-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Vj4ddTj5VtkO75A+oGnHqzOJY2kbBfqIWMSewF+tiww2VM+CpCLNr5kjSIxNtUDo ds4zdoXG8VXLJ5AqKu3vBA== 0000950130-95-001554.txt : 19950814 0000950130-95-001554.hdr.sgml : 19950814 ACCESSION NUMBER: 0000950130-95-001554 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLIN CORP CENTRAL INDEX KEY: 0000074303 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 131872319 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01070 FILM NUMBER: 95561017 BUSINESS ADDRESS: STREET 1: 120 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06904-1355 BUSINESS PHONE: 2033562000 FORMER COMPANY: FORMER CONFORMED NAME: OLIN MATHIESON CHEMICAL CORP DATE OF NAME CHANGE: 19691008 10-Q 1 FORM 10-Q 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 June 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 (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 July 31, 1995 there were outstanding 24,370,564 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) June 30, December 31, 1995 1994 -------- ------------ ASSETS - ------ Cash $ 3.7 $ 7.0 Accounts receivable, net 545.2 414.3 Inventories 415.0 386.2 Other current assets 68.9 72.4 -------- -------- Total current assets 1,032.8 879.9 Investments and advances 102.4 103.1 Property, plant and equipment (less accumulated depreciation of $1,685.7 and $1,624.4) 893.6 879.0 Goodwill 106.3 108.8 Other assets 54.0 58.8 -------- -------- Total assets $2,189.1 $2,029.6 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Short-term borrowings and current installments of long-term debt $ 160.3 $ 29.0 Accounts payable 267.5 332.2 Other current liabilities 284.3 257.0 -------- -------- Total current liabilities 712.1 618.2 Long-term senior debt 300.7 292.8 Long-term subordinated debt 125.0 125.0 Deferred income taxes 1.4 - Other liabilities 248.3 244.5 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 1.1 shares 83.7 85.6 Guaranteed ESOP obligations (26.0) (27.0) Common stock, par value $1 per share: Authorized 60.0 shares. Issued 24.3 shares (21.5 in 1994) 24.3 21.5 Additional paid-in capital 403.7 400.7 Cumulative translation adjustment (1.8) (3.1) Retained earnings 317.7 268.6 -------- -------- Total shareholders' equity 801.6 749.1 -------- -------- Total liabilities and shareholders' equity $2,189.1 $2,029.6 ======== ========
___________________________________ 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 (In millions, except per share amounts) Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 1995 1994 1995 1994 ------ ------ ------ ------ Sales $803.7 $708.1 $1,569.8 $1,313.0 Operating expenses: Cost of goods sold 632.7 567.2 1,245.7 1,054.7 Selling and administration 87.3 81.4 166.7 158.2 Research and development 7.1 8.8 14.4 17.3 ------ ------ -------- -------- Operating income 76.6 50.7 143.0 82.8 Interest expense 11.2 10.1 21.5 19.5 Interest and other income 2.3 2.0 5.7 3.2 ------ ------ -------- -------- Income before taxes 67.7 42.6 127.2 66.5 Income taxes 24.1 15.0 45.2 23.6 ------ ------ -------- -------- Net income 43.6 27.6 82.0 42.9 Preferred dividends 1.6 1.8 3.2 3.5 ------ ------ -------- -------- Net income available to common shareholders $ 42.0 $ 25.8 $ 78.8 $ 39.4 ====== ====== ======== ======== Per share of common stock: Primary $ 1.74 $ 1.16 $ 3.26 $ 1.78 Fully diluted $ 1.66 $ 1.10 $ 3.12 $ 1.72 Dividends $ 0.60 $ 0.55 $ 1.20 $ 1.10 ====== ====== ======== ======== Average common shares outstanding 24.3 20.3 24.3 19.8 ====== ====== ======== ========
___________________________________ The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statements of Cash Flows (In millions) Six Months Ended June 30, ----------------- 1995 1994 ------ ------ Operating activities - -------------------- Net income $ 82.0 $ 42.9 Depreciation and amortization 69.6 69.4 Changes in: Receivables (127.4) (93.5) Inventories (25.6) (4.7) Other current assets 3.5 1.8 Current liabilities (44.9) (37.9) Noncurrent liabilities 7.5 8.9 Deferred taxes 8.9 5.6 Other operating activities (1.6) 11.2 ------- ------ Net operating activities (28.0) 3.7 ------- ------ Investing activities - -------------------- Capital expenditures (84.0) (44.2) Business acquired in purchase - (25.4) transaction