Olin Corporation reported Winchester’s sales grew 14.7 percent in the fourth quarter to $390.6 million compared to $340.6 million in the fourth quarter of 2020. Olin said the increase in sales was primarily due to higher commercial ammunition pricing.
Fourth-quarter 2021 segment earnings were $101.8 million compared to $44.8 million in the fourth quarter of 2020. The $57.0 million increase in segment earnings was primarily due to higher commercial ammunition pricing which was partially offset by higher commodity and other materials costs. Winchester’s fourth-quarter 2021 results included depreciation and amortization expense of $6.5 million compared to $5.4 million in the fourth quarter 2020.
In the year, Winchester’s sales reached $1,583.8 million against $927.6 million a year ago, a gain of 70.7 percent. Operating income in the nears increased four-fold to $412.1 million from $92.3 million a year ago.
Companywide, sales for Olin, which also owns chemical businesses, were $2,430.4 million compared to $1,654.1 million in the fourth quarter 2020.
Fourth-quarter 2021 reported net income was $306.6 million, or $1.89 per diluted share, which compares to fourth quarter 2020 reported net loss of $33.0 million, or ($0.21) per diluted share. Fourth-quarter 2021 interest expense included a loss on extinguishment of debt of $104.6 million from the $391.4 million prepayments of the 9.5 percent Senior Notes due in 2025. Fourth-quarter 2021 adjusted EBITDA of $686.7 million excludes depreciation and amortization expense of $150.1 million and restructuring charges and other non-recurring items of $2.0 million. Fourth-quarter 2020 adjusted EBITDA was $246.2 million.
Full-year 2021 reported net income was $1,296.7 million, or $7.96 per diluted share, which compares to full-year 2020 reported net loss of $969.9 million, or ($6.14) per diluted share.
Scott Sutton, chairman, president and chief executive officer, said, “Our team’s performance in 2021 demonstrated the success of our unique winning model, which prioritizes value and highlights the potential still to be unlocked across our Chemicals and Winchester businesses. Our fourth-quarter performance demonstrated how our model can adapt in real-time to emphasize ‘value first’ versus our historical sales volume maximization approach, as our chemical businesses reduced operating rates and increased product purchases to fulfill our participation level. As a result, our fourth quarter 2021 adjusted EBITDA delivered our forecasted guidance. Our Electrochemical Unit Profit Contribution Index (ECU PCI) continued to move higher as Olin drove sequential pricing improvement in the fourth quarter 2021 for chlorine, chlorine derivatives, including epoxy resins, and caustic soda. Winchester continued to deliver on both commercial and military fronts, as we launched our Shoot United initiative during the quarter to promote recreational sport shooting.
“We enter 2022 with our model of focusing on system value fully effective and ready to incorporate organic and inorganic growth initiatives. In early 2022, we expect sequentially higher raw material and operating costs, mainly increased natural gas and electrical power costs. As a result, we expect the first quarter 2022 results from our Chemical businesses to be similar to fourth-quarter 2021 levels. We expect our Winchester business first quarter 2022 results to increase sequentially from fourth quarter 2021.”
Photo courtesy Winchester
