Strike at Mississippi plant impacts OMNOVA’s earnings
OMNOVA Solutions Inc. of Fairlawn, Ohio, reported net income of $3.5 million, or $0.08 per diluted share, for the third quarter ended Aug. 31, 2010, compared to net income of $10.1 million, or $0.23 per diluted share, for the third quarter of 2009.
Included in the third quarter of 2010 were non-recurring expenses totaling $6.7 million, including $3.9 million related to a strike at a Decorative Products manufacturing plant in East Mississippi.
On May 20, the Columbus-based United Steelworkers Local 748-L voted against ratification of a new contract proposal and subsequently went on strike May 21. During the quarter, the company’s salaried workforce and contract labor continued to operate the plant and meet customers’ requirements. Late in the quarter, the company transitioned from contract labor to locally hired replacement workers.
As a result, strike-related costs, which were $3.9 million in the third quarter, are expected to decline significantly in the fourth quarter to approximately $0.9 million to $1.2 million, according to OMNOVA.
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