Other investments 2.1 (0.8) Other investing activities 3.9 7.2 ------- ------ Net investing activities (78.0) (63.2) ------- ------ Financing activities - -------------------- Long-term debt: Borrowings 50.0 - Repayments (8.0) (15.5) Short-term borrowings (repayments) 91.7 (0.8) Issuance of common stock - 98.0 Repayment from ESOP 1.0 10.0 Dividends paid (33.3) (29.5) Other financing activities 1.3 - ------- ------ Net financing activities 102.7 62.2 ------- ------ Net (decrease) increase in cash (3.3) 2.7 Cash, beginning of period 7.0 3.3 ------- ------ Cash, end of period $ 3.7 $ 6.0 ======= ======
___________________________________ The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. 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 June 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 June 30, 1995), and $40 million of borrowings from the company. At June 30, 1995 there were approximately 1.1 million shares of ESOP preferred stock outstanding at a value of $78.25 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 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 June 1995, the company signed a letter of intent to acquire from Ciba- Geigy its remaining 50% interest in OCG Microelectronic Materials, a joint venture formed by these two companies in 1990. 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. Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations. ---------------------- Segment operating data for the 1995 second quarter and year-to-date period compared with corresponding prior year periods are set forth in the following table:
Three Months Six Months Ended June 30, Ended June 30, ---------------- -------------------- (In millions) 1995 1994 1995 1994 ------- ------- --------- --------- Sales: Chemicals $397.8 $338.4 $ 748.7 $ 623.6 Metals 219.9 186.5 459.5 366.0 Defense and Ammunition 186.0 183.2 361.6 323.4 ------ ------ -------- -------- Total $803.7 $708.1 $1,569.8 $1,313.0 ====== ====== ======== ======== Net Income: Chemicals $ 36.1 $ 14.9 $ 58.4 $ 22.7 Metals 10.6 9.4 25.6 18.3 Defense and Ammunition 3.7 9.0 10.9 13.2 Corporate and Other (6.8) (5.7) (12.9) (11.3) ------ ------ -------- -------- Total $ 43.6 $ 27.6 $ 82.0 $ 42.9 ====== ====== ======== ========
Chemicals sales for the quarter and six-month period increased 18% and 20%, respectively, with a significant increase in net income from 1994. Chlor/Alkali and urethanes businesses were the major contributors to the segment's improvement. Chlor-Alkali's improved financial performance was driven by continuing strong demand for chlorine and caustic along with higher caustic pricing. Strong demand for certain products and higher TDI prices, especially in the foreign markets, more than offset the impact of higher raw material and manufacturing costs and contributed to urethanes improved financial performance. In the other chemical businesses, such as biocides, industrial chemicals and hydrazine improved performance was due primarily to additional sales volumes. Pool chemicals sales increased over 1994's levels; pool's operating results were comparable to last year's quarter and ahead for the six-month period. Continued strong demand from the semiconductor industry contributed to increased financial performance of the electronic materials business. Metals sales for the quarter and six-month period increased 18% and 26%, respectively, while net income increased 13% and 40%, respectively, from 1994. Increased shipments to the automotive, housing and ammunition markets along with higher metals values contributed to the sales increase. The profit improvement resulted from the additional volumes along with higher profit margins associated with a favorable product mix and improved pricing. Defense and Ammunition sales increased slightly for the quarter and 12% for the six-month period with a significant decrease in net income due primarily to Winchester's lower commercial ammunition shipments. Winchester's financial performance was adversely impacted by dealers and distributors adjusting commercial ammunition levels downward as consumer demand lessened, and by increased raw material costs, primarily copper. Aerospace's financial performance was ahead of 1994 due to its in-flight entertainment business and solid propellant programs. Ordnance's sales for the quarter and six-month period increased over 1994. Ordnance's operating results for the quarter were down from 1994 due to lower Ball Powder(R) propellant volumes and continuing performance issues relating to certain medium caliber ammunition. The Ball Powder(R) propellant business, favorable cost performance on tank ammunition programs and the operating results of the medium caliber ammunition business contributed to Ordnance's improved year-to-date performance. 