Olin Corporation reports that its Winchester ammunition segment posted a 10.1 percent sales increase in the fourth quarter. Segment revenues amounted to $435.4 million in Q4, compared to $395.4 million in the fourth quarter 2023. The increase in sales was said to be primarily due to higher military sales and military project revenue, partially offset by lower commercial ammunition sales.
Winchester’s fourth quarter 2024 segment earnings were $42.0 million, compared to $65.4 million in the fourth quarter 2023. The $23.4 million decrease in segment earnings was primarily due to lower commercial ammunition shipments and pricing and higher propellant costs, partially offset by higher military shipments and project revenues.
Winchester’s fourth quarter 2024 results included depreciation and amortization expense of $9.1 million compared to $8.1 million in the fourth quarter 2023.
Winchester Outlook
“We expect our Winchester first quarter 2025 results to be slightly lower than fourth quarter 2024, as commercial customers continue to work down elevated inventories along with softer consumer demand,” offered Ken Lane, president and CEO of Olin Corporation.
Lane said Olin announced on January 21, 2025, that Winchester entered into a definitive agreement to acquire the ammunition manufacturing assets of Ammo, Inc.
“We expect this acquisition to be immediately accretive and to enable our broader participation in high-margin specialty calibers. The transaction is expected to close in second quarter 2025,” Lane noted.
Consolidated Fourth Quarter Results
Olin Corporation reported sales in the fourth quarter were $1.67 billion, compared to $1.61 billion in the fourth quarter of 2023. Fourth quarter 2024 reported net income was $10.7 million, or 9 cents per diluted share, which compares to fourth quarter 2023 reported net income of $52.9 million, or 43 cents per diluted share.
Fourth quarter 2024 Adjusted EBITDA of $193.4 million excludes depreciation and amortization expense of $129.2 million and restructuring charges of $10.3 million. Fourth quarter 2023 Adjusted EBITDA was $210.1 million.
Full year 2024 reported net income was $108.6 million, or 91 cents per diluted share, which compares to full year 2023 reported net income of $460.2 million, or $3.57 per diluted share.
“While we expect challenging industry conditions to continue into 2025, we will stay focused on optimizing our core businesses through our value-first commercial approach as well as controlling our costs as we described during our Investor Day in December. We remain confident in our ability to generate higher trough-level earnings and cash flow despite the difficult environment.
“Global epoxy demand remains weak, and our U.S. and European Epoxy business remains significantly challenged by subsidized Asian competition. Our Epoxy business focus remains on maximizing the chlor alkali integration value, continuing to reduce our costs and growing our formulated solutions business.
“We expect first quarter 2025 results from our Chemicals businesses to be lower than fourth quarter 2024 as our disciplined market participation continues. Our Chlor Alkali business expects sequentially lower chlorine and caustic soda volumes and continued pricing pressure on ethylene dichloride (EDC).
“As we announced at our Investor Day in December, Olin will enter the domestic polyvinyl chloride (PVC) resin market in the first quarter 2025 through our EDC tolling agreement. This pilot initiative expands our chlorine optionality, upgrades the value of Olin EDC and will guide our PVC resin go-to-market strategy in the coming years,” continued Lane.
Commenting on the overall first-quarter outlook, Lane continued, “We expect Olin’s first quarter 2025 adjusted EBITDA to be in the range of $150 million to $170 million, and we will continue Olin’s disciplined capital allocation strategy to prioritize share repurchases from available cash flow. During 2024, we repurchased approximately 5 percent of outstanding Olin shares.”
Corporate and Other Costs
Other corporate and unallocated costs in the fourth quarter of 2024 decreased $5.3 million compared to fourth quarter 2023 primarily due to lower stock-based compensation, including mark-to-market adjustments, partially offset by higher consulting costs and legal and legal-related settlement costs.
Liquidity and Share Repurchases
The cash balance on December 31, 2024, was $175.6 million. Olin ended the fourth quarter 2024 with a net debt of approximately $2.7 billion and a net debt-to-adjusted EBITDA ratio of 3.1x. On December 31, 2024, Olin had approximately $1.2 billion of available liquidity.
During the fourth quarter of 2024, the company repurchased approximately 1.0 million shares of common stock for $43.5 million. During 2024, it repurchased approximately 5.9 million shares of common stock for $300.3 million. On December 31, 2024, Olin had roughly $2.0 billion available under its share repurchase authorizations.
Image courtesy Winchester Ammunition/Dania Vizzi
