Olin Corporation
07/29/2025 | Press release | Distributed by Public on 07/29/2025 13:54
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS BACKGROUND
Olin Corporation (Olin, the Company, we or our) is a Virginia corporation, incorporated in 1892, having its principal executive offices in Clayton, MO. We are a leading vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. Our operations are concentrated in three business segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. All of our business segments are capital-intensive manufacturing businesses. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride (EDC) and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and formulated solutions products such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, industrial cartridges and clay targets.
EXECUTIVE SUMMARY
Overview
Net (loss) income for the three and six months ended June 30, 2025 was ($1.3) million, and $0.1 million, respectively, compared to $74.2 million and $122.8 million, for the prior year periods, respectively. The decrease of $75.5 million and $122.7 million, respectively, in net income from the prior year periods was primarily due to lower operating results across all of our business segments. Diluted net (loss) income per share was ($0.01) and $0.00 for the three and six months ended June 30, 2025, respectively, compared to $0.62 and $1.01 in the prior year periods, respectively.
Chlor Alkali Products and Vinyls reported segment income was $64.9 million and $143.2 million for the three and six months ended June 30, 2025, respectively. Chlor Alkali Products and Vinyls segment results were lower than the comparable prior year periods due to higher raw material and operating costs, including planned maintenance turnaround expenses, and lower pricing, primarily EDC, partially offset by higher volumes.
Epoxy reported a segment loss of $23.7 million and $52.1 million for the three and six months ended June 30, 2025, respectively. Epoxy segment results were lower than the comparable prior year periods primarily due to higher operating costs, including planned maintenance turnaround expenses, as product margins were comparable year over year. Global epoxy demand remains weak, and our U.S. and European Epoxy businesses remains significantly challenged by subsidized Asian competition. Our anti-dumping initiatives have provided limited benefits to date.
Winchester reported segment income of $25.0 million and $47.8 million for the three and six months ended June 30, 2025, respectively. Winchester segment results were lower than the comparable prior year periods due to decreased commercial ammunition sales volumes and pricing and higher raw material and operating costs, including commodity metal and propellant costs, partially offset by higher domestic and international military sales and military project revenue.
Liquidity and Share Repurchases
During the six months ended June 30, 2025, we repurchased and retired 1.2 million shares of common stock at a total value of $30.3 million. As of June 30, 2025, we had $1,968.9 million of remaining authorized common stock to be repurchased under our 2022 Repurchase Authorization and 2024 Repurchase Authorization (both defined below) programs.
On March 14, 2025, we issued $600.0 million aggregate principal amount of 6.625% senior notes due April 1, 2033 (2033 Notes), in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended.
On March 14, 2025, we entered into a new $1,850.0 million senior credit facility (2025 Senior Credit Facility), which increased the borrowing limit of our then-existing credit facility by $300.0 million and extended the maturity date from October 11, 2027 to March 14, 2030. Pursuant to the agreement, the aggregate principal amount under our term loan facility increased from $350.0 million to $650.0 million and the aggregate principal amount under our revolving credit facility remained at $1,200.0 million. The term loan was fully drawn on the closing date.
During the six months ended June 30, 2025, we had net borrowings of $159.8 million. Proceeds from the 2033 Notes, together with borrowings under the 2025 Senior Credit Facility, were used to redeem the $108.6 million 9.50% senior notes due 2025 (2025 Notes), redeem the $500.0 million 5.125% senior notes due 2027 (2027 Notes), refinance the then-existing $1,550.0 million senior credit facility (2022 Senior Credit Facility) comprised of $505.0 million of borrowings under the prior revolving credit facility and $332.5 million of borrowings under the prior term loan facility, and pay related fees and expenses.
International Trade
The ultimate impact of tariffs and trade flows remains highly uncertain. While we are continuing to monitor the situation, as of the date of this filing, the direct impact from current tariffs have not been significant to our chemicals businesses. Our chemicals businesses generally source and sell where we produce. An exception to this would be potential retaliatory tariffs on caustic soda and EDC exports, which could alter the economics rapidly within the respective countries. Additionally, although Winchester buys most metals locally, we still realize tariff-related price inflation on the domestic price of steel, aluminum and copper.
Other Items
On April 18, 2025, Olin acquired AMMO, Inc.'s small caliber ammunition manufacturing assets for total consideration of $55.8 million, subject to normal post-closing adjustments. The acquisition, which included AMMO Inc.'s brass shellcase capabilities and its 185,000 square foot production facility located in Manitowoc, WI, is included in Olin's Winchester segment. The acquisition was financed with cash on hand.
