Olin(OLN) - 2023 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2023, net income attributable to Olin Corporation was $104.1 million, compared to$315.2 million for the same period in 2022, representing a decrease of 66.9%[33] - For the nine months ended September 30, 2023, net income attributable to Olin Corporation was $407.3 million, down from$1,130.3 million in 2022, a decline of 64.0%[33] - Basic net income attributable to Olin Corporation per share for the three months ended September 30, 2023, was $0.84, down from$2.23 in 2022, a decrease of 62.3%[33] - Diluted net income attributable to Olin Corporation per share for the three months ended September 30, 2023, was $0.82, compared to$2.18 in 2022, a decline of 62.4%[33] - Total sales for Q3 2023 were $1,671.4 million, a decrease of 28.0$2,321.7 million in Q3 2022[68] - Total sales for the nine months ended September 30, 2023 were $5,218.4 million, a decrease of 29.5$7,399.2 million in the same period of 2022[68] Restructuring and Charges - Restructuring charges recorded for the three months ended September 30, 2023, amounted to $8.6 million, while for the nine months, the total was$79.7 million[23][24] - Cumulative restructuring charges through September 30, 2023, totaled $388.6 million, with cash expenditures of$184.5 million and non-cash charges of $158.0 million related to these actions[30] - The company expects to incur additional restructuring charges of approximately$45 million through 2026 related to the Epoxy Optimization Plan[24] - The company announced the decision to cease operations at its Gumi, South Korea facility and reduce epoxy resin capacity at its Freeport, TX facility, expected to be completed by December 31, 2023[23] Segment Performance - Chlor Alkali Products and Vinyls segment sales were $969.6 million in Q3 2023, down 23.3$1,263.5 million in Q3 2022[68] - Epoxy segment reported a loss of $28.8 million in Q3 2023, compared to a profit of$80.1 million in Q3 2022[68] - Winchester segment sales decreased to $380.2 million in Q3 2023 from$414.1 million in Q3 2022, a decline of 8.2%[68] - Chlor Alkali Products and Vinyls segment income was $172.3 million for the three months ended September 30, 2023, lower than the prior year due to reduced volumes and pricing[105] - Segment income for Winchester fell to$64.5 million in Q3 2023, a decrease of 38% from $89.0 million in Q3 2022, driven by lower product pricing and volumes[137] Debt and Financing - As of September 30, 2023, the company had$350.0 million drawn under its $425.0 million Receivables Financing Agreement, with$489.4 million of trade receivables pledged as collateral[34] - Long-term debt borrowings for the nine months ended September 30, 2023, were $587.7 million, compared to$215.0 million in 2022[41] - The Senior Credit Facility, established on October 11, 2022, has a total commitment of $1,550.0 million, replacing the previous facility[42] - As of September 30, 2023, the company had$1,034.6 million available under its $1,200.0 million Senior Revolving Credit Facility[43] - The fair value of long-term debt as of September 30, 2023, was$2,666.9 million, an increase from $2,517.7 million as of December 31, 2022[99] Tax and Benefits - The effective tax rate for the three months ended September 30, 2023, was 23.2$24.4 million primarily from stock-based compensation[51] - As of September 30, 2023, the company had $62.1 million of gross unrecognized tax benefits, which would impact the effective tax rate by$58.4 million if recognized[53] Share Repurchase and Compensation - For the nine months ended September 30, 2023, the company repurchased 10.8 million shares at a total value of $595.1 million, compared to 20.8 million shares at$1,100.6 million in 2022[62] - The total stock-based compensation expense for the three months ended September 30, 2023, was $4.4 million, an increase from$3.8 million in 2022[57] - The company granted 562,124 stock options in 2023, with a weighted-average grant fair value of $28.74 per option[57] - As of September 30, 2023, the company had repurchased a total of 16.7 million shares under the 2022 Repurchase Authorization program, with$1,112.1 million remaining authorized for repurchase[62] Environmental and Legal Matters - Environmental expenses for Q3 2023 were $6.9 million, slightly lower than$7.4 million in Q3 2022[72] - The company has reserves for future environmental expenditures amounting to $153.5 million as of September 30, 2023[71] - Accrued liabilities for legal actions as of September 30, 2023, were$15.3 million, up from $14.4 million at the end of 2022[77] - Environmental investigatory and remedial charges were$23.1 million for the nine months ended September 30, 2023, compared to $18.0 million in the same period of 2022[142] Market Risks and Economic Conditions - The company is sensitive to economic conditions, including potential downturns in the sectors served, which could affect performance[194] - The company faces risks related to the availability and costs of raw materials, energy, and transportation, which could impact operations[197] - The company is exposed to market risks due to fluctuations in commodity prices, foreign currencies, and interest rates, which could materially impact cash flows[182] - There is reliance on a limited number of suppliers for specified feedstock and services, which poses a risk to operational stability[194]