8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 28, 2008

OM GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

001-12515
(Commission File Number)

52-1736882
(I.R.S. Employer Identification Number)

127 Public Square
1500 Key Tower
Cleveland, Ohio 44114-1221
(Address of principal executive offices)
(Zip code)

(216) 781-0083
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 28, 2008, OM Group, Inc. issued a press release announcing the quarter and year ended December 31, 2007 financial results, a copy of which is attached as Exhibit 99 to this Current Report on Form 8-K, and hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits.

 As described in Item 2.02 of this Current Report on Form 8-K, the following Exhibit is furnished as part of this Current Report on Form 8-K.

(c) Exhibits

     99 OM Group, Inc. fourth quarter and full year 2007 press release, dated February 28, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OM Group, Inc. (Registrant)
Date: February 28, 2008	/s/ Robert T. Pierce
		Name:	Robert T. Pierce
		Title:	Vice President and Corporate Controller

EX-99

Exhibit 99

FOR IMMEDIATE RELEASE

OM GROUP ANNOUNCES RECORD RESULTS
FOR 2007 FOURTH QUARTER, FULL-YEAR
— Strong End-Market Demand, Favorable Pricing Fuel Performance —
— Company Remains “On Target” for 2010 Goals —

CLEVELAND — February 28, 2008 — OM Group, Inc. (NYSE: OMG) today announced record results for the fourth quarter and full year periods ended December 31, 2007.

Net sales for the fourth quarter of 2007 were $309.4 million, compared with $172.1 million in the corresponding period of 2006. Excluding the impact of the Borchers acquisition, which added $12.7 million in the fourth quarter of 2007, revenue grew 72 percent. Increased product selling prices, strong demand across most of the company’s end markets, and the re-sale of cobalt metal drove the increase in sales. The average cobalt reference price in the fourth quarter of 2007 was $32.68 compared with $18.66 in the 2006 period.

“We are quite pleased with the company’s financial performance in 2007,” said Joseph M. Scaminace, chairman and chief executive officer. “As was the case consistently throughout the year, we enjoyed strong customer demand for our products in nearly every end market we serve, most notably battery, chemical, powder metallurgy, and tire. Similarly, we benefited from favorable pricing for our products, which resulted in higher gross profit. And, thanks to our ongoing operational excellence initiatives, we were able to leverage operating expenses to achieve operating profit nearly five times greater than the same period last year.”

Gross profit increased to $84.2 million in the fourth quarter of 2007 versus $46.8 million in the comparable 2006 quarter. The increase was primarily attributable to a higher cobalt reference price, greater volume, and an unrealized gain on cobalt forward purchase contracts. As a percentage of net sales, gross margin was flat due to an increase in low-margin cobalt metal resale. Operating profit in the fourth quarter of 2007 was $55.5 million versus $11.8 million in the prior-year quarter.

Income from continuing operations was $46.4 million, or $1.53 per diluted share, in the fourth quarter of 2007, compared with a loss of $17.0 million, or $0.58 per diluted share, in the 2006 period. The significant increase is attributable to the higher operating profit, lower interest expense due to the redemption of the company’s long-term Notes earlier this year, higher interest income as a result of the company’s higher cash balance, and favorable foreign currency exchange gains.

Income from discontinued operations was $1.5 million in the 2007 fourth quarter, compared to income from discontinued operations in the 2006 period of $73.8 million, related primarily to the operations of the Nickel business that was sold in the first quarter of 2007.

Net income in the fourth quarter of 2007 was $48.0 million, or $1.58 per diluted share, compared to last year’s fourth quarter net income of $56.8 million, or $1.93 per diluted share. The decrease was due to the income of the discontinued Nickel business in the 2006 period.

Selling, general and administrative (SG&A) expenses fell to $28.7 million in the fourth quarter of 2007, compared with $35.0 million in the fourth quarter of 2006. Corporate expenses, a component of overall SG&A expenses, declined to $11.4 million in the 2007 fourth quarter from $12.6 million in the comparable quarter a

year ago. The overall decline in SG&A was due primarily to expenses in the fourth quarter of 2006 that did not repeat in 2007 such as $4.2 million in environmental charges and $3.2 million related to the former CEO’s termination.

