Company News
November 5, 2020
Olin Earnings
Olin Announces Third Quarter 2020 Results
Wed November 4, 2020 5:33 PM|PR Newswire|About: OLNQ3: 11-04-20 Earnings Summary
EPS of $-0.1307 beats by $0.10 Revenue of $1.44B (-8.82% Y/Y) beats by $22.97M
CLAYTON, Mo., Nov. 4, 2020 /PRNewswire/ — Olin Corporation (OLN) announced financial results for the third quarter ended September 30, 2020.
The third quarter 2020 reported net loss was $736.8 million, or $4.67 per diluted share, which compares to the third quarter 2019 reported net income of $44.2 million, or $0.27 per diluted share. Third quarter 2020 adjusted EBITDA of $195.5 million excludes depreciation and amortization expense of $142.1 million, a goodwill impairment charge of $699.8 million, information technology integration costs of $25.5 million, and restructuring charges and other non-recurring costs of $7.0 million. Third quarter 2019 adjusted EBITDA was $292.9 million. Sales in the third quarter 2020 were $1,437.6 million compared to $1,576.6 million in the third quarter 2019.
Scott Sutton, President and Chief Executive Officer, said, “Third quarter 2020 sales for the Chemicals businesses increased sequentially from second quarter 2020 by approximately 17%, and sales have increased every month since the low point in April. Additionally, Olin drove sequential pricing improvement in the third quarter 2020 for chlorine and almost all chlorine derivatives and our newly established ECU (Electrochemical Unit) Profit Contribution Index improved in the third quarter compared to the second quarter. Looking ahead, Olin’s recent price increases for chlorine, epoxy resins, bleach, ethylene dichloride and chlorinated organics are expected to positively contribute to our ECU Profit Contribution Index in the fourth quarter. Fourth quarter volumes are expected to be challenged based on customer year-end inventory reductions and Olin selectively selling less into poor quality markets, slightly more than offsetting the positives from driving price increases.
“The Winchester business continued to drive improved segment earnings from strong commercial ammunition demand. On October 1st, Winchester began to operate the Lake City U.S. Army Ammunition Plant (Lake City) and expects to generate sequential incremental adjusted EBITDA of approximately $10 million in fourth quarter 2020 from both Lake City and price increases across the commercial ammunition portfolio.”
Sutton added, “Our employees are engaged in implementing a new winning model focused on leveraging Olin’s leadership across the whole ECU and ammunition landscape regardless of singular product demand.”
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 third quarter 2020 were $755.1 million compared to $876.3 million in the third quarter 2019. Third quarter 2020 segment earnings were $37.8 million compared to $112.7 million in the third quarter 2019. The decreases in the third quarter sales and segment earnings compared to the third quarter of 2019 were primarily due to lower ECU pricing, mainly caustic soda and ethylene dichloride, and lower volumes. The decline in segment earnings was partially offset by lower raw material and operating costs. Chlor Alkali Products and Vinyls third quarter 2020 results included depreciation and amortization expense of $112.1 million compared to $122.2 million in the third quarter 2019.
EPOXY
Epoxy sales for the third quarter 2020 were $476.1 million compared to $511.6 million in the third quarter 2019. The decrease in Epoxy sales was primarily due to lower product prices and lower epoxy resin volumes. The third quarter 2020 segment earnings were $14.9 million compared to $24.2 million in the third quarter 2019. The decrease in Epoxy segment earnings was primarily due to lower product prices and lower epoxy resin volumes, partially offset by lower raw material costs, primarily benzene and propylene, and lower operating costs. Epoxy third quarter 2020 results included depreciation and amortization expense of $23.9 million compared to $26.9 million in the third quarter 2019.
https://seekingalpha.com/pr/18072103-olin-announces-third-quarter-2020-results
November 4, 2020
Leggett & Platt Investors’ Call Highlights
Karl Glassman
Good morning and thank you for joining us today. First and foremost, I would like to thank our employees for their continued commitment to keeping each other safe and healthy while serving our customers. We are pleased to deliver strong third quarter results in these uncertain times and this could not have happened without the dedication and hard work of our people.
As we reported yesterday, third quarter earnings per share were a quarterly record of $0.77; this included $6 million of restructuring charges incurred primarily from pandemic-related cost reductions. Third quarter 2019 EPS was $0.74 and included $0.02 per share of restructuring-related charges. Excluding these items, third quarter adjusted earnings of $0.80 were up $0.04 from adjusted 2019 third quarter earnings.
Third quarter EBIT was a quarterly record $147 million. EBIT increased in the quarter versus third quarter last year primarily due to lower fixed cost, partially offset by lower volume and a change in LIFO impact. EBIT margin increased 60 basis points to 12.2%, while adjusted EBIT margin increased 80 basis points to 12.7% and adjusted EBITDA margins increased 80 basis points to 16.6%.
