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For the year ended November 30, 2012
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Commission File Number 1-15147
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Ohio
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34-1897652
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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175 Ghent Road, Fairlawn, Ohio
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44333-3300
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(Address of principal executive offices)
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(Zip Code)
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Title of each
class
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Name of each exchange
on which registered
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Common Stock, par value 10¢ per share
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The New York Stock Exchange
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Large accelerated filer
¨
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Accelerated filer
þ
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(do not check if a smaller reporting company)
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Item
Number
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PART I
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1
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1A
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1B
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2
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3
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4
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4A
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PART II
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5
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6
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7
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7A
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8
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9
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9A
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9B
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PART III
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10
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11
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12
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13
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14
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PART IV
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15
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Item 1.
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Business
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Product Category
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% of Performance
Chemicals Fiscal
2012 Net Sales
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Primary Products
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End-use Applications
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Brand Names
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Paper and Carpet Chemicals
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40%
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SB and SBA latex
coating binders,
carpet backing
binders and paper
chemicals including
crosslinkers,
lubricants, other
coating additives and
hollow plastic
pigments
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Magazines, catalogs,
direct mail
advertising,
brochures, specialty
papers, food cartons,
household and other
consumer and
industrial packaging,
and residential and
commercial carpet
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GENCAL, GENFLO,
GENCRYL, GENCRYL
PT, NOVAGREEN,
REACTOPAQUE,
SUNKOTE,
SUNBOND,
SUNKEM, SUNCRYL,
SUNSIZE,
ECOKOTE,
UNIQ-PRINT,
SEQUABOND,
SUNREZ,
SEQUAREZ,
OMNABLOC,
OMNAGLIDE,
OMNATUF
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Specialty
Chemicals
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60%
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SB, SBA, styrene
butadiene vinyl
pyridine, acrylic,
vinyl acrylic, styrene
acrylic, and polyvinyl
acetate emulsion
polymers, hollow
plastic pigments,
solid & glyoxal
resins, phenolic and
diphenylamine
antioxidants, NBR
powders and
dispersions,
elastomers, silicone
emulsions,
polyethylene resins and fluorochemicals
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Nonwovens (such as
hygiene products,
engine filters and roofing
mat), construction,
adhesives, tapes, tire
cord, floor care,
textiles, graphic arts,
oil/gas drilling,
polymer stabilization,
industrial hoses,
specialty coatings
(such as masonry,
direct to metal, and
stain blocking
primers), elastomeric
modification (brake
linings, PVC
windows, automotive
interiors)
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GENFLO, GENCRYL,
GENTAC,
OMNAGLO,
OMNAPEL,
SEQUABOND,
SUNCRYL, SECOAT,
SECRYL, MOR-GLO,
LYTRON,
MOR-SHINE,
MOR-FLO,
NOVACRYL,
ACRYGEN, MYKON,
PERMAFRESH,
SEQUAPEL,
POLYFOX, X-CAPE,
GENGLAZE,
MYKOSOFT,
MYKOSIL, NORANE,
GENCEAL,
WINGSTAY,
PLIOLITE, PLIOWAY,
PLIOTEC,
HYDRO PLIOLITE,
CHEMIGUM,
SUNIGUM,
PLIOCORD
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Product Category
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% of Engineered Surfaces Fiscal
2012 Net Sales |
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Primary Products
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End-use Applications
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Brand Names
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Coated Fabrics
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45%
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Vinyl and urethane coated fabrics
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Seating surfacing for transportation, marine, offices, hotels, hospital and health care facilities, stores, schools, restaurants, public buildings and residences; decorative and protective surfacing for automotive soft top covers, and industrial applications
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BOLTAFLEX, BOLTASOFT, NAUTOLEX, PREFIXX, PREVAILL, Pinnacle
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Laminates and Performance Films
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55%
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Vinyl, paper and specialty laminates; performance films
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Decorative and protective surfacing for kitchen and bath cabinets, manufactured housing, recreational vehicle interiors, flooring, commercial and residential furniture, retail display and food service fixtures, home furnishings and consumer appliances, wall panel systems, decorative wall surfacing, performance films for pool liners, banners, tents, ceiling tiles, decking and medical products
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RADIANCE,
SURF(X), DESIGN4, EFX, DURAMAX, HARMONY, VIEWNIQUE, DIVERSIWALL,
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•
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Coated Fabrics — Nassimi, Morbern, China General, Uniroyal and Spradling International
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•
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Laminates and Performance Films — Dai Nippon Printing, Toppan Printing, Renolit Corporation, LG ChemAmerica, Riken USA Corporation, I2M and Spartech Industries
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Item 1A.
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Risk Factors
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•
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fluctuations in currency exchange rates;
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•
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transportation delays and interruptions;
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•
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political and economic instability and disruptions;
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•
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the imposition of duties and tariffs;
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•
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import and export controls;
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•
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government control of capital transactions, including the borrowing of funds for operations or the expatriation of cash;
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•
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difficulties in staffing and managing multi-national operations;
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•
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limitations on our ability to enforce legal rights and remedies;
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•
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more stringent environmental, health and safety laws and regulations;
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•
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potentially adverse tax consequences; and
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•
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government expropriation of a business or assets.
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•
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difficulty integrating operations and personnel at different locations;
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•
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diversion of management attention;
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•
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potential disruption of ongoing business because of the unknown reactions to the combination of OMNOVA and the acquisition by customers, suppliers and other key constituencies;
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•
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difficulties in assimilating the technologies and products of the acquisition;
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•
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inability to retain key personnel;
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•
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inability to successfully incorporate acquired business components with our existing operational and accounting infrastructure;
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•
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difficulty in expanding product manufacturing to new sites; and
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•
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inability to maintain uniform standards, controls, procedures and policies.
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•
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make it more difficult for us to satisfy our obligations with respect to the notes, the term loan and the revolving credit facility;
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•
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increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations, because a portion of our borrowings, including those under the term loan and the revolving credit facility, are at variable rates of interest;
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•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, joint ventures, pension contributions and investments and other general corporate purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the product categories in which we participate;
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•
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limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements;
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•
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place us at a competitive disadvantage compared to our competitors that have less debt.
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•
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incur additional debt or issue certain disqualified stock and preferred stock;
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•
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pay dividends or certain other distributions on our capital stock or repurchase our capital stock;
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•
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make certain investments or other restricted payments;
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•
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place restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;
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•
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engage in transactions with affiliates;
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•
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sell certain assets or merge with or into other companies;
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•
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enter into sale and leaseback transactions;
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•
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guarantee debt;
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•
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create liens; and
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•
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enter into unrelated businesses.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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*
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An asterisk next to a facility listed above indicates that it is a leased property.
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Item 3.
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Legal Proceedings
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Item 4.
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Submission of Matters to a Vote of Security Holders
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Item 4A.
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Executive Officers of the Registrant
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
(1)
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2012
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2011
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2010
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2009
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2008
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||||||||||
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(Dollars in millions, except per share data)
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||||||||||||||||||
Statement of operations data:
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||||||||||
Net Sales
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$
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1,125.5
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$
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1,201.1
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$
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781.7
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$
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625.3
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$
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766.7
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Cost of goods sold
(2)
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898.3
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982.5
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635.3
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490.6
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662.4
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Gross profit
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227.2
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218.6
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146.4
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134.7
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104.3
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Selling, general and administrative
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121.2
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108.6
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77.6
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76.8
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74.0
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|||||
Depreciation and amortization
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32.0
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33.5
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18.7
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20.4
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20.9
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|||||
Fixed asset impairment
(3)
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1.0
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3.1
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2.7
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1.1
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—
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|||||
Restructuring and severance
(4)
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1.0
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1.6
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.5
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1.4
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.4
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|||||
Interest expense
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36.5
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38.0
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8.7
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8.1
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13.0
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Equity (earnings) loss in affiliates
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—
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—
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—
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—
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(.2
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)
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|||||
Acquisition and integration related expense
(5)
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—
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2.3
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5.5
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—
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—
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Deferred financing fees write-off
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—
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1.0
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—
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—
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—
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Other (income) expense, net
(2)(6)
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(1.4
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)
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.4
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(.6
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)
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(1.5
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)
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(1.0
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)
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|||||
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190.3
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188.5
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113.1
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106.3
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107.1
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Income (loss) from continuing operations before income taxes
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36.9
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30.1
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33.3
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28.4
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(2.8
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)
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|||||
Income tax expense (benefit)
(7)
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11.2
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13.4
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(83.9
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)
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1.0
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.1
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|||||
Income (loss) from continuing operations
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25.7
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16.7
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117.2
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27.4
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(2.9
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)
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|||||
Discontinued Operations, net of tax:
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||||||||||
(Loss) income from operations
(8)
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(4.1
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)
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(19.5
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)
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(9.3
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)
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(1.2
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)
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|
.7
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|
|||||
Gain on sale
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6.0
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—
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—
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—
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—
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|||||
Income (loss) from discontinued operations
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1.9
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(19.5
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)
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(9.3
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)
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(1.2
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)
|
|
.7
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|
|||||
Net income (loss)
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$
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27.6
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$
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(2.8
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)
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$
|
107.9
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$
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26.2
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|
$
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(2.2
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)
|
Basic income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
.56
|
|
|
$
|
.37
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|
|
$
|
2.63
|
|
|
$
|
.62
|
|
|
$
|
(.07
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)
|
Income (loss) from discontinued operations
|
.05
|
|
|
(.43
|
)
|
|
(.21
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)
|
|
(.03
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)
|
|
.02
|
|
|||||
Net income (loss) per share
|
$
|
.61
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|
|
$
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(.06
|
)
|
|
$
|
2.42
|
|
|
$
|
.59
|
|
|
$
|
(.05
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)
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
.56
|
|
|
$
|
.37
|
|
|
$
|
2.61
|
|
|
$
|
.62
|
|
|
$
|
(.07
|
)
|
Income (loss) from discontinued operations
|
.04
|
|
|
(.43
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)
|
|
(.21
|
)
|
|
(.03
|
)
|
|
.02
|
|
|||||
Net income (loss) per share
|
$
|
.60
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|
|
$
|
(.06
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)
|
|
$
|
2.40
|
|
|
$
|
.59
|
|
|
$
|
(.05
|
)
|
General:
|
|
|
|
|
|
|
|
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|
||||||||||
Capital expenditures
|
$
|
32.8
|
|
|
$
|
24.1
|
|
|
$
|
13.7
|
|
|
$
|
9.0
|
|
|
$
|
11.8
|
|
Total assets
|
$
|
873.7
|
|
|
$
|
865.1
|
|
|
$
|
727.0
|
|
|
$
|
338.0
|
|
|
$
|
351.6
|
|
Long-term debt
(9)
|
$
|
442.6
|
|
|
$
|
444.3
|
|
|
$
|
389.4
|
|
|
$
|
140.8
|
|
|
$
|
182.1
|
|
Cash
(9)
|
$
|
148.5
|
|
|
$
|
103.1
|
|
|
$
|
324.3
|
|
|
$
|
31.2
|
|
|
$
|
9.6
|
|
(1)
|
During November 2011, the Company committed to a plan to dispose of substantially all of its Engineered Surfaces commercial wallcovering operations. As such, the results of operations for these businesses have been classified as discontinued operations for all periods presented.
|
(2)
|
During 2010, the Company recognized strike-related costs of $2.4 million of which $1.4 million is recorded in cost of products sold and $1.0 million is recorded in other (income) expense.
|
(3)
|
During 2012, the Company recognized asset impairment charges of $1.0 million to write-down the value of its Columbus, Mississippi facility and to write-off other assets no longer used (see Management's Discussion and Analysis of Financial condition and Results of Operations - Discontinued Operations). During 2011, the Company recognized asset impairment charges of $3.1 million due to the idling of a plant in Taicang, China and the planned realignment of coated fabrics production amongst existing facilities. During 2010, the Company recorded asset impairment charges of $2.7 million to write-down machinery and equipment at its Columbus, Mississippi plant to fair value. During 2009, the Company recorded asset impairment charges of $1.1 million related to assets that would no longer be utilized due to moving certain production activities to other facilities.
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(4)
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Restructuring and severance consisted primarily of severance costs of $1.0 million in 2012, $1.6 million in 2011, $0.5 million in 2010, $1.4 million in 2009 and costs for the closure of an extrusion facility and severance costs in 2008.
|
(5)
|
The Company recognized acquisition and integration costs of $2.3 million and $5.5 million in 2011 and 2010, respectively, related to the purchase of Eliokem International SAS, which was acquired on December 9, 2010.
|
(6)
|
During 2010, the Company recorded a charge of $9.2 million for a fair value adjustment on a foreign currency collar and recorded a gain of $9.7 million from the dissolution of a joint venture marketing alliance.
|
(7)
|
During 2010, the Company reversed a significant portion of its deferred tax valuation allowance of $98.2 million.
|
(8)
|
Includes long-lived asset impairment charges of $13.6 million and $3.5 million in 2011 and 2010, respectively.
|
(9)
|
During 2010, in connection with the pending acquisition of Eliokem International SAS, the Company issued $250 million of Senior Notes, the proceeds of which were held in escrow as of November 30, 2010, and subsequently used on December 9, 2010 to fund the acquisition.
|
Item 7.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Pounds Purchased (in millions)
|
|
Market Price Range Per Pound
|
2012
|
177
|
|
$0.57 - $0.78
|
2011*
|
205
|
|
$0.65 - $0.77
|
2010
|
180
|
|
$0.54 - $0.68
|
2009
|
170
|
|
$0.38 - $0.61
|
*
|
|
The increase over 2010 is partially due to requirements for the acquired ELIOKEM business.
|
|
Pounds Purchased (in millions)
|
|
Market Price Range Per Pound
|
2012
|
158
|
|
$0.84 - $1.98
|
2011*
|
175
|
|
$0.86 -$1.77
|
2010
|
135
|
|
$0.63 -$0.94
|
2009
|
125
|
|
$0.25 -$0.68
|
*
|
|
The increase over 2010 is partially due to requirements for the acquired ELIOKEM business.
