FAIRLAWN, OH -- OMNOVA Solutions Inc. has 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 percent, 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 percent, in the second quarter of 2010, compared to $40.0 million and margins of 24.8 percent in the second quarter of 2009. While gross profit dollars improved by 18 percent, the decline in gross profit margin was primarily due to higher raw material costs and product mix, partially offset by higher selling prices.
Performance Chemicals’ net sales during the second quarter of 2010 increased 59.3 percent, to $138.6 million, compared to $87.0 million in the second quarter of 2009. The improvement was driven by volume increases of $13.7 million or 15.7 percent, higher selling prices of $37.5 million and foreign currency translation effects of $0.4 million. Segment operating profit was $26.7 million for the second quarter of 2010 as compared to $11.4 million in the second quarter of 2009, an increase of $15.3 million.
Decorative Products’ net sales were $87.8 million during the second quarter of 2010, an increase of $13.5 million, or 18.2 percent, compared to the second quarter of 2009. Sales improved in six of the segment's seven product categories, with the strongest growth coming from the domestic laminates and Asian businesses. Volumes grew for the second consecutive quarter after reaching historical lows in 2009. Segment operating loss was $4.5 million in the second quarter of 2010, compared to income of $0.2 million for the second quarter of 2009. Included in the loss was a non-cash impairment charge of $6.2 million related to a write-down of manufacturing assets that support the domestic coated fabrics and wallcovering product lines, reflecting the transfer of certain products to other company facilities to better meet customer demand and weaker market conditions for commercial wallcovering. Excluding the impairment charge, Decorative Products generated second-quarter operating profit of $1.7 million and year-over-year operating profit improvement for the fourth consecutive quarter. This improvement has been driven by significant cost reduction actions, new product introductions, improved productivity and higher volumes in the Decorative Laminates and Asian coated fabrics businesses.