Olin Corporation reported that its Winchester (ammo) segment posted $395.4 million in sales for the 2023 fourth quarter, up approximately 23.6 percent from $320.0 million in the 2022 fourth quarter. The increase in Winchester segment sales was due primarily to higher commercial ammunition shipments, higher domestic and international military sales and sales related to the acquisition of White Flyer, which the company completed in the fourth quarter.
White Flyer designs, manufactures and sells recreational trap, skeet, international, and sporting clay targets.
Fourth quarter 2023 segment earnings were $65.4 million, compared to $45.7 million in the prior-year quarter. The $19.7 million increase in segment earnings was primarily due to higher commercial ammunition shipments, higher military sales, and lower operating costs, partially offset by lower commercial ammunition pricing.
Winchester’s fourth quarter 2023 results included depreciation and amortization expenses of $8.1 million compared to $6.4 million in the fourth quarter of 2022. Adjusted EBITDA was $73.5 million for the quarter.
Breaking down the business, company CEO Scott Sutton told analysts on a quarterly conference call that its military side has become “about as big in rough terms” as the commercial side of the business. “In fact, in the third quarter of 2023, it was actually bigger than the commercial business for the first time in history,”
Sutton also said, “A good way to think of it is, it’s sort of half and half from a sales perspective. It’s not quite as profitable as the commercial business, but that’s roughly the sizing of it.”
For the full year, sales were $1.51 billion, down 5.7 percent from $1.60 billion in 2022, due to lower commercial volume and pricing, partially offset by higher domestic and international military volume and the inclusion of White Flyer results in the fourth quarter.
Earnings were $397.5 million for the year, a 28.9 percent decline from $282.8 million in 2022.
Winchester’s full-year 2023 results included depreciation and amortization expenses of $27.2 million compared to $24.6 million in the fourth quarter of 2022. Adjusted EBITDA was $397.5 million for the year.
Looking ahead, Sutton said the company is in the middle of doubling its military business and is “on track both domestically and internationally” when looking at the potential for segment growth.
“In the commercial side of that business, demand stays rather high,” Sutton continued. “And on top of that, we have the White Flyer acquisition for a full year. And on top of that, there’s going to be a shortage of propellant across the industry this year, and Winchester is well-positioned to take advantage of that. So, we feel really good about the profit growth in Winchester.”
The company sees Winchester’s commercial ammunition pricing in the first quarter improving sequentially from the fourth quarter.
Image courtesy of Winchester/Olin Corp.