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. Selling and administration expenses as a percent of sales was 10.9% and 10.6% for quarter and six-month period, respectively (16.5% and 12.0%, respectively in 1994). The decrease was attributable to the increased sales. Selling and administration expenses increased in amount due to higher legal costs, investments in data processing capabilities, higher costs related to incentive compensation programs and the inclusion of the 1994 medium caliber acquisition offset in part by cost reduction programs. Interest expense increased over 1994 due to higher average interest rates on higher average borrowings. Interest and other income increased due to the favorable performance of nonconsolidated affiliates. The effective tax rate was comparable for both 1995 and 1994 periods. Cash used for operating activities amounted to $28.0 million in 1995 while cash flow from operating activities was $3.7 million in 1994. The decrease was primarily attributable to higher receivables and inventory levels and was partially offset by higher operating income. Additional funds were invested in inventories to support higher level of business activity. The increase in receivables was due to 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 $78.0 million and $63.2 million for the first six months of 1995 and 1994, respectively. Capital spending of $84.0 million in 1995 was ahead of 1994. Total year capital spending, including environmental capital spending of $15 million, is estimated to increase 30% 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 April 1994, the company purchased certain assets of the medium caliber ordnance business of Aerojet for approximately $25 million. 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. 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. Over the years, the company has been unsuccessful in overturning this ruling. In February 1995, the company executed an agreement to sell its South Charleston and Livonia facilities to subsidiaries of Israel Chemicals Ltd. In August, the company received FTC approval on these transactions. On August 7, 1995 the company completed the sale of the Sun(R) brand trademark to Aqua Clear Industries, Inc. The company expects to finalize the sale to Israel Chemicals Ltd. by the end of the 1995 third quarter. These transactions are not expected to have a material adverse effect on the results of operations in 1995. In June 1995, the company has signed a letter of intent with Ciba-Geigy A.G. to acquire Ciba's 50% share of OCG Microelectronics Materials, a joint venture formed by the two companies in 1990. OCG is a leading supplier of specialty chemicals and advanced microelectronic materials to the global semiconductor industry. It is expected that the acquisition will be funded with cash generated from operations and from the sale of the South Charleston and Livonia facilities. At June 30, 1995, the percent of total debt to total capitalization (excluding the reduction in equity for the Contributing Employee Ownership Plan) was 41.5%, up from 36.5% at year-end 1994. The increase from year-end is attributable to higher short-term borrowings to 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 June 30, 1995, the company maintained committed credit facilities with banks of $298 million of which $206 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 half of 1995, the company spent approximately $9 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 $30 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 1994 and are expected to be material to net income in 1995 and 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 $111 million