<PAGE>
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 SEPTEMBER 30, 1995
-------------------
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
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
120 LONG RIDGE ROAD, STAMFORD, CT 06904
--------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(203) 356-2000
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER 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
------------ -----------
AS OF OCTOBER 31, 1995 THERE WERE OUTSTANDING 24,624,451 SHARES OF THE
REGISTRANT'S COMMON STOCK.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Part I - Financial Information
Item 1. Financial Statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Balance Sheets
(In millions)
September 30, December 31,
1995 1994
---- ----
ASSETS
- ------
Cash $ 5.6 $ 7.0
Accounts receivable, net 567.6 414.3
Inventories 407.3 386.2
Other current assets 73.8 72.4
-------- --------
Total current assets 1,054.3 879.9
Investments and advances 77.6 103.1
Property, plant and equipment
(less accumulated depreciation
of $1,726.4 and $1,624.4) 952.5 879.0
Goodwill 121.6 108.8
Other assets 77.1 58.8
-------- --------
Total assets $2,283.1 $2,029.6
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Short-term borrowings and current
installments of long-term debt $ 212.2 $ 29.0
Accounts payable 264.5 332.2
Other current liabilities 311.8 257.0
-------- --------
Total current liabilities 788.5 618.2
Long-term senior debt 300.6 292.8
Long-term subordinated debt 125.0 125.0
Other liabilities 243.0 244.5
Shareholders' equity:
Preferred stock, par value $1 per share:
Authorized 10.0 shares.
Series A Conversion Preferred Stock
Issued 2.76 shares in 1994 - 2.8
ESOP Preferred Stock
Issued 1.0 shares (1.1 in 1994) 80.4 85.6
Guaranteed ESOP obligations (26.0) (27.0)
Common stock, par value $1 per share:
Authorized 60.0 shares.
Issued 24.6 shares (21.5 in 1994) 24.6 21.5
Additional paid-in capital 416.2 400.7
Cumulative translation adjustment (1.9) (3.1)
Retained earnings 332.7 268.6
-------- --------
Total shareholders' equity 826.0 749.1
-------- --------
Total liabilities and
shareholders' equity $2,283.1 $2,029.6
======== ========
___________________________________
The accompanying Notes to Condensed Financial Statements are an integral
part of the condensed financial statements.
</TABLE>
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Income
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------ -------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 796.4 $ 666.9 $2,366.2 $1,979.9
Operating expenses:
Cost of goods sold 643.9 543.6 1,889.6 1,598.3
Selling and administration 84.3 73.9 251.0 232.1
Research and development 12.1 8.7 26.5 26.0
------- ------- -------- --------
Operating income 56.1 40.7 199.1 123.5
Interest expense 11.4 8.9 32.9 28.4
Interest and other income 3.5 4.2 9.2 7.4
------- ------- -------- --------
Income before taxes 48.2 36.0 175.4 102.5
Income taxes 17.1 13.9 62.3 37.5
------- ------- -------- --------
Net income 31.1 22.1 113.1 65.0
Preferred dividends 1.6 1.6 4.8 5.1
------- ------- -------- --------
Net income available to
common shareholders $ 29.5 $ 20.5 $ 108.3 $ 59.9
======= ======= ======== ========
Per share of common stock:
Primary $1.21 $0.86 $4.47 $2.64
Fully diluted $1.20 $0.85 $4.32 $2.57
Dividends $0.60 $0.55 $1.80 $1.65
===== ===== ===== =====
Average common shares outstanding 24.5 21.4 24.4 20.3
==== ==== ==== ====
___________________________________
The accompanying Notes to Condensed Financial Statements are an integral
part of the condensed financial statements.
