Winchester Ammo Sales Fall 17 Percent In Second Quarter

Olin Corp. reported sales at its Winchester ammunition business fell 16.7 percent in the second quarter, to $366.6 million from $439.9 million a year ago. The decrease was primarily due to lower commercial ammunition shipments, partially offset by higher domestic and international military sales.

Olin expects Winchester’s third-quarter sales to increase sequentially from the second quarter due to anticipated international and domestic military growth.

Second-quarter earnings from the Winchester segment were $64.7 million, down 45.8 percent compared to $119.3 million in the second quarter of 2022. The $54.6 million decrease in segment earnings was primarily due to lower commercial ammunition shipments and pricing and higher commodity and other materials costs partially offset by higher military sales.

Companywide, Olin’s net income in the second quarter was $146.9 million, or $1.13 per share, down from $422.1 million, or $2.76, a year ago.

Adjusted EBITDA of $351.1 million was down from adjusted EBITDA of $727.3 million a year ago. Adjusted EBITDA in the latest quarter excludes depreciation and amortization expense of $136.8 million, a gain on the sale of its domestic private trucking fleet and operations of $27.0 million, and restructuring charges of $19.2 million.

Sales in the second quarter of 2023 were $1,702.7 million compared to $2,616.1 million in the second quarter of 2022.

Olin’s other businesses focus on the production of chemicals. The chemical products produced include chlorine, caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid.

Scott Sutton, chairman, president, and chief executive officer, said, “In this challenging demand environment, Olin’s global team continues to prove our model’s resilience and the ability to deliver significantly higher trough-level adjusted EBITDA and corresponding cash flows. Our investment-grade balance sheet and strong cash flow allow Olin to successfully maintain our commercial discipline and “value-first” approach, which will fuel an accelerated earnings recovery once demand improves. We continue to prioritize share repurchases from excess cash flow, with approximately 5 percent of outstanding shares repurchased so far in 2023.

“In light of the difficult global economic environment and continued operating issues with the vinyl chloride monomer Freeport, Texas facility, we expect third quarter 2023 results from our Chemical businesses to be lower than second quarter 2023 levels. We expect our Winchester business third quarter 2023 results to increase sequentially from the second quarter 2023 as we anticipate international and domestic military growth. Overall, we expect Olin’s third quarter 2023 adjusted EBITDA to be approximately 10 percent lower than the second quarter 2023 levels. We expect full-year adjusted EBITDA to be in the range of $1.4 billion.”