at June 30, 1995 and December 31, 1994, of which $71 million was classified as other noncurrent liabilities. Included in the reserve at June 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. Part II - Other Information Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- The Company held its Annual Meeting of Shareholders on April 27, 1995. Of the 25,371,181 shares of Common Stock and ESOP Preferred Stock entitled to vote at such meeting, 22,926,518 shares were present for purposes of a quorum. At the meeting, shareholders elected to the Board of Directors John W. Johnstone, Jr., Jack D. Kuehler, William L. Read and Irving Shain as Class I Directors with terms expiring in 1998, William J. Alley as a Class II Director with a term expiring in 1996 and Suzanne D. Jaffe as a Class III Director with a term expiring in 1997. Votes cast for and votes withheld in the election of Directors were as follows:
Votes For Votes Withheld ---------- -------------- John W. Johnstone, Jr. 22,331,282 595,236 Jack D. Kuehler 22,360,515 566,003 William L. Read 22,362,371 564,147 Irving Shain 22,332,674 593,844 William J. Alley 22,321,725 604,793 Suzanne D. Jaffe 22,326,215 600,303
There were no abstentions or broker non-votes. The shareholders also voted on and approved amendments to the Olin Senior Management Incentive Compensation Plan. Voting for the resolution approving the amendments were 20,397,610 shares, 1,731,676 shares were voted against and 797,232 shares abstained from voting. There were no broker non-votes. The shareholders also voted on a shareholder proposal which requested that the Board of Directors take the necessary steps in accordance with state law to declassify the Board so that all directors are elected annually. The proposal was defeated. Voting for this resolution was 8,035,773 shares, 11,302,411 shares were voted against and 1,224,449 shares abstained from voting. There were 2,363,885 broker non-votes. The shareholders also ratified the appointment of KPMG Peat Marwick as independent auditors for 1995. Voting for the resolution ratifying the appointment were 22,539,506 shares, 282,814 shares were voted against and 104,198 shares abstained from voting. There were no broker non-votes. Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibits -------- 4. Amendment, dated April 11, 1995, to Credit Agreement, dated as of September 30, 1993, between Olin Corporation and several banks. 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 ------------------- Except for Current Reports on Form 8-K dated May 23, 1995 and May 26, 1995, and with respect to item 5 thereof, no reports on Form 8-K were filed during the quarter ended June 30, 1995. 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: J. A. Riggs ----------- J. A. Riggs Senior Vice President and Chief Financial Officer (Duly authorized signatory and Chief Financial Officer) Date: August 11, 1995 EXHIBIT INDEX Exhibit No. Description - ------- ----------- 4. Amendment, dated April 11, 1995, to Credit Agreement dated as of September 30, 1993, between Olin Corporation and several banks. 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. EX-4 2 AMENDMENT TO CREDIT AGREEMENT Exhibit 4 April 11, 1995 The Boatmen's National Bank of St. Louis P.O. Box 236 St. Louis, MO 63166 Attention: Timothy L. Drone, Vice President & Manager Bank of Boston Connecticut Corporate Banking 1 Landmark Square Stamford, CT 06901 Attention: Jo Ann Keller, Director The Chase Manhattan Bank, N.A. One Chase Plaza New York, NY 10081 Attention: Lawrence C. Shields, Managing Director Chemical Bank 270 Park Avenue New York, NY 10017 Attention: Lorraine A. Mohan, Vice President Citibank, N.A. 399 Park Avenue, 8th Floor New York, NY 10043 Attention: Goran Sare, Vice President 2 Credit Suisse New York Branch 12 East 49th Street New York, NY 10017 Attention: Lynne Allegaert, Member of Senior Management Morgan Guaranty Trust Company of New York 60 Wall Street New York, NY 10260-0060 Attention: Martin R. Atkin, Managing Director J. P. Morgan Delaware 902 Market Street Wilmington, DE 19801 Attention: David J. Morris, Vice President Dear Sirs: We refer to the Credit Agreement, dated as of September 30, 1993 ("Credit Agreement"), among Olin