Displaying items by tag: OMNOVA Solutions

OMNOVA Solutions (NYSE: OMN) recently announced its 2014 Technology Award recipients. This annual award program recognizes exemplary technological contributions by associates in OMNOVA's research and development, sales and marketing, technical service, operations and LEAN SixSigma organizations.

These innovations in product development and process improvement are positively impacting customers in many of OMNOVA's served markets including performance chemicals for a variety of specialty chemical applications, as well as coated fabrics for automotive seating.

Recipients hail from across OMNOVA's global operations, including facilities in Akron, Ohio; Mogadore, Ohio; Jeannette, Pennsylvania; Monroe, North Carolina; Green Bay, Wisconsin; and Minhang, China.

"As a global, customer-centric company, we are continually taking actions that will enhance the value we deliver to our customers and lead to profitable growth," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "The foundation of these efforts is the enhancement of our existing competencies, as well as the development of new, sustainable products and processes that position our customers and our Company for the future. These innovation teams have clearly demonstrated their commitment to our core values and have strengthened our diverse technology base.

"We are working hard to continually enhance our ability to identify new opportunities in our existing and adjacent markets to leverage OMNOVA technology to provide unique value added solutions for meeting unmet customer needs. These and other ongoing innovation efforts position us to further meet the needs of the markets we serve, profitably grow and become a more valuable supplier to our customers, while reaffirming our commitment as a responsible member of the communities in which we operate."

Innovation titles, summaries and recipients are as follows:

Stain Resistant Finish for Coated Fabrics
Category: New Product Development/Commercialization

• Marilyn Germano - Akron, Ohio (Global Technology Center)
• Barry Goldslager - Akron, Ohio (Global Technology Center)
• Charles Kausch - Akron, Ohio (Global Technology Center)
• Rick Thomas - Akron, Ohio (Global Technology Center)
• Raymond Weinert - Akron, Ohio (Global Technology Center)
• James Robbins - Akron, Ohio (Global Technology Center)

Performance Chemicals and Engineered Surfaces division team members worked collaboratively to develop and implement new topcoats that extend the competitive advantage of the PreFixx^® finish when applied to coated fabrics. They utilized the Company's unique PolyFox™ fluorochemicals to provide a more stain resistant PreFixx^® finish. The new topcoat allows improved stain resistance and easier cleaning of stains, including permanent markers, offering customers stain protection that is a leader in the industry. 

Styrene Butadiene (SB) Latex by Controlled Polymerization and Improved Process 
Category: Continuous Innovation

• Pam Arndorfer – Green Bay, Wisconsin
• Kristie Crocker – Green Bay, Wisconsin
• Mike Flickinger - Akron, Ohio (Global Technology Center)
• Yongsin Kim - Akron, Ohio (Global Technology Center)
• Scott Sabourin – Field Sales
• Mitch Shipman - Akron, Ohio (Global Technology Center)
• John Westerman - Akron, Ohio (Global Technology Center)

The team developed a SB latex for the paper industry that delivers styrene butadiene acrylonitrile terpolymer latex performance. The latex provides increased strength as well as the ability to produce multi-modal products, delivering high strength and superior optical properties in one product.

Cost of Quality Performance Improvement (Jeannette, PA) 
Category: LEAN SixSigma Excellence

• Jared Antonacci – Monroe, North Carolina
• John Coulter – Jeannette, Pennsylvania
• Dan Hilt – Jeannette, Pennsylvania
• Dave Kostrzewski – Jeannette, Pennsylvania
• Josh Scott – Jeannette, Pennsylvania

The team used LEAN SixSigma tools, including value stream analysis, to evaluate and identify areas of waste that were negatively contributing to the Jeannette, Pennsylvania laminates and films plant's long term competitive position. The tools identified many potential opportunities, and numerous projects were run to eliminate waste. The projects generated improvements in material flow and handling, defective material reduction, inventory management and communication. This led to a significant reduction in overall quality related costs to the plant.  

GenCryl Pt^® by Semi-Continuous Process with Controlled Polymer Architecture 
Category: Core Competence Building

• Kristie Crocker – Green Bay, Wisconsin
• Mike Flickinger - Akron, Ohio (Global Technology Center)
• Scott Frasca – Field Sales
• Yongsin Kim - Akron, Ohio (Global Technology Center)
• Rochelle Morgan – Pilot Plant, Mogadore, Ohio
• Mitch Shipman - Akron, Ohio (Global Technology Center)

The team developed a new high strength, low odor latex designed specifically to maximize the efficiency of the latex in a specific customer's formulation. The improved polymer properties were achieved by identifying critical polymer structures that provided maximum binding strength. New processing parameters were developed to control the polymerization, allowing production of polymer structures needed to deliver superior performance. The new product resulted in binder reductions and lower end use cost for this customer, and a new capability that can be leveraged more broadly.

