Exhibit 99
Investor Contact: Richard Koch
203-750-3254
Press Contact: William McDaniel
203-750-2619
FOR IMMEDIATE RELEASE
OLIN CORPORATION TO SPIN OFF SPECIALTY CHEMICAL OPERATIONS;
COMPANY REPORTS SECOND QUARTER RESULTS, DECLARES DIVIDEND
NORWALK, CT, July 30, 1998 - Olin Corporation (NYSE: OLN) today announced
that the board of directors has approved the spin off of Olin's specialty
chemicals businesses to shareholders as a separate, publicly held company.
The spin off would combine Olin's microelectronic materials, pool
chemicals, biocides, sulfuric acid, hydrazine and performance urethanes
businesses in the new Specialty Chemicals Company, which will be named later.
Olin would retain its Chlor Alkali, Brass and Winchester businesses. The spin
off transaction is expected to be completed during the first quarter of 1999.
Separately, Olin reported second quarter earnings of $38.6 million, or 80
cents per share, compared to $38.6 million, or 75 cents per share, a year
earlier. Earnings per share increased because of the lower number of shares
outstanding as a result of the Company's share repurchase program. Because of
lower metal values, sales declined to $613 million from $632 million a year
earlier. Olin said that 1998 earnings per share are expected to be in the $3.00
range as a result of a greater-than-anticipated effect of the Asian financial
turmoil on the semiconductor and chemical industry.
Olin's board of directors also declared a regular, quarterly dividend of 30
cents per common share, the same amount as paid in the prior quarter, to be paid
on September 10, 1998 to shareholders of record on August 10, 1998. This is
Olin's 287th consecutive quarterly dividend.
SPIN OFF OF SPECIALTY CHEMICALS
Donald W. Griffin will remain chairman, president and CEO of Olin
Corporation. Michael E. Campbell, currently executive vice president of Olin
Corporation in charge of Olin's operations, will lead the new Specialty
Chemicals Company as chief executive officer. The businesses, which will
comprise the Specialty Chemicals Company, had approximately $950 million in
sales in 1997, representing approximately 40% of Olin's total 1997 sales. Olin's
remaining businesses had approximately $1.5 billion in sales in 1997, or 60% of
total sales.
"Olin today consists of two distinct businesses: basic materials and
specialty chemicals," said Mr. Griffin. "Each group differs from the other in
its growth potential, its customer priorities, its profit drivers, its
marketplace conditions, its cyclicality, its capital needs and its access to
capital. This spin off creates two companies, each with sharper management
focus and increased accountability to deliver improved performance, and the
financial flexibility to independently pursue their own investment
opportunities. Each will be better able to compete in tomorrow's markets, and
to deliver value for its shareholders and customers.
"Both companies will begin their independent operations with the key
components for continued success already in place: financial resources,
experienced management and market-leading products," Mr. Griffin continued. "By
realigning our businesses into more complementary and more focused structures,
we expect to significantly enhance the performance and profitability of each,
and by so doing unlock the significant value that resides in each of them.
Investors will be able to focus on the specific growth and value characteristics
best suited to their investment philosophies."
OLIN CORPORATION
Of the businesses to remain a part of Olin Corporation after the spin off,
Chlor Alkali Products is the leading producer of chlorine and caustic soda in
the eastern United States, and one of the largest producers of sodium
hydrosulfite in North America; Olin Brass produces copper and copper alloys for
electronic, automotive, construction, and decorative uses, and clad metals for
use in coins; Winchester produces ammunition and related products for hunters,
recreational shooters and law enforcement agencies.
"Success for Olin will depend on its ability to focus its energy,
creativity and resources on becoming a premier basic materials company, offering
its customers outstanding customer value with the lowest cost, highest quality
products in their respective markets," said Mr. Griffin. "Our focus will be on
manufacturing processes, efficiencies and cost control. Olin will remain alert
to synergistic acquisitions of compelling value."
SPECIALTY CHEMICALS COMPANY
The specialty chemicals businesses to be spun off produce, among other
products, microelectronic materials and related products and services for the
semiconductor industry; chemicals for pools and water sanitization systems;
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biocides for anti-dandruff shampoos and marine and architectural coatings;
sulfuric acid for the oil and petrochemical industries; hydrazine for chemical
blowing agents and satellite positioning thrusters; and performance urethanes
and organics for the coatings, adhesives, sealants and elastomers markets, and
other downstream chemical applications.
