Q4 2025 Olin Corp Earnings Call

January 30, 2026

Speaker #1: Good

Operator: Good morning, and welcome to the Olin Corporation's Q4 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a 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 the question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.

Speaker #1: morning and welcome to the OLIN Corporation's fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #1: 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 touch-tone phone.

Speaker #1: To withdraw the question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Steve Keenan, OLIN's Director of Investor Relations.

Speaker #1: Please go ahead,

Speaker #1: Steve. Thank you,

Steve Keenan: Thank you, operator. Good morning, everyone. We appreciate you joining us today to review Olin's Q4 2025 results. Please keep in mind that today's discussion, together with the associated slides, as well as 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 Olin's 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 fourth quarter earnings press release. A copy of today's transcript and slides will be available on our website in the Investors section under Past Events. Our earnings press release and related financial data and information are available under Press Releases.

Q4 2025 Olin Corp Earnings Call

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Q4 2025 Olin Corp Earnings Call

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Friday, January 30th, 2026 at 2:00 PM

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Speaker #2: Operator. Good morning, everyone. We appreciate you joining us today to review OLIN's fourth quarter 2025 results. Please keep in mind that today's discussion together with the Associated Slides as well as a question-and-answer session that follows will include statements regarding estimates or expectations of future performance.

Speaker #2: Please note these are forward-looking statements and that OLIN's 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 fourth quarter earnings press release.

Speaker #2: A copy of today’s transcript and slides will be available on our website in the Investors section under Past Events. Our earnings press release and related financial data and information are available under Press Releases.

Speaker #2: With me this morning are Ken Lane, OLIN's President and CEO, and Todd Slater, OLIN's CFO. We'll start with some prepared remarks and then we'll look forward to taking your questions.

Steve Keenan: With me this morning are Ken Lane, Olin's President and CEO, and Todd Slater, Olin's CFO. We'll start with some prepared remarks, and then we'll look forward to taking your questions. In order to give everyone an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to Olin's President and CEO, Ken Lane.

With me this morning are Ken Lane, Olin's President and CEO, and Todd Slater, Olin's CFO. We'll start with some prepared remarks, and then we'll look forward to taking your questions. In order to give everyone an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to Olin's President and CEO, Ken Lane.

Speaker #2: In order to give everyone an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to OLIN's President and CEO, Ken Lane.

Speaker #3: Thanks, Steve, and thank you to everyone for joining us today. Let's start with slide three and review our fourth quarter highlights. As we previously announced, our fourth quarter came in significantly below our expectations.

Ken Lane: Thanks, Steve, and thank you to everyone for joining us today. Let's start with slide 3 and review our fourth quarter highlights. As we previously announced, our fourth quarter came in significantly below our expectations. In December, we experienced operational issues related to an extended turnaround of our Freeport, Texas, chlorinated organics asset and third-party raw material supply constraints, both of which impacted our chloralkali assets. At the same time, we also experienced a sharp decline in chlorine pipeline demand in an already seasonally weaker quarter. During the quarter, we were able to preserve our ECU values by staying disciplined with our Value-First Commercial Approach, and we also announced a long-term EDC supply agreement with Braskem, which provides a higher value to both parties by integrating the low-cost producer of EDC with the leader in PVC in Brazil.

Kenneth Lane: Thanks, Steve, and thank you to everyone for joining us today. Let's start with slide 3 and review our fourth quarter highlights. As we previously announced, our fourth quarter came in significantly below our expectations. In December, we experienced operational issues related to an extended turnaround of our Freeport, Texas, chlorinated organics asset and third-party raw material supply constraints, both of which impacted our chloralkali assets. At the same time, we also experienced a sharp decline in chlorine pipeline demand in an already seasonally weaker quarter. During the quarter, we were able to preserve our ECU values by staying disciplined with our Value-First Commercial Approach, and we also announced a long-term EDC supply agreement with Braskem, which provides a higher value to both parties by integrating the low-cost producer of EDC with the leader in PVC in Brazil.

Speaker #3: In December, we experienced operational issues related to an extended turnaround of our Freeport, Texas chlorinated organics asset and third-party raw material supply constraints, both of which impacted our chlorophyll assets.

Speaker #3: At the same time, we also experienced a sharp decline in chlorine pipeline demand in an already seasonally weaker quarter. During the quarter, we were able to preserve our ECU values by staying disciplined with our value-first commercial approach and we also announced a long-term EDC supply agreement with Braskem which provides a higher value to both parties by integrating the low-cost producer of EDC with the leader in PVC in Brazil.

Speaker #3: In addition, we've expanded our infrastructure footprint in Brazil. Which enables us to grow our cost of sales there in 2026. In our epoxy business, we were able to contract for significant growth in our European business, which we'll begin to benefit from in the first quarter of 2026.

Ken Lane: In addition, we've expanded our infrastructure footprint in Brazil, which enables us to grow our caustic sales there in 2026. In our Epoxy business, we were able to contract for significant growth in our European business, which we'll begin to benefit from in Q1 2026. This is a result of our commercial team's successful strategy to position Olin as the last integrated supplier of Epoxy in Europe, providing reliable, secure supply to local customers in the face of continued headwinds from subsidized Asian producers. In our Winchester business, we took aggressive action to accelerate inventory reductions across our system and began efforts to rightsize our cost structure in response to lower commercial ammunition demand. Cash generation is a high priority for Olin, especially in the trough environment that we're in.

In addition, we've expanded our infrastructure footprint in Brazil, which enables us to grow our caustic sales there in 2026. In our Epoxy business, we were able to contract for significant growth in our European business, which we'll begin to benefit from in Q1 2026. This is a result of our commercial team's successful strategy to position Olin as the last integrated supplier of Epoxy in Europe, providing reliable, secure supply to local customers in the face of continued headwinds from subsidized Asian producers. In our Winchester business, we took aggressive action to accelerate inventory reductions across our system and began efforts to rightsize our cost structure in response to lower commercial ammunition demand. Cash generation is a high priority for Olin, especially in the trough environment that we're in.

Speaker #3: This is a result of our commercial team's successful strategy to position Olin as the last integrated supplier of epoxy in Europe, providing reliable, secure supply to local customers in the face of continued headwinds from subsidized Asian producers.

