OMNOVA Solutions Inc. Annual Report 2005

Plain-text annual report

rethink 2005 Annual Report and 10K ON THE COVER OMNOVA’s memerase® ﬂ exible dry-erase surfaces offer the perfect opportunity to collaborate and brainstorm. Also pictured: Boltaﬂ ex® upholstery, surf(x)® 3D Laminates (on side tables), ﬂ ooring laminates, and chemicals used in coated paper and packaging, carpet, tape, ﬂ oor polish and apparel. APPLICATIONS PIC TURED THIS PAGE: coated paper, commercial rooﬁ ng, furniture laminates, construction materials, oil/gas ﬁ eld drilling, ﬂ oor care, disposable diapers, nonwoven wipes, automotive upholstery. OPPOSITE PAGE: tape and adhesives, marine upholstery. Omnova05_CvrSingleWt 2 Omnova05_CvrSingleWt 2 2/7/06 1:18:29 PM 2/7/06 1:18:29 PM 1 | OMNOVA Solutions Inc. rethinkOMNOVA OMNOVA TO OUR SHAREHOLDERS Today’s OMNOVA Solutions is a different company than it was a year ago. We have improved margins, reduced costs, streamlined processes, entered attractive new markets and geographies, and enhanced the skills and abilities of our team. These actions resulted in substantial performance improvement in 2005, providing tangible evidence that OMNOVA’s turnaround is well under way. Most importantly, we proved that we could increase proﬁ tability – our number-one priority – despite facing the challenges of difﬁ cult outside economic and market forces. So if you thought you knew what OMNOVA was all about, think again…and read on. I believe you will be impressed with the progress your company is making. OMNOVA Solutions had record sales of $810 million in agreement to November 2009 and at more attractive terms – a 2005, up nearly 9%, as we improved signiﬁ cantly in virtually every show of conﬁ dence by our lenders. These successes in cost and key ﬁ nancial metric. Our Adjusted EBITDA doubled from the debt reduction, and improved credit terms will provide greater previous year, from $26 million to $52 million, led by Performance operating leverage and ﬂ exibility for the future. Chemicals and improved performance in Decorative Products. We are proud of the improvements we have made, but also [A deﬁ nition of Adjusted EBITDA and reconciliation to net very mindful that this is just the ﬁ rst step, albeit an important one, income are provided on page 3 of this Annual Report.] This was in a journey to sustainable superior performance, and we realize accomplished despite continuing record inﬂ ation in the costs of that there is more work ahead to make that goal a reality. Likewise, our oil-based raw materials. we are keenly aware that our progress has not yet translated The ﬁ rst quarter is typically OMNOVA’s weakest, and this into positive returns to our shareholders. However, we are was again the case in 2005. But we gained traction in the second conﬁ dent that our ongoing strategy of investing in new products, quarter and never looked back, ending the year with three expanding to new markets, broadening our global presence consecutive quarters of positive earnings per share. Year-over- and continuing to drive down costs will further strengthen our year, we achieved a $0.57 increase in earnings per share. Company’s operating performance and, in turn, create As a result of the many actions we have taken to streamline shareholder value. This, we believe, will cause investors to our cost structure, SG&A (sales, general and administrative) RETHINK the exciting investment opportunity our Company expenses of $122 million, or 15% of sales, were both record lows presents. for our Company. Continued strong cash ﬂ ow contributed to another excellent year for debt reduction, as we ended 2005 with a debt level of $176 million. We improved our debt-to-Adjusted EBITDA ratio by more than half year-over-year, from 6.9 to 3.4. In May, OMNOVA announced an extension of its bank credit Omnova05_Text_Wt 1 Omnova05_Text_Wt 1 2/1/06 2:40:56 PM 2/1/06 2:40:56 PM OMNO VA So l ution s Inc. | 2 RETHINK: MARKET STR ATEGY In Decorative Products, where many market segments have Although there have been challenges in certain of our experienced prolonged recessionary conditions, we captured key traditional market segments in recent years, other market segments opportunities in targeted high-potential segments such as kitchen still offer attractive growth opportunities. We are continually and bath cabinetry. As the year came to a close, OMNOVA was identifying and seizing opportunities to leverage our competitive awarded substantial new laminates business from one of the largest strengths and value-added innovations to gain share in our traditional market segments, and to move into new, related markets and applications. and fastest growing cabinet makers in America. In addition, our surf(x)® 3D Laminates continue to win business from an expanding customer base that