WEB NEWS Comments & Business Outlook
First Quarter 2012 Results
Net sales increased $4.0 million , or 1.5%, to $ 275.9 million for the first quarter of 2012, compared to $271.9 million for the first quarter of 2011.
Net income for the first quarter was $12.7 million , or $0.28 per diluted share, compared to $1.0 million , or $0.02 per diluted share for the first quarter of 2011.
"The first quarter 2012 operating profit improved versus the first quarter of last year and sequentially from the fourth quarter of 2011. First quarter raw material costs started at relatively low levels, but increased throughout the quarter. However, due to pricing actions, an improved sales mix of higher margin products, benefits from our global manufacturing footprint and continued productivity improvements, profits increased despite softness in market demand," said Kevin McMullen , OMNOVA Solutions' Chairman and Chief Executive Officer. "We also generated positive cash flow during the quarter and increased our cash balance $21 million to over $124 million .
"Our improved first quarter results reflect the fundamental improvements we have made to our Company, including our globalization initiatives, expansion of our specialty chemicals capability through the ELIOKEM acquisition and a repositioning of our Decorative Products segment. Performance Chemicals achieved its best quarterly operating profit performance in history, and the integration of the ELIOKEM acquisition continues to proceed successfully and has been accretive to earnings. The Decorative Products segment, now comprised of our coated fabrics and laminate/ performance films product lines, significantly improved its profitability versus losses last year. With the divestitures of our wallcovering businesses, the Decorative Products segment is positioned to be a positive contributor to OMNOVA's future financial results," said McMullen.
Comments & Business Outlook
Third Quarter 2011 Results
For the third quarter ended August 31, 2011 , Net Income was $0.4 million , compared to $3.5 million in the third quarter of 2010. Third quarter 2011 Adjusted Net Income was $4.3 million , compared to third quarter 2010 Pro Forma Adjusted Net Income of $7.2 million . Third quarter 2011 results were negatively impacted by several non-recurring charges.
$0.01 compared to $0.08 in the third quarter of 2010. Third quarter 2011 Adjusted Diluted Earnings Per Share was $0.09 , compared to third quarter 2010 Pro Forma Adjusted Diluted Earnings Per Share of $0.16 .
The acquisition and integration of ELIOKEM significantly improves the Company's long-term prospects by expanding, diversifying and further globalizing our specialty chemicals business.
"Many of the markets we serve slowed during the last half of the quarter as consumer confidence fell," said Kevin McMullen , OMNOVA Solutions' Chairman and Chief Executive Officer. "As a result, many of our customers moderated their purchases in the quarter and lowered their outlook for the remainder of the year. Additionally, raw material input costs were at an all-time high despite declining oil prices in the quarter, and year-over-year raw material inflation increased during the period by almost $37 million in the legacy OMNOVA business. However, the Company was able to cover this inflation with increased product pricing of $37 million ."
"Despite these headwinds, we have clearly improved our long-term position with the acquisition of ELIOKEM," McMullen said. "In these very challenging conditions, our Performance Chemicals business, including ELIOKEM, is on pace to achieve its second best yearly pro forma profit performance. We are making solid progress on realizing the benefits of this combination, including a larger global footprint with greater exposure to faster growing regions like India and China , a much broader technology portfolio and an increased number of served markets."
Previously, the Company had provided guidance for full-year Adjusted Diluted Earnings Per Share of $0.40 to $0.44 . Based on the current outlook, the Company expects to be at the top of that range.
