Olin(OLN) - 2025 Q2 - Quarterly Report

Part I — Financial Information Financial Statements This section presents Olin Corporation's unaudited condensed consolidated financial statements for the period ended June 30, 2025, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, along with detailed notes on accounting policies and financial data Condensed Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 (Millions USD) | Dec 31, 2024 (Millions USD) | June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | 223.8 | 175.6 | 182.1 | | Total current assets | 2,286.7 | 2,079.8 | 2,058.3 | | Total assets | 7,667.9 | 7,579.1 | 7,660.6 | | Liabilities & Equity | | | | | Total current liabilities | 1,545.9 | 1,632.2 | 1,439.3 | | Long-term debt | 2,977.5 | 2,713.2 | 2,789.1 | | Total liabilities | 5,680.1 | 5,523.7 | 5,491.3 | | Total equity | 1,987.8 | 2,055.4 | 2,169.3 | Statement of Operations Summary | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | H1 2025 (Millions USD) | H1 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | Sales | 1,758.3 | 1,644.0 | 3,402.5 | 3,279.3 | | Operating income | 35.3 | 136.4 | 79.0 | 233.7 | | Net (loss) income attributable to Olin | (1.3) | 74.2 | 0.1 | 122.8 | | Diluted EPS | (0.01) | 0.62 | 0.00 | 1.01 | Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net cash from operating activities | 126.3 | 171.6 | | Net cash for investing activities | (152.3) | (150.4) | | Net cash from financing activities | 73.4 | (8.9) | | Net increase in cash | 48.2 | 11.8 | Notes to Condensed Financial Statements - Olin operates in three segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester[17] - On April 18, 2025, Olin acquired AMMO, Inc.'s small caliber ammunition manufacturing assets for $55.8 million in cash, which is now part of the Winchester segment[21] - In March 2025, the company issued $600.0 million of 6.625% senior notes due 2033 and entered into a new $1.85 billion senior credit facility, extending maturity to 2030 and increasing borrowing limits[36][37] - For the six months ended June 30, 2025, the company repurchased and retired 1.2 million shares of common stock for $30.3 million. As of June 30, 2025, $1.97 billion remained authorized for repurchase[67][182] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting a significant decrease in net income for the second quarter and first half of 2025 compared to the prior year, attributed to lower operating results across all segments, higher costs, planned maintenance, and pricing pressures, detailing segment-specific performance, liquidity actions, and providing an outlook for the third quarter and full year 2025 Executive Summary Net Income and EPS Comparison | Period | Net Income (Loss) Attributable to Olin (Millions USD) | Diluted EPS (USD) | | :--- | :--- | :--- | | Q2 2025 | (1.3) | (0.01) | | Q2 2024 | 74.2 | 0.62 | | H1 2025 | 0.1 | 0.00 | | H1 2024 | 122.8 | 1.01 | - The decrease in net income was primarily due to lower operating results across all business segments[105] - Chlor Alkali Products and Vinyls segment income was lower due to higher costs and lower EDC pricing, despite higher volumes[106] - The Epoxy segment reported a loss, impacted by higher operating costs and weak global demand, with challenges from subsidized Asian competition[107] - Winchester segment income declined due to decreased commercial ammunition sales and higher costs, partially offset by increased military sales[108] Consolidated Results of Operations - Q2 2025 sales increased 7% YoY to $1,758.3 million, driven by higher volumes in Chlor Alkali and higher military sales in Winchester[116] - Q2 2025 gross margin decreased by $99.7 million YoY, with the margin percentage falling to 8% from 14%, primarily due to lower commercial sales and pricing in Winchester and higher operating costs across all segments[117] - H1 2025 sales increased 4% YoY to $3,402.5 million, driven by higher volumes in Chlor Alkali and increased military sales in Winchester[122] - H1 2025 gross margin decreased by $158.3 million YoY, with the margin percentage falling to 8% from 14%, due to lower commercial volumes and pricing in Winchester and