A record fourth quarter and strong 2009 performance puts wallcovering giant OMNOVA Solutions in “the strongest financial position in our history,” the company’s CEO says.
The Ohio-based company reported fourth-quarter net income of $11.1 million, up $10.3 million compared to the fourth quarter of 2008. Diluted earnings per share was $0.25, an improvement of $0.23 per share compared to the fourth quarter of 2008.
Volumes for the quarter increased modestly compared to 2008, reversing a trend of six consecutive quarterly declines.
Segment operating profit was $17.6 million, an increase of $12.7 million over the fourth quarter of 2008, while Net Debt declined by 11.5 million to $111.2 million.
Net sales decreased $30.8 million, or 14.0%, to $188.8 million for the fourth quarter of 2009, compared to $219.6 million for the fourth quarter of 2008, largely because of lower selling prices and foreign currency translation effects. These were partially offset by the improved volume, which included market share gains and penetration into new adjacent markets.
Gross profit improved to $44.0 million, with margins of 23.3%, in the fourth quarter of 2009, compared to $34.6 million, and margins of 15.8%, in the fourth quarter of 2008. The margin improvement was primarily due to lower raw material costs and reduced manufacturing expenses.
"Our strong fourth quarter performance caps off a year in which the company made enormous progress on many fronts, despite one of the worst global recessions in many decades,” said chairman and CEO Kevin McMullen.
“During the quarter, OMNOVA's team of 2,300 associates executed upon a number of profitable initiatives, including the commercialization of innovative new products, penetration of new adjacent markets, broad-based cost reductions which now total over $24 million for the year, effective global raw material sourcing, and improved pricing strategies.
"These actions contributed to record earnings and cash-flow generation for the quarter and the year and create a strong foundation for the future. While economic uncertainties remain, including inflationary threats for some of our raw materials, we are encouraged as we enter 2010.
“Demand across most of our markets is improving, as volumes were positive year-over-year in the fourth quarter, and the company is in the strongest financial position in our history."
OMNOVA (www.omnova.com) is an innovator of emulsion polymers, specialty chemicals and decorative and functional surfaces for a variety of commercial, industrial and residential end uses.