Welcome!

Microsoft Cloud Authors: Elizabeth White, Liz McMillan, Mihai Corbuleac, Pat Romanski, David Bermingham

News Feed Item

OMNOVA Solutions Concludes Year of Solid Profit Improvement and Strong Cash Generation as it Reports Fourth Quarter 2012 and Full Year Results

FAIRLAWN, Ohio, Jan. 22, 2013 /PRNewswire/ --

Fourth Quarter 2012 Highlights

  • For the fourth quarter of 2012, the Company reported income from continuing operations of $1.2 million, or $0.02 per diluted share, compared to $6.3 million, or $0.14 per diluted share, in the fourth quarter of 2011.
  • Adjusted Income from Continuing Operations for the fourth quarter of 2012 was $3.2 million, or $0.07 per diluted share, as compared to $5.9 million, or $0.13 per diluted share last year (See Tables B and C).  Results in the quarter were negatively impacted by LIFO expense of $1.8 million (net of tax), or $0.04 per diluted share.
  • The Decorative Products segment name has been changed to Engineered Surfaces to reflect the improved portfolio and importance of innovation and functional performance in the segment's products.

Full Year 2012 Highlights

  • Record Segment Operating Profit of $93.4 million in 2012, compared to $85.2 million in 2011.
  • Gross profit margins increased to 20.2% versus 18.2% in 2011.
  • Record operating profit in the Specialty Chemicals and Laminates product lines.
  • Strong cash generation improves balance sheet with a net debt reduction of $49.2 million and a net leverage decline to 2.75 times.
  • Portfolio enhancement and manufacturing footprint improvement with the sale of wallcovering businesses in 2012 and the coated fabrics manufacturing transition which will be completed in the first quarter of 2013.

OMNOVA Solutions Inc. (NYSE: OMN) today announced income from continuing operations of $1.2 million, or $0.02 per diluted share, for the fourth quarter ended November 30, 2012.  Net income for the fourth quarter was $0.7 million, or $0.01 per diluted share.  Adjusted Income from Continuing Operations for the fourth quarter of 2012 was $3.2 million, or $0.07 per diluted share, as compared to $5.9 million, or $0.13 per diluted share last year (See Tables B and C).  Results in the quarter were negatively impacted by LIFO expense of $1.8 million (net of tax), or $0.04 per diluted share, primarily related to the inventory build for the transition of coated fabrics manufacturing to other, more efficient OMNOVA plants due to the wind-down of manufacturing operations in Columbus, Mississippi.

"The fourth quarter results were negatively impacted by weakness in global demand, particularly in Europe and in the North American paper industry, as well as several one-time unusual items.  During the year, we made structural improvements in our business portfolio, and took many other positive actions that drove continued improvement in our full-year profitability, and generated significant cash flow which allowed us to reduce our net leverage to 2.75 times," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.

"As we look forward to 2013, we are encouraged by a number of actions and market developments that are expected to gain traction starting in the second quarter and, as a result, we believe the Company will continue to improve earnings in fiscal 2013.  Among those actions are several recent new business wins, including one which was driven by the conversion of U.S.-based styrene butadiene latex capacity to a new high styrene chemistry application.  Engineered Surfaces expects further profit improvement beginning in the second quarter after the wind-down of the Columbus, Mississippi manufacturing operations and the transition of coated fabrics manufacturing to more efficient OMNOVA facilities.  Later in the year, we will have increased our Performance Chemicals capabilities in China with expanded specialty chemistry offerings to our customers as we commission the new capacity addition at our Caojing site.  Finally, the Company continues to make progress on productivity and cost reduction actions with over $8 million of non-raw material improvements expected in 2013.

"In addition, we are encouraged by a number of market developments including the continuing momentum of the U.S. housing recovery, rapid growth in oil and gas exploration and production, a strong outlook for automotive and transportation segments in North America and Asia, and growing demand, particularly in developing regions of the world, for personal hygiene products.  OMNOVA has a strong pipeline of new products and is well positioned to serve these markets," said McMullen.

