Adjusted Income From Continuing Operations was $5.5 million, or $0.12 per diluted share, for the fourth quarter ending November 30, 2013. This compares to fourth quarter 2012 Adjusted Income From Continuing Operations of $2.5 million, or $0.06 per diluted share.
Fourth Quarter 2013 Highlights
The Company reported net income of $7.9 million, or $0.17 per diluted share for the fourth quarter of 2013, compared to $0.7 million, or $0.01 per diluted share for the fourth quarter of 2012.
The Company's Adjusted Income from Continuing Operations improved to $5.5 million, or $0.12 per diluted share, compared to $2.5 million, or $0.06 per diluted share for the fourth quarter of 2012.
Gross profit was $51.7 million with margins increasing to 22.1% in the fourth quarter of 2013 as compared to $48.5 million, or 19.1% a year ago. The improvement was due to favorable product mix and cost reduction actions.
The Company's segment operating profit was $21.7 million in the fourth quarter of 2013, compared to $15.5 million for the fourth quarter of 2012. Adjusted Segment Operating Profit improved to $19.9 million in the fourth quarter of 2013 from $17.4 million a year ago.
The Company's leverage ratio as measured by Net Debt to Adjusted EBITDA improved from the third quarter of 2013 to under 3.0 times.
"Our financial results in the fourth quarter of 2013 improved as compared to last year, led by stronger results in Engineered Surfaces, which had a favorable mix of business and reduced costs, resulting in its highest quarter and full-year operating profit since 2001. Within Performance Chemicals, the Company's Specialty Chemicals product line had higher volumes and gross profit year-over-year. However, Performance Materials' (North American paper and carpet chemicals) gross profit was negatively impacted by weaker paper market conditions and competitive pricing pressures," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.
"We continue to work on a number of key structural improvements in Performance Chemicals that should positively contribute to future results, including the recent startup of new specialty chemicals capabilities in China, styrene butadiene latex capacity rationalization in North America, and several new product launches. Engineered Surfaces is benefiting from a lower cost structure as the result of a manufacturing footprint consolidation that was completed earlier in the year, and sales growth in the Asian automotive and the U.S. housing / refurbishment markets," said McMullen.
"After a slow start to 2013, our year-over-year results improved throughout the year. Looking forward, there are encouraging signs in markets where we are well positioned such as oil and gas exploration, automotive and transportation and U.S. construction and refurbishment. In addition, we look to leverage the cost actions we have implemented and will continue to make to improve our competitive position," McMullen said.
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