Third quarter sales were $1.208 billion, down 3% versus third quarter of 2019. Continued strong demand in residential end markets was more than offset by weaknesses in Aerospace and Work Furniture. Operating cash flow in the quarter was a record $261 million. Adjusted working capital as a percent of annualized sales for the quarter improved to a notable 8.7% versus 10.7% in the third quarter of 2019. As we also reported yesterday, our Board of Directors declared a $0.40 per share fourth quarter dividend. At an annual dividend of $1.60 per share, we have increased our annual dividend for 49 consecutive years. We remain committed to our position as a Dividend Aristocrat.
At the end of October, we received positive news related to the US mattress industries anti-dumping petition on mattress importers from seven countries including Vietnam, Indonesia and Cambodia. The Department of Commerce made a preliminary determination that mattresses were being sold at prices that violate the US trade laws and imposed preliminary duties that range from 3% to 990%. Also, in the quarter, the Department of Commerce imposed preliminary countervailing duties of 98% on China. We anticipate final determinations in these investigations in 2021 likely during second quarter. This should allow domestic mattress producers to compete on a more level playing field.
The Company remains well positioned both competitively and financially to capitalize on long-term opportunities in various end markets. Our enduring long-term fundamentals give us confidence in our ability to continue to create value for our shareholders.
Mitch Dolloff
While challenges remain in most of these areas, we continue to make headway and will provide more detail as we discuss each segment. Sales in our Bedding Products segment were down 2% in the third quarter. Strong demand throughout the quarter in the bedding market drove sales growth in ECS, US Spring, and European Spring. This growth was more than offset by lower volume in Adjustable bed and exited volume in Fashion Bed and Drawn Wire. We continue to increase production while managing supply challenges with non-woven fabrics and labor shortages. We found some alternatives for our non-woven fabrics, but they are less efficient and constrained production and are higher cost. We also incurred significant additional cost to air freight non-woven materials in an effort to better meet demand.
In our US Spring business, staffing is above the pre-COVID levels and we continue adding employees in response to strong demand. During the quarter, we also began to face supply constraints on TDI, a chemical used in the production of foam. Producers of TDI declared force majeure and significantly reduced supply of the chemical. While the supply constraints have relaxed to a degree, we expect to see reduced supply through at least the end of the year. Within the last month, we have also seen shortages of polyols and MDI, chemical more widely used in our specialty foams. Producers have pointed to equipment outages and hurricanes in the Gulf as well as raw material availability as impediments to production. We anticipate a tight supply of these chemicals through mid-2021. Our supply chains have also been hampered by congested ports, especially on the West Coast of the US. We are working diligently to address these issues and increase production so that we can better meet growing levels of market demand.
Keith Hughes
Thank you. A couple of questions. First, your Specialty Foam sales were up as you noted in the slides. Given some of these force majeure on various chemicals, is growth going to deteriorate during the fourth quarter as a result of the actions that occurred?
Karl Glassman
Mitch, do you want to handle it, It’s to be determined based on chemical availability, it’s going to be tight. But Mitch, do you want to elaborate?
Mitch Dolloff
Yes, I mean I think that’s the best way to answer it, Karl. We are on allocation under all — of all those chemicals under force majeure. There has been a number of issues that have popped up from mechanical issues to availability of raw materials, to hurricanes and tropical storms that have all impacted these things. So we are — I think we’re getting by but it’s tight and it’s hard to predict how long this will last. So I think at this point, I wouldn’t be — I wouldn’t put a negative spin on the fourth quarter, but it’s going to be tight.
Keith Hughes
Okay. And if we switch over to Home Furniture, it was up 4% in the quarter, that’s another area where you’ve heard kind of surging sales. Is there — were there operational issues there or production issues there or where do you think you stand versus market growth?
Karl Glassman
Yes, why don’t I start and then Steve, if you want to pile on that. Remember, if you look at the whole segment of FF&T, through the first three weeks of July, we told you that sales were up 7% and then they ended up being 1%. And I don’t want anyone to think that’s a call on Home Furniture in that Home Furniture was up strongly in early July because in 2020, the Home Furniture producers in the United States produced as opposed to taking our normal, always the July 4 week and sometimes two weeks of July. So the comp was exceeded significantly. Home Furniture demand subsequent to those first three weeks of the quarter continued to be strong. Our customers have been somewhat impacted by labor availability issues, so have we to a lesser degree. They have been impacted by the TDI issue that was most acute in September that Mitch made reference to. So furniture demand is strong, we have — we are very comfortable with our market share position and the position that the industry holds. Said differently, there is a backlog in Home Furniture that is consistent with the backlog in Bedding. So all is well on Home Furniture. But Steve, I’ve jumped in front of you.