</TABLE>
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Cash Flows
(In millions)
Nine Months
Ended September 30,
------------------
1995 1994
---- ----
Operating activities
- --------------------
Net income $ 113.1 $ 65.0
Depreciation and amortization 105.0 105.8
Changes in:
Receivables (129.4) (60.4)
Inventories 12.7 8.1
Other current assets 1.1 (3.9)
Current liabilities (41.6) (24.1)
Noncurrent liabilities 7.8 10.6
Deferred taxes 7.5 8.3
Other operating activities (6.4) 6.4
------- -------
Net operating activities 69.8 115.8
------- -------
Investing activities
- --------------------
Capital expenditures (132.7) (76.3)
Proceeds from sale of business - 11.3
Businesses acquired in purchase transactions (65.0) (25.4)
Other investments (1.3) (1.2)
Other investing activities 0.6 11.3
------- -------
Net investing activities (198.4) (80.3)
------- -------
Financing activities
- --------------------
Long-term debt:
Borrowings 50.0 -
Repayments (8.0) (15.5)
Short-term borrowings (repayments) 121.9 (78.5)
Issuance of common stock - 97.7
Stock options exercised 10.3 3.7
Repayment from ESOP 1.0 10.0
Dividends paid (49.5) (45.5)
Other financing activities 0.7 (2.7)
------- -------
Net financing activities 126.4 (30.8)
------- -------
Net (decrease) increase in cash (2.2) 4.7
Cash, beginning of period 7.8 3.3
------- -------
Cash, end of period $ 5.6 $ 8.0
======= =======
___________________________________
The accompanying Notes to Condensed Financial Statements are an
integral part of the condensed financial statements.
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by the
company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and, in the opinion of the company,
reflect all adjustments (consisting only of normal accruals) which are
necessary to present fairly the results for interim periods. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations; however, the company believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements, accounting policies and the notes thereto and management's
discussion and analysis of financial condition and results of operations
included in the company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. Inventories are valued principally by the dollar value last-in, first-out
(LIFO) method of inventory accounting. It is not practicable, therefore, to
separate the inventory into its components (raw materials, work-in-process
and finished products). Inventories under the LIFO method are based on
annual determination of quantities and costs as of the year-end; therefore,
the consolidated financial statements at September 30, 1995, reflect certain
estimates relating to inventory quantities and costs at December 31, 1995.
3. An Employee Stock Ownership Plan (ESOP) was established in June 1989. The
ESOP purchased from the company approximately 1.3 million shares ($100
million) of a newly-authorized 1.75 million share series of the company's
ESOP preferred stock, financed by $60 million of notes guaranteed by the
company(of which $26 million is outstanding at September 30, 1995), and $40
million of borrowings from the company.
At September 30, 1995 there were approximately 1.0 million shares of ESOP
preferred stock outstanding at a value of $84.00 per share. The quarterly
fixed dividend rate is $1.4925 per share. The ESOP preferred stock is
convertible by the holder into the company's common stock on a one-for-one
basis, subject to anti-dilutive adjustments and may be redeemed at the option
of the company, or at the option of the plan under certain circumstances
(including upon payment of withdrawing plan participant accounts or if
required to meet the plan's debt payments). The company reserves the right to
satisfy the redemption in cash, marketable obligations or common stock. The
ESOP preferred stock is included in shareholders' equity because the company
intends to redeem the outstanding ESOP preferred stock solely with shares of
the company's common stock, and has the ability to do so.
4. Primary earnings per share are computed by dividing net income less the ESOP
preferred dividend requirement by the weighted average number of common
shares outstanding, plus an equivalent number (one-for-one) of common shares,
assuming the conversion of the Series A Stock in 1994. Fully diluted
earnings per share reflect the dilutive effect of stock
<PAGE>
options and assume the conversion of outstanding ESOP preferred stock into an
equivalent number of common shares. Net income was reduced by an additional
ESOP contribution (differential between the common and the ESOP preferred
dividend rates under an assumed conversion) necessary to satisfy the debt
service requirement.
5. In August 1995, the company completed its acquisition for approximately $65
million of Ciba-Geigy's 50% share of OCG Microelectronic Materials, a joint
venture formed by Ciba and the company in 1990. The acquisition was
accounted for as a purchase and accordingly, its results of operations, which
were not material, are included in the consolidated financial statements from
July 1, 1995, the effective date of the acquisition.
6. In June 1995, the company sold $50 million of 7.11% notes due June 2005. The
proceeds from this issue were used to reduce short-term debt incurred for
working capital purposes.
