Ohio | 1-15147 | 34-1897652 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
25435 Harvard Road Beachwood, Ohio | 44122-6201 | |||
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
Exhibit Number | Description | |
99 | Press Release, dated February 1, 2017, issued by OMNOVA Solutions Inc. | |
OMNOVA SOLUTIONS INC. | ||
By: | /s/ Frank P. Esposito | |
Name: | Frank P. Esposito | |
Title: | Assistant General Counsel & Corporate Secretary | |
Date: | February 1, 2017 |
Exhibit Number | Description | |
99 | Press Release, dated February 1, 2017, issued by OMNOVA Solutions Inc. |
Contact: | Sandi Noah | Paul DeSantis | ||
Communications | Chet Fox | |||
(216) 682-7011 | Investor Relations | |||
sandi.noah@omnova.com | (216) 682-7003 |
• | Loss Per Share (EPS) in the fourth quarter of 2016 was $0.25, compared to a loss of $0.43 in the 2015 fourth quarter. Adjusted Diluted Earnings Per Share (Adjusted EPS) in the fourth quarter of 2016 expanded to $0.14, compared to $0.13 in the prior year period, marking the seventh consecutive quarter of year-over-year improvement. |
• | Performance Chemicals’ segment operating profit for the quarter was $13.5 million, compared with a loss of $11.5 million in the 2015 fourth quarter. Adjusted Segment Operating Profit rose 3.5%, to $14.7 million. (See Tables A and B.) This was Performance Chemicals' seventh consecutive quarter of year-over-year improvement in Adjusted Segment Operating Profit. |
• | Volume in the quarter for Performance Chemicals’ specialty businesses was up 4.8%, the second quarter in a row of year-over-year specialty volume improvement. |
• | Strong earnings and cash flow led to the continued reduction in net leverage as net debt-to-trailing twelve month Adjusted EBITDA improved to 3.5x, compared to 3.9x at the end of last year’s fourth quarter. (See Tables E and F.) |
• | For the full year 2016, EPS was a loss of $0.01, compared to a loss of $0.39 last year. For the full year 2016, Adjusted EPS was $0.50, up 39% from last year’s $0.36. |
• | On December 1, 2016, Anne Noonan was appointed President and Chief Executive Officer of OMNOVA Solutions. |
Three Months Ended | Year Ended | ||||||||||||||
November 30, | November 30, | ||||||||||||||
(Dollars in millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net Sales | |||||||||||||||
Performance Chemicals | |||||||||||||||
Performance Materials | $ | 68.6 | $ | 78.1 | $ | 284.1 | $ | 331.0 | |||||||
Specialty Chemicals | 64.7 | 63.0 | 264.7 | 277.1 | |||||||||||
Total Performance Chemicals | $ | 133.3 | $ | 141.1 | $ | 548.8 | $ | 608.1 | |||||||
Engineered Surfaces | |||||||||||||||
Coated Fabrics | $ | 17.0 | $ | 21.9 | $ | 71.5 | $ | 87.8 | |||||||
Laminates and Performance Films | 36.7 | 37.0 | 139.6 | 142.1 | |||||||||||
Total Engineered Surfaces | 53.7 | 58.9 | 211.1 | 229.9 | |||||||||||
Total Net Sales | $ | 187.0 | $ | 200.0 | $ | 759.9 | $ | 838.0 | |||||||
Segment Operating Profit (Loss) | |||||||||||||||
Performance Chemicals | $ | 13.5 | $ | (11.5 | ) | $ | 55.9 | $ | 15.9 | ||||||
Engineered Surfaces | (1.4 | ) | 4.7 | 12.4 | 18.9 | ||||||||||
Interest expense | (7.3 | ) | (7.8 | ) | (24.7 | ) | (28.3 | ) | |||||||