Consolidated Results for the Fourth Quarter Ending November 30, 2012

Net sales decreased $47.5 million, or 15.8%, to $253.9 million for the fourth quarter of 2012, compared to $301.4 million for the fourth quarter of 2011.  The sales decrease was driven by price reductions of $28.0 million, or 9.3%, reduced volumes of $16.4 million, or 5.5%, and unfavorable foreign currency translation effects of $3.1 million, or 1.0%.

Gross profit in the fourth quarter of 2012 decreased to $48.5 million, compared to $55.8 million in the fourth quarter of 2011, driven primarily by lower sales volume.  Raw material costs decreased $31.7 million in the fourth quarter versus the same period last year.  Gross profit margins in the fourth quarter of 2012 improved to 19.1%, compared to margins of 18.5% in the fourth quarter of 2011.

Selling, general and administrative expense in the fourth quarter of 2012 was $29.1 million, compared to $26.0 million in the fourth quarter of 2011.  The increase was due to higher employment-related, research and development and information technology costs.

Interest expense in the fourth quarter of 2012 was $8.7 million, a decrease of $0.8 million from the fourth quarter of 2011, due primarily to the completed amortization of an interest rate swap agreement in the second quarter of 2012.

Income tax expense was $1.4 million, or a 53.8% effective income tax rate for the fourth quarter of 2012, compared to income tax expense of $4.5 million, or a 41.7% effective tax rate in the fourth quarter of 2011. The higher tax rate in the fourth quarter of 2012 was due primarily to the lower level of income and non-recurring permanent tax expense items.

Net income for the fourth quarter of 2012 was $0.7 million, or $0.01 per diluted share, compared to a loss of $10.4 million, or $0.23 per diluted share, for the fourth quarter of 2011.  Included in the fourth quarter of 2012 are losses from discontinued operations of $0.5 million, or $0.01 per diluted share, compared to a loss from discontinued operations of $16.7 million, or $0.37 per diluted share, in the fourth quarter of 2011, primarily related to the decision to exit the global wallcovering businesses and the related write-down of manufacturing assets in Columbus, Mississippi.  Income from continuing operations for the fourth quarter of 2012 was $1.2 million, or $0.02 per diluted share, compared to $6.3 million, or $0.14 per diluted share, for the fourth quarter of 2011.  Adjusted Income From Continuing Operations (which excludes certain non-recurring expense items detailed in Tables B and C) was $3.2 million, or $0.07 per diluted share, for the fourth quarter of 2012, compared to $5.9 million, or $0.13 per diluted share, in the fourth quarter of 2011.  Results in the quarter were negatively impacted by LIFO expense of $1.8 million (net of tax), or $0.04 per diluted share, primarily related to the inventory build for the transition of coated fabrics manufacturing to other, more efficient OMNOVA plants due to the wind-down of manufacturing operations in Columbus, Mississippi.

Consolidated Results for the Year Ending November 30, 2012

Net sales decreased $75.6 million, or 6.3%, to $1,125.5 million for 2012, compared to $1,201.1 million for 2011.  The sales decrease was driven by reduced volumes of $60.4 million, or 5.0%, which was partially offset by price increases of $0.8 million, or 0.1%.  Currency translation effects were $16.0 million unfavorable, or 1.4% of sales.

Gross profit in 2012 increased to $227.2 million, compared to $218.6 million in 2011, driven primarily by a change in sales mix and lower raw material costs.  Raw material costs decreased $23.0 million in 2012 versus fiscal 2011.  Gross profit margins in 2012 improved to 20.2%, compared to margins of 18.2% in fiscal 2011.

Selling, general and administrative expense in 2012 was $121.2 million, compared to $108.6 million in 2011.  The increase was due to higher employment-related, research and development and information technology costs.

Interest expense in 2012 was $36.5 million, a decrease of $1.5 million from 2011, due primarily to the completed amortization of an interest rate swap agreement in the second quarter of 2012 and slightly lower pricing for the term loan.

Income tax expense was $11.2 million, or a 30.3% effective income tax rate for 2012, compared to income tax expense of $13.4 million, or a 44.5% effective tax rate in 2011.  The higher tax rate in 2011 was due primarily to non-recurring permanent tax expense items related to the ELIOKEM acquisition. Cash tax payments in the U.S. over the next few years are expected to be minimal as the Company has $116.8 million of U.S. federal net operating loss carryforwards and $90.0 million of state and local tax net operating loss carryforwards with expiration dates between 2022 and 2032.