Speaker #3: In our Winchester business, we took aggressive action to accelerate inventory reductions across our system and began efforts to right-size our cost structure in response to lower commercial ammunition demand.

Speaker #3: Cash generation is a high priority for OLIN, especially in the trough environment that we're in. I'm very proud of how our team has responded and to generate $321 million of operating cash flow and hold net debt flat versus year-end 2024.

Ken Lane: I'm very proud of how our team has responded, and through actions that we took, we were able to generate $321 million of operating cash flow and hold net debt flat versus year-end 2024. Let's turn to slide 4 for a closer look at our chloralkali products and vinyls results. Macro conditions remain challenging. Merchant chlorine demand remains under pressure through this extended trough as subsidized Asian chlorine derivatives flood export markets. Since 2019, China exports of titanium dioxide, urethanes, epoxies, crop protection chemicals, and PVC have grown 300% to 600%, placing significant pressure on US chlorine derivative customers. As you would expect in a trough environment, we are already seeing chloralkali capacity rationalization in Europe, Latin America, and the US, which should accelerate operating rates as demand recovers.

I'm very proud of how our team has responded, and through actions that we took, we were able to generate $321 million of operating cash flow and hold net debt flat versus year-end 2024. Let's turn to slide 4 for a closer look at our chloralkali products and vinyls results. Macro conditions remain challenging. Merchant chlorine demand remains under pressure through this extended trough as subsidized Asian chlorine derivatives flood export markets. Since 2019, China exports of titanium dioxide, urethanes, epoxies, crop protection chemicals, and PVC have grown 300% to 600%, placing significant pressure on US chlorine derivative customers. As you would expect in a trough environment, we are already seeing chloralkali capacity rationalization in Europe, Latin America, and the US, which should accelerate operating rates as demand recovers.

Speaker #3: Let's turn to slide four for a closer look at our chlorophyll products and vinyls results. Macro conditions remain challenging. Merchant chlorine demand remains under pressure through this extended trough as subsidized Asian chlorine derivatives flood export markets.

Speaker #3: Since 2019, China exports of titanium dioxide, urethanes, epoxies, crop protection chemicals, and PVC have grown $300 to $600 percent. Placing significant pressure on US chlorine derivative customers.

Speaker #3: As you would expect in a trough environment, we are already seeing chlorophyll capacity rationalization in Europe, Latin America, and the US, which should accelerate operating rates as demand recovers.

Speaker #3: OLIN has done a great job of preserving our ECU values and remains committed to our value-first approach. We are well positioned when markets recover from the trough.

Ken Lane: Olin has done a great job of preserving our ECU values and remains committed to our value-first approach, and we are well positioned when markets recover from the trough. As we look ahead to Q1, we'll continue to face headwinds related to power and raw materials. As a result of Winter Storm Fern, we proactively shut down several of our Gulf Coast assets, which will increase our Q1 costs. In addition, we'll see higher turnaround costs as we begin our VCM turnaround at our Freeport, Texas, site. This is the single largest turnaround that Olin executes and occurs every three years. Global caustic soda demand remains healthy, led by alumina, water treatment, and pulp and paper. Olin ended 2025 with very low inventories, and we're seeing good momentum on our caustic soda price increase.

Olin has done a great job of preserving our ECU values and remains committed to our value-first approach, and we are well positioned when markets recover from the trough. As we look ahead to Q1, we'll continue to face headwinds related to power and raw materials. As a result of Winter Storm Fern, we proactively shut down several of our Gulf Coast assets, which will increase our Q1 costs. In addition, we'll see higher turnaround costs as we begin our VCM turnaround at our Freeport, Texas, site. This is the single largest turnaround that Olin executes and occurs every three years. Global caustic soda demand remains healthy, led by alumina, water treatment, and pulp and paper. Olin ended 2025 with very low inventories, and we're seeing good momentum on our caustic soda price increase.

Speaker #3: As we look ahead to the first quarter, we'll continue to face headwinds related to power and raw materials. As a result of winter storm Fern, we proactively shut down several of our Gulf Coast assets, which will increase our first quarter costs.

Speaker #3: In addition, we'll see higher turnaround costs as we begin our VCM turnaround at our Freeport, Texas site. This is the single largest turnaround that OLIN executes and occurs every three years.

Speaker #3: Global costs exceeded demand remain healthy, led by Illumina, water treatment, and pulp and paper. OLIN ended 2025 with very low inventories and we're seeing good momentum on our cost exceeded price increase.

Speaker #3: As seasonal demand returns this spring, already low inventories and planned industry turnarounds are expected to further tighten cost supply. Our full year 2026 chlorophyll outlook remains challenging.

Ken Lane: As seasonal demand returns this spring, already low inventories and planned industry turnarounds are expected to further tighten caustic supply. Our full year 2026 chlor-alkali outlook remains challenging. We expect global vinyls pricing will remain under pressure. Rising US natural gas, power, and feedstock costs will present a headwind, in contrast to falling global oil prices, serving to erode the US cost advantage. In the near term, Olin faces stranded costs of approximately $70 million, resulting from Dow's recent closure of their Freeport propylene oxide plant. This cost burden will be offset by our Beyond 250 structural cost reductions, which I'll discuss shortly. Now let's turn to Slide 5 for a look at our Epoxy results. Our Q4 Epoxy results sequentially increased due to improved product mix, allylics, and aromatics margins, partially offset by higher turnaround and seasonally lower demand.

As seasonal demand returns this spring, already low inventories and planned industry turnarounds are expected to further tighten caustic supply. Our full year 2026 chlor-alkali outlook remains challenging. We expect global vinyls pricing will remain under pressure. Rising US natural gas, power, and feedstock costs will present a headwind, in contrast to falling global oil prices, serving to erode the US cost advantage. In the near term, Olin faces stranded costs of approximately $70 million, resulting from Dow's recent closure of their Freeport propylene oxide plant. This cost burden will be offset by our Beyond 250 structural cost reductions, which I'll discuss shortly. Now let's turn to Slide 5 for a look at our Epoxy results. Our Q4 Epoxy results sequentially increased due to improved product mix, allylics, and aromatics margins, partially offset by higher turnaround and seasonally lower demand.