Corporate expense | (4.9 | ) | (5.0 | ) | (25.8 | ) | (23.7 | ) | |||||||
Corporate severance | (4.9 | ) | — | (4.9 | ) | — | |||||||||
Shareholder activist costs | — | — | — | (1.9 | ) | ||||||||||
Operational improvement costs and other | .4 | — | .8 | (.4 | ) | ||||||||||
Asset impairment | — | — | — | (.6 | ) | ||||||||||
Debt issuance costs write-off | (1.2 | ) | (.6 | ) | (2.9 | ) | (.6 | ) | |||||||
Acquisition and integration related expenses | (.5 | ) | — | (.9 | ) | (.4 | ) | ||||||||
(Loss) Income From Continuing Operations Before Income Taxes | (6.3 | ) | (20.2 | ) | 9.9 | (21.1 | ) | ||||||||
Income tax (expense) benefit | (4.9 | ) | 1.3 | (10.3 | ) | 2.4 | |||||||||
(Loss) from continuing operations | (11.2 | ) | (18.9 | ) | (0.4 | ) | (18.7 | ) | |||||||
Discontinued operations, net of tax | — | — | — | .9 | |||||||||||
Net (Loss) | $ | (11.2 | ) | $ | (18.9 | ) | $ | (0.4 | ) | $ | (17.8 | ) | |||
Depreciation and amortization | $ | 7.1 | $ | 10.1 | $ | 30.6 | $ | 34.0 | |||||||
Capital expenditures | $ | 9.1 | $ | 8.7 | $ | 25.6 | $ | 24.0 |
OMNOVA SOLUTIONS INC. | ||||||||||||||||||||
Non-GAAP and other Financial Matters (Continued) | ||||||||||||||||||||
Three Months Ended November 30, 2016 | ||||||||||||||||||||
Table A - Reconciliation of Segment Sales and Operating Profit to Adjusted Segment Operating Profit and Adjusted Income from Continuing Operations | ||||||||||||||||||||
(Dollars in millions except per share data) | Performance Chemicals | Engineered Surfaces | Combined | Corporate | Consolidated | |||||||||||||||
Sales | $ | 133.3 | $ | 53.7 | $ | 187.0 | $ | — | $ | 187.0 | ||||||||||
Segment Operating Profit / Corporate Expense | $ | 13.5 | $ | (1.4 | ) | $ | 12.1 | $ | (11.1 | ) | $ | 1.0 | ||||||||
Interest Expense | — | — | — | (7.3 | ) | (7.3 | ) | |||||||||||||
Income (Loss) From Continuing Operations Before Income Taxes | $ | 13.5 | $ | (1.4 | ) | $ | 12.1 | $ | (18.4 | ) | $ | (6.3 | ) | |||||||
Management Excluded Items | ||||||||||||||||||||
Restructuring and severance | .6 | (.1 | ) | .5 | 4.9 | 5.4 | ||||||||||||||
Acquisition and integration related expense | — | — | — | .5 | .5 | |||||||||||||||
Environmental costs | — | .3 | .3 | — | .3 | |||||||||||||||
Debt issuance costs write-off and additional interest | — | — | — | 3.2 | 3.2 | |||||||||||||||
Asset impairment, facility closure costs and other | .8 | 5.4 | 6.2 | (.2 | ) | 6.0 | ||||||||||||||
Vacation policy change | (.2 | ) | (.2 | ) | (.4 | ) | (.1 | ) | (.5 | ) | ||||||||||
Subtotal for Management Excluded Items | 1.2 | 5.4 | 6.6 | 8.3 | 14.9 | |||||||||||||||
Adjusted Segment Operating Profit / Corporate Expense from Continuing Operations before Income Taxes | $ | 14.7 | $ | 4.0 | $ | 18.7 | $ | (10.1 | ) | $ | 8.6 | |||||||||
Tax Expense (30% rate)* | (2.6 | ) | ||||||||||||||||||
Adjusted Income From Continuing Operations | $ | 6.0 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share from Adjusted Income from Continuing Operations | $ | .14 | ||||||||||||||||||
*Tax rate is based on the Company's estimated normalized annual effective tax rate. | ||||||||||||||||||||
Adjusted segment operating profit from continuing operations as a % of sales | 11.0 | % | 7.4 | % | 10.0 | % | ||||||||||||||
