairment, the determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. The measurement of an impairment loss for long-lived assets, where management expects to hold and use the asset, are based on the asset’s estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value.

Book Overdraft

Book Overdraft — At July 31, 2011, the Company had a book overdraft of $2.9 million that represented the amount in excess of the bank balance that was necessary to fund checks that were paid but not yet cleared. GAAP requires that the book overdrafts be classified as a current liability on the consolidated balance sheets. For purposes of reporting cash flows, the Company reports the book overdrafts as a financing activity. There was no book overdraft as of July 31, 2012.

Revenue Recognition

Revenue Recognition — The Company’s chemical products are sold in the open market and revenue is recognized when risk of loss and title to the products transfers to customers. In general, risk of loss transfers upon shipment to customers.

Cost of Sales

Cost of Sales — Cost of sales includes inbound freight charges, purchasing and receiving costs, inspection costs and internal transfer costs. In the case of products manufactured by the Company, direct and indirect manufacturing costs (including depreciation and amortization) and associated plant administrative expenses are included as well as laid-in cost of raw materials consumed in the manufacturing process. We include depreciation on our property, plant and equipment in cost of sales.

Distribution Expenses

Distribution Expenses — These expenses include outbound freight, storage and handling expenses and other miscellaneous costs associated with product storage, handling and distribution.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses — These expenses include selling expenses, corporate headquarters’ expenses, amortization of intangible assets and environmental regulatory support expenses.

Advertising Costs

Advertising Costs — Our policy is to expense advertising costs as they are incurred. Advertising costs were approximately $347,000, $608,000 and $465,000 in fiscal years ended July 31, 2012, 2011 and 2010, respectively. These costs were primarily related to the animal health business which is reported as discontinued operations in the consolidated statements of income. See Note 12.

Shipping and Handling Costs

Shipping and Handling Costs — Shipping and handling costs are included in cost of sales and distribution expenses. Inbound freight charges and internal transfer costs are included in cost of sales. Product storage and handling costs and the cost of distributing products to the Company’s customers are included in distribution expenses.

Income Taxes

Income Taxes — The Company files a consolidated United States federal income tax return, and for financial reporting purposes, provides income taxes for the differences between the financial statement carrying amounts of assets and liabilities and their tax bases in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes.”

Earnings Per Share

Earnings Per Share — Basic earnings per common share amounts are calculated using the average number of common shares outstanding during each period. Diluted earnings per share assumes the issuance of restricted stock awards and the exercise of stock options having exercise prices less than the average market price during the period of the common stock, using the treasury stock method.

Foreign Currency Translation

Foreign Currency Translation — The functional currency of the Company’s Mexico operations is the U.S. Dollar. As a result, monetary assets and liabilities for KMEX are re-measured to U.S. dollars at current rates at the balance sheet dates, income statement items are re-measured at the average monthly exchange rates for the dates those items were recognized, and certain assets (including plant and production equipment) are re-measured at historical exchange rates. Foreign currency transaction gains and losses are included in the statement of operations as incurred along with gains and losses from currency re-measurement. These gains and losses were nominal in fiscal years 2012, 2011 and 2010.

The functional currency of the Company’s KMG Italia subsidiary is the local currency (Euro). The translation adjustment resulting from currency translation of the local currency into the reporting currency (U.S. Dollar) is included as a separate component of stockholders’ equity. The assets and liabilities have been translated from Euros into U.S. Dollars using exchange rates in effect at the balance sheet dates. Results of operations have been translated using the average exchange rates during the year. Foreign currency translation resulted in a translation adjustment of $3.1 million and $2.1 million in fiscal years 2012 and 2011, respectively, each of which are included in accumulated other comprehensive loss in the consolidated balance sheets.

Stock-Based Compensation

Stock-Based Compensation — The Company’s stock-based compensation expense is based on the fair value of the award measured on the date of grant. For stock option awards, the grant date fair value is measured using a Black-Scholes option valuation model. For stock awards, the Company’s stock price on the date of the grant is used to measure grant date fair value. For awards of stock which are based on a fixed monetary value the grant date fair value is based on the monetary value. Stock-based compensation costs are recognized as an expense over the requisite service period of the award using the straight-line method.

Recent Accounting Standards

Recent Accounting Standards

The Company has considered all recently issued accounting standards updates and SEC rules and interpretive releases.

In July 2012, the Financial Accounting Standards Board (“FASB”) issued updated accounting guidance amending the method an entity uses to test indefinite-lived assets for impairment. Under previous guidance, an entity was required to test indefinite-lived assets for impairment on at least an annual basis, in two steps. First, an entity had to compare the fair value of the asset with its carrying amount. If the fair value of the asset was less than its carrying amount, then the second step of the test had to be performed to measure the amount of the impairment loss, if any. Under the updated guidance, an entity is not required to calculate the fair value of an asset, unless it determines that it is more likely than not that its fair value is less than its carrying amount. An entity has the option to first assess qualitative factors to determine whether it is more likely than not that an asset’s fair value is less than its carrying amount. Performing the two-step impairment test is unnecessary, when the asset’s fair value is determined to more likely than not be greater than its carrying amount. The updated guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual or interim indefinite-lived assets impairment tests performed prior to July 27, 2012, if an entity’s financial statements for the most recent annual period have not yet been issued. The Company early adopted the updated guidance for its annual impairment test for indefinite-lived assets performed as of July 31, 2012, which did not have a material impact on its financial statements. Based on the Company’s assessment, it was determined that it was more likely than not that the fair value of the Company’s indefinite-lived intangible assets was greater than the carrying amount based on our assessment and that there would be no impairment of the assets.

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Discontinued Operations (Details Textual) (USD $)	12 Months Ended
	Jul. 31, 2012 Extensions Employees	Jul. 31, 2011	Jul. 31, 2010	Mar. 01, 2012
Discontinued Operations (Textual) [Abstract]
Number of employees hired by contractor	2
Dismantling expense incurred			$ 0
Dismantling of related equipment and the accident cost	599,000	120,000
Amount for business sold	10,203,000
Restricted cash held in escrow related to business sale				1,000,000
Period of escrow deposit release	5 years
Period for manufacturing products under transition services agreement	1 year
Number of half yearly extensions	2
Extension period for manufacturing products under transition services agreement	6 months
Gain on sale	$ 90,000

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Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Consolidated Statements of Stockholders' Equity [Abstract]
Cash dividend per share	$ 0.11	$ 0.09	$ 0.08

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Consolidated Balance Sheets [Abstract]
Allowances for accounts receivables	$ 16	$ 414
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares, issued	11,405,808	11,318,941
Common stock, shares outstanding	11,405,808	11,318,941

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Employee Benefit Plans

12 Months Ended

Jul. 31, 2012

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS

9. EMPLOYEE BENEFIT PLANS

The Company has a defined contribution 401(k) plan covering substantially all of its U.S. employees. The Company makes matching contributions under this plan of up to 3% of the participant’s compensation. Company contributions to the plan totaled approximately $420,000, $393,000 and $313,000 in fiscal years 2012, 2011 and 2010, respectively.

In July 2001, the Company adopted a supplemental executive retirement plan. Only persons specifically designated by the Company may be participants in the plan. The plan is unfunded and amounts payable to participants are general obligations of the Company. The plan provides that a participant will be paid a supplemental retirement benefit for 10 years equal to a percentage of the participant’s three-year average base salary at normal retirement. The benefit payable to participants is reduced by the equivalent actuarial value of the Company’s other pension plan payments to the participant, if any, the Company’s 401(k) plan and one-half social security benefits. Normal retirement is the earlier of age 65 and completion of 10 years credited service or age 60 with 30 years credited service. One executive has been designated as a participant. The Company recorded approximately $54,000 $33,000 and $36,000 of expenses for fiscal years 2012, 2011 and 2010, respectively related to the plan. As of July 31, 2012, and 2011, the liability under this plan was approximately $664,000 and $610,000, respectively. Monthly payments of $5,531 are scheduled to begin effective April 2013.

