>>
Home / Knowledge / News / Textiles / 2009 cost reductions now expected to exceed $23 mn - OMNOVA

2009 cost reductions now expected to exceed $23 mn - OMNOVA

30
Sep '09
OMNOVA Solutions Inc reported net income of $10.1 million, or $0.23 per diluted share, for the third quarter ended August 31, 2009, compared to net income of $3.1 million, or $0.07 per diluted share, for the third quarter of 2008. Included in the third quarter of 2009 were restructuring and severance charges of $0.3 million and flood-related expenses of $0.6 million.

Net sales decreased $53.4 million, or 22.3%, to $186.1 million for the third quarter of 2009, compared to $239.5 million for the third quarter of 2008. The third quarter decrease in sales 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 $44.0 million, with margins of 23.6%, in the third quarter of 2009, compared to $39.1 million, and margins of 16.3%, in the third quarter of 2008. The margin improvement was due primarily to lower raw material costs and reduced manufacturing expenses.

"Our improved third quarter performance reflects the impact from a number of positive ongoing actions being taken by the Company, including broad-based cost reductions now totaling more than $23 million for the year, effective raw material sourcing and commercialization of innovative new products," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "Our Performance Chemicals segment and Decorative Products Asian businesses led the Company's overall improvement. The actions taken by the Company led to significantly higher earnings and positive cash flow from operations, which allowed us to further reduce our debt and increase the Company's financial flexibility.

"Entering our fourth quarter, overall market demand in Decorative Products appears to be bottoming. Volumes in Performance Chemicals are expected to be up year-over-year for the fourth quarter but down modestly on a sequential basis, as is typical, compared to the third quarter. Because of the initiatives we have taken and continue to take, the Company expects to continue to generate significantly improved year-over-year earnings in the fourth quarter," McMullen added.

Selling, general and administrative expense in the third quarter of 2009 fell to $25.7 million, compared to $26.7 million in the third quarter of 2008. Interest expense in the third quarter of 2009 was $2.0 million, a decrease of $1.0 million compared to the third quarter of 2008, as a result of lower average interest rates and debt. The weighted average cost of borrowing during the third quarter of 2009 was 4.6%, an improvement from 5.5% in the third quarter of 2008. The Company's tax benefit and expense for the third quarter of 2009 and 2008 is substantially lower than its statutory rate primarily due to the Company's available net operating loss carryforwards.

The Company's Net Debt was $122.7 million at August 31, 2009, a decline of $18.3 million during the quarter and a reduction of $67.4 million over last year. Debt of $144.6 million was comprised of a term loan facility with $142.7 million outstanding which matures in 2014, and $1.9 million in short-term debt, primarily in Asia. As of August 31, 2009, the Company's revolving asset-based credit facility was not being used and available borrowing capacity was $65.6 million. The quarter-end consolidated cash balance grew to $29.6 million.


Must ReadView All

Pic: Shutterstock

Textiles | On 26th Jan 2022

Vietnam-US trade hits $111.56 bn in 2021

Vietnam-US trade hit $111.56 billion in 2021, up by nearly $21...

Pic: Shutterstock

Textiles | On 26th Jan 2022

Turkey using less coal, hydropower; use of renewables, gas up: Ember

The use of coal and water for energy in Turkey reduced in 2021, while ...

Pic: Bangladesh Parliament Secretariat/Facebook

Apparel/Garments | On 26th Jan 2022

Trade Organisation Bill, 2022, introduced in Bangladesh parliament

The Trade Organisation Bill, 2022, aimed at allowing foreign traders...

Interviews View All

Florian Heubrandner, Lenzing AG

Florian Heubrandner
Lenzing AG

Sustainable and eco-friendly fibres remain in the minority

Textile Industry, Head honchos

Textile Industry
Head honchos

Global supply chain collapsed during the pandemic

Textile Industry, Head honchos

Textile Industry
Head honchos

Good tidings expected for textile industry

Dhiraj Shah,

Dhiraj Shah

The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), set...

Chendhuran Sundar,

Chendhuran Sundar

Headquartered at Singapore, Crocodile is a global fashion and lifestyle...

