CLAYTON, Mo., July 30, 2015 /PRNewswire/ -- Olin
Corporation (NYSE: OLN) announced today that its second quarter
2015 income from continuing operations was $42.3 million, or $0.54 per diluted share, which compares to income
from continuing operations of $36.6
million, or $0.46 per diluted
share in the second quarter of 2014. Sales in the second
quarter of 2015 were $535.4 million
compared to $570.4 million in the
second quarter of 2014.
Second quarter 2015 results included a pretax gain of
$52.2 million related to property
damage and business interruption insurance recoveries resulting
from the June 2014 incident at one of
the two chlor alkali production units at our Becancour, Canada facility. Second
quarter 2015 results also included pretax acquisition-related
financing and other costs of $22.1
million, increased legacy environmental costs of
$3.9 million and pretax
restructuring charges of $0.7
million.
Joseph D. Rupp, Chairman and
Chief Executive Officer said, "We continue to focus significant
effort preparing for the Dow transaction. All anti-trust
approvals have been received and we now expect to close early in
the fourth quarter. We remain excited and confident that the
transaction will be value creating and we believe we can generate
at least $200 million in annual
synergies within three years after closing. Some of the key
benefits Olin expects from the acquisition will come from a
significant reduction in the average cost to manufacture an ECU; a
meaningful reduction in the annual number of miles chlorine is
shipped by rail; and the opportunity to continue to expand our
sales of bleach. We are also pleased that the current leaders
and their respective management teams of global epoxy, chlor alkali
vinyls, chlorinated organics, and global chlor alkali manufacturing
have all agreed to join Olin at closing.
"As the second quarter of 2015 ended and the third quarter
began, it became clear that our expectation that improving demand
for chlorine and caustic soda would lead to meaningfully higher ECU
netbacks in 2015, would not materialize. Chlorine pricing has
improved in our system but has been more than offset by weaker
caustic soda pricing. As a result, we now expect Chlor Alkali
segment earnings will decline in 2015 compared to 2014 but will be
partially offset by improved Chemical Distribution segment
earnings. Without giving consideration to the impact of the
Dow acquisition in the fourth quarter, due to the lack of
significant improvement in ECU netbacks for 2015, we are reducing
our full year adjusted EBITDA forecast to the $330 million to $360 million range.
"Third quarter 2015 net income is forecast to be in the
$0.05 to $0.10 per diluted share
range, which includes pretax acquisition-related costs and
financing expenses of approximately $17
million and $8 million,
respectively. Chlor Alkali third quarter 2015 earnings are
expected to be lower than the third quarter of 2014 segment
earnings, primarily due to lower caustic soda volumes. Third
quarter 2015 Chemical Distribution earnings are expected to be
higher than second quarter 2015 segment earnings primarily due to
the seasonal increase in bleach volumes and continued earnings
contributions from Olin-produced hydrochloric acid and potassium
hydroxide sales. In the Winchester business, third quarter
2015 earnings are expected to be comparable to third quarter 2014
levels. Third quarter 2015 results are also forecast to
include approximately $6 million of
higher legacy environmental costs compared to the third quarter of
2014. Third quarter 2015 earnings are also expected to
include restructuring charges of approximately $1 million."
SEGMENT REPORTING
We define segment earnings as income (loss) from continuing
operations before interest expense, interest income, other
operating income (expense), other income (expense) and income taxes
and include the earnings of non-consolidated affiliates in segment
results consistent with management's monitoring of the operating
segments.
CHLOR ALKALI PRODUCTS
Chlor Alkali Products sales for the second quarter of 2015 were
$294.7 million compared to
$338.5 million in the second quarter
of 2014. Second quarter 2015 chlorine and caustic soda
volumes decreased 12% compared to second quarter 2014 levels, and
ECU netbacks declined approximately 1% in the second quarter of
2015 compared to the second quarter of 2014. Second quarter
2015 potassium hydroxide volumes decreased 10% compared to the
second quarter of 2014 and hydrochloric acid volumes decreased 12%
during the second quarter of 2015 compared to the second quarter of
2014. Bleach volumes increased 2% in the second quarter of
2015 compared to the second quarter of 2014. Second quarter
2015 Chlor Alkali segment earnings of $25.0
million decreased compared to $40.8
million in the second quarter of 2014, primarily due to
lower chlorine and caustic soda volumes, lower ECU netbacks, and
higher maintenance turnaround costs of approximately $7 million. These second quarter segment
results included a gain of $9.9
million, from the Becancour,
Canada property insurance recoveries, related to costs
incurred and expensed in prior periods.