Segment / Corporate Capital Expenditures | $ | 5.9 | $ | 3.1 | $ | 9.0 | $ | .1 | $ | 9.1 | ||||||||||
Adjusted segment operating profit / corporate expense from continuing operations before income taxes | $ | 14.7 | $ | 4.0 | $ | 18.7 | $ | (10.1 | ) | $ | 8.6 | |||||||||
Unallocated Corporate Interest Expense excluding debt premium | — | — | — | 5.3 | 5.3 | |||||||||||||||
Segment / Consolidated Adjusted EBIT | 14.7 | 4.0 | 18.7 | (4.8 | ) | 13.9 | ||||||||||||||
Depreciation and Amortization excluding accelerated depreciation | 5.2 | 1.6 | 6.8 | .3 | 7.1 | |||||||||||||||
Segment / Consolidated Adjusted EBITDA | $ | 19.9 | $ | 5.6 | $ | 25.5 | $ | (4.5 | ) | $ | 21.0 | |||||||||
Adjusted EBITDA as a % of sales | 14.9 | % | 10.4 | % | 13.6 | % | 11.2 | % |
OMNOVA SOLUTIONS INC. | ||||||||||||||||||||
Non-GAAP and other Financial Matters (Continued) | ||||||||||||||||||||
Three Months Ended November 30, 2015 | ||||||||||||||||||||
Table A - Reconciliation of Segment Sales and Operating Profit to Adjusted Segment Operating Profit and Adjusted Income from Continuing Operations | ||||||||||||||||||||
(Dollars in millions except per share data) | Performance Chemicals | Engineered Surfaces | Combined | Corporate | Consolidated | |||||||||||||||
Sales | $ | 141.1 | $ | 58.9 | $ | 200.0 | $ | — | $ | 200.0 | ||||||||||
Segment Operating Profit / Corporate Expense | $ | (11.5 | ) | $ | 4.7 | $ | (6.8 | ) | $ | (5.6 | ) | $ | (12.4 | ) | ||||||
Interest Expense | — | — | — | (7.8 | ) | (7.8 | ) | |||||||||||||
(Loss) Income From Continuing Operations Before Income Taxes | $ | (11.5 | ) | $ | 4.7 | $ | (6.8 | ) | $ | (13.4 | ) | $ | (20.2 | ) | ||||||
Management Excluded Items | ||||||||||||||||||||
Restructuring and severance | .7 | 1.0 | 1.7 | — | 1.7 | |||||||||||||||
Accelerated depreciation on production transfer | 2.9 | — | 2.9 | — | 2.9 | |||||||||||||||
Operational improvements costs | .9 | — | .9 | — | .9 | |||||||||||||||
Environmental costs | 2.8 | — | 2.8 | — | 2.8 | |||||||||||||||
Debt issuance costs write-off | — | — | — | .6 | .6 | |||||||||||||||
Other financing costs | — | — | — | 1.0 | 1.0 | |||||||||||||||
Asset impairment, facility closure costs and other | 18.4 | .3 | 18.7 | — | 18.7 | |||||||||||||||
Subtotal for Management Excluded Items | 25.7 | 1.3 | 27.0 | 1.6 | 28.6 | |||||||||||||||
Adjusted Segment Operating Profit / Corporate Expense from Continuing Operations before Income Taxes | $ | 14.2 | $ | 6.0 | $ | 20.2 | $ | (11.8 | ) | $ | 8.4 | |||||||||
Tax Expense (30% rate)* | (2.5 | ) | ||||||||||||||||||
Adjusted Income From Continuing Operations | $ | 5.9 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share from Adjusted Income from Continuing Operations | $ | .13 | ||||||||||||||||||
*Tax rate is based on the Company's estimated normalized annual effective tax rate. | ||||||||||||||||||||
Adjusted segment operating profit from continuing operations as a % of sales | 10.1 | % | 10.2 | % | 10.1 | % | ||||||||||||||
Segment / Corporate Capital Expenditures | $ | 4.9 | $ | 2.8 | $ | 7.7 | $ | 1.0 | $ | 8.7 | ||||||||||
Adjusted segment operating profit / corporate expense from continuing operations before income taxes | $ | 14.2 | $ | 6.0 | $ | 20.2 | $ | (11.8 | ) | $ | 8.4 | |||||||||