Creation of the Magnetic Resonance Facility 
Category: Core Competence Building

• Tammy Donohue - Akron, Ohio (Global Technology Center)
• Matthew Espe, Ph.D - Akron, Ohio (Global Technology Center)
• William Sands - Akron, Ohio (Global Technology Center)

This award acknowledges the continuous innovation benefits provided by OMNOVA's Magnetic Resonance Facility (MRF). The MRF was established in OMNOVA's Global Technology Center (GTC) in Akron, Ohio, and the facility supports new product development (NPD), manufacturing and customer support. The facility has benefited OMNOVA through expedited NPD, developing rapid solutions to manufacturing issues, providing customer support and qualifying secondary raw material sources. The facility has been involved in projects across all business units, as well as supporting analytical efforts worldwide.

Water-based Low TVOC and Odor Coated Vinyl for Automotive Application 
Category: New Product Development/Commercialization

• Sunny He – Minhang, China
• John Zhao  – Minhang, China
• Lu Zhenhai  – Minhang, China

OMNOVA's global coated fabrics team proposed to a large automotive manufacturer in China that it switch from the current solvent-based coated product to a fully water-based coated product. The product was successfully launched in May 2014. This initiative greatly reduced the concentration level of eight types of solvents in the passenger car compartment, enhancing air quality. Total volatile organic compounds (TVOC) test results show an obvious reduction of solvents level in the product. This demonstrated OMNOVA's valued-added capabilities and services in helping to improve overall vehicle performance in the market.

OMNOVA Solutions Inc. is a technology-based company with 2014 sales of $1 billion and a global workforce of approximately 2,300.  OMNOVA is an innovator of emulsion polymers, specialty chemicals, and functional and decorative surfaces for a variety of commercial, industrial and residential end uses.  Visit OMNOVA Solutions at www.omnova.com.

GENCRYL PT and PREFIXX are registered trademarks of OMNOVA Solutions. 
POLYFOX is a trademark used under license.

SOURCE OMNOVA Solutions

OMNOVA Solutions Inc. (NYSE: OMN) has announced income from continuing operations of $0.2 million, or breakeven per diluted share, for the first quarter ended February 28, 2013.  Net loss for the first quarter was $0.2 million, or breakeven per diluted share.  Included in the first quarter results were restructuring, severance, manufacturing transition costs and other items which totaled $1.9 million pre-tax.  These were primarily related to the closure of manufacturing operations at a plant, which had previously been disclosed.

"As we expected, operating results in our first quarter of 2013, which has been historically our weakest on a seasonal basis, were lower than last year.  These results are not reflective of what we anticipate for the rest of the year.  As previously disclosed, we lost significant volume in our coated paper chemicals markets late last year, which negatively impacted results in the first quarter.  However, we have won new commitments that are expected to offset much of the lost volume, with product shipments beginning to ramp up in the second quarter.  Additionally, weak volumes in both the European and Indian markets negatively impacted results," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.  "While we had a weak start to the quarter, we were encouraged by the profit trend as the quarter progressed, with February results significantly stronger than the prior two months.

"We have made a number of structural improvements that we expect will begin contributing to increased operating profit during the remainder of the year, including new global manufacturing capability coming online and the completion of the Columbus, Mississippi manufacturing consolidation.  In addition, we have recent new business commitments from customers and are seeing encouraging signs from key end markets in which we are well positioned such as housing, oil and gas exploration, personal hygiene and transportation.  As a result, we expect full-year 2013 Adjusted Income from Continuing Operations will exceed last year's performance," said McMullen.

Consolidated Results for the First Quarter Ending February 28, 2013

Net sales decreased $24.2 million, or 8.8%, to $251.7 million for the first quarter of 2013, compared to $275.9 million for the first quarter of 2012.  The sales decrease was driven by lower volume of $19.7 million, or 7.1%, and reduced pricing of $4.7 million, partially offset by favorable currency translation effects of $0.2 million. 

Gross profit in the first quarter of 2013 decreased to $49.0 million, compared to $60.9 million in the first quarter of 2012, due primarily to the lower volumes.  Raw material costs declined $3.1 million in the first quarter versus the same period last year.  Gross profit margins in the first quarter of 2013 were 19.5%, compared to margins of 22.1% in the first quarter of 2012. The decline was due to the lower volumes, reduced pricing and related manufacturing cost absorption.

Selling, general and administrative expense (SG&A) in the first quarter of 2013 was $30.5 million, or 12.1% of sales, compared to $29.5 million, or 10.7% of sales, in the first quarter of 2012.  The increase was due to higher outside services, health care and other employee costs.

Interest expense in the first quarter of 2013 was $8.6 million, a decrease of $0.9 million from the first quarter of 2012, due primarily to the completed amortization in 2012 of an interest rate swap agreement.

Income tax expense was $0.6 million, representing a 75.0% effective income tax rate, for the first quarter of 2013, compared to income tax expense of $3.5 million, or a 24.6% effective tax rate in the first quarter of 2012.  The lower rate in the first quarter of 2012 was due primarily to a foreign tax benefit of $1.0 million.  The higher rate in the first quarter of 2013 was primarily related to the low pre-tax income results.  While the first quarter effective tax rate appears high at 75%, the Company estimates its full-year 2013 effective rate will be approximately 30% to 33%.