7. On March 1, 1995, 2.76 million shares of the company's $1 par value Series A
Conversion Preferred Stock were converted into shares of common stock on a
one-for-one basis. The last dividend on these preferred shares was paid in
March 1995.
8. Effective January 1, 1995, the company acquired the remaining 51% of Etoxyl,
C.A., a Latin American joint venture. The purchase price is contingent upon
the future earnings of this entity. The acquisition was accounted for as a
purchase and accordingly, its results of operations, which were not material,
are included in the consolidated financial statements from the date of
acquisition.
9. In 1987, a Federal Trade Commission (FTC) judge ruled that the company must
divest the chlorinated isocyanurates business acquired in 1985, which
included an isocyanurates manufacturing facility in South Charleston, WV, a
packaging facility in Livonia, MI and the SUN (R) brand trademark. The
company was unsuccessful in overturning this ruling. On August 8, 1995 the
company completed the sale of the Sun (R) brand trademark to AquaClear
Industries, Inc. In October 1995, the company completed the sale of its dry
sanitizer plant in South Charleston WV and a related tableting operation in
Livonia, MI to Clearon Corp., a joint venture of Israel Chemicals Ltd. and
its subsidiary, Dead Sea Bromine Group. These transactions did not have a
material impact on the company's results of operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
----------------------
Segment sales and net income for the 1995 third quarter and year-to-date period
compared with corresponding prior year periods are set forth in the following
table:
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------- ---------------------
(In millions) 1995 1994 1995 1994
---- ---- ---- ----
Sales:
- --------------------------
Chemicals $392.3 $299.6 $1,141.0 $ 923.2
Metals 201.2 188.7 660.7 554.7
Defense and Ammunition 202.9 178.6 564.5 502.0
------ ------ -------- --------
Total $796.4 $666.9 $2,366.2 $1,979.9
====== ====== ======== ========
Net Income:
Chemicals $ 28.1 $ 10.5 $ 86.5 $ 33.2
Metals 6.3 8.3 31.9 26.6
Defense and Ammunition 3.5 8.5 14.4 21.7
Corporate and Other (6.8) (5.2) (19.7) (16.5)
------ ------ -------- --------
Total $ 31.1 $ 22.1 $ 113.1 $ 65.0
====== ====== ======== ========
Chemicals sales for the quarter increased 31%, while net income increased
significantly from 1994 due to the improved performance of chlorine and caustic,
urethanes and electronic materials. Higher caustic pricing was the main
contributor to Chlor-Alkali's increased sales and profits. Higher prices for
TDI(toluene diisocyanate) were the main factors in the improved financial
results for urethanes. Pool chemicals sales increased over 1994 as worldwide
demand exceeded capacity and prices in most foreign markets were higher. Pool's
operating results were unfavorable due to higher raw materials costs and higher
manufacturing costs. In the other chemical businesses such as biocides and
hydrazine, additional sales volumes contributed to their improved performance.
Sales and profits of the electronic materials business included the operating
results of OCG Microelectronics Materials (OCG) and, also, benefited from the
strong semiconductor industry demand. In August 1995, the company completed its
acquisition of the remaining 50 percent share of OCG. On a year-to-date basis,
segment sales increased 24%, while net income more than doubled from 1994's
level. Demand for chlorine and caustic has been strong throughout 1995. Higher
caustic prices and increased chlorine volumes have improved Chlor-Alkali's
performance. Urethanes sales and profits have benefited from an increase in
worldwide TDI demand along with increasing TDI prices, especially in the foreign
markets. Higher raw materials and manufacturing costs more than offset the
profit impact from higher sales and were the main factors in Pool chemicals
profit decline. The electronic materials year-to-date performance has increased
due to higher semiconductor industry demand along with the inclusion of OCG's
operating results.
