FAIRLAWN, OH - OMNOVA Solutions Inc. announced net income of $6.2 million, or $0.14 diluted earnings per share, for the second quarter ended May 31, 2011. This compares to net income of $15.1 million, or diluted earnings per share of $0.33, for the second quarter of 2010. In the second quarter of 2011, there were a number of non-recurring charges totaling $1.1 million resulting primarily from the acquisition of specialty chemicals producer ELIOKEM. Excluding these items, adjusted net income for the second quarter of 2011 was $7.3 million, with adjusted diluted earnings per share of $0.16, as compared to the adjusted pro forma net income of $12.8 million or $0.29 per diluted share for the second quarter of 2010. The adjusted net income for the second quarter of 2011 also includes, net of tax, unrecovered raw material costs of $2.4 million, lower margin on weaker volumes of $ 2.2 million, foreign exchange currency losses of $1.8 million and new plant start-up costs of $0.3 million. The diluted earnings per share impact of these items was approximately $(0.14).
"The company faced stiff headwinds in the second quarter with record-high raw material costs, weaker demand in certain end-use markets and start-up costs for a new plant in China," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "In the face of these market challenges, our second-quarter results, while below our prior expectations, reflect the company's improved, more robust and global business model. The integration of ELIOKEM has added numerous innovative products, expanded our penetration into new and adjacent markets, and accelerated the globalization of our business."
Net sales increased $103.5 million, or 45.7 percent, to $329.9 million for the second quarter of 2011, compared to $226.4 million for the second quarter of 2010. The sales improvement was driven by $94.8 million of revenues from the ELIOKEM acquisition and increased OMNOVA legacy sales of $8.7 million. The higher OMNOVA legacy sales resulted from price increases of $22.5 million and $3.0 million of favorable currency translation effects, which were partially offset by volume decreases of $16.8 million.
OMNOVA Solutions Announces Second-Quarter Results
July 5, 2011