CHEMICAL DISTRIBUTION
Chemical Distribution sales in the second quarter of 2015 were
$70.3 million compared to
$75.6 million in the second quarter
of 2014. The year-over-year decrease in Chemical Distribution
sales reflects lower caustic soda selling prices and volumes,
partially offset by higher shipments of hydrochloric acid and
potassium hydroxide. Chemical Distribution segment earnings
of $2.4 million in the second quarter
of 2015 increased compared to breakeven segment earnings in the
second quarter of 2014, primarily due to increased caustic soda
margins and higher shipments of bleach, hydrochloric acid and
potassium hydroxide. Chemical Distribution second quarter
2015 and 2014 results both included depreciation and amortization
expense of $3.9 million.
WINCHESTER
Winchester second quarter of 2015 sales were $194.2 million compared to $181.0 million in the second quarter of
2014. The increase in second quarter of 2015 sales compared
to the second quarter of 2014 reflects increased shipments to
commercial, law enforcement and military customers.
Winchester's second quarter 2015 segment earnings were $33.9 million compared to $33.1 million in the second quarter of
2014. The increase in segment earnings reflects the impact of
lower commodity and material costs and lower manufacturing and
other costs, partially offset by a less favorable product mix.
CORPORATE AND OTHER COSTS
Pension income included in the second quarter 2015 Corporate and
Other segment was $7.4 million
compared to $7.5 million in the
second quarter of 2014.
Second quarter 2015 charges to income for environmental
investigatory and remedial activities were $5.1 million compared to $1.2 million in the second quarter of 2014.
These charges relate primarily to remedial and investigatory
activities associated with former waste sites and past
operations.
Other corporate and unallocated costs in the second quarter of
2015 decreased $1.4 million compared
to the second quarter of 2014, primarily due to lower stock-based
compensation expense, including mark-to-market adjustments and
lower legal and legal-related settlement costs, partially offset by
higher non-income tax expense.
PROPOSED ACQUISITION
On March 27, 2015, Olin and The
Dow Chemical Company (TDCC) announced that Olin had agreed to
acquire certain chlor alkali and downstream derivatives businesses
from TDCC using a Reverse Morris Trust structure. Second
quarter 2015 results included acquisition-related costs of
$10.5 million and acquisition
financing expenses included in interest expense of $11.6 million related to this pending
transaction.
During the second quarter, the required waiting period under the
Hart-Scott Rodino (HSR) Antitrust Improvements Act of 1976 expired
and on July 6, 2015, Olin announced
that all foreign regulatory approvals required to close the pending
transaction had been obtained. The transaction is still
subject to approval by Olin shareholders and other customary
closing conditions. The transaction is expected to close
early in the fourth quarter of 2015. In connection with the
pending transaction, Olin entered into a $1.85 billion new senior unsecured credit
facility, including a $1.35 billion
5-year term loan and a $0.5 billion
revolving credit facility, which will replace Olin's current senior
credit facility.
DIVIDEND
On July 23, 2015, Olin's Board of
Directors declared a dividend of $0.20 on each share of Olin common stock.
The dividend is payable on September 10,
2015 to shareholders of record at the close of business on
August 10, 2015. This will be
the 355th consecutive quarterly dividend to be paid by the
Company.
CONFERENCE CALL INFORMATION
The Company's second quarter earnings conference call with
securities analysts is scheduled for 10:00
A.M. Eastern Time, Friday, July 31. The call will
feature remarks by Joseph D. Rupp,
Olin's Chairman and Chief Executive Officer; John E. Fischer, Olin's President and Chief
Operating Officer; John L. McIntosh,
Olin's Senior Vice President, Chemicals; Todd A. Slater, Olin's Vice President and Chief
Financial Officer; and Larry P.
Kromidas, Olin's Assistant Treasurer and Director, Investor
Relations. Anyone wishing to listen to the call may do so via
the Internet by following the instructions posted under the
Conference Call icon on Olin's website, olin.com. Listeners
should log on to the website 15 minutes prior to the call.
The call will also be audio archived on the Olin website for future
replay beginning at 12:00 P.M. Eastern
Time. A final transcript of the conference call will
be available on the website in the Investor section the following
day.