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Document and Entity Information (USD $)	12 Months Ended
	Jul. 31, 2012	Oct. 12, 2012	Jan. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	KMG CHEMICALS INC
Entity Central Index Key	0001028215
Document Type	10-K
Document Period End Date	Jul. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--07-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 144,276,000
Entity Common Stock, Shares Outstanding		11,412,400

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Earnings Per Share

12 Months Ended

Jul. 31, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

10. EARNINGS PER SHARE

Basic earnings per share have been computed by dividing net income by the weighted average shares outstanding. Diluted earnings per share have been computed by dividing net income by the weighted average shares outstanding plus potentially dilutive common shares. The following table presents information necessary to calculate basic and diluted earnings per share for periods indicated:

	Year Ended
	2012			2011		2010
	(Amounts in thousands, except per share data)
Income from continuing operations	$	14,315		$	9,418	$	15,177
Income/(loss) from discontinued operations		(490	)		311		153
Net income	$	13,825		$	9,729	$	15,330
Weighted average shares outstanding — basic		11,363			11,309		11,183
Dilutive effect of options/warrants and stock awards		165			180		239
Weighted average shares outstanding — diluted		11,528			11,489		11,422
Basic earnings per share
Basic earnings per share from continuing operations	$	1.26		$	0.83	$	1.36
Basic earnings per share on income/(loss) from discontinued operations		(0.04	)		0.03		0.01
Basic earnings per share	$	1.22		$	0.86	$	1.37
Diluted earnings per share
Diluted earnings per share from continuing operations	$	1.24		$	0.82	$	1.33
Diluted earnings per share on income/(loss) from discontinued operations		(0.04	)		0.03		0.01
Diluted earnings per share	$	1.20		$	0.85	$	1.34

Outstanding stock-based awards are not included in the computation of diluted earnings per share under the treasury stock method, if including them would be anti-dilutive. There was an average of four thousand nine hundred seventy-two shares for the fiscal year ended 2012 and less than one thousand shares of potentially dilutive securities for the fiscal years ended 2011 and 2010, not included in the computation of diluted earnings per share.

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Consolidated Statements of Income [Abstract]
Net sales	$ 272,700	$ 255,596	$ 197,997
Cost of sales	195,635	187,536	131,274
Gross profit	77,065	68,060	66,723
Distribution expenses	26,770	28,821	19,054
Selling, general and administrative expenses	24,858	22,217	20,938
Operating income	25,437	17,022	26,731
Other income/(expense)
Interest income	1	1	5
Interest expense	(2,100)	(2,336)	(2,252)
Other, net	(269)	(208)	(211)
Total other expense, net	(2,368)	(2,543)	(2,458)
Income from continuing operations before income taxes	23,069	14,479	24,273
Provision for income taxes	(8,754)	(5,061)	(9,096)
Income from continuing operations	14,315	9,418	15,177
Discontinued operations
Income/(loss) from discontinued operations, before income taxes	(711)	514	247
Income tax benefit/(expense)	221	(203)	(94)
Income/(loss) from discontinued operations	(490)	311	153
Net income	$ 13,825	$ 9,729	$ 15,330
Basic
Basic earnings per share	$ 1.26	$ 0.83	$ 1.36
Income/(loss) from discontinued operations	$ (0.04)	$ 0.03	$ 0.01
Net income	$ 1.22	$ 0.86	$ 1.37
Diluted
Diluted earnings per share	$ 1.24	$ 0.82	$ 1.33
Income/(loss) from discontinued operations	$ (0.04)	$ 0.03	$ 0.01
Net income	$ 1.20	$ 0.85	$ 1.34
Weighted average shares outstanding:
Basic	11,363	11,309	11,183
Diluted	11,528	11,489	11,422

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Property, Plant and Equipment

12 Months Ended

Jul. 31, 2012

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment and related accumulated depreciation and amortization are summarized as follows at July 31, 2012 and 2011 (in thousands):

	2012			2011
Land	$	9,034		$	10,081
Buildings and improvements		35,578			35,795
Equipment		45,924			44,098
Leasehold improvements		143			143
		90,679			90,117
Less accumulated depreciation and amortization		(28,824	)		(24,388	)
		61,855			65,729
Construction-in-progress		6,171			6,097
Property, plant and equipment, net	$	68,026		$	71,826

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Inventories

12 Months Ended

Jul. 31, 2012

Inventories [Abstract]

INVENTORIES

3. INVENTORIES

Inventories are summarized as follows at July 31, 2012 and 2011 (in thousands):

	2012			2011
Raw materials and supplies	$	5,846		$	7,475
Work in process		896			1,034
Supplies		1,405			1,405
Finished products		33,007			32,189
Less reserve for inventory obsolescence		(493	)		(333	)
Inventories, net	$	40,661		$	41,770

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Jul. 31, 2012

Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

Schedule II — Valuation and Qualifying Accounts

Fiscal years ended July 31, 2012, 2011 and 2010

Description	Balance at beginning of period		Charged to costs and expenses			Additions/ Deductions			Balance at end of period
Year ended July 31, 2012:
Allowance for doubtful accounts	$	414,000	$	—		$	(398,000	)	$	16,000
Inventory obsolescence		333,000		272,000			(112,000	)		493,000
Valuation allowance on deferred tax assets		—		—			—			—
Year ended July 31, 2011:
Allowance for doubtful accounts	$	260,000	$	154,000		$	—		$	414,000
Inventory obsolescence		418,000		(34,000	)		(51,000	)		333,000
Valuation allowance on deferred tax assets		627,000		(627,000	)		—			—
Year ended July 31, 2010:
Allowance for doubtful accounts	$	595,000	$	63,000		$	(398,000	)	$	260,000
Inventory obsolescence		395,000		171,000			(148,000	)		418,000
Valuation allowance on deferred tax assets		1,509,000		(882,000	)		—			627,000

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Stock-Based Compensation

12 Months Ended

Jul. 31, 2012

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

Stock-Based Incentive Plans

The Company adopted a 2009 Long-Term Incentive Plan (“2009 LTI Plan”) in October 2009, and it was approved by the shareholders at the annual meeting in December 2009. The Company adopted a 2004 Long-Term Incentive Plan (“2004 LTI Plan”) in October 2004, and it was approved by the shareholders at the annual meeting in November 2005 (the 2009 LTI Plan and the 2004 LTI Plan are referred to collectively as the “LTI Plans”). The Company adopted the 1996 Stock Option Plan (the “1996 Stock Plan”) in October, 1996, and it was approved by the Company’s shareholders in October, 1996.

The LTI Plans permit the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards. They are administered by the Board of Directors or a committee appointed by the Board of Directors. The Board has designated the Compensation Committee as the administrator of the LTI Plans. Subject to the terms of the LTI Plans, the committee has the sole discretion to select the persons eligible to receive awards, the type and amount of incentives to be awarded, and the terms and conditions of awards. The committee also has the authority to interpret the LTI Plans, and establish and amend regulations necessary or appropriate for their administration. Any employee of the Company or a subsidiary of the Company or a director of the Company whose judgment, initiative, and efforts contributed or may be expected to contribute to the successful performance of the Company is eligible to participate. The maximum number of shares of the Company’s common stock that may be delivered pursuant to awards granted is 750,000 shares under the 2009 Long-Term Incentive Plan and 375,000 shares under the 2004 Long-Term Incentive Plan. Under the 2009 Long-Term Plan no executive officer may receive in any calendar year stock options or stock appreciation rights, or awards that are subject to the attainment of performance goals relating to more than 200,000 shares of common stock. Under the 2004 Long-Term Plan no executive officer may receive in any calendar year stock options or stock appreciation rights relating to more than 250,000 shares of common stock, or awards that are subject to the attainment of performance goals relating to more than 100,000 shares of common stock. At July 31, 2012 there were approximately 490,512 shares and 88,596 shares available for future grants under the 2009 Long-Term Plan and 2004 Long-Term Plan, respectively.

The 1996 Stock Plan terminated by expiration of its original term on July 31, 2007. Options previously issued under the plan remain in effect. The 1996 Stock Plan is administered either by the Company’s Board of Directors or by a committee of two or more non-employee directors. The Board designated the Compensation Committee as the administrator of the plan. Options are exercisable during the period specified in each option agreement and in accordance with a vesting schedule designated by the Board of Directors or the committee. Any option agreement may provide that options become immediately exercisable in the event of a change or threatened change in control of the Company and in the event of certain mergers and reorganizations of the Company. Options may be subject to early termination within a designated period following the option holder’s cessation of service with the Company.

Accounting for Stock-Based Compensation

The Company recognized stock-based compensation costs of approximately $714,000, $542,000 and $768,000, respectively, for the fiscal years ended July 31, 2012, 2011 and 2010, and the related tax benefits of $266,000, $209,000 and $292,000, respectively, for the fiscal years ended July 31, 2012, 2011 and 2010. Stock-based compensation costs are recorded as selling, general and administrative expenses in the consolidated statements of income. The Company accounts for stock-based compensation costs at fair value measured on the date of grant of the award using a Black-Scholes option valuation model for stock option awards. Grant date fair value for stock awards is measured using the Company’s closing stock price on the date of grant of the stock awards where the award is based on a specific number of shares. For awards of stock which are granted based on a fixed monetary value the grant date fair value is based on the monetary value. Stock-based compensation costs are recognized as an expense over the requisite service period, generally the vesting period of the award, using the straight-line method.