CONSOLIDATED RESULTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| ($ in millions, except per share data) | |||||||||||||||||||||||
| Sales | $ | 1,758.3 | $ | 1,644.0 | $ | 3,402.5 | $ | 3,279.3 | |||||||||||||||
| Cost of goods sold | 1,620.2 | 1,406.2 | 3,115.7 | 2,834.2 | |||||||||||||||||||
| Gross margin | 138.1 | 237.8 | 286.8 | 445.1 | |||||||||||||||||||
| Selling and administrative | 95.2 | 94.6 | 196.2 | 196.5 | |||||||||||||||||||
| Restructuring charges | 7.4 | 6.8 | 11.4 | 15.1 | |||||||||||||||||||
| Other operating (expense) income | (0.2) | - | (0.2) | 0.2 | |||||||||||||||||||
| Operating income | 35.3 | 136.4 | 79.0 | 233.7 | |||||||||||||||||||
| Losses of non-consolidated affiliates | (1.4) | - | (1.4) | - | |||||||||||||||||||
| Interest expense | 46.8 | 46.6 | 95.3 | 91.2 | |||||||||||||||||||
| Interest income | 1.2 | 0.9 | 2.4 | 1.7 | |||||||||||||||||||
| Non-operating pension income | 4.9 | 5.9 | 10.6 | 12.7 | |||||||||||||||||||
| Income (loss) before taxes | (6.8) | 96.6 | (4.7) | 156.9 | |||||||||||||||||||
| Income tax (benefit) provision | (4.0) | 24.3 | (3.1) | 36.8 | |||||||||||||||||||
| Net (loss) income | (2.8) | $ | 72.3 | (1.6) | 120.1 | ||||||||||||||||||
| Net loss attributable to noncontrolling interests | (1.5) | (1.9) | (1.7) | (2.7) | |||||||||||||||||||
| Net (loss) income attributable to Olin Corporation | $ | (1.3) | $ | 74.2 | $ | 0.1 | $ | 122.8 | |||||||||||||||
| Net (loss) income attributable to Olin Corporation per common share: | |||||||||||||||||||||||
| Basic | $ | (0.01) | $ | 0.63 | $ | - | $ | 1.03 | |||||||||||||||
| Diluted | $ | (0.01) | $ | 0.62 | $ | - | $ | 1.01 | |||||||||||||||
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Sales for the three months ended June 30, 2025 were $1,758.3 million compared to $1,644.0 million in the same period last year, an increase of $114.3 million, or 7%. Chlor Alkali Products and Vinyls sales increased by $59.2 million primarily due to higher volumes. Winchester sales increased by $41.6 million, primarily due to increased sales to military customers and military project revenue, partially offset by lower commercial ammunition sales. Epoxy sales increased by $13.5 million, primarily due to higher volumes, partially offset by lower pricing.
Gross margin decreased $99.7 million for the three months ended June 30, 2025 compared to the prior year period. Winchester gross margin decreased by $48.2 million primarily due to lower commercial sales volumes and pricing. Chlor Alkali Products and Vinyls gross margin decreased by $34.1 million primarily due to higher raw material and operating costs, including planned maintenance turnaround expenses, partially offset by higher volumes. Epoxy gross margin decreased by $18.9 million primarily due to higher operating costs, including planned maintenance turnaround expenses. Gross margin as a percentage of sales decreased to 8% during the three months ended June 30, 2025 from 14% during the three months ended June 30, 2024.
Selling and administration expenses for the three months ended June 30, 2025 were $95.2 million, an increase of $0.6 million from the prior year period. The increase was primarily due to higher stock-based compensation expense of $7.3 million, which includes mark-to-market adjustments, partially offset by favorable foreign currency impact of $4.9 million. Selling and administration expenses as a percentage of sales was 5% and 6% for the three months ended June 30, 2025 and 2024, respectively.
Restructuring charges for the three months ended June 30, 2025 and 2024 were $7.4 million and $6.8 million, respectively. Restructuring charges include facility exit costs, lease and other contract termination costs, and employee severance and related benefits costs
Losses of non-consolidated affiliates relate to Olin's equity share of the Hidrogenii, LLC joint venture.
Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was lower for the three months ended June 30, 2025 compared to the prior year period, primarily due to a lower assumption for the long-term rate of return on plan assets.
The effective tax rate for the three months ended June 30, 2025 included a net $3.3 million tax benefit, primarily associated with U.S. federal investment tax credits and a release of valuation allowances on domestic state net operating losses and tax credits, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2025 of 10.3% was lower than the 21.0% U.S. federal statutory rate primarily due to state income tax, favorable permanent salt depletion deductions, non-taxable exchange rate results and a favorable foreign rate differential, partially offset by foreign income inclusions. The effective tax rate for the three months ended June 30, 2024 included a net $0.6 million tax benefit, primarily associated with stock-based compensation and U.S. federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2024 of 25.8% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Sales for the six months ended June 30, 2025 were $3,402.5 million compared to $3,279.3 million in the same period last year, an increase of $123.2 million, or 4%. Chlor Alkali Products and Vinyls sales increased by $99.1 million primarily due to higher volumes, partially offset by lower pricing, primarily EDC. Winchester sales increased by $20.2 million, primarily due to increased sales to military customers and military project revenue, partially offset by lower commercial ammunition sales. Epoxy sales increased by $3.9 million, primarily due to higher volumes, partially offset by lower pricing.
