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

Courtesy: Fashion Revolution/Fashion Transparency Index

Apparel/Garments | On 23rd Apr 2018

Transparency helps in swiftly alerting brands

Disclosing key supplier, supply chain and operational information...

Japan’s clothing imports up 4% in fiscal 2017

Apparel/Garments | On 23rd Apr 2018

Japan’s clothing imports up 4% in fiscal 2017

Japan’s imports of clothing and accessories increased by 4 per cent...

Courtesy: Fashion Revolution/Fashion Transparency Index

Fashion | On 23rd Apr 2018

Top global fashion brands now more transparent

Fashion Revolution’s Fashion Transparency Index 2018 reveals Adidas...

Interviews View All

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Urmil Arya

Sushila International, a well established textile organisation established ...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Marten Alkhagen
Swerea IVF AB

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

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Anisha Chaudhari
Threads & Shirts

Threads &amp; Shirts is a freshly-tailored concept providing men/women a...

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

Leave your Comments


April 2018

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
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

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
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

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
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

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
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


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