As of July 31, 2012, there was approximately $306,000 of unrecognized compensation costs that were related to outstanding stock awards expected to be recognized over a weighted-average period of 1.5 years.

A summary of activity for stock option and stock-awards is presented below.

Stock Options

A summary of option activity associated with employee compensation for the fiscal year ended July 31, 2012 is presented below.

	Shares			Weighted- Average Exercise Price
Outstanding on August 1, 2011.		222,000		$	3.98
Granted		—			—
Exercised		(42,000	)		3.32
Forfeited/Expired		—			—
Outstanding on July 31, 2012		180,000		$	4.13

The following table summarizes information about stock options outstanding at July 31, 2012 that are fully vested (currently exercisable) and those that are expected to vest:

	Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic  Value (in thousands) (1)
Fully vested and currently exercisable		150,000	$	4.09		5.66	$	2,069
Expected to vest		30,000		4.37		11.11		405
Total outstanding stock options		180,000	$	4.13		6.57	$	2,474

(1) The aggregate intrinsic value is computed based on the closing price of the Company’s stock on July 31, 2012.

No options were granted in fiscal years 2012, 2011 and 2010.

The total intrinsic value of options exercised in fiscal years 2012, 2011 and 2010 was approximately $629,000, $546,000 and $934,000, respectively. The total fair value of shares vested was $39,000, $44,000 and $44,000 for the fiscal years ended 2012, 2011 and 2010, respectively.

Performance Shares

At August 1, 2011 there were 209,305 non-vested performance shares outstanding and during fiscal year 2012 there were 124,311 performance-based stock awards granted as Series 1 and 2 awards to certain executives and employees. Those shares represented the maximum award subject to certain performance measures as described below. There were 19,081 performance shares vested during fiscal year 2012. At July 31, 2012 there were 227,609 non-vested performance shares outstanding reflecting the maximum number of shares issuable under outstanding awards. The fair value of the fiscal year 2012 award was measured on the grant dates on October 11, 2011, October 28, 2011 and February 27, 2012 using the Company’s closing stock price of $14.16, $15.30 and $18.08, respectively. Stock-based compensation on the award is recognized on a straight-line basis over the requisite service period beginning on the date of grant through the end of the measurement period ending on July 31, 2014, based on the number of shares expected to vest at the end of the measurement period.

A summary of the performance based stock awards granted to certain executives as Series 1 and Series 2 awards in fiscal years 2012, 2011 and 2010 is detailed below.

Date of Grant	Series Award		Maximum Award (Shares)		Grant Date Fair Value		Measurement Period  Ending		Actual or Expected Percentage of Vesting (1)			Actual Shares Vested or Shares Projected to Vest (1)
Fiscal Year 2012 Award
2/27/2012		Series 1		300	$	18.08		07/31/2014		20	%		60
2/27/2012		Series 2		200	$	18.08		07/31/2014		0	%		—
				500									60
10/28/2011		Series 1		15,300	$	15.30		07/31/2014		20	%		3,060
10/28/2011		Series 2		10,200	$	15.30		07/31/2014		0	%		—
				25,500									3,060
10/11/2011		Series 1		58,987	$	14.16		07/31/2014		20	%		11,797
10/11/2011		Series 2		39,324	$	14.16		07/31/2014		0	%		—
				98,311									11,797
Fiscal Year 2011 Award
12/7/2010		Series 1		61,980	$	15.65		07/31/2013		30	%		18,594
12/7/2010		Series 2		41,318	$	15.65		07/31/2013		0	%		—
				103,298									18,594
Fiscal Year 2010 Award
3/17/2010		Series 1		63,605	$	15.55		07/31/2012		30	%		19,081
3/17/2010		Series 2		42,402	$	15.55		07/31/2012		0	%		—
				106,007									19,081
Total				333,616									52,592

(1) For performance shares granted in March 2010, the above table represents the actual percentage vesting and shares vested as of the end of the measurement period ended July 31, 2012. For the other performance share grants identified in the above table, the information set forth is the expected vesting percentage and the shares projected to vest.

Series 1: Vesting for the Series 1 awards is subject to a performance requirement composed of certain revenue growth objectives and average annual return on invested capital or equity objectives measured across a three-year period. These objectives are measured quarterly using the Company’s budget, actual results and long-term projections. For the fiscal year 2012 and 2011 awards the expected percentage of vesting is based on performance through July 31, 2012 and reflects the percentage of shares projected to vest for the respective awards at the end of their measurement periods. For the Series 1 award for fiscal year 2010, the actual vesting was determined to be 30.0% at the end of the measurement period. Performance shares that have vested are normally issued within 75 days of the end of the fiscal year.

Series 2: Vesting for the Series 2 awards is subject to performance requirements pertaining to the growth rate in the Company’s basic earnings per share over a three-year period. The achievement of performance requirements is measured quarterly using the Company’s budget, actual results and long-term projections. For the fiscal year 2012 and 2011 awards the expected percentage of vesting is based on performance through July 31, 2012 and reflects the percentage of shares projected to vest for the respective awards at the end of their measurement periods. For the Series 2 award for fiscal year 2010, the actual vesting was determined to be zero at the end of the measurement period.

The weighted-average grant-date fair value of performance share awards outstanding at August 1, 2011 and July 31, 2012 was $15.60 and $15.10, respectively.

The total fair value of performance shares vested during fiscal years 2012, 2011 and 2010 was approximately $297,000, $63,000 and $204,000, respectively.

Time-Based Shares

A summary of activity for time-based stock awards for the fiscal year ended July 31, 2012 is presented below:

	Shares			Weighted-Average Grant-Date Fair Value
Non-vested on August 1, 2011		24,939		$	16.03
Granted (1)		13,432			17.55
Vested (2)		(32,602	)		16.26
Forfeited		—			—
Non-vested on July 31, 2012		5,769		$	15.65

(1) Reflects 6,632 and 6,800 shares granted to non-employee directors on February 28, 2012 and May 23, 2012, respectively. The grants reflected service for the three month periods ended on each of the respective dates. The shares vested on the date of grant. The Company recognizes compensation expense related to the awards over the respective three month service period in accordance with GAAP.

(2) During the fiscal year ended July 31, 2012 there were 33,453 shares vested. The number of shares presented here includes an adjustment of 851 shares which do not represent shares that vested during the fiscal year ended July 31, 2012. The adjustment was related to the fiscal year 2011 non-employee director stock grant, and reflects the difference between the number of shares reported as granted and the number of shares vested over the twelve month service period of the award ended November 30, 2011. The number of shares granted was calculated based on the aggregate monetary value of the award divided by the Company’s closing stock price on the respective date of grant. The number of shares vested at the end of each of the three month service periods over the twelve month service period ending November 30, 2011 was based on the Company’s closing stock price at the end of each of the three month periods.

The total fair value of shares vested during the fiscal year ended 2012, 2011 and 2010 was approximately $545,000, $374,000 and $370,000, respectively.

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Long-Term Obligations

12 Months Ended

Jul. 31, 2012

Long-Term Obligations [Abstract]

LONG-TERM OBLIGATIONS

7. LONG-TERM OBLIGATIONS

The Company’s debt as of July 31, 2012 and July 31, 2011 consisted of the following (in thousands):

	July 31, 2012		July 31, 2011
Senior Secured Debt:
Note Purchase Agreement, maturing on December 31, 2014, interest rate of 7.43%	$	20,000	$	20,000
Secured Debt: Term Loan Facility, maturing on December 31, 2012 (extinguished October 31, 2011)		—		11,333
Revolving Loan Facility, maturing on December 31, 2016, variable interest rates based on LIBOR plus 2.00% (2.25% at July 31, 2012)		4,000		17,946
Total debt		24,000		49,279
Current maturities of long-term debt		—		(8,000	)
Long-term debt, net of current maturities	$	24,000	$	41,279

To finance the acquisition of the electronic chemicals business from Air Products in December 2007, the Company entered into an amended and restated credit agreement and a note purchase agreement with Wachovia Bank, National Association, a subsidiary of Wells Fargo & Co., Bank of America, N.A., The Prudential Insurance Company of America, and Pruco Life Insurance Company. The credit facility included a revolving loan facility and a term loan facility.

The Company amended those facilities in November 2011 to increase the amount that may be borrowed under the revolving loan facility to $60.0 million, to extend the maturity to December 31, 2016, and to allow advances under the revolving loan facility without reference to a borrowing base restriction. The financial covenant for debt to capitalization was replaced by a current ratio minimum of 1.5 to 1.0. During the first quarter of fiscal year 2012, the Company paid off all outstanding advances under the credit facility’s term loan commitment, and in the November 2011 amendment, that aspect of the facility was deleted.

