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OMNOVA reports record Q4 earnings to cap off strong year
19
Jan '10
OMNOVA Solutions Inc. reported net income of $11.1 million, or $0.25 per diluted share, for the fourth quarter ended November 30, 2009, compared to net income of $0.8 million, or $0.02 per diluted share, for the fourth quarter of 2008. Included in the fourth quarter of 2009 were restructuring, severance, asset impairment and other charges of $0.4 million, compared to $0.3 million in the fourth quarter of 2008.

Net sales decreased $30.8 million, or 14.0%, to $188.8 million for the fourth quarter of 2009, compared to $219.6 million for the fourth quarter of 2008. The fourth quarter decrease in sales was the result of lower selling prices of $30.1 million and foreign currency translation effects of $1.1 million, partially offset by improved volume of $0.4 million which included market share gains and penetration into new adjacent markets.

Gross profit improved to $44.0 million, with margins of 23.3%, in the fourth quarter of 2009, compared to $34.6 million, and margins of 15.8%, in the fourth quarter of 2008. The margin improvement was primarily due to lower raw material costs and reduced manufacturing expenses.

"Our strong fourth quarter performance caps off a year in which the Company made enormous progress on many fronts, despite one of the worst global recessions in many decades. During the quarter, OMNOVA's team of 2,300 associates executed upon a number of profitable initiatives including the commercialization of innovative new products, penetration of new adjacent markets, broad based cost reductions which now total over $24 million for the year, effective global raw material sourcing, and improved pricing strategies," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.

"These actions contributed to record earnings and cash flow generation for the quarter and the year and create a strong foundation for the future. While economic uncertainties remain, including inflationary threats for some of our raw materials, we are encouraged as we enter 2010. Demand across most of our markets is improving, as volumes were positive year-over-year in the fourth quarter, and the Company is in the strongest financial position in our history," McMullen added.

• Net income was $11.1 million, up $10.3 million compared to the fourth quarter of 2008.
• Diluted earnings per share was $0.25, an improvement of $0.23 per share compared to the fourth quarter of 2008.
• Volumes increased modestly compared to last year, reversing a trend of six consecutive quarterly declines.
• Segment operating profit was $17.6 million, an increase of $12.7 million over the fourth quarter of 2008.
• Net Debt was $111.2 million, a decline of $11.5 million during the quarter, with the leverage ratio improving to 2.0 versus 2.3 in the third quarter of 2009.
• Fiscal 2009 cost reduction action increased to over $24 million.

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OMNOVA Solutions Inc

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