OMNOVA Solutions Inc. (OMN) saw its loss narrow to $11.30 million, or $0.25 a share for the quarter ended Nov. 30, 2016. In the previous year period, the company reported a loss of $18.90 million, or $0.43 a share. On the other hand, adjusted net income from Continuing Operations for the quarter stood at $6 million, or $0.14 a share compared with $5.90 million or $0.13 a share, a year ago.
Revenue during the quarter dropped 6.50 percent to $187 million from $200 million in the previous year period. Gross margin for the quarter expanded 236 basis points over the previous year period to 26.26 percent. Operating margin for the quarter period stood at positive 1.18 percent as compared to a negative 4.90 percent for the previous year period.
Operating income for the quarter was $2.20 million, compared with an operating loss of $9.80 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $21 million compared with $22.40 million in the prior year period. At the same time, adjusted EBITDA margin improved 3 basis points in the quarter to 11.23 percent from 11.20 percent in the last year period.
"I am excited to assume the role of president and chief executive officer and want to thank Kevin McMullen for his 16 years of leadership of OMNOVA Solutions," said Anne Noonan. "We have a strong foundation of innovation, market focus and passion for the customer at OMNOVA. Leveraging these strengths, in addition to continued focus on commercial and operational excellence, will drive growth in our specialty businesses, and margin expansion and cash contribution from our more mature businesses. "Performance Chemicals recorded the second consecutive quarter of year-over-year volume growth in its specialty businesses. The volume growth in the fourth quarter was broad based among our specialty markets including coatings, adhesives, sealants and elastomers (C.A.S.E.), as well as nonwovens and oil & gas additives," said Noonan.
Operating cash flow improves
OMNOVA Solutions Inc. has generated cash of $50.70 million from operating activities during the year, up 16.02 percent or $7 million, when compared with the last year.
The company has spent $20.30 million cash to meet investing activities during the year as against cash outgo of $29 million in the last year.
Cash flow from financing activities was $0.80 million for the year as against cash outgo of $72.70 million in the last year period.
Cash and cash equivalents stood at $78 million as on Nov. 30, 2016, up 73.72 percent or $33.10 million from $44.90 million on Nov. 30, 2015.
Working capital increases
OMNOVA Solutions Inc. has recorded an increase in the working capital over the last year. It stood at $160.60 million as at Nov. 30, 2016, up 16.04 percent or $22.20 million from $138.40 million on Nov. 30, 2015. Current ratio was at 2.42 as on Nov. 30, 2016, up from 2.23 on Nov. 30, 2015.
Debt moves up marginally
OMNOVA Solutions Inc. has witnessed an increase in total debt over the last one year. It stood at $362.60 million as on Nov. 30, 2016, up 1.65 percent or $5.90 million from $356.70 million on Nov. 30, 2015. Total debt was 52.31 percent of total assets as on Nov. 30, 2016, compared with 51.91 percent on Nov. 30, 2015. Debt to equity ratio was at 3.30 as on Nov. 30, 2016, up from 3.27 as on Nov. 30, 2015.
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