Speaker #3: We expect global vinyls pricing will remain under pressure. Rising US natural gas, power, and feedstock costs will present a headwind in contrast to falling global oil prices serving to erode the US cost advantage.

Speaker #3: In the near term, Olin faces stranded costs of approximately $70 million, resulting from Dow's recent closure of their Freeport propylene oxide plant. This cost burden will be offset by our Beyond 250 structural cost reductions, which I'll discuss shortly.

Speaker #3: Now let's turn to slide five for a look at our epoxy results. Our fourth quarter epoxy results sequentially increased due to improved product mix, acrylics and aromatics margins, partially offset by higher turnaround and seasonally lower demand.

Speaker #3: As we look ahead to the first quarter, we do expect our epoxy business to return to profitability, although at a low level. This will be realized through actions we have taken by growing our participation in the European market, realizing lower costs at our Stade Germany site, and lower turnaround costs.

Ken Lane: As we look ahead to Q1, we do expect our Epoxy business to return to profitability, although at a low level. This will be realized through actions we have taken by growing our participation in the European market, realizing lower costs at our Stade, Germany site, and lower turnaround costs. As we look out further, structural changes in our cost position, recent European Epoxy chain plant closures, and continued growth in our formulated solutions portfolio will support a return to profitability for 2026 as well. Over the past 3 years, Olin's Epoxy business has remained focused on cost reductions. In that time, we've reduced our global Epoxy cash costs by about 19%. Our most recent action was this month's closure of our Guarujá, Brazil, Epoxy plant. This shutdown is expected to deliver $10 million of annual structural savings.

As we look ahead to Q1, we do expect our Epoxy business to return to profitability, although at a low level. This will be realized through actions we have taken by growing our participation in the European market, realizing lower costs at our Stade, Germany site, and lower turnaround costs. As we look out further, structural changes in our cost position, recent European Epoxy chain plant closures, and continued growth in our formulated solutions portfolio will support a return to profitability for 2026 as well. Over the past 3 years, Olin's Epoxy business has remained focused on cost reductions. In that time, we've reduced our global Epoxy cash costs by about 19%. Our most recent action was this month's closure of our Guarujá, Brazil, Epoxy plant. This shutdown is expected to deliver $10 million of annual structural savings.

Speaker #3: As we look out further, structural changes in our cost position, recent European epoxy chain plant closures, and continued growth in our formulated solutions portfolio will support a return to profitability for 2026 as well.

Speaker #3: Over the past three years, Olin's epoxy business has remained focused on cost reductions. In that time, we've reduced our global epoxy cash costs by about 19%.

Speaker #3: Our most recent action was this month's closure of our Guaruja, Brazil epoxy plant. This shutdown is expected to deliver $10 million of annual structural savings.

Speaker #3: Also, in 2025, we continue to deliver on our formulated solution sales growth. These solutions enable AI chips to better manage heat and conductivity, allow lightweight wind blades to exceed 500 feet in length, and serve as adhesives in some of the most challenging environments and applications.

Ken Lane: Also, in 2025, we continued to deliver on our formulated solution sales growth. These solutions enable AI chips to better manage heat and conductivity, that allow lightweight wind blades to exceed 500 feet in length, and that serve as adhesives in some of the most challenging environments and application. We will continue to benefit from that growth in 2026. Now, please turn to Slide 6 for an update on our Winchester business. During Q4, Winchester took aggressive action to adjust its operating model to reflect lower commercial ammunition demand and significantly reduce inventory. As expected, we realized higher military and military project sales, which was offset by these lower commercial sales and higher metals and operating costs. Winchester's Q1 priority will be the implementation of our commercial ammunition price increase. Our new pricing is expected to offset the majority of 2025 cost escalation.

Also, in 2025, we continued to deliver on our formulated solution sales growth. These solutions enable AI chips to better manage heat and conductivity, that allow lightweight wind blades to exceed 500 feet in length, and that serve as adhesives in some of the most challenging environments and application. We will continue to benefit from that growth in 2026. Now, please turn to Slide 6 for an update on our Winchester business. During Q4, Winchester took aggressive action to adjust its operating model to reflect lower commercial ammunition demand and significantly reduce inventory. As expected, we realized higher military and military project sales, which was offset by these lower commercial sales and higher metals and operating costs. Winchester's Q1 priority will be the implementation of our commercial ammunition price increase. Our new pricing is expected to offset the majority of 2025 cost escalation.

Speaker #3: We will continue to benefit from that growth in 2026. Now, please turn to slide six for an update on our Winchester business. During the fourth quarter, Winchester took aggressive action to adjust its operating model to reflect lower commercial ammunition demand and significantly reduce inventory.

Speaker #3: As expected, we realized higher military and military project sales, which was offset by these lower commercial sales and higher metals and operating costs. Winchester's first quarter priority will be the implementation of our commercial ammunition price increase.

Speaker #3: Our new pricing is expected to offset the majority of 2025 cost escalation. As we begin 2026, commercial shipments will continue to be made to order and subject to our increased pricing.

Ken Lane: As we begin 2026, commercial shipments will continue to be made to order and subject to our increased pricing. As we look back at 2025, we've seen a significant decline in demand for commercial ammunition back to pre-COVID levels. In response, our Winchester team has taken the necessary actions to align our production capacity with today's reduced demand. We've eliminated shifts, reduced headcount, and restricted overtime across all Winchester plants. At the same time, ammunition imports have slowed dramatically in the face of US tariffs as high as 50%. Last year, imported ammunition satisfied approximately 12% of US demand. In the most recent September import data, imports from Brazil, which typically is the largest importer, have disappeared completely. Domestic and international military sales continue to grow as NATO countries expand their defense budgets and the US increases its own defense spending.