Net Income for 2012 was $27.6 million, or $0.60 per diluted share, compared to a loss of $2.8 million, or $0.06 per diluted share, for 2011.  Included in 2012 net income is income from discontinued operations of $1.9 million, or $0.04 per diluted share, compared to a loss from discontinued operations of $19.5 million, or $0.43 per diluted share, in 2011 primarily related to the decision to exit the global wallcovering businesses and a related write-down of manufacturing assets.  Income from continuing operations for 2012 was $25.7 million, or $0.56 per diluted share, compared to $16.7 million, or $0.37 per diluted share, for 2011.  Adjusted Income From Continuing Operations (which excludes certain non-recurring expense items detailed in Tables B and C) was $28.5 million, or $0.63 per diluted share, for 2012, compared to Adjusted Income From Continuing Operations of $24.8 million, or $0.55 per diluted share, in fiscal 2011.

As of November 30, 2012, the Company's debt of $453.6 million was comprised of $250.0 million of 7.875% Senior Notes maturing in 2018, a term loan of $196.0 million maturing in 2017 and $7.6 million of foreign operations borrowings.  The Company continued its strong liquidity position as consolidated cash closed at $148.5 million, or an improvement of $45.4 million in 2012.  On November 30, 2012, there were no outstanding borrowings under the Company's U.S. revolving asset-based credit facility, and the available borrowing capacity was $74.0 million.

Net Debt declined $49.2 million during fiscal 2012 to $307.3 million.  The Net Leverage Ratio (Net Debt / Adjusted EBITDA), as calculated in the Company's Credit Agreement, improved to 2.75x at November 30, 2012, compared to 3.12x on November 30, 2011 (see Table D). 

Discontinued Operations

As part of the Company's strategy to focus on businesses with greater global growth and profit potential, the Company divested its North American and U.K- based commercial wallcovering businesses in 2012.

These businesses were classified as discontinued operations at the end of 2011.  The Columbus, Mississippi manufacturing facility produced both wallcovering and coated fabric products for the North American market.  During 2012, the Company was transitioning the manufacturing of coated fabric products from Columbus to other, more efficient OMNOVA manufacturing sites.  The Company plans to cease manufacturing activities at the Columbus site in February 2013.

Performance Chemicals Fourth Quarter 2012 Results

Net sales during the fourth quarter of 2012 decreased $51.9 million, or 21.5%, to $189.5 million, compared to $241.4 million in the fourth quarter of 2011.  Sales decreased due to reduced pricing of $27.8 million, or 11.5%, volume declines of $21.1 million, or 8.8%, and unfavorable foreign currency translation effects of $3.0 million, or 1.2%.  In the fourth quarter of 2012, Performance Chemicals generated Adjusted Segment Operating Profit of $18.5 million, compared to Adjusted Segment Operating Profit of $22.5 million in the fourth quarter of 2011 (see Table A).  Included in the fourth quarter of 2012 was LIFO income of $0.6 million.  Adjusted Segment Operating Profit declined due to the lower volumes.  The Adjusted Segment Operating Profit margin was 9.8% for the fourth quarter of 2012, compared to an Adjusted Segment Operating Profit margin of 9.3% in the fourth quarter of 2011.

Specialty Chemicals sales were $114.7 million for the fourth quarter of 2012 as compared to $132.6 million for the fourth quarter of 2011.  Volumes in Specialty Chemicals were down 2.7% and pricing declined 8.5%, both of which were partially offset by increased global sales in oilfield drilling, personal hygiene products, floor care, and tapes and adhesives.  During the quarter, there were several new product introductions in oil and gas drilling chemicals that were being trialed by customers, and the Company won new customers in construction chemicals.  At OMNOVA's newest plant in Caojing, China, shipments of tire cord adhesive product increased significantly over the last few months.  This site also continued working on a major plant expansion which is focused on growing other specialty chemical product offerings, with an expected completion in the third quarter of 2013.  This investment will focus on local supply into the fast-growing Asian personal hygiene market and other specialty segments.