|
|
|
November 30,
|
||
(Dollars in millions)
|
|
2011
|
||
Cash
|
|
$
|
2.8
|
|
Accounts receivable
|
|
7.1
|
|
|
Inventories, net
|
|
4.0
|
|
|
Other current assets
|
|
2.7
|
|
|
Assets held for sale—current
|
|
$
|
16.6
|
|
Property, plant and equipment, net
|
|
$
|
—
|
|
Assets held for sale—noncurrent
|
|
$
|
—
|
|
Accounts payable
|
|
$
|
6.6
|
|
Accrued payroll and personal property tax
|
|
1.1
|
|
|
Other current liabilities
|
|
.8
|
|
|
Liabilities held for sale—current
|
|
$
|
8.5
|
|
|
Year Ended
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Segment Sales:
|
|
|
|
||||
Performance Chemicals
|
|
|
|
||||
Paper and Carpet Chemicals
|
$
|
343.2
|
|
|
$
|
399.3
|
|
Specialty Chemicals
|
521.3
|
|
|
552.6
|
|
||
Total Performance Chemicals
|
$
|
864.5
|
|
|
$
|
951.9
|
|
|
|
|
|
||||
Engineered Surfaces
|
|
|
|
||||
Coated Fabrics
|
$
|
117.0
|
|
|
$
|
114.3
|
|
Laminates and Performance Films
|
144.0
|
|
|
134.9
|
|
||
Total Engineered Surfaces
|
261.0
|
|
|
249.2
|
|
||
Consolidated Net Sales
|
$
|
1,125.5
|
|
|
$
|
1,201.1
|
|
|
|
|
|
||||
Segment Gross Profit:
|
|
|
|
||||
Performance Chemicals
|
$
|
177.2
|
|
|
$
|
175.2
|
|
Engineered Surfaces
|
50.0
|
|
|
43.4
|
|
||
Consolidated Gross Profit
|
$
|
227.2
|
|
|
$
|
218.6
|
|
|
|
|
|
||||
Segment Operating Profit (Loss):
|
|
|
|
||||
Performance Chemicals
|
$
|
89.6
|
|
|
$
|
86.5
|
|
Engineered Surfaces
|
3.8
|
|
|
(1.3
|
)
|
||
Interest expense
|
(36.5
|
)
|
|
(38.0
|
)
|
||
Corporate expense
|
(20.0
|
)
|
|
(13.8
|
)
|
||
Write-off of deferred financing fees
|
—
|
|
|
(1.0
|
)
|
||
Acquisition and integration related expenses
|
—
|
|
|
(2.3
|
)
|
||
Consolidated income from continuing operations before income tax
|
$
|
36.9
|
|
|
$
|
30.1
|
|
|
Year Ended
November 30,
|
||||||
|
2011
|
|
2010
|
||||
|
(Dollars in millions)
|
||||||
Segment Sales:
|
|
|
|
||||
Performance Chemicals
|
|
|
|
||||
Paper and Carpet Chemicals
|
$
|
399.3
|
|
|
$
|
330.1
|
|
Specialty Chemicals
|
552.6
|
|
|
197.8
|
|
||
Total Performance Chemicals
|
$
|
951.9
|
|
|
$
|
527.9
|
|
|
|
|
|
||||
Engineered Surfaces
|
|
|
|
||||
Coated Fabrics
|
$
|
114.3
|
|
|
$
|
118.7
|
|
Laminates and Performance Films
|
134.9
|
|
|
135.1
|
|
||
Total Engineered Surfaces
|
249.2
|
|
|
253.8
|
|
||
Consolidated Net Sales
|
$
|
1,201.1
|
|
|
$
|
781.7
|
|
|
|
|
|
||||
Segment Gross Profit:
|
|
|
|
||||
Performance Chemicals
|
$
|
175.2
|
|
|
$
|
104.4
|
|
Engineered Surfaces
|
43.4
|
|
|
42.0
|
|
||
Consolidated Gross Profit
|
$
|
218.6
|
|
|
$
|
146.4
|
|
|
|
|
|
||||
Segment Operating Profit (Loss):
|
|
|
|
||||
Performance Chemicals
|
$
|
86.5
|
|
|
$
|
73.3
|
|
Engineered Surfaces
|
(1.3
|
)
|
|
(3.2
|
)
|
||
Interest expense
|
(38.0
|
)
|
|
(8.7
|
)
|
||
Corporate expense
|
(13.8
|
)
|
|
(22.6
|
)
|
||
Deferred financing fees write-off
|
(1.0
|
)
|
|
—
|
|
||
Acquisition and integration related expenses
|
(2.3
|
)
|
|
(5.5
|
)
|
||
Consolidated income from continuing operations before income tax
|
$
|
30.1
|
|
|
$
|
33.3
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Cash provided by operating activities
|
$
|
65.3
|
|
|
$
|
15.7
|
|
|
$
|
51.3
|
|
Cash used in investing activities
|
$
|
(20.1
|
)
|
|
$
|
(42.1
|
)
|
|
$
|
(259.8
|
)
|
Cash (used in) provided by in financing activities
|
$
|
(2.9
|
)
|
|
$
|
39.3
|
|
|
$
|
250.3
|
|
Increase in cash and cash equivalents
|
$
|
44.1
|
|
|
$
|
27.7
|
|
|
$
|
40.0
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
Total
|
|
Less
Than 1
Year
|
|
2 – 3
Years
|
|
4 – 5
Years
|
|
More
Than 5
Years
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Long-term debt and amounts due banks
|
$
|
453.6
|
|
|
$
|
9.6
|
|
|
$
|
4.0
|
|
|
$
|
190.0
|
|
|
$
|
250.0
|
|
Interest payments on long-term debt
(1)
|
165.6
|
|
|
30.4
|
|
|
60.5
|
|
|
55.0
|
|
|
19.7
|
|
|||||
Operating leases
|
40.3
|
|
|
4.9
|
|
|
7.3
|
|
|
4.3
|
|
|
23.8
|
|
|||||
Purchase obligations
|
4.9
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension funding obligations
(2)
|
51.1
|
|
|
14.9
|
|
|
17.6
|
|
|
13.4
|
|
|
5.2
|
|
|||||
Other long-term liabilities
|
12.4
|
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
|
6.4
|
|
|||||
Total
|
$
|
727.9
|
|
|
$
|
64.7
|
|
|
$
|
92.4
|
|
|
$
|
265.7
|
|
|
$
|
305.1
|
|
(1)
|
Based on outstanding debt balances as of November 30, 2012 and estimated interest rates. As those are based on estimates, actual future payments may be different.
|
(2)
|
Payments are based on Company estimates and current funding laws. Actual results may be different.
|
•
|
Investment returns which differ materially from the Company’s 7.75% return assumption for 2013.
|
•
|
Significant changes in interest rates, affecting the discount rate.
|
•
|
Opportunities to reduce future cash requirements by accelerating contributions ahead of the minimum required schedule. Voluntary contributions in excess of minimally required amounts may prevent the need for larger contributions in the future.
|
Item 7A.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
/s/ Ernst & Young LLP
|
|
Akron, Ohio
|
|
January 25, 2013
|
|
Item 8.
|
|
Consolidated Financial Statements and Supplementary Data
|
|
Page
Number
|
/s/ Kevin M. McMullen
|
Kevin M. McMullen
|
Chairman, Chief Executive Officer and President
|
|
/s/ Michael E. Hicks
|
Michael E. Hicks
|
Senior Vice President and Chief Financial Officer
|
|
January 25, 2013
|
/s/ Ernst & Young LLP
|
|
Akron, Ohio
|
|
January 25, 2013
|
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions, except per share data)
|
||||||||||
Net Sales
|
$
|
1,125.5
|
|
|
$
|
1,201.1
|
|
|
$
|
781.7
|
|
Cost of products sold (exclusive of depreciation)
|
898.3
|
|
|
982.5
|
|
|
635.3
|
|
|||
Gross profit
|
227.2
|
|
|
218.6
|
|
|
146.4
|
|
|||
Selling, general and administrative
|
121.2
|
|
|
108.6
|
|
|
77.6
|
|
|||
Depreciation and amortization
|
32.0
|
|
|
33.5
|
|
|
18.7
|
|
|||
Asset impairment
|
1.0
|
|
|
3.1
|
|
|
2.7
|
|
|||
Restructuring and severance
|
1.0
|
|
|
1.6
|
|
|
.5
|
|
|||
Interest expense
|
36.5
|
|
|
38.0
|
|
|
8.7
|
|
|||
Deferred financing fees write-off
|
—
|
|
|
1.0
|
|
|
—
|
|
|||
Acquisition and integration related expenses
|
—
|
|
|
2.3
|
|
|
5.5
|
|
|||
Other (income) expense, net
|
(1.4
|
)
|
|
.4
|
|
|
(.6
|
)
|
|||
|
190.3
|
|
|
188.5
|
|
|
113.1
|
|
|||
Income from continuing operations before income taxes
|
36.9
|
|
|
30.1
|
|
|
33.3
|
|
|||
Income tax expense (benefit)
|
11.2
|
|
|
13.4
|
|
|
(83.9
|
)
|
|||
Income from continuing operations
|
25.7
|
|
|
16.7
|
|
|
117.2
|
|
|||
Discontinued Operations:
|
|
|
|
|
|
||||||
Loss from discontinued operations (net of tax benefit of $0.9 million, $3.8 million and $5.5 million in 2012, 2011 and 2010, respectively)
|
(4.1
|
)
|
|
(19.5
|
)
|
|
(9.3
|
)
|
|||
Gain on sale of discontinued operations (net of tax of $3.9 million)
|
6.0
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations
|
$
|
1.9
|
|
|
$
|
(19.5
|
)
|
|
$
|
(9.3
|
)
|
Net Income (Loss)
|
$
|
27.6
|
|
|
$
|
(2.8
|
)
|
|
$
|
107.9
|
|
Income Per Share—Basic
|
|
|
|
|
|
||||||
Income per share—continuing operations
|
$
|
.56
|
|
|
$
|
.37
|
|
|
$
|
2.63
|
|
Income (loss) per share—discontinued operations
|
.05
|
|
|
(.43
|
)
|
|
(.21
|
)
|
|||
Basic income (loss) per share
|
$
|
.61
|
|
|
$
|
(.06
|
)
|
|
$
|
2.42
|
|
Income Per Share—Diluted
|
|
|
|
|
|
||||||
Income per share—continuing operations
|
$
|
.56
|
|
|
$
|
.37
|
|
|
$
|
2.61
|
|
Loss per share—discontinued operations
|
.04
|
|
|
(.43
|
)
|
|
(.21
|
)
|
|||
Diluted income (loss) per share
|
$
|
.60
|
|
|
$
|
(.06
|
)
|
|
$
|
2.40
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - Basic
|
45.6
|
|
|
44.8
|
|
|
44.6
|
|
|||
Weighted average shares outstanding - Diluted
|
46.0
|
|
|
45.2
|
|
|
45.0
|
|
|
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions, except
per share amounts)
|
||||||
ASSETS:
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
143.0
|
|
|
$
|
98.9
|
|
Restricted cash
|
5.5
|
|
|
4.2
|
|
||
Accounts receivable, net
|
137.3
|
|
|
163.2
|
|
||
Inventories
|
96.2
|
|
|
84.5
|
|
||
Prepaid expenses and other
|
7.6
|
|
|
3.9
|
|
||
Deferred income taxes—current
|
10.7
|
|
|
6.5
|
|
||
Assets held for sale—current
|
—
|
|
|
16.6
|
|
||
Total Current Assets
|
400.3
|
|
|
377.8
|
|
||
Property, plant and equipment, net
|
222.8
|
|
|
220.8
|
|
||
Trademarks and other intangible assets, net
|
79.6
|
|
|
87.5
|
|
||
Goodwill
|
86.7
|
|
|
88.0
|
|
||
Deferred income taxes—non-current
|
65.7
|
|
|
69.1
|
|
||
Deferred financing fees
|
11.3
|
|
|
13.6
|
|
||
Other assets
|
7.3
|
|
|
8.3
|
|
||
Total Assets
|
$
|
873.7
|
|
|
$
|
865.1
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Amounts due banks
|
$
|
9.6
|
|
|
$
|
11.3
|
|
Accounts payable
|
102.8
|
|
|
106.4
|
|
||
Accrued payroll and personal property taxes
|
21.8
|
|
|
18.9
|
|
||
Employee benefit obligations
|
2.1
|
|
|
2.2
|
|
||
Deferred income taxes—current
|
—
|
|
|
.1
|
|
||
Accrued interest
|
1.8
|
|
|
1.8
|
|
||
Other current liabilities
|
7.4
|
|
|
7.3
|
|
||
Liabilities held for sale—current
|
—
|
|
|
8.5
|
|
||
Total Current Liabilities
|
145.5
|
|
|
156.5
|
|
||
Senior notes
|
250.0
|
|
|
250.0
|
|
||
Long-term debt
|
192.6
|
|
|
194.3
|
|
||
Post-retirement benefits other than pensions
|
7.7
|
|
|
7.8
|
|
||
Pension liabilities
|
111.4
|
|
|
91.5
|
|
||
Deferred income taxes—non-current
|
23.9
|
|
|
28.3
|
|
||
Other liabilities
|
12.4
|
|
|
15.0
|
|
||
Total liabilities
|
743.5
|
|
|
743.4
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Preference stock—$1.00 par value; 15 million shares authorized; none outstanding
|
—
|
|
|
—
|
|
||
Common stock—$0.10 par value; 135 million shares authorized; 47.5 million and 46.1 million shares issued as of November 30, 2012 and 2011, respectively
|
4.7
|
|
|
4.6
|
|
||
Additional contributed capital