Cash tax payments in the U.S. over the next few years are expected to be minimal as the Company has $116.8 million of U.S. federal net operating loss carryforwards and $90.0 million of state and local tax net operating loss carryforwards with expiration dates between 2022 and 2032.

Net loss for the first quarter of 2013 was $0.2 million, or breakeven per diluted share, compared to net income of $13.5 million, or $0.29 per diluted share, for the first quarter of 2012. This included a loss from discontinued operations of $0.4 million for the first quarter of 2013, compared to income from discontinued operations of $2.8 million, or $0.06 per diluted share, in the first quarter of 2012.  Income from continuing operations for the first quarter of 2013 was $0.2 million, or breakeven per diluted share, compared to $10.7 million, or $0.23 per diluted share, for the first quarter of 2012.  Adjusted Income From Continuing Operations was $1.5 million, or $0.03 per diluted share for the first quarter of 2013, compared to Adjusted Income From Continuing Operations of $10.0 million, or $0.22 per diluted share, in the first quarter of 2012 (see Tables B and C).

As of February 28, 2013, the Company's debt of $454.0 million was comprised of $250.0 million of 7.875% Senior Notes maturing in 2018, a term loan of $195.5 million maturing in 2017 and $8.5 million of foreign operations borrowing.  The Company's liquidity position remained strong and totaled $200.1 million.  Liquidity was comprised of cash, cash equivalents and restricted cash of $122.0 million and $78.1 million of available borrowing capacity under the Company's U.S. revolving asset-based credit facility.

Net Debt increased $26.9 million to $334.2 million during the quarter due primarily to an increase in working capital.  However, Net Debt was flat with the same period a year ago. Adjusted EBITDA (as defined in the Company's Term Loan Credit Agreement, see Table D) declined to $97.4 million at the end of the first quarter of 2013.  The Company was in compliance with all lender covenants.

In March, the Company amended and extended its $195.5 million term loan facility by one year, to May 2018.  Additionally, the floating-rate pricing of this debt declined by 1.25%, to 4.25%, or a savings of $2.4 million per year at prevailing LIBOR rates.

Discontinued Operations

As part of a strategy to focus on businesses with greater global growth potential, the Company divested its North American and U.K.-based commercial wallcovering businesses in fiscal 2012, receiving proceeds of $16.2 million in cash and notes, along with the potential for future royalty payments.  These businesses were classified as discontinued operations at the end of fiscal 2011.  As part of a manufacturing transition agreement with the buyer, the Company continued to operate a plant in Columbus, Mississippi, which made commercial wallcovering and coated fabric products until February 2013, when production ceased.

Performance Chemicals First Quarter 2013 Results

Net sales during the first quarter of 2013 decreased $27.2 million, to $191.2 million, compared to $218.4 million in the first quarter of 2012.  Sales decreased due to volume declines of $22.2 million or 10.2%, reduced pricing of $4.9 million and unfavorable foreign currency translation of $0.1 million.  For the first quarter of 2013, Performance Chemicals generated Adjusted Segment Operating Profit of $15.1 million, compared to Adjusted Segment Operating Profit of $25.7 million in the first quarter of 2012 (see Table A).  Adjusted Segment Operating Profit declined due primarily to the lower volumes.

Adjusted Segment Operating Profit margin was 7.9% for the first quarter of 2013, compared to Adjusted Segment Operating Profit margin of 11.8% in the first quarter of 2012.

Specialty chemical sales declined $8.0 million to $123.9 million for the first quarter of 2013, compared to $131.9 million for the first quarter of 2012, driven primarily by lower sales in tire cord, elastomeric modifiers, specialty rubbers and contract manufacturing.  This was partially offset by sales growth in key global product lines that enjoy solid market positions in Asia, including nonwovens, oil and gas drilling chemicals, antioxidants, tape/adhesive and floor care.   Regionally, specialty chemical sales were lower in Europe and India versus last year, but higher in Asia.  The oil and gas drilling chemical business generated initial sales for three new products during the quarter.  The Company also received commitments for additional volumes in roofing and construction applications.  Continued progress was made in obtaining customer approvals for specialty latex from OMNOVA's newest plant in Caojing, China, which ran at 50% utilization levels supplying tire cord products and was profitable throughout the quarter.  Additionally, the construction of new styrene butadiene latex capacity and capability on the Caojing site is nearing completion. Commissioning and customer qualifications are expected to occur during the second half of the year.     

