Olin Announces Record Sales and Earnings in 2006.CLAYTON, Mo. -- Olin Corporation (NYSE NYSE See: New York Stock Exchange : OLN OLN Outdoor Life Network (TV channel) OLN Oracle Learning Network OLN Olin Corporation OLN Operator License Number OLN on Line Network OLN Office for Library and Information Networking ) announced today that its 2006 earnings per diluted share of $2.06 represent the best year since the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of Arch Chemicals Founded in 1999, Arch Chemicals (NYSE: ARJ) is a biocides company with over a billion dollars in annual sales. It consists of four divisions:
Joseph D. Rupp, Chairman, President, and Chief Executive Officer said, "I am pleased to report that our fourth quarter net income of $0.37 per diluted share exceeded our guidance of $0.25 per diluted share due primarily to better than expected results in our Metals and Winchester businesses, an inventory liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy gain generated by operations, and a lower than expected restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . In Metals, weaker volumes were more than offset by improved pricing and lower costs. Winchester experienced stronger than expected sale volumes. Our Chlor Alkali alkali (ăl`kəlī) [Arab., al-gili=ashes of saltwort], hydroxide of an alkali metal. Alkalies are readily soluble in water and form strongly basic solutions with a characteristic acrid taste. business experienced normal seasonal weakness. Shipment volumes and pricing in Chlor Alkali both declined from the third quarter and pricing was weaker than the fourth quarter of 2005." Earnings in the first quarter of 2007 are projected to be in the $0.25 per diluted share range. This forecast reflects softness in both the Chlor Alkali and Metals businesses. In Chlor Alkali, we expect both shipment volumes and pricing to be lower than the first quarter of 2006. In the Metals business, we expect lower volumes to be offset by higher pricing. Winchester results are expected to improve year-over-year due to improved pricing. Year-over-year pension expense is expected to decline approximately $1.0 million. Fourth quarter 2006 earnings include a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern insurance recovery of $6.0 million related to Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. business interruptions, $12.4
million of pretax inventory liquidation gains associated primarily with
the shutdown of the Metals' New Haven New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many Copper operations, a $1.9
million pretax restructuring charge related to the New Haven Copper and
Waterbury Rolling Mills rolling mill: see steel. shutdowns, a $5.4 million pretax pension
curtailment charge resulting from the transition of a portion of the
Metals and Winchester hourly workforces from a defined benefit to a
defined contribution pension plan, and a $4.6 million unfavorable
adjustment to state income tax expense. Fourth quarter 2005 earnings
included a pretax recovery from a third party of $30.4 million of
environmental costs incurred and expensed in prior periods and the
related interest, a favorable $2.5 million pretax adjustment related to
asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1].Firms must recognize the ARO liability in the period it was acquired, generally acquisition. , and a pretax charge for an accounting change of $10.5 million related to the adoption of Interpretation 47 of FAS 143 "Accounting for Asset Retirement Obligations." The full-year 2006 earnings include pretax inventory liquidation gains of $25.9 million, pretax restructuring charges of $17.6 million associated with plant closures in our Metals business, the pension curtailment charge of $5.4 million, pretax insurance recoveries in our Metals and Chlor Alkali businesses of $8.3 million, and a $21.6 million reduction in income tax expenses associated with the settlement of the tax treatment of capital losses generated in 1997 and other tax matters. The full-year 2005 earnings included pretax recoveries from third parties of $49.9 million of environmental costs incurred and expensed in prior periods and the related interest, $9.1 million of pretax gains associated with real estate transactions, the $2.5 million favorable adjustment related to asset retirement obligations, $1.2 million of income tax recoveries, and a pretax charge for an accounting change of $10.5 million related to Interpretation 47 of FAS 143. SEGMENT REPORTING segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four We define segment results as income (loss) before interest expense, interest income, other income, and income taxes and include the results of non-consolidated affiliates in segment results, consistent with management's monitoring of the operating segments. CHLOR ALKALI PRODUCTS Chlor Alkali product sales for the fourth quarter of 2006 were $153.8 million, compared to $156.7 million in the fourth quarter of 2005. This decrease reflects the impact of lower prices. Total caustic soda caustic soda: see sodium hydroxide. caustic soda Sodium hydroxide (NaOH), an inorganic compound. The alkalies called caustic soda and caustic potash (potassium hydroxide) are very important industrial chemicals, with uses in the manufacture of and chlorine shipment volumes were similar in each period. Chlor Alkali income during the quarter was $52.2 million, compared to $56.3 million in the fourth quarter of 2005. The lower level of income reflects lower selling prices and higher transportation costs. METALS Metals sales for the fourth quarter of 2006 were $501.3 million, compared to $366.7 million in the fourth quarter of 2005. This increase is due to higher copper prices and improved product pricing, which more than offset lower shipment volumes. Shipment volumes in the fourth