|
331.8
|
|
|
324.9
|
|
||
Retained deficit
|
(87.2
|
)
|
|
(114.8
|
)
|
||
Treasury stock at cost; .6 million shares and .4 million shares at November 30, 2012 and 2011, respectively
|
(4.4
|
)
|
|
(2.7
|
)
|
||
Accumulated other comprehensive loss
|
(114.7
|
)
|
|
(90.3
|
)
|
||
Total Shareholders’ Equity
|
130.2
|
|
|
121.7
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
873.7
|
|
|
$
|
865.1
|
|
(Dollars and shares in millions)
|
Number of Common Shares Outstanding
|
|
Common
Stock
|
|
Additional
Contributed
Capital
|
|
Retained
Deficit
|
|
Treasury
Stock
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Shareholders’ Equity
|
|
|
Total Comprehensive Income (Loss)
|
|||||||||||||||
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance November 30, 2009
|
44.5
|
|
|
$
|
4.4
|
|
|
$
|
314.1
|
|
|
$
|
(219.9
|
)
|
|
$
|
(.4
|
)
|
|
$
|
(83.1
|
)
|
|
$
|
15.1
|
|
|
|
|
||
Net income
|
|
|
|
|
|
|
107.9
|
|
|
|
|
|
|
107.9
|
|
|
|
$
|
107.9
|
|
|||||||||||
Cumulative translation adjustment
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
1.4
|
|
|
|
1.4
|
|
||||||||||||
Unrecognized gain on interest rate swap (net of tax of $0.3 million)
|
|
|
|
|
|
|
|
|
|
|
.4
|
|
|
.4
|
|
|
|
.4
|
|
||||||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Prior service credits (net of tax of $0.6 million)
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
|
1.0
|
|
|
|
1.0
|
|
||||||||||||
Net actuarial loss (net of tax of $(3.4) million)
|
|
|
|
|
|
|
|
|
|
|
(5.5
|
)
|
|
(5.5
|
)
|
|
|
(5.5
|
)
|
||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
105.2
|
|
|||||||||||||
Common stock issuance
|
.6
|
|
|
.1
|
|
|
3.9
|
|
|
|
|
(.9
|
)
|
|
|
|
3.1
|
|
|
|
|
||||||||||
Balance November 30, 2010
|
45.1
|
|
|
$
|
4.5
|
|
|
$
|
318.0
|
|
|
$
|
(112.0
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(85.8
|
)
|
|
$
|
123.4
|
|
|
|
|
||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
|
|
|
|
|
|
(2.8
|
)
|
|
|
|
|
|
(2.8
|
)
|
|
|
$
|
(2.8
|
)
|
|||||||||||
Cumulative translation adjustment
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
2.1
|
|
|
|
2.1
|
|
||||||||||||
Amortization of unrecognized loss on interest rate swap (net of tax of $1.0 million)
|
|
|
|
|
|
|
|
|
|
|
1.6
|
|
|
1.6
|
|
|
|
1.6
|
|
||||||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net actuarial loss (net of tax benefit of $(5.1) million)
|
|
|
|
|
|
|
|
|
|
|
(6.5
|
)
|
|
(6.5
|
)
|
|
|
(6.5
|
)
|
||||||||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(5.6
|
)
|
|||||||||||||
Common stock issuance
|
.6
|
|
|
.1
|
|
|
6.9
|
|
|
|
|
(1.4
|
)
|
|
|
|
5.6
|
|
|
|
|
||||||||||
Net actuarial loss of acquired business
|
|
|
|
|
|
|
|
|
|
|
(1.7
|
)
|
|
(1.7
|
)
|
|
|
|
|||||||||||||
Balance November 30, 2011
|
45.7
|
|
|
$
|
4.6
|
|
|
$
|
324.9
|
|
|
$
|
(114.8
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(90.3
|
)
|
|
$
|
121.7
|
|
|
|
|
||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
|
|
|
|
|
|
27.6
|
|
|
|
|
|
|
27.6
|
|
|
|
$
|
27.6
|
|
|||||||||||
Cumulative translation adjustment (net of tax benefit of ($0.5) million)
|
|
|
|
|
|
|
|
|
|
|
(4.3
|
)
|
|
(4.3
|
)
|
|
|
(4.3
|
)
|
||||||||||||
Amortization of unrecognized loss on interest rate swap (including tax of $1.3 million)
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
2.6
|
|
|
|
2.6
|
|
||||||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Prior service cost (net of tax benefit of $0.9 million)
|
|
|
|
|
|
|
|
|
|
|
.6
|
|
|
.6
|
|
|
|
.6
|
|
||||||||||||
Net actuarial loss (net of tax benefit of $14.5 million)
|
|
|
|
|
|
|
|
|
|
|
(23.3
|
)
|
|
(23.3
|
)
|
|
|
(23.3
|
)
|
||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.2
|
|
|||||||||||||
Common stock issuance
|
1.2
|
|
|
.1
|
|
|
6.9
|
|
|
|
|
(1.7
|
)
|
|
|
|
5.3
|
|
|
|
|
||||||||||
Balance November 30, 2012
|
46.9
|
|
|
$
|
4.7
|
|
|
$
|
331.8
|
|
|
$
|
(87.2
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(114.7
|
)
|
|
$
|
130.2
|
|
|
|
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
27.6
|
|
|
$
|
(2.8
|
)
|
|
$
|
107.9
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Loss (gain) on disposal of fixed assets
|
—
|
|
|
1.2
|
|
|
—
|
|
|||
Depreciation and amortization
|
32.0
|
|
|
33.5
|
|
|
18.7
|
|
|||
Amortization of deferred financing fees
|
2.7
|
|
|
2.7
|
|
|
.7
|
|
|||
Gain on sale of business
|
(9.9
|
)
|
|
—
|
|
|
—
|
|
|||
Gain from dissolution of joint marketing alliance
|
—
|
|
|
—
|
|
|
(9.7
|
)
|
|||
Impairment of fixed assets
|
1.0
|
|
|
3.1
|
|
|
2.7
|
|
|||
Fair value adjustment on currency collar
|
—
|
|
|
—
|
|
|
9.2
|
|
|||
Settlement of interest rate swap
|
—
|
|
|
—
|
|
|
4.3
|
|
|||
Non-cash stock compensation expense
|
4.5
|
|
|
3.4
|
|
|
3.5
|
|
|||
Provision for uncollectible accounts
|
.6
|
|
|
1.8
|
|
|
.1
|
|
|||
Provision for obsolete inventories
|
—
|
|
|
2.6
|
|
|
.1
|
|
|||
Deferred income taxes
|
8.6
|
|
|
10.7
|
|
|
(83.3
|
)
|
|||
Other
|
.6
|
|
|
.2
|
|
|
(.4
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
31.7
|
|
|
(39.7
|
)
|
|
(1.6
|
)
|
|||
Inventories
|
(15.6
|
)
|
|
(7.6
|
)
|
|
(6.3
|
)
|
|||
Other current assets
|
(.4
|
)
|
|
(4.5
|
)
|
|
(.9
|
)
|
|||
Current liabilities
|
(14.0
|
)
|
|
8.8
|
|
|
2.1
|
|
|||
Other non-current assets
|
2.5
|
|
|
(19.1
|
)
|
|
.3
|
|
|||
Contribution to defined benefit plan
|
(18.7
|
)
|
|
(2.8
|
)
|
|
(5.1
|
)
|
|||
Other non-current liabilities
|
5.7
|
|
|
6.6
|
|
|
—
|
|
|||
Discontinued operations
|
6.4
|
|
|
17.6
|
|
|
9.0
|
|
|||
Net Cash Provided By Operating Activities
|
65.3
|
|
|
15.7
|
|
|
51.3
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(32.8
|
)
|
|
(24.1
|
)
|
|
(13.7
|
)
|
|||
Proceeds from sale of businesses
|
12.4
|
|
|
—
|
|
|
—
|
|
|||
Acquisitions of business, less cash acquired
|
—
|
|
|
(271.6
|
)
|
|
—
|
|
|||
Acquisition of intangible assets
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|||
Proceeds from dissolution of joint marketing alliance
|
—
|
|
|
—
|
|
|
9.7
|
|
|||
Proceeds from insurance settlements
|
—
|
|
|
—
|
|
|
.4
|
|
|||
Proceeds from asset dispositions
|
.3
|
|
|
1.0
|
|
|
.5
|
|
|||
Restricted cash
|
—
|
|
|
253.2
|
|
|
(253.1
|
)
|
|||
Discontinued operations
|
—
|
|
|
(.6
|
)
|
|
(1.1
|
)
|
|||
Net Cash Used By Investing Activities
|
(20.1
|
)
|
|
(42.1
|
)
|
|
(259.8
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
—
|
|
|
199.2
|
|
|
662.1
|
|
|||
Repayment of debt obligations
|
(2.0
|
)
|
|
(144.0
|
)
|
|
(413.6
|
)
|
|||
Short-term debt borrowings
|
43.8
|
|
|
96.5
|
|
|
1.5
|
|
|||
Short-term debt payments
|
(45.4
|
)
|
|
(95.1
|
)
|
|
—
|
|
|||
Payments for debt refinancing
|
—
|
|
|
(15.5
|
)
|
|
—
|
|
|||
Restricted cash
|
(1.3
|
)
|
|
(4.2
|
)
|
|
—
|
|
|||
Cash received from exercise of stock options
|
2.0
|
|
|
2.4
|
|
|
.3
|
|
|||
Net Cash (Used In) Provided By Financing Activities
|
(2.9
|
)
|
|
39.3
|
|
|
250.3
|
|
|||
Effect of exchange rate changes on cash
|
1.8
|
|
|
14.8
|
|
|
(1.8
|
)
|
|||
Net Increase in Cash and Cash Equivalents
|
44.1
|
|
|
27.7
|
|
|
40.0
|
|
|||
Cash and cash equivalents at beginning of period
|
98.9
|
|
|
71.2
|
|
|
31.2
|
|
|||
Cash and Cash Equivalents at End of Period
|
$
|
143.0
|
|
|
$
|
98.9
|
|
|
$
|
71.2
|
|
•
|
Level 1—Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in an active market, quoted prices in markets that are not active, and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data.
|
•
|
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
|
Years
|
Buildings
|
25 – 40
|
Machinery and equipment
|
5 –15
|
Furniture and fixtures
|
3 –10
|
Software
|
3 –5
|
|
Year Ended November 30, 2010
|
||
|
(Dollars in millions, except per share amounts)
|
||
Net sales
|
$
|
1,070.1
|
|
Income from continuing operations
|
$
|
113.7
|
|
Net income per share, basic
|
$
|
2.54
|
|
Net income per share, diluted
|
$
|
2.52
|
|
|
|
November 30,
|
||
(Dollars in millions)
|
|
2011
|
||
Cash
|
|
$
|
2.8
|
|
Accounts receivable
|
|
7.1
|
|
|
Inventories, net
|
|
4.0
|
|
|
Other current assets
|
|
2.7
|
|
|
Assets held for sale—current
|
|
$
|
16.6
|
|
Property, plant and equipment, net
|
|
$
|
—
|
|
Assets held for sale—noncurrent
|
|
$
|
—
|
|
Accounts payable
|
|
$
|
6.6
|
|
Accrued payroll and personal property tax
|
|
1.1
|
|
|
Other current liabilities
|
|
.8
|
|
|
Liabilities held for sale—current
|
|
$
|
8.5
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Severance expense
|
$
|
1.0
|
|
|
$
|
1.6
|
|
|
$
|
.5
|
|
|
November 30,
2011
|
|
2012
|
|
November 30,
2012
|
||||||||||
|
Provision
|
|
Payments
|
|
|||||||||||
|
(Dollars in millions)
|
||||||||||||||
Performance Chemicals
|
$
|
.1
|
|
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
—
|
|
Engineered Surfaces
|
—
|
|
|
1.0
|
|
|
.7
|
|
|
.3
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
.1
|
|
|
$
|
1.0
|
|
|
$
|
.8
|
|
|
$
|
.3
|
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Loss (gain) on foreign currency transactions
|
$
|
.2
|
|
|
$
|
2.9
|
|
|
$
|
.2
|
|
Interest income
|
(.6
|
)
|
|
(.3
|
)
|
|
(.1
|
)
|
|||
Income from scrap material sales
|
(1.9
|
)
|
|
(1.4
|
)
|
|
(.6
|
)
|
|||
Licensing income
|
—
|
|
|
(.7
|
)
|
|
(.1
|
)
|
|||
Other non-income taxes
|
.8
|
|
|
1.0
|
|
|
.3
|
|
|||
Gain on RohmNova dissolution
|
—
|
|
|
—
|
|
|
(9.7
|
)
|
|||
Fair value adjustment to Euro Currency Collar
|
—
|
|
|
—
|
|
|
9.2
|
|
|||
Strike-related expenses
|
—
|
|
|
—
|
|
|
1.0
|
|
|||
Foreign import/export duty claim
|
—
|
|
|
—
|
|
|
.3
|
|
|||
Indemnification reserve reversal
|
—
|
|
|
.2
|
|
|
(.7
|
)
|
|||
Canada GST refund
|
—
|
|
|
(.8
|
)
|
|
—
|
|
|||
Other
|
.1
|
|
|
(.5
|
)
|
|
(.4
|
)
|
|||
|
$
|
(1.4
|
)
|
|
$
|
.4
|
|
|
$
|
(.6
|
)
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Income from Continuing Operations Before Income Taxes
|
|
|
|
|
|
||||||
U.S.