values the design ﬂ exibility offered by this In 2005, we were particularly successful in growing market dynamic product. The store ﬁ xtures and ofﬁ ce furniture market share in our paper coating and carpet chemical product lines. segments are increasingly important for surf(x) laminates which can Customers have been very excited by the performance advantages offered by our new GenCryl® Platinum Pt™ paper latex as well as provide a cost-effective solution for contoured edges that are so popular in today’s designs. our 4200 Series advanced coating lubricants. These technologies Commercial wallcovering has been especially impacted by have helped us boost share in the North American coated paper several years of challenging market conditions. However, the market. At the same time, an array of recently introduced products, hospitality segment – OMNOVA’s fastest growing wallcovering combined with truly superior technical service, have continued to end use – improved in 2005. In addition, ofﬁ ce occupancy rates win new business for OMNOVA in the carpet market. began to pick up toward the end of the year, which is a good Polymers for nonwoven applications, both for durables and leading indicator of future improvement in our largest commercial nondurables, remain an area of strength for us. Disposable diapers, wallcovering segment. To make the most of these market rebounds construction materials and ﬁ ltration media are examples of growth going forward, OMNOVA Solutions took several actions designed opportunities for our nonwoven business. We are also receiving to sharpen our focus in this business. Those actions included the excellent customer reaction and increased sales from our products closure of our wallcovering distribution facility in Massachusetts, for adhesives and tape with our technical advances in tape release the divestiture of selected brands – while retaining long-term systems. manufacturing supply agreements – and an exciting partnership FINANCIAL HIGHLIGHTS (Dollars in millions, except per share data) Net Sales Performance Chemicals Decorative Products Building Products Segment Operating Proﬁ t (Loss) Performance Chemicals Decorative Products Building Products Interest expense Corporate expenses Deferred ﬁ nancing costs write-off Income tax beneﬁ t Net Loss Basic and Diluted Loss Per Share Net Loss Per Basic and Diluted Share Other Data Capital expenditures Depreciation and amortization Number of employees at year-end Number of outstanding shares for diluted EPS (millions) Years Ended November 30, 2005 2004 2003 $ 452.8 242.2 115.1 $ 810.1 $ 33.8 (2.8) .9 $31.91 (21.2) (12.8) – .3 (1.8) (.04) $ $ $ 13.2 $ 22.3 1,800 40.7 $ 372.9 257.8 115.0 $ 745.7 $ 327.0 257.6 98.0 $ 682.6 $ $ $ $ $ $ 13.5 (6.8) 1.0 7.71 (20.7) (11.7) – .3 (24.4) $ $ 11.2 (70.0) 3.0 (55.8)1 (15.3) (10.2) (3.1) .6 (83.8) $ (.61) $ (2.10) 11.8 22.8 2,000 40.2 $ 8.8 $ 33.7 2,100 39.9 1Segment operating proﬁ t for the full year of 2005, 2004 and 2003 was impacted by a number of items which are discussed in this Annual Report. Management excludes certain of these items when evaluating the results of the Company’s segments. These items include, for the full year of 2005, restructuring and severance charges of $5.8 million, asset impairment charges of $2.5 million, a gain on a legal settlement of $0.9 million, a gain on the sale of a brand of $0.8 million and work stoppage charges of $1.7 million; for the full year of 2004, trademark impairment charges of $3.9 million and restructuring and severance charges of $0.5 million; and for the full year of 2003, restructuring and severance charges of $8.8 million, goodwill and trademark impairment charges of $49.6 million and asset impairment charges of $5.7 million. Omnova05_Text_Wt 2 Omnova05_Text_Wt 2 2/1/06 2:41:43 PM 2/1/06 2:41:43 PM 3 | OMNOVA Solutions I nc. with leading wallcovering designer DLM Studio to create a new design direction for our Bolta®, Genon® and Tower® brands. At the two most notable examples of this focus on adjacent markets are in our coated fabrics product line. While we continue to offer leading- same time, we have made signiﬁ cant improvements in our custom edge designs for traditional furniture applications, over the past wallcovering business and in the breadth of our printing capability, further enhancing our industry leadership in both areas. As you can see, there are still many exciting opportunities for growth in our traditional markets. However, we also recognize that it is critical for us to ﬁ nd applications for our products in new, related two years OMNOVA Solutions has gained signiﬁ cant new business in marine upholstery and trim with our respected Nautolex® fabrics protected with our proprietary PreFixx® coating. We have also entered OEM and aftermarket automotive seating