Exhibit 99.1
Olin Third Quarter Earnings of $0.10 Per Share In Line With
Expectations; Declares $.20 Per Share Quarterly Dividend
NORWALK, Conn.--(BUSINESS WIRE)--Oct. 30, 2003--Olin Corporation
(NYSE: OLN) today announced net income in the third quarter of 2003 of
$6.0 million or $0.10 per diluted share, compared with a net loss of
$1.0 million or $0.02 per diluted share in the third quarter of 2002.
Sales for the third quarter of 2003 were $414.5 million, which
included sales of $54.5 million for Chase Industries, which was
acquired in September 2002. Excluding Chase, sales for the third
quarter of 2003 were $360.0 million compared with $340.3 million last
year.
Joseph D. Rupp, President and Chief Executive Officer, said, "Our
third quarter results were in line with our previous expectations of
earnings being in the $0.10 per share range. Our third quarter
operating results were more favorable than they were a year ago
primarily because of the turnaround in the chlor alkali market, which
resulted in significantly higher ECU selling prices. Winchester's
sales in the third quarter exceeded 2002 as a result of higher
domestic military demand. Earnings in our Metals segment were below
last year primarily because of lower industry-wide demand for brass
products."
In the fourth quarter of 2003, Olin expects to report a loss in
the $0.05 per diluted share range compared with a reported loss of
$0.21 per diluted share in the fourth quarter of 2002. The reported
2002 loss of $0.21 per diluted share includes the $0.18 per share
charge recorded in connection with the surrender of life insurance
policies purchased under the Company Owned Life Insurance (COLI)
program. Fourth quarter 2003 results are expected to be below the
third quarter of 2003 primarily because of the normal seasonal decline
in Winchester, lower Chlor Alkali sales volumes and prices, and
continuing soft demand in the Metals segment. Both Chlor Alkali and
Metals are also affected by seasonal factors.
The following commentary compares segment operating results for
the third quarter of 2003 to the third quarter of 2002:
CHLOR ALKALI PRODUCTS
Chlor Alkali Products' sales for the third quarter of 2003 were
$100.9 million, an increase of 21% from the third quarter of 2002.
Chlor Alkali posted operating income of $13.2 million, compared with
an operating loss of $8.1 million in the third quarter of 2002. The
improved operating results were primarily due to higher ECU selling
prices. Sales volumes were somewhat lower.
METALS
Sales for the third quarter of 2003 were $216.3 million and
include sales of $54.5 million from Chase Industries, which Olin
acquired in September 2002. Excluding Chase, third quarter 2003 sales
were $161.8 million. Sales in the third quarter of 2002 were $164.0
million. Shipment volumes (excluding Chase) were down 10% from 2002
mainly due to softer demand in the automotive and coinage segments,
with other market segments being flat to slightly weaker, except for
the ammunition segment, which was stronger. Despite the 10% volume
decline, reported sales (excluding Chase) were only off 1% because of
higher copper prices and a product mix containing a higher metal
component.
The Metals segment operating loss of $5.1 million includes $1.6
million of Chase profits in 2003. In the third quarter of 2003, the
Metals segment (excluding Chase) recorded an operating loss of $6.7
million in comparison to a profit of $4.8 million in 2002. The Metals
segment (excluding Chase) had lower operating results in the third
quarter of 2003 primarily because of softer volumes and margin
pressures and higher wage and fringe benefit costs, in particular
pension and medical benefits. In addition, higher natural gas costs
also negatively affected operating results. Chase sales and profits
for the third quarter of 2003 were lower than the comparable period
last year as a result of softer demand and lower selling prices.
WINCHESTER
Sales for the third quarter of 2003 were $97.3 million compared
with $93.0 million in the third quarter of 2002. The increase in sales
was primarily driven by higher domestic military demand. Operating
income in the third quarter of 2003 was $7.2 million, compared with
$7.8 million in 2002 primarily because the favorable effect of higher
sales was more than offset by higher wages, fringe benefit and other
costs.
DIVIDEND
Olin Corporation's Board of Directors declared a quarterly
dividend of 20 cents on each share of Olin common stock. The dividend
is payable on December 10, 2003, to shareholders of record at the
close of business on November 10, 2003. This is the 308th consecutive
dividend to be paid by the company.
CONFERENCE CALL INFORMATION
Olin will hold a conference call with securities analysts at 10:00
a.m., Eastern time, October 31, 2003. 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 least 15
minutes before the call. A copy of this press release, together with
other financial and statistical information about the period ended
September 30, 2003, is available on the Olin website in the Investor
section under Recent Press Releases and Speeches. The text of the
prepared remarks from the conference call will be available after the
conclusion of the call in the same website location. The call also
will be audio archived on the Olin website for future replay. Archived
versions of the call will be available until November 15.