Advances under the revolving loan mature December 31, 2016. The revolving loan bears interest at varying rate of LIBOR plus a margin based on our funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”).

Ratio of Funded Debt to EBITDA	Margin
Equal to or greater than 3.0 to 1.0		2.75	%
Equal to or greater than 2.5 to 1.0, but less than 3.0 to 1.0		2.50	%
Equal to or greater than 2.0 to 1.0, but less than 2.5 to 1.0		2.25	%
Equal to or greater than 1.5 to 1.0, but less than 2.0 to 1.0		2.00	%
Less than 1.5 to 1.0		1.75	%

Advances under the revolving loan bear interest at 2.25% as of July 31, 2012. Before the term loan facility was paid off in October 2011 and removed from the credit facility, the term facility required principal payments were $458,333 per month for 24 months and then beginning January 2010 principal payments became $666,667 per month for the balance of the term prior to maturity. The Company used the proceeds received on the sale of its animal health business to repay $10.0 million of the balance on the revolving loan facility on March 2, 2012. The amount outstanding on the revolving loan facility was $4.0 million at July 31, 2012.

In fiscal year 2008 the Company also entered into a $20.0 million note purchase agreement with the Prudential Insurance Company of America. Advances under the note purchase agreement mature December 31, 2014, and bear interest at 7.43% per annum. Principal is payable at maturity. At July 31, 2012, $20.0 million was outstanding under the note purchase agreement.

Loans under the amended and restated credit facility and the note purchase agreement are secured by the Company’s assets, including inventory, accounts receivable, equipment, intangible assets, and real property. The credit facility and the note purchase agreement have restrictive covenants, including that the Company must maintain a fixed charge coverage ratio of 1.5 to 1.0, a ratio of funded debt to EBITDA of 3.0 to 1.0 and a fixed charge coverage ratio of at least 1.5 to 1.0. The Company is also obligated to maintain a debt to capitalization ratio of not more than 50%. For purposes of calculating these financial covenant ratios, the Company uses a pro forma EBITDA.

Principal payments due under long-term debt agreements for the fiscal years ended July 31 are as follows (in thousands):

	Total		2013		2014		2015		2016		2017		Thereafter
Long-term debt	$	24,000	$	—	$	—	$	20,000	$	—	$	4,000	$	—

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Stock-Based Compensation (Details) (USD $)	12 Months Ended
	Jul. 31, 2012
Stock option activity associated with employee compensation
Outstanding on August 1, 2011, Shares	222,000
Outstanding on August 1, 2011, Weighted Average Exercise Price	$ 3.98
Granted, shares
Exercised, shares	(42,000)
Forfeited/Expired, Shares
Outstanding on July 31, 2012, Shares	180,000
Outstanding on July 31, 2012, Weighted Average Exercise Price	$ 4.13
Granted, Weighted Average Exercise Price
Exercised, Weighted Average Exercise Price	$ 3.32
Forfeited/Expired, Weighted Average Exercise Price

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Income Taxes

12 Months Ended

Jul. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

5. INCOME TAXES

The Company is subject to United States federal, state and foreign taxes on its operations. The geographical sources of income from continuing operations before income taxes for each of the three years ended July 31 (in thousands):

	2012		2011		2010
United States	$	21,789	$	13,716	$	22,342
Foreign		1,280		763		1,931
Income from continuing operations before income taxes	$	23,069	$	14,479	$	24,273

The components of income tax expense/(benefit) from continuing operations for the years ended July 31 consisted of the following (in thousands):

	2012			2011			2010
Current:
Federal	$	5,639		$	1,746		$	5,846
Foreign		686			513			487
State		1,071			719			959
		7,396			2,978			7,292
Deferred:
Federal		1,441			2,546			1,625
Foreign		(104	)		(648	)		17
State		21			185			162
		1,358			2,083			1,804
Total	$	8,754		$	5,061		$	9,096

The Company allocated income tax benefits of $221,000 and income tax expense of $203,000 and $94,000 to discontinued operations for the fiscal years ended July 31, 2012, 2011 and 2010, respectively.

Deferred income taxes are provided on all temporary differences between financial and taxable income. The following table presents the components of the Company’s deferred tax assets and liabilities at July 31, 2012 and 2011 (in thousands):

	2012			2011
Deferred tax assets:
Current deferred tax assets:
Bad debt expense	$	—		$	67
Inventory		780			737
Accrued liabilities		460			419
Accrued bonus		710			—
Other		27			—
Total current deferred tax assets	$	1,977		$	1,223
Non-current deferred tax assets
Net operating loss	$	411		$	592
Difference in depreciable basis of property		745			701
Deferred compensation		690			553
Other		5			—
Total non-current deferred tax assets	$	1,851		$	1,846
Deferred tax liabilities:
Current deferred tax liabilities:
Prepaid assets	$	(560	)	$	(504	)
Non-current deferred tax liabilities:
Difference in amortization basis of intangibles	$	(2,440	)	$	(2,027	)
Difference in depreciable basis of property		(5,328	)		(4,024	)
Total non-current deferred tax liabilities		(7,768	)		(6,051	)
Net current deferred tax asset	$	1,417		$	719
Net non-current deferred tax liability	$	(5,917	)	$	(4,205	)

The Company has concluded that it is more likely than not that the results of future operations will generate sufficient taxable income to realize its deferred tax assets.

The Company records provisions for uncertain tax provisions in accordance with ASC Topic 740, which clarified the accounting for income taxes by prescribing the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Based on an evaluation of tax years that remain open and subject to potential examination, the Company determined that it had no additional significant unrecognized tax benefits and no interest or penalties as of July 31, 2012, 2011 and 2010. The statute of limitations remains open for the fiscal years ended July 31, 2009 and forward for United States federal income taxes and fiscal year ended July 31, 2007 and forward for state tax jurisdictions. In Mexico, tax years subsequent to 2006, and in Italy, tax years beginning with our acquisition of the electronic chemicals business in December 2007, remain open and subject to examination.

The Company’s subsidiary in Italy is currently under examination for the period ended July 31, 2009. Adjustments were proposed by the taxing authority at the end of April 2011 that would result in approximately $1.6 million (including interest and penalties) of additional liability, if all the adjustments are sustained. The Company has provided additional information and documentary evidence in response to the proposed adjustments, and intends to vigorously defend its tax positions. Therefore, no amount has been recorded in the Company’s consolidated financial statements

The Italian subsidiary has net operating losses carried forward of approximately $1.5 million and $2.1 million as of July 31, 2012 and 2011, respectively. The net operating losses are available to offset future income indefinitely.

Undistributed earnings of the Company’s Mexico subsidiary amounted to approximately $5.6 million at July 31, 2012. Those earnings are considered to be permanently reinvested. For the years ended July 31, 2012, the Company decided to implement an annual dividend policy plan for Mexico up to its current year earnings and profits. It is the Company’s intention to continue to remain permanently invested in Mexico on its prior year cumulative undistributed earnings. In addition, the undistributed earnings of the Company’s Italian subsidiary are considered to be permanently reinvested. Accordingly, no provision for United States income taxes have been provided with respect to the undistributed earnings. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company will be subject to both United States income taxes (subject to an adjustment for foreign tax credits) and potential withholding taxes payable to the foreign country. Determination of the amount of unrecognized deferred United States income tax liability is not practicable due to the complexities associated with its hypothetical calculation.