"As a separate company, the Specialty Chemicals Company will be better able
to expand its customer base by offering value-added products and services," said
Mr. Campbell. "Our success will depend on our ability to deliver innovative
products and customized services to meet changing customer needs. Additionally,
the market will be better able to evaluate the growth potential and performance
of this new company."
The spin-off is expected to be in the form of a dividend distribution of
the shares of the new company. The board of directors will determine the
distribution ratio and record and distribution dates for the spin-off at a later
date. The transaction is anticipated to qualify as a tax-free distribution to
Olin and its shareholders. The company will apply to the Internal Revenue
Service for a ruling to that effect.
The transaction is subject to numerous conditions including, among other
things, the receipt of the IRS ruling, certain government and third party
approvals, and review by the Securities and Exchange Commission of necessary SEC
filings.
SECOND QUARTER RESULTS
"Our overall second quarter earnings were in-line with our expectations,
with higher than expected profits from pool chemicals and performance urethanes
offsetting lower than expected earnings from our microelectronic materials and
chlor alkali businesses," said Mr. Griffin.
"Regarding our 1998 earnings estimate, during the last month we have
received and analyzed new market data and forecasts affecting customers in both
our chemicals and metals businesses. The Asian turmoil will likely be reflected
in the performance of our microelectronic materials, chlor alkali, biocides,
performance urethanes and Brass businesses to a greater degree than we
previously expected."
The following commentary compares segment operating income for the second
quarter of 1998 and 1997:
CHEMICALS
Chemicals segment operating income decreased 6% to $43.2 million in 1998,
from $46.0 million in 1997. Microelectronic materials profits decreased from
last year due to lower industry demand. Chlor Alkali operating income
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trailed the same period last year due to lower volumes (in part due to reduced
downstream Asian demand), higher electricity costs due to extremely hot weather
in the South, partially offset by higher ECU prices. Biocides profits were
reduced by lower demand, particularly from the Asian market. Pool chemicals
profits increased as higher domestic, branded volumes, caused in part by
favorable weather, offset lower pricing. Performance urethanes profits increased
due to the restructuring of the business in 1997 and lower raw material costs.
METALS AND AMMUNITION
Metals and ammunition operating income increased 30% to $16.4 million, from
$12.6 million. Metals profits declined slightly as an inventory correction at
some automotive accounts and lower electronics and connector demand, in part due
to Asia, more than offset higher foreign coinage and cupping sales.
Winchester's operating results were ahead of last year as a result of higher
sales, improved plant operating performance and lower costs.
SHARE REPURCHASE PROGRAM
During the second quarter of 1998 the company repurchased 445,000 shares of
its common stock, bringing the cumulative total since January 1997 to 5,105,600
shares.
Headquartered in Norwalk, CT, Olin is one of the world's leading producers
of chemicals, metals, microelectronic materials and sporting ammunition.
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Except for historical information contained herein, the information set forth in
this communication contains forward-looking statements that are based on
management's beliefs, certain assumptions made by management and current
expectations, estimates and projections about the markets and economy in which
the company and its various divisions and profit centers operate. Words such as
"expects," "believes," "should," "plans," "will," "forecasts," "estimates," and
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions ("Future
Factors") which are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expected or forecasted in such
forward-looking statements. The company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of future events,
new information or otherwise. Future factors which could cause actual results
to differ materially from those discussed in these sections and notes include
but are not limited to: lack of moderate growth in the U.S. economy or even a
slight recession in 1998; worsening economic conditions in Asia; competitive
pricing pressures; the company's ability to maintain chemical price increases;
no increase in Chlor Alkali's ECU prices; Chlor Alkali operating rates below
current levels; higher-than-expected raw material costs for certain chemical
product lines; increased foreign competition in the calcium hypochlorite
markets; lack of stability in the semiconductor industry; the negative effects
from the General Motor's strike; a downturn in many of the markets the company
serves such as electronics, automotive, ammunition and housing; the
supply/demand balance for the company's products, including the impact of excess
industry capacity; failure to achieve targeted cost reduction programs;
unsuccessful entry into new markets for electronic chemicals; capital
expenditures, such as cost overruns, in excess of those scheduled; environmental
costs in excess of those projected; and the occurrence of unexpected
manufacturing interruptions/outages.
7X98 - 30
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