Metals sales for the quarter increased 7%, while its net income was behind last
year. Higher metal values was the main contributor to the sales increase. After
a record 1995 first half performance, this segment experienced lower earnings in
the third quarter. Declining demand for brass strip from the automotive and
ammunition markets and the impact of lower shipments and higher costs associated
with the planned maintenance
<PAGE>
shutdowns at its major operations led to decreased profits. On a year-to-date
basis, higher metal values, improved pricing and a favorable product mix
contributed to the sales increase and, also accounted primarily for the profit
improvement over 1994.
Defense and Ammunition sales for the quarter increased 14%, but net income
decreased significantly. Winchester's higher military shipments were not
sufficient to offset the decline in sporting ammunition business, which had
experienced record levels brought about by unprecedented demand throughout 1994.
This reduced sales level along with increased commodity costs (primarily copper)
were the main contributors to the decline in Winchester's quarterly profits.
Although Aerospace's sales increased over 1994 due primarily to strong demand
for its solid propellant products, profits were behind due to higher costs
associated with certain developmental programs. Ordnance's sales improved due to
its combined effects munitions contract. Delivery delays and lower volumes on
certain medium caliber ammunition programs and cost overruns on certain programs
were the main contributors to Ordnance's lower profits. On a year-to-date basis,
the reduction in the sporting ammunition business and higher commodity costs
more than offset the impact of the improved military ammunition operating
results and were the main detractors to Winchester's financial performance,
compared to 1994. Aerospace's sales increased as additional sales volumes
(primarily solid propellant products) more than offset reductions in the in-
flight entertainment orders. Profits, however, decreased due to a change in
product mix and higher costs on certain developmental programs. Ordnance's sales
increase is primarily attributable to the inclusion of the operating results of
the 1994 medium caliber ammunition acquisition. Several factors, such as cost
overruns, and delivery delays and lower volumes on certain medium caliber
ammunition programs led to reduced 1995 profits.
Changes in the strategic direction of defense spending, the timing of defense
procurements and specific defense program appropriation decisions may adversely
affect the performance of the Defense and Ammunition segment and the company in
future years, including its income, liquidity, capital resources and financial
condition. The precise impact of these decisions will depend on the timing and
size of changes and decisions, and the company's ability to mitigate their
impact with new business, business consolidations or cost reductions. The
company currently provides services to the US Government in facilities
management and ordnance demilitarization and continues to pursue other business
areas. In view of continuing uncertainty regarding the strategy and priorities
of the Department of Defense, the historical financial information of the
Defense and Ammunition segment, and to a lesser extent, of the company, may not
be indicative of future performance.
In November 1995, the company announced that it is studying a spin off of its
Ordnance and Aerospace divisions as a free-standing public company to its
shareholders. Any final decision would require the approval of the Board of
Directors among others.
Selling and administration expenses as a percent of sales were 10.6% for both
the quarter and nine-month period (11.1% and 11.7%, respectively in 1994). The
decrease was attributable to the increased sales. For the quarter, selling and
administration, and research and development expenses increased primarily due to
the inclusion of the OCG's operating results. On a year-to-date basis, several
factors contributed to the 1995 increase in selling and administration expenses.
The company incurred higher legal costs, additional information processing
expenses and higher costs related to incentive compensation programs, offset in
part by cost reduction programs. The inclusion of the operating results of OCG
and the 1994 medium caliber business(acquired in April 1994), also, contributed
to this increase. Interest expense increased over 1994 levels due to higher
average interest rates on higher average borrowings. Interest and other income
<PAGE>
for the 1995 nine-month period increased due to the favorable performance of
nonconsolidated affiliates.
Cash flow from operating activities amounted to $69.8 million and $115.8 million
in 1995 and 1994, respectively. The decrease was primarily attributable to a
higher receivables level and was partially offset by higher net income. The
increase in receivables was due to higher level of business activity and the
termination of a program under which an undivided interest in a designated pool
of receivables was sold.
Cash used for investing activities amounted to $198.4 million and $80.3 million
in 1995 and 1994, respectively. Capital spending of $132.7 million in 1995 was
ahead of 1994. Total year capital spending, including environmental capital
spending of $15 million, is estimated to increase 34% from 1994, mainly to
provide additional capacity and product quality for selected product lines.
