Stock Monitor: Northern Technologies Intl. Post Earnings Reporting
LONDON, UK / ACCESSWIRE / July 17, 2018 / If you want access to our free earnings report on OMNOVA Solutions Inc. (NYSE: OMN) ("OMNOVA"), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=OMN. The Company reported its second quarter fiscal 2018 operating and financial results on June 28, 2018. The chemical maker outperformed top- and bottom-line expectations. Register today and get access to over 1,000 Free Research Reports by joining our site below:
Active-Investors.com is currently working on the research report for Northern Technologies International Corporation (NASDAQ: NTIC), which also belongs to the Basic Materials sector as the Company OMNOVA Solutions. Do not miss out and become a member today for free to access this upcoming report at:
Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, OMNOVA Solutions most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:
Earnings Highlights and Summary
For the second quarter of the fiscal year 2018, OMNOVA's net sales were $206.3 million, down 6.8% from $221.3 million in the last year's second quarter. Excluding the effect of China Coated Fabrics (CCF), which had sales of $3.9 million in FY17, the Company's sales decreased 5.1% on a y-o-y basis. The Company's revenue numbers beat analysts' expectations by $2.37 million.
During Q2 FY18, OMNOVA's selling, general, and administrative expenses (SG&A) were $27.4 million, down from $30.1 million in Q2 FY17. The primary drivers of the decrease were benefits from the "One OMNOVA" cost reduction initiatives, reduced incentive compensation expenses, and the sale of CCF.
For Q2 FY18, OMNOVA's income tax expenses were $2.5 million compared to $2.4 million in Q2 2017. The Company's cash taxes overall were $2.8 million in the reported quarter compared to $1.3 million in the year earlier same quarter, as a result of increased earnings overseas. US cash tax payments were minimal as the Company had approximately $91.1 million of US federal net operating loss carryforwards and $86.8 million of state and local tax net operating loss carryforwards.
OMNOVA's trailing 12-month adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $88.9 million from $80.1 million in Q2 FY17. The Company's adjusted net leverage decreased to 3.0x adjusted EBITDA versus 3.6x in the year earlier comparable period.
For Q2 FY18, OMNOVA reported earnings of $8.4 million, or $0.19 per diluted share, compared to a loss of $6.3 million, or $0.14 loss per diluted share, in Q2 FY17. For the reported quarter, the Company recorded charges of $1.1 million, primarily for asset impairments and acquisition & integration-related expenses. During Q2 FY17, the Company recorded charges of $14.1 million, primarily related to the sale of the CCF business.
OMNOVA's adjusted diluted earnings per share (EPS) were $0.20 in Q2 FY18, up 25% compared to $0.16 in Q2 FY17. The increase in adjusted earnings was attributed to the strong performance in the Company's Specialty Solutions segment which was partially offset by its Performance Materials segment. The Company's earnings surpassed Wall Street's estimates of $0.19 per share.
During Q2 FY18, OMNOVA's Specialty Solutions segment's net sales rose 6% to $128.8 million compared to $121.5 million in Q2 FY17. The improvement was driven by volume increases of $2.9 million, or 2.4%, partially offset by price and mix decreases of $0.1 million, or 1%. Foreign currency translation also had a favorable effect of $4.5 million, or 3.7%.
For the reported quarter, the segment's operating profit was $21.9 million compared to $17.3 million in the year earlier corresponding quarter. The segment's adjusted operating profit surged 24% to $22 million, or 17.1% of net sales, in Q2 FY18 compared to $17.7 million, or 14.6% of net sales, in Q2 FY17. An increased volume, a healthy mix, and the benefits of cost controls drove the improvement in the segment's operating profit.
During Q2 FY18, OMNOVA's Performance Materials segment's net sales were $77.5 million compared to $99.8 million in Q2 FY17. The divested CCF business accounted for $3.9 million of net sales in Q2 FY17. The segment's volume, excluding CCF, was down $10.8 million, or 10.9%, primarily driven by declining sales into the commodity paper market.
For Q2 FY18, the segment's operating profit was $0.1 million compared to a loss of $7.2 million in Q2 FY17. The segment's adjusted operating profit was $0.6 million, or 0.8% of net sales, in the reported quarter compared to $4.2 million, or 4.2% of net sales, in the year earlier same quarter. In addition to the impact from the volume declines, the segment's margins were unfavorably impacted by increases in raw material prices and approximately $1.0 million of costs including a bad debt write-off from a bankrupt paper customer and asset impairment costs.
At the end of May 2018, OMNOVA's working capital days were 53.5, 2.6 days unfavorable compared to May 2017, driven by increased receivables. In spite of the unfavorable working capital days, the Company's cash provided by operations was $23.6 million in Q2 FY18 compared to $7.3 million in the year earlier comparable quarter, reflecting the strong operating performance in the Specialty Solutions segment.
Stock Performance Snapshot
July 16, 2018 - At Monday's closing bell, OMNOVA Solutions' stock dropped 4.90%, ending the trading session at $9.70.
Volume traded for the day: 89.42 thousand shares.
After yesterday's close, OMNOVA Solutions' market cap was at $436.69 million.
The stock is part of the Basic Materials sector, categorized under the Specialty Chemicals industry.
Active-Investors (A-I) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. A-I has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
A-I has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third-party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email firstname.lastname@example.org. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by A-I. A-I is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
A-I, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. A-I, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, A-I, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither A-I nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://active-investors.com/legal-disclaimer/.
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Phone number: 73 29 92 6381
Office Address: 6, Jalan Kia Peng, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.