Olin Corporation, the parent company to Winchester Ammunition, reported first-quarter net income fell 60 percent to $156.3 million, or $1.16 per diluted share, which compares to first quarter 2022 reported net income of $393.0 million, or $2.48 per diluted share. First quarter 2023 adjusted EBITDA of $434.1 million excludes depreciation and amortization expense of $137.1 million and restructuring charges of $60.9 million. First quarter 2022 adjusted EBITDA was $710.9 million. Total consolidated sales in the first quarter 2023 were $1.84 billion compared to $2.46 billion in the first quarter 2022.
Scott Sutton, chairman, president, and CEO of Olin Corporation, said, “Our team’s performance in the first quarter continues to demonstrate our winning model’s resilience and ability to deliver significantly higher recessionary trough level adjusted EBITDA compared to Olin’s historical approach. During first quarter, our Chlor Alkali Products and Vinyls team pivoted our market participation as caustic soda became the weaker side of the Electrochemical Unit (ECU) versus chlorine and chlorine derivatives. Olin realigned its operating rates and product purchases to match the caustic soda market conditions; thereby, refraining from selling incremental volume into poor-quality markets. Our Epoxy business continues to be challenged by European and North American demand weakness, aggravated by elevated Asian exports and a muted recovery of Chinese domestic demand. As expected, Winchester’s decisive fourth-quarter actions delivered sequential improvement in its segment results, which were further lifted by improved domestic and international military demand.
Winchester sales for the first quarter 2023 declined 14.1 percent to $366.5 million compared to $426.7 million in the first quarter 2022. The decrease in Winchester sales was primarily due to lower commercial ammunition shipments, partially offset by higher military and law enforcement shipments. In fourth quarter 2022 and first quarter 2023, Winchester chose to preserve value by manufacturing and selling less commercial ammunition to adjust overfilled supply chains.
First quarter 2023 Winchester segment earnings were down 48.6 percent to $61.0 million compared to $118.9 million in the first quarter 2022. The $57.9 million decrease in segment earnings was primarily due to lower commercial ammunition shipments and higher commodity and other materials costs partially offset by higher military and law enforcement sales. Winchester’s first quarter 2023 and 2022 results included depreciation and amortization expense of $6.2 million.
“In light of the ongoing challenging global economic environment, we expect second quarter 2023 results from our Chemical businesses to be slightly lower than first quarter 2023 levels. As commercial customer inventories become more normalized, we expect our Winchester business second quarter 2023 results to increase sequentially from first quarter 2023. Overall, we expect Olin’s second quarter 2023 adjusted EBITDA to be slightly lower than first quarter 2023 levels.”
Photo courtesy Winchester