Paper and Carpet Chemicals sales were $74.8 million for the fourth quarter of 2012 as compared to $108.8 million for the fourth quarter of 2011.  As compared to last year, fourth quarter volumes in Paper and Carpet Chemicals were down 16.1% due to weak market conditions and market share loss.  Pricing declined 15.2% due to index pricing formulas and competitive activity. During the first quarter of 2013, Performance Chemicals won several new business awards with sales expected to ramp up in the second quarter of 2013. Actions continue to be focused on more cost effective as well as higher performance product solutions including bio-based co-polymer hybrids and other emulsion chemistries to deliver greater customer value.  In addition, the Company is currently finalizing manufacturing capabilities to begin its own internal production of hollow plastic pigment products for coated paper, packaging, and other applications, replacing what had been externally produced on a contract basis.  This technology, which provides opacity and gloss and reduces the need for other ingredients such as titanium dioxide, was acquired from Dow Chemical in 2010.  The capability to produce these specialty, high-performing emulsion products was converted from previously existing styrene butadiene latex manufacturing capacity as part of OMNOVA's continuing strategy to repurpose manufacturing assets to meet changing market demands.

On a full-year basis, Performance Chemicals sales were $864.5 million in 2012 as compared to $951.9 million in 2011.  Sales decreased due to lower pricing of $4.4 million, or 0.5%, volume declines of $66.1 million, or 6.9%, and unfavorable foreign currency translation effects of $16.9 million, or 1.8%.  Adjusted Segment Operating Profit was $89.6 million as compared to $91.2 million for the same period in 2011 and operating profit margins were 10.4% in 2012, versus 9.6% in 2011.

Engineered Surfaces Fourth Quarter 2012 Results

The Company recently changed the name of its Decorative Products segment to Engineered Surfaces to better reflect the improved portfolio and the importance of innovation and functional performance that are valued by customers in the served markets.

Net sales were $64.4 million during the fourth quarter of 2012, an increase of $4.4 million, or 7.3%, compared to the fourth quarter of 2011.  The sales increase was driven primarily by higher volumes in the laminates product line.  The Adjusted Segment Operating Loss was $1.0 million in the fourth quarter of 2012, compared to Adjusted Segment Operating Profit for the fourth quarter of 2011 of $2.2 million. (see Table A).  Negatively impacting the fourth quarter of 2012 was LIFO expense of $3.2 million, primarily related to the inventory build for the transition of coated fabrics manufacturing from Columbus, Mississippi to other OMNOVA plants.  Excluding this item, Adjusted Segment Operating Profit for the fourth quarter of 2012 would have been $2.2 million.

Coated Fabrics sales were $27.3 million, a decrease of $1.2 million, or 4.2%, driven by a decline in domestic transportation, low-margin furniture in China, and European contract sales.  During the quarter, the Company was awarded business from a large Chinese automotive manufacturer which is expected to ramp up in 2013.

Laminates and Performance Films sales were $37.1 million, an increase of $5.6 million, or 17.8%, as compared to the previous year.  Laminate sales grew across most market segments led by flooring, appliances, kitchen and bath, store fixtures and recreational vehicles.  

On a full-year basis, sales were $261.0 million in 2012 as compared to $249.2 million in 2011 led by price increases of $5.2 million and improved volumes of $5.7 million.  Adjusted Segment Operating Profit was $9.3 million as compared to $3.1 million for the same period in 2011.  During 2012, Engineered Surfaces incurred $3.0 million of non-recurring expense as it transitioned the manufacturing of coated fabrics products from Columbus, Mississippi to other, more efficient OMNOVA manufacturing sites.

Earnings Conference Call - OMNOVA Solutions has scheduled its Earnings Conference Call for Tuesday, January 22, 2013, at 11:00 a.m. ET.  The live audio event will be hosted by OMNOVA Solutions' Chairman and Chief Executive Officer, Kevin McMullen.  It is anticipated to be approximately one hour in length and may be accessed by the public from the Company's website (www.omnova.com).  Webcast attendees will be in a listen-only mode.  Following the live webcast, OMNOVA will archive the call on its website until noon ET, February 12, 2013.  A telephone replay will also be available beginning at 1:00 p.m. ET on January 22, 2013, and ending at 11:59 p.m, ET on February 12, 2013.  To listen to the telephone replay, callers should dial:  (USA) 800-475-6701 or (Int'l) 320-365-3844.  The Access Code is 276294.