Akram Tariq Khan,

Akram Tariq Khan

E-commerce brand YourLibaas meaning "garment or attire" in Udru, was...

Dave Rousse, INDA

Dave Rousse
INDA

INDA, a global association of the nonwoven fabrics industry, has been...

Giulio Cesareo, Directa Plus

Giulio Cesareo
Directa Plus

UK-based Directa Plus is one of the largest producers and suppliers...

Thomas Ong P S, NanoTextile

Thomas Ong P S
NanoTextile

Malaysian company NanoTextile Sdn Bhd taps into the potentials of...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

Abhishek Bajaj & Samiksha Bajaj, Samshek

Abhishek Bajaj & Samiksha Bajaj
Samshek

Samshek is a fashion forward tech brand which combines digital experience...

Carmen Emanuela Popa, Label - Carmen Emanuela Popa

Carmen Emanuela Popa
Label - Carmen Emanuela Popa

<b>Carmen Emanuela Popa,</b> a Romanian fashion designer, is known for her ...

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

ESTEEMED CLIENTS

THE BOMBAY DYEING ;& MFG.CO. LTD
BIANCA
Puma
KIABI
Hirdaramani International Export Private Limited
OVS Hong Kong Sourcing Ltd.
KAS Direct Sourcing
SYNERGIES HONG KONG LIMITED
LC Waikiki
Gatsby Africa
J ;& P Coats
Seasalt Limited
Varner AS Retail
NITI Aayog
Helly Hansen Far East Ltd
Groz-Beckert East Asia LLP
Lenzing Aktiengesellschaft
IDH – The Sustainable Trade Initiative
Lacoste (Wanchai)
Rosset ;& Cia Limited
Etam Group Strategy Hong Kong Limited
Sateri (Jiujiang) Fiber Co.,Ltd
Lululemon Athletica Inc
SHAHI Exports Pvt Ltd
Tommy Hilfiger
G-Star Raw C.V.
Splash
Sportswear Company Spa
BIMBA ;& LOLA SL
The LYCRA Company Singapore  Pte. Ltd
Cat Tuong Real Estate Group Joint Stock Company
Vardhman Textile Ltd
T.T. Limited
Midas Clothing Limited
Grasim Industries Limited
Babyshop
Benetton Group
TESCO INTERNATIONAL SOURCING LIMITED
Sportmaster Ltd.
Decathlon
Vianney Textil Hogar S.A. De C.V.
Desigual - ABASIC, S.A.
Esprit Europe Services GmbH
Brandix Lanka Limited
Alison Hayes Romania
Guess Europe Sagl,
Boardriders Asia Sourcing Limited
Abit
Huntsman (Singapore) Pte Ltd
Tchibo GmbH
Gap International Sourcing Limited
Walmart
Chori Company Limited
John Varvatos
Deckers Outdoor (Guangzhou) Consultant Co., LTD.
Recron Polyester from Reliance Industries Limited
H;&M Hennes ;& Mauritz (Far East) Ltd
Tory Burch Hong Kong Ltd
Hela Clothing Pvt Ltd
Aramark Uniform ;& Career Apparel, LLC
MAS Active / MAS Kreeda / MAS Bodyline
Amazon China
Page Industries Limited (Bangalore)
PVH Corporation
BIRLA CENTURY A DIVISION OF CENTURY TEXTILES AND INDUSTRIES
Target Corporation (MN)
Arvind Limited
Bluestem Global Sourcing Limited
Gokaldas Exports Limited
Asos
The Top Form Brassiere Manufacturing Company Limited
Calvin Klein
Lisa S.P.A.
Restoque S.A.
Rayonese Textile Inc., Division de Culp Inc.
Permoda(Koaj/Armi/Pronto/Bkul)
Truetzschler India Private Limited
Phong Phu international JSC (PPJ)
Alix Partners
C;&A Sourcing International Ltd
Maceton Limited
Green Fibre
Under Armour Global Sourcing Ltd
Sainsbury's Argos Asia Limited
Gloria Jeans
Reiter India Private Limited
Chico’ FAS
International Textile Manufacturers Federation
Eastman Chemical Company
Lifestyle

January 2022

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


Advanced Search