COMPANY DESCRIPTION
Olin Corporation is a manufacturer concentrated in three
business segments: Chlor Alkali Products, Chemical
Distribution and Winchester. Chlor Alkali Products, with
eight U. S. manufacturing facilities and one Canadian manufacturing
facility, produces chlorine and caustic soda, hydrochloric acid,
hydrogen, bleach products and potassium hydroxide. Chemical
Distribution manufactures bleach products and distributes caustic
soda, bleach products, potassium hydroxide and hydrochloric
acid. Winchester, with its principal manufacturing facilities
in East Alton, IL and Oxford, MS, produces and distributes sporting
ammunition, law enforcement ammunition, reloading components, small
caliber military ammunition and components, and industrial
cartridges.
Visit olin.com for more information on Olin.
FORWARD-LOOKING STATEMENTS
This communication includes forward-looking statements. These
statements relate to analyses and other information that are based
on management's beliefs, certain assumptions made by management,
forecasts of future results, and current expectations, estimates
and projections about the markets and economy in which we and our
various segments operate. These statements may include statements
regarding the proposed acquisition of certain chlor alkali and
downstream derivatives businesses from TDCC using a "Reverse Morris
Trust" structure, the expected timetable for completing the
transaction, benefits and synergies of the transaction, and future
opportunities for the combined company following the transaction.
The statements contained in this communication that are not
statements of historical fact may include forward-looking
statements that involve a number of risks and uncertainties.
We have used the words "anticipate," "intend," "may," "expect,"
"believe," "should," "plan," "project," "estimate," "forecast,"
"optimistic," and variations of such words and similar expressions
in this communication to identify such forward-looking statements.
These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions, which are
difficult to predict and many of which are beyond our control.
Therefore, actual outcomes and results may differ materially from
those matters expressed or implied in such forward-looking
statements. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of future events,
new information or otherwise. Relative to the dividend, the payment
of cash dividends is subject to the discretion of our board of
directors and will be determined in light of then-current
conditions, including our earnings, our operations, our financial
conditions, our capital requirements and other factors deemed
relevant by our board of directors. In the future, our board of
directors may change our dividend policy, including the frequency
or amount of any dividend, in light of then-existing
conditions.
The risks, uncertainties and assumptions involved in our
forward-looking statements, many of which are discussed in more
detail in our filings with the SEC, including without limitation
the "Risk Factors" section of our Annual Report on Form 10-K for
the year ended December 31, 2014,
include, but are not limited to, the following:
- sensitivity to economic, business and market conditions in
the United States and overseas,
including economic instability or a downturn in the sectors served
by us, such as ammunition, vinyls, urethanes, and pulp and paper,
and the migration by United States
customers to low-cost foreign locations;
- the cyclical nature of our operating results, particularly
declines in average selling prices in the chlor alkali industry and
the supply/demand balance for our products, including the impact of
excess industry capacity or an imbalance in demand for our chlor
alkali products;
- economic and industry downturns that result in diminished
product demand and excess manufacturing capacity in any of our
segments and that, in many cases, result in lower selling prices
and profits;
- new regulations or public policy changes regarding the
transportation of hazardous chemicals and the security of chemical
manufacturing facilities;
- changes in legislation or government regulations or
policies;
- higher-than-expected raw material and energy, transportation,
and/or logistics costs;
- costs and other expenditures in excess of those projected for
environmental investigation and remediation or other legal
proceedings;
- unexpected litigation outcomes;
- the failure or an interruption of our information technology
systems;
- the occurrence of unexpected manufacturing interruptions and
outages, including those occurring as a result of labor disruptions
and production hazards;
- adverse conditions in the credit and capital markets, limiting
or preventing our ability to borrow or raise capital;
- weak industry conditions could affect our ability to comply
with the financial maintenance covenants in our senior revolving
credit facility and certain tax-exempt bonds;
- the effects of any declines in global equity markets on asset
values and any declines in interest rates used to value the
liabilities in our pension plan;
- an increase in our indebtedness or higher-than-expected
interest rates, affecting our ability to generate sufficient cash
flow for debt service;
- factors relating to the satisfaction of the conditions to the
proposed transaction with TDCC, including regulatory approvals and
the required approvals of our shareholders;
- our and TDCC's ability to meet expectations regarding the
timing, completion and accounting and tax treatments of the
transaction with TDCC;
- the possibility that we may be unable to achieve expected
synergies and operating efficiencies in connection with the
transaction with TDCC within the expected time-frames or at
all;
- integration of TDCC's chlorine products business being more
difficult, time-consuming or costly than expected;
- the effect of any changes resulting from the proposed
transaction in customer, supplier and other business
relationships;
- general market perception of the proposed transaction with
TDCC; and
- exposure to lawsuits and contingencies associated with TDCC's
chlorine products business.