Gross margin decreased $158.3 million for the six months ended June 30, 2025 compared to the prior year period. Winchester gross margin decreased by $95.9 million primarily due to lower commercial sales volumes and pricing, and higher raw material and operating costs, including commodity metal and propellant costs. Epoxy gross margin decreased by $34.5 million primarily due to higher operating costs, including planned maintenance turnaround expenses. Chlor Alkali Products and Vinyls gross margin decreased by $30.2 million primarily due to higher raw material and operating costs, including planned maintenance turnaround expenses, and lower pricing, primarily EDC, partially offset by higher volumes. Gross margin as a percentage of sales decreased to 8% during the six months ended June 30, 2025 from 14% during the six months ended June 30, 2024.
Selling and administration expenses for the six months ended June 30, 2025 were $196.2 million, a decrease of $0.3 million from the prior year period. The decrease was primarily due to a favorable foreign currency impact of $9.6 million, partially offset by higher legal and legal-related settlement expense of $4.6 million and higher stock-based compensation expense of $1.0 million, which includes mark-to-market adjustments. Selling and administration expenses as a percentage of sales was 6% for both the six months ended June 30, 2025 and 2024.
Restructuring charges for the six months ended June 30, 2025 and 2024 were $11.4 million and $15.1 million, respectively. Restructuring charges include facility exit costs, lease and other contract termination costs, and employee severance and related benefits costs.
Losses of non-consolidated affiliates relate to Olin's equity share of the Hidrogenii, LLC joint venture.
Interest expense for the six months ended June 30, 2025 included $3.3 million for the write-off of unamortized deferred debt issuance costs and costs associated with our first quarter financing transactions, including the 2025 Senior Credit Facility, early redemption of the 2025 Notes and the 2027 Notes, and issuance of the 2033 Notes.
Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was lower for the six months ended June 30, 2025 primarily due to a lower assumption for the long-term rate of return on plan assets.
The effective tax rate for the six months ended June 30, 2025 included a net $2.9 million tax benefit, primarily associated with U.S. federal investment tax credits and a release of valuation allowances on domestic state net operating losses and tax credits, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2025 of 4.3% was lower than the 21.0% U.S. federal statutory rate primarily due to state income tax, favorable permanent salt depletion deductions, non-taxable exchange rate results and a favorable foreign rate differential, partially offset by foreign income inclusions. The effective tax rate for the six months ended June 30, 2024 included a net $3.3 million tax benefit, primarily associated with stock-based compensation and U.S. federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2024 of 25.6% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions.
SEGMENT RESULTS
We define segment results as income (loss) before interest expense, interest income, other operating income (expense), non-operating pension income, other income and income taxes, and includes the results of non-consolidated affiliates in segment results consistent with management's monitoring of the operating segments. We have three operating segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The three operating segments reflect the organization used by our management for purposes of allocating resources and assessing performance. Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Segment Detail | ($ in millions) | ||||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Chlor Alkali Products and Vinyls | $ | 979.5 | $ | 920.3 | $ | 1,904.0 | $ | 1,804.9 | |||||||||||||||
| Epoxy | 331.2 | 317.7 | 662.9 | 659.0 | |||||||||||||||||||
| Winchester | 447.6 | 406.0 | 835.6 | 815.4 | |||||||||||||||||||
| Total sales | $ | 1,758.3 | $ | 1,644.0 | $ | 3,402.5 | $ | 3,279.3 | |||||||||||||||
| Income (loss) before taxes | |||||||||||||||||||||||
| Chlor Alkali Products and Vinyls | $ | 64.9 | $ | 99.3 | $ | 143.2 | $ | 175.9 | |||||||||||||||
| Epoxy | (23.7) | (3.0) | (52.1) | (14.8) | |||||||||||||||||||
| Winchester | 25.0 | 70.3 | 47.8 | 142.5 | |||||||||||||||||||
| Corporate/other: | |||||||||||||||||||||||
| Environmental expense | (4.8) | (6.4) | (9.8) | (12.2) | |||||||||||||||||||
| Other corporate and unallocated costs | (19.9) | (17.0) | (39.9) | (42.8) | |||||||||||||||||||
| Restructuring charges | (7.4) | (6.8) | (11.4) | (15.1) | |||||||||||||||||||
| Other operating (expense) income | (0.2) | - | (0.2) | 0.2 | |||||||||||||||||||
| Interest expense | (46.8) | (46.6) | (95.3) | (91.2) | |||||||||||||||||||
| Interest income | 1.2 | 0.9 | 2.4 | 1.7 | |||||||||||||||||||
| Non-operating pension income | 4.9 | 5.9 | 10.6 | 12.7 | |||||||||||||||||||
| Income (loss) before taxes | $ | (6.8) | $ | 96.6 | $ | (4.7) | $ | 156.9 | |||||||||||||||
Chlor Alkali Products and Vinyls
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Chlor Alkali Products and Vinyls sales for the three months ended June 30, 2025 were $979.5 million compared to $920.3 million for the same period in 2024, an increase of $59.2 million, or 6%. The sales increase was primarily due to higher volumes, partially offset by lower pricing. Higher caustic soda pricing was more than offset by lower EDC pricing.
