OM Group Inc. (OMG, Financial) filed Quarterly Report for the period ended 2009-03-31.
OM Group Inc. is a leading international producer and marketer ofvalue-added metal-based specialty chemicals and powders. The company supplies numerous different product offerings -- principally categorized as metal carboxylates inorganic metal salts and metal powders for diverse applications to more a range of different industries. Typically their products represent a small portion of the customer's total cost of manufacturing or processing but are critical to the customer's product performance. OM Group Inc. has a market cap of $764.6 million; its shares were traded at around $25.09 with a P/E ratio of 6.5 and P/S ratio of 0.4.
segment. The weak economy drove decreases in volume in both Specialty Chemicals ($54.4 million) and Advanced Materials ($39.5 million). Copper by-product sales also were lower ($14.4 million) due to the lower average copper price in the first quarter of 2009 compared with the first quarter of 2008.
Gross profit decreased to $26.6 million in the first quarter of 2009, compared with $136.7 million in the first quarter of 2008. The largest factor affecting the $110.1 million decrease in gross profit was the decrease in the average cobalt reference price from $46.19 in the first quarter of 2008 to $13.37 in the first quarter of 2009, which reduced gross profit by $56.8 million in the first quarter of 2009 compared with the first quarter of 2008. Also impacting the Advanced Materials segment gross profit was decreased volume ($19.8 million); a decrease in profit associated with copper by-product sales ($7.7 million); and a $3.3 million charge to reduce the carrying value of certain inventory to market value at March 31, 2009. The first quarter of 2008 was favorably impacted by a $5.8 million unrealized gain on cobalt forward purchase contracts. Advanced Materials was also impacted by a $2.8 million reduction in manufacturing and distribution expenses due primarily to the Companys cost cutting initiatives that include reductions in discretionary spending; headcount reductions; and decreased employee incentive compensation. In the Specialty Chemicals segment, decreased volume reduced gross profit by $19.8 million. Specialty Chemicals was also impacted by a $4.7 million reduction in manufacturing and distribution expenses due primarily to the Companys cost cutting initiatives that include reductions in discretionary spending; headcount reductions; and decreased employee incentive compensation, partially offset by a $3.3 million charge to reduce the carrying value of certain inventory to market value at March 31, 2009. The decrease in gross profit as a percentage of net sales (13.9% in the first quarter of 2009 versus 28.4% in the first quarter of 2008) was primarily due to the impact of a rising price environment in the first quarter of 2008 resulting in the sale of lower cost cobalt raw materials at higher selling prices compared to a lower and more stable price environment in the first quarter of 2009 and fixed expenses spread over lower sales volumes in the first quarter of 2009.
Income tax expense in the first quarter of 2009 was $2.2 million on a pre-tax loss of $9.8 million, compared to income tax expense in the first quarter of 2008 of $27.1 million on pre-tax income of $95.5 million, or 28.4%. Income tax expense for the three months ended March 31, 2009 included discrete tax expense items totaling $4.7 million, including expense of $3.4 million related to a return-to-provision adjustment made in connection with filing the 2008 GTL tax return in the DRC; errors in the 2008 tax provision for GTL totaling $1.9 million; and a DRC tax penalty of $0.6 million; all partially offset by a $1.2 million reversal related to an uncertain tax position in France. Without the discrete items, the effective tax rate would have been 24.9% for the three months ended March 31, 2009. This rate is lower than the U.S. statutory tax rate primarily due to income earned in tax jurisdictions with lower statutory rates than the U.S. (primarily Finland). This factor was partially offset by losses in certain jurisdictions with no corresponding tax benefit, and taxes related to the planned repatriation of foreign earnings in 2009. The effective income tax rate for the three months ended March 31, 2008 is lower than the U.S. statutory rate due primarily to income earned in foreign tax jurisdictions with lower statutory tax rates than the U.S. (primarily Finland) and a tax holiday in Malaysia ($1.9 million impact in first quarter 2008). In the three months ended March 31, 2008, these factors were partially offset by tax expense related to foreign earnings repatriation during 2008.
Income (loss) from continuing operations attributable to OM Group, Inc. was a loss of $8.5 million, or $0.28 per diluted share, in the first quarter of 2009, compared with income of $55.6 million, or $1.82 per diluted share, in the first quarter of 2008. The increase was due primarily to the aforementioned factors.
Net income (loss) attributable to OM Group, Inc. was a loss of $8.3 million, or $0.27 per diluted share, in the first quarter of 2009, compared with $55.2 million, or $1.81 per diluted share, in the first quarter of 2008. The increase was due primarily to the aforementioned factors.
