FAIRLAWN, Ohio—Omnova Solutions Inc. reported a net income of $7.9 million compared to $700,000 for the fourth quarter of 2012.
Omnova cited the sale of its assets in Taicang, China as a reason for the improvement. The sale netted the company $3.5 million.
The firm's net sales decreased $19.5 million to $234.4 million for fourth quarter 2013 compared to $253.9 million. Omnova said the decline was a result of reduced pricing of $16.3 million and lower volumes of $3.9 million.
Gross profit increased to $51.7 million compared to $48.5 million. The company said the improvement was due to lower overhead costs as a result of cost reduction actions and better product mix. Raw material costs declined by $14.5 million.
"Our financial results in fourth quarter 2013 improved as compared to last year, led by stronger results in engineered surfaces, which had a favorable mix of business and reduced costs, resulting in its highest quarter and full-year operating profit since 2001," said Kevin McMullen, Omnova Solutions chairman and CEO. "Within performance chemicals, the company's specialty chemicals product line had higher volumes and gross profit year-over-year."
Net sales of performance chemicals' decreased $11 million to $178.5 million compared to $189.5 million and total sales decreased to $773 million compared to $864.5 million. The firm cited reduced pricing of $17.3 million, driven by lower raw material costs, which were offset partially by volume and product mix increases of $6 million.
The company is consolidating polymer emulsion manufacturing from its Akron plant into its facility in Mogadore, Ohio. The project is expected to be complete by the end of 2014. Omnova said it will increase its efficiency and capacity utilization by converting styrene butadiene latex polymerization vessels to acrylic manufacturing capabilities.
The cost associated with the project is projected at $9 million with an estimated operating savings of $4 million per year beginning in 2015, the firm said. It will result in a reduction of 80 million pounds of styrene butadiene manufacturing capacity in Mogadore, including the 40 million pound reducing in styrene butadiene latex capacity completed 2013 by converting reactors to produce hollow plastic pigment products.
The Akron plant will continue to operate as a drying operation to process emulsions into dry polymers.