The following table accounts for the differences between the actual tax provision, and the amounts obtained by applying the applicable statutory United States federal income tax rate of 35% to income from continuing operations before income taxes for each of the years ended July 31, 2012, 2011, and 2010, respectively (in thousands):

	2012			2011			2010
Income taxes at the federal statutory rate	$	8,074		$	5,068		$	8,495
Effect of foreign operations		160			225			711
Change in valuation allowance		—			(627	)		(882	)
State income taxes, net of federal income tax effect		717			659			802
Other		(197	)		(264	)		(30	)
Total	$	8,754		$	5,061		$	9,096

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Intangible Assets

12 Months Ended

Jul. 31, 2012

Intangible Assets [Abstract]

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

Intangible assets are summarized as follows (in thousands):

	Number of Years
	Weighted Average		July 31, 2012
	Amortization Period		Original Cost		Accumulated Amortization			Carrying Amount
Intangible assets subject to amortization (range of useful life):
Creosote supply contract (10 years)		10.0	$	4,000	$	(4,000	)	$	—
Electronic chemicals-related contracts (3-8 years)		3.8		1,164		(1,053	)		111
Electronic chemicals-related trademarks and patents (10-15 years)		12.0		117		(46	)		71
Electronic chemicals—value of product qualifications (5 years)		5.0		1,300		(606	)		694
Total intangible assets subject to amortization		8.0	$	6,581	$	(5,705	)		876
Intangible assets not subject to amortization:
Creosote product registrations									5,339
Penta product registrations									8,765
Total intangible assets not subject to amortization									14,104
Total intangible assets, net								$	14,980
	Number of Years
	Weighted Average		July 31, 2011
	Amortization Period		Original Cost		Accumulated Amortization			Carrying Amount
Intangible assets subject to amortization (range of useful life):
Creosote supply contract (10 years)		10.0	$	4,000	$	(3,955	)	$	45
Electronic chemicals-related contracts (3-8 years)		3.8		1,164		(1,014	)		150
Electronic chemicals-related trademarks and patents (10-15 years)		12.0		117		(36	)		81
Electronic chemicals-value of product qualifications (5 years)		5.0		1,300		(347	)		953
Discontinued operations		17.6		6,529		(2,369	)		4,160
Total intangible assets subject to amortization		12.8	$	13,110	$	(7,721	)		5,389
Intangible assets not subject to amortization:
Creosote product registrations									5,339
Penta product registrations									8,765
Total intangible assets not subject to amortization									14,104
Total intangible assets, net								$	19,493

Intangible assets subject to amortization are amortized over their estimated useful lives which are between three and 15 years. Amortization expense was approximately $548,000, $1.0 million and $1.1 million for the fiscal years ended July 31, 2012, 2011 and 2010, respectively. The estimated amortization expense is projected to be approximately $296,000, $289,000, $202,000, $29,000 and $29,000 for fiscal years 2013 through 2017, respectively.

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Commitments and Contingencies

12 Months Ended

Jul. 31, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations — The Company has non-cancelable operating leases for its office and warehouse facilities and certain transportation equipment and purchase obligations. Our obligations to make future payments under certain contractual obligations as of July 31, 2012 are summarized in the following table (in thousands):

	Total		2013		2014		2015		2016		2017		Thereafter
Operating leases	$	6,131	$	2,294	$	1,864	$	681	$	603	$	401	$	288
Purchase obligations (1)		266,543		86,081		59,337		40,539		38,008		27,654		14,924
Total	$	272,674	$	88,375	$	61,201	$	41,220	$	38,611	$	28,055	$	15,212

(1) Consists primarily of raw materials purchase contracts. These are typically not fixed price arrangements. The prices are based on the prevailing market prices.

Rent expense relating to the operating leases was approximately $2.3 million, $2.0 million and $2.0 million in fiscal years 2012, 2011 and 2010, respectively.

Environmental — The Company’s operations are subject to extensive federal, state and local laws, regulations and ordinances in the United States and abroad relating to the generation, storage, handling, emission, transportation and discharge of certain materials, substances and waste into the environment, and various other health and safety matters. Governmental authorities have the power to enforce compliance with their regulations, and violators may be subject to fines, injunctions or both. The Company must devote substantial financial resources to ensure compliance, and it believes that it is in substantial compliance with all the applicable laws and regulations.

Certain licenses, permits and product registrations are required for the Company’s products and operations in the United States, Mexico and other countries in which it does business. The licenses, permits and product registrations are subject to revocation, modification and renewal by governmental authorities. In the United States in particular, producers and distributors of chemicals such as penta and creosote are subject to registration and notification requirements under federal law (including under the Federal Insecticide Fungicide and Rodenticide Act (“FIFRA”), and comparable state law) in order to sell those products in the United States. Compliance with these requirements has had, and in the future will continue to have, a material effect on our business, financial condition and results of operations.

The Company incurred expenses in connection with FIFRA research and testing programs of approximately $802,000, $760,000 and $636,000 in fiscal year 2012, 2011 and 2010, respectively. These costs are included in selling, general, and administrative expenses.

Litigation and Other Contingencies — The Company is subject to contingencies, including litigation relating to environmental laws and regulations, commercial disputes and other matters. Certain of these contingencies are discussed below. The ultimate resolution of these contingencies is subject to significant uncertainty, and should the Company fail to prevail in any of them or should several of them be resolved against the Company in the same reporting period, these matters could, individually or in the aggregate, be material to the consolidated financial statements. The ultimate outcome of these matters, however, cannot be determined at this time, nor can the amount of any potential loss be reasonably estimated, and as a result no amounts have been recorded in the Company’s consolidated financial statements except where indicated.

The Company records legal costs associated with loss contingencies as expenses in the period in which they are incurred.

A lawsuit was filed against the Company’s wholly-owned subsidiary, KMG de Mexico, relating to the title to the land on which its facility in Matamoros is located. The plaintiffs claim that their title to the land is superior to the person from whom our subsidiary bought the land. The plaintiffs are seeking to have our subsidiary’s purchase overturned, and to recover the land and certain improvements or their value. The lawsuit was initially filed in 1998 in Matamoros, Mexico under Adolfo Cazares Rosas, et al vs. KMG de Mexico and Guillermo Villarreal. In January 2008, the case was sent by the appeals court back to the lower court to obtain additional factual information, and on April 20, 2009 the plaintiffs were required to re-file the case in the First Civil Court in Matamoros, Tamaulipas, Mexico as Adolfo Cazares, Luis Escudero and Juan Cue vs. KMG de Mexico and Guillermo Villarreal. In June 2011 the lower court ruled against KMG de Mexico, and held that the plaintiffs had superior title to the land, but that verdict was overturned on appeal in May 2012, and the case has been returned to the trial court for further action. The Company intends to continue to vigorously defend KMG de Mexico.

When the Company purchased assets from Air Products, Inc. (“Air Products”) in December 2007, the Company agreed to be responsible for the applicable sales tax on the personal property that it purchased. The Colorado Department of Revenue audited the purchase, and in November 2009 issued a deficiency notice to Air Products for unpaid sales tax on the purchase of approximately $819,000, before interest and penalties. The Company assumed the defense of the matter as allowed under its indemnity of Air Products. We classified certain property at our Pueblo facility as real property not subject to tax, rather than as personal property subject to sales tax. In fiscal year 2012, the Company recorded a reserve of approximately $372,000 in the consolidated statements of income that the Company believes is adequate for the resolution of this matter, including taxes, penalties and interest.

The Company’s subsidiary in Italy is currently under examination by the taxing authority there for the period ended July 31, 2009. Adjustments were proposed by the taxing authority at the end of April 2011 that would result in approximately $1.6 million of additional income tax (including interest and penalties), if all the adjustments are sustained. We have provided additional information in response to the proposed adjustments, and intend to vigorously defend our tax positions. The ultimate outcome of this examination is subject to uncertainty and no amount has been recorded in our consolidated financial statements.

The Company is subject to federal, state, local and foreign laws and regulations and potential liabilities relating to the protection of the environment and human health and safety including, among other things, the cleanup of contaminated sites, the treatment, storage and disposal of wastes, the emission of substances into the air or waterways, and various health and safety matters. The Company expects to incur substantial costs for ongoing compliance with such laws and regulations. The Company may also face governmental or third-party claims, or otherwise incur costs, relating to cleanup of, or for injuries resulting from, contamination at sites associated with past and present operations. The Company accrues for environmental liabilities when a determination can be made that they are probable and reasonably estimable.