|
$
|
21.7
|
|
|
$
|
18.5
|
|
|
$
|
27.7
|
|
Foreign
|
15.2
|
|
|
11.6
|
|
|
5.6
|
|
|||
|
$
|
36.9
|
|
|
$
|
30.1
|
|
|
$
|
33.3
|
|
|
Years Ended November 30,
|
||||||||||
(Dollars in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Income Tax Expense (Benefit)
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
—
|
|
|
$
|
(.2
|
)
|
|
$
|
.2
|
|
U.S. State and Local
|
.1
|
|
|
.9
|
|
|
.7
|
|
|||
Foreign
|
2.5
|
|
|
2.0
|
|
|
(1.5
|
)
|
|||
|
2.6
|
|
|
2.7
|
|
|
(.6
|
)
|
|||
Deferred
|
|
|
|
|
|
||||||
U.S. Federal
|
7.0
|
|
|
6.7
|
|
|
(77.3
|
)
|
|||
U.S. State and Local
|
(.6
|
)
|
|
(.4
|
)
|
|
(7.5
|
)
|
|||
Foreign
|
2.2
|
|
|
4.4
|
|
|
1.5
|
|
|||
|
8.6
|
|
|
10.7
|
|
|
(83.3
|
)
|
|||
Income Tax Expense (Benefit)
|
$
|
11.2
|
|
|
$
|
13.4
|
|
|
$
|
(83.9
|
)
|
|
Years Ended November 30,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Effective Income Tax Rate
|
|
|
|
|
|
|||
Tax at Federal Statutory Rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Valuation allowance (reversal)
|
.7
|
|
|
10.1
|
|
|
(299.5
|
)
|
Permanent items
|
2.2
|
|
|
9.3
|
|
|
9.5
|
|
Foreign taxes at different rates
|
(5.0
|
)
|
|
(6.3
|
)
|
|
(3.0
|
)
|
Uncertain tax positions
|
(4.3
|
)
|
|
(5.4
|
)
|
|
(7.0
|
)
|
State taxes
|
.7
|
|
|
3.4
|
|
|
16.4
|
|
French tax on intercompany sale
|
—
|
|
|
3.0
|
|
|
—
|
|
French business tax
|
1.3
|
|
|
2.2
|
|
|
—
|
|
Tax credits
|
(2.1
|
)
|
|
(4.5
|
)
|
|
—
|
|
Settlement of OCI tax to continuing operations
|
4.8
|
|
|
—
|
|
|
—
|
|
Other, net
|
(3.0
|
)
|
|
(2.3
|
)
|
|
(3.4
|
)
|
Effective Income Tax Rate
|
30.3
|
%
|
|
44.5
|
%
|
|
(252.0
|
)%
|
|
November 30,
|
||||||||||||||
|
2012
|
|
2011
|
||||||||||||
(Dollars in millions)
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Accrued estimated costs
|
$
|
9.4
|
|
|
$
|
—
|
|
|
$
|
9.0
|
|
|
$
|
—
|
|
Goodwill and intangible assets
|
—
|
|
|
25.5
|
|
|
—
|
|
|
21.0
|
|
||||
Depreciation
|
—
|
|
|
27.0
|
|
|
—
|
|
|
28.3
|
|
||||
Pension
|
39.7
|
|
|
—
|
|
|
31.1
|
|
|
—
|
|
||||
NOLCs and other carryforwards
|
58.6
|
|
|
—
|
|
|
52.1
|
|
|
—
|
|
||||
Post-retirement employee benefits
|
6.3
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
||||
Other
|
1.9
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
||||
Valuation allowance
|
(11.0
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
||||
Deferred Taxes
|
$
|
104.9
|
|
|
$
|
52.5
|
|
|
$
|
96.5
|
|
|
$
|
49.3
|
|
|
Years Ended November 30,
|
||||||||||
(Dollars in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Opening balance December 1
|
$
|
10.6
|
|
|
$
|
3.8
|
|
|
$
|
7.5
|
|
Increase based on tax positions related to acquisition
|
—
|
|
|
10.7
|
|
|
—
|
|
|||
Increase based on tax positions related to prior year
|
1.0
|
|
|
—
|
|
|
—
|
|
|||
Decrease based on tax positions in the prior year
|
(3.3
|
)
|
|
(.1
|
)
|
|
(1.1
|
)
|
|||
Reduction due to lapse of statue of limitations
|
(3.7
|
)
|
|
(3.9
|
)
|
|
(2.7
|
)
|
|||
Currency translation effects
|
(.3
|
)
|
|
.1
|
|
|
.1
|
|
|||
Ending balance November 30
|
$
|
4.3
|
|
|
$
|
10.6
|
|
|
$
|
3.8
|
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Foreign currency translation adjustments
|
$
|
(2.2
|
)
|
|
$
|
2.1
|
|
|
$
|
—
|
|
Unrecognized loss on interest rate swap
|
—
|
|
|
(2.6
|
)
|
|
(4.2
|
)
|
|||
Employee benefit plans
|
(112.5
|
)
|
|
(89.8
|
)
|
|
(81.6
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(114.7
|
)
|
|
$
|
(90.3
|
)
|
|
$
|
(85.8
|
)
|
|
Pension
|
|
Health Care
|
|
Total
|
||||||
|
(Dollars in millions)
|
||||||||||
2012
|
|
|
|
|
|
||||||
Net Actuarial (Loss) Gain
|
|
|
|
|
|
||||||
Net actuarial (loss) gain incurred during the period
|
$
|
(39.2
|
)
|
|
$
|
—
|
|
|
$
|
(39.2
|
)
|
Amortization included in net periodic expense (income)
|
3.0
|
|
|
(1.6
|
)
|
|
1.4
|
|
|||
Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in actuarial gain
|
$
|
(36.2
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(37.8
|
)
|
Prior Service Cost
|
|
|
|
|
|
||||||
Amortization included in net periodic expense (income)
|
$
|
—
|
|
|
$
|
(.3
|
)
|
|
$
|
(.3
|
)
|
Curtailment loss
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net change in prior service costs
|
$
|
—
|
|
|
$
|
(.3
|
)
|
|
$
|
(.3
|
)
|
2011
|
|
|
|
|
|
||||||
Net Actuarial (Loss) Gain
|
|
|
|
|
|
||||||
Net actuarial (loss) gain incurred during the period
|
$
|
(11.8
|
)
|
|
$
|
(.2
|
)
|
|
$
|
(12.0
|
)
|
Amortization included in net periodic expense (income)
|
2.3
|
|
|
(1.8
|
)
|
|
.5
|
|
|||
Acquisition
|
(1.7
|
)
|
|
—
|
|
|
(1.7
|
)
|
|||
Change in actuarial gain
|
$
|
(11.2
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(13.2
|
)
|
Prior Service Cost
|
|
|
|
|
|
||||||
Amortization included in net periodic expense (income)
|
$
|
.1
|
|
|
$
|
(.3
|
)
|
|
$
|
(.2
|
)
|
Curtailment loss
|
.1
|
|
|
—
|
|
|
.1
|
|
|||
Net change in prior service costs
|
$
|
.2
|
|
|
$
|
(.3
|
)
|
|
$
|
(.1
|
)
|
|
Years Ended November 30,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Basic Earnings Per Share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
25.7
|
|
|
$
|
16.7
|
|
|
$
|
117.2
|
|
Income from continuing operations allocated to participating securities
|
.1
|
|
|
—
|
|
|
3.1
|
|
|||
Income from continuing operations allocated to common stockholders
|
$
|
25.6
|
|
|
$
|
16.7
|
|
|
$
|
114.1
|
|
Income (loss) from discontinued operations
|
$
|
1.9
|
|
|
$
|
(19.5
|
)
|
|
$
|
(9.3
|
)
|
Income (loss) from discontinued operations allocated to participating securities
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|||
Income (loss) from discontinued operations allocated to common stockholders
|
$
|
1.9
|
|
|
$
|
(19.5
|
)
|
|
$
|
(9.1
|
)
|
Net income (loss)
|
$
|
27.6
|
|
|
$
|
(2.8
|
)
|
|
$
|
107.9
|
|
Net income allocated to participating securities
|
.1
|
|
|
—
|
|
|
2.9
|
|
|||
Net income (loss) allocated to common stockholders
|
$
|
27.5
|
|
|
$
|
(2.8
|
)
|
|
$
|
105.0
|
|
Weighted-average common shares outstanding – basic
|
45.6
|
|
|
44.8
|
|
|
44.6
|
|
|||
Income from continuing operations income per common share – basic
|
$
|
.56
|
|
|
$
|
.37
|
|
|
$
|
2.63
|
|
Income (loss) from discontinued operations per common share – basic
|
$
|
.05
|
|
|
$
|
(.43
|
)
|
|
$
|
(.21
|
)
|
Net income (loss) per common share – basic
|
$
|
.61
|
|
|
$
|
(.06
|
)
|
|
$
|
2.42
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
25.7
|
|
|
$
|
16.7
|
|
|
$
|
117.2
|
|
Income from continuing operations allocated to participating securities
|
.1
|
|
|
—
|
|
|
3.1
|
|
|||
Income from continuing operations allocated to common stockholders
|
$
|
25.6
|
|
|
$
|
16.7
|
|
|
$
|
114.1
|
|
Income (loss) from discontinued operations
|
$
|
1.9
|
|
|
$
|
(19.5
|
)
|
|
$
|
(9.3
|
)
|
Income (loss) from discontinued operations allocated to participating securities
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|||
Income (loss) from discontinued operations allocated to common stockholders
|
$
|
1.9
|
|
|
$
|
(19.5
|
)
|
|
$
|
(9.1
|
)
|
Net income (loss)
|
$
|
27.6
|
|
|
$
|
(2.8
|
)
|
|
$
|
107.9
|
|
Net income allocated to participating securities
|
.1
|
|
|
—
|
|
|
2.9
|
|
|||
Net income (loss) allocated to common stockholders
|
$
|
27.5
|
|
|
$
|
(2.8
|
)
|
|
$
|
105.0
|
|
Weighted-average common shares outstanding – basic
|
45.6
|
|
|
44.8
|
|
|
44.6
|
|
|||
Dilutive effect of stock options
|
.4
|
|
|
.4
|
|
|
.4
|
|
|||
Weighted-average common shares outstanding – assuming dilution
|
46.0
|
|
|
45.2
|
|
|
45.0
|
|
|||
Income from continuing operations per common share – assuming dilution
|
$
|
.56
|
|
|
$
|
.37
|
|
|
$
|
2.61
|
|
Income (loss) from discontinued operations per common share – assuming dilution
|
$
|
.04
|
|
|
$
|
(.43
|
)
|
|
$
|
(.21
|
)
|
Net income (loss) per common share – assuming dilution
|
$
|
.60
|
|
|
$
|
(.06
|
)
|
|
$
|
2.40
|
|
|
Years Ended November 30,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Weighted-average common shares outstanding
|
45.4
|
|
|
44.2
|
|
|
43.4
|
|
Weighted-average participating shares outstanding
|
.2
|
|
|
.6
|
|
|
1.2
|
|
Total weighted-average shares outstanding—basic
|
45.6
|
|
|
44.8
|
|
|
44.6
|
|
Dilutive effect of stock options
|
.4
|
|
|
.4
|
|
|
.4
|
|
Total weighted-average shares outstanding—assuming dilution
|
46.0
|
|
|
45.2
|
|
|
45.0
|
|
|
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Raw materials and supplies
|
$
|
48.6
|
|
|
$
|
42.3
|
|
Work-in-process
|
6.4
|
|
|
5.7
|
|
||
Finished products
|
81.8
|
|
|
77.1
|
|
||
Acquired cost of inventories
|
136.8
|
|
|
125.1
|
|
||
Excess of acquired cost over LIFO cost
|
(29.9
|
)
|
|
(28.2
|
)
|
||
Obsolesence reserves
|
(10.7
|
)
|
|
(12.4
|
)
|
||
Inventories
|
$
|
96.2
|
|
|
$
|
84.5
|
|
|
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Land
|
$
|
11.9
|
|
|
$
|
11.9
|
|
Building and improvements
|
132.3
|
|
|
129.6
|
|
||
Machinery and equipment
|
449.3
|
|
|
445.4
|
|
||
Construction in progress
|
25.8
|
|
|
14.2
|
|
||
|
619.3
|
|
|
601.1
|
|
||
Accumulated depreciation
|
(396.5
|
)
|
|
(380.3
|
)
|
||
Property, Plant and Equipment, Net
|
$
|
222.8
|
|
|
$
|
220.8
|
|
Balance at December 1, 2011
|
$
|
88.0
|
|
Currency translation adjustment
|
(1.3
|
)
|
|
Balance at November 30, 2012
|
$
|
86.7
|
|
|
November 30, 2012
|
|
November 30, 2011
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Finite lived intangible assets
|
|
|
|
|
|
|
|
||||||||
Patents
|
$
|
9.6
|
|
|
$
|
9.4
|
|
|
$
|
9.6
|
|
|
$
|
8.8
|
|
Trademarks
|
7.5
|
|
|
6.4
|
|
|
7.5
|
|
|
6.2
|
|
||||
Technical know-how
|
17.2
|
|
|
8.0
|
|
|
17.6
|
|
|
6.0
|
|
||||
Customer lists
|
37.5
|
|
|
6.4
|
|
|
38.3
|
|
|
3.4
|
|
||||
Other
|
9.7
|
|
|
2.6
|
|
|
10.4
|
|
|
2.4
|
|
||||
|
$
|
81.5
|
|
|
$
|
32.8
|
|
|
$
|
83.4
|
|
|
$
|
26.8
|
|
Indefinite lived intangible assets
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
30.9
|
|
|
$
|
—
|
|
|
$
|
30.9
|
|
|
$
|
—
|
|
Total intangible assets
|
$
|
112.4
|
|
|
$
|
32.8
|
|
|
$
|
114.3
|
|
|
$
|
26.8
|
|
|
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
$200 million Term Loan B—current portion (interest at 5.5%)
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Foreign subsidiaries borrowings (interest at 5.4%—12.7%)
|
7.6
|
|
|
9.3
|
|
||
Total
|
$
|
9.6
|
|
|
$
|
11.3
|
|
|
November 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
$200 million Term Loan B (interest at 5.5%)
|
$
|
196.0
|
|
|
$
|
198.0
|
|
Senior Unsecured Notes (interest at 7.875%)
|
250.0
|
|
|
250.0
|
|
||
Senior Revolving Credit Facility (interest at 2.46%)
|
—
|
|
|
—
|
|
||
|
446.0
|
|
|
448.0
|
|
||
Less: current portion
|
(2.0
|
)
|
|
(2.0
|
)
|
||
Unamortized original issue discount
|
(1.4
|
)
|
|
(1.7
|
)
|
||
Total long-term debt
|
$
|
442.6
|
|
|
$
|
444.3
|
|
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Change in Benefit Obligation
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
259.4
|
|
|
$
|
244.6
|
|
Service cost
|
1.5
|
|
|
1.7
|
|
||
Interest cost
|
13.8
|
|
|
14.2
|
|
||
Actuarial loss
|
47.1
|
|
|
6.9
|
|
||
Acquisitions
|
—
|
|
|
7.2
|
|
||
Benefits paid net of retiree contributions
|
(15.3
|
)
|
|
(15.0
|
)
|
||
Exchange rate changes