Unallocated Corporate Interest Expense excluding debt premium | — | — | — | 6.8 | 6.8 | |||||||||||||||
Segment / Consolidated Adjusted EBIT | 14.2 | 6.0 | 20.2 | (5.0 | ) | 15.2 | ||||||||||||||
Depreciation and Amortization excluding accelerated depreciation | 5.4 | 1.6 | 7.0 | .2 | 7.2 | |||||||||||||||
Segment / Consolidated Adjusted EBITDA | $ | 19.6 | $ | 7.6 | $ | 27.2 | $ | (4.8 | ) | $ | 22.4 | |||||||||
Adjusted EBITDA as a % of sales | 13.9 | % | 12.9 | % | 0.1 | 11.2 | % |
OMNOVA SOLUTIONS INC. | ||||||||||||||||||||
Non-GAAP and other Financial Matters (Continued) | ||||||||||||||||||||
Twelve Months Ended November 30, 2016 | ||||||||||||||||||||
Table C - Reconciliation of Segment Sales and Operating Profit to Adjusted Segment Operating Profit and Adjusted Income from Continuing Operations | ||||||||||||||||||||
(Dollars in millions except per share data) | Performance Chemicals | Engineered Surfaces | Combined | Corporate | Consolidated | |||||||||||||||
Sales | $ | 548.8 | $ | 211.1 | $ | 759.9 | $ | — | $ | 759.9 | ||||||||||
Segment Operating Profit / Corporate Expense | $ | 55.9 | $ | 12.4 | $ | 68.3 | $ | (33.7 | ) | $ | 34.6 | |||||||||
Interest Expense | — | — | — | (24.7 | ) | (24.7 | ) | |||||||||||||
Income (Loss) From Continuing Operations Before Income Taxes | 55.9 | 12.4 | 68.3 | (58.4 | ) | 9.9 | ||||||||||||||
Management Excluded Items | ||||||||||||||||||||
Restructuring and severance | 2.9 | .6 | 3.5 | 4.9 | 8.4 | |||||||||||||||
Accelerated depreciation on production transfer | 3.0 | — | 3.0 | — | 3.0 | |||||||||||||||
Operational improvements costs | (.4 | ) | — | (.4 | ) | — | (.4 | ) | ||||||||||||
Acquisition and integration related expense | — | — | — | .9 | .9 | |||||||||||||||
Environmental costs | — | .3 | .3 | — | .3 | |||||||||||||||
Debt issuance costs write-off and additional interest | — | — | — | 4.9 | 4.9 | |||||||||||||||
Corporate Headquarters relocation costs | — | — | — | (.2 | ) | (.2 | ) | |||||||||||||
Asset impairment, facility closure costs and other | 2.5 | 5.8 | 8.3 | — | 8.3 | |||||||||||||||
Vacation policy change | (1.5 | ) | (1.2 | ) | (2.7 | ) | (.7 | ) | (3.4 | ) | ||||||||||
Subtotal for Management Excluded Items | 6.5 | 5.5 | 12.0 | 9.8 | 21.8 | |||||||||||||||
Adjusted Segment Operating Profit / Corporate Expense from Continuing Operations before Income Taxes | $ | 62.4 | $ | 17.9 | $ | 80.3 | $ | (48.6 | ) | $ | 31.7 | |||||||||
Tax Expense (30% rate)* | $ | (9.5 | ) | |||||||||||||||||
Adjusted Income From Continuing Operations | $ | 22.2 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share from Adjusted Income from Continuing Operations | $ | .50 | ||||||||||||||||||
*Tax rate is based on the Company's estimated normalized annual effective tax rate. | ||||||||||||||||||||
Adjusted segment operating profit from continuing operations as a % of sales | 11.4 | % | 8.5 | % | 10.6 | % | ||||||||||||||
Segment / Corporate Capital Expenditures | $ | 15.6 | $ | 8.2 | $ | 23.8 | $ | 1.8 | $ | 25.6 | ||||||||||
Adjusted segment operating profit / corporate expense from continuing operations before income taxes | $ | 62.4 | $ | 17.9 | $ | 80.3 | $ | (48.6 | ) | $ | 31.7 | |||||||||
