SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-1070
Olin Corporation
(Exact name of registrant as specified in its charter)
| Virginia |
13-1872319 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| 501 Merritt 7, Norwalk, CT |
06856 | |
| (Address of principal executive offices) |
(Zip Code) |
(203) 750-3000
(Registrant’s telephone number, including area code)
(Former name, address, and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
As of April 30, 2003, there were outstanding 58,073,522 shares of the registrant’s common stock.
Part I—Financial Information
Item 1. Financial Statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Balance Sheets
(In millions, except per share data)
| Unaudited March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ |
70.7 |
|
$ |
110.5 |
| ||
| Short-term investments |
|
— |
|
|
25.0 |
| ||
| Accounts receivable, net |
|
212.1 |
|
|
168.1 |
| ||
| Inventories |
|
268.8 |
|
|
255.0 |
| ||
| Income taxes receivable |
|
22.7 |
|
|
9.4 |
| ||
| Other current assets |
|
62.5 |
|
|
70.1 |
| ||
| Total current assets |
|
636.8 |
|
|
638.1 |
| ||
| Property, plant and equipment (less accumulated depreciation of $1,277.9 and $1,308.4) |
|
519.8 |
|
|
551.5 |
| ||
| Prepaid pension costs |
|
106.4 |
|
|
106.4 |
| ||
| Other assets |
|
63.6 |
|
|
45.9 |
| ||
| Goodwill |
|
79.5 |
|
|
81.9 |
| ||
| Total assets |
$ |
1,406.1 |
|
$ |
1,423.8 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Short-term borrowings and current installments of long-term debt |
$ |
19.1 |
|
$ |
1.6 |
| ||
| Accounts payable |
|
90.6 |
|
|
109.8 |
| ||
| Accrued liabilities |
|
162.7 |
|
|
145.8 |
| ||
| Total current liabilities |
|
272.4 |
|
|
257.2 |
| ||
| Long-term debt |
|
309.6 |
|
|
327.6 |
| ||
| Accrued pension liability |
|
444.8 |
|
|
445.3 |
| ||
| Other liabilities |
|
190.3 |
|
|
162.4 |
| ||
| Total liabilities |
|
1,217.1 |
|
|
1,192.5 |
| ||
| Commitments and contingencies |
||||||||
| Shareholders’ equity: |
||||||||
| Common stock, par value $1 per share: |
||||||||
| Authorized 120.0 shares |
||||||||
| Issued 58.0 shares (57.6 in 2002) |
|
58.0 |
|
|
57.6 |
| ||
| Additional paid-in capital |
|
447.4 |
|
|
441.9 |
| ||
| Accumulated other comprehensive loss |
|
(236.5 |
) |
|
(238.8 |
) | ||
| Accumulated deficit |
|
(79.9 |
) |
|
(29.4 |
) | ||
| Total shareholders’ equity |
|
189.0 |
|
|
231.3 |
| ||
| Total liabilities and shareholders’ equity |
$ |
1,406.1 |
|
$ |
1,423.8 |
| ||
The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Income (Unaudited)
(In millions, except per share amounts)
| Three Months |
||||||||
| 2003 |
2002 |
|||||||
| Sales |
$ |
390.2 |
|
$ |
295.0 |
| ||
| Operating Expenses: |
||||||||
| Cost of goods sold |
|
345.9 |
|
|
270.1 |
| ||
| Selling and administration |
|
30.3 |
|
|
29.2 |
| ||
| Research and development |
|
1.2 |
|
|
1.2 |
| ||
| Restructuring charge |
|
29.0 |
|
|
— |
| ||
| Earnings (loss) of non-consolidated affiliates |
|
1.5 |
|
|
(3.9 |
) | ||
| Interest expense |
|
5.2 |
|
|
7.6 |
| ||
| Interest income |
|
0.2 |
|
|
0.8 |
| ||
| Other income |
|
— |
|
|
1.3 |
| ||
| Loss before taxes and cumulative effect of accounting change |
|
(19.7 |
) |
|
(14.9 |
) | ||
| Income tax benefit |
|
(6.1 |
) |
|
(3.6 |
) | ||
| Loss before cumulative effect of accounting change |
|
(13.6 |
) |
|
(11.3 |
) | ||
| Cumulative effect of accounting change, net |
|
(25.4 |
) |
|
— |
| ||
| Net loss |
$ |
(39.0 |
) |
$ |
(11.3 |
) | ||
| Basic and diluted net loss per common share: |
||||||||
| Loss before cumulative effect of accounting change |
$ |
(0.23 |
) |
$ |
(0.26 |
) | ||
| Cumulative effect of accounting change, net |
|
(0.44 |
) |
|
— |
| ||
| Net loss |
$ |
(0.67 |
) |
$ |
(0.26 |
) | ||
| Dividends per common share |
$ |
0.20 |
|
$ |
0.20 |
| ||
| Basic and diluted average common shares outstanding |
|
57.8 |
|
|
44.3 |
| ||
The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Cash Flows (Unaudited)
(In millions)
| Three Months |
||||||||
| 2003 |
2002 |
|||||||
| Operating activities |
||||||||
| Net loss |
$ |
(39.0 |
) |
$ |
(11.3 |
) | ||
| Adjustments to reconcile net loss to net cash and cash equivalents used for operating activities: |
||||||||
| (Earnings) loss of non-consolidated affiliates |
|
(1.5 |
) |
|
3.9 |
| ||
| Depreciation and amortization |
|
22.8 |
|
|
21.3 |
| ||
| Deferred income taxes |
|
(18.9 |
) |
|
1.8 |
| ||
| Non-cash portion of restructuring charge |
|
22.8 |
|
|
— |
| ||
| Qualified pension plan (income) |
|
— |
|
|
(2.5 |
) | ||
| Common stock issued under employee benefit plans |
|
0.7 |
|
|
1.4 |
| ||
| Change in: |
||||||||
| Receivables |
|
(44.0 |
) |
|
(29.2 |
) | ||
| Inventories |
|
(16.8 |
) |
|
24.8 |
| ||
| Other current assets |
|
(0.6 |
) |
|
(3.9 |
) | ||
| Accounts payable and accrued liabilities |
|
(3.6 |
) |
|
(21.9 |
) | ||
| Income taxes payable |
|
(3.8 |
) |
|
(5.4 |
) | ||
| Noncurrent liabilities |
|
27.7 |
|
|
(0.2 |
) | ||
| Other operating activities |
|
(2.6 |
) |
|
7.0 |
| ||
| Net operating activities |
|
(56.8 |
) |
|
(14.2 |
) | ||
| Investing activities |
||||||||
| Capital expenditures |
|
(8.6 |
) |
|
(3.4 |
) | ||
| Proceeds from sale of short-term investments |
|
25.0 |
|
|
11.0 |
| ||
| Investments and advances-affiliated companies at equity |
|
5.7 |
|
|
1.0 |
| ||
| Disposition of property, plant and equipment |
|
0.4 |
|
|
— |
| ||
| Other investing activities |
|
1.6 |
|
|
0.3 |
| ||
| Net investing activities |
|
24.1 |
|
|
8.9 |
| ||
| Financing activities |
||||||||
| Long-term debt: |
||||||||
| Borrowings |
|
— |
|
|
34.7 |
| ||
| Repayments |
|
(0.5 |
) |
|
(35.2 |
) | ||
| Issuance of common stock |
|
3.9 |
|
|
57.0 |
| ||
| Purchases of Olin common stock |
|
— |
|
|
(2.5 |
) | ||
| Stock options exercised |
|
1.0 |
|
|||||