November 4, 2020
Leggett & Platt Investors’ Call Highlights
Karl Glassman
Good morning and thank you for joining us today. First and foremost, I would like to thank our employees for their continued commitment to keeping each other safe and healthy while serving our customers. We are pleased to deliver strong third quarter results in these uncertain times and this could not have happened without the dedication and hard work of our people.
As we reported yesterday, third quarter earnings per share were a quarterly record of $0.77; this included $6 million of restructuring charges incurred primarily from pandemic-related cost reductions. Third quarter 2019 EPS was $0.74 and included $0.02 per share of restructuring-related charges. Excluding these items, third quarter adjusted earnings of $0.80 were up $0.04 from adjusted 2019 third quarter earnings.
Third quarter EBIT was a quarterly record $147 million. EBIT increased in the quarter versus third quarter last year primarily due to lower fixed cost, partially offset by lower volume and a change in LIFO impact. EBIT margin increased 60 basis points to 12.2%, while adjusted EBIT margin increased 80 basis points to 12.7% and adjusted EBITDA margins increased 80 basis points to 16.6%.
Third quarter sales were $1.208 billion, down 3% versus third quarter of 2019. Continued strong demand in residential end markets was more than offset by weaknesses in Aerospace and Work Furniture. Operating cash flow in the quarter was a record $261 million. Adjusted working capital as a percent of annualized sales for the quarter improved to a notable 8.7% versus 10.7% in the third quarter of 2019. As we also reported yesterday, our Board of Directors declared a $0.40 per share fourth quarter dividend. At an annual dividend of $1.60 per share, we have increased our annual dividend for 49 consecutive years. We remain committed to our position as a Dividend Aristocrat.
At the end of October, we received positive news related to the US mattress industries anti-dumping petition on mattress importers from seven countries including Vietnam, Indonesia and Cambodia. The Department of Commerce made a preliminary determination that mattresses were being sold at prices that violate the US trade laws and imposed preliminary duties that range from 3% to 990%. Also, in the quarter, the Department of Commerce imposed preliminary countervailing duties of 98% on China. We anticipate final determinations in these investigations in 2021 likely during second quarter. This should allow domestic mattress producers to compete on a more level playing field.
The Company remains well positioned both competitively and financially to capitalize on long-term opportunities in various end markets. Our enduring long-term fundamentals give us confidence in our ability to continue to create value for our shareholders.
Mitch Dolloff
While challenges remain in most of these areas, we continue to make headway and will provide more detail as we discuss each segment. Sales in our Bedding Products segment were down 2% in the third quarter. Strong demand throughout the quarter in the bedding market drove sales growth in ECS, US Spring, and European Spring. This growth was more than offset by lower volume in Adjustable bed and exited volume in Fashion Bed and Drawn Wire. We continue to increase production while managing supply challenges with non-woven fabrics and labor shortages. We found some alternatives for our non-woven fabrics, but they are less efficient and constrained production and are higher cost. We also incurred significant additional cost to air freight non-woven materials in an effort to better meet demand.
In our US Spring business, staffing is above the pre-COVID levels and we continue adding employees in response to strong demand. During the quarter, we also began to face supply constraints on TDI, a chemical used in the production of foam. Producers of TDI declared force majeure and significantly reduced supply of the chemical. While the supply constraints have relaxed to a degree, we expect to see reduced supply through at least the end of the year. Within the last month, we have also seen shortages of polyols and MDI, chemical more widely used in our specialty foams. Producers have pointed to equipment outages and hurricanes in the Gulf as well as raw material availability as impediments to production. We anticipate a tight supply of these chemicals through mid-2021. Our supply chains have also been hampered by congested ports, especially on the West Coast of the US. We are working diligently to address these issues and increase production so that we can better meet growing levels of market demand.
Keith Hughes
Thank you. A couple of questions. First, your Specialty Foam sales were up as you noted in the slides. Given some of these force majeure on various chemicals, is growth going to deteriorate during the fourth quarter as a result of the actions that occurred?
Karl Glassman
Mitch, do you want to handle it, It’s to be determined based on chemical availability, it’s going to be tight. But Mitch, do you want to elaborate?
Mitch Dolloff
Yes, I mean I think that’s the best way to answer it, Karl. We are on allocation under all — of all those chemicals under force majeure. There has been a number of issues that have popped up from mechanical issues to availability of raw materials, to hurricanes and tropical storms that have all impacted these things. So we are — I think we’re getting by but it’s tight and it’s hard to predict how long this will last. So I think at this point, I wouldn’t be — I wouldn’t put a negative spin on the fourth quarter, but it’s going to be tight.
Keith Hughes
Okay. And if we switch over to Home Furniture, it was up 4% in the quarter, that’s another area where you’ve heard kind of surging sales. Is there — were there operational issues there or production issues there or where do you think you stand versus market growth?
