Omnova Solutions reports second quarter results

qiangzi

Friday, June 29, 2012

Fairlawn, OH - Omnova Solutions announced income from continuing operations of $6.9 million, or $0.15 per diluted share, for the second quarter ended May 31. Net income for the second quarter was $7.0 million or $0.15 per diluted share. “The second quarter 2012 financial results were solid, considering the weak global economy and higher raw material costs. The company continued to generate positive cash flow during the quarter and increased our cash balances $9 million to over $133 million. In the second quarter, raw material costs, especially butadiene, increased significantly versus the first quarter of 2012 and the second quarter of 2011. However, as we enter the third quarter, raw material prices are declining as a result of improved supply and a weaker global economy,” said Kevin McMullen, Omnova chairman and chief executive officer. Net sales decreased $5.3 million, or 1.7 percent, to $307.5 million for the second quarter of 2012, compared to $312.8 million for the second quarter of 2011. The sales decrease was driven by a volume decline of $21.1 million and unfavorable currency translation effects of $3.5 million, which was partially offset by improved pricing of $19.3 million to cover higher raw material costs. Gross profit in the second quarter of 2012 decreased slightly to $60.0 million, compared to $60.4 million in the second quarter of 2011, despite lower volumes. Raw material costs increased $13.5 million in the second quarter versus the same period last year. Gross profit margins in the second quarter of 2012 were 19.5 percent, compared to margins of 19.3 percent in the second quarter of 2011. Selling, general and administrative expense (SG&A) in the second quarter of 2012 was $32.2 million, or 10.5 percent of sales, compared to $28.4 million, or 9.1 percent of sales, in the second quarter of 2011. The increase was due to higher employee benefit and information technology costs. Net income for the second quarter was $7 million, or $0.15 per diluted share, compared to $6.2 million, or $0.14 per diluted share for the second quarter of 2011. This included income from discontinued operations of $0.1 million for the second quarter of 2012, compared to a loss of $1.3 million or a loss of $0.02 per diluted share in the second quarter of 2011. Income from continuing operations for the second quarter of 2012 was $6.9 million or $0.15 per diluted share, compared to $7.5 million or $0.16 per diluted share for the second quarter of 2011. -