All of our forward-looking statements should be considered in
light of these factors. In addition, other risks and uncertainties
not presently known to us or that we consider immaterial could
affect the accuracy of our forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed combination of Olin with the
chlorine products business of TDCC, Blue Cube Spinco Inc.
("Spinco") has filed a registration statement on Form S-4 and Form
S-1 containing a prospectus and Olin has filed a preliminary proxy
statement on Schedule 14A and a registration statement on Form S-4
containing a prospectus with the U.S. Securities and Exchange
Commission (the "SEC"). Both Olin and Spinco expect to file
amendments to these filings before they become effective.
INVESTORS AND SECURITYHOLDERS ARE ADVISED TO READ THE REGISTRATION
STATEMENTS/PROSPECTUSES AND PROXY STATEMENT AND ANY AMENDMENTS
THERETO WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT OLIN, TDCC, SPINCO AND THE PROPOSED
TRANSACTION. Investors and securityholders may obtain a free
copy of the registration statements/prospectuses and preliminary
proxy statement and any further amendments (when available) and
other documents filed by Olin, TDCC and Spinco with the SEC at the
SEC's website at http://www.sec.gov. Free copies of these
documents and any further amendments, once available, and each of
the companies' other filings with the SEC, may also be obtained
from the respective companies by directing a request to Olin at
Olin Corporation, ATTN: Investor Relations, 190 Carondelet Plaza,
Suite 1530, Clayton, Missouri
63105 or TDCC or Spinco at The Dow Chemical Company, 2030 Dow
Center, Midland, Michigan 48674,
ATTN: Investor Relations, as applicable.
Participants in Solicitation
This communication is not a solicitation of a proxy from any
investor or securityholder. However, Olin, TDCC, Spinco and
certain of their respective directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from shareholders of
Olin in respect of the proposed transaction under the rules of the
SEC. Information regarding Olin's directors and executive
officers is available in Olin's 2014 Annual Report on Form 10-K
filed with the SEC on February 25,
2015, and in its definitive proxy statement for its 2015
Annual Meeting of Shareholders filed March
4, 2015. Information regarding TDCC's directors and
executive officers is available in TDCC's Annual Report on Form
10-K filed with the SEC on February 13,
2015, and in its definitive proxy statement for its annual
meeting of shareholders filed March 27,
2015. These documents can be obtained free of charge
from the sources indicated above. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the registration statements,
prospectuses and proxy statement and other relevant materials filed
with the SEC in connection with the proposed transaction.
Non-Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
2015-17
Olin
Corporation
|
|
|
|
|
|
Consolidated
Statements of Income(a)
|
|
|
|
|
|
|
|
Three
Months
|
|
Six
Months
|
|
|
Ended June
30,
|
|
Ended June
30,
|
(In millions,
except per share amounts)
|
2015
|
2014
|
|
2015
|
2014
|
|
|
|
|
|
|
|
Sales
|
$ 535.4
|
$ 570.4
|
|
$1,053.4
|
$1,147.8
|
Operating
Expenses:
|
|
|
|
|
|
|
Cost of Goods
Sold
|
445.5
|
463.6
|
|
878.7