Karl Glassman
Yes, why don’t I start and then Steve, if you want to pile on that. Remember, if you look at the whole segment of FF&T, through the first three weeks of July, we told you that sales were up 7% and then they ended up being 1%. And I don’t want anyone to think that’s a call on Home Furniture in that Home Furniture was up strongly in early July because in 2020, the Home Furniture producers in the United States produced as opposed to taking our normal, always the July 4 week and sometimes two weeks of July. So the comp was exceeded significantly. Home Furniture demand subsequent to those first three weeks of the quarter continued to be strong. Our customers have been somewhat impacted by labor availability issues, so have we to a lesser degree. They have been impacted by the TDI issue that was most acute in September that Mitch made reference to. So furniture demand is strong, we have — we are very comfortable with our market share position and the position that the industry holds. Said differently, there is a backlog in Home Furniture that is consistent with the backlog in Bedding. So all is well on Home Furniture. But Steve, I’ve jumped in front of you.
November 3, 2020
Univar to Distribute Huntsman Catalysts
Huntsman Appoints Univar Solutions as Distributor of Polyurethane Additives Portfolio in the Americas
News provided by Univar Solutions Inc.
Nov 02, 2020, 16:30 ET
DOWNERS GROVE, Ill., Nov. 2, 2020 /PRNewswire/ — Univar Solutions Inc. (NYSE: UNVR) (“Univar Solutions” or “the Company”), a global chemical and ingredient distributor and provider of value-added services, announced today that it has been appointed distributor of Huntsman’s Performance Products division’s portfolio of polyurethane additives into the Americas polyurethane market. These specialty lines include the JEFFADD® Aldehyde Scavenger and JEFFCAT® Catalyst product brands, which are used extensively in the production of polyurethane foams, coatings, adhesives, elastomers and high-modulus castings for the automotive, refrigeration, furniture and bedding, as well as building and construction markets.
“We’re very excited to represent Huntsman’s portfolio of polyurethane additives throughout the Americas as our network, digital technology, technical expertise, and market knowledge is expected to help customers’ efforts with developing low emission polyurethane systems for better sustainability profiles,” said Nick Powell, President, Specialty Chemicals and Ingredients for Univar Solutions.
With a high-level focus on reducing aldehyde, fogging, odor and volatile organic compound emissions, Huntsman Performance Products’ specialized JEFFADD® Aldehyde Scavenger and JEFFCAT® Catalyst technologies help meet some of the most stringent emission specifications in the polyurethane industry. And Univar Solutions features polyurethane centers of excellence through a global network of solutions centers with resources dedicated to its new Industrial Solutions vertical market approach for the coatings, adhesives, sealants and elastomers segments.
David Ming, vice president of Huntsman’s Performance Products Americas business, said, “We are excited to build on our existing partnership with Univar Solutions Inc. which will bring a first class experience to our customers and help enable their success.”
November 3, 2020
Univar to Distribute Huntsman Catalysts
Huntsman Appoints Univar Solutions as Distributor of Polyurethane Additives Portfolio in the Americas
News provided by Univar Solutions Inc.
Nov 02, 2020, 16:30 ET
DOWNERS GROVE, Ill., Nov. 2, 2020 /PRNewswire/ — Univar Solutions Inc. (NYSE: UNVR) (“Univar Solutions” or “the Company”), a global chemical and ingredient distributor and provider of value-added services, announced today that it has been appointed distributor of Huntsman’s Performance Products division’s portfolio of polyurethane additives into the Americas polyurethane market. These specialty lines include the JEFFADD® Aldehyde Scavenger and JEFFCAT® Catalyst product brands, which are used extensively in the production of polyurethane foams, coatings, adhesives, elastomers and high-modulus castings for the automotive, refrigeration, furniture and bedding, as well as building and construction markets.
“We’re very excited to represent Huntsman’s portfolio of polyurethane additives throughout the Americas as our network, digital technology, technical expertise, and market knowledge is expected to help customers’ efforts with developing low emission polyurethane systems for better sustainability profiles,” said Nick Powell, President, Specialty Chemicals and Ingredients for Univar Solutions.
With a high-level focus on reducing aldehyde, fogging, odor and volatile organic compound emissions, Huntsman Performance Products’ specialized JEFFADD® Aldehyde Scavenger and JEFFCAT® Catalyst technologies help meet some of the most stringent emission specifications in the polyurethane industry. And Univar Solutions features polyurethane centers of excellence through a global network of solutions centers with resources dedicated to its new Industrial Solutions vertical market approach for the coatings, adhesives, sealants and elastomers segments.
David Ming, vice president of Huntsman’s Performance Products Americas business, said, “We are excited to build on our existing partnership with Univar Solutions Inc. which will bring a first class experience to our customers and help enable their success.”
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