Unallocated Corporate Interest Expense excluding debt premium | — | — | — | 22.7 | 22.7 | |||||||||||||||
Segment / Consolidated Adjusted EBIT | 62.4 | 17.9 | 80.3 | (25.9 | ) | 54.4 | ||||||||||||||
Depreciation and Amortization excluding accelerated depreciation | 20.1 | 6.3 | 26.4 | 1.2 | 27.6 | |||||||||||||||
Segment / Consolidated Adjusted EBITDA | $ | 82.5 | $ | 24.2 | $ | 106.7 | $ | (24.7 | ) | $ | 82.0 | |||||||||
Adjusted EBITDA as a % of sales | 15.0 | % | 11.5 | % | 14.0 | % | 10.8 | % | ||||||||||||
Net Leverage | ||||||||||||||||||||
Total short and long-term debt (excluding original issue discount) | $ | 366.0 | ||||||||||||||||||
Less Cash | (78.0 | ) | ||||||||||||||||||
Net Debt (Debt less Cash) | $ | 288.0 | ||||||||||||||||||
Net Leverage Ratio** | 3.5x | |||||||||||||||||||
** The above calculation is not intended to be used for purposes of calculating debt covenant compliance. |
OMNOVA SOLUTIONS INC. | ||||||||||||||||||||
Non-GAAP and other Financial Matters (Continued) | ||||||||||||||||||||
Twelve Months Ended November 30, 2015 | ||||||||||||||||||||
Table C - Reconciliation of Segment Sales and Operating Profit to Adjusted Segment Operating Profit and Adjusted Income from Continuing Operations | ||||||||||||||||||||
(Dollars in millions except per share data) | Performance Chemicals | Engineered Surfaces | Combined | Corporate | Consolidated | |||||||||||||||
Sales | $ | 608.1 | $ | 229.9 | $ | 838.0 | $ | — | $ | 838.0 | ||||||||||
Segment Operating Profit / Corporate Expense | $ | 15.9 | $ | 18.9 | $ | 34.8 | $ | (27.6 | ) | $ | 7.2 | |||||||||
Interest Expense | — | — | — | (28.3 | ) | (28.3 | ) | |||||||||||||
Income (Loss) From Continuing Operations Before Income Taxes | 15.9 | 18.9 | 34.8 | (55.9 | ) | (21.1 | ) | |||||||||||||
Management Excluded Items | ||||||||||||||||||||
Restructuring and severance | 4.3 | 1.5 | 5.8 | .1 | 5.9 | |||||||||||||||
Accelerated depreciation on production transfer | 5.8 | — | 5.8 | — | 5.8 | |||||||||||||||
Operational improvements costs | 5.0 | — | 5.0 | .4 | 5.4 | |||||||||||||||
Acquisition and integration related expense | — | — | — | .4 | .4 | |||||||||||||||
Environmental costs | 2.8 | .2 | 3.0 | — | 3.0 | |||||||||||||||
Debt issuance costs write-off | — | — | — | .6 | .6 | |||||||||||||||
Other financing costs | — | — | — | 1.0 | 1.0 | |||||||||||||||
Shareholder activist costs | — | — | — | 1.9 | 1.9 | |||||||||||||||
Asset impairment, facility closure costs and other | 18.4 | 1.6 | 20.0 | .6 | 20.6 | |||||||||||||||
Subtotal for Management Excluded Items | 36.3 | 3.3 | 39.6 | 5.0 | 44.6 | |||||||||||||||
Adjusted Segment Operating Profit / Corporate Expense from Continuing Operations before Income Taxes | $ | 52.2 | $ | 22.2 | $ | 74.4 | $ | (50.9 | ) | $ | 23.5 | |||||||||
Tax Expense (30% rate)* | $ | (7.0 | ) | |||||||||||||||||
Adjusted Income From Continuing Operations | $ | 16.5 | ||||||||||||||||||
Adjusted Diluted Earnings Per Share from Adjusted Income from Continuing Operations | $ | .36 | ||||||||||||||||||
*Tax rate is based on the Company's estimated normalized annual effective tax rate. | ||||||||||||||||||||