Chlor Alkali Products and Vinyls segment income was $64.9 million for the three months ended June 30, 2025 compared to $99.3 million for the same period in 2024, a decrease of $34.4 million. The decrease in segment results was due to higher raw material and operating costs ($49.5 million), including planned maintenance turnaround expenses, and lower pricing ($8.6 million), primarily EDC, partially offset by higher volumes ($14.4 million) and lower costs associated with products purchased from other parties ($9.3 million). Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $106.3 million and $105.8 million for the three months ended June 30, 2025 and 2024, respectively.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Chlor Alkali Products and Vinyls sales for the six months ended June 30, 2025 were $1,904.0 million compared to $1,804.9 million for the same period in 2024, an increase of $99.1 million, or 5%. The sales increase was primarily due to higher volumes, partially offset by lower pricing, primarily EDC.
Chlor Alkali Products and Vinyls segment income was $143.2 million for the six months ended June 30, 2025 compared to $175.9 million for the same period in 2024. The decrease in segment results of $32.7 million was due to lower pricing ($54.3 million), primarily EDC, and higher raw material and operating costs ($47.2 million), including planned maintenance turnaround expenses, partially offset by higher volumes ($43.5 million) and lower costs associated with products purchased from other parties ($25.3 million). Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $213.5 million and $212.6 million for the six months ended June 30, 2025 and 2024, respectively.
Epoxy
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Epoxy sales for the three months ended June 30, 2025 were $331.2 million compared to $317.7 million for the same period in 2024, an increase of $13.5 million, or 4%. The sales increase was due to higher volumes ($24.6 million) and a favorable effect of foreign currency translation ($5.0 million), partially offset by lower product pricing ($16.1 million).
Epoxy segment loss was $23.7 million for the three months ended June 30, 2025 compared to segment loss of $3.0 million for the same period in 2024. The decrease in segment results of $20.7 million was due to higher operating costs ($24.4 million), including planned maintenance turnaround expenses, and lower product pricing ($16.1 million), offset by lower raw material costs ($18.1 million), primarily benzene and propylene, and increased volumes ($1.7 million), which included an unfavorable product mix. A significant percentage of our Euro denominated sales are from products manufactured within Europe. As a result, the impact of foreign currency translation on revenue is primarily offset by the impact of foreign currency translation on raw materials and manufacturing costs also denominated in Euros. Epoxy segment results included depreciation and amortization expense of $13.1 million and $13.4 million for the three months ended June 30, 2025 and 2024, respectively.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Epoxy sales for the six months ended June 30, 2025 were $662.9 million compared to $659.0 million for the same period in 2024, an increase of $3.9 million, or 1%. The sales increase was due to higher volumes ($24.6 million), partially offset by lower product pricing ($18.4 million) and an unfavorable effect of foreign currency translation ($2.3 million).
Epoxy segment loss was $52.1 million for the six months ended June 30, 2025 compared to segment loss of $14.8 million for the same period in 2024. The decrease in segment results of $37.3 million was due to higher operating costs ($41.7 million), including planned maintenance turnaround expenses, and lower product pricing ($18.4 million), offset by lower raw material costs ($23.2 million), primarily benzene and propylene, and an unfavorable product mix ($0.4 million). A significant percentage of our Euro denominated sales are from products manufactured within Europe. As a result, the impact of foreign currency translation on revenue is primarily offset by the impact of foreign currency translation on raw materials and manufacturing costs also denominated in Euros. Epoxy segment results included depreciation and amortization expense of $25.9 million and $26.9 million for the six months ended June 30, 2025 and 2024, respectively.
Winchester
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Winchester sales were $447.6 million for the three months ended June 30, 2025 compared to $406.0 million for the same period in 2024, an increase of $41.6 million, or 10%. The sales increase was due to higher sales to military customers and military project revenue ($102.0 million), partially offset by lower sales to commercial customers ($55.2 million) and law enforcement agencies ($5.2 million).