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Stock-Based Compensation (Details Textual) (USD $)	12 Months Ended								12 Months Ended											12 Months Ended			3 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010	Feb. 27, 2012	Oct. 28, 2011	Oct. 11, 2011	Dec. 07, 2010	Mar. 17, 2010	Jul. 31, 2012 2009 long term incentive plan [Member]	Jul. 31, 2012 2004 long term incentive plan [Member]	Jul. 31, 2012 Outstanding Stock Option [Member]	Jul. 31, 2012 Performance Shares [Member]	Jul. 31, 2011 Performance Shares [Member]	Jul. 31, 2010 Performance Shares [Member]	Feb. 27, 2012 Performance Shares [Member]	Oct. 28, 2011 Performance Shares [Member]	Oct. 11, 2011 Performance Shares [Member]	Jul. 31, 2009 Series 1 [Member]	Jul. 31, 2009 Series 2 [Member]	Jul. 31, 2012 Time based shares [Member]	Jul. 31, 2011 Time based shares [Member]	Jul. 31, 2010 Time based shares [Member]	Jul. 31, 2012 Time based shares [Member] Non Employee Director [Member]	Apr. 30, 2012 Time based shares [Member] Non Employee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of common stock that may be delivered pursuant to awards granted									750,000	375,000
Maximum award under long term incentive plans									200,000	250,000
Common stock related to performance goal										100,000
Shares available for future grant									490,512	88,596
Recognized stock based compensation cost	$ 714,000	$ 542,000	$ 768,000
Tax benefits related to stock based compensation	266,000	209,000	292,000
Weighted average period for recognition of compensation cost											1 year 6 months
Total intrinsic value of option exercised	629,000	546,000	934,000
Total fair value of share vested	39,000	44,000	44,000									297,000	63,000	204,000
Performance shares outstanding , nonvested												227,609	209,305							5,769	24,939
Grant Dates															Feb. 27, 2011	Oct. 28, 2011	Oct. 11, 2011
Grant Date Fair Value												$ 15.10	$ 15.60		$ 18.08	$ 15.30	$ 14.16			$ 15.65	$ 16.03
Performance based stock awards granted												124,311								13,432			6,800	6,632
Performance shares vested	52,592			60	3,060	11,797	18,594	19,081				19,081
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period	0 months
Vesting percentage of series 1 awards																		30.00%	0.00%
Performance shares issued period			75 days
Shares issued on stock award vested																				33,453
Number of shares vested adjusted downward																				851
Fair value of shares vested																				545,000	374,000	370,000
Performance shares non-vested at end of fiscal year																				32,602
Stock Based Compensation (Textual) [Abstract]
Unrecognized compensation costs related to outstanding stock awards	$ 306,000

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Discontinued Operations (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012
Gain (loss) from discontinued operations before income taxes
Cash considerations	$ 10,203
Less: net book value of assets sold as of February 29, 2012 and transaction costs	(10,113)
Total pre-tax gain	$ 90

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Stock-Based Compensation (Details 3) (Time based shares [Member], USD $)	12 Months Ended
	Jul. 31, 2012
Time based shares [Member]
Summary of activity for time-based stock awards
Non-vested Shares, Beginning Balance	24,939
Granted Shares	13,432
Granted Weighted-Average Grant-Date Fair Value	$ 17.55
Vested Shares	(32,602)
Vested Weighted-Average Grant-Date Fair Value	$ 16.26
Forfeited Shares
Forfeited Weighted-Average Grant-Date Fair Value
Non-vested Shares, Ending Balance	5,769
Non-vested Weighted-Average Grant-Date Fair Value, Beginning Balance	$ 16.03
Non-vested Weighted-Average Grant-Date Fair Value, Ending Balance	$ 15.65

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Stock-Based Compensation (Tables)

12 Months Ended

Jul. 31, 2012

Stock-Based Compensation [Abstract]

Stock option activity associated with employee compensation

	Shares			Weighted- Average Exercise Price
Outstanding on August 1, 2011.		222,000		$	3.98
Granted		—			—
Exercised		(42,000	)		3.32
Forfeited/Expired		—			—
Outstanding on July 31, 2012		180,000		$	4.13

Stock option awards expected to vest

	Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic  Value (in thousands) (1)
Fully vested and currently exercisable		150,000	$	4.09		5.66	$	2,069
Expected to vest		30,000		4.37		11.11		405
Total outstanding stock options		180,000	$	4.13		6.57	$	2,474

(1) The aggregate intrinsic value is computed based on the closing price of the Company’s stock on July 31, 2012.

Summary of the performance based stock awards granted

Date of Grant	Series Award		Maximum Award (Shares)		Grant Date Fair Value		Measurement Period  Ending		Actual or Expected Percentage of Vesting (1)			Actual Shares Vested or Shares Projected to Vest (1)
Fiscal Year 2012 Award
2/27/2012		Series 1		300	$	18.08		07/31/2014		20	%		60
2/27/2012		Series 2		200	$	18.08		07/31/2014		0	%		—
				500									60
10/28/2011		Series 1		15,300	$	15.30		07/31/2014		20	%		3,060
10/28/2011		Series 2		10,200	$	15.30		07/31/2014		0	%		—
				25,500									3,060
10/11/2011		Series 1		58,987	$	14.16		07/31/2014		20	%		11,797
10/11/2011		Series 2		39,324	$	14.16		07/31/2014		0	%		—
				98,311									11,797
Fiscal Year 2011 Award
12/7/2010		Series 1		61,980	$	15.65		07/31/2013		30	%		18,594
12/7/2010		Series 2		41,318	$	15.65		07/31/2013		0	%		—
				103,298									18,594
Fiscal Year 2010 Award
3/17/2010		Series 1		63,605	$	15.55		07/31/2012		30	%		19,081
3/17/2010		Series 2		42,402	$	15.55		07/31/2012		0	%		—
				106,007									19,081
Total				333,616									52,592

(1) For performance shares granted in March 2010, the above table represents the actual percentage vesting and shares vested as of the end of the measurement period ended July 31, 2012. For the other performance share grants identified in the above table, the information set forth is the expected vesting percentage and the shares projected to vest.

Summary of activity for time-based stock awards

	Shares			Weighted-Average Grant-Date Fair Value
Non-vested on August 1, 2011		24,939		$	16.03
Granted (1)		13,432			17.55
Vested (2)		(32,602	)		16.26
Forfeited		—			—
Non-vested on July 31, 2012		5,769		$	15.65

(1) Reflects 6,632 and 6,800 shares granted to non-employee directors on February 28, 2012 and May 23, 2012, respectively. The grants reflected service for the three month periods ended on each of the respective dates. The shares vested on the date of grant. The Company recognizes compensation expense related to the awards over the respective three month service period in accordance with GAAP.

(2) During the fiscal year ended July 31, 2012 there were 33,453 shares vested. The number of shares presented here includes an adjustment of 851 shares which do not represent shares that vested during the fiscal year ended July 31, 2012. The adjustment was related to the fiscal year 2011 non-employee director stock grant, and reflects the difference between the number of shares reported as granted and the number of shares vested over the twelve month service period of the award ended November 30, 2011. The number of shares granted was calculated based on the aggregate monetary value of the award divided by the Company’s closing stock price on the respective date of grant. The number of shares vested at the end of each of the three month service periods over the twelve month service period ending November 30, 2011 was based on the Company’s closing stock price at the end of each of the three month periods.

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Long-Term Obligations (Details) (USD $) In Thousands, unless otherwise specified	Jul. 31, 2012	Jul. 31, 2011
Debt:
Total debt	$ 24,000	$ 49,279
Current portion of long-term debt		(8,000)
Long-term debt, net of current maturities	24,000	41,279
Note Purchase Agreement [Member]
Debt:
Total debt	20,000
Senior Notes [Member] | Note Purchase Agreement [Member]
Debt:
Total debt	20,000	20,000
Senior Notes [Member] | Secured Debt Term Loan Facility [Member]
Debt:
Total debt		11,333
Senior Notes [Member] | Revolving Loan Facility [Member]
Debt:
Total debt	$ 4,000	$ 17,946

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Segment Information

12 Months Ended

Jul. 31, 2012

Segment Information [Abstract]

SEGMENT INFORMATION

13. SEGMENT INFORMATION

The Company previously had four reportable segments for electronic chemicals, penta, creosote and animal health. During the first quarter of fiscal year 2012, the Company re-evaluated the criteria used to determine operating segments and concluded that its two wood treating product lines met the criteria of a single operating segment. As a result, during the first quarter of fiscal year 2012, the composition of the Company’s reportable segments was revised to reflect a change combining those two reportable segments. The Company sold its animal health business on March 1, 2012, and results of that former segment are now reported as discontinued operations. As a result, as of July 31, 2012 the Company has two reportable segments – electronic chemicals and wood treating. Prior year information has been reclassified to conform to the current period presentation.

	2012		2011		2010
	(Amounts in thousands)
Sales
Electronic chemicals	$	159,451	$	151,481	$	111,990
Wood treating		113,034		104,115		86,007
Total sales for reportable segments	$	272,485	$	255,596	$	197,997
Depreciation and amortization
Electronic chemicals	$	5,933	$	5,607	$	4,784
Wood treating		504		814		894
Discontinued operations		342		664		766
Other — general corporate		239		269		267
Total consolidated depreciation and amortization	$	7,018	$	7,354	$	6,711
Segment income from operations (1)
Electronic chemicals	$	13,392	$	6,205	$	8,379
Wood treating		15,622		14,766		23,007
Total segment income from operations	$	29,014	$	20,971	$	31,386
Capital expenditures
Electronic chemicals	$	4,493	$	7,359	$	29,066
Wood treating		393		354		482
Discontinued operations		—		17		64
Included in acquisition		—		—		(26,784	)
Other — general corporate		307		538		187
Total capital expenditures	$	5,193	$	8,268	$	3,015
Total assets
Electronic chemicals	$	111,144	$	114,929
Wood treating		44,880		45,917
Total assets for reportable segments	$	156,024	$	160,846

(1) Segment income from operations includes allocated corporate overhead expenses.