higher operating costs across segments[123] Segment Results Segment Income (Loss) Before Taxes (Millions USD) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Chlor Alkali Products and Vinyls | 64.9 | 99.3 | 143.2 | 175.9 | | Epoxy | (23.7) | (3.0) | (52.1) | (14.8) | | Winchester | 25.0 | 70.3 | 47.8 | 142.5 | - Chlor Alkali Products and Vinyls: Q2 segment income decreased by $34.4 million YoY due to higher raw material/operating costs and lower EDC pricing, which offset higher volumes[133] - Epoxy: Q2 segment loss widened by $20.7 million YoY, driven by higher operating costs from planned maintenance and lower product pricing[138] - Winchester: Q2 segment income fell by $45.3 million YoY, attributed to lower commercial sales volumes, lower pricing, and higher raw material costs[143] Outlook - Expects Q3 2025 operating results to be comparable or slightly higher than Q2 2025 levels, with seasonally stronger demand in Chemicals and increased military demand in Winchester[153] Full Year 2025 Forecast | Metric | Forecast Range (Millions USD) | | :--- | :--- | | Capital Spending | 200 - 220 | | Depreciation & Amortization | ~525 | | Environmental Expenses | 25 - 35 | | Cash Taxes Paid | ~175 | - The 2025 effective tax rate is expected to be in the 25% to 35% range[156] Liquidity and Capital Resources - Cash from operations decreased by $45.3 million in H1 2025 compared to H1 2024, primarily due to lower operating results[162] - Capital spending for H1 2025 was $92.4 million, down from $100.8 million in H1 2024[163] - In H1 2025, the company had net debt borrowings of $159.8 million, repurchased $30.3 million of common stock, and paid $46.0 million in dividends[161][165][166][168] - As of June 30, 2025, the company had $1,164.6 million available under its 2025 Revolving Credit Facility[173] Quantitative and Qualitative Disclosures about Market Risk Olin is exposed to market risks from commodity price volatility, foreign currency exchange rates, and interest rate changes, which the company manages using derivative instruments; as of June 30, 2025, a hypothetical 100-basis point change in the SOFR would impact annual interest expense by $12.3 million on its $1.23 billion of variable-rate debt - The company is exposed to market risk from commodity prices (energy, raw materials), foreign currencies (primarily Euro), and interest rates[187][188][190][191] - A hypothetical 100-basis point change in the SOFR would impact annual interest expense by an estimated $12.3 million, based on variable-rate debt levels at June 30, 2025[192] Controls and Procedures The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[194] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[195] Part II — Other Information Legal Proceedings This section notes a chlorine release incident at the company's Freeport, TX site on May 20, 2025, and while monetary fines or penalties are possible, the company cannot currently predict the outcome or estimate any potential loss - On May 20, 2025, a chlorine release occurred at the Freeport, TX site, which may result in monetary fines or penalties[201] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred to the risk factors disclosed in the 2024 Annual Report on Form 10-K[203] Unregistered Sales of Equity Securities and Use of Proceeds During the second quarter of 2025, Olin repurchased 510,088 shares of its common stock, and as of June 30, 2025, approximately $1.97 billion remained available for purchase under its authorized share repurchase programs Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share (USD) | | :--- | :--- | :--- | | April 1-30, 2025 | — | — | | May 1-31, 2025 | 387,104 | 19.77 | | June 1-30, 2025 | 122,984 | 19.18 | | Total | 510,088 | N/A | - As of June 30, 2025, $1,968.9 million remained available for repurchase under the company's 2022 and 2024 share repurchase authorizations[204] Exhibits This section lists the exhibits filed with the Form 10-Q, including bylaws, debt agreements, officer certifications, and XBRL data files - Exhibits filed include amended bylaws, debt indentures and credit agreements, CEO/CFO certifications, and interactive data files (XBRL)[211]