|
(.1
|
)
|
|
(.2
|
)
|
||
Benefit Obligation at End of Year
|
$
|
306.4
|
|
|
$
|
259.4
|
|
Change in Plan Assets
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
167.8
|
|
|
$
|
171.1
|
|
Actual return on assets
|
23.1
|
|
|
8.4
|
|
||
Employer contributions
|
18.7
|
|
|
3.1
|
|
||
Acquisitions
|
—
|
|
|
.2
|
|
||
Benefits and expenses paid net of retiree contributions
|
(15.3
|
)
|
|
(15.0
|
)
|
||
Fair Value of Plan Assets at End of Year
|
$
|
194.3
|
|
|
$
|
167.8
|
|
Funded Status at November 30
|
$
|
(112.1
|
)
|
|
$
|
(91.6
|
)
|
Amounts Recognized in the Consolidated Balance Sheets
|
|
|
|
||||
Current liability
|
$
|
(.7
|
)
|
|
$
|
(.1
|
)
|
Non-current liability
|
(111.4
|
)
|
|
(91.5
|
)
|
||
Net Amount Recognized
|
$
|
(112.1
|
)
|
|
$
|
(91.6
|
)
|
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Net actuarial loss
|
$
|
(153.2
|
)
|
|
$
|
(118.2
|
)
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Net Periodic Benefit Cost
|
|
|
|
|
|
||||||
Service costs for benefits earned
|
$
|
1.5
|
|
|
$
|
1.7
|
|
|
$
|
1.6
|
|
Interest costs on benefit obligation
|
13.8
|
|
|
14.2
|
|
|
13.4
|
|
|||
Amortization of prior service costs
|
—
|
|
|
.1
|
|
|
.6
|
|
|||
Assumed return on plan assets
|
(14.2
|
)
|
|
(15.0
|
)
|
|
(15.6
|
)
|
|||
Amortization of net loss
|
3.0
|
|
|
2.3
|
|
|
4.0
|
|
|||
Curtailment loss
|
—
|
|
|
.1
|
|
|
4.2
|
|
|||
Total
|
$
|
4.1
|
|
|
$
|
3.4
|
|
|
$
|
8.2
|
|
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
U.S. Pension Plans
|
|
|
|
||||
Projected benefit obligation
|
$
|
293.4
|
|
|
$
|
250.3
|
|
Accumulated benefit obligation
|
$
|
293.4
|
|
|
$
|
250.3
|
|
Fair value of plan assets
|
$
|
194.1
|
|
|
$
|
167.6
|
|
Non-U.S. Pension Plans
|
|
|
|
||||
Projected benefit obligation
|
$
|
12.7
|
|
|
$
|
8.8
|
|
Accumulated benefit obligation
|
$
|
9.6
|
|
|
$
|
7.1
|
|
Fair value of plan assets
|
$
|
.2
|
|
|
$
|
.2
|
|
|
Pension Plans
|
||||
|
2012
|
|
2011
|
||
Weighted Average Assumptions
|
|
|
|
||
Discount rate used for liability determination
|
4.14
|
%
|
|
5.52
|
%
|
Annual rates of salary increase (non-U.S. plans)
|
3.40
|
%
|
|
3.07
|
%
|
Measurement date
|
11/30
|
|
|
11/30
|
|
Asset
Category
|
Target
Allocation 2012 |
|
Percentage of Plan Assets
At November 30, |
|
Weighted-Average Expected Long-Term Rate Of Return
|
||||||
2012
|
|
2011
|
|
||||||||
Equity securities
|
51
|
%
|
|
54
|
%
|
|
52
|
%
|
|
4.5
|
%
|
Fixed income securities
|
30
|
%
|
|
27
|
%
|
|
24
|
%
|
|
1.5
|
%
|
Real estate partnerships
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
|
.3
|
%
|
Other
|
15
|
%
|
|
16
|
%
|
|
20
|
%
|
|
.8
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
7.75
|
%
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
(Dollars in millions)
|
|
|
||||||||||
Money market funds
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Registered investment companies:
|
|
|
|
|
|
|
|
|
||||||||
Equity mutual funds
|
|
103.8
|
|
|
103.8
|
|
|
—
|
|
|
—
|
|
||||
Fixed income mutual funds
|
|
52.5
|
|
|
52.5
|
|
|
—
|
|
|
—
|
|
||||
Total registered Investment companies
|
|
156.3
|
|
|
156.3
|
|
|
—
|
|
|
—
|
|
||||
Collective trust funds:
|
|
|
|
|
|
|
|
|
||||||||
Private investment funds
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
Collateralized loan obligations
|
|
30.2
|
|
|
—
|
|
|
—
|
|
|
30.2
|
|
||||
Total collective trust funds
|
|
31.2
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
||||
Real estate partnerships
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
||||
|
|
$
|
194.1
|
|
|
$
|
156.4
|
|
|
$
|
—
|
|
|
$
|
37.7
|
|
|
Total
|
|
Collective
Trusts
|
|
Real Estate
Partnerships
|
||||||
|
(Dollars in millions)
|
||||||||||
Beginning balance, December 1, 2010
|
$
|
45.7
|
|
|
$
|
38.4
|
|
|
$
|
7.3
|
|
Redemptions
|
(8.9
|
)
|
|
(8.9
|
)
|
|
—
|
|
|||
Total gains or losses included in funded status
|
3.4
|
|
|
3.4
|
|
|
—
|
|
|||
Ending balance, November 30, 2011
|
$
|
40.2
|
|
|
$
|
32.9
|
|
|
$
|
7.3
|
|
Redemptions
|
(9.6
|
)
|
|
(9.6
|
)
|
|
—
|
|
|||
Total gains or losses included in funded status
|
7.1
|
|
|
7.9
|
|
|
(.8
|
)
|
|||
Ending balance, November 30, 2012
|
$
|
37.7
|
|
|
$
|
31.2
|
|
|
$
|
6.5
|
|
|
Fair Value
|
||
SEI Structured Credit Collective Fund
(a)
|
$
|
30.2
|
|
SEI Opportunity Collective Fund
(b)
|
$
|
1.0
|
|
(a)
|
The SEI Structured Credit Collective Fund seeks to provide high general returns by investing in collateralized debt obligations (“CDO’s”) and other structured credit instruments. The SEI Structured Credit Collective Fund requires a
two
-year non-redemption period after which investments can be redeemed at any time, however, a
90
day redemption notification period is required. The Plan has satisfied all funding obligations related to this investment and has surpassed the
two
-year non-redemption period.
|
(b)
|
The SEI Opportunity Collective Fund seeks to provide returns that are less correlated with investments in traditional asset classes and that provide a return that falls somewhere between stocks and bonds while incurring bond-like risk. Investment in the SEI Opportunity Collective Fund can be redeemed at any time; however, a
90
day redemption notification period is required. The Plan has satisfied all funding obligations related to this investment. The Plan filed a redemption notice with the fund manager for which
90%
of the Plan's investment in this fund was redeemed in 2012 and the remainder will be redeemed in the first quarter of 2013.
|
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Change in Benefit Obligation
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
8.7
|
|
|
$
|
8.7
|
|
Service cost
|
—
|
|
|
—
|
|
||
Interest cost
|
.4
|
|
|
.4
|
|
||
Actuarial loss
|
.1
|
|
|
.2
|
|
||
Benefits paid net of retiree contributions
|
(.7
|
)
|
|
(.6
|
)
|
||
Benefit Obligation at End of Year
|
$
|
8.5
|
|
|
$
|
8.7
|
|
Change in Plan Assets
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
.7
|
|
|
.6
|
|
||
Benefits and expenses paid net of retiree contributions
|
(.7
|
)
|
|
(.6
|
)
|
||
Fair Value of Plan Assets at End of Year
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status at November 30
|
$
|
(8.5
|
)
|
|
$
|
(8.7
|
)
|
Amounts Recognized in the Consolidated Balance Sheets
|
|
|
|
||||
Current liability
|
$
|
(.8
|
)
|
|
$
|
(.9
|
)
|
Non-current liability
|
(7.7
|
)
|
|
(7.8
|
)
|
||
Net Amount Recognized
|
$
|
(8.5
|
)
|
|
$
|
(8.7
|
)
|
|
2012
|
|
2011
|
||||
|
(Dollars in millions)
|
||||||
Net actuarial gain
|
$
|
17.9
|
|
|
$
|
19.6
|
|
Prior service credit
|
$
|
.6
|
|
|
$
|
.9
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Net Periodic Benefit Cost (Income)
|
|
|
|
|
|
||||||
Service costs for benefits earned
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
Interest costs on benefit obligation
|
.4
|
|
|
.4
|
|
|
.5
|
|
|||
Amortization of prior service credits
|
(.3
|
)
|
|
(.3
|
)
|
|
(.3
|
)
|
|||
Amortization of net gain
|
(1.6
|
)
|
|
(1.9
|
)
|
|
(2.3
|
)
|
|||
Curtailment gain
|
—
|
|
|
—
|
|
|
(.8
|
)
|
|||
Total
|
$
|
(1.5
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(2.8
|
)
|
|
Benefit
Payments
|
|
Medicare
Part D
Subsidy
|
||||
|
(Dollars in millions)
|
||||||
2013
|
$
|
.9
|
|
|
$
|
.1
|
|
2014
|
$
|
.9
|
|
|
$
|
.1
|
|
2015
|
$
|
.9
|
|
|
$
|
.1
|
|
2016
|
$
|
.9
|
|
|
$
|
.2
|
|
2017
|
$
|
.8
|
|
|
$
|
.2
|
|
2018 — 2022
|
$
|
3.7
|
|
|
$
|
.8
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Weighted Average Assumptions
|
|
|
|
|
|
|||
Discount rate used for liability determination
|
3.73
|
%
|
|
5.18
|
%
|
|
4.90
|
%
|
Discount rate used for expense determination
|
5.2
|
%
|
|
4.9
|
%
|
|
6.05
|
%
|
Current trend rate for health care costs
|
7.8
|
%
|
|
8.0
|
%
|
|
8.2
|
%
|
Ultimate trend rate for health care costs
|
4.5
|
%
|
|
4.5
|
%
|
|
4.5
|
%
|
Year reached
|
2028
|
|
|
2028
|
|
|
2028
|
|
Measurement date
|
11/30
|
|
|
11/30
|
|
|
11/30
|
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
|
Shares
|
|
Weighted
Average Exercise Price |
|
Shares
|
|
Weighted
Average Exercise Price |
|
Shares
|
|
Weighted
Average Exercise Price |
|||||||||
Outstanding at beginning of year
|
1,147,426
|
|
|
$
|
6.10
|
|
|
1,968,892
|
|
|
$
|
6.00
|
|
|
2,614,461
|
|
|
$
|
6.32
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited or expired
|
(527,801)
|
|
|
$
|
8.19
|
|
|
(445,816)
|
|
|
$
|
5.38
|
|
|
(598,160)
|
|
|
$
|
7.40
|
|
Exercised
|
(491,625)
|
|
|
$
|
4.14
|
|
|
(375,650)
|
|
|
$
|
6.44
|
|
|
(47,409)
|
|
|
$
|
6.02
|
|
Outstanding at end of year
|
128,000
|
|
|
$
|
4.99
|
|
|
1,147,426
|
|
|
$
|
6.10
|
|
|
1,968,892
|
|
|
$
|
6.00
|
|
|
Outstanding Options
|
|
Exercisable Options
|
||||||||||
|
Number
|
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Life (yrs) |
|
Number
|
|
Weighted
Average Exercise Price |
||||
$0.00—$4.99
|
60,500
|
|
$
|
4.14
|
|
|
0.6
|
|
60,500
|
|
$
|
4.14
|
|
$5.00—$5.99
|
63,500
|
|
$
|
5.73
|
|
|
1.6
|
|
63,500
|
|
$
|
5.73
|
|
$6.00—$6.99
|
4,000
|
|
$
|
6.08
|
|
|
3.1
|
|
4,000
|
|
$
|
6.08
|
|
Total
|
128,000
|
|
$
|
4.99
|
|
|
1.1
|
|
128,000
|
|
$
|
4.99
|
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
||||||
Non-vested
|
1,076,475
|
|
$
|
4.99
|
|
|
1,333,650
|
|
$
|
3.65
|
|
|
1,394,570
|
|
$
|
3.45
|
|
Granted
|
385,700
|
|
$
|
5.73
|
|
|
269,675
|
|
$
|
7.95
|
|
|
232,900
|
|
$
|
7.55
|
|
Vested
|
(594,375)
|
|
$
|
2.75
|
|
|
(505,900)
|
|
$
|
3.05
|
|
|
(262,270)
|
|
$
|
6.14
|
|
Forfeited
|
(4,650)
|
|
$
|
5.94
|
|
|
(20,950)
|
|
$
|
4.80
|
|
|
(31,550)
|
|
$
|
2.96
|
|
Non-vested at end of year
|
863,150
|
|
$
|
6.86
|
|
|
1,076,475
|
|
$
|
4.99
|
|
|
1,333,650
|
|
$
|
3.65
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Net Sales
|
|
|
|
|
|
||||||
Performance Chemicals
|
|
|
|
|
|
||||||
Paper and Carpet Chemicals
|
$
|
343.2
|
|
|
$
|
399.3
|
|
|
$
|
330.1
|
|
Specialty Chemicals
|
521.3
|
|
|
552.6
|
|
|
197.8
|
|
|||
Total Performance Chemicals
|
$
|
864.5
|
|
|
$
|
951.9
|
|
|
$
|
527.9
|
|
Engineered Surfaces
|
|
|
|
|
|
||||||
Coated Fabrics
|
$
|
117.0
|
|
|
$
|
114.3
|
|
|
$
|
118.7
|
|
Laminates and Performance Films
|
144.0
|
|
|
134.9
|
|
|
135.1
|
|
|||
Total Engineered Surfaces
|
$
|
261.0
|
|
|
$
|
249.2
|
|
|
$
|
253.8
|
|
Total Net Sales
|
$
|
1,125.5
|
|
|
$
|
1,201.1
|
|
|
$
|
781.7
|
|
Segment Operating Profit (Loss)
|
|
|
|
|
|
||||||
Performance Chemicals
|
$
|
89.6
|
|
|
$
|
86.5
|
|
|
$
|
73.3
|
|
Engineered Surfaces
|
3.8
|
|
|
(1.3
|
)
|
|
(3.2
|
)
|
|||
Total segment operating profit
|
93.4
|
|
|
85.2
|
|
|
70.1
|
|
|||
Interest expense
|
(36.5
|
)
|
|
(38.0
|
)
|
|
(8.7
|
)
|
|||
Corporate expenses
(a)
|
(20.0
|
)
|
|
(13.8
|
)
|
|
(22.6
|
)
|
|||
Acquisition and integration costs
|
—
|
|
|
(2.3
|
)
|
|
(5.5
|
)
|
|||
Deferred financing fees write-off
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|||
Income From Continuing Operations Before Income Taxes
|
$
|
36.9
|
|
|
$
|
30.1
|
|
|
$
|
33.3
|
|
(a)
|
Included in corporate expenses for 2010 are a fair value adjustment of
$9.2 million
related to a Euro currency option collar which the Company put in place to hedge currency risk for the ELIOKEM acquisition.