Paper and carpet chemical sales were $67.3 million for the first quarter of 2013, compared to $86.5 million for the first quarter of 2012, driven primarily by lower year-over-year volumes in both markets.  The Company previously disclosed the loss of approximately 60 million pounds to competitive activity in the last half of 2012, but has won new commitments that are expected to significantly offset the volume loss with product shipments beginning to ramp up in the second quarter of 2013. Actions continue to be focused on higher performance and more sustainable product solutions, such as bio-based co-polymer hybrid chemistry as well as high strength technologies, to deliver greater customer value.  Commissioning and scale-up of the Company's new hollow plastic pigment product, which utilizes re-purposed styrene-butadiene latex reactors, is progressing with customer conversions and new account penetrations expected late in the second quarter.

Engineered Surfaces First Quarter 2013 Results

Net sales were $60.5 million during the first quarter of 2013, an increase of $3.0 million, or 5.2%, compared to the first quarter of 2012.  Sales improved by 2.5% for global coated fabrics and 7.8% for global laminates and performance films.  Adjusted Segment Operating Profit was $1.8 million in the first quarter of 2013, compared to Adjusted Segment Operating Profit of $3.0 million for the first quarter of 2012 (see Table A).  The decline in Adjusted Segment Operating Profit was the result of $0.8 million of lower LIFO and other inventory valuations compared to the first quarter of 2012, due to the transition of coated fabrics production and $0.4 million of higher raw material and manufacturing costs.

Global coated fabric sales were $28.9 million, up $0.7 million or an increase of 2.5%.  Sales improved in Asia, but declined in North America.  The sales improvement in Thailand and China was due primarily to higher volumes in transportation markets as a result of new automotive wins.  North American sales declined primarily due to customer pre-buys in the fourth quarter of 2012 in anticipation of the Columbus, Mississippi manufacturing plant shutdown.  During the quarter, wallcovering and coated fabrics production ceased at the facility and the volume was moved to other OMNOVA facilities. Coated fabrics profitability is forecasted to improve over the remaining three quarters of 2013 versus the prior year as customer trials have been completed, and orders are expected to ramp up from current levels.   

Laminate and performance film sales were $31.6 million, an increase of $2.3 million or 7.8%, led by a strong demand in residential and commercial construction-related markets for products that go into kitchen and bath, flooring, store fixture and display applications.

For the full release with tables click here....

SOURCE OMNOVA Solutions Inc.

OMNOVA Solutions has announced its 2011 Technology Award recipients. This annual award program recognizes exemplary technological contributions by associates in OMNOVA's research and development, sales and marketing, technical service, operations, product management and LEAN SixSigma organizations.

These innovations in product development and process improvement are positively impacting customers in many of OMNOVA's served markets including performance chemicals for oil and natural gas drilling, paper and tape applications, as well as laminates for the kitchen and bath cabinetry, RV/manufactured housing and store fixture markets.

Recipients hail from across OMNOVA's global operations, including its Performance Chemicals business segment facilities in Akron, Ohio; Mogadore, Ohio; Chester, South Carolina; and Green Bay, Wisconsin, as well as Villejust, France and Shanghai, China. OMNOVA's Decorative Products business segment is also well-represented with Technology Award winners from its facilities in Fairlawn, Ohio; Auburn, Pennsylvania and Monroe, North Carolina.

"As a global company, we are continually taking actions that will enhance the value we deliver to our customers and allow us to pursue new and adjacent markets," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "The cornerstone of these efforts is the enhancement of our existing competencies, as well as the development of new, sustainable products and processes for the future. These outstanding innovation teams have clearly focused on delivering value to our customers, enhancing our operations and reducing our environmental footprint, positioning OMNOVA for sustained profitable growth as we move forward."

Innovation titles, summaries and recipients are as follows:

Global High Performance Release Coating
Category: New Product Development/Commercialization

Doug Harper – Chester, South Carolina
Bobbi Varnadore – Chester, South Carolina
Tom Walsh – Akron, Ohio Global Technology Center
Haiping Fu – Shanghai, China

The strength of OMNOVA's global Performance Chemicals team was highlighted through the development of new release coating technology for the Chinese tape market. The release coating provides enhanced runnability on the customer's production line and delivers improved overall tape performance including overlap/release properties.

Elimination of Print Voids in Laminates
Category: LEAN SixSigma Excellence

Hrishikesh Bhide – Auburn, Pennsylvania
Mike Weremedic – Auburn, Pennsylvania
Don Scarnulis – Auburn, Pennsylvania
Eric Johnson – Fairlawn, Ohio World Headquarters

This Decorative Products team identified and implemented "Print Assist Technology" to eliminate the occurrence of print voids, which were small blemishes that would not receive ink during the printing process of vinyl laminates. The new technology ensures that ink will adhere to these voids, improving overall product quality at OMNOVA's Auburn plant. It also reduces the amount of printing ink consumed due to reprints and decreases scrap.