|
939.0
|
|
Selling and
Administration
|
39.9
|
41.7
|
|
86.9
|
85.2
|
|
Restructuring
Charges (b)
|
0.7
|
2.3
|
|
1.9
|
3.3
|
|
Acquisition-related Costs
(c)
|
10.5
|
0.2
|
|
20.9
|
0.4
|
Other Operating
Income (d)
|
42.4
|
0.9
|
|
42.2
|
0.8
|
|
Operating
Income
|
81.2
|
63.5
|
|
107.2
|
120.7
|
Earnings of
Non-consolidated Affiliates
|
0.4
|
0.5
|
|
0.8
|
0.9
|
Interest Expense
(e)
|
18.2
|
9.6
|
|
25.3
|
19.3
|
Interest
Income
|
0.3
|
0.4
|
|
0.6
|
0.7
|
|
Income from
Continuing Operations before Taxes
|
63.7
|
54.8
|
|
83.3
|
103.0
|
Income Tax
Provision
|
21.4
|
18.2
|
|
27.9
|
36.9
|
|
Income from
Continuing Operations, Net
|
42.3
|
36.6
|
|
55.4
|
66.1
|
|
Income from
Discontinued Operations, Net (f)
|
-
|
0.7
|
|
-
|
0.7
|
Net
Income
|
$ 42.3
|
$ 37.3
|
|
$ 55.4
|
$ 66.8
|
Net Income Per
Common Share:
|
|
|
|
|
|
|
Basic Income per
Common Share:
|
|
|
|
|
|
|
Income from
Continuing Operations, Net
|
$ 0.55
|
$ 0.46
|
|
$ 0.71
|
$ 0.84
|
|
Income from
Discontinued Operations, Net
|
-
|
0.01
|
|
-
|
0.01
|
|
Net
Income
|
$ 0.55
|
$ 0.47
|
|
$ 0.71
|
$ 0.85
|
|
Diluted Income per
Common Share:
|
|
|
|
|
|
|
Income from
Continuing Operations, Net
|
$ 0.54
|
$ 0.46
|
|
$ 0.70
|
$ 0.82
|
|
Income from
Discontinued Operations, Net
|
-
|
0.01
|
|
-
|
0.01
|
|
Net
Income
|
$ 0.54
|
$ 0.47
|
|
$ 0.70
|
$ 0.83
|
Dividends Per
Common Share
|
$ 0.20
|
$ 0.20
|
|
$ 0.40
|
$ 0.40
|
Average Common
Shares Outstanding - Basic
|
77.5
|
78.8
|
|
77.5
|
79.0
|
Average Common
Shares Outstanding - Diluted
|
78.7
|
80.0
|
|
78.6
|
80.2
|
|
|
|
|
|
|
|
(a)
|
Unaudited.
|
|
|
|
|
|
(b)
|
Restructuring
charges for the three and six months ended June 30, 2015 were
associated with permanently closing a portion of the Becancour,
Canada chlor alkali facility and the ongoing relocation of our
Winchester centerfire ammunition manufacturing operations from East
Alton, IL to Oxford, MS. Restructuring charges for the three
and six months ended June 30, 2014 were associated with exiting the
use of mercury cell technology in the chlor alkali manufacturing
process and the ongoing relocation of our Winchester centerfire
ammunition manufacturing operations from East Alton, IL to Oxford,
MS.
|
(c)
|
Acquisition-related costs for the three and six
months ended June 30, 2015 and 2014 were associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
(d)
|
Other operating
income for the three and six months ended June 30, 2015 included
$42.3 million of insurance recoveries for property damage and
business interruption related to the portion of the Becancour,
Canada chlor alkali facility that has been shut down since late
June 2014. Other operating income for the three and six
months ended June 30, 2014 included a gain of $1.0 million for the
resolution of a contract matter.
|
(e)
|
Interest expense
for the three and six months ended June 30, 2015 included
acquisition financing expenses of $11.6 million and $12.0 million,
respectively, for the bridge financing associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
(f)
|
Income from
discontinued operations, net for the three and six months ended
June 30, 2014 included a $0.7 million after tax gain for the
favorable resolution of certain indemnity obligations related to
our Metals business sold in 2007.