FULL-YEAR RESULTS

Net sales for 2007 were $1.02 billion versus $660.1 million for 2006. Income from continuing operations was $111.5 million, or $3.68 per diluted share, compared to $23.6 million, or $0.80 per diluted share, a year ago. Net income was $246.9 million, or $8.15 per diluted share, in 2007 compared with net income of $216.1 million, or $7.31 per diluted share, in 2006.

Gross profit rose to $313.2 million in 2007, compared with $184.7 million in 2006. As a percentage of net sales, gross profit increased to 31 percent from 28 percent. Operating profit increased to $196.2 million in 2007 from $75.3 million in 2006. The increases reflected higher cobalt prices and higher-priced sales of finished products manufactured with cobalt raw materials purchased at lower prices. Higher sales volumes across all three product line groupings also contributed to the more favorable 2007 results.

SG&A expenses were $117.0 million in 2007, compared with $109.4 million one year-ago. The increase was due to higher selling expenses as a result of higher net sales and SG&A expenses of the acquired businesses that were not included in full-year results for 2006.

OUTLOOK

“While the company’s record-setting financial performance is impressive, I believe it was our operational success during the year that makes 2007 a watershed year in the transformation of OM Group,” said Scaminace. “From the acquisitions of the electronics businesses of Rockwood Holdings and Borchers to our unwavering financial discipline, this is already a much different company from even one year ago. We enter 2008 with tremendous momentum, a portfolio more appropriately balanced, true financial flexibility and exciting, long-term growth opportunities before us.”

According to Scaminace, despite the mixed opinions and indicators concerning global economies, “We remain resolute that the company is on the right track. We continue to believe that our efforts will result in a company with consolidated revenues of $2 billion to $4 billion by 2010 and a ranking in the top quartile of specialty chemicals and specialty materials companies in terms of EBITDA margins and other financial metrics.”

WEBCAST INFORMATION

The company has scheduled a conference call and live audio broadcast on the Web for today at 10 a.m. (ET). Investors may access the live audio broadcast by logging on to www.omgi.com. A copy of management’s presentation materials will be available on OMG’s Web site at the time of the call. The company recommends visiting the Web site at least 15 minutes prior to the webcast to download and install any necessary software. Also, a webcast audio replay will be available on the “Investor Audio Archive” page of the company’s Web site, commencing three hours after the call.

ABOUT OM GROUP, INC.

OM Group, Inc. is a diversified global developer, producer and marketer of value-added specialty chemicals and advanced materials that are essential to complex chemical and industrial processes. Key technology-based end-use applications include affordable energy, portable power, clean air, clean water and proprietary products and services for the microelectronics industry. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia and Africa. For more information, visit the company’s Web site at http://www.omgi.com/.

# # #

For more information, contact: Greg Griffith vice president, strategic planning, development and investor relations, at +1-216-263-7455.

FORWARD-LOOKING STATEMENTS

The foregoing discussion may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company’s operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: the direction and pace of our strategic transformation, including our use of proceeds from the sale of our Nickel business on March 1, 2007 and identification of potential acquisitions; the successful integration of certain Electronics businesses of Rockwood Holdings, Inc.; the operation of our critical business facilities without interruption; the speed and sustainability of price changes in cobalt; the potential for lower of cost or market write-downs of the carrying value of inventory necessitated by decreases in the market price of cobalt or the selling prices of the Company’s finished products; the availability of competitively priced supplies of raw materials, particularly cobalt; the risk that new or modified internal controls, implemented in response to the Company’s examination of its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, are not effective and need to be improved; the demand for metal-based specialty chemicals and products in the Company’s markets; the impact of environmental regulations on our operating facilities and the impact of new or changes to current environmental, health and safety laws on our products and their use by our customers; the effect of fluctuations in currency exchange rates on the Company’s international operations; the effect of non-currency risks of investing and conducting operations in foreign countries, including political, social, economic and regulatory factors; the effect of changes in domestic or international tax laws; and the general level of global economic activity and demand for the Company’s products.

