Olin Corp. announced today that its first quarter 2014 net income was $29.5 million, or 37 cents per diluted share, which compares to $40.5 million, or 50 per diluted share in the first quarter of 2013.
Sales in the first quarter of 2014 were $577.4 million compared to $630.0 million in the first quarter of 2013.
First quarter 2014 results included pretax restructuring charges of $1.0 million, an unfavorable income tax adjustment of $1.6 million associated with a March 31, 2014, change in a state tax law, and approximately $6 million of one-time, weather related, out of pocket costs in the Chlor Alkali and Chemical Distribution businesses during the quarter.
Joseph D. Rupp, chairman, president, and chief executive officer, said, “Today the Olin board of directors approved a three-year, eight-million shares repurchase program. With our current financial profile and our outlook for 2014 and beyond, this program will allow us to be a consistent, steady and opportunistic buyer of our shares.
“The high level of commercial demand that was experienced by Winchester in 2013 continued in the first quarter of 2014, and Winchester generated the second-highest level of quarterly sales and segment income in its history. In addition, the commercial backlog at the end of the quarter remained above $400 million, which is significantly higher than the pre-surge March 31, 2012, commercial backlog of $137 million.
“During the first quarter of 2014, the Chlor Alkali business experienced lower chlorine and caustic soda shipments compared to the first quarter of 2013. These were partially offset by higher first quarter 2014 shipments of bleach, hydrochloric acid, and potassium hydroxide compared to the first quarter of 2013. First quarter 2014 ECU netbacks declined compared to the first quarter of 2013 reflecting lower caustic soda prices. First quarter 2014 Chemical Distribution shipments declined compared to the first quarter of 2013 and were negatively impacted by the weather in the Midwest.
“First quarter 2014 adjusted EBITDA was $91.8 million and we continue to forecast that full year adjusted EBITDA will be in the $375 million to $425 million range.
“Second quarter 2014 net income is forecast to be in the 40 to 45 cents per diluted share range. Chlor Alkali second quarter earnings are expected to decline compared to the second quarter of 2013 due to lower ECU netbacks, partially offset by lower costs. Second quarter 2014 Chemical Distribution earnings are expected to be similar to the second quarter of 2013.
“In the Winchester business, we continue to see strong commercial demand but second quarter 2014 earnings are expected to decline compared to second quarter 2013 levels due to a more historical level of seasonal demand for shotshell ammunition and reduced levels of pistol, rifle and rimfire inventory in our system, which will reduce total ammunition sales and earnings compared to both the second quarter 2013 and first quarter 2014 levels. Second quarter 2014 corporate and other expenses are forecast to be comparable to the second quarter of 2013. Second quarter 2014 earnings are also expected to include restructuring charges of $2.5 million.”
Winchester, with its principal manufacturing facilities in East Alton, Ill., and Oxford, Miss., produces and distributes sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
Winchester first quarter 2014 sales were $200.6 million compared to $188.0 million in the first quarter of 2013. The increase in first quarter 2014 sales compared to the first quarter of 2013 reflects increased shipments to commercial, military, and law enforcement customers. Winchester’s first quarter 2014 segment earnings were $38.3 million compared to $31.3 million in the first quarter of 2013. The increase in segment earnings reflects the impact of higher shipments, improved pricing, and lower manufacturing and other costs.
Pension income included in the first quarter 2014 corporate and other segments was $7.9 million compared to $6.3 million in the first quarter of 2013.
First quarter charges to income for environmental investigatory and remedial activities were $3.5 million in 2014 compared to $1.8 million in the first quarter of 2013. These charges relate primarily to remedial and investigatory activities associated with former waste sites and past operations.
Other corporate and unallocated costs in the first quarter of 2014 decreased $3.8 million compared to the first quarter of 2013, primarily due to lower stock-based compensation expense, including mark-to-market adjustments.
During the first quarter of 2014, approximately 0.6 million shares of common stock were repurchased at a cost of $14.7 million.
Olin’s board approved a three-year share repurchase program for up to eight million shares of Olin common stock. This plan replaces the three-year, five million shares plan that would have expired on July 20, 2014. There were 2.5 million shares repurchased under that plan.
Olin’s board declared a dividend of 20 cents on each share of Olin common stock. The dividend is payable on June 10, 2014 to shareholders of record at the close of business on May 9. This is the 350th consecutive quarterly dividend to be paid by the company.