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Total Assets
|
|
|
|
|
|
||||||
Performance Chemicals
|
$
|
542.6
|
|
|
$
|
563.5
|
|
|
$
|
138.1
|
|
Engineered Surfaces
|
136.6
|
|
|
138.5
|
|
|
146.0
|
|
|||
Corporate
|
194.5
|
|
|
146.5
|
|
|
412.2
|
|
|||
Discontinued Operations
|
—
|
|
|
16.6
|
|
|
30.7
|
|
|||
|
$
|
873.7
|
|
|
$
|
865.1
|
|
|
$
|
727.0
|
|
Capital Expenditures
|
|
|
|
|
|
||||||
Performance Chemicals
|
$
|
24.4
|
|
|
$
|
17.9
|
|
|
$
|
8.2
|
|
Engineered Surfaces
|
7.0
|
|
|
6.0
|
|
|
4.0
|
|
|||
Corporate
|
1.4
|
|
|
.2
|
|
|
1.5
|
|
|||
|
$
|
32.8
|
|
|
$
|
24.1
|
|
|
$
|
13.7
|
|
Depreciation and Amortization
|
|
|
|
|
|
||||||
Performance Chemicals
|
$
|
24.1
|
|
|
$
|
24.6
|
|
|
$
|
9.4
|
|
Engineered Surfaces
|
7.6
|
|
|
8.5
|
|
|
9.0
|
|
|||
Corporate
|
.3
|
|
|
.4
|
|
|
.3
|
|
|||
|
$
|
32.0
|
|
|
$
|
33.5
|
|
|
$
|
18.7
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(Dollars in millions)
|
||||||||||
Net Sales
|
|
|
|
|
|
||||||
United States
|
$
|
685.4
|
|
|
$
|
731.5
|
|
|
$
|
608.3
|
|
United States export sales
|
8.0
|
|
|
11.0
|
|
|
20.6
|
|
|||
Europe
|
226.8
|
|
|
260.6
|
|
|
31.0
|
|
|||
Asia
|
205.3
|
|
|
198.0
|
|
|
121.8
|
|
|||
|
$
|
1,125.5
|
|
|
$
|
1,201.1
|
|
|
$
|
781.7
|
|
Segment Operating Profit
|
|
|
|
|
|
||||||
United States
|
$
|
68.1
|
|
|
$
|
63.2
|
|
|
$
|
64.5
|
|
Europe
|
16.5
|
|
|
23.5
|
|
|
2.8
|
|
|||
Asia
|
8.8
|
|
|
(1.5
|
)
|
|
2.8
|
|
|||
|
$
|
93.4
|
|
|
$
|
85.2
|
|
|
$
|
70.1
|
|
Total Assets
|
|
|
|
|
|
||||||
United States
|
$
|
389.6
|
|
|
$
|
428.1
|
|
|
$
|
626.7
|
|
Europe
|
296.5
|
|
|
255.6
|
|
|
10.9
|
|
|||
Asia
|
187.6
|
|
|
181.4
|
|
|
89.4
|
|
|||
|
$
|
873.7
|
|
|
$
|
865.1
|
|
|
$
|
727.0
|
|
Long-Lived Assets
|
|
|
|
|
|
||||||
United States
|
$
|
188.7
|
|
|
$
|
105.5
|
|
|
$
|
94.4
|
|
Europe
|
125.7
|
|
|
60.2
|
|
|
—
|
|
|||
Asia
|
74.7
|
|
|
55.1
|
|
|
25.3
|
|
|||
|
$
|
389.1
|
|
|
$
|
220.8
|
|
|
$
|
119.7
|
|
Fair Value Measurements
|
|
|
|
|
|
|
|
||||||||
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
.2
|
|
|
$
|
—
|
|
|
$
|
.2
|
|
|
$
|
—
|
|
Note receivable
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
||||
Total Assets
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
.2
|
|
|
$
|
3.7
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Exchange Contracts
|
$
|
.1
|
|
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
—
|
|
(Dollars in millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net Sales
|
$
|
749.7
|
|
|
$
|
—
|
|
|
$
|
407.7
|
|
|
$
|
(31.9
|
)
|
|
$
|
1,125.5
|
|
Cost of products sold
|
601.2
|
|
|
—
|
|
|
328.5
|
|
|
(31.4
|
)
|
|
898.3
|
|
|||||
Gross profit
|
148.5
|
|
|
—
|
|
|
79.2
|
|
|
(.5
|
)
|
|
227.2
|
|
|||||
Selling, general and administrative
|
84.0
|
|
|
.9
|
|
|
36.3
|
|
|
—
|
|
|
121.2
|
|
|||||
Depreciation and amortization
|
16.2
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
|
32.0
|
|
|||||
Restructuring and severance
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|||||
Asset impairment
|
.8
|
|
|
—
|
|
|
.2
|
|
|
—
|
|
|
1.0
|
|
|||||
Interest expense
|
29.8
|
|
|
(1.9
|
)
|
|
8.8
|
|
|
(.2
|
)
|
|
36.5
|
|
|||||
(Income) loss from subsidiaries
|
(5.6
|
)
|
|
(8.3
|
)
|
|
—
|
|
|
13.9
|
|
|
—
|
|
|||||
Other (income) expense, net
|
(3.7
|
)
|
|
(.8
|
)
|
|
2.9
|
|
|
.2
|
|
|
(1.4
|
)
|
|||||
|
122.5
|
|
|
(10.1
|
)
|
|
64.0
|
|
|
13.9
|
|
|
190.3
|
|
|||||
Income (loss) from continuing operations before income taxes
|
26.0
|
|
|
10.1
|
|
|
15.2
|
|
|
(14.4
|
)
|
|
36.9
|
|
|||||
Income tax expense
|
3.3
|
|
|
3.1
|
|
|
4.8
|
|
|
—
|
|
|
11.2
|
|
|||||
Income (loss) from continuing operations
|
22.7
|
|
|
7.0
|
|
|
10.4
|
|
|
(14.4
|
)
|
|
25.7
|
|
|||||
Income (loss) from discontinued operations
|
4.9
|
|
|
(.9
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
1.9
|
|
|||||
Net Income (Loss)
|
$
|
27.6
|
|
|
$
|
6.1
|
|
|
$
|
8.3
|
|
|
$
|
(14.4
|
)
|
|
$
|
27.6
|
|
(Dollars in millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net Sales
|
$
|
790.5
|
|
|
$
|
—
|
|
|
$
|
431.1
|
|
|
$
|
(20.5
|
)
|
|
$
|
1,201.1
|
|
Cost of products sold
|
653.2
|
|
|
—
|
|
|
349.5
|
|
|
(20.2
|
)
|
|
982.5
|
|
|||||
Gross profit
|
137.3
|
|
|
—
|
|
|
81.6
|
|
|
(.3
|
)
|
|
218.6
|
|
|||||
Selling, general and administrative
|
71.8
|
|
|
1.2
|
|
|
35.6
|
|
|
—
|
|
|
108.6
|
|
|||||
Depreciation and amortization
|
16.4
|
|
|
—
|
|
|
17.1
|
|
|
—
|
|
|
33.5
|
|
|||||
Restructuring and severance
|
.6
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.6
|
|
|||||
Asset impairment
|
.7
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
3.1
|
|
|||||
Interest expense
|
30.8
|
|
|
(1.4
|
)
|
|
8.2
|
|
|
.4
|
|
|
38.0
|
|
|||||
Deferred financing fees write-off
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|||||
Loss (income) from subsidiaries
|
4.4
|
|
|
10.0
|
|
|
—
|
|
|
(14.4
|
)
|
|
—
|
|
|||||
Acquisition and integration costs
|
2.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|||||
Other (income) expense, net
|
(4.5
|
)
|
|
(.8
|
)
|
|
5.6
|
|
|
.1
|
|
|
.4
|
|
|||||
|
123.5
|
|
|
9.0
|
|
|
69.9
|
|
|
(13.9
|
)
|
|
188.5
|
|
|||||
Income (loss) from continuing operations before income taxes
|
13.8
|
|
|
(9.0
|
)
|
|
11.7
|
|
|
13.6
|
|
|
30.1
|
|
|||||
Income tax expense (benefit)
|
11.0
|
|
|
(4.0
|
)
|
|
6.4
|
|
|
—
|
|
|
13.4
|
|
|||||
Income (loss) from continuing operations
|
2.8
|
|
|
(5.0
|
)
|
|
5.3
|
|
|
13.6
|
|
|
16.7
|
|
|||||
(Loss) income from discontinued operations
|
(5.6
|
)
|
|
1.4
|
|
|
(15.3
|
)
|
|
—
|
|
|
(19.5
|
)
|
|||||
Net (Loss) Income
|
$
|
(2.8
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
13.6
|
|
|
$
|
(2.8
|
)
|
(Dollars in millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net Sales
|
$
|
646.5
|
|
|
$
|
—
|
|
|
$
|
152.8
|
|
|
$
|
(17.6
|
)
|
|
$
|
781.7
|
|
Cost of products sold
|
520.0
|
|
|
—
|
|
|
132.6
|
|
|
(17.3
|
)
|
|
635.3
|
|
|||||
Gross profit
|
126.5
|
|
|
—
|
|
|
20.2
|
|
|
(.3
|
)
|
|
146.4
|
|
|||||
Selling, general and administrative
|
67.1
|
|
|
.8
|
|
|
9.7
|
|
|
—
|
|
|
77.6
|
|
|||||
Depreciation and amortization
|
14.9
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
18.7
|
|
|||||
Restructuring and severance
|
.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|||||
Asset impairment
|
2.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||
Interest expense
|
8.5
|
|
|
—
|
|
|
.2
|
|
|
—
|
|
|
8.7
|
|
|||||
Acquisition and integration costs
|
5.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|||||
(Income) loss from subsidiaries
|
(5.4
|
)
|
|
(3.9
|
)
|
|
—
|
|
|
9.3
|
|
|
—
|
|
|||||
Other (income) expense, net
|
(.9
|
)
|
|
(.4
|
)
|
|
.7
|
|
|
—
|
|
|
(.6
|
)
|
|||||
|
92.9
|
|
|
(3.5
|
)
|
|
14.4
|
|
|
9.3
|
|
|
113.1
|
|
|||||
Income (loss) from continuing operations before income taxes
|
33.6
|
|
|
3.5
|
|
|
5.8
|
|
|
(9.6
|
)
|
|
33.3
|
|
|||||
Income tax (benefit) expense
|
(83.0
|
)
|
|
(.9
|
)
|
|
—
|
|
|
—
|
|
|
(83.9
|
)
|
|||||
Income (loss) from continuing operations
|
116.6
|
|
|
4.4
|
|
|
5.8
|
|
|
(9.6
|
)
|
|
117.2
|
|
|||||
(Loss) income from discontinued operations
|
(8.7
|
)
|
|
1.3
|
|
|
(1.9
|
)
|
|
—
|
|
|
(9.3
|
)
|
|||||
Net Income (Loss)
|
$
|
107.9
|
|
|
$
|
5.7
|
|
|
$
|
3.9
|
|
|
$
|
(9.6
|
)
|
|
$
|
107.9
|
|
(Dollars in millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
98.7
|
|
|
$
|
—
|
|
|
$
|
44.3
|
|
|
$
|
—
|
|
|
$
|
143.0
|
|
Restricted cash
|
5.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|||||
Accounts receivable, net
|
69.6
|
|
|
—
|
|
|
67.7
|
|
|
—
|
|
|
137.3
|
|
|||||
Inventories
|
45.7
|
|
|
—
|
|
|
51.6
|
|
|
(1.1
|
)
|
|
96.2
|
|
|||||
Deferred income taxes
|
7.2
|
|
|
—
|
|
|
4.0
|
|
|
(.5
|
)
|
|
10.7
|
|
|||||
Prepaid expenses and other
|
5.5
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
7.6
|
|
|||||
Assets held for sale—current
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Assets
|
232.2
|
|
|
—
|
|
|
169.7
|
|
|
(1.6
|
)
|
|
400.3
|
|
|||||
Property, plant and equipment, net
|
110.2
|
|
|
—
|
|
|
112.6
|
|
|
—
|
|
|
222.8
|
|
|||||
Trademarks and other intangible assets, net
|
89.8
|
|
|
—
|
|
|
87.8
|
|
|
—
|
|
|
177.6
|
|
|||||
Deferred income taxes
|
67.0
|
|
|
—
|
|
|
6.1
|
|
|
(7.4
|
)
|
|
65.7
|
|
|||||
Investments in subsidiaries and inter company
|
456.6
|
|
|
203.8
|
|
|
460.3
|
|
|
(1,120.7
|
)
|
|
—
|
|
|||||
Other assets
|
1.1
|
|
|
3.8
|
|
|
2.4
|
|
|
—
|
|
|
7.3
|
|
|||||
Total Assets
|
$
|
956.9
|
|
|
$
|
207.6
|
|
|
$
|
838.9
|
|
|
$
|
(1,129.7
|
)
|
|
$
|
873.7
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts due to banks
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
7.6
|
|
|
$
|
—
|
|
|
$
|
9.6
|
|
Accounts payable
|
54.2
|
|
|
.2
|
|
|
48.6
|
|
|
(.2
|
)
|
|
102.8
|
|
|||||
Accrued payroll and personal property taxes
|
16.4
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
|
21.8
|
|
|||||
Employee benefit obligations
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
.6
|
|
|
(.6
|
)
|
|
—
|
|
|||||
Other current liabilities
|
9.1
|
|
|
2.7
|
|
|
3.2
|
|
|
(5.8
|
)
|
|
9.2
|
|
|||||
Liabilities held for sale—current
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Liabilities
|
83.8
|
|
|
2.9
|
|
|
65.4
|
|
|
(6.6
|
)
|
|
145.5
|
|
|||||
Long-term debt
|
442.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
442.6
|
|
|||||
Postretirement benefits other than pensions
|
7.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
|||||
Pension liabilities
|
99.2
|
|
|
—
|
|
|
12.2
|
|
|
—
|
|
|
111.4
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
31.3
|
|
|
(7.4
|
)
|
|
23.9
|
|
|||||
Intercompany
|
183.8
|
|
|
141.3
|
|
|
674.7
|
|
|
(999.8
|
)
|
|
—
|
|
|||||
Other liabilities
|
9.6
|
|
|
—
|
|
|
2.7
|
|
|
.1
|
|
|
12.4
|
|
|||||
Total Liabilities
|
826.7
|
|
|
144.2
|
|
|
786.3
|
|
|
(1,013.7
|
)
|
|
743.5
|
|
|||||
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
4.7
|
|
|
—
|
|
|
16.2
|
|
|
(16.2
|
)
|
|
4.7
|
|
|||||
Additional contributed capital
|
331.8
|
|
|
153.2
|
|
|
4.9
|
|
|
(158.1
|
)
|
|
331.8
|
|
|||||
Retained earnings (deficit)
|
(87.2
|
)
|
|
(86.4
|
)
|
|
34.6
|
|
|
51.8
|
|
|
(87.2
|
)
|
|||||
Treasury stock
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|||||
Accumulated other comprehensive loss
|
(114.7
|
)
|
|
(3.4
|
)
|
|
(3.1
|
)
|
|
6.5
|
|
|
(114.7
|
)
|
|||||
Total Shareholders’ Equity
|
130.2
|
|
|
63.4
|
|
|
52.6
|
|
|
(116.0
|
)
|
|
130.2
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
956.9
|
|
|
$
|
207.6
|
|
|
$
|
838.9
|
|
|
$
|
(1,129.7
|
)
|
|
$
|
873.7
|
|
(Dollars in millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
55.1
|
|
|
$
|
—
|
|
|
$
|
43.8
|
|
|
$
|
—
|
|
|
$
|
98.9
|
|
Restricted cash
|
4.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|||||
Accounts receivable, net
|
87.7
|
|
|
—
|
|
|
75.5
|
|
|
—
|
|
|
163.2
|
|
|||||
Inventories
|
35.9
|
|
|
—
|
|
|
49.0
|
|
|
(.4
|
)
|
|
84.5
|
|
|||||
Deferred income taxes—current
|
4.5
|
|
|
—
|
|
|
3.0
|
|
|
(1.0
|
)
|
|
6.5
|
|
|||||
Prepaid expenses and other
|
2.6
|
|
|
4.0
|
|
|
1.3
|
|
|
(4.0
|
)
|
|
3.9
|
|
|||||
Assets held for sale—current
|
—
|
|
|
—
|
|
|
16.6
|
|
|
—
|
|
|
16.6
|
|
|||||
Total Current Assets
|
190.0
|
|
|
4.0
|
|
|
189.2
|
|
|
(5.4
|
)
|
|
377.8
|
|
|||||
Property, plant and equipment, net
|
105.5
|
|
|
—
|
|
|
115.3
|
|
|
—
|
|
|
220.8
|
|
|||||
Trademarks and other intangible assets, net
|
80.5
|
|
|
—
|
|
|
95.0
|
|
|
—
|
|
|
175.5
|
|
|||||
Deferred income taxes—non-current
|
67.1
|
|
|
—
|
|
|
5.1
|
|
|
(3.1
|
)
|
|
69.1
|
|
|||||
Investments in subsidiaries and intercompany