Historically, the company has funded its environmental capital spending through
cash flow from operations and expects to do so in the future. In August 1995,
the company completed its acquisition for approximately $65 million of Ciba-
Geigy's 50% share of OCG, a joint venture formed by Ciba and the company in
1990. OCG is a supplier of photoresists, polyimides and ancillary products with
R&D, manufacturing, customer support and distribution facilities in North
America, Europe and Asia. In April 1994, the company purchased certain assets of
the medium caliber ordnance business of Aerojet for approximately $25 million.
In the 1994 third quarter, the company sold its conductive materials business
including its manufacturing facility in Ontario, CA to Acheson Industries, which
generated proceeds of $11.3 million.
In 1987, a Federal Trade Commission (FTC) judge ruled that the company must
divest the chlorinated isocyanurates business acquired in 1985, which included
an isocyanurates manufacturing facility in South Charleston, WV, a packaging
facility in Livonia, MI and the SUN (R) brand trademark. The company was
unsuccessful in overturning this ruling. On August 8, 1995 the company completed
the sale of the Sun (R) brand trademark to AquaClear Industries, Inc. In October
1995, the company completed the sale of its dry sanitizer plant in South
Charleston WV and a related tableting operation in Livonia, MI to Clearon Corp.,
a joint venture of Israel Chemicals Ltd. and its subsidiary, Dead Sea Bromine
Group. These transactions did not have a material impact on the company's
results of operations.
On March 1, 1995, the outstanding Series A Conversion Preferred stock converted
automatically into shares of common stock on a one-for-one basis. The last
dividend on these preferred shares was paid in March 1995. Commencing with first
quarter of 1995, the quarterly common stock dividend increased to $.60 per
share. In May 1994, the company issued 2.2 million shares of common stock at a
price of $46.00. The net proceeds of $98 million were used to reduce short-term
floating-rate debt, some of which was incurred to finance the acquisition of the
medium caliber ammunition business.
At September 30, 1995, the percent of total debt to total capitalization
(excluding the reduction in equity for the Contributing Employee Ownership Plan)
was 42.8%, up from 36.5% at year-end 1994. The increase from year-end is
attributable to higher short-term borrowings to fund the OCG acquisition and
finance seasonal working capital requirements.
Cash flow from operations and the use of credit facilities financed the
company's seasonal working capital requirements, capital expenditures and
dividends. At September 30, 1995, the company maintained committed credit
<PAGE>
facilities with banks of $290 million of which $146 million was available. The
company believes that cash flow from operations, existing credit facilities and
potential long-term borrowing capabilities are adequate to satisfy its liquidity
needs for the near future.
In the first nine months of 1995, the company spent approximately $16 million
for investigatory and clean-up activities associated with former waste sites and
past operations. Spending for environmental investigatory and remedial efforts
for the full year 1995 is estimated to be $25 million. These amounts were not
charged to income but instead were charged to reserves established for such
costs identified and expensed to income in prior years. Associated costs of
investigatory and remedial activities are provided for in accordance with
generally accepted accounting principles governing probability and the ability
to reasonably estimate future costs. Charges to income for investigatory and
remedial efforts were material to operating results in 1995 and 1994 and are
expected to be material to net income in future years.
Annual environmental-related cash outlays for capital projects, site
investigation and remediation, and normal plant operations are expected to range
between $90-$105 million over the next several years. While the company does not
anticipate a material increase in the projected annual level of its
environmental-related costs, there is always the possibility that such increases
may occur in the future in view of the uncertainties associated with
environmental exposures. Environmental exposures are difficult to assess for
numerous reasons, including the identification of new sites, developments at
sites resulting from investigatory studies, advances in technology, changes in
environmental laws and regulations and their application, the scarcity of
reliable data pertaining to identified sites, the difficulty in assessing the
involvement and the financial capability of other potentially responsible
parties and the company's ability to obtain contributions from other parties and
the time periods (sometimes lengthy) over which site remediation occurs. It is
possible that some of these matters (the outcomes of which are subject to
various uncertainties) may be resolved unfavorably against the company.