Extreme Condition Fluid Loss Resins for Oil/Gas Drilling Muds
Category: Continuous Innovation

Bertrand Guichard – Villejust, France Global Technology Center
Patrick Vongphouthone – Villejust, France Global Technology Center
Cecile Mazard – Villejust, France Global Technology Center
Bill Brown – Mogadore, Ohio Pilot Plant

This global team built on OMNOVA's already robust oil/gas drilling chemical portfolio by developing new fluid loss control polymeric particles for extreme condition drilling muds. These products are designed to provide excellent fluid loss control and low formation damage in oil and synthetic based fluids (drilling and drill-in fluids, completion fluids, etc.) under extreme heat and pressure conditions that intensify as wells are drilled deeper.

Extending Pot Life of Coatings for Laminates (Monroe, NC)
Category: LEAN SixSigma Excellence

Milton Johnson – Monroe, North Carolina
Tim Van Allen – Monroe, North Carolina
William Nick Gusler, Jr. – Monroe, North Carolina
Ron Collette – Monroe, North Carolina

This team developed a unique coating technology with a longer shelf life that could be reused for multiple production runs without compromising performance. This has enabled the Monroe plant to reduce its raw material costs and significantly decrease waste – a goal for the facility as part of OMNOVA's Vision 2014 sustainability program.

GenCryl Pt® 9525 Paper Coating Latex
Category: New Product Development/Commercialization

Scott Sabourin – Field Technical Sales
Rick Ellenberg – Field Technical Sales
Mark Pomush – Green Bay, Wisconsin
John Westerman – Akron, Ohio Global Technology Center

This cross-functional team developed a unique paper coating latex to meet specific customer needs for production and performance. GenCryl Pt 9525 provides exceptional paper coating strength attributes while maintaining other key requirements, such as high-speed coater runnability, ideal surface properties and high print fidelity for digital printing applications.

OMNOVA Solutions is a technology-based company with 2011 sales of $1.2 billion and a global workforce of approximately 2,300. OMNOVA is an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses.  Visit OMNOVA Solutions on the internet at www.omnova.com.

GENCRYL PT is a registered trademark of OMNOVA Solutions.

SOURCE OMNOVA Solutions 

OMNOVA Solutions Fitchburg, Massachusetts specialty chemicals facility recently received an Environmental Merit Award from the New England Region One Office of the U.S. Environmental Protection Agency (EPA). Ongoing since 1970, the EPA merit awards honor individuals and groups who have shown particular ingenuity and commitment in their efforts to preserve the region's environment.

OMNOVA's Fitchburg plant received the award for improvement in all major company sustainability categories, including reducing its consumption of natural gas, electricity and water, as well as decreasing its emissions. Since the establishment of baseline metrics in 2007 through the Company's Vision 2014 sustainability commitment, the plant achieved improvements of 33% or more in each of these categories. Employees at the Fitchburg facility utilized LEAN SixSigma methodologies, to focus on eliminating waste and achieving continuous improvement in all facets of manufacturing to drive these changes.

In addition, the Fitchburg plant has provided over $27,000 annually to local educational, health and wellness, and civic organizations through the OMNOVA Solutions Foundation as part of its commitment to building strong communities.

"As a Responsible Care company, it is our responsibility to enhance the sustainability of our processes, products and communities," said Dan Flint, Director of Operations for OMNOVA's Performance Chemicals Division. "By reducing its environmental footprint and embracing its role as good corporate citizen, the Fitchburg plant has exemplified the values of our Company and is one of the leaders in delivering on our Vision 2014 sustainability commitment. This award signifies the willingness of our employees to take an active role in driving continuous improvement to secure a better future for OMNOVA, our customers and our neighbors."

SOURCE OMNOVA Solutions

OMNOVA Solutions Chairman and Chief Executive Officer Kevin McMullen will speak at Houlihan Lokey's 2012 Global Industrials Conference in New York on Thursday, May 10, 2012.  The presentation will be webcast live beginning at approximately 12:15 p.m. ET.  

Participants may access the live webcast from the Investors page of OMNOVA Solutions' website at www.omnova.com.  Following the conference, an archive will be maintained on the OMNOVA website until May 31, 2012. 

OMNOVA Solutions is a technology-based company with pro forma sales for the twelve months ending February 29, 2012, of $1.2 billion and a global workforce of approximately 2,300.  OMNOVA is an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses.  Visit OMNOVA Solutions on the internet at www.omnova.com.

SOURCE OMNOVA Solutions

OMNOVA Solutions has announced that it has sold its U.K.-based Muraspec commercial wallcovering business to affiliates of a2e Venture Catalysts Limited, and its principal Amin Amiri based in Manchester, United Kingdom.  Muraspec produces and distributes wallcoverings and other interior surfacing products, primarily to commercial markets in the U.K., Europe and the Middle East.

This stock transaction involves the entire Muraspec business including all brands, a plant in Kent, U.K., a design and distribution center outside London, plus sales offices in Paris, Warsaw and Dubai.  Muraspec has approximately $40 million in sales.  OMNOVA operated Muraspec as a stand-alone business. 