Winchester segment income was $25.0 million for the three months ended June 30, 2025 compared to $70.3 million for the same period in 2024, a decrease of $45.3 million. The decrease in segment results was due to lower sales volumes ($21.4 million), lower product pricing ($12.7 million), and higher raw material and operating costs ($11.2 million), including commodity metal and propellant costs. Winchester segment income included depreciation and amortization expense of $7.9 million and $8.3 million for the three months ended June 30, 2025 and 2024, respectively.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Winchester sales were $835.6 million for the six months ended June 30, 2025 compared to $815.4 million for the same period in 2024, an increase of $20.2 million, or 2%. The sales increase was due to higher sales to military customers and military project revenue ($168.7 million), partially offset by lower sales to commercial customers ($142.1 million) and law enforcement agencies ($6.4 million).
Winchester segment income was $47.8 million for the six months ended June 30, 2025 compared to $142.5 million for the same period in 2024, a decrease of $94.7 million. The decrease in segment results was due to lower sales volumes ($46.1 million), higher raw material and operating costs ($27.8 million), including commodity metal and propellant costs, and lower product pricing ($20.8 million). Winchester segment income included depreciation and amortization expense of $17.4 million and $16.2 million for the six months ended June 30, 2025 and 2024, respectively.
Corporate/Other
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
For the three months ended June 30, 2025, charges to income for environmental investigatory and remedial activities were $4.8 million compared to $6.4 million for the three months ended June 30, 2024. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.
For the three months ended June 30, 2025, other corporate and unallocated costs were $19.9 million compared to $17.0 million for the three months ended June 30, 2024, an increase of $2.9 million. The increase was primarily due to higher variable incentive compensation costs ($9.0 million), which includes mark-to-market adjustments on stock-based compensation expense, partially offset by a favorable foreign currency impact ($5.0 million).
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
For the six months ended June 30, 2025, charges to income for environmental investigatory and remedial activities were $9.8 million compared to $12.2 million for the six months ended June 30, 2024. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.
For the six months ended June 30, 2025, other corporate and unallocated costs were $39.9 million compared to $42.8 million for the six months ended June 30, 2024, a decrease of $2.9 million. The decrease was primarily due to a favorable foreign currency impact ($9.7 million), partially offset by higher variable incentive compensation costs ($4.4 million), which includes mark-to-market adjustments on stock-based compensation expense.
Restructurings
Pretax restructuring charges related to our restructuring and optimization efforts include facility exit costs, lease and other contract termination costs, employee severance and related benefits costs and the write-off of equipment and facilities. Pretax restructuring charges for the three and six months ended June 30, 2025 and 2024, were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Restructuring Charges | ($ in millions, except per share data) | ||||||||||||||||||||||
| Restructuring charges | $ | 7.4 | $ | 6.8 | $ | 11.4 | $ | 15.1 | |||||||||||||||
Further discussion on our restructuring optimization efforts is referenced under Item 1, within Note 4, "Restructuring Charges."
OUTLOOK
We expect our third quarter 2025 operating results to continue to be impacted by challenging markets with potential higher costs and general uncertainty related to tariffs. Despite these macroeconomic headwinds, we anticipate our Chemicals businesses operating results will experience seasonally stronger demand, and lower maintenance turnaround expenses from second quarter 2025 levels. In the third quarter 2025, we expect our Winchester business to experience increased military demand and seasonally stronger commercial sales volumes, partially offset by sequentially higher raw material costs, including tariff-driven commodity metal costs. Overall, we expect Olin's third quarter 2025 operating results to be comparable or slightly higher than our second quarter 2025 levels.
Other corporate and unallocated costs in 2025 are expected to be higher than the $90.1 million in 2024.
During 2025, we anticipate environmental expenses in the $25 million to $35 million range, compared to $30.2 million in 2024.
We expect non-operating pension income in 2025 to be lower than the $26.0 million in 2024. Based on our plan assumptions and estimates, we will not be required to make any cash contributions to our domestic qualified defined benefit pension plan in 2025. We have several international qualified defined benefit pension plans for which we anticipate cash contributions of less than $5 million in 2025.
In 2025, we currently expect our capital spending to be in the $200 million to $220 million range. We expect 2025 depreciation and amortization expense to be approximately $525 million.
We currently believe the 2025 effective tax rate will be in the 25% to 35% range. We expect cash taxes paid to be approximately $175 million, primarily for earnings in foreign jurisdictions, including the previously deferred international tax payments expected to be made in 2025.
ENVIRONMENTAL MATTERS
Environmental provisions charged to income, which are included in costs of goods sold, were $4.8 million and $6.4 million for the three months ended June 30, 2025 and 2024, respectively, and $9.8 million and $12.2 million for the six months ended June 30, 2025 and 2024, respectively.