As we begin 2026, commercial shipments will continue to be made to order and subject to our increased pricing. As we look back at 2025, we've seen a significant decline in demand for commercial ammunition back to pre-COVID levels. In response, our Winchester team has taken the necessary actions to align our production capacity with today's reduced demand. We've eliminated shifts, reduced headcount, and restricted overtime across all Winchester plants. At the same time, ammunition imports have slowed dramatically in the face of US tariffs as high as 50%. Last year, imported ammunition satisfied approximately 12% of US demand. In the most recent September import data, imports from Brazil, which typically is the largest importer, have disappeared completely. Domestic and international military sales continue to grow as NATO countries expand their defense budgets and the US increases its own defense spending.

Speaker #3: As we look back at 2025, we've seen a significant decline in demand for commercial ammunition. Back to pre-COVID levels, in response, our Winchester team has taken the necessary actions to align our production capacity with today's reduced demand.

Speaker #3: We've eliminated shifts, reduced headcount, and restricted overtime across all Winchester plants. At the same time, ammunition imports have slowed dramatically in the face of U.S. tariffs as high as 50%.

Speaker #3: Last year, imported ammunition satisfied approximately 12 percent of US demand. In the most recent September import data, imports from Brazil, which typically is the largest importer, have disappeared completely.

Speaker #3: Domestic and international military sales continue to grow as NATO countries expand their defense budgets and the US increases its own defense spending. Our next-generation squad weapon project remains on schedule and will be the most modern and sophisticated small-caliber ammunition plant in the world.

Ken Lane: Our Next Generation Squad Weapon project remains on schedule and will be the most modern and sophisticated small-caliber ammunition plants in the world. Winchester's 2026 outlook still faces significant cost headwinds from higher copper, brass, and propellant costs. Winchester 2026 tailwinds include expected sales growth across domestic military, international military, and military projects. Commercial volumes and pricing are also expected to improve during 2026. Retail sales have begun to show year-over-year improvement, albeit over a low baseline, and retailer inventories have come down significantly. Let's turn to Slide 7 for a high-level view of our Beyond 250 structural cost savings program. Olin's Beyond 250 structural cost reduction program focuses on the identification and removal of inefficiencies.

Our Next Generation Squad Weapon project remains on schedule and will be the most modern and sophisticated small-caliber ammunition plants in the world. Winchester's 2026 outlook still faces significant cost headwinds from higher copper, brass, and propellant costs. Winchester 2026 tailwinds include expected sales growth across domestic military, international military, and military projects. Commercial volumes and pricing are also expected to improve during 2026. Retail sales have begun to show year-over-year improvement, albeit over a low baseline, and retailer inventories have come down significantly. Let's turn to Slide 7 for a high-level view of our Beyond 250 structural cost savings program. Olin's Beyond 250 structural cost reduction program focuses on the identification and removal of inefficiencies.

Speaker #3: Winchester's 2026 outlook still faces significant cost headwinds from higher copper, brass, and propellant costs. Winchester's 2026 tailwinds include expected sales growth across domestic military, international military, and military projects.

Speaker #3: Commercial volumes and pricing are also expected to improve during 2026. Retail sales have begun to show year-over-year improvement, albeit over a low baseline, and retailer inventories have come down significantly.

Speaker #3: Let's turn to slide seven for a high-level view of our Beyond 250 structural cost savings program. Olin's Beyond 250 structural cost reduction program focuses on the identification and removal of inefficiencies.

Speaker #3: During our 2024 Investor Day, each Olin business made a cost savings commitment, and we are focused on delivering these savings as quickly and efficiently as possible while maintaining safe and reliable performance of our assets.

Ken Lane: During our 2024 Investor Day, each Olin business made a cost savings commitment, and we are focused on delivering these savings as quickly and efficiently as possible, while maintaining safe and reliable performance of our assets. In 2025, we delivered $44 million in structural cost savings, and we expect to add an incremental $100 to $120 million of annual Beyond 250 savings during 2026, spread across our three businesses. As I discussed last year, we've enlisted outside expertise to help review our organization and processes against industry best practices. We've begun to improve efficiency at our largest site in Freeport, Texas. By streamlining our work processes, we've already been able to achieve a meaningful reduction in staffing. Through this exercise, we've identified many key performance metrics and gaps to close.

During our 2024 Investor Day, each Olin business made a cost savings commitment, and we are focused on delivering these savings as quickly and efficiently as possible, while maintaining safe and reliable performance of our assets. In 2025, we delivered $44 million in structural cost savings, and we expect to add an incremental $100 to $120 million of annual Beyond 250 savings during 2026, spread across our three businesses. As I discussed last year, we've enlisted outside expertise to help review our organization and processes against industry best practices. We've begun to improve efficiency at our largest site in Freeport, Texas. By streamlining our work processes, we've already been able to achieve a meaningful reduction in staffing. Through this exercise, we've identified many key performance metrics and gaps to close.

Speaker #3: In 2025, we delivered $44 million in structural cost savings and we expect to add an incremental $100 to $120 million of annual beyond 250 savings during 2026, spread across our three businesses.

Speaker #3: As I discussed last year, we've enlisted outside expertise to help review our organization and processes against industry best practices. We've begun to improve efficiency at our largest site in Freeport, Texas.

Speaker #3: By streamlining our work processes, we've already been able to achieve a meaningful reduction in staffing. Through this exercise, we've and gaps to close. For example, our contractor time on tools was well below industry best practice and our overall reliance on contractors was excessive.

Ken Lane: For example, our contractor time on tools was well below industry best practice, and our overall reliance on contractors was excessive. With our new organization, work processes, and performance tracking, we have clear line of sight to deliver these additional cost savings in 2026. Our Freeport plant is the pilot for this improvement program, which we're now rolling out across our other global sites.... At the same time, Winchester has been rightsizing their staffing and operations to reflect lower levels of commercial ammunition demand. Both of these efforts combined have resulted in a reduction of more than 300 employee and contractor positions during the second half of 2025. We expect to realize a similar level in 2026, as we implement the same efficiency measures at our other sites.

For example, our contractor time on tools was well below industry best practice, and our overall reliance on contractors was excessive. With our new organization, work processes, and performance tracking, we have clear line of sight to deliver these additional cost savings in 2026. Our Freeport plant is the pilot for this improvement program, which we're now rolling out across our other global sites.... At the same time, Winchester has been rightsizing their staffing and operations to reflect lower levels of commercial ammunition demand. Both of these efforts combined have resulted in a reduction of more than 300 employee and contractor positions during the second half of 2025. We expect to realize a similar level in 2026, as we implement the same efficiency measures at our other sites.

