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Olin Olin Announces First Quarter 2021 Results CLAYTON , Mo. , April 27 , 2021 / PRNewswire / - First Quarter 2021 Highlights ⚫ Net income of $ 243.6 million • Record quarterly adjusted EBITDA of $ 540.4 million ECU Profit Contribution Index improved by 39 % compared to fourth quarter Olin Corporation ( NYSE : OLN ) announced financial results for the first quarter ended March 31 , 2021 . First quarter 2021 reported net income was $ 243.6 million , or $ 1.51 per diluted share , which compares to first quarter 2020 reported net loss of $ 80.0 million , or $ 0.51 per diluted share . First quarter 2021 adjusted EBITDA of $ 540.4 million excludes depreciation and amortization expense of $ 145.2 million and restructuring charges and other non - recurring items of $ 4.7 million . The first quarter 2021 adjusted EBITDA included a gain of $ 99.9 million associated with Winter Storm Uri due to Olin's customary financial hedges and contracts maintained to provide protection from rapid and dramatic changes in energy costs , partially offset by unabsorbed fixed manufacturing costs and storm - related maintenance costs . First quarter 2020 adjusted EBITDA was $ 122.8 million . Sales in the first quarter 2021 were $ 1,918.8 million compared to $ 1,425.1 million in the first quarter 2020 . Scott Sutton , Chairman , President and Chief Executive Officer , said , " Our team's performance in the first quarter demonstrates the success of our unique winning model , that prioritizes ' value first , ' and highlights the value still to be unlocked across our Chemicals and Winchester businesses . As predicted , we increased the Electrochemical Unit Profit Contribution Index ( ECU PCI ) in the face of softening caustic soda values . Olin drove sequential pricing improvement in the first quarter 2021 for chlorine and almost all chlorine derivatives , including epoxy resins . Our Winchester business also continued to deliver record quarterly segment results . Continuing to build on these successes , Olin now expects to deliver adjusted EBITDA of $ 1.8 billion to $ 2.1 billion for 2021 . " As we look forward to second quarter 2021 in our Chemicals businesses , we expect our winning model to push the ECU PCI higher , with Olin's recent price increase announcements for chlorine , epichlorohydrin , epoxy resins , bleach , ethylene dichloride , chlorinated organics , and caustic soda forecast to positively contribute . We expect some volume offsets as Olin continues to selectively sell less into poor quality markets , as we remain disciplined in our approach to caustic soda . We expect sequentially higher maintenance costs and unabsorbed fixed manufacturing costs of approximately $ 40 million associated with planned Epoxy maintenance turnarounds in second quarter 2021. With our recently announced price increases for ammunition and primers , we expect Winchester second quarter segment results to increase sequentially . Overall , we expect second quarter 2021 adjusted EBITDA to improve sequentially from first quarter 2021 levels excluding the net one - time financial benefits from Winter Storm Uri . " SEGMENT REPORTING Olin defines segment earnings as income ( loss ) before interest expense , interest income , goodwill impairment charges , other operating income ( expense ) , non - operating pension income , other income , and income taxes . CHLOR ALKALI PRODUCTS AND VINYLS Chlor Alkali Products and Vinyls sales for the first quarter 2021 were $ 867.0 million compared to $ 759.9 million in the first quarter 2020. The increase in Chlor Alkali Products and Vinyls sales was primarily due to higher pricing partially offset by lower volumes . First quarter 2021 segment earnings were $ 271.1 million compared to a segment loss of $ 34.3 million in the first quarter 2020. The first quarter 2021 segment eamings included a gain of $ 121.4 million associated with Winter Storm Uri due to customary financial hedges and contracts maintained to provide protection from rapid and dramatic changes in energy costs , partially offset by unabsorbed fixed manufacturing costs and storm - related maintenance costs . Excluding the effects of Winter Storm Uri , the $ 184.0 million increase in segment earnings was primarily due to higher pricing , mainly ethylene dichloride , chlorine , and chlorinated organics , partially offset by lower volumes . The segment earnings also improved due to lower operating costs . Chlor Alkali Products and Vinyls first quarter 2021 results included depreciation and amortization expense of $ 115.8 million compared to $ 118.5 million in the first quarter 2020 . EPOXY Epoxy sales for the first quarter 2021 were $ 662.6 million compared to $ 477.2 million in the first quarter 2020. The increase in Epoxy sales was primarily due to pricing . The first quarter 2021 segment earnings were $ 65.2 million compared to $ 11.7 million in the first quarter 2020. The first quarter 2021 segment earnings included a penalty of $ 21.5 million associated with Winter Storm Uri due to unabsorbed fixed manufacturing costs and storm - related maintenance costs . Excluding the effects of Winter Storm Uri , the $ 75.0 million increase in Epoxy segment earnings was due to higher product margins , as higher pricing was partially offset by higher benzene and propylene raw material costs . Epoxy first quarter 2021 results included depreciation and amortization expense of $ 22.1 million compared to $ 21.5 million in the first quarter 2020 . WINCHESTER On October 1 , 2020 , Winchester began operating the Lake City U.S. Army Ammunition Plant ( Lake City ) . Winchester sales for the first quarter 2021 were $ 389.2 million compared to $ 188.0 million in the first quarter 2020. First quarter 2021 segment earnings were $ 85.1 million compared to $ 10.5 million in the first quarter 2020. The increase in first quarter sales and segment earnings was primarily due to higher commercial and military sales , which included ammunition produced at Lake City , and higher commercial ammunition pricing . The segment earnings were also impacted by higher commodity and operating costs . Winchester first quarter 2021 results included depreciation and amortization expense of $ 5.6 million compared to $ 5.0 million in the first quarter 2020 . CORPORATE AND OTHER COSTS Other corporate and unallocated costs in the first quarter of 2021 increased $ 1.9 million compared to the first quarter 2020 , as higher incentive costs , which includes mark - to - market adjustments on stock - based compensation , were partially offset by lower costs associated with the absence of implementation of new enterprise resource planning , manufacturing , and engineering systems , and the related infrastructure costs . This project was completed in late 2020 . CASH AND DEBT REDUCTION The cash balance on March 31 , 2021 was $ 259.9 million . Olin ended first quarter 2021 with net debt of $ 3,488.2 million and a net debt to adjusted EBITDA ratio of 3.3 times . Through a combination of improved adjusted EBITDA , disciplined capital spending and debt reduction , Olin expects its net debt to adjusted EBITDA ratio to improve to less than 2 times by year end 2021. During 2021 , Olin is targeting debt reduction of approximately $ 1 billion using cash generated from operations . On April 14 , 2021 , Olin announced it expects to redeem on May 14 , 2021 the remaining $ 185 million 10 % senior notes due October 15 , 2025 for a redemption price in cash of 105 % of the principal amount ( representing an aggregate redemption premium of approximately $ 9.3 million ) . Olin expects to fund the redemption using cash generated from operations .