Non-GAAP and Other Financial Measures

Reconciliation of Reported Segment Sales and Operating Profit (Loss) to Net Sales and Net Income (Loss)


Three Months Ended

November 30,


Year Ended

November 30,

(Dollars in millions)

2012


2011


2012


2011

Performance Chemicals












Paper and Carpet Chemicals

$

74.8


$

108.8


$

343.2


$

399.3

Specialty Chemicals


114.7



132.6



521.3



552.6

Total Performance Chemicals

$

189.5


$

241.4


$

864.5


$

951.9

Engineered Surfaces












Coated Fabrics

$

27.3


$

28.5


$

117.0


$

114.3

Laminates and Performance Films


37.1



31.5



144.0



134.9

Total Engineered Surfaces


64.4



60.0



261.0



249.2

Total Net Sales

$

253.9


$

301.4


$

1,125.5


$

1,201.1

Segment Operating Profit (Loss)












Performance Chemicals

$

18.5


$

24.1


$

89.6


$

86.5

Engineered Surfaces


(3.0)



.7



3.8



(1.3)

Interest expense


(8.7)



(9.5)



(36.5)



(38.0)

Corporate expense


(4.2)



(4.5)



(20.0)



(13.8)

Acquisition and integration related expense








(2.3)

Deferred financing fees write-off








(1.0)

Income From Continuing Operations Before












Income Taxes


2.6



10.8



36.9



30.1

Income tax expense


(1.4)



(4.5)



(11.2)



(13.4)

Income from continuing operations


1.2



6.3



25.7



16.7

(Loss) Income from discontinued operations, net of tax


(.5)



(16.7)



1.9



(19.5)

Net Income (Loss)

$

.7


$

(10.4)


$

27.6


$

(2.8)

Depreciation and amortization

$

8.1


$

8.8


$

32.0


$

33.5

Capital expenditures

$

13.3


$

8.6


$

32.8


$

24.1

This Earnings Release includes Adjusted Segment Operating Profit (Loss), Adjusted Income From Continuing Operations and Adjusted Diluted Earnings Per Share which are non-GAAP financial measures as defined by the Securities and Exchange Commission. Management reviews the adjusted financial measures in assessing the performance of the business segments and in making decisions regarding the allocation of resources to the business segments. Management also believes that the adjusted information is useful for providing investors with an understanding of the Company's business and operating performance. Management excludes the items shown in the tables below because management does not consider them to be reflective of normal operations. These adjusted financial measurements are not measurements of financial performance under GAAP and such financial measures should not be considered as an alternative to Segment Operating Profit (Loss), Net Income (Loss), Diluted Earnings Per Share or other measures of financial performance determined in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. The tables below provide the reconciliation of these financial measures to the comparable GAAP financial measures.

Presented in Table D is the Company's Net Leverage Ratio (Net Debt/Adjusted EBITDA) calculation. EBITDA and Net Debt are presented as defined in the Company's Term Loan Credit Agreement and the calculation of Net Debt includes restricted cash and outstanding letters of credit.

Non-GAAP and Other Financial Measures (Continued)

Reconciliation Tables for: (A) Adjusted Segment Operating Profit, (B) Adjusted Income From Continuing Operations, (C) Adjusted Diluted Earnings Per Share From Continuing Operations and (D) Net Leverage Ratio Calculation

TABLE A                                                                                                                                                                     

Adjusted Segment Operating Profit Reconciliation

Three Months Ended


Year Ended


November 30,


November 30,

(Dollars in millions)

2012


2011


2012


2011

Performance Chemicals Segment Operating Profit

$

18.5


$

24.1


$

89.6


$

86.5

Restructuring and severance




.1





1.1

Customer trade receivable write-off




(1.7)