Corporate overhead expenses allocated to segment income for the fiscal year ended July 31, 2012, 2011 and 2010 were as follows:

	2012		2011		2010
	(Amounts in thousands)
Electronic chemicals	$	5,354	$	4,066	$	4,065
Wood treating		4,406		3,337		3,122
Total corporate overhead expense allocation	$	9,760	$	7,403	$	7,187

For fiscal year 2012 one customer in our electronic chemicals segment represented approximately 19% of the Company’s net sales, and one customer in our wood treating segment represented approximately 12% of the Company’s net sales. For fiscal years 2011 one customer in our electronic chemicals segment represented approximately 16% of the Company’s net sales and one customer in our wood treating segment represented approximately 12% of the Company’s net sales. For fiscal year 2010 sales to one customer in our electronic chemicals segment represented approximately 18% of the Company’s net sales. No other customers accounted for 10% or more of the Company’s net sales.

A reconciliation of total segment to consolidated amounts for fiscal years 2012, 2011 and 2010 is set forth in the table below.

	2012			2011			2010
	(Amounts in thousands)
Assets:
Total assets for reportable segments	$	156,024		$	160,846
Total assets for discontinued operations (1)		467			10,461
Other current assets		3,627			7,529
Other assets		7,572			6,542
Total assets	$	167,690		$	185,378
Sales:
Total sales for reportable segments	$	272,485		$	255,596		$	197,997
Other (2)		215			—			—
Net sales	$	272,700		$	255,596		$	197,997
Segment income from operations:
Total segment income from operations (3)	$	29,014		$	20,971		$	31,386
Other corporate expense (3)		(3,577	)		(3,949	)		(4,655	)
Operating income		25,437			17,022			26,731
Interest income		1			1			5
Interest expense		(2,100	)		(2,336	)		(2,252	)
Other expense, net		(269	)		(208	)		(211	)
Income from continuing operations before income taxes	$	23,069		$	14,479		$	24,273

Geographic Data

	2012		2011		2010
	(Amounts in thousands)
Net sales:
United States	$	229,140	$	218,961	$	165,217
International		43,560		36,635		32,780
Net sales	$	272,700	$	255,596	$	197,997
Property, plant and equipment, net:
United States	$	52,178	$	53,039
International		15,848		18,787
Property, plant and equipment, net	$	68,026	$	71,826

(1) Includes approximately $467,000 and $644,000 of deferred tax assets as of July 31, 2012 and 2011, respectively. For fiscal year ended 2011 the remainder of assets was related to the animal health business sold in March 2012.

(2) Reflects fees from the transition services agreement in connection with the sale of the animal health business. See Note 12.

(3) Other corporate expense primarily represents employee stock-based compensation expenses and those expenses associated with the Company’s operation as a public entity such as board compensation, audit expense and fees related to the listing of our stock. The amounts presented include corporate overhead previously allocated to the animal health business. These amounts were not reallocated to the remaining segments.

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Acquisitions (Tables)

12 Months Ended

Jul. 31, 2012

Acquisitions [Abstract]

Unaudited pro forma financial information

(Unaudited) (in thousands, except per share data)

	2010
Revenues	$	226,216
Operating income		28,366
Net income		16,368
Earnings per share — basic	$	1.46

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Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011
Intangible assets subject to amortization:
Number of years weighted average amortization period	8 years	12 years 8 months
Original Cost	$ 6,581	$ 13,110
Accumulated Amortization	(5,705)	(7,721)
Carrying Amount	876	5,389
Intangible assets not subject to amortization:
Total intangible assets not subject to amortization	14,104	14,104
Total intangible assets, net	14,980	19,493
Maximum [Member]
Intangible assets subject to amortization:
Range of useful life	15 years
Minimum [Member]
Intangible assets subject to amortization:
Range of useful life	3 years
Discontinued operations [Member]
Intangible assets subject to amortization:
Number of years weighted average amortization period		17 years 6 months
Original Cost		6,529
Accumulated Amortization		(2,369)
Carrying Amount		4,160
Creosote product registrations [Member]
Intangible assets not subject to amortization:
Total intangible assets not subject to amortization	5,339	5,339
Penta Product Registrations [Member]
Intangible assets not subject to amortization:
Total intangible assets not subject to amortization	8,765	8,765
Creosote supply contract [Member]
Intangible assets subject to amortization:
Range of useful life	10 years
Number of years weighted average amortization period	10 years	10 years
Original Cost	4,000	4,000
Accumulated Amortization	(4,000)	(3,955)
Carrying Amount		45
Electronic chemicals-related contracts [Member]
Intangible assets subject to amortization:
Number of years weighted average amortization period	3 years 9 months 18 days	3 years 9 months 18 days
Original Cost	1,164	1,164
Accumulated Amortization	(1,053)	(1,014)
Carrying Amount	111	150
Electronic chemicals-related contracts [Member] | Maximum [Member]
Intangible assets subject to amortization:
Range of useful life	8 years
Electronic chemicals-related contracts [Member] | Minimum [Member]
Intangible assets subject to amortization:
Range of useful life	3 years
Electronic Chemicals Related Trademarks and Patents [Member]
Intangible assets subject to amortization:
Number of years weighted average amortization period	12 years	12 years
Original Cost	117	117
Accumulated Amortization	(46)	(36)
Carrying Amount	71	81
Electronic Chemicals Related Trademarks and Patents [Member] | Maximum [Member]
Intangible assets subject to amortization:
Range of useful life	15 years
Electronic Chemicals Related Trademarks and Patents [Member] | Minimum [Member]
Intangible assets subject to amortization:
Range of useful life	10 years
Electronic Chemicals-Value of Product Qualifications [Member]
Intangible assets subject to amortization:
Range of useful life	5 years
Number of years weighted average amortization period	5 years	5 years
Original Cost	1,300	1,300
Accumulated Amortization	(606)	(347)
Carrying Amount	$ 694	$ 953

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Acquisitions (Details Textual) (USD $)	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010 sqft
Acquisitions (Textual) [Abstract]
Net sales	$ 67,607,000	$ 66,579,000	$ 66,975,000	$ 71,539,000	$ 70,936,000	$ 61,899,000	$ 61,808,000	$ 60,953,000	$ 272,700,000	$ 255,596,000	$ 197,997,000
Net income	3,863,000	3,965,000	2,462,000	3,535,000	1,182,000	2,607,000	2,424,000	3,516,000	13,825,000	9,729,000	15,330,000
Acquisitions (Additional Textual) [Abstract]
Purchase Inventory Area of Manufacturing Facility											48,000
Cash paid											26,800,000
Depreciation included in the pro forma financial information										0	230,000
Selling, General and Administrative Expenses [Member]
Acquisitions (Textual) [Abstract]
Integration costs related to acquisition											398,000
General Chemical Performance Products, LLC [Member]
Acquisitions (Textual) [Abstract]
Net sales											15,700,000
Net income											318,000
Integration costs related to acquisition											$ 663,000

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 13,825	$ 9,729	$ 15,330
Other comprehensive income/(loss)
Foreign currency translation gain/(loss)	(3,106)	2,102	(1,871)
Total other comprehensive income/(loss)	(3,106)	2,102	(1,871)
Total comprehensive income	$ 10,719	$ 11,831	$ 13,459

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Acquisitions

12 Months Ended

Jul. 31, 2012

Acquisitions [Abstract]

ACQUISITIONS

2. ACQUISITIONS

On March 29, 2010, the Company acquired certain assets of the electronic chemicals business of General Chemical Performance Products, LLC (“General Chemical”). The acquired business included products similar to the products of the Company’s then existing electronic chemicals business. The purpose of the acquisition was to expand the Company’s product line and increase market share.

The purchase included inventory, a 48,000 square foot manufacturing facility in Hollister, California and certain equipment at General Chemical’s Bay Point, California facility. The Company paid $26.8 million in cash which was financed with available cash and borrowings under the Company’s revolving credit facility.

Acquisition-related costs that were included in selling, general and administrative expenses in the Company’s consolidated statements of income for the year ended July 31, 2010 were approximately $398,000.

The following table sets forth pro forma results for the fiscal year ended July 31, 2010 had the acquisition occurred as of the beginning of the fiscal year. The pro forma results also include the effects of discontinued operations related to the animal health business which was sold in March 2012, described in Note 12. The unaudited pro forma financial information is not necessarily indicative of what the Company’s consolidated results of operations would have been had it completed the transaction as of the date indicated.

