Welcome!

.NET Authors: Glenn Rossman, Lori MacVittie, Yeshim Deniz, Ivan Antsipau, Liz McMillan

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
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how these devices generate enough data to learn our behaviors and simplify/improve our lives. What if we could connect everything to everything? I'm not only talking about connecting things to things but also systems, cloud services, and people. Add in a little machine learning and artificial intelligence and now we have something interesting...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) irreversibly encoded. In his session at Internet of @ThingsExpo, Peter Dunkley, Technical Director at Acision, will look at how this identity problem can be solved and discuss ways to use existing web identities for real-time communication.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn real-world benefits of WebRTC and explore future possibilities, as WebRTC and IoT intersect to improve customer service.
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, an Open Source Cloud Communications company that helps the shift from legacy IN/SS7 telco networks to IP-based cloud comms. An early investor in multiple start-ups, he still finds time to code for his companies and contribute to open source projects.
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines.
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice services to the modern P2P RTC era of OTT cloud assisted services.
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehension and conference efficiency.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example to explain some of these concepts including when to use different storage models.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace. These technological reforms have not only changed computers and smartphones, but are also changing the data processing model for all information devices. In particular, in the area known as M2M (Machine-To-Machine), there are great expectations that information with a new type of value can be produced using a variety of devices and sensors saving/sharing data via the network and through large-scale cloud-type data processing. This consortium believes that attaching a huge number of devic...
Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies, with a focus on the enterprise, industrial, aerospace, and defense industries. Innodisk is dedicated to serving their customers and business partners. Quality is vitally important when it comes to industrial embedded flash and DRAM storage products. That’s why Innodisk manufactures all of their products in their own purpose-built memory production facility. In fact, they designed and built their production center to maximize manufacturing efficiency and guarantee the highest quality of our products.
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. Every other IT news item seems to be about IoT and its implications on the future of digital business.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. Download Slide Deck: ▸ Here
BSQUARE is a global leader of embedded software solutions. We enable smart connected systems at the device level and beyond that millions use every day and provide actionable data solutions for the growing Internet of Things (IoT) market. We empower our world-class customers with our products, services and solutions to achieve innovation and success. For more information, visit www.bsquare.com.
With the iCloud scandal seemingly in its past, Apple announced new iPhones, updates to iPad and MacBook as well as news on OSX Yosemite. Although consumers will have to wait to get their hands on some of that new stuff, what they can get is the latest release of iOS 8 that Apple made available for most in-market iPhones and iPads. Originally announced at WWDC (Apple’s annual developers conference) in June, iOS 8 seems to spearhead Apple’s newfound focus upon greater integration of their products into everyday tasks, cross-platform mobility and self-monitoring. Before you update your device, here is a look at some of the new features and things you may want to consider from a mobile security perspective.