Adjusted segment operating profit from continuing operations as a % of sales | 8.6 | % | 9.7 | % | 8.9 | % | ||||||||||||||
Segment / Corporate Capital Expenditures | $ | 12.6 | $ | 8.5 | $ | 21.1 | $ | 2.9 | $ | 24.0 | ||||||||||
Adjusted segment operating profit / corporate expense from continuing operations before income taxes | $ | 52.2 | $ | 22.2 | $ | 74.4 | $ | (50.9 | ) | $ | 23.5 | |||||||||
Unallocated Corporate Interest Expense excluding debt premium | — | — | — | 27.3 | 27.3 | |||||||||||||||
Segment / Consolidated Adjusted EBIT | 52.2 | 22.2 | 74.4 | (23.6 | ) | 50.8 | ||||||||||||||
Depreciation and Amortization excluding accelerated depreciation | 21.1 | 6.0 | 27.1 | 1.1 | 28.2 | |||||||||||||||
Segment / Consolidated Adjusted EBITDA | $ | 73.3 | $ | 28.2 | $ | 101.5 | $ | (22.5 | ) | $ | 79.0 | |||||||||
Adjusted EBITDA as a % of sales | 12.1 | % | 12.3 | % | 12.1 | % | 9.4 | % | ||||||||||||
Net Leverage | ||||||||||||||||||||
Total short and long-term debt (excluding original issue discount) | $ | 356.7 | ||||||||||||||||||
Less Cash | (44.9 | ) | ||||||||||||||||||
Net Debt (Debt less Cash) | $ | 311.8 | ||||||||||||||||||
Net Leverage Ratio** | 3.9x | |||||||||||||||||||
** The above calculation is not intended to be used for purposes of calculating debt covenant compliance. |
OMNOVA Solutions Inc. | ||||||||||
Non-GAAP and other Financial Matters (Continued) | ||||||||||
Twelve Months Ended November 30, 2016 and 2015 | ||||||||||
Table E - Adjusted Return on Invested Capital | ||||||||||
Adjusted Net Operating Profit after Tax | 2016 | 2015 | ||||||||
Adjusted Income from Continuing Operations | $ | 22.2 | $ | 16.5 | ||||||
Interest add back excluding debt premium | 22.7 | 27.3 | ||||||||
Tax Effect of Interest add back* | (6.8 | ) | (8.2 | ) | ||||||
Total Adjusted Net Operating Profit after Tax | $ | 38.1 | $ | 35.6 | ||||||
As of | As of | |||||||||
Debt and Equity | November 30, 2016 | November 30, 2015 | ||||||||
Short-term Debt | $ | 4.2 | $ | 2.5 | ||||||
Senior Notes | — | 150.0 | ||||||||
Long-term Debt | 358.4 | 204.2 | ||||||||
Total Shareholders' Equity | 109.8 | 109.1 | ||||||||
Total Debt and Equity | $ | 472.4 | $ | 465.8 | ||||||
Adjusted Return on Invested Capital | 8.1 | % | 7.6 | % | ||||||
*Tax rate is based on the Company's estimated normalized annual effective tax rate. |
OMNOVA SOLUTIONS INC. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Dollars in Millions, Except Per Share Data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
November 30, | November 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net Sales | $ | 187.0 | $ | 200.0 | $ | 759.9 | $ | 838.0 | |||||||
Cost of goods sold (exclusive of depreciation) | 137.9 | 152.2 | 556.0 | 644.1 | |||||||||||
Gross Profit | 49.1 | 47.8 | 203.9 | 193.9 | |||||||||||
Selling, general and administrative | 27.5 | 27.6 | 118.5 | 119.3 | |||||||||||
Depreciation and amortization | 7.1 | 10.1 | 30.6 | 34.0 | |||||||||||
Asset impairment | 5.4 | 18.3 | 5.7 | 19.4 | |||||||||||
Loss on sale of assets | .2 | .2 | .3 | .2 | |||||||||||
Restructuring and severance | 6.2 | 1.4 | 11.1 | 5.9 | |||||||||||
Interest expense | 7.3 | 7.8 | 24.7 | 28.3 | |||||||||||