"The sale of our European wallcovering business allows us to focus our resources on our global Performance Chemicals business as well as the coated fabrics, laminates and performance films product lines within Decorative Products that offer greater global growth potential," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.  "Due to the very different design preferences of countries and cultures throughout the world, the global commercial wallcovering market tends to require a regional focus, which a2e will be in a better position to serve. 

"I want to thank each of our associates in the Muraspec business for their dedication and service to the Company.  Their efforts have built a strong reputation for the Muraspec name and its related brands.  We wish them continued success," McMullen said.

Under key terms of the transaction, OMNOVA will receive approximately US$7.0 million in cash and notes.

This announcement follows the December 2011 sale of certain assets of OMNOVA's North American commercial wallcovering business to J. Josephson.  Going forward, OMNOVA's decorative products portfolio will include coated fabrics, laminates, performance films, digital wall murals and laminated surfaces for the interior construction systems market.

OMNOVA Solutions Inc. has announced a net loss of $10.4 million, or a diluted loss per share of $0.23, for the fourth quarter ended November 30, 2011.  Included in the fourth quarter net loss was a loss from discontinued operations of $16.7 million, or a diluted loss per share of $0.37, related primarily to non-cash asset impairment charges of $13.6 million.

"Operating profit improved sequentially in the fourth quarter despite continued weakness in market demand," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "Fourth quarter results were positively impacted by lower raw material input costs, which declined from an all-time high in the third quarter, but were still higher than the prior year.  We also generated positive cash during the quarter and increased our cash balance to approximately $106 million.

"For full year 2011, the Company achieved record operating profit despite unprecedented raw material inflation.  Our Performance Chemicals business, including ELIOKEM, achieved its best annual profit performance and the ELIOKEM acquisition was accretive in the first year.  As we celebrate the one-year anniversary of the ELIOKEM acquisition, we are very enthusiastic about the long-term value we can create together," McMullen said.  "Additionally, with the decision to exit commercial wallcovering, the Decorative Products segment is better positioned to be a positive contributor to OMNOVA's future financial results.

"While we are optimistic about the fundamental improvement we have made to the long-term business outlook for the Company, we are clearly facing some near-term headwinds with raw material price volatility and uncertain market demand," McMullen added.

Discontinued Operations

As part of the Company's strategy to focus on businesses with greater global growth potential, the Company decided in the fourth quarter of 2011 to exit commercial wallcovering, and these businesses were classified as discontinued operations.  On December 12, 2011, the Company completed the sale of the North American commercial wallcovering business.  Total sale proceeds from the North American assets were $10.0 million along with potential future royalty payments.

The Company's European-based commercial wallcovering business, known as Muraspec, serves the global commercial wallcovering market outside of North America, including Asia.  Muraspec has been operated on a stand-alone basis and will continue business as usual to design, produce, sell and service its commercial wallcovering and other products.  The Company is pursuing the sale of the ongoing Muraspec business.

The Company recorded a loss of $16.7 million in the fourth quarter of 2011 for discontinued operations which was related primarily to non-cash asset impairments of $13.6 million.  OMNOVA will record a gain of approximately $9.8 million related to the sale of the North American commercial wallcovering business in the first quarter of 2012.

Commercial wallcovering results in the fourth quarter were sales of $19.3 million with an operating loss of $3.9 million excluding unusual items.  For the full year 2011, the commercial wallcovering operations generated net sales of $70.2 million and an operating loss of $7.9 million excluding unusual items.

Reported Consolidated Results for the Fourth Quarter Ending November 30, 2011

Net sales increased $111.1 million, or 58%, to $301.4 million for the fourth quarter of 2011, compared to $190.3 million for the fourth quarter of 2010.  The sales improvement was driven by $81.8 million of revenues from the ELIOKEM acquisition and increased OMNOVA legacy sales of $29.3 million.  The higher OMNOVA legacy sales resulted from price increases of $44.4 million and $2.0 million of favorable currency translation effects, which were partially offset by volume decreases of $17.1 million.

Gross profit in the fourth quarter of 2011 increased to $55.8 million, compared to $32.0 million in the fourth quarter of 2010, due primarily to the ELIOKEM acquisition.  Raw material costs in OMNOVA's legacy business increased $39.4 million in the fourth quarter versus the same period last year. Gross profit margins in the fourth quarter of 2011 were 18.5%, compared to margins of 16.8% in the fourth quarter of 2010.  The increase in gross profit margin percentage was due primarily to productivity and pricing actions.

Selling, general and administrative expenses (SG&A) in the fourth quarter of 2011 increased to $26.0 million, or 8.6% of sales, compared to $19.3 million, or 10.1% of sales, in the fourth quarter of 2010.  The increase of $6.7 million in SG&A was due primarily to the ELIOKEM acquisition, partially offset by a bad debt reserve recovery of $1.7 million.  The decline as a percentage of sales was due to higher sales and the Company's focused ongoing efforts to control costs and leverage SG&A across its global operations.