(Unaudited) (in thousands, except per share data)

	2010
Revenues	$	226,216
Operating income		28,366
Net income		16,368
Earnings per share — basic	$	1.46

The Company recognized $15.7 million of net sales and a net loss of $318,000, net of income tax, and integration costs of $663,000 related to the acquired business, in its consolidated statements of income for the fiscal year ended July 31, 2010. Depreciation included in the pro forma financial information is approximately $230,000 per month for the year ended July 31, 2010.

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Basic and diluted earnings per share
Income from continuing operations									$ 14,315	$ 9,418	$ 15,177
Income/(loss) from discontinued operations									(490)	311	153
Net income	$ 3,863	$ 3,965	$ 2,462	$ 3,535	$ 1,182	$ 2,607	$ 2,424	$ 3,516	$ 13,825	$ 9,729	$ 15,330
Weighted average shares outstanding-basic									11,363	11,309	11,183
Dilutive effect of options/warrants and stock awards									165	180	239
Weighted average shares outstanding-diluted									11,528	11,489	11,422
BASIC EARNINGS PER SHARE:
Basic earnings per share from continuing operations	$ 0.35	$ 0.34	$ 0.22	$ 0.34	$ 0.09	$ 0.21	$ 0.20	$ 0.33	$ 1.26	$ 0.83	$ 1.36
Basic earnings per share on income/(loss) from discontinued									$ (0.04)	$ 0.03	$ 0.01
Basic earnings per share	$ 0.34	$ 0.35	$ 0.22	$ 0.31	$ 0.10	$ 0.23	$ 0.21	$ 0.31	$ 1.22	$ 0.86	$ 1.37
BASIC EARNINGS PER SHARE:
Diluted earnings per share from continuing operations	$ 0.34	$ 0.33	$ 0.22	$ 0.34	$ 0.09	$ 0.21	$ 0.20	$ 0.33	$ 1.24	$ 0.82	$ 1.33
Diluted earnings per share on income/(loss) from discontinued operations									$ (0.04)	$ 0.03	$ 0.01
Diluted earnings per share	$ 0.33	$ 0.34	$ 0.21	$ 0.31	$ 0.10	$ 0.23	$ 0.21	$ 0.31	$ 1.20	$ 0.85	$ 1.34

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jul. 31, 2012	Apr. 30, 2012	Jan. 31, 2012	Oct. 31, 2011	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2011	Oct. 31, 2010	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Sales:
Net sales	$ 67,607	$ 66,579	$ 66,975	$ 71,539	$ 70,936	$ 61,899	$ 61,808	$ 60,953	$ 272,700	$ 255,596	$ 197,997
Depreciation, Depletion and Amortization [Abstract]
Total consolidated depreciation and amortization									7,018	7,354	6,711
Segment income from operations
Total segment income from operations									29,014	20,971	31,386
Capital Expenditures
Total capital expenditures									5,193	8,268	3,015
Total assets
Total assets for reportable segments	156,024				160,846				156,024	160,846
Electronic chemicals [Member]
Sales:
Net sales									159,451	151,481	111,990
Depreciation, Depletion and Amortization [Abstract]
Total consolidated depreciation and amortization									5,933	5,607	4,784
Segment income from operations
Total segment income from operations									13,392	6,205	8,379
Capital Expenditures
Total capital expenditures									4,493	7,359	29,066
Total assets
Total assets for reportable segments	111,144				114,929				111,144	114,929
Wood treating chemicals [Member]
Sales:
Net sales									113,034	104,115	86,007
Depreciation, Depletion and Amortization [Abstract]
Total consolidated depreciation and amortization									504	814	894
Segment income from operations
Total segment income from operations									15,622	14,766	23,007
Capital Expenditures
Total capital expenditures									393	354	482
Total assets
Total assets for reportable segments	44,880				45,917				44,880	45,917
Discontinued operations [Member]
Depreciation, Depletion and Amortization [Abstract]
Total consolidated depreciation and amortization									342	664	766
Capital Expenditures
Total capital expenditures										17	64
Other - general corporate [Member]
Depreciation, Depletion and Amortization [Abstract]
Total consolidated depreciation and amortization									239	269	267
Capital Expenditures
Total capital expenditures									307	538	187
Included in Acquisition [Member]
Capital Expenditures
Total capital expenditures											$ (26,784)

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Inventories (Tables)

12 Months Ended

Jul. 31, 2012

Inventories [Abstract]

Inventories

	2012			2011
Raw materials and supplies	$	5,846		$	7,475
Work in process		896			1,034
Supplies		1,405			1,405
Finished products		33,007			32,189
Less reserve for inventory obsolescence		(493	)		(333	)
Inventories, net	$	40,661		$	41,770

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Schedule II - Valuation and Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jul. 31, 2012	Jul. 31, 2011	Jul. 31, 2010
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	$ 414,000	$ 260,000	$ 595,000
Charged to costs and expenses		154,000	63,000
Additions/ Deductions	(398,000)		(398,000)
Balance at end of period	16,000	414,000	260,000
Inventory obsolescence [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	333,000	418,000	395,000
Charged to costs and expenses	272,000	(34,000)	171,000
Additions/ Deductions	(112,000)	(51,000)	(148,000)
Balance at end of period	493,000	333,000	418,000
Valuation allowance on deferred tax assets [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		627,000	1,509,000
Charged to costs and expenses		(627,000)	(882,000)
Additions/ Deductions
Balance at end of period			$ 627,000

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Summary of Significant Accounting Policies (Details)	12 Months Ended
	Jul. 31, 2012
Building [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	15 years
Building [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	30 years
Plant [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	10 years
Plant [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	18 years
Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	3 years
Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of assets	15 years
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Useful life of leasehold	remaining life of the lease

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Discontinued Operations

12 Months Ended

Jul. 31, 2012

Discontinued Operations [Abstract]

DISCONTINUED OPERATION

12. DISCONTINUED OPERATIONS

In fiscal year 2008 the Company discontinued operations of its herbicide product line that had comprised the agricultural chemical segment. During fiscal year 2011, the Company began dismantling the related equipment at its Matamoros, Mexico facility. In fiscal year 2012, two employees of the contractor hired to do the dismantling work were injured. The Company incurred costs in fiscal years 2012 and 2011 for equipment dismantlement, and in addition, the current year period included medical and other expenses associated with the accident. No dismantling expense was incurred in fiscal year 2010. The Company reported the costs in income (loss) from discontinued operations, before income taxes, which included $599,000 and $120,000 for the fiscal years ended July 31, 2012 and 2011, respectively.

On March 1, 2012, the Company sold its animal health business that had comprised the animal health segment to Bayer Healthcare LLC. The sale included inventory, equipment and product registrations. The Company retained the real estate and buildings at its facility in Elwood, Kansas. The Company sold the business for approximately $10.2 million, including $1.0 million in restricted cash held in escrow. The purchase price was paid in cash, subject to the escrow. The escrowed amount is to be held pending final acceptance by the United States Environmental Protection Agency (“EPA”) of certain studies being performed at the request of the EPA on tetrachlorvinphos, the active ingredient used in Rabon products. The escrowed funds are to be released to the Company once the EPA has finally accepted the studies, the buyer has voluntarily canceled the products, or after five years. The escrowed funds are to be released to the buyer if the EPA cancels the products to which the studies pertain before the funds are distributed to the Company. Management believes that the EPA will accept the studies within five years.

The Company will continue to operate the facility in Elwood, Kansas to manufacture products for the buyer under a transition services agreement for one year, subject to two six-month extensions. The Company evaluated the transition services agreement and concluded that it did not represent significant continuing involvement or a continuation of activities by the Company in accordance with GAAP.

As of July 31, 2011 the components of assets and liabilities related to the discontinued operations of the animal health business included in the consolidated balance sheets were as follows (in thousands):

Inventories	$	5,401
Prepaid commissions		65
Total current assets		5,466
Property, plant and equipment, net		191
Intangible assets, net		4,160
Total assets	$	9,817

The Company recognized a gain on sale of approximately $90,000 included in income (loss) from discontinued operations, before income taxes, in the Company’s consolidated statements of income, calculated as follows in thousands.

Cash consideration	$	10,203
Less: net book value of assets sold as of February 29, 2012 and transaction costs		(10,113	)
Total pre-tax gain	$	90

Animal health net sales and income before income tax reported in discontinued operations were as follows for the fiscal year ended July 31:

	2012			2011		2010
	(Amounts in thousands)
Revenue	$	5,643		$	10,760	$	10,631
Income (loss) before income taxes		(202	)		634		247