|
286.8
|
|
|
179.0
|
|
|
2.8
|
|
|
(468.6
|
)
|
|
—
|
|
|||||
Other assets
|
15.7
|
|
|
(.1
|
)
|
|
6.1
|
|
|
.2
|
|
|
21.9
|
|
|||||
Assets held for sale—non-current
|
.1
|
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
|||||
Total Assets
|
$
|
745.7
|
|
|
$
|
182.9
|
|
|
$
|
413.4
|
|
|
$
|
(476.9
|
)
|
|
$
|
865.1
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts due to banks
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
Accounts payable
|
49.8
|
|
|
—
|
|
|
56.6
|
|
|
—
|
|
|
106.4
|
|
|||||
Accrued payroll and personal property taxes
|
15.3
|
|
|
.1
|
|
|
3.5
|
|
|
—
|
|
|
18.9
|
|
|||||
Employee benefit obligations
|
2.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
1.1
|
|
|
(1.0
|
)
|
|
.1
|
|
|||||
Other current liabilities
|
8.6
|
|
|
.6
|
|
|
4.6
|
|
|
(4.7
|
)
|
|
9.1
|
|
|||||
Liabilities held for sale—current
|
—
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
8.5
|
|
|||||
Total Current Liabilities
|
77.9
|
|
|
.7
|
|
|
83.6
|
|
|
(5.7
|
)
|
|
156.5
|
|
|||||
Long-term debt
|
444.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
444.3
|
|
|||||
Postretirement benefits other than pensions
|
7.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|||||
Pension liabilities
|
82.6
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
91.5
|
|
|||||
Deferred income taxes—non-current
|
—
|
|
|
—
|
|
|
31.4
|
|
|
(3.1
|
)
|
|
28.3
|
|
|||||
Intercompany
|
—
|
|
|
68.4
|
|
|
245.4
|
|
|
(313.8
|
)
|
|
—
|
|
|||||
Other liabilities
|
11.4
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
|
15.0
|
|
|||||
Total Liabilities
|
624.0
|
|
|
69.1
|
|
|
372.9
|
|
|
(322.6
|
)
|
|
743.4
|
|
|||||
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
4.6
|
|
|
—
|
|
|
57.1
|
|
|
(57.1
|
)
|
|
4.6
|
|
|||||
Additional contributed capital
|
324.9
|
|
|
140.6
|
|
|
8.9
|
|
|
(149.5
|
)
|
|
324.9
|
|
|||||
Retained (deficit) earnings
|
(114.8
|
)
|
|
(28.3
|
)
|
|
(27.1
|
)
|
|
55.4
|
|
|
(114.8
|
)
|
|||||
Treasury stock
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|||||
Accumulated other comprehensive (loss) income
|
(90.3
|
)
|
|
1.5
|
|
|
1.6
|
|
|
(3.1
|
)
|
|
(90.3
|
)
|
|||||
Total Shareholders’ Equity
|
121.7
|
|
|
113.8
|
|
|
40.5
|
|
|
(154.3
|
)
|
|
121.7
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
745.7
|
|
|
$
|
182.9
|
|
|
$
|
413.4
|
|
|
$
|
(476.9
|
)
|
|
$
|
865.1
|
|
(Dollars in Millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Cash Provided By (Used In) Operating Activities
|
$
|
51.9
|
|
|
$
|
5.0
|
|
|
$
|
11.3
|
|
|
$
|
(2.9
|
)
|
|
$
|
65.3
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(20.1
|
)
|
|
—
|
|
|
(12.7
|
)
|
|
—
|
|
|
(32.8
|
)
|
|||||
Proceeds from asset disposals
|
12.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.7
|
|
|||||
Net Cash Provided by (Used in) Investing Activities
|
(7.4
|
)
|
|
—
|
|
|
(12.7
|
)
|
|
—
|
|
|
(20.1
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of debt obligations
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|||||
Short-term debt borrowings
|
—
|
|
|
—
|
|
|
43.8
|
|
|
—
|
|
|
43.8
|
|
|||||
Short-term debt payments
|
—
|
|
|
—
|
|
|
(45.4
|
)
|
|
—
|
|
|
(45.4
|
)
|
|||||
Restricted cash
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||||
Cash received from exercise of stock options
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|||||
Net Cash Provided by (Used in) Financing Activities
|
(1.3
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(2.9
|
)
|
|||||
Effect of exchange rate changes on cash
|
.4
|
|
|
(5.0
|
)
|
|
3.5
|
|
|
2.9
|
|
|
1.8
|
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
43.6
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
44.1
|
|
|||||
Cash and cash equivalents at beginning of period
|
55.1
|
|
|
—
|
|
|
43.8
|
|
|
—
|
|
|
98.9
|
|
|||||
Cash and Cash Equivalents at End of Period
|
$
|
98.7
|
|
|
$
|
—
|
|
|
$
|
44.3
|
|
|
$
|
—
|
|
|
$
|
143.0
|
|
(Dollars in Millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net Cash Provided By (Used In) Operating Activities
|
$
|
(250.0
|
)
|
|
$
|
2.4
|
|
|
$
|
137.6
|
|
|
$
|
125.7
|
|
|
$
|
15.7
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(13.9
|
)
|
|
—
|
|
|
(10.2
|
)
|
|
—
|
|
|
(24.1
|
)
|
|||||
Acquisitions of business, less cash received
|
(21.5
|
)
|
|
(142.6
|
)
|
|
(107.5
|
)
|
|
—
|
|
|
(271.6
|
)
|
|||||
Proceeds from asset disposals
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|||||
Restricted cash
|
253.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
253.2
|
|
|||||
Discontinued operations
|
(.4
|
)
|
|
—
|
|
|
(.2
|
)
|
|
—
|
|
|
(.6
|
)
|
|||||
Net Cash Provided by (Used in) Investing Activities
|
217.4
|
|
|
(142.6
|
)
|
|
(116.9
|
)
|
|
—
|
|
|
(42.1
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from borrowings
|
199.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199.2
|
|
|||||
Repayment of debt obligations
|
(144.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144.0
|
)
|
|||||
Short-term debt borrowings
|
—
|
|
|
—
|
|
|
96.5
|
|
|
—
|
|
|
96.5
|
|
|||||
Short-term debt payments
|
—
|
|
|
—
|
|
|
(95.1
|
)
|
|
—
|
|
|
(95.1
|
)
|
|||||
Payments for debt refinancing
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.5
|
)
|
|||||
Restricted cash
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|||||
Cash received from exercise of stock options
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||||
Other
|
—
|
|
|
140.6
|
|
|
(10.0
|
)
|
|
(130.6
|
)
|
|
—
|
|
|||||
Net Cash Provided by (Used in) Financing Activities
|
37.9
|
|
|
140.6
|
|
|
(8.6
|
)
|
|
(130.6
|
)
|
|
39.3
|
|
|||||
Effect of exchange rate changes on cash
|
.2
|
|
|
(.4
|
)
|
|
10.1
|
|
|
4.9
|
|
|
14.8
|
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
5.5
|
|
|
—
|
|
|
22.2
|
|
|
—
|
|
|
27.7
|
|
|||||
Cash and cash equivalents at beginning of period
|
49.6
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
|
71.2
|
|
|||||
Cash and Cash Equivalents at End of Period
|
$
|
55.1
|
|
|
$
|
—
|
|
|
$
|
43.8
|
|
|
$
|
—
|
|
|
$
|
98.9
|
|
(Dollars in Millions)
|
OMNOVA
Solutions
(Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net Cash Provided By (Used In) Operating Activities
|
$
|
47.6
|
|
|
$
|
.1
|
|
|
$
|
4.3
|
|
|
$
|
(.7
|
)
|
|
$
|
51.3
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(12.1
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(13.7
|
)
|
|||||
Acquisitions of intangible assets
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|||||
Proceeds from dissolution of joint marketing alliance
|
9.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
|||||
Proceeds from insurance settlements
|
.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
|||||
Proceeds from asset disposals
|
—
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
.5
|
|
|||||
Restricted cash
|
(253.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(253.1
|
)
|
|||||
Discontinued operations
|
(.9
|
)
|
|
—
|
|
|
(.2
|
)
|
|
—
|
|
|
(1.1
|
)
|
|||||
Net Cash Used in Investing Activities
|
(258.5
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(259.8
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from borrowings
|
662.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
662.1
|
|
|||||
Repayment of debt obligations
|
(413.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(413.6
|
)
|
|||||
Short-term debt borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Short-term debt payments
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|||||
Other
|
.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
|||||
Net Cash Provided by Financing Activities
|
248.8
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
250.3
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
(.1
|
)
|
|
(2.4
|
)
|
|
.7
|
|
|
(1.8
|
)
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
37.9
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
40.0
|
|
|||||
Cash and cash equivalents at beginning of period
|
11.7
|
|
|
—
|
|
|
19.5
|
|
|
—
|
|
|
31.2
|
|
|||||
Cash and Cash Equivalents at End of Period
|
$
|
49.6
|
|
|
$
|
—
|
|
|
$
|
21.6
|
|
|
$
|
—
|
|
|
$
|
71.2
|
|
|
Three Months Ended
|
||||||||||||||
2012
|
February 29,
|
|
May 31,
|
|
August 31,
|
|
November 30,
|
||||||||
|
(Dollars in millions, except per share amounts)
|
||||||||||||||
Net sales
|
$
|
275.9
|
|
|
$
|
307.5
|
|
|
$
|
288.2
|
|
|
$
|
253.9
|
|
Gross profit
(1)(2)
|
$
|
60.9
|
|
|
$
|
60.0
|
|
|
$
|
57.8
|
|
|
$
|
48.5
|
|
Restructuring and severance
|
$
|
.5
|
|
|
$
|
.3
|
|
|
$
|
.3
|
|
|
$
|
(.1
|
)
|
Asset impairments and write-offs
|
$
|
—
|
|
|
$
|
.2
|
|
|
$
|
—
|
|
|
$
|
.8
|
|
Income from continuing operations
|
$
|
10.7
|
|
|
$
|
6.9
|
|
|
$
|
6.9
|
|
|
$
|
1.2
|
|
Income (loss) from discontinued operations
|
$
|
2.8
|
|
|
$
|
.1
|
|
|
$
|
(.5
|
)
|
|
$
|
(.5
|
)
|
Net income
|
$
|
13.5
|
|
|
$
|
7.0
|
|
|
$
|
6.4
|
|
|
$
|
.7
|
|
Income (loss) per share from continuing operations
(4)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.23
|
|
|
$
|
.15
|
|
|
$
|
.14
|
|
|
$
|
.02
|
|
Diluted
|
$
|
.23
|
|
|
$
|
.15
|
|
|
$
|
.14
|
|
|
$
|
.02
|
|
Net income (loss) per share
(4)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.29
|
|
|
$
|
.15
|
|
|
$
|
.14
|
|
|
$
|
.01
|
|
Diluted
|
$
|
.29
|
|
|
$
|
.15
|
|
|
$
|
.14
|
|
|
$
|
.01
|
|
Common stock price range per share—high
|
$
|
5.61
|
|
|
$
|
7.84
|
|
|
$
|
8.17
|
|
|
$
|
8.83
|
|
—low
|
$
|
4.00
|
|
|
$
|
5.18
|
|
|
$
|
6.45
|
|
|
$
|
6.20
|
|
|
Three Months Ended
|
||||||||||||||
2011
|
February 28,
|
|
May 31,
|
|
August 31,
|
|
November 30,
|
||||||||
|
(Dollars in millions, except per share amounts)
|
||||||||||||||
Net sales
|
$
|
271.9
|
|
|
$
|
312.9
|
|
|
$
|
314.9
|
|
|
$
|
301.4
|
|
Gross profit
(1)(2)
|
$
|
52.1
|
|
|
$
|
60.3
|
|
|
$
|
50.4
|
|
|
$
|
55.8
|
|
Restructuring and severance
|
$
|
(.8
|
)
|
|
$
|
(.5
|
)
|
|
$
|
(.1
|
)
|
|
$
|
(.2
|
)
|
Acquisition and integration related expenses
(3)
|
$
|
(1.9
|
)
|
|
$
|
(.8
|
)
|
|
$
|
.4
|
|
|
$
|
—
|
|
Asset impairments and write-offs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.4
|
)
|
|
$
|
(.7
|
)
|
Customer trade receivable write-off
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.6
|
)
|
|
$
|
1.7
|
|
Income (loss) from continuing operations
|
$
|
1.5
|
|
|
$
|
7.5
|
|
|
$
|
1.4
|
|
|
$
|
6.3
|
|
Income (loss) from discontinued operations
|
$
|
(.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(16.7
|
)
|
Net income (loss)
|
$
|
1.0
|
|
|
$
|
6.2
|
|
|
$
|
.4
|
|
|
$
|
(10.4
|
)
|
Income (loss) per share from continuing operations
(4)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.03
|
|
|
$
|
.17
|
|
|
$
|
.03
|
|
|
$
|
.14
|
|
Diluted
|
$
|
.03
|
|
|
$
|
.16
|
|
|
$
|
.03
|
|
|
$
|
.14
|
|
Net income (loss) per share
(4)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.02
|
|
|
$
|
.14
|
|
|
$
|
.01
|
|
|
$
|
(.23
|
)
|
Diluted
|
$
|
.02
|
|
|
$
|
.14
|
|
|
$
|
.01
|
|
|
$
|
(.23
|
)
|
Common stock price range per share—high
|
$
|
9.10
|
|
|
$
|
9.43
|
|
|
$
|
9.40
|
|
|
$
|
4.84
|
|
—low
|
$
|
6.77
|
|
|
$
|
6.45
|
|
|
$
|
4.14
|
|
|
$
|
3.07
|
|
(1)
|
Gross profit excludes depreciation expense. Depreciation expense related to manufacturing facilities and equipment was
$5.7 million
,
$5.8 million
,
$5.8 million
and
$6.1 million
for the three months ended February 29, 2012, May 31, 2012, August 31, 2012 and November 30, 2012 and
$3.7 million
,
$3.7 million
,
$3.3 million
and
$3.4 million
for the three months ended February 28, 2011, May 31, 2011, August 31, 2011 and November 30, 2011, respectively.
