OMNOVA's Fourth Quarter Net Sales Increase 58%
Gross profit in the fourth quarter of 2011 increased to $55.8 million, compared to $32 million in the previous year’s fourth quarter, due primarily to the ELIOKEM acquisition. Raw material costs in OMNOVA’s legacy business increased $39.4 million in the fourth quarter vs. the same period last year. Gross profit margins in the fourth quarter of 2011 were 18.5%, compared to margins of 16.8% in the 2010 fourth quarter. The increase in gross profit margin was due primarily to productivity and pricing actions.
The company reported a net loss of $10.4 million for the fourth quarter, which included a loss from discontinued operations of $16.7 million.
“Operating profit improved sequentially in the fourth quarter despite continued weakness in market demand,” said Kevin McMullen, chairman and CEO. “Fourth quarter results were positively impacted by lower raw material input costs, which declined from an all-time high in the third quarter, but were still higher than the prior year. We also generated positive cash during the quarter and increased our cash balance to approximately $106 million.
“For full year 2011, the company achieved record operating profit despite unprecedented raw material inflation. Our Performance Chemicals business, including ELIOKEM, achieved its best annual profit performance and the ELIOKEM acquisition was accretive in the first year. As we celebrate the one-year anniversary of the ELIOKEM acquisition, we are very enthusiastic about the long-term value we can create together.”
For more information, visit www.omnova.com.