Omnova Solutions Losses Grow in 1Q

Fairlawn, OH, March 20, 2007--Omnova Solutions said it widened its loss in its fiscal first quarter due to decreased sales volume, which the company attributed to weak residential housing-related markets.

The company said its loss for the quarter ended February 28 loss was $5.1 million, or 12 cents per share, compared with a loss of $4.3 million, or 10 cents per share, a year earlier.

Analysts were anticipating a loss of 2 cents per share.

First-quarter net sales fell 3 percent to $164.8 million from $169.8 million in the prior year.

The company said a $9.7 million reduction in unit volume offset sales price increases of $2.8 million and favorable foreign exchange conversion of $1.9 million.

Chairman and Chief Executive Kevin McMullen, who noted that Omnova's first quarter is historically the weakest, said the results do not reflect the company's expectations for its full-year performance.

"Despite what continues to be a challenging environment, we remain optimistic about achieving volume and earnings improvement for the full-year 2007," McMullen said.

He said the seasonality was compounded by a weak residential housing industry, which led to carpet industry volume declines in the company's performance chemicals sector.

First-quarter sales in the performance chemicals segment dropped 3 percent to $105.8 million, while sales in the decorative products segment also fell 2.5 percent, to $59 million.