FAIRLAWN, OH - OMNOVA Solutions Inc. has reported net income of $3.5 million, or $0.08 per diluted share, for the third quarter ended August 31, 2010, compared to net income of $10.1 million, or $0.23 per diluted share, for the third quarter of 2009. Included in the third quarter of 2010 were non-recurring expenses totaling $6.7 million, including $3.9 million related to a strike at a Decorative Products manufacturing plant, $1.9 million related to a pending acquisition, $0.8 million for a foreign import duty claim, and $0.1 million for restructuring and severance actions and other items. Included in the third quarter of 2009 were non-recurring expenses totaling $0.7 million including $0.6 million for flood-related damage, and $0.3 million for restructuring and severance actions offset by pension curtailment gains of $0.2 million.
Net sales increased $41.8 million, or 22.5 percent, to $227.9 million for the third quarter of 2010, compared to $186.1 million for the third quarter of 2009. The third-quarter increase in net sales was the result of improved volumes of $7.4 million and higher selling prices of $35.0 million, partially offset by unfavorable foreign currency translation effects of $0.6 million. Gross profit declined to $39.1 million, with margins of 17.2 percent, in the third quarter of 2010, compared to $44.0 million and margins of 23.6 percent in the third quarter of 2009. Included in gross profit in the third quarter of 2010 is $2.6 million of strike-related costs. The decline in gross profit margin percentage was primarily due to a change in product mix, higher manufacturing costs as a result of the strike, and the effect of index pricing, in which higher raw materials are passed through without any gross margin benefit.
OMNOVA Solutions Reports Third-Quarter Earnings
September 30, 2010