The following table summarizes the environmental liability activity:
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Environmental Liabilities | ($ in millions) | ||||||||||
| Balance at beginning of year | $ | 156.5 | $ | 153.6 | |||||||
| Charges to income | 9.8 | 12.2 | |||||||||
| Remedial and investigatory spending | (11.1) | (10.5) | |||||||||
| Balance at end of period | $ | 155.2 | $ | 155.3 | |||||||
Environmental investigatory and remediation activities spending was associated with former waste disposal sites and past manufacturing operations. Spending in 2025 for investigatory and remedial efforts, the timing of which is subject to regulatory approvals and other uncertainties, is estimated to be approximately $30 million. Cash outlays for remedial and investigatory activities associated with former waste disposal sites and past manufacturing operations were not charged to income, but instead, were charged to reserves established for such costs identified and expensed to income in prior periods. Associated costs of investigatory and remedial activities are provided for in accordance with generally accepted accounting principles governing probability and the ability to reasonably estimate future costs. Our ability to estimate future costs depends on whether our investigatory and remedial activities are in preliminary or advanced stages. With respect to unasserted claims,
we accrue liabilities for costs that, in our experience, we expect to incur to protect our interests against those unasserted claims. Our accrued liabilities for unasserted claims amounted to $11.6 million at June 30, 2025. With respect to asserted claims, we accrue liabilities based on remedial investigation, feasibility study, remedial action and operation, maintenance and monitoring (OM&M) expenses that, in our experience, we expect to incur in connection with the asserted claims. Required site OM&M expenses are estimated and accrued in their entirety for required periods not exceeding 30 years, which reasonably approximates the typical duration of long-term site OM&M. Charges to income for investigatory and remedial efforts may be material to our operating results in 2025.
The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $155.2 million, $156.5 million and $155.3 million at June 30, 2025, December 31, 2024 and June 30, 2024, respectively, of which $125.2 million, $126.5 million and $123.3 million, respectively, were classified as other noncurrent liabilities. These amounts do not take into account any discounting of future expenditures or any consideration of insurance recoveries or advances in technology. These liabilities are reassessed periodically to determine if environmental circumstances have changed and/or remediation efforts and our estimate of related costs have changed. As a result of these reassessments, future charges to income may be made for additional liabilities.
Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other Potentially Responsible Parties (PRPs), our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs. It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.
LEGAL MATTERS AND CONTINGENCIES
Discussion of legal matters and contingencies can be referred to under Item 1, within Note 18, "Commitments and Contingencies."
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow Data
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash Provided by (Used for) | ($ in millions) | ||||||||||
| Net operating activities | $ | 126.3 | $ | 171.6 | |||||||
| Capital expenditures | (92.4) | (100.8) | |||||||||
| Business acquired in purchase transaction, net of cash acquired | (55.8) | - | |||||||||
| Payments under other long-term supply contracts | - | (46.7) | |||||||||
| Net investing activities | (152.3) | (150.4) | |||||||||
| Long-term debt borrowings, net | 159.8 | 238.9 | |||||||||
| Common stock repurchased and retired | (30.3) | (211.4) | |||||||||
| Stock options exercised | 1.9 | 21.7 | |||||||||
| Dividends paid | (46.0) | (47.6) | |||||||||
| Net financing activities | 73.4 | (8.9) | |||||||||
Operating Activities
For the six months ended June 30, 2025, cash provided by operating activities decreased by $45.3 million from the six months ended June 30, 2024, primarily due to a decrease in operating results, partially offset by a smaller increase in working capital compared with the prior year period. For the six months ended June 30, 2025, working capital increased $112.4 million compared to an increase of $166.3 million for the six months ended June 30, 2024. Receivables increased $34.1 million, primarily due to the timing of sales during the second quarter 2025 compared to the fourth quarter 2024. Inventories increased $51.8 million from December 31, 2024, which reflects normal seasonal growth. Income taxes payable, net of income taxes receivable, decreased by $124.3 million from December 31, 2024 primarily due to timing of international tax payments. Accounts payable and accrued liabilities increased $108.2 million from December 31, 2024, primarily as a result of timing of payments during the first half of 2025.
Investing Activities
Capital spending was $92.4 million for the six months ended June 30, 2025, compared to $100.8 million for the comparable period in 2024. For the full year 2025, we expect our capital spending to be in the $200 million to $220 million range. Our capital spending forecast represents normal capital spending to maintain our current operating facilities. We expect 2025 depreciation and amortization expense to be in the $525 million range.
On April 18, 2025, Olin acquired AMMO, Inc.'s small caliber ammunition manufacturing assets for total consideration of $55.8 million. The acquisition was financed with cash on hand.
For the six months ended June 30, 2024, payments under other long-term supply contracts were $46.7 million for energy modernization on the U.S. Gulf Coast. Our payments for this project were completed in the third quarter of 2024.