COMPANY DESCRIPTION
Olin Corporation is a manufacturer concentrated in three business
segments: Metals, Chlor Alkali Products and Winchester. Metals
products include copper and copper alloy sheet, strip, foil, rod,
welded tube, fabricated parts, metal packages; and stainless steel and
aluminum strip. Chlor Alkali Products manufactures chlorine and
caustic soda, sodium hydrosulfite, hydrochloric acid and bleach
products. Winchester products include sporting ammunition, canister
powder, reloading components, small caliber military ammunition and
industrial cartridges.
FORWARD-LOOKING STATEMENTS
This communication includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. 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. 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," "will," "estimate," 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.
The risks, uncertainties and assumptions involved in our
forward-looking statements include, but are not limited to, the
following, many of which are discussed in more detail in our filings
with the SEC, including our Annual Report on Form 10-K for the year
ended December 31, 2002:
-- 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 automotive,
electronics, coinage, telecommunications, ammunition, housing,
vinyls and pulp and paper;
-- extraordinary events, such as additional terrorist attacks or
war with one or more countries;
-- continued or additional 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;
-- 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;
-- an increase in our indebtedness or higher-than-expected
interest rates, affecting our ability to generate sufficient
cash flow for debt service;
-- unforeseen effects of competition, including the migration by
United States customers to low-cost foreign locations;
-- costs and other expenditures in excess of those projected for
environmental investigation and remediation or other legal
proceedings;
-- unexpected litigation outcomes;
-- higher-than-expected raw material and utility or
transportation and/or logistics costs;
-- the occurrence of unexpected manufacturing interruptions and
outages, including those occurring as a result of production
hazards;
-- unexpected additional taxes and related interest as the result
of pending income tax audits; and
-- the effects of a continued depressed stock market on the asset
values and declining long-term interest rates on the
liabilities in our pension plan.
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.
Olin Corporation
Consolidated Statements of Income (a)
- ----------------------------------------------------------------------
Three Months Nine Months
Ended Ended
(In millions, except per share September 30, September 30,
amounts) 2003 (b) 2002 2003 (b) 2002
- ----------------------------------------------------------------------
Sales $414.5 $340.3 $1,201.1 $949.6
Operating Expenses:
Cost of Goods Sold (c) 365.8 307.9 1,060.1 862.7
Selling and Administration 34.0 26.2 95.9 83.5
Research and Development 1.2 1.2 3.5 3.5
Restructuring Charge (d) - - 29.0 -
Earnings (Loss) of Non-consolidated
Affiliates 1.8 (0.5) 6.4 (8.3)
- ----------------------------------------------------------------------
Operating Income (Loss) 15.3 4.5 19.0 (8.4)
Interest Expense 5.1 5.8 15.4 20.4
Interest Income 0.3 0.3 0.8 2.1
Other Income 0.4 0.5 2.2 2.1
- ----------------------------------------------------------------------
Income (Loss) before Taxes and
Cumulative Effect of
Accounting Change 10.9 (0.5) 6.6 (24.6)
Income Tax Provision (Benefit) 4.9 0.5 5.7 (5.3)
- ----------------------------------------------------------------------
Income (Loss) before Cumulative
Effect of Accounting Change 6.0 (1.0) 0.9 (19.3)
Cumulative Effect of Accounting
Change, Net (e) - - (25.4) -
- ----------------------------------------------------------------------
Net Income (Loss) $6.0 $(1.0) $(24.5) $(19.3)
- ----------------------------------------------------------------------
Basic and Diluted Net Income (Loss) Per
Common Share:
Income (Loss) before Accounting
Change $0.10 $(0.02) $0.02 $(0.41)
Accounting Change, Net - - (0.44) -
- ----------------------------------------------------------------------
Net Income (Loss) $0.10 $(0.02) $(0.42) $(0.41)
- ----------------------------------------------------------------------
Dividends Per Common Share $0.20 $0.20 $0.60 $0.60
- ----------------------------------------------------------------------
Average Common Shares Outstanding -
Diluted 58.7 49.7 58.1 47.0
- ----------------------------------------------------------------------
(a) Unaudited
(b) Operating results for the third quarter and first nine months of
2003 included the results of Chase Industries which was acquired
on September 27, 2002. Sales and operating income of Chase
Industries included in the third quarter and the first nine
months of 2003 were $54.5 and $1.6 and $165.6 and $6.4,
respectively.
(c) Cost of Goods Sold for the 2002 year-to-date period included a
pretax gain of $4.5 on an insurance settlement.
