Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

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 N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
SYS-CON Events announced today that SourceForge has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SourceForge is the largest, most trusted destination for Open Source Software development, collaboration, discovery and download on the web serving over 32 million viewers, 150 million downloads and over 460,000 active development projects each and every month.
SYS-CON Events announced today that Daiya Industry will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Daiya Industry specializes in orthotic support systems and assistive devices with pneumatic artificial muscles in order to contribute to an extended healthy life expectancy. For more information, please visit https://www.daiyak...
SYS-CON Events announced today that Nihon Micron will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Nihon Micron Co., Ltd. strives for technological innovation to establish high-density, high-precision processing technology for providing printed circuit board and metal mount RFID tags used for communication devices. For more inf...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that Suzuki Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Suzuki Inc. is a semiconductor-related business, including sales of consuming parts, parts repair, and maintenance for semiconductor manufacturing machines, etc. It is also a health care business providing experimental research for...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
Elon Musk is among the notable industry figures who worries about the power of AI to destroy rather than help society. Mark Zuckerberg, on the other hand, embraces all that is going on. AI is most powerful when deployed across the vast networks being built for Internets of Things in the manufacturing, transportation and logistics, retail, healthcare, government and other sectors. Is AI transforming IoT for the good or the bad? Do we need to worry about its potential destructive power? Or will we...
SYS-CON Events announced today that B2Cloud will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. B2Cloud specializes in IoT devices for preventive and predictive maintenance in any kind of equipment retrieving data like Energy consumption, working time, temperature, humidity, pressure, etc.
In his session at @ThingsExpo, Greg Gorman is the Director, IoT Developer Ecosystem, Watson IoT, will provide a short tutorial on Node-RED, a Node.js-based programming tool for wiring together hardware devices, APIs and online services in new and interesting ways. It provides a browser-based editor that makes it easy to wire together flows using a wide range of nodes in the palette that can be deployed to its runtime in a single-click. There is a large library of contributed nodes that help so...
What is the best strategy for selecting the right offshore company for your business? In his session at 21st Cloud Expo, Alan Winters, U.S. Head of Business Development at MobiDev, will discuss the things to look for - positive and negative - in evaluating your options. He will also discuss how to maximize productivity with your offshore developers. Before you start your search, clearly understand your business needs and how that impacts software choices.
SYS-CON Events announced today that SIGMA Corporation will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. uLaser flow inspection device from the Japanese top share to Global Standard! Then, make the best use of data to flip to next page. For more information, visit http://www.sigma-k.co.jp/en/.
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp em...
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
There is huge complexity in implementing a successful digital business that requires efficient on-premise and cloud back-end infrastructure, IT and Internet of Things (IoT) data, analytics, Machine Learning, Artificial Intelligence (AI) and Digital Applications. In the data center alone, there are physical and virtual infrastructures, multiple operating systems, multiple applications and new and emerging business and technological paradigms such as cloud computing and XaaS. And then there are pe...
Real IoT production deployments running at scale are collecting sensor data from hundreds / thousands / millions of devices. The goal is to take business-critical actions on the real-time data and find insights from stored datasets. In his session at @ThingsExpo, John Walicki, Watson IoT Developer Advocate at IBM Cloud, will provide a fast-paced developer journey that follows the IoT sensor data from generation, to edge gateway, to edge analytics, to encryption, to the IBM Bluemix cloud, to Wa...
SYS-CON Events announced today that Keisoku Research Consultant Co. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Keisoku Research Consultant, Co. offers research and consulting in a wide range of civil engineering-related fields from information construction to preservation of cultural properties. For more information, vi...