OLIN Corp

Sales for the three months ended June 30, 2024 were $1,644.0 million compared to $1,702.7 million in the same period last year, a decrease of $58.7 million, or 3%. Chlor Alkali Products and Vinyls sales decreased by $82.0 million primarily due to lower caustic soda pricing, partially offset by increased volumes which were primarily associated with products purchased from other parties. Epoxy sales decreased by $16.1 million, primarily due to lower product pricing, partially offset by increased sales volumes. Winchester sales increased by $39.4 million, primarily due to second quarter 2024 sales from White Flyer and increased sales to international military customers.

Gross margin decreased $72.3 million for the three months ended June 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $77.8 million primarily due to lower caustic soda pricing. Epoxy gross margin decreased by $4.4 million primarily due to lower product pricing, partially offset by increased volumes. Winchester gross margin increased by $2.9 million primarily due to higher sales volumes, including White Flyer, partially offset by lower product pricing. Gross margin as a percentage of sales decreased to 14% in 2024 from 18% in 2023, across all segments.

Selling and administrative expenses for the three months ended June 30, 2024 were $94.6 million, a decrease of $6.6 million from the prior year. The decrease was primarily due to lower stock-based compensation expense of $6.7 million, which includes mark-to-market adjustments. Selling and administrative expenses as a percentage of sales was 6% for both the three months ended June 30, 2024 and 2023.

Restructuring charges for the three months ended June 30, 2024 and 2023 were $6.8 million and $19.2 million, respectively. The decrease in charges was primarily due to a decline in charges associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $5.8 million and $13.3 million for the three months ended June 30, 2024 and 2023, respectively.

Other operating income for the three months ended June 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Interest expense increased by $1.3 million for the three months ended June 30, 2024 from the prior year, primarily due to higher average interest rates.

Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was higher for the three months ended June 30, 2024 primarily due to a decrease in the discount rate used to determine interest costs, partially offset by higher actuarial losses recognized to income.

The effective tax rate for the three months ended June 30, 2024 included a net $0.6 million tax benefit, primarily associated with stock-based compensation and U.S. Federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2024 of 25.8% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the three months ended June 30, 2023 included a net $12.0 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions and from a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2023 of 25.4% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.

Sales for the six months ended June 30, 2024 were $3,279.3 million compared to $3,547.0 million in the same period last year, a decrease of $267.7 million, or 8%. Chlor Alkali Products and Vinyls sales decreased by $314.5 million primarily due to lower caustic soda pricing, partially offset by increased sales volumes associated with product purchased from other parties. Epoxy sales decreased by $35.5 million, primarily due to lower product pricing, partially offset by increased sales volumes. Winchester sales increased by $82.3 million, primarily due to 2024 sales from White Flyer, higher commercial ammunition sales volumes, and increased sales to international military customers.

Gross margin decreased $267.6 million for the six months ended June 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $243.2 million primarily due to lower caustic soda pricing, partially offset by lower costs. Epoxy gross margin decreased by $39.9 million primarily due to lower product pricing, partially offset by increased volumes. Winchester gross margin increased by $11.0 million primarily due to higher sales volume, including White Flyer, partially offset by lower product pricing. Gross margin as a percentage of sales decreased to 14% in 2024 from 20% in 2023, across all segments.

Selling and administration expenses for the six months ended June 30, 2024 were $196.5 million, a decrease of $16.5 million from the prior year. The decrease was primarily due to lower stock-based compensation expense of $4.9 million, which includes mark-to-market adjustments, lower costs of $4.8 million associated with consulting and contract services and a favorable foreign currency impact of $3.8 million. Selling and administration expenses as a percentage of sales was 6% for both the six months ended June 30, 2024 and 2023.

Restructuring charges for the six months ended June 30, 2024 and 2023 were $15.1 million and $80.1 million, respectively. The decrease in charges was primarily due to a decline in charges associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $9.3 million and $71.1 million for the six months ended June 30, 2024 and 2023, respectively.

Other operating income for the six months ended June 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Interest expense increased by $3.5 million for the six months ended June 30, 2024 from the prior year primarily due to higher average interest rates.

Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was higher for the six months ended June 30, 2024 primarily due to a decrease in the discount rate used to determine interest costs, partially offset by higher actuarial losses recognized to income.

The effective tax rate for the six months ended June 30, 2024 included a net $3.3 million tax benefit, primarily associated with stock-based compensation and U.S. Federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2024 of 25.6% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the six months ended June 30, 2023 included a net $17.2 million tax benefit, primarily associated with stock-based compensation, remeasurement of deferred taxes due to a decrease in our state effective tax rates, and prior year tax positions, partially offset by an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions and from a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2023 of 24.5% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.