Interest expense in the fourth quarter of 2011 was $9.5 million, an increase of $6.4 million from the fourth quarter of 2010, due to higher borrowing levels and an increase in interest rates resulting from refinancing activities relative to the ELIOKEM acquisition in December 2010.

Income from continuing operations before income taxes in the fourth quarter of 2011 was $10.8 million, compared to a loss of $5.6 million in the fourth quarter of 2010.

For the fourth quarter of 2011, income tax expense was $4.5 million, a 41.7% effective income tax rate.  In the fourth quarter of 2010, the Company recorded a tax benefit of $89.2 million related to the reversal of a deferred tax asset valuation allowance in the U.S., which was no longer required.  Cash tax payments in the U.S. over the next few years are expected to be minimal because the Company has $124.8 million of U.S. federal net operating loss carryforwards and $109.1 million of state and local tax net operating loss carryforwards with expiration dates between 2022 and 2032.

In the fourth quarter of 2011, income from continuing operations was $6.3 million, or $0.14 per diluted share.  Loss from discontinued operations, net of tax, was $16.7 million related primarily to non-cash asset impairment charges of $13.6 million, or $0.37 per diluted share.  The net loss was $10.4 million, or $0.23 per diluted share.  

As of November 30, 2011, the Company's debt of $457.3 million was comprised of $250.0 million of 7.875% Senior Notes maturing in 2018, a term loan of $198.0 million maturing in 2017 and $9.3 million of foreign operations borrowings.  The Company maintained its strong liquidity position as global cash and cash equivalents totaled almost $106 million.  Also, on November 30, 2011, there were no outstanding borrowings under the Company's U.S. revolving asset-based credit facility, and the available borrowing capacity was $83.8 million.

Performance Chemicals Fourth Quarter 2011 Results

Net sales during the fourth quarter of 2011 increased $110.2 million, to $241.4 million, compared to $131.2 million in the fourth quarter of 2010.  The ELIOKEM acquisition added $81.8 million of sales versus the prior year.  Performance Chemicals' legacy sales increased $28.4 million in the fourth quarter of 2011 due to positive pricing actions of $39.6 million and $0.2 million of foreign currency translation effects, partially offset by volume decreases of $11.4 million. Segment operating profit was $24.1 million for the fourth quarter of 2011, compared to $17.6 million in the fourth quarter of 2010, an increase of $6.5 million (see Table 1).

Performance Chemicals Adjusted Segment Operating Profit for the fourth quarter of 2011 was $22.5 million, compared to the fourth quarter Pro Forma Adjusted Segment Operating Profit of $25.0 million in 2010 (see Table 3).  The adjusted operating profit margin was 9.3% for the fourth quarter of 2011, compared to the pro forma adjusted operating profit margin of 12.2% in the fourth quarter of 2010.  The decline in the operating profit margin was due primarily to the volume declines.

NewPage Corporation, a major customer, filed for Chapter 11 bankruptcy protection in September 2011.  Early in the first quarter of 2012, the Company completed a new two-year supply contract with NewPage and has been designated as a Critical Vendor.  NewPage paid a cash settlement to the Company on its pre-petition bankruptcy trade receivable balance.  The Bankruptcy Court has approved the settlement.  As a result, in the fourth quarter of 2011, the Company reversed $1.7 million of the $2.6 million bad debt charge that it recorded for the NewPage receivable in the third quarter of 2011.

The specialty product lines within Performance Chemicals recorded strong double-digit sales growth in global drilling chemicals, continuing a year-long trend with increasing participation in high temperature, high pressure drilling environments around the world.  Significant progress was made in obtaining customer approvals for tire cord latex from OMNOVA's new plant in Caojing, China.  Also, Performance Chemicals introduced its bio-based co-polymer hybrid chemistry into both carpet and coated paper applications following successful commercialization with several specialty customers.

Decorative Products Fourth Quarter 2011 Results

Results of continuing operations excluding commercial wallcovering (see Table 2) were sales of $60.0 million during the fourth quarter of 2011, an increase of $0.9 million, or 1.5%, compared to the fourth quarter of 2010.  Sales improved for North American and China coated fabrics and for decorative laminates but declined in performance films and Thailand coated fabrics.  Adjusted Segment Operating Profit was $2.2 million in the fourth quarter of 2011, compared to a Pro Forma Adjusted Segment Operating Loss of $2.7 million for the fourth quarter of 2010 (see Table 3).  The improvement is related primarily to productivity and pricing actions.

During the quarter, raw material price recovery was significantly higher than the previous year and continued the trend of sequential quarterly improvements in 2011.  Globally, coated fabrics sales into the transportation and contract upholstery markets were very strong, driven by double-digit volume growth in after-market automotive, motorcycle, recreational seating and healthcare applications.  The Thailand coated fabrics sales drop reflected the massive flooding in the region which impacted the manufacturing plants of customers.  The Company's Thailand plants were not damaged and continued operating.  Laminates sales grew double-digit in the store fixture and kitchen and bath segments, driven by specification of OMNOVA's products by a major DIY store chain.