Read the The complete Report
OM Group Inc. is a leading international producer and marketer ofvalue-added metal-based specialty chemicals and powders. The company supplies numerous different product offerings -- principally categorized as metal carboxylates inorganic metal salts and metal powders for diverse applications to more a range of different industries. Typically their products represent a small portion of the customer's total cost of manufacturing or processing but are critical to the customer's product performance. OM Group Inc. has a market cap of $764.6 million; its shares were traded at around $25.09 with a P/E ratio of 6.5 and P/S ratio of 0.4.
Highlight of Business Operations:
Net sales decreased $289.1 million, or 60%, primarily due to decreases in the cobalt reference price and decreased volume. The average cobalt reference price decreased from $46.19 in the first quarter of 2008 to $13.37 in the first quarter of 2009, which resulted in lower product selling prices ($116.2 million) and a decrease in cobalt metal resale ($52.7 million) in the Advanced Materialssegment. The weak economy drove decreases in volume in both Specialty Chemicals ($54.4 million) and Advanced Materials ($39.5 million). Copper by-product sales also were lower ($14.4 million) due to the lower average copper price in the first quarter of 2009 compared with the first quarter of 2008.
Gross profit decreased to $26.6 million in the first quarter of 2009, compared with $136.7 million in the first quarter of 2008. The largest factor affecting the $110.1 million decrease in gross profit was the decrease in the average cobalt reference price from $46.19 in the first quarter of 2008 to $13.37 in the first quarter of 2009, which reduced gross profit by $56.8 million in the first quarter of 2009 compared with the first quarter of 2008. Also impacting the Advanced Materials segment gross profit was decreased volume ($19.8 million); a decrease in profit associated with copper by-product sales ($7.7 million); and a $3.3 million charge to reduce the carrying value of certain inventory to market value at March 31, 2009. The first quarter of 2008 was favorably impacted by a $5.8 million unrealized gain on cobalt forward purchase contracts. Advanced Materials was also impacted by a $2.8 million reduction in manufacturing and distribution expenses due primarily to the Companys cost cutting initiatives that include reductions in discretionary spending; headcount reductions; and decreased employee incentive compensation. In the Specialty Chemicals segment, decreased volume reduced gross profit by $19.8 million. Specialty Chemicals was also impacted by a $4.7 million reduction in manufacturing and distribution expenses due primarily to the Companys cost cutting initiatives that include reductions in discretionary spending; headcount reductions; and decreased employee incentive compensation, partially offset by a $3.3 million charge to reduce the carrying value of certain inventory to market value at March 31, 2009. The decrease in gross profit as a percentage of net sales (13.9% in the first quarter of 2009 versus 28.4% in the first quarter of 2008) was primarily due to the impact of a rising price environment in the first quarter of 2008 resulting in the sale of lower cost cobalt raw materials at higher selling prices compared to a lower and more stable price environment in the first quarter of 2009 and fixed expenses spread over lower sales volumes in the first quarter of 2009.
Income tax expense in the first quarter of 2009 was $2.2 million on a pre-tax loss of $9.8 million, compared to income tax expense in the first quarter of 2008 of $27.1 million on pre-tax income of $95.5 million, or 28.4%. Income tax expense for the three months ended March 31, 2009 included discrete tax expense items totaling $4.7 million, including expense of $3.4 million related to a return-to-provision adjustment made in connection with filing the 2008 GTL tax return in the DRC; errors in the 2008 tax provision for GTL totaling $1.9 million; and a DRC tax penalty of $0.6 million; all partially offset by a $1.2 million reversal related to an uncertain tax position in France. Without the discrete items, the effective tax rate would have been 24.9% for the three months ended March 31, 2009. This rate is lower than the U.S. statutory tax rate primarily due to income earned in tax jurisdictions with lower statutory rates than the U.S. (primarily Finland). This factor was partially offset by losses in certain jurisdictions with no corresponding tax benefit, and taxes related to the planned repatriation of foreign earnings in 2009. The effective income tax rate for the three months ended March 31, 2008 is lower than the U.S. statutory rate due primarily to income earned in foreign tax jurisdictions with lower statutory tax rates than the U.S. (primarily Finland) and a tax holiday in Malaysia ($1.9 million impact in first quarter 2008). In the three months ended March 31, 2008, these factors were partially offset by tax expense related to foreign earnings repatriation during 2008.
Income (loss) from continuing operations attributable to OM Group, Inc. was a loss of $8.5 million, or $0.28 per diluted share, in the first quarter of 2009, compared with income of $55.6 million, or $1.82 per diluted share, in the first quarter of 2008. The increase was due primarily to the aforementioned factors.
Net income (loss) attributable to OM Group, Inc. was a loss of $8.3 million, or $0.27 per diluted share, in the first quarter of 2009, compared with $55.2 million, or $1.81 per diluted share, in the first quarter of 2008. The increase was due primarily to the aforementioned factors.
Read the The complete Report