|
|
Olin
Corporation
|
|
|
|
|
|
|
|
Segment
Information(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Six
Months
|
|
|
Ended June
30,
|
|
Ended June
30,
|
(In
millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Sales:
|
|
|
|
|
|
|
|
|
Chlor Alkali
Products
|
$ 294.7
|
|
$ 338.5
|
|
$ 587.4
|
|
$ 666.8
|
|
Chemical
Distribution
|
70.3
|
|
75.6
|
|
140.1
|
|
144.8
|
|
Winchester
|
194.2
|
|
181.0
|
|
372.9
|
|
381.6
|
|
Intersegment Sales
Elimination (b)
|
(23.8)
|
|
(24.7)
|
|
(47.0)
|
|
(45.4)
|
|
Total
Sales
|
$ 535.4
|
|
$ 570.4
|
|
$ 1,053.4
|
|
$ 1,147.8
|
Income (Loss) from
Continuing Operations before Taxes:
|
|
|
|
|
|
|
|
|
Chlor Alkali
Products (c)
|
$ 25.0
|
|
$ 40.8
|
|
$ 48.1
|
|
$ 75.1
|
|
Chemical
Distribution
|
2.4
|
|
-
|
|
3.4
|
|
(0.8)
|
|
Winchester
|
33.9
|
|
33.1
|
|
63.7
|
|
71.4
|
|
Corporate/Other:
|
|
|
|
|
|
|
|
|
Pension Income
(d)
|
7.4
|
|
7.5
|
|
14.5
|
|
15.4
|
|
Environmental
Expense
|
(5.1)
|
|
(1.2)
|
|
(5.8)
|
|
(4.7)
|
|
Other Corporate and
Unallocated Costs
|
(13.2)
|
|
(14.6)
|
|
(35.3)
|
|
(31.9)
|
|
Restructuring Charges
(e)
|
(0.7)
|
|
(2.3)
|
|
(1.9)
|
|
(3.3)
|
|
Acquisition-related Costs
(f)
|
(10.5)
|
|
(0.2)
|
|
(20.9)
|
|
(0.4)
|
|
Other Operating
Income (g)
|
42.4
|
|
0.9
|
|
42.2
|
|
0.8
|
|
Interest Expense
(h)
|
(18.2)
|
|
(9.6)
|
|
(25.3)
|
|
(19.3)
|
|
Interest
Income
|
0.3
|
|
0.4
|
|
0.6
|
|
0.7
|
|
Income from
Continuing Operations before Taxes
|
$ 63.7
|
|
$ 54.8
|
|
$ 83.3
|
|
$ 103.0
|
|
|
|
|
|
|
|
|
|
(a)
|
Unaudited.
|
|
|
|
|
|
|
|
(b)
|
Intersegment sales
elimination represents the sale of caustic soda, bleach, potassium
hydroxide, and hydrochloric acid between Chemical Distribution and
Chlor Alkali Products, at prices that approximate
market.
|
(c)
|
Earnings of
non-consolidated affiliates are included in the Chlor Alkali
Products segment results consistent with management's monitoring of
the operating segments. The earnings from non-consolidated
affiliates were $0.4 million and $0.5 million for the three months
ended June 30, 2015 and 2014, respectively, and $0.8 million and
$0.9 million for the six months ended June 30, 2015 and 2014,
respectively.
|
(d)
|
The service cost
and the amortization of prior service cost components of pension
expense related to the employees of the operating segments are
allocated to the operating segments based on their respective
estimated census data. All other components of pension costs
are included in Corporate/Other and include items such as the
expected return on plan assets, interest cost and recognized
actuarial gains and losses.
|
(e)
|
Restructuring
charges for the three and six months ended June 30, 2015 were
associated with permanently closing a portion of the Becancour,
Canada chlor alkali facility and the ongoing relocation of our
Winchester centerfire ammunition manufacturing operations from East
Alton, IL to Oxford, MS. Restructuring charges for the three and
six months ended June 30, 2014 were associated with exiting the use
of mercury cell technology in the chlor alkali manufacturing
process and the ongoing relocation of our Winchester centerfire
ammunition manufacturing operations from East Alton, IL to Oxford,
MS.
|
(f)
|
Acquisition-related costs for the three and six
months ended June 30, 2015 and 2014 were associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
(g)
|
Other operating
income for the three and six months ended June 30, 2015 included
$42.3 million of insurance recoveries for property damage and
business interruption related to the portion of the Becancour,
Canada chlor alkali facility that has been shut down since late
June 2014. Other operating income for the three and six
months ended June 30, 2014 included a gain of $1.0 million for the
resolution of a contract matter.