OM Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

	December 31,		December 31,
	2007		2006
(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	100,187	$	282,288
Accounts receivable, less allowances		178,481		82,931
Inventories		413,434		216,492
Other current assets		64,431		30,648
Assets of discontinued operations		—		597,682
Total current assets		756,533		1,210,041
Property, plant and equipment, net		288,834		210,953
Goodwill		322,172		137,543
Notes receivable from joint venture partner, less allowances		24,179		24,179
Other non-current assets		77,492		35,508
Total assets	$	1,469,210	$	1,618,224
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term debt and current portion of long-term debt	$	513	$	493
Debt to be redeemed		—		402,520
Accounts payable		214,244		90,768
Accrued income taxes		32,040		17,497
Accrued employee costs		34,707		28,806
Other current liabilities		25,435		42,057
Liabilities of discontinued operations		—		167,148
Total current liabilities		306,939		749,289
Long-term debt		1,136		1,224
Deferred income taxes		29,645		4,118
Minority interests		52,314		43,286
Other non-current liabilities		50,790		38,228
Total stockholders’ equity		1,028,386		782,079
Total liabilities and stockholders’ equity	$	1,469,210	$	1,618,224

OM Group, Inc. and Subsidiaries
Condensed Statements of Consolidated Income

	Three Months Ended December 31,						For the Year Ended December 31,
(In thousands, except per share data)	2007			2006			2007			2006
Net sales	$	309,367		$	172,081		$	1,021,501			$	660,104
Cost of products sold		225,182			125,278			708,257				475,437
Gross profit		84,185			46,803			313,244				184,667
Selling, general and administrative expenses		28,733			35,000			117,009				109,408
Operating profit		55,452			11,803			196,235				75,259
Other income (expense):
Interest expense		(297	)		(9,328	)		(7,820	)			(38,659	)
Loss on redemption of Notes		—			—			(21,733	)			—
Interest income		8,279			3,154			23,922				8,566
Foreign exchange gain		2,138			628			8,100				3,661
Gain on sale of investment		—			—			—				12,223
Other income (expense), net		550			(420	)		(449	)			(582	)
		10,670			(5,966	)		2,020				(14,791	)
Income from continuing operations before income taxes, minority interest and cumulative effect of change in accounting principle		66,122			5,837			198,255				60,468
Income tax expense		(18,596	)		(20,056	)		(76,311	)			(30,554	)
Minority partners’ share of income		(1,085	)		(2,817	)		(10,405	)			(6,291	)
Income (loss) from continuing operations before cumulative effect of change in accounting principle		46,441			(17,036	)		111,539				23,623
Discontinued operations:
Income from discontinued operations, net of tax		1,546			73,813			63,057				192,163
Gain on sale of discontinued operations, net of tax		—			—			72,270				—
Total income from discontinued operations, net of tax		1,546			73,813			135,327				192,163
Income before cumulative effect of change in accounting principle		47,987			56,777			246,866				215,786
Cumulative effect of change in accounting principle		—			—			—				287
Net income	$	47,987		$	56,777		$	246,866			$	216,073
Net income (loss) per common share — basic:
Continuing operations	$	1.55		$	(0.58	)	$	3.73			$	0.80
Discontinued operations		0.05			2.51			4.52				6.55
Cumulative effect of change in accounting principle		—			—			—				0.01
Net income	$	1.60		$	1.93		$	8.25			$	7.36
Net income (loss) per common share — assuming dilution:
Continuing operations	$	1.53		$	(0.58	)	$	3.68			$	0.80
Discontinued operations		0.05			2.51			4.47				6.50
Cumulative effect of change in accounting principle		—			—			—				0.01
Net income	$	1.58		$	1.93		$	8.15			$	7.31
Weighted average shares outstanding
Basic		30,040			29,480			29,937				29,362
Assuming dilution		30,397			29,480			30,276				29,578

OM Group, Inc. and Subsidiaries
Condensed Statements of Consolidated Cash Flows

	For the Year Ended December 31,
(In thousands)	2007			2006
Operating activities
Net income	$	246,866		$	216,073
Adjustments to reconcile net income to net cash provided by
operating activities:
Total income from discontinued operations		(135,327	)		(192,163	)
Loss on redemption of Notes		21,733		—
Depreciation and amortization		33,229			31,841
Other non-cash items		(17,911	)		7,267
Changes in operating assets and liabilities
Accounts receivable		(38,364	)		(3,879	)
Inventories		(165,694	)		(27,613	)
Accounts payable		92,161			39,310
Other, net		4,311			24,131
Net cash provided by operating activities		41,004			94,967
Investing activities
Expenditures for property, plant and equipment		(19,357	)		(14,547	)
Net proceeds from the sale of the Nickel business		490,036		—
Acquisitions of businesses, net of cash acquired		(336,976	)		(5,418	)
Other investing activities		1,546			2,006
Net cash provided by (used for) investing activities		135,249			(17,959	)
Financing activities
Payments of long-term debt		(400,000	)		(17,250	)
Premium for redemption of Notes		(18,500	)	—
Other financing activities		11,738			11,558
Net cash used for financing activities		(406,762	)		(5,692	)
Effect of exchange rate changes on cash		1,440			4,569
Cash and cash equivalents
Increase (decrease) from continuing operations		(229,069	)		75,885
Discontinued operations — net cash provided by operating activities		48,508			107,379
Discontinued operations — net cash used for investing activities		(1,540	)		(15,594	)
Balance at the beginning of the year		282,288			114,618
Balance at the end of the year	$	100,187		$	282,288