Debt issuance costs write-off | 1.2 | .6 | 2.9 | .6 | |||||||||||
Acquisition and integration related expense | .5 | — | .9 | .4 | |||||||||||
Other (income) expense, net | .1 | 2.0 | (.7 | ) | 6.9 | ||||||||||
55.5 | 68.0 | 194.0 | 215.0 | ||||||||||||
(Loss) Income From Continuing Operations Before Income Taxes | (6.4 | ) | (20.2 | ) | 9.9 | (21.1 | ) | ||||||||
Income tax (expense) benefit | (4.9 | ) | 1.3 | (10.3 | ) | 2.4 | |||||||||
(Loss) From Continuing Operations | (11.3 | ) | (18.9 | ) | (.4 | ) | (18.7 | ) | |||||||
Discontinued Operations | |||||||||||||||
Gain (loss) from discontinued operations, net of tax | — | — | — | .9 | |||||||||||
Net (Loss) | $ | (11.3 | ) | $ | (18.9 | ) | $ | (.4 | ) | $ | (17.8 | ) | |||
(Loss) Per Share - Basic and Diluted | |||||||||||||||
(Loss) per share - continuing operations | $ | (.25 | ) | $ | (.43 | ) | $ | (.01 | ) | $ | (.41 | ) | |||
Income per share - discontinued operations | — | — | — | .02 | |||||||||||
Basic and Diluted (Loss) Per Share | $ | (.25 | ) | $ | (.43 | ) | $ | (.01 | ) | $ | (.39 | ) |
OMNOVA SOLUTIONS INC. | |||||||
Consolidated Balance Sheets | |||||||
(Dollars in Millions, Except Per Share Data) | |||||||
November 30, 2016 | November 30, 2015 | ||||||
(Unaudited) | (Audited) | ||||||
ASSETS: | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 78.0 | $ | 44.9 | |||
Accounts receivable, net | 99.5 | 105.3 | |||||
Inventories | 77.0 | 81.9 | |||||
Prepaid expenses and other | 19.4 | 18.8 | |||||
Total Current Assets | 273.9 | 250.9 | |||||
Property, plant and equipment, net | 205.8 | 214.9 | |||||
Trademarks and other intangible assets, net | 56.7 | 60.9 | |||||
Goodwill | 80.2 | 80.8 | |||||
Deferred income taxes - non-current | 66.7 | 67.8 | |||||
Debt issuance costs | 5.9 | 4.7 | |||||
Other assets | 4.0 | 7.2 | |||||
Total Assets | $ | 693.2 | $ | 687.2 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Current Liabilities | |||||||
Amounts due banks | $ | 4.2 | $ | 2.5 | |||
Senior Notes | — | — | |||||
Accounts payable | 73.3 | 72.0 | |||||
Accrued payroll and personal property taxes | 24.1 | 25.0 | |||||
Employee benefit obligations | 4.5 | 3.2 | |||||
Accrued interest | 0.1 | 1.1 | |||||
Other current liabilities | 7.1 | 8.7 | |||||
Total Current Liabilities | 113.3 | 112.5 | |||||
Senior notes | — | 150.0 | |||||
Long-term debt - other | 358.4 | 204.2 | |||||
Postretirement benefits other than pensions | 6.3 | 6.9 | |||||
Pension liabilities | 82.3 | 84.9 | |||||
Deferred income taxes - non-current | 11.4 | 9.5 | |||||
Other liabilities | 11.7 | 10.1 | |||||
Total Liabilities | 583.4 | 578.1 | |||||
Shareholders’ Equity | |||||||
Common stock - $0.10 par value; 135 million shares authorized, 48.3 million shares issued as of November 30, 2016 and 2015 | 4.8 | 4.8 | |||||
Additional contributed capital | 341.0 | 339.7 | |||||
Retained deficit | (74.3 | ) | (73.9 | ) | |||
Treasury stock at cost- 3.2 million and 3.5 million shares at November 30, 2016 and 2015, respectively | (23.2 | ) | (25.6 | ) | |||
Accumulated other comprehensive loss | (138.5 | ) | (135.9 | ) | |||
Total Shareholders’ Equity | 109.8 | 109.1 | |||||
Total Liabilities and Shareholders’ Equity | $ | 693.2 | $ | 687.2 |