Corporation ("Borrower"), Bank of Boston Connecticut, Chemical Bank, Citibank, N.A., Credit Suisse, Morgan Guaranty Trust Company of New York, JP Morgan Delaware, The Boatmen's National Bank of St. Louis and The Chase Manhattan Bank, N.A. The following sets forth the agreement of the undersigned to make changes in the Applicable Margin, Facility Fee Rate and Termination Date, to eliminate the Current Ratio as an affirmative covenant and to make certain other changes in the Credit Agreement: 1. Section 1.01 is amended by changing the definitions of "Applicable Margin", "Facility Fee Rate" and "Termination Date" therein to read respectively as follows: "Applicable Margin" means, as determined on the date the Adjusted CD Rate or ----------------- Eurodollar Rate, as the case may be, is determined, when the Ratings are as set forth below, the rate per annum set forth below opposite such Ratings: 3
Applicable Applicable Ratings Eurodollar C/D Rate Moody's S&P Margin Margin -------- --- ---------- ---------- Greater than A3 or A- .1750% .3000% or equal to Equal to Baal and BBB+ .1850% .3100% Baa2 and BBB+ Baa1 and BBB .2000% .3250% Baa2 and BBB Baa2 and BBB- Baa3 and BBB .2700% .3950% Baa3 and BBB- Any other Rating lower than those set forth above .5000% .6250%
"Facility Fee Rate" means with respect to each day when the Ratings are as ----------------- set forth below, the rate per annum set forth below opposite such Ratings:
Ratings Moody's S&P Facility Fee Rate ------- --- ----------------- Greater than A3 or A- .1000% or equal to Equal to Baa1 and BBB+ .1150% Baa2 and BBB+ Baa1 and BBB .1500% Baa2 and BBB Baa2 and BBB- Baa3 and BBB .1800% Baa3 and BBB- Any other Rating lower than those set forth above .2500%
"Termination Date" means (i) May 8, 2000 or (ii) any date to which the ------------------ Termination Date shall have been extended pursuant to Section 2.04(b); provided in each case of (i) and (ii), the earlier date on which the termination in whole of the Commitments occurs pursuant to Section 2.04(a) or 6.01. 4 2. The text contained in Section 5.01(d) is hereby deleted and replaced with "(d) [Intentionally Left Blank]". 3. Section 5.02(a) is amended to delete the word "and" appearing after clause (vii) thereof, to replace the period following clause (viii) thereof with the word "and" and to add the following clause (ix) to the end of Section 5.02(a): (ix) Liens in favor of the Olin-DNT Limited Partnership, a Delaware limited partnership, or Air Products and Chemicals, Inc., a Delaware corporation, or any of their respective successors and assigns, securing obligations relating to lease agreements entered into with respect to a demonstration DNT plant and a commercial DNT plant as set forth in and pursuant to Precautionary Security Agreements to be filed and recorded in the appropriate records of Calcasieu Parish, Louisiana with respect to the property referred to therein, and with respect to real estate assets referred to therein not to exceed in the aggregate fifteen acres of Borrower's real estate, and extensions and renewals of such liens. 4. This amendment shall become effective as of May 1, 1995 provided it is approval by the Borrower's Board of Directors (or authorized committee thereof) prior to such date and by the Banks as required by Section 8.01 of the Credit Agreement at any time. The Borrower confirms that the representations and warranties contained in Section 4.01 of the Credit Agreement are correct as though made on and as of the date hereof (for this purpose the term "Agreement" as used in Section 4.01 shall mean the Credit Agreement as amended hereby and the "for the six months ended, June 30, 1993" reference in paragraph (e) of Section 4.01 shall be deemed to be "for the twelve months ended, December 31, 1994"). Kindly confirm by your signature below your agreement to the foregoing. BORROWER -------- OLIN CORPORATION By /s/J. M. Pierpont ----------------- Title: Vice President and Treasurer Commitment BANKS ---------- ----- $ 20,000,000 BANK OF BOSTON CONNECTICUT By: /s/ JoAnn Keller ---------------- Name: JoAnn Keller Title: Director 5 $ 40,000,000 CHEMICAL BANK By: /s/Susan L. Kane ---------------- Name: Susan L. Kane Title: Managing Director $ 50,000,000 