FAIRLAWN, Ohio (June 23, 2008) — Omnova Solutions Inc. reported a net loss of $3.1 million on sales of $219.7 million for the second quarter ended May 31, the company announced.
The loss was an improvement on the net loss of $9.8 million posted for the second quarter of 2007. Sales were up $31.7 million, or 16.9 percent, from the like period last year, Omnova reported.
The company's priority to improve profitability continued to be challenged by record-setting raw material inflation during the quarter, said Kevin McMullen, Omnova's chairman and CEO. Late in the second quarter, the firm implemented price increases within its Decorative Products and Performance Chemicals segments with minimal loss of volume.
However, as oil continued to climb as high as $139 a barrel, the company experienced new record high costs for major raw materials during its third quarter starting in June, McMullen said. In response, Omnova announced additional price increases of up to 30 percent across many of its Performance Chemicals products, he said.
In addition to new pricing actions, Omnova is focused on productivity improvements to restore profit margins to acceptable levels, McMullen said. The company is continuing to drive its Lean Six Sigma focus deeper into its domestic plants while introducing the concept to its new Asian businesses, he said.
“Our cost structure, excluding raw materials, is lower than anytime since our formation in 1999,” McMullen added. “Everyone in our organization is keenly focused on our most important priority, which is margin improvement," McMullen said.
For the first six months of fiscal 2008, Omnova posted a net loss of $5.8 million, an improvement from the $14.9 million net loss a year earlier. Net sales increased 16.3 percent during the period to $410.3 million.