quarter of 2006 decreased 11% from the fourth quarter of 2005. Automotive, building products, and electronic sales declined 31%, 14%, and 13%, respectively, compared to the fourth quarter of 2005, while ammunition and coinage coinage Certification of a piece of metal or other material (such as leather or porcelain) by a mark or marks upon it as being of a specific intrinsic or exchange value. Croesus (r. c. shipments increased 5% and 17%, respectively. Metals segment income in the fourth quarter of 2006 was $21.7 million, which includes inventory liquidation gains of $12.4 million. Metals segment income in the fourth quarter of 2005 was $5.0 million. The improved profit primarily reflects higher prices and lower operating costs operating costs npl → gastos mpl operacionales , which more than offset the impact of lower volumes. WINCHESTER Winchester's fourth quarter 2006 sales were $93.3 million, which is higher than the fourth quarter 2005 sales of $80.7 million. Commercial and military sales both increased during the quarter. Winchester's fourth quarter 2006 profit was $2.6 million, compared to a loss of $0.3 million in the fourth quarter of 2005. Higher selling prices and a more favorable product mix more than offset the impact of higher commodity and manufacturing costs. CORPORATE AND OTHER COSTS For the year 2006, pension expense was $44.1 million, compared to $26.2 million in 2005. The year-over-year increase in pension expense is due to the $5.4 million pension curtailment charge recorded in the fourth quarter and the amortization of plan losses from prior periods. During the fourth quarter, approximately 25% of the East Alton union employees voluntarily elected to transition from a defined benefit pension plan to a defined contribution pension plan effective January 1, 2007. The curtailment charge represents the accelerated recognition of prior service costs. Under Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 87, the Company recorded a non-cash after-tax credit of $54.5 million to Shareholders' Equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. as of December 31, 2006 primarily due to the use of a higher discount rate on pension benefit obligations. As of December 31, 2005, the Company recorded a non-cash after-tax charge of $29.2 million to Shareholders' Equity. The credit and charge reflect the difference between the accumulated benefit obligation Accumulated Benefit Obligation (ABO) An approximate measure of the liability of a pension plan in the event of a termination at the date the calculation is performed. Related: Projected benefit obligation. and the year-end market value of assets of the pension plan. In 2006, the positive impact of higher interest rates on plan liabilities was recognized. In 2005, the cost impact of plan changes and the adverse effect of lower interest rates more than offset the increase in the value of plan assets. Effective December 31, 2006, the Company adopted SFAS No. 158, "Accounting for Defined Benefit Pension and other Post-retirement Plans." The statement requires that a net asset or liability be recognized to report the funded status of defined benefit pension and other post-retirement plans on its balance sheet. At December 31, 2006, pretax charges to other comprehensive income of $65.0 million and $55.0 million were recorded for the defined benefit pension plan and post-retirement medical plans, respectively. During 2006, charges to income for environmental investigatory and remedial activities were $22.6 million, which includes $1.2 million of recoveries from third parties of costs incurred and expensed in prior periods. In 2005, a net credit of $15.8 million was recorded which included $38.5 million of recoveries from third parties of costs incurred and expensed in prior periods. Without these recoveries, charges to income for environmental investigatory and remedial activities would have been $23.8 million and $22.7 million in 2006 and 2005, respectively. These charges relate primarily to remedial and investigatory activities associated with former waste sites and past operations. Other corporate and unallocated costs decreased from 2005 to 2006 due to lower legal and legal related settlement expenses associated with legacy environmental matters. 2006 corporate and other unallocated costs include $2.9 million of expenses related to stock options. During the fourth quarter of 2005, the Company, based on revised estimates Revised estimate The third estimate of GDP released about three months after the measurement period. of future expenses, reduced the asset retirement obligation it had previously recorded by $2.5 million. Other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for 2006 includes the pretax insurance recovery of $6.0 million related to Hurricane Katrina business interruptions and $0.7 million of gains associated with real estate transactions. Other operating income for 2005 included $9.1 million of gains associated with real estate transactions. INCOME TAXES Fourth quarter income tax expense includes a $4.6 million increase related to state income taxes. This includes state tax adjustments associated with the settlement of the tax treatment of capital losses generated in 1997 and other tax matters and the unfavorable impact of higher Metals sales, which increased the income allocated to states with higher rates. CASH FLOW Cash, cash equivalents, and short-term investments at the end of 2006 were $276.4 million compared to $303.7 million at the end of 2005. Cash flow from operating activities decreased from $278.9 million in 2005 to $64.7 million in 2006. This decline primarily reflects the $80 million voluntary pension contribution made in the third quarter of 2006, the $47 million of tax payments made in conjunction with the settlement of the tax treatment of capital