CITIBANK, N.A. By: /s/Goran Sare ------------- Name: Goran Sare Title: Vice President $ 20,000,000 CREDIT SUISSE By: /s/Michael C. Mast ------------------ Name: Michael C. Mast Title: Member of Senior Management By: /s/Kristina Catlin ------------------ Name: Kristina Catlin Title: Associate $ 20,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/Penelope J. B. Cox --------------------- Name: Penelope J. B. Cox Title: Vice President $ 20,000,000 JP MORGAN DELAWARE By: /s/Philip S. Detjens -------------------- Name: Philip S. Detjens Title: Vice President $ 30,000,000 THE BOATMEN'S NATIONAL BANK OF ST. LOUIS By: /s/Kenneth J. Schult -------------------- Name: Kenneth J. Schult Title: Vice President By: /s/Timothy L. Drone ------------------- Name: Timothy L. Drone Title: Vice President & Manager 6 $ 50,000,000 THE CHASE MANHATTAN BANK, N.A. By: /s/Lawrence C. Shields ---------------------- Name: Lawrence C. Shields Title: Managing Director $250,000,000 Total of the Commitments EX-11 3 COMPUTATION OF PER SHARE EARNINGS Exhibit 11 OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Per Share Earnings (Unaudited) (In millions)
Six Months Ended June 30, -------------- Primary earnings per share - -------------------------- 1995 1994 ---- ---- Primary earnings: Net income $82.0 $42.9 Less ESOP preferred dividend, net of tax benefit (2.8) (3.5) ----- ----- Net income $79.2 $39.4 ===== ===== Primary shares: Weighted average shares outstanding 24.3 19.8 Weighted average common share equivalents assuming the conversion of Series A Conversion Preferred Stock at the date of issuance - 2.7 ----- ----- Primary shares 24.3 22.5 ===== ===== Primary net income per common share $3.26 $1.78 ===== ===== Fully diluted earnings per share - -------------------------------- Fully diluted earnings: Net income $82.0 $42.9 Less additional ESOP contribution (1.2) (1.5) ----- ----- Net income $80.8 $41.4 ===== ===== Fully diluted shares: Weighted average number of common shares outstanding and common stock equivalents 24.3 22.5 Dilutive effect of ESOP preferred stock 1.6 1.5 ----- ----- Fully diluted shares 25.9 24.0 ===== ===== Fully diluted net income per common share $3.12 $1.72 ===== =====
EX-12.A 4 COMP. OF RATIO OF EARNINGS OF FIXED CHARGES Exhibit 12(a) OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (Unaudited) (In millions)
Six Months Ended June 30, -------------- 1995 1994 ---- ---- Earnings: Income before taxes $127.2 $ 66.5 Add (deduct): Income taxes of 50% owned affiliates 2.4 2.0 Equity in losses of less than 50% owned affiliates 1.8 3.7 Dividends received from less than 50% owned affiliates - 0.1 Interest capitalized, net of amortization (0.2) (0.1) Fixed charges as described below 31.7 28.7 ------ ------ Total $162.9 $100.9 ====== ====== Fixed Charges: Interest expense $ 22.9 $ 20.2 Estimated interest factor in rent expense 8.8 8.5 ------ ------ Total $ 31.7 $ 28.7 ====== ====== Ratio of earnings to fixed charges 5.1 3.5 ====== ======
EX-12.B 5 COMP. OF RATIO OF EARNINGS PREFERRED STOCK DIV.
Exhibit 12(b) OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited) (In millions) Six Months Ended June 30, -------------- 1995 1994 ---- ---- Earnings: Income before taxes $127.2 $ 66.5 Add (deduct): Income taxes of 50% owned affiliates 2.4 2.0 Equity in losses of less than 50% owned affiliates 1.8 3.7 Dividends received from less than 50% owned affiliates - 0.1 Interest capitalized, net of amortization (0.2) (0.1) Fixed charges as described below 31.7 28.7 ------ ------ Total $162.9 $100.9 ====== ====== Fixed Charges: Interest expense $ 22.9 $ 20.2 Estimated interest factor in rent expense 8.8 8.5 Preferred stock dividend requirement 9.4 13.2 ------ ------ Total $ 41.1 $ 41.9 ====== ====== Ratio of earnings to combined fixed charges and preferred stock dividends 4.0 2.4 ====== ======
EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS IN ITEM 1 OF FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 6-MOS DEC-31-1994 JAN-01-1995 JUN-30-1995 3700 0 545200 0 415000 1032800 2579300 1685700 2189100 712100 425700 24300 0 83700 693600 2189100 1569800 1569800 1245700 1245700 0 0 21500 127200 45200 82000 0 0 0 82000 3.26 3.12
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