Financing Activities
During the six months ended June 30, 2025 and 2024, activity of our outstanding debt included:
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Long-term Debt Borrowings (Repayments) | ($ in millions) | ||||||||||
| Borrowings | |||||||||||
| Term Loan Facilities | $ | 650.0 | $ | - | |||||||
| Revolving Credit Facilities | 510.0 | 465.0 | |||||||||
| Receivables Financing Agreements | 570.0 | 46.5 | |||||||||
| 2033 Notes | 600.0 | - | |||||||||
| Total borrowings | 2,330.0 | 511.5 | |||||||||
| Repayments | |||||||||||
| Go zone bonds, due 2024 | - | (50.0) | |||||||||
| Recovery zone bonds, due 2024 | - | (20.0) | |||||||||
| Term Loan Facilities | (336.6) | (4.4) | |||||||||
| Revolving Credit Facilities | (645.0) | (122.0) | |||||||||
| Receivables Financing Agreements | (580.0) | (76.2) | |||||||||
| 2025 Notes | (108.6) | - | |||||||||
| 2027 Notes | (500.0) | - | |||||||||
| Total repayments | (2,170.2) | (272.6) | |||||||||
| Long-term debt borrowings, net | $ | 159.8 | $ | 238.9 | |||||||
For the six months ended June 30, 2025, we paid debt issuance costs of $12.0 million associated with the 2033 Notes and the 2025 Senior Credit Facility.
For the six months ended June 30, 2025 and 2024, 1.2 million and 3.9 million shares, respectively, of common stock were repurchased and retired at a total value of $30.3 million and $211.4 million, respectively.
We issued less than 0.1 million and 0.8 million shares representing stock options exercised for the six months ended June 30, 2025 and 2024, respectively, with a total value of $1.9 millionand $21.7 million, respectively. For the six months ended June 30, 2024, we withheld and paid $10.5 millionfor employee taxes on share-based payment arrangements.
The percentage of total debt to total capitalization increased to 60.1% as of June 30, 2025 from 58.0% as of December 31, 2024, primarily as a result of a higher level of debt outstanding.
In the first and second quarters of 2025 and 2024, we paid a quarterly dividend of $0.20 per share. Dividends paid for the six months ended June 30, 2025 and 2024, were $46.0 million and $47.6 million, respectively.
Liquidity and Other Financing Arrangements
Our principal sources of liquidity are from cash and cash equivalents, cash flow from operations and borrowings under our 2025 Revolving Credit Facility and our 2024 Receivables Financing Agreement (as defined below). Additionally, we believe that we have access to the high-yield debt and equity markets.
On March 14, 2025, Olin issued $600.0 million aggregate principal amount of 6.625% senior notes due April 1, 2033 (2033 Notes), in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. Interest on the 2033 Notes began accruing from March 14, 2025 and is paid semi-annually beginning on October 1, 2025, and every six months thereafter.
On March 14, 2025, Olin entered into a $1,850.0 million senior credit facility (2025 Senior Credit Facility), which increased the borrowing limit of our then-existing $1,550.0 million senior credit facility (2022 Senior Credit Facility) by $300.0 million and extended the maturity date from October 11, 2027 to March 14, 2030. The 2025 Senior Credit Facility includes a term loan facility with aggregate commitments of $650.0 million (2025 Term Loan Facility) and a revolving credit facility with aggregate commitments of $1,200.0 million (2025 Revolving Credit Facility).
The 2025 Term Loan Facility replaced Olin's then-existing $350.0 million term loan facility (2022 Term Loan Facility, and collectively with the new 2025 Term Loan Facility, the Term Loan Facilities). The 2025 Term Loan Facility requires principal amortization payments beginning on June 30, 2025 at a rate of 0.625% per quarter through March 31, 2027, increasing to 1.250% per quarter thereafter, until maturity, and was fully drawn on the closing date.
The 2025 Revolving Credit Facility replaced Olin's then-existing $1,200.0 million revolving credit facility (2022 Revolving Credit Facility, and collectively with the new 2025 Revolving Credit Facility, the Revolving Credit Facilities). The 2025 Revolving Credit Facility includes a $100.0 million letter of credit subfacility. At June 30, 2025, we had $1,164.6 million available under our 2025 Revolving Credit Facility because we had $35.0 million borrowed under the facility and issued $0.4 million of letters of credit.
Proceeds from the 2033 Notes, together with borrowings under the 2025 Senior Credit Facility, were used to redeem the $108.6 million 2025 Notes, redeem the $500.0 million 2027 Notes, refinance the then-existing 2022 Senior Credit Facility, comprised of $505.0 million of borrowings under the 2022 Revolving Credit Facility and $332.5 million of borrowings under the 2022 Term Loan Facility, and pay related fees and expenses.
