Home / Knowledge / News / Textiles / OMNOVA reports significantly improved Q2 earnings & cash flow

OMNOVA reports significantly improved Q2 earnings & cash flow

25
Jun '09
OMNOVA Solutions Inc reported net income of $5.1 million, or $0.12 per diluted share, for the second quarter ended May 31, 2009, compared to a net loss of $3.1 million, or $0.07 per diluted share, for the second quarter of 2008. Included in the second quarter of 2009 were restructuring and severance charges of $0.8 million and a net pension plan curtailment gain of $0.7 million resulting from the suspension of the accrual of future service benefits for all salary and non-union hourly employees and certain union hourly employees.

Net sales decreased $58.4 million, or 26.6%, to $161.3 million for the second quarter of 2009 compared to $219.7 million for the second quarter of 2008. The second quarter decrease was the result of lower selling prices and weak market demand which were partially offset by market share gains and penetration into new adjacent markets. Gross profit improved to $40.0 million, with margins of 24.8%, in the second quarter of 2009 compared to $33.8 million, and margins of 15.4%, in the second quarter of 2008. The margin improvement was due primarily to lower raw material and manufacturing costs.

"Our improved second quarter performance reflects the impact from a number of positive actions by the Company, including broad-based cost reductions, structurally improved pricing and the introduction of innovative new products, as well as lower raw material costs," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.

"Despite weak market conditions, we achieved significantly improved earnings and cash flow from operations which allowed us to further reduce our debt and increase the Company's financial flexibility. This was the fourth consecutive quarter that the Company reduced its Net Debt-to-EBITDA leverage ratio, ending the quarter at 2.8, and the second consecutive quarter of year-over-year earnings improvement. Though the overall economic environment remains uncertain, because of the fundamental improvements occurring at OMNOVA we expect the second half of 2009 to be profitable and cash flow positive." McMullen added.

Selling, general and administrative expense in the second quarter of 2009 fell to $25.7 million, compared to $27.5 million in the second quarter of 2008. Second quarter 2009 interest expense was $2.0 million, a decrease of $1.5 million as compared to the second quarter of 2008, due to lower average interest rates and debt. The weighted average cost of borrowing during the second quarter of 2009 was 4.4%, a significant improvement from 6.6% in the second quarter of 2008.

The Company's Net Debt declined $26.1 million during the quarter to $141.0 million as compared to $167.1 million at the end of the first quarter of 2009. Since November 30, 2008, debt has been reduced by $38.0 million. Debt is comprised of a term loan facility with $143.1 million outstanding which matures in 2014, a revolving asset-based credit facility with $9.1 million outstanding which matures in 2012 and $4.4 million in short-term debt, primarily in Asia, which matures in 2009. Unused and available borrowing capacity under the Company's revolving asset-based credit facility grew to $46.4 million at May 31, 2009. Cash on hand, primarily in foreign operations, increased $8.4 million in the quarter.


Must ReadView All

Vietnamese side of the border crossing with Hekou, China. Pic:  Klodien | Dreamstime.com

Textiles | On 27th Nov 2021

Efforts on to boost trade between Chinese & Vietnamese provinces

Trade agencies of Lao Cai province in the northwest region of Vietnam ...

Pic: Shaja | Dreamstime.com

Textiles | On 27th Nov 2021

US’ imports of polyester textured yarn to drop in coming months

The US’ imports of polyester textured yarn of HS code 540233 are...

Pic: Tatiyana Akimova | Dreamstime.com

Textiles | On 27th Nov 2021

Sri Lanka’s textile & garment exports on path to cross $5bn this year

After registering a steep fall of 21 per cent year-on-year to $4.423...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Led by MMF, Indian apparel exports likely to double in next 3 years

Textile Industry, Head honchos

Textile Industry
Head honchos

Luxury is not just about high prices but ability to create desire

Textile Industry, Head honchos

Textile Industry
Head honchos

Trainers faced immense challenges as most were not tech-savvy

Kurt Wedgwood,

Kurt Wedgwood

From design to raw material to fabrication and ultimately to delivery -...

Klaus Bergmann,

Klaus Bergmann

German company Erbatech GmbH develops, designs and manufactures high end...

Chendhuran Sundar,

Chendhuran Sundar

It manufactures and retails menswear garments in India under the brand...

Jacques Prigneaux, EDANA

Jacques Prigneaux
EDANA

EDANA has been the leading global association and voice of the nonwovens...

Sameer Sonkusale & Rachel Owyeung, Tufts University

Sameer Sonkusale & Rachel Owyeung
Tufts University

A team at the Tufts University in Massachusetts was recently in news for...

Karan Bose, Hula Global

Karan Bose
Hula Global

Hula Global, a leading isolation gown manufacturer in India, has been...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

Sandeep Gonsalves & Sarah Gonsalves, Sarah & Sandeep

Sandeep Gonsalves & Sarah Gonsalves
Sarah & Sandeep

Established in 2012, Sarah & Sandeep is a luxury menswear label...

Abhishek Agarwal, Purple Style Labs

Abhishek Agarwal
Purple Style Labs

Late Indian fashion designer Wendell Rodricks, is known for his...

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


November 2021

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


Advanced Search