.9

Fair value write-up of ELIOKEM inventory acquired








2.7

Total adjustments to Performance Chemicals' segment












  operating profit




(1.6)





4.7

Performance Chemicals' Adjusted Segment Operating Profit

$

18.5


$

22.5


$

89.6


$

91.2

Engineered Surfaces Segment Operating (Loss) Profit

$

(3.0)


$

.7


$

3.8


$

(1.3)

Restructuring and severance and other


.4



.2



1.5



.7

Asset impairment and facility closure costs


.8



1.3



1.0



3.7

Coated Fabrics manufacturing transition costs


.8





3.0



Total adjustments to Engineered Surfaces' segment












  operating profit


2.0



1.5



5.5



4.4

Engineered Surfaces' Adjusted Segment Operating (Loss) Profit

$

(1.0)


$

2.2


$

9.3


$

3.1

Total Adjusted Segment Operating Profit

$

17.5


$

24.7


$

98.9


$

94.3













 

TABLE B

Adjusted Income From Continuing Operations Reconciliation

Three Months Ended


Year Ended


November 30,


November 30,

(Dollars in millions)

2012


2011


2012


2011

Income From Continuing Operations

$

1.2


$

6.3


$

25.7


$

16.7

Performance Chemicals segment operating profit adjustments












  per Table A




(1.6)





4.7

Engineered Surfaces segment operating profit adjustments












  per Table A


2.0



1.5



5.5



4.4

Corporate restructuring and other








.2

Acquisition and integration related expense








2.3

Deferred financing fees write-off








1.0

Income tax expense adjustment(1)




(.3)



(1.7)



(5.6)

Tax expense for liquidation of foreign subsidiary








1.1

Tax benefit from foreign tax election






(1.0)



Adjusted Income From Continuing Operations

$

3.2


$

5.9


$

28.5


$

24.8













(1)The income tax adjustment is the additional tax benefit (expense) required to apply the Company's YTD effective tax rate to Income from Continuing Operations and the excluded items.


TABLE C

Adjusted Diluted Earnings Per Share From Continuing

     Operations Reconciliation

Three Months Ended


Year Ended


November 30,


November 30,

(Dollars)

2012


2011


2012


2011

Diluted Earnings Per Share From Continuing Operations

$

.02


$

.14


$

.56


$

.37

Performance Chemicals segment operating profit adjustments












  per Table A




(.04)





.11

Engineered Surfaces segment operating profit adjustments












  per Table A


.05



.04



.13



.10

Acquisition and integration related expense








.05

Deferred financing fees write-off








.02

Income tax expense adjustment




(.01)



(.04)



(.12)

Tax expense for liquidation of foreign subsidiary








.02

Tax benefit from foreign tax election






(.02)



Total Earnings Per Share Impact of Adjusted Items


.05



(.01)



.07



.18

Adjusted Diluted Earnings Per Share From Continuing

  Operations

$

.07


$

.13


$

.63


$

.55













Non-GAAP and Other Financial Measures (Continued)

TABLE D




Net Leverage Ratio Calculation





Year Ended

(Dollars in millions)

2012


2011

Income from continuing operations

$

25.7


$

16.7

Interest expense


33.8



35.3

Amortization of deferred financing costs


2.7



2.7

Income tax


11.2



13.4

Depreciation and amortization


32.0



33.5

EBITDA

$

105.4


$

101.6

Restructuring and severance


1.0



2.2

Asset impairments


1.0



3.1

Non-cash stock compensation


4.5



3.6

Other




3.7

Adjusted EBITDA

$

111.9


$

114.2














Year Ended

Net Debt Reconciliation

2012


2011

Total debt as defined by Term Loan B agreement

$

455.8


$

459.6

Less cash


(148.5)



(103.1)

Net Debt

$

307.3


$

356.5

Adjusted EBITDA

$

111.9


$

114.2

Net Debt/Adjusted EBITDA


2.75x  



3.12x  



















This press release includes "forward-looking statements" as defined by federal securities laws.  These statements, as well as any verbal statements by the Company in connection with this press release, are intended to qualify for the protections afforded forward-looking statements under the Private Securities Litigation Reform Act of 1995.  Forward-looking statements reflect management's current expectation, judgment, belief, assumption, estimate or forecast about future events, circumstances or results and may address business conditions and prospects, strategy, capital structure, sales, profits, earnings, markets, products, technology, operations, customers, raw materials, financial condition, and accounting policies, among other matters.  Words such as, but not limited to, "will," "may," "should," "projects," "forecasts," "seeks," "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "optimistic," "likely," "would," "could," and similar expressions or phrases identify forward-looking statements.