Speaker #3: With our new organization, work processes, and performance tracking, we have clear line of sight to deliver these additional cost savings in 2026. Our Freeport plant is the pilot for this improvement program, which we're now rolling out across our other global sites.

Speaker #3: At the same time, Winchester has been right-sizing their staffing and operations to reflect lower levels of commercial ammunition demand. Both of these efforts combined have resulted in a reduction of more than 300 employee and contractor positions during the second half of 2025.

Speaker #3: We expect to realize a similar level in 2026 as we implement the same efficiency measures at our other sites. In the first quarter of 2026, we'll begin to see the benefits of our new supply agreement at our Stotter, Germany site.

Ken Lane: In Q1 2026, we'll begin to see the benefits of our new supply agreement at our Stade, Germany site. We expect to realize $40 to 50 million of savings related to that in our Epoxy business through the year. As mentioned earlier, Dow's closure of its Freeport propylene oxide plant has created a $70 million stranded cost headwind for Olin. By optimizing our power supply, we've already managed to offset approximately $20 million of that stranded cost. Earlier this month, we announced the closure of our Epoxy production plant in Brazil. We'll be able to more cost-effectively serve our customers there with supply from either Freeport or Stade, both of which are vertically integrated with better cost structures. As a result of this action, we expect to realize a $10 million annual benefit.

In Q1 2026, we'll begin to see the benefits of our new supply agreement at our Stade, Germany site. We expect to realize $40 to 50 million of savings related to that in our Epoxy business through the year. As mentioned earlier, Dow's closure of its Freeport propylene oxide plant has created a $70 million stranded cost headwind for Olin. By optimizing our power supply, we've already managed to offset approximately $20 million of that stranded cost. Earlier this month, we announced the closure of our Epoxy production plant in Brazil. We'll be able to more cost-effectively serve our customers there with supply from either Freeport or Stade, both of which are vertically integrated with better cost structures. As a result of this action, we expect to realize a $10 million annual benefit.

Speaker #3: We expect to realize $40 to $50 million of savings related to that and our epoxy business through the year. As mentioned earlier, Dow's closure of its Freeport propylene oxide plant has created a $70 million stranded cost headwind for Olin.

Speaker #3: By optimizing our power supply, we've already managed to offset approximately $20 million of that stranded cost. Earlier this month, we announced the closure of our epoxy production plant in Brazil.

Speaker #3: We'll be able to more cost-effectively serve our customers there with supply from either Freeport or Stotter, both of which are vertically integrated with better cost structures.

Speaker #3: As a result of this action, we expect to realize a $10 million annual benefit. With the progress we made in 2025 and visibility of savings in 2026, we're confident we can exceed the $250 million savings commitment we made during our 2024 investor day.

Ken Lane: With the progress we made in 2025 and visibility of savings in 2026, we're confident we can exceed the $250 million savings commitment we made during our 2024 Investor Day. Now I'll turn the call over to Todd for a look at our financial highlights.

With the progress we made in 2025 and visibility of savings in 2026, we're confident we can exceed the $250 million savings commitment we made during our 2024 Investor Day. Now I'll turn the call over to Todd for a look at our financial highlights.

Speaker #3: Now I'll turn the call over to Todd for a look at our financials.

Speaker #3: highlights. Thanks,

Todd Slater: Thanks, Ken. Let's review our cash flow, liquidity, and financial foundation. Despite the challenges we encountered that impacted our adjusted EBITDA during Q4 and throughout 2025, I'm pleased to report that we successfully achieved our 2025 cash flow and working capital objectives. In Q4, we generated approximately $321 million in operating cash flow, which enabled us to keep our year-end net debt at a level comparable to where it stood at the end of 2024. Throughout 2025, our team's proactive working capital reductions contributed $248 million in cash, excluding the timing of tax payments. As we closed out the year, our available liquidity stood at $1 billion. Preserving and enhancing liquidity continues to be a top priority for us, particularly as we navigate this extended period of lower demand in our businesses.

Speaker #2: Ken. Let's review our cash flow, liquidity, and financial foundation. Despite the challenges we encountered that impacted our adjusted EBITDA during the fourth quarter and throughout, I am pleased to report that we successfully achieved our 2025 cash flow and working capital objectives.

Speaker #2: In the fourth quarter, we generated approximately $321 million in operating cash flow, which enabled us to keep our year-end net debt at a level comparable to where it stood at the end of 2024.

Speaker #2: Throughout 2025, our teams proactively working capital reductions contributed $248 million in cash, excluding the timing of tax payments. As we closed out the year, our available liquidity stood at $1 billion.

Speaker #2: Preserving and enhancing liquidity continues to be a top priority for us, particularly as we navigate this extended period of lower demand in our businesses.

Speaker #2: We continually review all sources and uses of cash, with the goal of cost-effectively maintaining adequate liquidity to support our business. Our debt profile remains managed.

Todd Slater: We continually review all sources and uses of cash, with the goal of cost effectively maintaining adequate liquidity to support our business. Our debt profile remains managed. Early last year, our team executed a well-timed bond issuance and debt refinancing, which provided a leverage-neutral extension to 2033 of our nearest bond maturities, as well as an extension of our senior bank credit agreement from 2027 to 2030. Importantly, we have no bonds maturing until mid-year 2029. Our debt structure consists of manageable tranches with staggered maturities in the years ahead. We remain firmly committed to managing our balance sheet in a way that maximizes our financial flexibility in the future. Now, let me take a moment to discuss our outlook for expected sources and uses of cash in 2026.

We continually review all sources and uses of cash, with the goal of cost effectively maintaining adequate liquidity to support our business. Our debt profile remains managed. Early last year, our team executed a well-timed bond issuance and debt refinancing, which provided a leverage-neutral extension to 2033 of our nearest bond maturities, as well as an extension of our senior bank credit agreement from 2027 to 2030. Importantly, we have no bonds maturing until mid-year 2029. Our debt structure consists of manageable tranches with staggered maturities in the years ahead. We remain firmly committed to managing our balance sheet in a way that maximizes our financial flexibility in the future. Now, let me take a moment to discuss our outlook for expected sources and uses of cash in 2026.