(d) Reflects the restructuring charge for the shutdown of our
Indianapolis Brass mill and certain other actions.
(e) Reflects the cumulative charge for the adoption of SFAS 143,
"Accounting for Asset Retirement Obligations", which we adopted
on January 1, 2003.
Olin Corporation
Consolidated Balance Sheets (a)
(In millions, except per share data)
- ------------------------------------------------------------ ---------
September 30, 2003 2002
- ------------------------------------------------------------ ---------
Assets:
Cash & Cash Equivalents $148.0 $93.9
Short-Term Investments - 25.0
Accounts Receivable, Net 219.0 210.5
Inventories, Net 235.0 255.5
Income Taxes Receivable 3.1 9.5
Other Current Assets 51.2 66.8
- ------------------------------------------------------------ ---------
Total Current Assets 656.3 661.2
Property, Plant and Equipment
(Less Accumulated Depreciation
of $1,296.6 and $1,290.2) 503.4 550.5
Prepaid Pension Costs 106.4 67.1
Other Assets 64.7 16.8
Goodwill 79.5 83.0
- ------------------------------------------------------------ ---------
Total Assets $1,410.3 $1,378.6
- ------------------------------------------------------------ ---------
Liabilities and Shareholders' Equity:
Current Debt $27.2 $1.5
Accounts Payable 96.5 107.8
Accrued Liabilities 160.4 165.0
- ------------------------------------------------------------ ---------
Total Current Liabilities 284.1 274.3
Long-Term Debt 300.6 328.4
Deferred Income Taxes - 91.6
Accrued Pension Liability 443.5 47.7
Other Liabilities 189.0 166.8
- ------------------------------------------------------------ ---------
Total Liabilities 1,217.2 908.8
- ------------------------------------------------------------ ---------
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share, Authorized
120.0 Shares:
Issued and Outstanding 58.6 Shares (57.2
in 2002) 58.6 57.2
Additional Paid-in Capital 457.4 435.9
Accumulated Other Comprehensive Loss (234.2) (17.4)
Accumulated Deficit (88.7) (5.9)
- ------------------------------------------------------------ ---------
Total Shareholders' Equity 193.1 469.8
- ------------------------------------------------------------ ---------
Total Liabilities and Shareholders' Equity $1,410.3 $1,378.6
- ------------------------------------------------------------ ---------
(a) Unaudited
Olin Corporation
Consolidated Statements of Cash Flows (a)
(In millions)
- -------------------------------------------------------------- -------
Nine Months Ended September 30, 2003 2002
- -------------------------------------------------------------- -------
Operating Activities:
Net Loss $(24.5) $(19.3)
(Earnings) Loss of Non-consolidated Affiliates (6.4) 8.3
Depreciation and Amortization 62.7 63.8
Deferred Income Taxes (4.6) 1.9
Non-Cash Portion of Restructuring Charge 22.8 -
Qualified Pension Plan Expense (Income) - (5.9)
Common Stock Issued Under Employee Benefit Plans 2.2 4.1
Changes in:
Receivables (50.9) (44.3)
Inventories 17.0 (17.7)
Other Current Assets (0.7) (17.9)
Accounts Payable and Accrued Liabilities (0.1) 13.3
Income Taxes Payable 7.7 (3.8)
Other Assets 4.2 4.6
Noncurrent Liabilities 25.6 (14.6)
Other Operating Activities 1.6 (0.5)
- -------------------------------------------------------------- -------
Net Operating Activities 56.6 (28.0)
- -------------------------------------------------------------- -------
Investing Activities:
Capital Expenditures (35.0) (15.2)
Proceeds From Sale of Short-Term Investments 25.0 11.0
Cash Acquired through Business Acquisition, Net - 13.1
Investments and Advances - Affiliated Companies at
Equity 7.0 (0.5)
Disposition of Property, Plant and Equipment 3.9 13.8
Other Investing Activities 2.7 0.2
- -------------------------------------------------------------- -------
Net Investing Activities 3.6 22.4
- -------------------------------------------------------------- -------
Financing Activities:
Long-Term Debt:
Borrowings - 34.7
Repayments (1.4) (135.5)
Issuance of Common Stock 10.8 63.3
Purchases of Olin Common Stock - (2.5)
Stock Options Exercised 3.1 2.7
Dividends Paid (34.8) (27.5)
Other Financing Activities (0.4) (0.5)
- -------------------------------------------------------------- -------
Net Financing Activities (22.7) (65.3)
- -------------------------------------------------------------- -------
Net Increase (Decrease) in Cash and Cash Equivalents 37.5 (70.9)
Cash and Cash Equivalents, Beginning of Year 110.5 164.8
- -------------------------------------------------------------- -------
Cash and Cash Equivalents, End of Period $148.0 $93.9
- -------------------------------------------------------------- -------
(a) Unaudited
Olin Corporation
Segment Information (a)
(In millions)
- ----------------------------------------------------------------------
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
2003 2002 2003 2002