with our new BoltaSoft® upholstery. In fact, as we began the 2006 ﬁ scal year, we markets where our technology can bring value to customers. The announced an agreement with a major OEM seating customer to rethinkOMNOVA OMNOVA Segment Operating Proﬁ t Dollars in millions Total Year-End Debt Dollars in millions Net Sales Dollars in millions U p 1 9 % 6 4 7 0 1 8 3 8 6 8 M 8 U p $ 8 2 3 ) 6 5 ( Down 8% 2 9 1 2 8 1 6 7 1 2003 2004 2005 2003 2004 2005 2003 2004 2005 RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA This Annual Report also includes Adjusted EBITDA, which is a non-GAAP ﬁ nancial measure as deﬁ ned by the Securities and Exchange Commission. Adjusted EBITDA is calculated in accordance with the deﬁ nition of adjusted net earnings from operations as set forth in the Company’s senior secured revolving credit facility dated May 28, 2003, as subsequently amended, and excludes charges for interest, taxes, depreciation, amortization, restructuring and severance, work stoppage, goodwill and trademark impairments, amortization of deferred ﬁ nancing costs, net earnings of joint ventures less cash dividends, gains or losses on asset sales, non-cash charge for 401(k) company match, pension income, commercial paper costs and deferred ﬁ nancing costs write-off. Adjusted EBITDA is not a measure of ﬁ nancial performance under GAAP. Adjusted EBITDA is not calculated in the same manner by all companies and accordingly is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for comparing performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of the Company’s operating performance or liquidity and should not be considered in isolation from or as a substitute for net income (loss), cash ﬂ ows from operations or cash ﬂ ow data which are all prepared in accordance with GAAP. Adjusted EBITDA is not intended to represent and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. Management believes that presenting this information is useful to investors because it is commonly used as an analytical indicator to evaluate performance, allocate resources and measure leverage capacity and debt service ability. Set forth below is a reconciliation of this non-GAAP ﬁ nancial measure to the most directly comparable GAAP ﬁ nancial measure. (Dollars in millions, except per share data) Net income (loss) Interest Taxes Depreciation and amortization Restructuring and severance Calender line restructuring Work stoppage Amortization of deferred ﬁ nancing costs Net earnings of joint ventures less cash dividends Gains or losses on asset sales Non-cash charge for 401(k) company match Pension income Goodwill and trademark write-offs Commercial paper costs Deferred ﬁ nancing costs write-off Adjusted EBITDA Years Ended November 30, 2005 2004 2003 (1.8) $ 21.2 (.3) 22.3 5.9 1.6 1.7 1.4 (.7) (1.1) 1.5 – – – – $ 51.7 $ (24.4) 20.7 (.3) 22.8 .4 – – 1.8 – – 1.4 – 3.9 – – $ 26.3 $ (83.8) 15.3 (.6) 26.5 9.0 – – 1.7 – – .5 (1.7) 60.1 .7 3.1 $ 30.8 Certain information included in this annual report is forward-looking and, accordingly, involves estimates, assumptions, judgments and uncertainties. Forward-looking statements may generally be identiﬁ ed by the use of forward-looking terms such as “may,” “should,” “projects,” “forecasts,” “seeks,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “likely,” “will,” “would,” “could,” or similar terms. For information regarding some of the factors that could cause actual results or outcomes to differ materially from those described in the forward-looking statements, see the Forward-Looking Statements section of Management’s Discussion and Analysis of Financial Condition and Results of Operations. Omnova05_Text_Wt 3 Omnova05_Text_Wt 3 2/1/06 2:41:43 PM 2/1/06 2:41:43 PM OMNO VA So l ution s Inc. | 4 “The transformation we are undergoing complements and builds upon [long-standing] strengths.” APPLICATIONS PIC TURED health & beauty products, digital murals, ﬁ ltration, tire cord produce upholstery at OMNOVA’s joint venture facility in Shanghai, of that related to increased volume, primarily driven by latex growth China, for the fast-growing Asian automotive market. in nonwovens in Europe and tire cord adhesives in Asia. Additional examples of our extension into related markets with Our Decorative Products joint ventures in Asia serve local and exciting potential include: multinational customers in this fast-growing region in addition to • viewnique® digitally printed full wall graphics – These providing targeted low-cost supply capabilities for product imports custom, one-of-a-kind murals enhance a unique visitor experience to North America and Europe. We made signiﬁ cant strides in 2005 and promote strong branding in establishments such as restaurants, to integrate these joint ventures into our core businesses and ﬁ tness