OMNOVA Reports Earnings Gain

Wallcovering and specialty chemicals manufacturer OMNOVA Solutions Inc. reported net income of $7.8 million for the company’s first quarter ended February 28, compared to a net loss of $0.1 million for same quarter a year earlier.
Included in the first quarters of both years were restructuring and severance charges of $0.3 million and $0.9 million, respectively.
Net sales for the quarter increased $23.7 million, or 14.8%, to $183.9 million, compared to $160.2 million for the previous year. The company said improved volumes accounted for $18.7 million of the the first-quarter sales increase, with higher selling prices responsible for a $3.1 million gain and foreign currency translation effects accounting for $1.9 million.
Kevin McMullen, chairman and CEO, said the results for the quarter—normally the company’s weakest—“is indicative of the fundamental improvements we have made in our company and the consolidation that is occurring in our industries.” He said the results continue “a very positive trend which began in the second half of 2008,” adding that the company has introduced a number of new products, penetrated new, adjacent markets, and continued a globalization program  while pursuing productivity gains and cost reductions.
The results mark the company’s fifth consecutive quarter of earnings improvement and the second consecutive quarter of volume improvement, McMullen said.

Segment results
The company’s Decorative Products business reported an operating loss of $0.1 million for the first quarter, typically the company’s weakest, compared to a loss of $2.9 million for the same quarter a year earlier. Sales for the quarter rose 8.4%, to $71.1 million. Sales improved in six of the segment’s seven product categories, with the strongest growth coming from Asian businesses and domestic laminates and films, the company said.
The Performance Chemicals segment reported an operating profit of $13.8 million, compared to $7.8 million for the first quarter a year earlier. Sales for the quarter rose 19.2%, to $112.8 million.