Olin Posts $37.7 Million Profit from Strong Chlor-Alkali Performance Despite Hurricane Disruptions

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Olin Corporation (NYSE:OLN) (Clayton, Missouri) has announced third-quarter 2008 earnings of $37.7 million, up from a deficit of $83.2 million in the same period last year. The company also posted a record operating income of $87 million in the quarter, up 130% from last year's $37.8 million. Joseph Rupp, Chairman, President and CEO, said the gains are largely attributable to strong performance in the company's Chlor Alkali Products and Winchester businesses, as well as continued benefits from the acquisition of Pioneer Companies Incorporated (Houston, Texas), a manufacturer of chlorine, caustic soda, bleach, hydrochloric acid and other related products.

At the end of August, Hurricane Gustav forced Olin to shut down its St. Gabriel chlor-alkali plant in Louisiana. "The storm caused minor damage to our plant, which we were able to repair within one week," Rupp said. "Our third-quarter results do include approximately $750,000 one-time expenses associated with the shutdown, repairs and restart of this facility." Hurricane Ike didn't directly affect Olin but rather its customers, some of which were unable to receive or return rail cars because of widespread damage along the Gulf Coast. "Volumes were negatively impacted by approximately 3% due to the hurricanes," Rupp said. However, Pioneer operations helped to increase chlorine and caustic-soda shipment volumes by 29% year over year. "In spite of these challenges, Chlor Alkali Products earned a record $103.6 million in the third quarter, which included a $31.7 million contribution from the Pioneer operations," Rupp said.

Winchester, which produces sporting ammunition, reloading components and industrial cartridges, reported third-quarter sales of $148 million and earnings of $9.8 million, reflecting higher product prices, higher costs, higher law-enforcement sales volumes and lower commercial volumes. Law-enforcement orders totaled more than $20 million, accounting for nearly one-fourth of all Winchester sales during the quarter. "While we're seeing weakness in some commercial sales areas, we are also encouraged by the growth that has been achieved in the law enforcement and military contract area," Rupp said. "The contracts that support law enforcement and military sales tend to be multiyear and they provide a stable base of business for Winchester in 209 and beyond."

Industrial Info is tracking 10 active projects worth $162.9 million involving Olin, including a $146 million expansion of the St. Gabriel chlor-alkali plant. The project, initially scheduled for completion in the first quarter of 2009, has been delayed by an estimated three to four weeks because of the hurricanes, Rupp said.

"Our third-quarter results and fourth-quarter outlook continue to demonstrate the benefits of our 2007 acquisition of Pioneer," he said. "During the third quarter, the benefits allowed us to overcome the negative impacts of two hurricanes and the continued escalation in the costs of electricity and freight. We are continuing to realize the expected synergies, which should enhance our results as we move forward."

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