Fairlawn, OH, September 23-- Omnova Solutions Inc., a specialty chemical maker, on Wednesday reported a narrowed third-quarter loss, despite the effect of higher raw material costs.
The company posted a third-quarter loss of $4.2 million, or 10 cents per share, narrower than the loss of $10.6 million, or 27 cents per share, reported a year ago. Excluding $6.2 million of restructuring and severance charges last year, the company would have reported a loss of 11 cents a share
Omnova said sales increased to $202.3 million, up 14.4 percent from the same period last year. Gross profit improved to $42.8 million, above last year's $42 million. However, gross profit margins declined to 21.2 percent from 23.8 percent as higher raw material for oil and natural gas.
The company said the carpet latex product line generated strong sales during the quarter driven by an improved market and increased market penetration through new account wins.
"While our operating profit improved slightly versus the third quarter of last year, the raw material environment remains extremely challenging," said chairman and chief executive Kevin McMullen in a statement. "We made progress in the third quarter in implementing price increases to partially offset this swift escalation and we have announced further increases for September and October of this year."
McMullen said the company was able to reduce debt during the period as it realized $16 million in benefits from actions taken in 2003 to reduce fixed costs. The gain helped the company reduce debt, which now stands at $185.4 million -- down $8.2 million from the second quarter and $26.1 million lower than the year-ago period.