We were in compliance with all covenants and restrictions under all our outstanding debt agreements as of June 30, 2025, and no event of default had occurred under any of our outstanding debt agreements that would permit the acceleration of the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As a result of our restrictive covenant related to the net leverage ratio, the maximum additional borrowings available to us could be limited in the future. The limitation, if an amendment or waiver from our lenders is not obtained, could restrict our ability to borrow the maximum amounts available under the 2025 Senior Credit Facility and the 2024 Receivables Financing Agreement (defined below). As of June 30, 2025, there were no covenants or other restrictions that limited our ability to borrow.
On November 20, 2024, we entered into a $500.0 million receivables financing agreement (2024 Receivables Financing Agreement), which increased the borrowing limit of our then-existing $425.0 million receivables financing agreement (2022 Receivables Financing Agreement) by $75.0 million and extended the maturity date from October 14, 2025 to November 19, 2027 (collectively, the Receivables Financing Agreements).
Under the Receivables Financing Agreements, our eligible trade receivables are used for collateralized borrowings and continue to be serviced by us. In addition, the Receivables Financing Agreements incorporate the net leverage ratio covenant that is contained in the 2025 Senior Credit Facility. As of June 30, 2025, December 31, 2024 and June 30, 2024, we had $465.0 million, $475.0 million and $298.8 million, respectively, drawn under the Receivables Financing Agreements. As of June 30, 2025, $609.3 million of our trade receivables were pledged as collateral and we had $35.0 million of additional borrowing capacity under the 2024 Receivables Financing Agreement.
At June 30, 2025, we had total letters of credit of $161.4 million outstanding, of which $0.4 million were issued under our 2025 Revolving Credit Facility. The letters of credit were used to support certain long-term debt obligations, workers compensation insurance policies, plant closure and post-closure obligations, international payment obligations and international pension funding requirements.
Our current debt structure is used to fund our business operations. As of June 30, 2025, we had long-term borrowings, including the current installment, of $2,996.7 million, of which $1,231.8 million were at variable rates. Included within long-term borrowings on the condensed balance sheets were deferred debt issuance costs of $19.7 million as of June 30, 2025.
We believe, based on current and projected levels of cash flow from our operations, together with our cash and cash equivalents on hand and the availability to borrow under our 2025 Revolving Credit Facility and 2024 Receivables Financing Agreement, we have the ability to access sufficient liquidity to meet our short-term and long-term needs, to make required payments of interest on our debt, fund our operating needs, working capital and our capital expenditure requirements, and comply with the financial ratios and other covenants and restrictions in our debt agreements.
On December 11, 2024, our Board of Directors approved a share repurchase program with a $1.3 billion authorization (2024 Repurchase Authorization). The Board of Directors previously authorized share repurchases with a $2.0 billion authorization on July 28, 2022 (2022 Repurchase Authorization). The 2024 Repurchase Authorization and 2022 Repurchase Authorization will terminate upon the purchase of $1.3 billion and $2.0 billion of common stock, respectively.
For the six months ended June 30, 2025, 1.2 million shares of common stock were repurchased and retired at a total value of $30.3 million. As of June 30, 2025, a cumulative total of 26.3 million shares of common stock have been repurchased and retired at a total value of $1,331.1 million under the 2022 Repurchase Authorization program, and $1,968.9 million of common stock remained authorized to be repurchased under the 2022 Repurchase Authorization and 2024 Repurchase Authorization programs.
We have registered the sale of an undetermined number of securities with the SEC, so that, from time-to-time, we may issue, offer and sell debt securities, preferred stock, common stock and/or warrants to purchase any such securities pursuant to a registration statement.
Credit Ratings
We receive ratings from three independent credit rating agencies: Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P). The following table summarizes our credit ratings as of June 30, 2025:
| Credit Rating Agency | Long-term Rating | Outlook | ||||||||||||
| Fitch Ratings | BBB- | Stable | ||||||||||||
| Moody's Investors Service | Ba1 | Stable | ||||||||||||
| Standard & Poor's | BB+ | Stable | ||||||||||||
On June 3, 2025, Moody's affirmed Olin's Ba1 rating and stable outlook. On March 12, 2025, Fitch affirmed Olin's BBB- rating and stable outlook. On August 8, 2024, S&P affirmed Olin's BB+ rating and revised its outlook from positive to stable.
Contractual Obligations
Purchasing commitments are utilized in our normal course of business for our projected needs. We have supply contracts with various third parties for certain raw materials including ethylene, electricity, propylene and benzene. These agreements are maintained through long-term cost-based contracts that provide us with a reliable supply of key raw materials. There have been no material changes in our contractual obligations and commitments as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, other than those which occur in the ordinary course of business.
Critical Accounting Estimates
Refer to "Critical Accounting Estimates" contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 for a complete discussion of our critical accounting estimates. There have been no material changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, 2024.
New Accounting Pronouncements
Discussion of new accounting pronouncements can be referred to under Item 1, within Note 2, "Recent Accounting Pronouncements."
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