centers, retail outlets, ofﬁ ce lobbies, and educational or improve their overall capabilities and quality systems. entertainment venues. During the summer, Performance Chemicals expanded its Asia • GenCeal™ latex for ocean natural gas well drilling oper- Paciﬁ c presence with the opening of an ofﬁ ce in Shanghai, China. ations, and for construction – This unique product improves We are beginning to actively market and promote our portfolio resistance to salt and extremely high temperatures encountered of specialty chemicals in targeted applications in the region while in deep wells in challenging high-growth drilling applications. seeking potential local supply sources for our products. This is an GenCeal latex is also being used in construction applications to excellent market for our tire cord adhesives, tape release systems, help improve water resistance of exterior sheathing. PolyFox ﬂ uorosurfactants and textile chemicals. • PolyFox™ ﬂ uorosurfactants – Excellent ﬂ ow and leveling While Asian markets offer substantial potential for future characteristics and environmental preferability provide advantages growth, most of the increase in our international chemical in the manufacture of construction materials, electronics and sales in 2005 resulted from the continued outstanding work of industrial coatings, ﬂ oor care and household cleaning products. our Performance Chemicals team in Europe to ﬁ nd exciting • Lytron® opaciﬁ ers for health and beauty products – opportunities to leverage our technology for growth in that part Originally developed for the paper industry, this technology has of the world. Two-thousand-ﬁ ve marked the sixth consecutive year found a home in consumer health and beauty product applications of chemical sales growth in Europe, up 47% over 2004. We look where a luxuriously creamy, opaque product is desired. forward to expanding on the solid foundation we have built both in • Geomembranes and waterprooﬁ ng membranes – Our GenFlex® single-ply rooﬁ ng technology is being extended into Asia and in Europe to achieve our future growth objectives. Our Building Products business unit, too, is aggressively applications for above-ground and below-surface protection of pursuing new business for our commercial rooﬁ ng products outside structures and containment systems. the United States. In 2005, we delivered systems to South Korea, RETHINK: GLOBAL POSITION If you thought OMNOVA Solutions was exclusively a domestic Turkey and Mexico and established distribution relationships in Western Europe, Singapore and the Middle East. company, think again. Not including the sales of our two Asian joint RETHINK: R AW MATERIALS AND SOURCING ventures, sales outside the United States were about $100 million As we all know, the impact of rising energy and raw material in 2005. In total, our unconsolidated China and Thailand joint prices is a major concern. Raw material inﬂ ation in our business has ventures in Decorative Products set record sales in 2005 of been unrelenting in the last several years. We have seen the price approximately $81 million, up $29 million from 2003. Though we do of oil move from under $20 a barrel in 2002 to a high of over $70 a not consolidate the joint venture sales in our ﬁ nancial statements, barrel in 2005. During that same period, OMNOVA’s raw material this revenue improvement made a positive contribution to costs rose approximately $160 million. Again in 2005, we saw new our reported operating proﬁ t. Total international sales in our record-high costs in many of our oil-based raw materials, totaling Performance Chemicals business increased 52% in 2005, with 28% $83 million in increases for the year. Omnova05_Text_Wt 4 Omnova05_Text_Wt 4 2/1/06 2:41:46 PM 2/1/06 2:41:46 PM 5 | OMNOVA Solutions Inc. We have taken many actions to reduce our operating costs to independent Board of Directors, a strong management team, protect our customers from the full brunt of these unprecedented and a never-ending focus on increasing shareholder value. The increases. However, with this prolonged inﬂ ation, pricing actions transformation we are undergoing complements and builds upon were an absolute must for our business and we have worked closely those strengths, offering a unique opportunity to investors. with our customers to communicate the rationale and timing Intense market and economic pressures have made the of these increases. While proﬁ t margins are still not at levels we past few years very challenging and required us to rethink our ultimately expect them to be, through productivity and cost actions opportunities. Through targeted investment in capability building, and our pricing efforts, we did make progress in expanding what we are seeing a signiﬁ cant increase in the active involvement of our had