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OMNOVA Q3 profit declines
18 Sep '08
4 min read
The increase in debt included $32.4 million of borrowings and assumed debt in connection with the Decorative Products Asian business acquisitions in January 2008. Net Debt was $190.1 million at the end of the third quarter of 2008.
There was $35.0 million of unused and available liquidity under the Company's revolving asset-based credit facility at August 31, 2008. The weighted average cost of borrowing during the third quarter of 2008 was 5.5%, a significant improvement from 7.8% during the third quarter of 2007.
EBITDA, as defined in the Company's borrowing agreements for the calculation of the net leverage ratio, was $15.1 million for the third quarter of 2008 compared to $14.3 million for the third quarter of 2007. EBITDA for the twelve months ended August 31, 2008 was $44.6 million, compared to $45.7 million for the twelve months ended August 31, 2007.
OMNOVA's leverage ratio of Net Debt to EBITDA was 4.3 at August 31, 2008, well under the covenant limit of 5.5.
Performance Chemicals - Net sales during the third quarter of 2008 increased 14.8%, to $145.5 million, compared to $126.7 million in the third quarter of 2007. The increase was driven by higher selling prices of $29.5 million, partially offset by weaker market conditions leading to volume decreases of $10.7 million.
Segment operating profit was $10.5 million for the third quarter of 2008, up from $7.9 million for the third quarter of 2007. The year-over-year operating profit improvement was driven by the higher pricing in response to $24.1 million of higher raw material costs, offset by lower volumes of $2.4 million, and increases in freight and utility expenses and unabsorbed manufacturing overhead.
Segment operating profit margin was 7.2% for the third quarter of 2008 as compared to 6.2% for the third quarter of 2007.
Continued...
There was $35.0 million of unused and available liquidity under the Company's revolving asset-based credit facility at August 31, 2008. The weighted average cost of borrowing during the third quarter of 2008 was 5.5%, a significant improvement from 7.8% during the third quarter of 2007.
EBITDA, as defined in the Company's borrowing agreements for the calculation of the net leverage ratio, was $15.1 million for the third quarter of 2008 compared to $14.3 million for the third quarter of 2007. EBITDA for the twelve months ended August 31, 2008 was $44.6 million, compared to $45.7 million for the twelve months ended August 31, 2007.
OMNOVA's leverage ratio of Net Debt to EBITDA was 4.3 at August 31, 2008, well under the covenant limit of 5.5.
Performance Chemicals - Net sales during the third quarter of 2008 increased 14.8%, to $145.5 million, compared to $126.7 million in the third quarter of 2007. The increase was driven by higher selling prices of $29.5 million, partially offset by weaker market conditions leading to volume decreases of $10.7 million.
Segment operating profit was $10.5 million for the third quarter of 2008, up from $7.9 million for the third quarter of 2007. The year-over-year operating profit improvement was driven by the higher pricing in response to $24.1 million of higher raw material costs, offset by lower volumes of $2.4 million, and increases in freight and utility expenses and unabsorbed manufacturing overhead.
Segment operating profit margin was 7.2% for the third quarter of 2008 as compared to 6.2% for the third quarter of 2007.
Continued...
OMNOVA Solutions Inc
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