|
(2)
|
Gross profit includes net LIFO inventory reserve adjustments of
$0.9 million
of expense,
$0.1 million
of expense,
$0.8 million
of income and
$2.5 million
of expense for the three months ended February 29, 2012, May 31, 2012, August 31, 2012 and November 30, 2012, respectively, and of
$0.8 million
of expense,
$2.4 million
of expense,
$3.6 million
of expense and
$2.9 million
of income for the three months ended February 28, 2011, May 31, 2011, August 31, 2011, and November 30, 2011, respectively. Gross profit in 2011 also includes a fair value adjustment of
$2.7 million
in the three months ended February 28, 2011 for inventory acquired in the ELIOKEM acquisition and inventory write-offs of
$0.4 million
for the three months ended November 30, 2011. 2010 also includes strike-related costs of
$0.1 million
,
$1.1 million
and
$0.2 million
for the three months ended May 31, August 31 and November 30, 2010, respectively, and net retirement benefit plan curtailment charges of
$1.4 million
for the three months ended November 30, 2010.
|
(3)
|
Acquisition and integration expense are related to the Company’s December 9, 2010 acquisition of Eliokem International SAS.
|
(4)
|
The sum of the quarterly earnings per share amounts may not equal the annual amount due to changes in the number of shares outstanding during the year.
|
Item 9.
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
|
Controls and Procedures
|
Item 9B.
|
|
Other Information
|
Item 10.
|
|
Directors and Executive Officers of the Registrant
|
Item 11.
|
|
Executive Compensation
|
Item 12.
|
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for issuance under equity compensation plans
|
||
Equity compensation plans approved by security holders
|
128,000
|
|
$4.99
|
3,484,036
|
|
Equity compensation plans not approved by security holders
|
N/A
|
|
N/A
|
N/A
|
|
Total
|
128,000
|
|
$4.99
|
3,484,036
|
|
Item 13.
|
|
Certain Relationships and Related Transactions, Director Independence
|
Item 14.
|
|
Principal Accountant Fees and Services
|
Item 15.
|
|
Exhibits and Financial Statement Schedules
|
Exhibit
|
|
Description
|
|
|
ACQUISITION AGREEMENTS
|
2.1
|
|
Sale and Purchase Agreement among OMNOVA Solutions Inc., AXA LBO Fund III-A, AXA LBO Fund III-B and the other holders of equity securities of Eliokem International SAS (incorporated by reference to the same numbered exhibit to the Company’s Current Report on Form 8-K filed November 24, 2010 (File No. 1-15147)).
|
|
|
|
|
|
CHARTER DOCUMENTS
|
3.2**
|
|
Form of Amended and Restated Articles of Incorporation of OMNOVA Solutions Inc.
|
3.4**
|
|
Amended and Restated Code of Regulations of OMNOVA Solutions Inc.
|
|
|
|
|
|
INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
|
4.1
|
|
Indenture dated as of November 3, 2010 by and among OMNOVA Solutions Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (incorporated by reference to the same numbered exhibit to the Company’s Current Report on Form 8-K filed November 4, 2010 (File No. 1-15147)).
|
|
|
|
|
|
MATERIAL CONTRACTS
|
10.3†
|
|
Amended and Restated Employment Agreement dated December 31, 2009 between OMNOVA Solutions and Kevin M. McMullen (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.5†
|
|
Amended and Restated Severance Agreement dated December 31, 2009 between OMNOVA Solutions and Kevin M. McMullen (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.6†
|
|
Form of Amended and Restated Severance Agreement granted to certain executive officers of OMNOVA Solutions (other than the officer identified above) (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.7†
|
|
OMNOVA Solutions Third Amended and Restated 1999 Equity and Performance Incentive Plan, (incorporated by reference to Appendix C to the Company's 2012 Proxy Statement filed with the Securities and Exchange Commission on February 3, 2012 (File No. 1-15147).
|
10.8†
|
|
OMNOVA Solutions Deferred Compensation Plan for Nonemployee Directors, as amended and restated effective January 1, 2009 (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.9†
|
|
Retirement Plan for Nonemployee Directors of OMNOVA Solutions, as amended and restated effective January 1, 2009 (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
Exhibit
|
|
Description
|
10.11†
|
|
Savings Benefits Restoration Plan for Salaried Employees of OMNOVA Solutions (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.12†
|
|
Pension Benefits Restoration Plan for Salaried Employees of OMNOVA Solutions (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.13
|
|
OMNOVA Solutions Corporate Officers Severance Plan, effective January 1, 2009 (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2008 (File No. 1-15147)).
|
10.14†
|
|
OMNOVA Solutions Long-Term Incentive Program, as amended and restated effective January 19, 2012 (incorporated by reference to Appendix B to the Company’s 2012 Proxy Statement filed with the Securities and Exchange Commission on February 3, 2012 (File No. 1-15147)).
|
10.22†
|
|
Form of Deferred Share Agreement (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2009 (File No. 1-15147)).
|
10.23†
|
|
Form of Performance Share Agreement
|
10.24†
|
|
Form of Restricted Stock Agreement (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2011 (File No. 1-15147)).
|
10.26†
|
|
OMNOVA Solutions Executive Incentive Compensation, as amended and restated effective January 19, 2012 (incorporated by reference to Appendix A to the Company’s 2012 Proxy Statement filed with the Securities and Exchange Commission on February 3, 2012 (File No. 1-15147)).
|
10.30
|
|
Second Amended and Restated Term Loan Credit Agreement dated as of December 9, 2010 by and among OMNOVA Solutions Inc., as Borrower, the financial institutions party thereto as Lenders, and Deutsche Bank Trust Company Americas, as agent for the Lenders (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2010 (File No. 1-15147)).
|
10.32
|
|
Second Amended and Restated Credit Agreement dated as of December 9, 2010 by and among OMNOVA Solutions Inc. and ELIOKEM Inc., as borrowers, the financial institutions party thereto, as Lenders, and JPMorgan Chase Bank N.A., as agent for the Lenders (incorporated by reference to the same numbered exhibit to the Company’s Annual Report on Form 10-K for the year ended November 30, 2010 (File No. 1-15147)).
|
12.1
|
|
Computation of Ratio of earnings to fixed charges.
|
|
|
|
|
|
SUBSIDIARIES OF THE REGISTRANT
|
21.1
|
|
Listing of Subsidiaries.
|
|
|
|
|
|
CONSENT OF EXPERTS
|
23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
|
POWER OF ATTORNEY
|
24.1
|
|
Powers of Attorney executed by D. J. D’Antoni, M. J. Merriman, S. W. Percy, A. R. Rothwell, L. B. Porcellato, W. R. Seelbach and R. A. Stefanko, Directors of the Company.
|
|
|
|
|
|
CERTIFICATIONS
|
31.1
|
|
Principal Executive Officer’s Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Principal Executive Officer’s Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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The following financial information from our Annual Report on Form 10-K for 2012, filed with the SEC on January 25, 2013, formatted in XBRL: (i) the Consolidated Statements of Operations for the years ended November 30, 2012, 2011 and 2010; (ii) the Consolidated Balance Sheets at November 30, 2012 and 2011; (iii) the Consolidated Statements of Shareholders’ Equity for the years ended November 30, 2012, 2011 and 2010; (iv) the Consolidated Statements of Cash Flows for the years ended November 30, 2012, 2011 and 2010; and (v) the Notes to the Consolidated Financial Statements.
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The Company will supply copies of any of the foregoing exhibits to any shareholder upon receipt of a written request addressed to OMNOVA Solutions Inc., 175 Ghent Road, Fairlawn, Ohio 44333-3300, Attention: Secretary, and payment of $1 per page to help defray the costs of handling, copying and return postage.
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**
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Incorporated by reference to the same-numbered exhibit to the Company’s Registration Statement on Form 10 (File No. 1-15147).
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†
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Management contract or compensatory arrangement.
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O
MNOVA
Solutions Inc.
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Date:
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January 25, 2013
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By
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/s/ J. C. LeMay
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J. C. LeMay
Senior Vice President,
Corporate Development;
General Counsel
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Signature
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Title
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Date
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/s/ K. M. McMullen
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Chairman, Chief Executive Officer and President
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January 25, 2013
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K. M. McMullen
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/s/ M. E. Hicks
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Senior Vice President and Chief Financial Officer
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January 25, 2013
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M. E. Hicks
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*
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Director
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January 25, 2013
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D. J. D’Antoni
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*
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Director
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January 25, 2013
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M. J. Merriman
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*
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Director
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January 25, 2013
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S. W. Percy
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*
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Director
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January 25, 2013
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L. B. Porcellato
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*
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Director
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January 25, 2013
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A. R. Rothwell
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*
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Director
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January 25, 2013
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W. R. Seelbach
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*
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Director
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January 25, 2013
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R. A. Stefanko
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*Signed by the undersigned as attorney-in-fact and agent for the Directors indicated.
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/s/ K. C. Syrvalin
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January 25, 2013
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K. C. Syrvalin
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Year Ended November 30,
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||||||||||||||||||
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2012
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2011
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2010
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2009
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2008
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||||||||||
Pre-tax income (loss) from continuing operations
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$
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36.9
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$
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30.1
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$
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33.3
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$
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28.4
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$
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(2.8
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)
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Adjustment for (income) loss from equity investees
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—
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—
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—
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—
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(.2
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)
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|||||
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees
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$
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36.9
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$
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30.1
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$
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33.3
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$
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28.4
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$
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(3.0
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)
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Distributed income equity investees
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—
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—
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—
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—
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—
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|||||
Less: Capitalized interest
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—
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—
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—
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—
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—
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|||||
Amortization of interest previously capitalized
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—
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—
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—
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—
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—
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|||||
Adjusted pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees
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$
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36.9
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$
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30.1
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$
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33.3
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$
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28.4
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$
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(3.0
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)
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Fixed Charges:
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||||||||||
Interest expense
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$
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33.8
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$
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35.3
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$
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8.0
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$
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7.5
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$
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12.3
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Interest capitalized during the period
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—
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—
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—
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—
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—
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|||||
Amortization of debt issuance costs
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2.7
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2.7
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.7
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.6
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.7
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Imputed interest portion of rent expense
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1.4
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1.4
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1.3
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1.3
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1.6
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Total Fixed Charges
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$
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37.9
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$
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39.4
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$
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10.0
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$
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9.4
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$
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14.6
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Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees plus fixed charges
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$
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74.8
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$
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69.5
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$
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43.3
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$
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37.8
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$
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11.6
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Ratio of Earnings to Fixed Charges
(a)
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2.0
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1.8
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4.3
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4.0
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.8
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(a)
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For fiscal year 2008, the ratio was less than 1.0x and was deficient by $3.0 million.
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(1)
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The Corporation also controls, directly or indirectly, twenty other companies that, in the aggregate as a single subsidiary, would not constitute a significant subsidiary, as such term is defined in Rule 1-02 (w) of Regulation S-X.
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1.
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Registration Statement No. 333-182524 on Form S-8 pertaining to the OMNOVA Solutions Inc. Third Amended and Restated 1999 Equity and Performance Incentive Plan, and
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2.
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Registration Statement No. 333-160509 on Form S-8 pertaining to the OMNOVA Solutions Retirement Savings Plan;
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1.
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I have reviewed this Annual Report on Form 10-K of OMNOVA Solutions Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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January 25, 2013
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/s/ Kevin M. McMullen
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Name: Kevin M. McMullen
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Title: Chairman, Chief Executive Officer and President
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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Date:
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January 25, 2013
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/s/ Kevin M. McMullen
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Name:
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Kevin M. McMullen
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Title:
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Chairman, Chief Executive Officer and President
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/s/ Michael E. Hicks
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Name:
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Michael E. Hicks
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Title:
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Senior Vice President and Chief Financial Officer
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1.
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I have reviewed this Annual Report on Form 10-K of OMNOVA Solutions Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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January 25, 2013
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/s/ Michael E. Hicks
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Name: Michael E. Hicks
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Title: Senior Vice President and Chief Financial Officer
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