Olin Corporation

Good morning, and welcome to Olin Corporation's second quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal your conference specialist by pressing the star key followed by zero. Following today's brief opening comments, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I now turn the conference over to Steve Keenan, Owens Director of Investor Relations. Please go ahead, Steve.

Thank you, Keith. Good morning, everyone, and thank you for joining us today. Before we begin, let me remind you that this discussion, along with the associated slides and the question and answer session that follows, will include statements regarding estimates or expectations of future performance. Please note these are forward-looking statements and that actual results could differ materially from those projected. Some of the factors that could cause actual results to differ from our projections are described without limitations in the risk factors section of our most recent Form 10-K and in yesterday's second quarter earnings press release. A copy of today's transcript and slides will be available in our website under the Investors section under Past Events. Our earnings press release and other financial data and information are available under Press Releases. With me this morning are Scott Sutton, Olin CEO, and Todd Slater, Olin CFO. I'll now turn the call over to Scott Sutton to make some brief remarks, after which we'll be happy to take your questions.

Thanks, Steve, and good morning, everybody. Global market conditions continue to be quite poor. Additionally, our performance in the second quarter was not up to expectations, partially due to the previously announced Freeport vinyl chloride monomer plant operating issues, but also due to excessive Asian epoxy resin exports and our associated epoxy asset rightsizing activities. These factors will result in a lower trough expectation for 2023 adjusted EBITDA. The bright spot in the second quarter was our purchase of 2.5% of our outstanding shares, while simultaneously reducing net debt compared to the first quarter. Since January 1st, 2022, we have purchased 21% of our outstanding shares. In the third quarter, we expect epoxy resins and system sales volumes to slightly improve relative to the second quarter. However, inventory reduction efforts will leave the business in negative EBITDA territory. While Winchester's performance is expected to slightly improve in the third quarter, mainly due to international and domestic military growth, our chloralkali and vinyls business is expected to be slightly down, mainly due to execution of our leadership model as we see bottoming of ECU values in some geographies likely a positive sign for 2024. This is our time to be tested, and I am confident that the Olin team is up to that test. It should be clear from slide number four that Olin believes running a value strategy with lots of built-in free options delivers more total cash for shareholders versus any alternative strategy. Looking forward, we are working on numerous initiatives to make sure both future peaks and troughs from that value strategy are higher than our previous results. Those initiatives are spelled out on slide number five. Keith, that concludes my opening remarks, and we can now proceed to questions.