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.