|
(h)
|
Interest expense
for the three and six months ended June 30, 2015 included
acquisition financing expenses of $11.6 million and $12.0 million,
respectively, for the bridge financing associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
|
Olin
Corporation
|
|
|
|
|
|
Consolidated
Balance Sheets (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
(In millions,
except per share data)
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
Cash &
Cash Equivalents
|
$
232.4
|
|
$
256.8
|
|
$
245.6
|
Accounts
Receivable, Net
|
321.3
|
|
263.1
|
|
341.2
|
Income
Taxes Receivable
|
3.2
|
|
21.6
|
|
9.2
|
Inventories
|
221.6
|
|
210.1
|
|
220.9
|
Current
Deferred Income Taxes
|
49.7
|
|
54.2
|
|
48.3
|
Other
Current Assets
|
16.1
|
|
10.3
|
|
13.8
|
Total Current Assets
|
844.3
|
|
816.1
|
|
879.0
|
Property,
Plant and Equipment
|
|
|
|
|
|
(Less Accumulated
Depreciation of $1,385.6, $1,330.7 and $1,316.4)
|
917.6
|
|
931.0
|
|
951.3
|
Prepaid
Pension Costs
|
-
|
|
-
|
|
1.7
|
Restricted
Cash
|
-
|
|
-
|
|
2.6
|
Deferred
Income Taxes
|
13.1
|
|
12.5
|
|
8.9
|
Other
Assets
|
179.0
|
|
191.4
|
|
200.1
|
Goodwill
|
747.1
|
|
747.1
|
|
747.1
|
Total
Assets
|
$
2,701.1
|
|
$
2,698.1
|
|
$
2,790.7
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
|
|
Current
Installments of Long-Term Debt
|
$
143.9
|
|
$
16.4
|
|
$
12.6
|
Accounts
Payable
|
148.6
|
|
146.8
|
|
186.8
|
Income
Taxes Payable
|
11.1
|
|
0.2
|
|
0.4
|
Accrued
Liabilities
|
205.4
|
|
214.3
|
|
194.5
|
Total Current Liabilities
|
509.0
|
|
377.7
|
|
394.3
|
Long-Term
Debt
|
528.2
|
|
658.7
|
|
676.6
|
Accrued
Pension Liability
|
152.5
|
|
182.0
|
|
87.9
|
Deferred
Income Taxes
|
99.5
|
|
107.1
|
|
130.9
|
Other
Liabilities
|
359.4
|
|
359.3
|
|
377.2
|
Total
Liabilities
|
1,648.6
|
|
1,684.8
|
|
1,666.9
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Common Stock, Par
Value $1 Per Share, Authorized 120.0 Shares:
|
|
|
|
|
|
Issued and Outstanding 77.5 Shares (77.4 and 78.6 in
2014)
|
77.5
|
|
77.4
|
|
78.6
|
Additional Paid-In
Capital
|
794.2
|
|
788.3
|
|
818.5
|
Accumulated Other
Comprehensive Loss
|
(434.3)
|
|
(443.1)
|
|
(356.4)
|
Retained
Earnings
|
615.1
|
|
590.7
|
|
583.1
|
Total
Shareholders' Equity
|
1,052.5
|
|
1,013.3
|
|
1,123.8
|
Total Liabilities
and Shareholders' Equity
|
$
2,701.1
|
|
$
2,698.1
|
|
$
2,790.7
|
|
|
|
|
|
|
(a)
Unaudited.
|
|
|
|
|
|
Olin
Corporation
|
|
|
|
Consolidated
Statements of Cash Flows(a)
|
|
|
|
|
|
|
|
|
Six
Months
|
|
Ended June
30,
|
(In
millions)
|
2015
|
|
2014
|
Operating
Activities:
|
|
|
|
Net
Income
|
$
55.4
|
|
$
66.8
|
Earnings of
Non-consolidated Affiliates
|
(0.8)
|
|
(0.9)
|
Gains on
Disposition of Property, Plant and Equipment
|
(23.7)
|
|
(0.6)
|
Stock-Based
Compensation
|
3.7
|
|
2.4
|
Depreciation and
Amortization
|
69.1
|
|
69.4
|
Deferred Income
Taxes
|
(10.0)
|
|
10.5
|
Qualified Pension
Plan Contributions
|
(0.3)
|
|
(0.4)
|
Qualified Pension
Plan Income
|
(14.0)
|
|
(14.3)
|
Changes
in:
|
|
|
|
Receivables
|
(58.2)
|
|
(61.1)
|
Income Taxes
Receivable/Payable
|
29.3
|
|
(8.6)
|
Inventories
|
(11.5)
|
|
(34.4)
|
Other Current
Assets
|
(5.8)
|
|
3.3
|
Accounts
Payable and Accrued Liabilities
|
(5.7)
|
|
8.2
|
Other
Assets
|
18.8
|
|
2.0
|
Other
Noncurrent Liabilities
|
1.7
|
|
(5.1)
|
Other Operating
Activities
|
0.1
|
|
0.2
|
Net Operating
