OMNOVA Solutions Inc. recently announced net income of $0.4 million for the third quarter ended August 31, compared to net income of $3.5 million for the same period in 2010. A number of non-recurring pre-tax charges totaled $4.8 million in the third quarter of 2011. These charges resulted primarily from an increase in bad debt reserves of $2.6 million related to a customer bankruptcy and an asset impairment charge of $2.4 million for an idled coated fabrics manufacturing plant in China. Excluding these items, adjusted net income for the 2011 third quarter was $4.3 million.
Net sales increased $103.2 million, or 45.3%, to $331.1 million for the third quarter of 2011, compared to $227.9 million for the third quarter of 2010. The sales improvement was driven by $86.1 million of revenues from the ELIOKEM acquisition and increased OMNOVA legacy sales of $17.1 million.
“Many of the markets we serve slowed during the last half of the quarter as consumer confidence fell,” said Kevin McMullen, chairman and CEO. “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.”
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OMNOVA Reports 45% Sales Increase in Third Quarter
October 4, 2011