All forward-looking statements involve risks and uncertainties.  Many risks and uncertainties are inherent in business generally and the markets in which the Company operates or proposes to operate.  Other risks and uncertainties are more specific to the Company's businesses including businesses the Company acquires.  The occurrence of such risks and uncertainties and the impact of such occurrences is often not predictable or within the Company's control.  Such impacts could adversely affect the Company's results and, in some cases, such effect could be material.

All written and verbal forward-looking statements attributable to the Company or any person acting on the Company's behalf are expressly qualified in their entirety by the risks, uncertainties, and cautionary statements contained herein.  Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation, and specifically declines any obligation other than that imposed by law, to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Risks and uncertainties that may cause actual results to differ materially from expected results include, among others:  economic trends and conditions affecting the economy in general and/or the Company's end-use markets; prices and availability of raw materials including styrene, butadiene, vinyl acetate monomer, polyvinyl chloride, acrylonitrile, acrylics and textiles; ability to increase pricing to offset raw material cost increases; product substitution and/or demand destruction due to product technology, performance or cost disadvantages; high degree of customer concentration and potential loss of a significant customer; supplier, customer and/or competitor consolidation; customer credit and bankruptcy risk; failure to successfully develop and commercialize new products; a decrease in regional customer demand due to reduced in-region production or increased import competition; risks associated with international operations including political unrest, fluctuations in exchange rates, and regulatory uncertainty; failure to successfully implement productivity enhancement and cost reduction initiatives; risks associated with chemical handling and manufacturing and with acts of war, terrorism, natural disasters or accidents, including fires, floods, explosions and releases of hazardous substances; unplanned full or partial suspension of plant operations; ability to comply, and cost of compliance with legislative and regulatory changes, including changes impacting environmental, health and safety compliance and changes which may restrict or prohibit the Company from using or selling certain products and raw materials; losses from the Company's strategic alliance, joint venture, acquisition, integration and operational activities; rapid inflation in health care costs; loss of key employees and inability to attract and retain new key employees; prolonged work stoppage resulting from labor disputes with unionized workforce; changes in, and significant contributions required to meet, pension plan funding obligations; attacks on and/or failure of the Company's information systems; infringement or loss of the Company's intellectual property; litigation and claims against the Company related to products, services, contracts, employment, environmental, safety, intellectual property and other matters; adverse litigation judgments or settlements; absence of or inadequacy of insurance coverage for litigation judgments, settlements or other losses; stock price volatility; availability of financing at anticipated rates and terms; and loan covenant default arising from substantial debt and leverage and the inability to service that debt, including increases in applicable short-term or long-term borrowing rates.

For further information on risks and uncertainties, see the Company's Form 10-K and 10-Q filings with the Securities and Exchange Commission.

OMNOVA Solutions Inc. is a technology-based company with sales for the fiscal year ending November 30, 2012 of $1.1 billion and a global workforce of approximately 2,390.  OMNOVA is an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses.  Visit OMNOVA Solutions on the internet at www.omnova.com.


 


 

OMNOVA SOLUTIONS INC.