Speaker #2: Early last year, our team executed a well-timed bond issuance and debt refinancing, which provided a leverage-neutral extension to 2033 of our nearest bond maturities, as well as an extension of our senior bank credit agreement from 2027 to 2030.

Speaker #2: Importantly, we have no bonds maturing until mid-year 2029. Our debt structure consists of manageable tranches with staggered maturities in the years ahead. We remain firmly committed to managing our balance sheet in a way that maximizes our financial flexibility in the future.

Speaker #2: Now let me take a moment to discuss our outlook for expected sources and uses of cash in 2026. First, regarding cash taxes, we anticipate receiving refunds from prior years related to the Clean Hydrogen Production Tax Credits under Section 45(v) as a part of the Inflation Reduction Act of 2022.

Todd Slater: First, regarding cash taxes, we anticipate receiving refunds from prior years related to the Clean Hydrogen Production Tax Credits under Section 45V, as a part of the Inflation Reduction Act of 2022. Factoring in these refunds, we expect 2026 to essentially be a cash-free tax year, plus or minus $20 million. We are proactively managing our capital spending, targeting approximately $200 million, with a focus on funding sustaining capital expenditures that ensure safe and reliable operation of our assets. We expect to continue our nearly century-long history of uninterrupted quarterly dividend payments. As we further strengthen our financial resilience, any remaining excess cash flow after the preceding capital allocation priorities will be used to reduce our outstanding debt. As a reminder, due to our normal seasonality of working capital, we expect net debt to increase during the first part of 2026.

First, regarding cash taxes, we anticipate receiving refunds from prior years related to the Clean Hydrogen Production Tax Credits under Section 45V, as a part of the Inflation Reduction Act of 2022. Factoring in these refunds, we expect 2026 to essentially be a cash-free tax year, plus or minus $20 million. We are proactively managing our capital spending, targeting approximately $200 million, with a focus on funding sustaining capital expenditures that ensure safe and reliable operation of our assets. We expect to continue our nearly century-long history of uninterrupted quarterly dividend payments. As we further strengthen our financial resilience, any remaining excess cash flow after the preceding capital allocation priorities will be used to reduce our outstanding debt. As a reminder, due to our normal seasonality of working capital, we expect net debt to increase during the first part of 2026.

Speaker #2: Factoring in these refunds, we expect 2026 to essentially be a cash-free tax year. Plus or minus $20 million. We are proactively managing our capital spending.

Speaker #2: Targeting approximately $200 million with a focus on funding sustaining capital expenditures that ensure safe and reliable operation of our assets. We expect to continue our nearly century-long history of uninterrupted quarterly dividend payments.

Speaker #2: As we further strengthen our financial resilience, any remaining excess cash flow after the preceding capital allocation priorities will be used to reduce our outstanding debt.

Speaker #2: As a reminder, due to our normal seasonality of working capital, we expect net debt to increase during the first part of 2026. We remain focused on minimizing our typical seasonal inventory build.

Todd Slater: We remain focused on minimizing our typical seasonal inventory build. Our teams remain dedicated to generating cash, maintaining strict cost discipline, and supporting our Beyond 250 cost savings. We are committed to maintaining a prudent capital structure with a strong balance sheet and robust cash flows.

We remain focused on minimizing our typical seasonal inventory build. Our teams remain dedicated to generating cash, maintaining strict cost discipline, and supporting our Beyond 250 cost savings. We are committed to maintaining a prudent capital structure with a strong balance sheet and robust cash flows. Ken, I'll hand the call back to you.

Speaker #2: Our teams remain dedicated to generating cash, maintaining strict cost discipline, and supporting our beyond $250 cost savings. We are committed to maintaining a prudent capital structure with a strong balance sheet and robust cash flows.

David Begleiter: ... Ken, I'll hand the call back to you.

Speaker #2: Ken, I'll hand the call back to you.

Speaker #3: Thanks, Todd. Let's finish up with slide nine and our outlook for the fourth quarter. We expect to deliver first quarter earnings lower than fourth quarter 2025.

Ken Lane: Thanks, Todd. Let's finish up with slide 9 and our outlook for the Q4. We expect to deliver Q1 earnings lower than Q4 2025. The main drivers behind that are continued seasonally weaker demand and higher costs in our CAPV business, as we previously discussed. We're seeing positive momentum with caustic pricing and expect to see more benefit from that as we move through the year. Epoxy results will be sequentially higher, driven by higher volumes and lower costs in Europe from the new Stade contract taking effect, partially offset by a less favorable product mix. Winchester results are expected to modestly improve from the Q4, with higher commercial ammunition volume and pricing to offset rising copper and brass costs, as well as lower operating costs from our new operating model.

Kenneth Lane: Thanks, Todd. Let's finish up with slide 9 and our outlook for the Q4. We expect to deliver Q1 earnings lower than Q4 2025. The main drivers behind that are continued seasonally weaker demand and higher costs in our CAPV business, as we previously discussed. We're seeing positive momentum with caustic pricing and expect to see more benefit from that as we move through the year. Epoxy results will be sequentially higher, driven by higher volumes and lower costs in Europe from the new Stade contract taking effect, partially offset by a less favorable product mix. Winchester results are expected to modestly improve from the Q4, with higher commercial ammunition volume and pricing to offset rising copper and brass costs, as well as lower operating costs from our new operating model.

Speaker #3: The main drivers behind that are continued seasonally weaker demand and higher costs in our CAPV business, as we previously discussed. We're seeing positive momentum with cost pricing and expect to see more benefit from that as we move through the year.

Speaker #3: Epoxy results will be sequentially higher driven by higher volumes and lower costs in Europe from the new Stotter contract taking effect. Partially offset by a less favorable product mix.

Speaker #3: Winchester results are expected to modestly improve from the fourth quarter, with higher commercial ammunition volume and pricing to offset rising copper and brass costs, as well as lower operating costs from our new operating model.

Speaker #3: While we're not satisfied with our results, everyone at Olin is focused on executing our value-first commercial approach: delivering our beyond $250 million cost reductions and controlling what we can control to drive better business outcomes going forward.