losses generated in 1997, $43 million of higher cash taxes paid, and higher working capital. In 2005, the Company paid minimal cash taxes due to the utilization of net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . In 2006, the Company's earnings were fully taxed. DIVIDEND On January 26, Olin's Board of Directors declared a dividend of $0.20 on each share of Olin common stock. The dividend is payable on March 9, 2007 to shareholders of record at the close of business February 9, 2007. This is the 321st consecutive dividend to be paid by the Company. CONFERENCE CALL INFORMATION The company's fourth quarter earnings conference call with securities analysts is scheduled for 10:00 A.M. Eastern Time, Tuesday, January 30. The call will feature remarks by Joseph D. Rupp, Olin's Chairman, President and Chief Executive Officer, and John E. Fischer, Olin's Vice President and Chief Financial Officer. Anyone wishing to listen to the call may do so via the Internet by following the instructions posted under the Conference Call icon on Olin's website, www.olin.com. Listeners should log on to the website at least 5 minutes before the call. The call will also be audio archived on the Olin website for future replay. A text of the prepared remarks from the conference call will be available on the website in the Investor section under Recent Press Releases and Speeches after the conclusion of the call. Archived versions of the call will be available until February 6. COMPANY DESCRIPTION Olin Corporation is a manufacturer concentrated in three business segments: Chlor Alkali Products, Metals, and Winchester. Chlor Alkali Products manufactures chlorine and caustic soda, sodium hydrosulfite sodium hydrosulfite n. A yellowish powder, Na2S2O4, used as a bleaching and reducing agent. Also called hydrosulfite, sodium hyposulfite. , hydrochloric acid hydrochloric acid: see hydrogen chloride. hydrochloric acid or muriatic acid Solution in water of hydrogen chloride (HCl), a gaseous inorganic compound. , hydrogen, potassium hydroxide potassium hydroxide, chemical compound with formula KOH. Pure potassium hydroxide forms white, deliquescent crystals. For commercial and laboratory use it is usually in the form of white pellets. and bleach bleach Solid or liquid chemical compound used to whiten or remove the natural colour of fibres, yarns, paper, and textile fabrics. Sunlight was the chief bleaching agent up to the discovery of chlorine in 1774 by Karl Wilhelm Scheele (b. 1742—d. products. Metals products include copper and copper alloy sheet, strip, foil, rod, welded tube, fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: parts, and stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. and aluminum strip. Winchester products include sporting ammunition, canister powder, reloading Reloading A term lenders commonly use to refer to the habits of borrowers taking out loans to repay the balance on other loans. Often reloading is done to take advantage of lower interest rates offered by other loans, and potential tax benefits. components, small caliber military ammunition, and industrial cartridges. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This communication includes forward-looking statements. These statements relate to analyses and other information that are based on management's beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate. The statements contained in this communication that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. We have used the words "anticipate," "intend," "may," "expect," "believe," "should," "plan," "project," "estimate," and variations of such words and similar expressions in this communication to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. Relative to the dividend, the payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and other factors deemed relevant by our Board of Directors. In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions. The risks, uncertainties and assumptions involved in our forward-looking statements, many of which are discussed in more detail in our filings with the SEC, including our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, include, but are not limited to, the following: * sensitivity to economic, business and market conditions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and overseas, including economic instability or a downturn in the sectors served by us, such as automotive, electronics, coinage, telecommunications, ammunition, housing, vinyls and pulp and paper and the migration by United States customers to low-cost foreign locations; * the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of our operating results, particularly declines in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. in the chlor alkali industry and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products; * economic and industry downturns that result in diminished product demand and excess manufacturing capacity in any of our segments and that, in many cases, result in lower selling prices and profits; * the effects of any declines in global equity markets on asset values and any declines in interest rates used to value the liabilities in our pension plan: * costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; * higher-than-expected raw material and energy or transportation and/or logistics costs; * the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards; * unexpected litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. outcomes; and * an increase in our indebtedness or higher-than-expected interest rates, affecting our ability to generate sufficient cash flow for debt service. All of our forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements. 2007 - 03 [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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