OLIN Corp

Overview

Net (loss) income for the three and nine months ended September 30, 2024, was $(24.9) million and $97.9 million, respectively, compared to $104.1 million and $407.3 million, for the prior year periods, respectively. The decrease of $129.0 million and $309.4 million, respectively, in net (loss) income from the prior year periods was primarily due to a decline in operating results across our Chemicals businesses. The operating results from our Winchester segment were lower for the three months ended September 30, 2024 but were higher for the nine months ended September 30, 2024 compared to the comparable prior year periods. Net income for the nine months ended September 30, 2023 also reflects a gain of $27.0 million for the sale of our domestic private trucking fleet and operations. Diluted net (loss) income per share was $(0.21) and $0.81 for the three and nine months ended September 30, 2024, respectively, compared to $0.82 and $3.12 in the prior year periods, respectively, a decrease of $1.03 and $2.31 per share.

Chlor Alkali Products and Vinyls reported segment income was $45.3 million and $221.2 million for the three and nine months ended September 30, 2024, respectively. Chlor Alkali Products and Vinyls segment results were lower than the comparable prior year periods due to the impact of Hurricane Beryl and lower pricing, primarily caustic soda. The nine months ended September 30, 2024 benefited from lower raw material and operating costs, and costs associated with products purchased from other parties, compared to last year. The Chlor Alkali and Vinyls segment results for the three and nine months ended September 30, 2023 were negatively impacted by higher costs and reduced profit from lost sales of $25.3 million and $104.2 million, respectively, associated with operating issues related to a 2023 second quarter maintenance turnaround at our vinyl chloride monomer plant at the Freeport, TX facility.

Epoxy reported a segment loss of $42.8 million and $57.6 million for the three and nine months ended September 30, 2024, respectively. Epoxy segment results for the three months ended September 30, 2024 were lower than the comparable prior year period primarily due to the impact of Hurricane Beryl, partially offset by lower raw material and operating costs. Epoxy segment results for the nine months ended September 30, 2024 were lower than the comparable prior year period primarily due to lower product pricing and the impact of Hurricane Beryl, partially offset by increased volumes and lower raw material and operating costs.

Winchester reported segment income of $53.4 million and $195.9 million for the three and nine months ended September 30, 2024, respectively. Winchester segment results for the three months ended September 30, 2024 were lower than the comparable prior year period due to higher commodity and operating costs, including propellant costs. Winchester segment results for the nine months ended September 30, 2024 were higher than the comparable prior year period due to higher sales volumes, which included White Flyer results, partially offset by higher commodity and operating costs, including propellant costs. Higher international military sales, military project revenue, and White Flyer sales were partially offset by lower commercial ammunition sales.

Liquidity and Share Repurchases

During the nine months ended September 30, 2024, we repurchased and retired 4.9 million shares of common stock at a total value of $256.8 million. As of September 30, 2024, we had $742.0 million of remaining authorized common stock to be repurchased under our 2022 Repurchase Authorization Program.

During the nine months ended September 30, 2024, we had net borrowings of $216.7 million with $282.0 million borrowed under our Senior Revolving Credit Facility, which was partially utilized to repay $70.0 million of tax-exempt variable-rate bonds, and $11.3 million under our Receivables Financing Agreement.

Other Items

On July 10, 2024, we announced a temporary disruption of operations at our Freeport, TX, facility as a result of Hurricane Beryl. In response to this disruption, we declared a system-wide force majeure for our Chlor Alkali Products & Vinyls products and aromatics shipments for our Epoxy segment. This disruption was a result of hurricane-related damage to Olin facilities in Freeport, TX, impacting Olin’s normal production and logistics capabilities including access to power, raw materials, and other essential feedstocks and services. During the third quarter, we safely returned many Freeport, TX plants to operation and on August 28, 2024, we lifted the system wide force majeure on Chlor Alkali Products and Vinyls products. However, persistent operating limitations necessitated an additional outage, which we commenced in late September and successfully completed during October.

The third quarter 2024 results included a negative pretax impact of $109.4 million associated with Hurricane Beryl for incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales. The Hurricane Beryl impact included in our Chlor Alkali Products and Vinyls and Epoxy segment results was $76.7 million and $32.7 million, respectively. We expect a residual fourth quarter Hurricane Beryl impact of approximately $25 million in our Chemicals businesses’ results.

Epoxy segment results in 2024 continue to be impacted by significant exports out of Asia into the European and North American markets, negatively impacting pricing and volumes. On April 3, 2024, we announced the filing of anti-dumping and countervailing duty petitions against China, India, South Korea, Taiwan and Thailand with the U.S. Department of Commerce and the U.S. International Trade Commission relating to certain epoxy resins, as part of the U.S. Epoxy Resin Producers Ad Hoc Coalition. The petitions were filed in response to large volumes of low-priced imports of epoxy resins into the U.S. from the subject countries over the past three years that have injured U.S. domestic epoxy resin producers.

On July 1, 2024, we announced the initiation of an anti-dumping proceeding by the European Commission against China, the Republic of Korea, Taiwan and Thailand concerning low-priced imports of epoxy resins into the European Union (EU), as a result of a complaint lodged by the Ad Hoc Coalition of Epoxy Resin Producers. The complaint alleges that exporting producers in the four targeted countries have injured the European epoxy resin producers by selling their products on the EU market at unfairly low prices that significantly undercut the prices of European producers.

During 2024, the U.S. Army awarded Winchester a contract for the construction of the Next Generation Squad Weapon (NGSW) manufacturing facility at Lake City Army Ammunition Plant. The project will be the first new manufacturing plant built at the Lake City facility in decades. The new manufacturing facility will provide safe, reliable, and advanced NGSW ammunition to the U.S. warfighter. Winchester will manage all aspects of the government-funded construction project, which commenced in the second quarter of 2024.