BEACHWOOD, Ohio—In the wake of weak earnings for its third quarter, Beachwood-based Omnova Solutions Inc. announced a general price increase of up to 20 percent for all products and across all markets served by its Performance Chemicals business.
The price hikes took effect Oct. 1 or as contracts allow, according to a news release the specialty chemical and materials company issued on Sept. 29.
"Despite concentrated efforts to improve our business performance, including an extensive organizational redesign and a comprehensive operational footprint overhaul, our financial returns are not generating reinvestment economics," Anne Noonan, president of Omnova's Performance Chemicals business, said in the release.
"In order for us to continue to provide the differentiated service and support our customers have come to expect from Omnova, we must take this critical action to ensure we remain a viable supplier of value creating solutions to the industries we serve now and in the future," Noonan said.
Omnova provides emulsion polymers, specialty chemicals and functional and decorative surfaces for commercial, industrial and residential end uses.
Last week, the company reported earnings of $400,000, or 1 cent per share, for the third quarter ended Aug. 31, compared with a profit of $1.8 million, or 4 cents per share, for the like period a year ago. Revenue fell 16 percent to $210.9 million.
During the quarter, as part of what Omnova characterized as “strategic actions to right-size its manufacturing footprint and cost base,” the company announced steps to reduce costs by $14 million to $17 million. Those actions include “closing two plants, reducing the size of our work force, re-engineering our core selling, marketing and product development business processes, and strengthening the capabilities of our team to drive growth in our higher margin specialty businesses,” Omnova CEO Kevin McMullen said in a news release.
The company's stock as of 10:20 a.m. Sept. 30, is at $5.52. Omnova stock on Sept. 29 hit a 52-week low of $5. Its 52-week high is $8.62.