Winchester sales for the third quarter were $414.1 million compared to $400.0 million in the third quarter of 2021, representing a gain of 3.5 percent.
Olin Corp, Winchester’s parent, said in a statement that the increase in Winchester sales was primarily due to higher commercial ammunition pricing. Sales also reflected lower commercial ammunition shipments partially offset by higher military and law enforcement shipments.
Third quarter 2022 segment earnings for Winchester were $89.0 million compared to $115.3 million in the third quarter 2021. The $26.3 million decrease in segment earnings was primarily due to higher commodity and other materials costs and lower commercial ammunition shipments partially offset by higher commercial ammunition pricing and higher military and law enforcement sales.
Winchester’s third-quarter 2022 results included depreciation and amortization expense of $6.1 million compared to $5.7 million in the third quarter 2021.
Companywide, Olin reported net income was $315.2 million, or $2.18 per share, which compares to third quarter 2021 reported net income of $390.7 million, or $2.38, a year ago.
Third quarter 2022 adjusted EBITDA of $547.8 million excludes depreciation and amortization expense of $149.8 million, gains on the sale of former manufacturing facilities of $13.0 million, and restructuring charges of $7.6 million.
Third quarter 2021 adjusted EBITDA was $707.0 million. Sales in the third quarter 2022 were $2,321.7 million, about flat compared to $2,340.1 million in the third quarter 2021.
At its Chlor Alkali Products and Vinyls segment, sales for the third quarter 2022 were $1,263.5 million compared to $1,062.4 million in the third quarter 2021 representing a gain of 18.9 percent. The increase in Chlor Alkali Products and Vinyls sales was primarily due to higher pricing, partially offset by 17 percent lower volumes.
At its Epoxy segment, sales for the third quarter 2022 were $644.1 million compared to $877.7 million in the third quarter 2021, representing a decline of 26.6 percent. The decrease in Epoxy sales was primarily due to 29 percent lower volumes, partially offset by higher pricing.
Scott Sutton, Olin’s chairman, president, and chief executive officer, said, “We are experiencing recessionary global economic conditions. Our third quarter adjusted EBITDA performance begins to demonstrate how our winning model, which emphasizes ‘value first’ versus a volume maximization approach, should dramatically improve our recessionary level of adjusted EBITDA compared to Olin’s historical performance.
“While our chemical businesses have been challenged by European and North American epoxy and vinyls intermediate demand shortfalls and increased Asian exports, the core electrochemical unit (ECU) pricing for merchant chlorine and caustic soda continued to move higher.
“We expect Chlor Alkali Products and Vinyls fourth quarter segment results to be slightly lower than third quarter 2022 levels, as we expect chlorine and caustic soda pricing to continue to improve, while vinyls intermediates pricing is likely to remain under pressure. Our Epoxy segment fourth-quarter results are expected to seasonally decline from third-quarter 2022 levels, exacerbated by increased Chinese exports precipitated by continuing weak Chinese domestic demand.
“Our team continues to adeptly reduce operating rates and increase product purchases, thereby refraining from selling incremental volume into poor-quality markets.
“We expect Winchester segment fourth-quarter results to seasonally decline from third-quarter 2022 levels as we execute our holiday shutdowns. Overall, we expect Olin’s fourth quarter 2022 adjusted EBITDA to decline approximately 15 percent to 20 percent from third quarter 2022 levels.
“So far in 2022, we repurchased approximately 13 percent of our outstanding shares from available cash flow while reducing our net debt level. With our strong balance sheet and confidence in Olin’s earnings and cash flow generation even in recessionary economic conditions, we expect to continue our capital allocation strategy while committing to maintain an investment-grade balance sheet and move Olin to an investment-grade credit rating.”
Photo courtesy Winchester