The company's consolidated balance sheets include reserves for future
environmental expenditures to investigate and remediate known sites amounting to
$107 million and $111 million at September 30, 1995 and December 31, 1994,
respectively, of which $67 million and $71 million was classified as other
noncurrent liabilities, respectively. Included in the reserve at September 30,
1995 and 1994, were liabilities anticipated to be shared with a third party,
with whom the company is currently in litigation. Those reserves did not take
into account any discounting of future expenditures or any consideration of
insurance recoveries or advances in technology. Those liabilities are reassessed
periodically to determine if environmental circumstances have changed and/or
remediation efforts and their costs can be better estimated. As a result of
these reassessments, future charges to income may be made for additional
liabilities.
There are a variety of legal proceedings pending or threatened against the
company. It is possible that some of these matters (the outcomes of which are
subject to various uncertainties) may be decided unfavorably against the
company. Certain of these matters are discussed in Item 3, Legal Proceedings of
the 1994 Form 10-K Annual Report and in other filings of the company with the
Securities and Exchange Commission, which filings are available on request from
the company.
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings.
-----------------
(a) With respect to the Saltville environmental site described in Item 3(b) of
---------
Olin's Annual Report on Form 10-K for the year ended December 31, 1994,
the following are subsequent developments:
Olin filed comments with the Environmental Protection Agency ("EPA")
during the public comment period for the EPA's Proposed Remedial Action
Plan issued on January 18, 1995 in support of alternatives to the proposed
remediation plan for the site. EPA issued a Record of Decision on
September 29, 1995 recognizing in substantial part Olin's comments. The
Record of Decision calls for covering the former waste ponds, treatment of
runoff from the ponds, and additional monitoring and investigation. The
Record of Decision does not address remediation of the former chlorine
plant site or the river, which are the subject of the additional
investigation. On March 15, 1995, EPA notified Olin of liability for lead
and asbestos present at the former steam-generating plant (power plant) at
the site. On July 11, 1995, Olin and EPA entered into an Administrative
Order on Consent in which Olin agreed to remove asbestos and lead, and
demolish the power plant. The work is expected to be done during 1996 and
1997.
(b) In May 1994, Olin discovered that an Ordnance Division employee may have
modified inspection and testing software used on certain medium caliber
ammunition production lines at its Marion, Illinois facility to permit
inspections to be performed at tolerances which may not have been fully
compliant with applicable contract specifications. Upon discovering the
issue, Olin promptly notified U.S. Government contracting representatives,
voluntarily disclosed the circumstances then known to the Department of
Defense's Office of the Inspector General and expressed its intent to
fully investigate the matter and take all necessary corrective actions.
In September 1994, a federal grand jury in the United States District
Court for the Southern District of Illinois issued two subpoenas to Olin
requesting production of documents relating generally to certain medium
caliber ammunition programs and specifically to the software modification
described above. Subsequently, Olin has received additional subpoenas and
several Marion employees have received subpoenas to testify before the
grand jury. Olin has fully complied with the subpoenas and is committed to
fully cooperating with Government officials to resolve the matter.
Olin cannot predict the ultimate outcome of the investigation but believes
that it will not be materially adverse to its results of operations or
financial position.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
--------
11. Computation of Per Share Earnings (Unaudited).
12(a). Computation of Ratio of Earnings to Fixed Charges (Unaudited).
12(b). Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends (Unaudited).
27. Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OLIN CORPORATION
(Registrant)
By: R. A. Beyerl
------------
R. A. Beyerl
Vice President and Controller
(Chief Accounting Officer)
By: J. M. Jackson, Jr.
------------------
J. M. Jackson, Jr.
Vice President and General Counsel
Date: November 14, 1995
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
11. Computation of Per Share Earnings (Unaudited).
12(a). Computation of Ratio of Earnings to Fixed Charges (Unaudited).
12(b). Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends (Unaudited).