Ken Lane: While we're not satisfied with our results, everyone at Olin is focused on executing our value-first commercial approach, delivering our Beyond 250 cost reductions, and controlling what we can control to drive better business outcomes going forward. Our team is committed to maintaining leading positions across our businesses, and I'm confident that we are well-positioned for the future. Operator, we're now ready to take questions.

While we're not satisfied with our results, everyone at Olin is focused on executing our value-first commercial approach, delivering our Beyond 250 cost reductions, and controlling what we can control to drive better business outcomes going forward. Our team is committed to maintaining leading positions across our businesses, and I'm confident that we are well-positioned for the future. Operator, we're now ready to take questions.

Speaker #3: Our team is committed to maintaining leading positions across our businesses and I'm confident that we are well positioned for the future. Operator, we're now ready to take

Speaker #3: questions. We

Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. Our first question comes from Aleksey Yefremov from KeyBanc. Please go ahead.

Speaker #1: will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #1: To withdraw your question, please press star, then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster.

Speaker #1: Our first question comes from Alexi Yefremov from KeyBank. Please go ahead.

Speaker #1: ahead. Thanks.

Aleksey Yefremov: Thanks. Good morning, everyone. You described a sharp decline in chlorine pipeline demand in Q4 as one of the biggest headwinds, and I'm curious if it remains a large headwind in Q1, and if so, when do you expect that chlorine demand to recover? Obviously, consultants are describing a more competitive merchant chlorine market. Is this part of the story here, or is this something idiosyncratic to your customers, and you still have those customers and have the same market share or not?

Speaker #4: Good morning, everyone. You described the sharp decline in chlorine pipeline demand in Q4 as one of the biggest headwinds, and I'm curious if it remains a large headwind in the first quarter. If so, when do you expect that chlorine demand to recover?

Speaker #4: Obviously, consultants are describing a more competitive merchant chlorine market. Is this part of the story here or is this something it is in credit to your customers and you still have those customers and have the same market share or

Speaker #4: not? Hi, good

Ken Lane: Hi, good morning, Aleksey. Thank you for your question. So yeah, listen, we saw the decline that we were referring to for the chlorine pipeline demand. That really happened in December, late in December. As you can imagine, it's pretty easy to reduce that offtake when you're on a pipeline. So we saw that happen. We think it was primarily related to destocking. We were already seeing the seasonally lower demand. It just, right at the end of the year, it went down even further. Now, that was a contributor to the lower earnings, but also the costs were a larger contributor to the earnings decline that we had talked about for the quarter.

Kenneth Lane: Hi, good morning, Aleksey. Thank you for your question. So yeah, listen, we saw the decline that we were referring to for the chlorine pipeline demand. That really happened in December, late in December. As you can imagine, it's pretty easy to reduce that offtake when you're on a pipeline. So we saw that happen. We think it was primarily related to destocking. We were already seeing the seasonally lower demand. It just, right at the end of the year, it went down even further. Now, that was a contributor to the lower earnings, but also the costs were a larger contributor to the earnings decline that we had talked about for the quarter.

Speaker #3: Morning, Alexi. Thank you for your question. So, yeah, listen, we saw the decline that we were referring to for the chlorine pipeline demand. That really happened in December, late in December.

Speaker #3: As you can imagine, it's pretty easy to reduce that offtake when you're on a pipeline. So we saw that happen; we think it was primarily related to destocking.

Speaker #3: We were already seeing the seasonally lower demand; it just right at the end of the year, it went down even further. Now, that was a contributor to the lower earnings, but also the costs were a larger contributor to the earnings decline that we had talked about for the quarter.

Ken Lane: You know, we are gonna-- we're gonna still see seasonally low demand in Q1 2026. I don't expect to see what we saw at the end of December happen again in the first quarter. But, you know, we're not going to see a large bounce back in demand until we get into the warmer weather months, and you start to see a recovery in water treatment demand and that sort of thing. That won't happen before Q2. So, we're still gonna be very aggressive on maintaining our costs and making sure that we're being disciplined around our operating rates because that's what we can control. And the other thing that I wanna mention is just related to caustic. There's no issue with demand on caustic.

You know, we are gonna we're gonna still see seasonally low demand in Q1 2026. I don't expect to see what we saw at the end of December happen again in the first quarter. But, you know, we're not going to see a large bounce back in demand until we get into the warmer weather months, and you start to see a recovery in water treatment demand and that sort of thing. That won't happen before Q2. So, we're still gonna be very aggressive on maintaining our costs and making sure that we're being disciplined around our operating rates because that's what we can control. And the other thing that I wanna mention is just related to caustic. There's no issue with demand on caustic.

Speaker #3: We are going to still see seasonally low demand in the first quarter of 2026. I don't expect to see what we saw at the end of December happen again in the first quarter, but we're not going to see a large bounce back in demand until we get into the warmer weather months and you start to see a recovery in water treatment demand and that sort of thing.

Speaker #3: That won't happen before second quarter. So we're still going to be very aggressive on maintaining our costs and making sure that we're being disciplined around our operating rates because that's what we can control.

Speaker #3: And the other thing that I want to mention is just related to caustic. There's no issue with demand on caustic. What we see happening on caustic is we don't have the volume to sell.

Ken Lane: What we see happening on caustic is we don't have the volume to sell. The market is tighter than what people think, and we actually are gonna see a little bit lower volumes in Q1 on caustic. That's an availability issue. That's not a demand issue.

What we see happening on caustic is we don't have the volume to sell. The market is tighter than what people think, and we actually are gonna see a little bit lower volumes in Q1 on caustic. That's an availability issue. That's not a demand issue.

Speaker #3: The market is tighter than what people think, and we actually are going to see a little bit lower volumes in the first quarter on costic; that's an availability issue.

Speaker #3: That's not a demand

Speaker #3: issue.

Speaker #1: All right.

Speaker #1: Our next question comes from David Begleiter with Deutsche Bank. Please go

Operator: Our next question comes from David Begleiter with Deutsche Bank. Please go ahead.

Speaker #1: ahead. Good morning.

