FAIRLAWN, OH - OMNOVA Solutions Inc. announced income from continuing operations of $10.7 million, or $0.23 per diluted share, for the first quarter ended February 29, 2012. Net income for the first quarter was $12.7 million, or $0.28 per diluted share. Included in the first-quarter net income was income of $2.0 million, or $0.05 per diluted share, from discontinued operations resulting from a gain on the sale of a discontinued wallcovering business of $6.0 million, which was partially offset by wallcovering-related operating losses and transition expenses of $4.0 million during the quarter.
"The first-quarter 2012 operating profit improved versus the first quarter of last year and sequentially from the fourth quarter of 2011. First-quarter raw material costs started at relatively low levels, but increased throughout the quarter. However, due to pricing actions, an improved sales mix of higher margin products, benefits from our global manufacturing footprint and continued productivity improvements, profits increased despite softness in market demand,” said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "We also generated positive cash flow during the quarter and increased our cash balance $21 million to over $124 million.”
Net sales increased $4.0 million, or 1.5 percent, to $275.9 million for the first quarter of 2012, compared to $271.9 million for the first quarter of 2011. The sales increase was driven by improved pricing of $24.2 million to cover higher raw material costs and favorable product mix, which was partially offset by volume decreases and unfavorable currency translation effects.
Gross profit in the first quarter of 2012 increased to $60.9 million, compared to $52.1 million in the first quarter of 2011, due primarily to pricing actions, favorable product mix and productivity improvements. Raw material costs increased $13.9 million in the first quarter versus the same period last year. Gross profit margins in the first quarter of 2012 were 22.1 percent, compared to margins of 19.2 percent in the first quarter of 2011.
Net income for the first quarter was $12.7 million, or $0.28 per diluted share, compared to $1.0 million, or $0.02 per diluted share, for the first quarter of 2011. This included income from discontinued operations of $2.0 million for the first quarter of 2012, or $0.05 per diluted share compared to a loss of $0.5 million, or a loss of $0.01 per diluted share, in the first quarter of 2011.