OMNOVA SOLUTIONS INC. | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
(Dollars in Millions) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
November 30, | November 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Unaudited) | (Unaudited) | (Audited) | |||||||||||||
Operating Activities | |||||||||||||||
Net (loss) income | $ | (11.2 | ) | $ | (18.9 | ) | $ | (.4 | ) | $ | (17.8 | ) | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||
Loss on disposal of fixed assets | .3 | .2 | .3 | .2 | |||||||||||
Depreciation and amortization | 7.1 | 10.1 | 30.6 | 34.0 | |||||||||||
Amortization and write-off of deferred financing fees | 1.6 | 1.1 | 4.7 | 2.8 | |||||||||||
Impairment of long-lived assets | 5.3 | 18.3 | 5.7 | 19.4 | |||||||||||
Non-cash stock compensation expense | 1.7 | .7 | 3.5 | 2.4 | |||||||||||
Provision for uncollectible accounts | .3 | — | .3 | .2 | |||||||||||
Provision for obsolete inventories | — | (.3 | ) | — | — | ||||||||||
Deferred income taxes | 5.2 | (5.9 | ) | 5.2 | (5.9 | ) | |||||||||
Other | (.1 | ) | — | (.8 | ) | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 3.5 | (2.3 | ) | 4.1 | 11.6 | ||||||||||
Inventories | 2.0 | 6.7 | 4.4 | 2.5 | |||||||||||
Other current assets | (8.5 | ) | .2 | (10.3 | ) | 9.4 | |||||||||
Current liabilities | .4 | (7.6 | ) | 11.4 | (3.6 | ) | |||||||||
Other non-current assets | (5.8 | ) | 14.8 | (12.9 | ) | 11.6 | |||||||||
Other non-current liabilities | 7.9 | (11.0 | ) | 11.1 | (18.4 | ) | |||||||||
Contributions to defined benefit plan | — | (.2 | ) | (6.2 | ) | (4.7 | ) | ||||||||
Net Cash Provided By Operating Activities | 9.7 | 5.9 | 50.7 | 43.7 | |||||||||||
Investing Activities | |||||||||||||||
Capital expenditures | (9.1 | ) | (8.7 | ) | (25.6 | ) | (24.0 | ) | |||||||
Proceeds from sale of businesses | (.1 | ) | — | 5.2 | — | ||||||||||
Acquisitions of business, less cash acquired | — | — | — | (5.0 | ) | ||||||||||
Proceeds from insurance settlements | .1 | — | .1 | — | |||||||||||
Net Cash (Used In) Investing Activities | (9.2 | ) | (8.7 | ) | (20.3 | ) | (29.0 | ) | |||||||
Financing Activities | |||||||||||||||
Proceeds from borrowings | — | — | 346.5 | — | |||||||||||
Repayment of debt obligations | (150.9 | ) | (50.6 | ) | (340.9 | ) | (52.5 | ) | |||||||
Short-term debt borrowings | — | 12.9 | — | 25.2 | |||||||||||
Short-term debt payments | — | (12.4 | ) | — | (26.8 | ) | |||||||||
Payments for debt refinancing | (.1 | ) | — | (4.3 | ) | — | |||||||||
Restricted cash | 155.9 | — | — | — | |||||||||||
Purchase of treasury shares | — | (6.4 | ) | (0.5 | ) | (18.6 | ) | ||||||||
Cash received from exercise of stock options | — | — | — | — | |||||||||||
Net Cash Provided by (Used In) Financing Activities | 4.9 | (56.5 | ) | 0.8 | (72.7 | ) | |||||||||
Effect of exchange rate changes on cash | 2.3 | 2.6 | 1.9 | 3.4 | |||||||||||
Net Increase (Decrease) In Cash And Cash Equivalents | 7.7 | (56.7 | ) | 33.1 | (54.6 | ) | |||||||||
Cash and cash equivalents at beginning of period | 70.3 | 101.6 | 44.9 | 99.5 | |||||||||||
Cash And Cash Equivalents At End Of Period | $ | 78.0 | $ | 44.9 | $ | 78.0 | $ | 44.9 |
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