OM Group, Inc. and Subsidiaries
Segment Information

	Three Months Ended
	December 31,						For the Year Ended December 31,
(In thousands)	2007			2006			2007			2006
Net Sales
Specialties	$	309,367		$	172,081		$	1,021,501		$	660,104
Operating profit (loss)
Specialties	$	66,896		$	24,424		$	232,042		$	115,349
Corporate		(11,444	)		(12,621	)		(35,807	)		(40,090	)
	$	55,452		$	11,803		$	196,235		$	75,259

OM Group, Inc and Subsidiaries
Non-GAAP Financial Measure

	Three months ended						Three months ended
Amounts in thousands except per share data	Dec 31, 2007						Dec 31, 2006
	$			Diluted EPS			$			Diluted EPS
Net income as reported	$	47,987		$	1.58		$	56,777		$	1.93
Less:
Income from discontinued operations		1,546			0.05			73,813			2.51
Income from continuing operations before accounting changes — as reported	$	46,441		$	1.53		$	(17,036	)	$	(0.58	)
Special items:
Interest income on Notes receivable from JV partner		(3,776	)		(0.12	)		—			—
Tax expense related to interest income on Notes from JV partner		982			0.03			—			—
Tax expense related to repatriation of foreign cash		6,911			0.22			18,380			0.63
Environmental charges		—			—			4,200			0.14
Executive transition		—			—			3,206			0.11
Income from continuing operations before accounting changes — as adjusted for special items	$	50,558		$	1.66		$	8,750		$	0.30
Weighted average shares outstanding — diluted					30,397						29,480

	Year ended						Year ended
Amounts in thousands except per share data	Dec 31, 2007						Dec 31, 2006
	$			Diluted EPS			$			Diluted EPS
Net income as reported	$	246,866		$	8.15		$	216,073		$	7.31
Less:
Income from discontinued operations		135,327			4.47			192,163			6.50
Cumulative effect of accounting changes		—			—			287			0.01
Income from continuing operations before accounting changes — as reported	$	111,539		$	3.68		$	23,623		$	0.80
Special items:
Loss on redemption of Notes		21,733			0.72			—			—
Tax benefit related to loss on redemption of Notes		(7,607	)		(0.25	)		—			—
Tax expense related to repatriation of foreign cash		45,700			1.51			18,380			0.62
Interest income on Notes receivable from JV partner		(4,526	)		(0.15	)		—			—
Tax expense related to interest income on Notes from JV partner		1,177			0.04			—			—
Gain on sale of shares in Weda Bay Minerals, Inc.		—			—			(12,223	)		(0.41	)
Environmental charges		3,857			0.13			4,200			0.14
Executive transition		—			—			3,206			0.11
Income from continuing operations before accounting changes — as adjusted for special items	$	171,873		$	5.68		$	37,186		$	1.26
Weighted average shares outstanding — diluted					30,276						29,578

Use of Non-GAAP Financial Information:

“Income from continuing operations before accounting changes — as adjusted for special items” is a non-GAAP financial measure that the Company’s management has used as an important metric in evaluating the performance of the Company’s business for 2007. The above table presents a reconciliation of the Company’s GAAP results, as reported (both net income and income from continuing operations before accounting changes), to its non-GAAP results after adjusting for the special items shown. The Company believes that the non-GAAP financial measure presented in the above table facilitates a comparative assessment of the Company’s operating performance by its management. In addition, the Company believes that this non-GAAP financial measure will enhance investors’ understanding of the performance of the Company’s operations during 2007 and of the comparability of the 2007 results to the results of prior periods.