Home / Knowledge / News / Textiles / OMNOVA Q3 profit declines
OMNOVA Q3 profit declines
18
Sep '08
OMNOVA Solutions Inc reported net income of $3.1 million, or $0.07 per diluted share, for the third quarter ended August 31, 2008, compared to net income of $4.5 million, or $0.11 per diluted share, for the third quarter of 2007. Included in the third quarter of 2008 were restructuring and severance charges of $0.4 million, compared to restructuring and severance charges of $0.1 million in the third quarter of 2007.

Net sales increased $42.7 million, to $239.5 million, for the third quarter of 2008 compared to $196.8 million during the same quarter a year ago. Contributing to the third quarter increase were sales of $28.1 million from the Decorative Products Asian businesses acquired in the first quarter of 2008 and favorable pricing of $31.9 million, partially offset by net volume declines of $17.1 million. Excluding the Decorative Products Asian businesses, the Company's sales grew $14.6 million, or 7.4%.

Gross profit was $39.5 million, with margins of 16.5% in the third quarter of 2008 compared to $36.8 million, or margins of 18.7%, in the third quarter of 2007. Cost of goods sold increased $40.0 million, to $200.0 million, for the third quarter of 2008 as compared to the third quarter of 2007.

The increase was the result of higher manufacturing costs of $26.7 million, primarily from the inclusion of the Decorative Products Asian businesses, and $26.5 million of higher raw material costs, less lower volumes.

"Pricing actions late in the second quarter and throughout the third quarter enabled us to achieve significant improvement in profitability as compared to the first half of the year. During the quarter, we experienced new record high costs for OMNOVA's major raw materials, along with higher utility and transportation costs, which required us to respond with critical pricing actions," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.

"Several end-use markets experienced declining demand as customers reduced inventory. However, we believe that in several key end uses, especially paper chemicals and wallcovering, we successfully leveraged leading technology and design to outperform the market.

"Despite the recent decline in oil prices, our raw material costs, including butadiene, continue to rise as we begin our fourth quarter," McMullen said. "As a result, everyone in our organization is keenly focused on productivity improvements and pricing actions critical to achieving our most important priority, which is restoration of margins to acceptable levels."

Selling, general and administrative expense as a percentage of sales fell to 11.1% in the third quarter of 2008 as compared to 12.2% a year ago. Expenses in the third quarter of 2008 were $26.7 million, including $1.9 million from the Asian businesses, as compared to $24.0 million last year.

Interest expense decreased $0.5 million, to $3.0 million, for the third quarter of 2008 due to significantly lower average interest rates as a result of the Company's refinancing actions in 2007, which were partially offset by higher average debt levels. Total debt at the end of the third quarter of 2008 was $200.4 million, up $40.8 million from the third quarter of 2007.


Must ReadView All

Textiles | On 18th Aug 2017

GST return filing deadline for transitional credit

For businesses who want to avail the transitional input tax credit...

Apparel/Garments | On 18th Aug 2017

Tough tax policy, lack of capital access for Myanmar SMEs

Small and medium enterprises (SMEs) in Myanmar suffer from arduous...

Courtesy: IRBC

Textiles | On 18th Aug 2017

IRBC targets 80% of Dutch textile businesses by 2021

The Dutch Government and several industry organisations, trade unions ...

Interviews View All

Claudia Kersten
Global Organic Textile Standard

‘GOTS is a very efficient supply chain management tool, especially for...

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Sonia Agarwal
Whitenife

‘The terms eco-friendly and organic are common but everyone perceives them ...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

August 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.0%
No
17.2%
Skip
13.8%

Total Votes: 29

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
41.4%
No
37.9%
Skip
20.7%

Total Votes: 29

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
82.8%
No
6.9%
Skip
10.3%

Total Votes: 29

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
58.6%
No
10.3%
Skip
31.0%

Total Votes: 29


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search