been unacceptably low margins. associates to implement changes that will elevate our competitive Our Strategic Sourcing organization continues to extend position and drive continuous improvement in all aspects of our its reach, identifying new global supply sources and developing business. We are fortunate to have people who dare to believe innovative relationships with our key suppliers. If the raw material that a fresh outlook, a ﬁ rm commitment, and effective planning and situation wasn’t challenging enough, hurricanes in the Gulf of execution will continue to transform our Company. Mexico in the fourth quarter put increased pressure on already tight Our focus in 2006 will be proﬁ table growth and margin North American petrochemical supplies. However, our team was expansion to demonstrate the sustainability of our much-improved able to keep materials ﬂ owing into and out of our facilities without Company and provide a positive return to shareholders. We will any disruption to customers. This situation demonstrated OMNOVA accomplish this by leveraging the changes we have already made, Solutions’ long-standing commitment to meet our customers’ gaining share through investments in value-added products and needs, even under the most difﬁ cult of circumstances. services, further extending our reach in traditional and new markets by better articulating that value to our customers, expanding our global presence and evaluating selective acquisitions made possible by our improved balance sheet. Thank you for your continued support of OMNOVA Solutions. These are exciting times. We are moving forward with a renewed sense of conﬁ dence as we challenge ourselves, our customers and our shareholders to RETHINK the company we are and can become. Kevin M. McMullen Chairman and CEO RETHINK: OPER ATIONAL EXCELLENCE We are successfully transforming into a leaner, nimbler company through our hard work to signiﬁ cantly reduce our cost structure and respond to the realities of the markets we serve. We have taken action on a number of fronts, including reducing our workforce by approximately 10% over the past year and 33% since our spin-off from GenCorp in 1999. While productivity and “operating lean” will always be among our top priorities, during 2005 we made some critical investments in our capabilities, business processes and infrastructure that will better enable us to drive future growth. Our implementation of an SAP enterprise resource manage- ment system was a signiﬁ cant achievement that will help in the standardization and streamlining of key processes in our Performance Chemicals business. We have all seen the headlines about companies that have struggled in implementing new enterprise business systems, but thanks to our disciplined approach, an appropriate balance of internal and external resources and great teamwork, we completed the project on time, on budget, on target for delivering key business beneﬁ ts and, most importantly, without disruption to our customers. Our LEAN SixSigma operating approach continues to gain momentum across the Company. LEAN SixSigma, which is focused on eliminating waste and optimizing processes, has helped us deliver faster inventory turns, lowered our capital expenditures due to improved cycle times, and contributed to OMNOVA’s success in reducing debt. More than 400 of our associates were involved in Kaizen events in 2005. These events are an important LEAN tool to engage associates that are closest to the work – and who therefore have the deepest insights into the processes – to make rapid improvements that achieve sustainable, positive change. RETHINK: OMNOVA OMNOVA Solutions has long-standing strengths, including a leading position in most of the market categories we serve, a broad portfolio of innovative products and services, a seasoned, Omnova05_Text_Wt 5 Omnova05_Text_Wt 5 2/1/06 2:42:04 PM 2/1/06 2:42:04 PM OMNO VA So l ution s Inc. | 6 directors&officers BOARD OF DIREC TORS Edward P. Campbell 2 Chairman and Chief Executive Officer, Nordson Corporation David A. Daberko 2,3 Chairman and Chief Executive Officer, National City Corporation David J. D’Antoni 1 Retired Senior Vice President Steven W. Percy 1 Former Chairman and and Group Operating Officer, Chief Executive Officer, Ashland Inc. BP America Inc. Diane E. McGarry 1 Retired Chief Marketing Officer, Xerox Corporation Kevin M. McMullen 3 Chairman, Chief Executive Officer and President, Dr. R. Byron Pipes 2,3 John L. Bray Distinguished Professor of Engineering, Purdue University William R. Seelbach 2 President and Chief Executive Officer, OMNOVA Solutions Inc. Ohio Aerospace Institute COMMITTEES 1 Audit Committee Chairman: Steven W. Percy 2 Compensation and Corporate Governance Committee Chairman: David A. Daberko 3 Executive Committee