OMNOVA reports seventh consecutive quarter of year-over-year growth in specialty segment
Staff Writer |
OMNOVA Solutions posted the third quarter of fiscal 2018 results.
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Loss per share for the third quarter ended August 31, 2018 was $0.04, compared to diluted earnings per share of $0.18 last year.
In the third quarter of 2018, the company recorded charges of $10.4 million primarily for asset writedowns in connection with the Green Bay, Wisconsin plant closure. In the third quarter of 2017, the company recorded charges of $1.8 million primarily related to the "One OMNOVA" cost reduction initiative.
OMNOVA Solutions Adjusted Diluted Earnings per Share was $0.18 for the quarter, compared with last year's unusually high $0.25. For context, Adjusted Diluted Earnings per Share for the third quarters of fiscal 2016 and 2015 were $0.14 and $0.13, respectively.
Net sales for the quarter were $193.6 million, down 3.6% from last year's $200.9 million. Net sales in Specialty Solutions increased 6.1% to $122.1 million, while net sales in Performance Materials decreased 16.7% to $71.5 million. Overall volume was unfavorable by $12.2 million, or 6%, as growth in Specialty Solutions was offset predominantly by the decline in Performance Materials due to the company's strategic exit from the commodity paper market. Price and mix had a favorable impact on net sales of $4.1 million, or 2%, primarily in Specialty Solutions. Currency translation was favorable by $1.5 million, or 0.7%, chiefly reflecting the strengthening of the Euro.
SG&A in the quarter was $25.9 million, down from $28.9 million in the same quarter last year. The primary drivers of the decrease were benefits from the "One OMNOVA" cost reduction initiatives and reduced incentive compensation expense.
Interest expense for the quarter was $4.7 million, compared to $5.5 million last year, reflecting lower average borrowing balances due to the company's $40 million debt pre-payment in December 2017, but partially offset by rising variable interest rates. ■