Activities
|
48.1
|
|
37.4
|
Investing
Activities:
|
|
|
|
Capital
Expenditures
|
(51.1)
|
|
(32.5)
|
Proceeds from
Disposition of Property, Plant and Equipment
|
24.7
|
|
1.8
|
Proceeds from
Disposition of Affiliated Companies
|
4.4
|
|
-
|
Restricted Cash
Activity
|
-
|
|
1.6
|
Other Investing
Activities
|
(1.1)
|
|
1.0
|
Net Investing
Activities
|
(23.1)
|
|
(28.1)
|
Financing
Activities:
|
|
|
|
Long-Term Debt
Repayments
|
(2.1)
|
|
(0.2)
|
Earn Out Payment -
SunBelt
|
-
|
|
(14.8)
|
Common Stock
Repurchased and Retired
|
-
|
|
(29.7)
|
Stock Options
Exercised
|
2.1
|
|
5.4
|
Excess Tax
Benefits from Stock-Based Compensation
|
0.3
|
|
0.7
|
Dividends
Paid
|
(31.0)
|
|
(31.7)
|
Deferred Debt
Issuance Costs
|
(18.7)
|
|
(1.2)
|
Net Financing
Activities
|
(49.4)
|
|
(71.5)
|
Net Decrease in
Cash and Cash Equivalents
|
(24.4)
|
|
(62.2)
|
Cash and Cash
Equivalents, Beginning of Year
|
256.8
|
|
307.8
|
Cash and Cash
Equivalents, End of Period
|
$ 232.4
|
|
$ 245.6
|
|
|
|
|
(a)
Unaudited.
|
|
|
|
Olin
Corporation
|
Non-GAAP Financial
Measures (a)
|
|
Olin's definition
of Adjusted EBITDA (Earnings before interest, taxes, depreciation,
and amortization) is income from continuing operations, net plus an
add-back for depreciation and amortization, interest expense
(income), income tax expense, other expense (income) and
acquisition-related costs. Adjusted EBITDA is a non-GAAP
financial measure. Management believes that this
measure is meaningful to investors as a supplemental financial
measure to assess the financial performance of our assets without
regard to financing methods, capital structures, taxes, or
historical cost basis. The use of non-GAAP financial measures
is not intended to replace any measures of performance determined
in accordance with GAAP and Adjusted EBITDA presented may not be
comparable to similarly titled measures of other
companies.
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Six
Months
|
|
|
Ended June
30,
|
|
Ended June
30,
|
(In
millions)
|
2015
|
2014
|
|
2015
|
2014
|
|
|
|
|
|
|
|
Reconciliation of
Income from Continuing Operations, Net to Adjusted
EBITDA:
|
|
|
|
|
|
Income from
Continuing Operations, Net
|
$ 42.3
|
$ 36.6
|
|
$ 55.4
|
$ 66.1
|
|
Add
Back:
|
|
|
|
|
|
|
Interest Expense
(b)
|
18.2
|
9.6
|
|
25.3
|
19.3
|
|
Interest
Income
|
(0.3)
|
(0.4)
|
|
(0.6)
|
(0.7)
|
|
Income Tax
Expense
|
21.4
|
18.2
|
|
27.9
|
36.9
|
|
Depreciation and
Amortization
|
34.7
|
35.2
|
|
69.1
|
69.4
|
EBITDA
|
116.3
|
99.2
|
|
177.1
|
191.0
|
|
Add
Back:
|
|
|
|
|
|
|
Acquisition-related Costs (c)
|
10.5
|
0.2
|
|
20.9
|
0.4
|
Adjusted
EBITDA
|
$ 126.8
|
$ 99.4
|
|
$ 198.0
|
$ 191.4
|
|
|
|
|
|
|
|
(a)
|
Unaudited.
|
|
|
|
|
|
(b)
|
Interest expense
for the three and six months ended June 30, 2015 included
acquisition financing expenses of $11.6 million and $12.0 million,
respectively, for the bridge financing associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
(c)
|
Acquisition-related costs for the three and six
months ended June 30, 2015 and 2014 were associated with Olin's
pending acquisition of a significant portion of The Dow Chemical
Company's chlor alkali and downstream derivatives
businesses.
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/olin-announces-second-quarter-2015-earnings-300121659.html
SOURCE Olin Corporation