Omnova Solutions cuts debt by $51.3 million in year through Aug. 31

By Lisa Kerner

Charlotte, N.C., Sept. 26 - Omnova Solutions Inc.'s net debt declined by $19.4 million during the fiscal third quarter to $305.2 million, with a year-to-date debt reduction of $51.3 million, chairman and chief executive officer Kevin McMullen said during the company's earnings call on Wednesday.

The company's total debt of $454 million includes $250 million of 7 7/8% senior notes due 2018, a $196.5 million term loan maturing in 2017 and $7.5 million of foreign operations borrowings.

Omnova's all-in debt cost is less than 7%.

Consolidated cash grew $17.6 million since the end of the second quarter to $151 million at the end of the fiscal third quarter on Aug. 31, according to an Omnova news release.

As of Aug. 31, there were no outstanding borrowings under the company's U.S. asset-based revolving credit facility, and the available borrowing capacity was $81.8 million.

Omnova's net leverage ratio improved to 2.5 times from 3.1 times at the end of 2011.

Compared to the prior-year period, Omnova's third-quarter net sales decreased by 8.5%, or $26.8 million, to $288.2 million. The decrease was driven by pricing declines of 4.7%, reduced volumes of $4.9 million and unfavorable currency translation effects.

Net income for the third quarter was $6.4 million, or $0.14 per diluted share, compared with $400,000, or $0.01 per diluted share, for the third quarter of 2011.

"Our current view is that general economic softness will persist in the fourth quarter with volumes expected to be flat or slightly up in most product lines," McMullen said.

"The exception is paper chemicals, which is experiencing weak market demand and increased competitive activity."

McMullen said the cost of raw materials is expected to move up slightly in the fourth quarter.

Omnova is a Fairlawn, Ohio-based provider of specialty chemicals, emulsion polymers and decorative surfaces.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.