Earnings Conference Call - OMNOVA Solutions has scheduled its Earnings Conference Call for Friday, January 27, 2012, at 11:00 a.m. ET.  The live audio event will be hosted by OMNOVA Solutions' Chairman and Chief Executive Officer, Kevin McMullen.  It is anticipated to be approximately one hour in length and may be accessed by the public from the Company's website (www.omnova.com).  Webcast attendees will be in a listen-only mode.  Following the live webcast, OMNOVA will archive the call on its website until noon ET, February 17, 2012.  A telephone replay will also be available beginning at 1:00 p.m. ET on January 27, 2012, and ending at 11:59 p.m., ET on February 17, 2012.  To listen to the telephone replay, callers should dial:  (USA) 800-475-6701 or (Int'l) 320-365-3844.  The Access Code is 231350.

OMNOVA Solutions received a letter of commendation from the U.S. Department of Energy (DOE) for the Company's achievement of a 5.8% reduction in energy usage for 2010. As a partner in DOE's Better Buildings, Better Plants program, OMNOVA has voluntarily developed internal targets to reduce its energy consumption by 25% over a ten-year period for all of its U.S.-based manufacturing locations.

"OMNOVA Solutions' most recent annual report showed a 5.8% reduction in energy intensity in 2010, placing the company well on its way to meeting the pledge target," wrote Dr. Leo Christodoulou, Program Manager for the U.S. Department of Energy. "We specifically acknowledge Mr. Doug Fox of OMNOVA's LEAN SixSigma organization, who has worked closely with the Department on this pubic/private partnership initiative."

Under requirements of the program, OMNOVA has established energy baselines, developed an energy-management plan and designated an energy leader/manager. The Company must also report its progress to DOE on an annual basis.

"We are proud to be a participant in the Better Buildings, Better Plants program in our Performance Chemicals and Decorative Products businesses," said Kevin McMullen, OMNOVA Solutions Chairman and CEO. "As a leader in our served markets and responsible neighbor in the communities in which we operate, it is great to see the progress we've made in pursuit of this energy reduction goal. This is an important element of our Vision 2014 sustainability effort to reduce our environmental footprint. The leadership efforts of Doug Fox and other associates across our Company have enabled us to identify potential areas for change and to enact sustainable practices."

OMNOVA is participating in the Better Buildings, Better Plants program concurrently with its own Vision 2014 sustainability effort. The establishment of baseline metrics and integration of process improvements, which were already underway within the framework of the OMNOVA program, are included as part of the Company's involvement with the Department of Energy program.

The U.S. Department of Energy's Better Buildings, Better Plants program, formerly the Save Energy Now LEADER initiative, has been renamed to better reflect DOE's emphasis on advancing and coordinating energy efficiency strategies across multiple fronts. Key program elements will remain unchanged, including the 10-year, 25% energy intensity improvement target.

OMNOVA Solutions is a Responsible Care® company, with a strong, long-standing commitment to the American Chemistry Council's environmental, health, safety and security initiative that covers nearly every aspect of chemical development, manufacturing, transportation and disposal.

OMNOVA Solutions Inc. is a technology-based company with pro forma sales for the twelve months ending August 31, 2011 of $1.2 billion and a global workforce of approximately 2,700. OMNOVA is an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses. Visit OMNOVA Solutions on the internet at www.omnova.com.

RESPONSIBLE CARE is a registered trademark of the American Chemistry Council

SOURCE OMNOVA Solutions Inc.

OMNOVA Solutions (NYSE:OMN) has announced that the Company will immediately suspend production at its Taicang, China plant and consolidate production into its Shanghai, China facility, pending future improvement in business conditions.  Both facilities make coated fabrics for OMNOVA's Decorative Products business segment.  Idling of the Taicang plant is in response to weak demand in the domestic and export furniture and automotive upholstery markets, which has created excess industry capacity in the region.

"By consolidating all coated fabrics manufacturing into our well-established and larger Shanghai facility, OMNOVA will improve our capacity utilization while continuing to provide quality products and timely service to our customers in China," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.  "Since the production processes at both facilities are largely redundant, the transition period will be very brief.  Importantly, as the local and export markets regain momentum, our Taicang site remains an attractive option to support future growth."

The Company emphasized that the suspension of production will occur in an orderly fashion, consistent with local labor requirements and appropriate safety and environmental practices.

The idling will affect approximately 95 employees at the Taicang plant.  Some employees will have the opportunity to transfer to the Company's Shanghai facility.  "We regret that market conditions make it necessary to take this action.  We certainly appreciate and want to thank our employees for their hard work and dedicated service to OMNOVA," McMullen said.    

Annual sales from products manufactured at the Taicang plant were approximately $8 million.  Cash costs to idle the facility are estimated at $0.5 million, which will be incurred during the fourth quarter of 2011.  Cost savings from idling the plant are forecasted to be $1.2 million in 2012.

SOURCE OMNOVA Solutions