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OMNOVA Solutions Inc. Reports Operating Results (10-K)

January 25, 2011 | About:
10qk

10qk

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OMNOVA Solutions Inc. (OMN) filed Annual Report for the period ended 2010-11-30.

Omnova Solution has a market cap of $337.7 million; its shares were traded at around $7.52 with a P/E ratio of 8.6 and P/S ratio of 0.4. Omnova Solution had an annual average earning growth of 6.1% over the past 5 years.Hedge Fund Gurus that owns OMN: Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns OMN: Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

The aggregate market value of the voting stock held by nonaffiliates of the registrant was $348,991,721 based on the closing price per share of $8.03 on May 28, 2010, the last business day of the registrants most recently completed second quarter.

Net sales from our foreign operations were $180.5 million in 2010, $166.5 million in 2009 and $170.4 million in 2008. These net sales represented 21.3% of our total net sales in 2010, 23.9% of our total net sales in 2009 and 19.6% of our total net sales in 2008. Long-lived assets primarily consist of net property, plant and equipment and net intangibles. Long-lived assets of our foreign operations totaled $39.3 million at November 30, 2010 and $41.4 million at November 30, 2009. Our consolidated long-lived assets totaled $137.3 million at November 30, 2010 and $146.3 million at November 30, 2009.

At November 30, 2010, the Company employed approximately 2,430 employees at offices, plants and other facilities located principally throughout the United States, United Kingdom, China and Thailand. Approximately 14% or 350 of the Companys employees are covered by collective bargaining agreements in the United States. In March 2010, the Company and its Calhoun, Georgia employees represented by Local 1876, Southern Region of Workers United, SEIU, agreed to a new three year contract. On May 20, 2010, the approximately 180 Columbus, Mississippi employees represented by United Steelworkers Local #748-L voted against ratification of a new contract proposal and subsequently went on strike on May 21, 2010. Initially, the Companys salaried workforce and contract labor operated the plant, meeting customers requirements. During the fourth quarter of 2010, the Company began transitioning from contract labor to locally hired replacement employees. The Company incurred strike-related costs of $5.5 million in 2010, of which $3.3 million was included in cost of goods sold and $2.2 million included in other expense (income). Strike-related costs peaked in July 2010 and have declined significantly since then. In the fourth quarter of 2010, strike-related costs were $1.2 million, compared to $3.9 million in the third quarter of 2010. The Company generally would describe its relationship with employees as good even though its union-represented Columbus, Mississippi employees chose to go on strike.

Our research and development expenses were $8.8 million in 2010, $8.2 million in 2009 and $10.3 million in 2008. Research and development expenses include the costs of technical activities that are useful in developing new products, services, processes or techniques, as well as those expenses for technical activities that may significantly improve existing products or processes. Information relating to research and development expense is set forth in Note A to the Consolidated Financial Statements of this report.

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