27. Financial Data Schedule.
<PAGE>
EXHIBIT 11
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computation of Per Share Earnings (Unaudited)
(In millions)
Nine Months
Ended September 30,
-------------------
Primary earnings per share
- --------------------------
1995 1994
---- ----
Primary earnings:
Net income $113.1 $ 65.0
Less ESOP preferred dividend, net of tax benefit (4.3) (4.2)
------ ------
Net income $108.8 $ 60.8
====== ======
Primary shares:
Weighted average shares outstanding 24.4 20.3
Weighted average common share equivalents
assuming the conversion of Series A Conversion
Preferred Stock at the date of issuance - 2.7
------ ------
Primary shares 24.4 23.0
====== ======
Primary net income per common share $ 4.47 $ 2.64
====== ======
Fully diluted earnings per share
- --------------------------------
Fully diluted earnings:
Net income $113.1 $ 65.0
Less additional ESOP contribution (2.3) (2.3)
------ ------
Net income $110.8 $ 62.7
====== ======
Fully diluted shares:
Weighted average number of common
shares outstanding and common
stock equivalents 24.4 23.0
Dilutive effect of ESOP preferred stock 1.3 1.4
------ ------
Fully diluted shares 25.7 24.4
====== ======
Fully diluted net income per common share $ 4.32 $ 2.57
====== ======
<PAGE>
Exhibit 12(a)
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges (Unaudited)
(In millions)
Nine Months
Ended September 30,
-------------------
1995 1994
---- ----
Earnings:
Income before taxes $175.4 $102.5
Add (deduct):
Income taxes of 50% owned affiliates 2.7 3.0
Equity in losses of less than 50%
owned affiliates 2.0 3.4
Dividends received from less
than 50% owned affiliates 0.7 0.4
Interest capitalized, net of amortization (0.1) 0.3
Fixed charges as described below 47.8 41.9
------ ------
Total $228.5 $151.5
====== ======
Fixed Charges:
Interest expense $ 34.5 $ 29.3
Estimated interest factor in rent expense 13.3 12.6
------ ------
Total $ 47.8 $ 41.9
====== ======
Ratio of earnings to fixed charges 4.8 3.6
=== ===
<PAGE>
Exhibit 12(b)
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends (Unaudited)
(In millions)
Nine Months
Ended September 30,
-------------------
1995 1994
---- ----
Earnings:
Income before taxes $175.4 $102.5
Add (deduct):
Income taxes of 50% owned affiliates 2.7 3.0
Equity in losses of less than 50%
owned affiliates 2.0 3.4
Dividends received from less
than 50% owned affiliates 0.7 0.4
Interest capitalized, net of amortization (0.1) 0.3
Fixed charges as described below 47.8 41.9
------ ------
Total $228.5 $151.5
====== ======
Fixed Charges:
Interest expense $ 34.5 $ 29.3
Estimated interest factor in rent expense 13.3 12.6
Preferred stock dividend requirement 12.0 20.0
------ ------
Total $ 59.8 $ 61.9
====== ======
Ratio of earnings to combined fixed charges
and preferred stock dividends 3.8 2.4
=== ===
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements contained in Item 1 of Form 10-Q for the period ended
September 30, 1995 and is qualified in its entirety by reference to such
financial statements. Figures are rounded to the nearest 100,000 (except EPS).
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 5,600
<SECURITIES> 0
<RECEIVABLES> 567,600
<ALLOWANCES> 0
<INVENTORY> 407,300
<CURRENT-ASSETS> 1,054,300
<PP&E> 2,678,900
<DEPRECIATION> (1,726,400)
<TOTAL-ASSETS> 2,283,100
<CURRENT-LIABILITIES> 788,500
<BONDS> 425,600
<COMMON> 24,600
0
80,400
<OTHER-SE> 721,000
<TOTAL-LIABILITY-AND-EQUITY> 2,283,100
<SALES> 2,366,200
<TOTAL-REVENUES> 2,366,200
<CGS> 1,889,600
<TOTAL-COSTS> 1,889,600
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,900
<INCOME-PRETAX> 175,400
<INCOME-TAX> 62,300
<INCOME-CONTINUING> 113,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113,100
<EPS-PRIMARY> 4.47
<EPS-DILUTED> 4.32
</TABLE>
