OMNOVA Reports Record Second Quarter Earnings
OMNOVA Solutions Inc. reported net income of $15.1 million, or $0.33 per
diluted share, for the second quarter ended May 31, 2010, compared to net
income of $5.1 million, or $0.12 per diluted share, for the second quarter of
2009. Included in the second quarter of 2010 was a net non-operating gain
of $2.1 million, compared to a net non-operating expense of $0.8 million
in the second quarter of 2009.
Net sales increased $65.1 million, or 40.4%, to $226.4 million for the second quarter of 2010, compared to $161.3 million for the second quarter of 2009. The second quarter increase in net sales was the result of improved volumes of $25.6 million, higher selling prices of $37.5 million and favorable foreign currency translation effects of $2.0 million. Gross profit improved to $47.2 million, with margins of 20.8%, in the second quarter of 2010, compared to $40.0 million and margins of 24.8% in the second quarter of 2009. While gross profit dollars improved by 18%, the decline in gross profit margin was primarily due to higher raw material costs and product mix, partially offset by higher selling prices.
“OMNOVA’s record second quarter reflects the fundamental improvements we have made in our company and improving economic conditions,” said Kevin McMullen, OMNOVA chairman and CEO. “We have made significant progress on many fronts, including the introduction of numerous innovative products; penetration into new, adjacent markets; the continued globalization of our business; and aggressive productivity gains and cost reductions.
“This is the sixth consecutive quarter of year-over-year earnings improvement and the third consecutive quarter of volume improvement. The volume expansion was broad-based, as both of our segments achieved over 15% volume growth in the quarter. Paper and specialty chemicals, domestic laminates and our Asian businesses led the year-over-year improvement. After spending several years improving our business model and cost structure in the face of reduced market demand, we have strong operating leverage as volumes outpaced last year’s levels.”
For more information, visit www.omnova.com.
Net sales increased $65.1 million, or 40.4%, to $226.4 million for the second quarter of 2010, compared to $161.3 million for the second quarter of 2009. The second quarter increase in net sales was the result of improved volumes of $25.6 million, higher selling prices of $37.5 million and favorable foreign currency translation effects of $2.0 million. Gross profit improved to $47.2 million, with margins of 20.8%, in the second quarter of 2010, compared to $40.0 million and margins of 24.8% in the second quarter of 2009. While gross profit dollars improved by 18%, the decline in gross profit margin was primarily due to higher raw material costs and product mix, partially offset by higher selling prices.
“OMNOVA’s record second quarter reflects the fundamental improvements we have made in our company and improving economic conditions,” said Kevin McMullen, OMNOVA chairman and CEO. “We have made significant progress on many fronts, including the introduction of numerous innovative products; penetration into new, adjacent markets; the continued globalization of our business; and aggressive productivity gains and cost reductions.
“This is the sixth consecutive quarter of year-over-year earnings improvement and the third consecutive quarter of volume improvement. The volume expansion was broad-based, as both of our segments achieved over 15% volume growth in the quarter. Paper and specialty chemicals, domestic laminates and our Asian businesses led the year-over-year improvement. After spending several years improving our business model and cost structure in the face of reduced market demand, we have strong operating leverage as volumes outpaced last year’s levels.”
For more information, visit www.omnova.com.
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