Exhibit 99.1
Investor Contact: Richard E. Koch
(203) 750-3254
Press Contact: Thomas J. Fitzgerald
(203) 750-3831
[LETTERHEAD OF OLIN NEWS]
Olin Corporation, P.O. Box 4500, 501 Merritt 7, Norwalk, CT 06856-4500
FOR IMMEDIATE RELEASE
Olin Reaffirms Second Quarter Earnings Forecast;
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Revises Expectations for the Year; Announces Restructuring Charge
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NORWALK, CT, June 26, 2001 - Olin Corporation (NYSE: OLN) today announced
that it remains comfortable with its second quarter earnings projection of
approximately $.15 per share, but said it is revising its earnings forecast
downward for the full year because the company does not now expect economic
conditions to improve this year. The company also announced it intends to record
a charge to earnings in the third quarter to reduce employment and to optimize
manufacturing operations.
Olin said that its Brass business continues to be adversely impacted by
depressed economic conditions, primarily in its automotive, coinage, electronics
and telecommunications markets. Additionally, the company noted that projected
earnings increases in its Chlor Alkali business this year have been diminished
somewhat by continued slow customer demand.
Donald W. Griffin, Chairman, President and Chief Executive Officer, said,
"We have recently completed a comprehensive review of our business outlook for
this year. Based on this current information, we continue to believe our
earnings per share for the second quarter will be in the $.15 range, as
previously forecast. In April, we based our full year earnings estimate of $1.00
per share on the assumption that an economic recovery would occur in the second
half of the year. Current data does not support that assumption and we now
believe it is more likely
the economy will recover next year rather than this year. As a result, we now
project that Olin's earnings for the year will more likely be in the $.50 per
share range, before the charge to earnings."
(more)
In light of current and forecasted business conditions, the company is
taking immediate actions to better align its cost structure with its revenue
base. These actions are expected to result in a pretax restructuring charge in
the $40 to $50 million range, or $.55 to $.69 per share, in the third quarter
with pretax annual savings expected to be in the $20 to $25 million range, or
$.28 to $.34 per share. The actual cash outflows related to this charge will be
paid over future years and will be more than offset by the cash inflows from the
savings.
The company's plans include the following:
. Achieve a permanent workforce reduction by offering an early retirement
incentive plan to certain salaried employees at the company's Brass and
Winchester operations. Total employment at the company is expected to decrease
by approximately 14% as a result of these actions and the hourly layoffs already
implemented.
. Optimize capacity at its Brass operations consistent with expected business
conditions. Specific plans will be finalized in the third quarter.
The company also announced that it is reducing its previously forecasted
capital spending of $90 million this year by approximately 20% to better match
capacity with expected demand. The company continues to forecast that its
depreciation will be approximately $85 million in 2001.
The company noted that it has already taken significant actions to reduce
costs particularly at its Brass operations this year. These include layoffs of
hourly workers primarily at East Alton and Indianapolis. Earlier in June, the
company also notified workers at its Indianapolis plant that additional manpower
reductions could occur if business conditions did not improve in the third
quarter.
The company said that it was reviewing costs in all parts of the company to
provide the most cost efficient operation possible during this period of
economic difficulty.
(more)
Headquartered in Norwalk, CT, Olin Corporation had 2000 sales of $1.5
billion and employed 6,700 people. The company is a leading North American
producer of copper and copper-based alloys, sporting ammunition, and chlorine
and caustic soda.
CONFERENCE CALL INFORMATION
Olin will hold a conference call with securities analysts at 10:30 a.m.
Eastern time, June 26. Anyone desiring to listen to the call may do so via the
Internet by following the instructions posted under the Conference Call icon on
Olin's internet website, www.olin.com. Listeners should log on to the website at
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least 15 minutes before the call. The call also will be audio archived on the
Olin website for future replay. A text of the prepared remarks from the
conference call will be available on the website after the conclusion of the
call. Archived versions of the call will be available until July 15, 2001.
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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
Olin and its respective divisions operate. Words such as "anticipates,"
"expects," "believes," "should," "plans," "will," "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. Olin 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 include but are not limited to: general economic and business and
market conditions, competitive pricing pressures; changes in Chlor Alkali's ECU
prices from expected levels; Chlor Alkali operating rates below anticipated
levels; higher-than-expected raw material costs; higher-than-expected
transportation and/or logistics costs; a protracted work stoppage in connection
with collective bargaining negotiations with labor unions; the supply/demand
balance for Olin's products, including the impact of excess industry capacity;
efficacy of new technologies; changes in U.S. laws and regulations; failure to
achieve targeted cost reduction programs; 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.
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