Winchester Ammunition parent Olin Corporation reported that its Chlor Alkali Products and Vinyls business benefited from seasonal demand improvement in the second quarter, and its Epoxy business continued to improve sequentially as well, delivering higher margins and lower costs from the ongoing delivery of previously announced restructuring plans.
The company’s Winchester business achieved higher military ammunition shipments and military project revenue, while commercial ammunition shipments were sequentially lower with higher propellant costs, resulting in a relatively flat performance versus the first quarter, as it had expected.
Winchester sales for the second quarter 2024 were $406.0 million, compared to $366.6 million in the second quarter 2023. The increase in sales was said to be primarily due to higher international military sales, military project revenue, and White Flyer sales, partially offset by lower commercial ammunition sales.
In fourth quarter 2023, Olin completed the acquisition of the White Flyer business, which was included in the Winchester segment. White Flyer designs, manufactures and sells recreational trap, skeet, international, and sporting clay targets.
Winchester segment earnings were $70.3 million in Q2, compared to $64.7 million in the second quarter 2023. The $5.6 million increase in segment earnings was primarily due to White Flyer earnings and higher military shipments and military project revenue, partially offset by lower commercial ammunition shipments and pricing and higher propellant costs.
Winchester’s second quarter 2024 results included depreciation and amortization expenses of $8.3 million compared to $6.3 million in the second quarter 2023.
“We expect our Winchester business third quarter results to improve from second quarter levels with seasonally stronger commercial ammunition demand and higher military shipments and project revenue,” suggested Ken Lane, president and CEO of Olin Corporation.
The company may see some other issues in Q3 due to Hurricane Baeryl, as operations at its Freeport, TX facility were disrupted in early July. Lane said the company has safely returned many Freeport plants to operation. Wind damage to ancillary equipment has prevented the remainder from resuming production.
“Once this critical equipment is restored, those remaining assets, including our vinyl chloride monomer and phenol/acetone plants, will be restarted. We currently estimate that Olin’s third quarter 2024 adjusted EBITDA will be reduced by approximately $100 million due to incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales associated with the storm,” added Lane.
Image courtesy Winchester