- ----------------------------------------------------------------------
Sales:
Chlor Alkali Products $100.9 $83.3 $305.6 $230.9
Metals (b) 216.3 164.0 656.8 498.9
Winchester 97.3 93.0 238.7 219.8
- ----------------------------------------------------------------------
Total Sales $414.5 $340.3 $1,201.1 $949.6
- ----------------------------------------------------------------------
Segment Operating Income(Loss)
before Restructuring Charge (c):
Chlor Alkali Products $13.2 $(8.1) $36.4 $(38.4)
Metals (b) (5.1) 4.8 (3.7) 16.0
Winchester 7.2 7.8 15.3 14.0
- ----------------------------------------------------------------------
Total Segment Operating
Income(Loss) before
Restructuring Charge $15.3 $4.5 $48.0 $(8.4)
- ----------------------------------------------------------------------
(a) Unaudited
(b) Operating results for the third quarter and first nine months
of 2003 included the results of Chase Industries which was
acquired on September 27, 2002. Sales and operating income of
Chase Industries included in the third quarter and the first
nine months of 2003 were $54.5 and $1.6 and $165.6 and $6.4,
respectively.
(c) Segment operating income excludes the 2003 restructuring
charge of $29.0 pretax.
Olin Corporation
Profit Summary (a)
(In millions, except EPS)
- -------------------------------
The following table summarizes the significant unusual items
impacting the reported operating results. Management monitors earnings
per share excluding unusual items such as restructuring charges,
unusual charges/credits and accounting changes. Management believes
that these items are unique and are not part of the ongoing business
results. Management believes that providing this information to
investors will better enable them to understand our historical and
future trends by excluding these items from our results. The table
below reconciles operating income/(loss), pretax income/(loss), net
income/(loss) and diluted earnings per share on a generally accepted
accounting principles basis, as reflected in our Consolidated
Statements of Income, to diluted earnings per share as adjusted for
each of the unusual items.
On September 2002 we completed our acquisition of Chase
Industries. The acquisition was accounted for using the purchase
method of accounting. Accordingly, the operating results of Chase have
been included in the accompanying financial statements since the date
of acquisition. We believe that a meaningful analysis of our financial
performance requires that we exclude the Chase operating results when
comparing results in 2003 to results in 2002 that do not include
Chase. We have included operating results with and without Chase in
the text of the press release in order to assist investors in
analyzing comparable results for those periods.
-------------------------------------------------
Third Quarter - 2003
-------------------------------------------------
Operating Pretax Net Diluted
Income/(Loss) Income/(Loss) Income/(Loss) EPS
-------------------------------------------------
As Reported $15.3 $10.9 $6.0 $0.10
=================================================
Average Diluted Shares 58.7
=======
--------------------------------------------------
Third Quarter - 2002
--------------------------------------------------
Operating Pretax Net Diluted
Income/(Loss) Income (Loss) Income/(Loss) EPS
--------------------------------------------------
As Reported $4.5 ($0.5) ($1.0) ($0.02)
==================================================
Average Diluted Shares 49.7
=======
--------------------------------------------------
Nine Months - 2003
--------------------------------------------------
Operating Pretax Net Diluted
Income/(Loss) Income/(Loss) Income/(Loss) EPS
--------------------------------------------------
As Reported $19.0 $6.6 ($24.5) ($0.42)
Accounting Change (b) - - 25.4 0.44
Restructuring
Charge (c) 29.0 29.0 18.7 0.32
--------------------------------------------------
As Adjusted $48.0 $35.6 $19.6 $0.34
==================================================
Average Diluted Shares 58.1
=======
---------------------------------------------------
Nine Months - 2002
---------------------------------------------------
Operating Pretax Net Diluted
Income/(Loss) Income (Loss) Income/(Loss) EPS
---------------------------------------------------
As Reported ($8.4) ($24.6) ($19.3) ($0.41)
===================================================
Average Diluted Shares 47.0
=======
(a) Unaudited
(b) Reflects the cumulative charge for the adoption of SFAS 143,
"Accounting for Asset Retirement Obligations", which we
adopted on January 1, 2003.
(c) Reflects the restructuring charge for the shutdown of our
Indianapolis Brass mill and certain other actions.
CONTACT: Olin Corporation
Investor Contact:
Richard E. Koch, 203-750-3254
or
Press Contact:
Thomas J. Fitzgerald, 203-750-3831