 

Consolidated Statements of Operations
(Dollars in Millions, Except Per Share Data)
(Unaudited)

 


Three Months Ended
November 30,


Year Ended
November 30,



2012



2011



2012



2011

Net Sales

$

253.9


$

301.4


$

1,125.5


$

1,201.1

Cost of goods sold


205.4



245.6



898.3



982.5

Gross Profit


48.5



55.8



227.2



218.6

Selling, general and administrative


29.1



26.0



121.2



108.6

Depreciation and amortization


8.1



8.8



32.0



33.5

Asset impairment


.8



.7



1.0



3.1

Restructuring and severance




.2



1.0



1.6

Interest expense


8.7



9.5



36.5



38.0

Deferred financing fees write-off








1.0

Acquisition and integration related expense








2.3

Other (income) expense, net


(.8)



(.2)



(1.4)



.4



45.9



45.0



190.3



188.5

Income From Continuing Operations












  Before Income Taxes


2.6



10.8



36.9



30.1

Income tax expense


1.4



4.5



11.2



13.4

Income From Continuing Operations


1.2



6.3



25.7



16.7

Discontinued Operations












Loss from discontinued operations (net of tax)


(.5)



(16.7)



(4.1)



(19.5)

Gain on sale of discontinued operations (net of tax)






6.0



Total discontinued operations


(.5)



(16.7)



1.9



(19.5)

Net Income (Loss)

$

.7


$

(10.4)


$

27.6


$

(2.8)

Income (Loss) Per Share












Basic












Basic income from continuing operations per share

$

.02


$

.14


$

.56


$

.37

Basic income (loss) from discontinued operations per share


(.01)



(.37)



.05



(.43)

Basic Net Income (Loss) Per Share

$

.01


$

(.23)


$

.61


$

(.06)

Diluted












Diluted income from continuing operations per share

$

.02


$

.14


$

.56


$

.37

Diluted income (loss) from discontinued operations per share


(.01)



(.37)



.04



(.43)

Diluted Net Income (Loss) Per Share

$

.01


$

(.23)


$

.60


$

(.06)

Weighted-average shares outstanding – basic


46.1



45.2



45.6



44.8

Weighted-average shares outstanding – diluted


46.4



45.6



46.0



45.2

 

 

OMNOVA SOLUTIONS INC.

 

Consolidated Balance Sheets

(Dollars in Millions, except per share amounts)

 


November 30,


November 30,


2012


2011


(Unaudited)




ASSETS:






Current Assets






Cash and cash equivalents

$

143.0


$

98.9

Restricted cash


5.5



4.2

Accounts receivable, net


137.3



163.2

Inventories


96.2



84.5

Prepaid expenses and other


7.6



3.9

Deferred income taxes - current


10.7



6.5

Assets held for sale - current




16.6

Total Current Assets


400.3



377.8

Property, plant and equipment, net


222.8



220.8

Trademarks and other intangible assets, net


79.6



87.5

Goodwill


86.7



88.0

Deferred income taxes - non-current


65.7



69.1

Deferred financing fees


11.3



13.6

Other assets


7.3



8.3

Total Assets

$

873.7


$

865.1

LIABILITIES AND SHAREHOLDERS' EQUITY:






Current Liabilities






Amounts due banks

$

9.6


$

11.3

Accounts payable


106.9



108.5

Accrued payroll and personal property taxes


17.7



16.8

Employee benefit obligations


2.1



2.2

Deferred income taxes - current




.1

Accrued interest


1.8



1.8

Other current liabilities


7.4



7.3

Liabilities held for sale - current




8.5

Total Current Liabilities


145.5



156.5

Senior notes


250.0



250.0

Long-term debt - other


192.6



194.3

Post-retirement benefits other than pensions


7.7



7.8

Pension liabilities


111.4



91.5

Deferred income taxes - non-current


23.9



28.3

Other liabilities


12.4



15.0

Total Liabilities


743.5



743.4

Shareholders' Equity






Preference stock - $1.00 par value; 15 million shares authorized;






none outstanding




Common stock - $0.10 par value; 135 million shares authorized;






47.5 million and 46.1 million shares issued at November 30, 2012






and November 30, 2011, respectively


4.7



4.6

Additional contributed capital


331.8



324.9

Retained deficit


(87.2)



(114.8)

Treasury stock at cost; .6 million shares at November 30, 2012






and .4 million shares at November 30, 2011


(4.4)



(2.7)

Accumulated other comprehensive loss


(114.7)



(90.3)

Total Shareholders' Equity


130.2



121.7

Total Liabilities and Shareholders' Equity

$

873.7


$

865.1

 

SOURCE OMNOVA Solutions Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
SYS-CON Events announced today Object Management Group® has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 18th International CloudExpo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...