Chairman: Kevin M. McMullen E XECUTIVE OFFICERS Kevin M. McMullen Chairman, Chief Executive Officer and President Gregory T. Troy Senior Vice President, Human Resources Michael E. Hicks Senior Vice President and Chief Financial Officer; Treasurer Douglas E. Wenger Senior Vice President and Chief Information Officer James C. LeMay Senior Vice President, Business Development; General Counsel James J. Hohman Vice President; President, Performance Chemicals Robert H. Coleman President, Decorative Products Harold P. Franze President, Building Products Sandra L. Klaasse Vice President, LEAN SixSigma FRONT ROW L-R: James LeMay Kevin McMullen Michael Hicks BACK ROW L-R: Robert Coleman Harold Franze Gregory Troy Sandra Klaasse James Hohman Douglas Wenger Omnova05_Text_Wt 6 Omnova05_Text_Wt 6 2/1/06 2:42:15 PM 2/1/06 2:42:15 PM corporateinformation SHAREHOLDER INFORMATION NYSE Annual CEO Certification BuyDIRECT Common Stock Listing OMNOVA Solutions Foundation The annual CEO certification required by (A direct purchase, sale and dividend New York Stock Exchange 175 Ghent Road Section 303A.12(a) of the New York Stock reinvestment plan) BuyDIRECT is Ticker Symbol: OMN Fairlawn, OH 44333-3300 Exchange Listed Company Manual was available to shareholders and 330-869-4289 submitted by Kevin M. McMullen without interested first-time investors and Annual Meeting of Shareholders qualification on April 21, 2005. offers a convenient method of March 23, 2006 at 9:00 a.m. Communications increasing investment in the Company. Hilton Akron – Fairlawn General inquiries, contact: Transfer Agent and Registrar All brokerage commissions and 3180 West Market Street Corporate Communications, The Bank of New York 1-800-524-4458 bank service fees incurred on behalf Fairlawn, OH 44333 330-869-4271. of the participants in connection Financial literature requests, 1-610-382-7833 (outside U.S.) with stock purchases and dividend Independent Registered contact: World Investor Link, 1-888-269-5221 (hearing impaired – TDD phone) reinvestments are paid by the Company. Public Accounting Firm 1-888-400-7789. Shareowners@bankofny.com (Email) Subject to terms and conditions of Ernst & Young LLP www.stockbny.com (stock transfer website) the plan, dividends, together with Akron, OH Send shareholder inquiries to: $120,000 per year, are used to buy Form 10-K optional cash investments of up to Internet Website www.omnova.com The Bank of New York more shares of the Company’s Additional copies available after OMNOVA Solutions is an equal Shareholder Relations Department 11-E Common Stock. March 1, 2006 on the internet at opportunity employer. P.O. Box 11258 Church Street Station New York, NY 10286 BuyDIRECT Contact: The Bank of New York www.omnova.com or by writing to: OMNOVA Solutions Inc. 175 Ghent Road Send certificates for transfer and P.O. Box 1958 Attention: Secretary Dividend Reinvestment Department Fairlawn, OH 44333-3300 address changes to: The Bank of New York Newark, NJ 07101-9774 1-800-524-4458 Receive and Deliver Department 11-W P.O. Box 11002 Church Street Station New York, NY 10286 Shareholder Services 1-800-735-5160 Investor Relations Contact Michael E. Hicks Senior Vice President and Chief Financial Officer; Treasurer 330-869-4411 OMNOVA enhanced its sales and marketing efforts with the launch of a new website in 2005. It features an interactive Design Center that allows customers to browse thousands of decorative products, create project folders and order samples online. The site also includes an expanded section for investors. i n o t a E & x D y b n g i s e D PAPER STOCK: The cover and inside glossy pages of this report are printed on paper coated with GenFlo® latex. PHOTOS: Automotive upholstery photo courtesy of Distinctive Industries Inc. (cid:127) Marine upholstery photo courtesy of Stingray Boats (cid:127) Cover photo shot at BIE – Business Interiors and Environments, Inc., Cleveland, Ohio. DIGITAL MURAL ON PAGE 4: Design by Becky Wagley, of Wagley Design Omnova05_CvrSingleWt 3 Omnova05_CvrSingleWt 3 2/7/06 1:19:25 PM 2/7/06 1:19:25 PM OMNOVA SOLUTIONS INC. 175 Ghent Road Fairlawn, OH 44333 Telephone: 330-869-4200 www.omnova.com MEMERASE, BOLTAFLEX, SURF(x), GENCRYL, BOLTA, GENON, NAUTOLEX, PREFIXX, BOLTASOFT, VIEWNIQUE, LYTRON, GENFLEX and GENFLO are registered trademarks of OMNOVA Solutions Inc. POLYFOX and TOWER are registered trademarks used under license by OMNOVA Solutions Inc. PLATINUM PT and GENCEAL are trademarks of OMNOVA Solutions Inc. ALL OMNOVA PRODUCTS AND SERVICES ARE OFFERED AND SOLD SUBJECT TO THE OMNOVA STANDARD TERMS AND CONDITIONS OF SALE AGREEMENT SET FORTH AT WWW.OMNOVA.COM. © 2006 OMNOVA Solutions Inc. Omnova05_CvrSingleWt 4 Omnova05_CvrSingleWt 4 2/7/06 1:19:25 PM 2/7/06 1:19:25 PM

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