David Begleiter: Good morning. Ken, one of your competitors has announced some capacity closures in North America. Can you discuss how you think the impact of those closures will be felt and how beneficial it could be to Olin in 2026? Thank you.

Speaker #5: Ken, one of your competitors has announced some capacity closures in North America. Can you discuss how you think the impact of those closures will be felt, and how beneficial it could be to Olin in 2026?

Speaker #5: Thank

Speaker #6: Good morning, Dave. you. joining us. So listen, like I had said in the prepared comments, we have been seeing rationalization of capacity occurring over the last 12 to 18 months.

Ken Lane: Good morning, Dave. Thanks for joining us. So listen, like I had said in the prepared comments, we have been seeing rationalization of capacity occurring over the last 12 to 18 months in pretty much all regions of the world. So it's not surprising when you're at the trough that you're seeing less cost-competitive assets being shut down. And our view has been that operating rates, you know, will improve, supply-demand balances will improve quicker than what you may be seeing in a lot of the publications because of that. That's what happens in every trough, and this is just another example of that. So again, while we're in a situation of this longer trough that's been exacerbated by the additional capacity that's been added in Asia, you are starting to see those rationalizations occur.

Kenneth Lane: Good morning, Dave. Thanks for joining us. So listen, like I had said in the prepared comments, we have been seeing rationalization of capacity occurring over the last 12 to 18 months in pretty much all regions of the world. So it's not surprising when you're at the trough that you're seeing less cost-competitive assets being shut down. And our view has been that operating rates, you know, will improve, supply-demand balances will improve quicker than what you may be seeing in a lot of the publications because of that. That's what happens in every trough, and this is just another example of that. So again, while we're in a situation of this longer trough that's been exacerbated by the additional capacity that's been added in Asia, you are starting to see those rationalizations occur.

Speaker #6: And pretty much all regions of the world. So it's not surprising when you're cost-competitive assets at the trough that you're seeing less being shut down.

Speaker #6: And our view has been that operating rates will improve supply-demand balances will improve, quicker than what you may be seeing in a lot of the publications because of that.

Speaker #6: That's what happens in every trough, and this is just another example of that. So again, while we're in a situation of this longer trough that's been exacerbated by the additional capacity that's been added in Asia, you are starting to see those rationalizations occur.

Speaker #6: Demand has not come back, and when demand does recover—and it will one day—I know, sitting here today, it may feel like it won't, but we're ready when it does.

Ken Lane: Demand has not come back, and when demand does recover, and it will one day, I know sitting here today, it may feel like it won't, but we're ready when it does. We're doing the right things to prepare our assets. We made a step change in our performance in 2025 in terms of safety, and that goes hand in hand with reliability. Those are very big focuses of our organization. And so what we've got to do is be really good at having the most cost-competitive assets, the most reliable, and the safest assets to be able to supply the markets that we serve.

Demand has not come back, and when demand does recover, and it will one day, I know sitting here today, it may feel like it won't, but we're ready when it does. We're doing the right things to prepare our assets. We made a step change in our performance in 2025 in terms of safety, and that goes hand in hand with reliability. Those are very big focuses of our organization. And so what we've got to do is be really good at having the most cost-competitive assets, the most reliable, and the safest assets to be able to supply the markets that we serve.

Speaker #6: We're doing the right things to prepare our assets. We made a step change in our performance in 2025 in terms of safety, and that goes hand in hand with reliability.

Speaker #6: Those are very big focuses of our organization. And so what we've got to do is be really good at having the most cost-competitive assets and the most reliable and the safest assets to be able to supply the markets that we serve.

Speaker #1: Our next question comes from Kevin McCarthy with Vertical Research. Please go ahead.

Operator: Our next question comes from Kevin McCarthy with Vertical Research Partners. Please go ahead.

Speaker #7: Yes, thank you, and good morning. Ken, can you comment on how military demand trended at Winchester in 2025, and how much that might have been up versus the pressure that you discussed on the commercial side?

Kevin McCarthy: Yes, thank you, and good morning. Ken, can you comment on how military demand trended at Winchester in 2025? How much that might have been up versus the pressure that you discussed on the commercial side? And looking ahead, I think you made a comment that, that maybe commercial demand is starting to trend positively on a year-over-year basis. So, so what is your outlook in that regard for 2026, please?

Speaker #7: And looking ahead, I think you made a comment that maybe commercial demand is starting to trend positively on a year-over-year basis. So what is your outlook in that regard for 2026,

Speaker #7: please? Good morning,

Ken Lane: Good morning, Kevin. Yeah, so listen, what we saw in 2025 was significant growth in revenue related to military, both domestic and international. Now, a lot of that gets skewed by the project revenue that you see related to the Next Generation Squad Weapon facility at Lake City. That project is going very well. I do expect, you know, we're even sitting here today, we're a little bit ahead of schedule, and so we feel really good about that project being on track to continue to realize growth related to that, even in 2026. If you just think about the ammunition sales, yes, we did see growth even in the ammunition sales. The highest growth would have been in the international military space.

Kenneth Lane: Good morning, Kevin. Yeah, so listen, what we saw in 2025 was significant growth in revenue related to military, both domestic and international. Now, a lot of that gets skewed by the project revenue that you see related to the Next Generation Squad Weapon facility at Lake City. That project is going very well. I do expect, you know, we're even sitting here today, we're a little bit ahead of schedule, and so we feel really good about that project being on track to continue to realize growth related to that, even in 2026. If you just think about the ammunition sales, yes, we did see growth even in the ammunition sales. The highest growth would have been in the international military space.

Speaker #6: Kevin. Yeah, so listen, what we saw in 2025 was significant growth in revenue related to military, both domestic and international. Now, a lot of that gets skewed by the project revenue that you see related to the Next Generation Squad Weapon facility at Lake City.

Speaker #6: That project is going very well. I do expect we're even sitting here today, we're a little bit ahead of schedule, and so we feel really good about that project, being on track to continue to realize growth related to that even in 2026.

Speaker #6: If you just think about the ammunition sales, yes, we did see growth even in the ammunition sales. The highest growth would have been in the international military space.

Speaker #6: That's growing off of a small base. So as a percentage of our total military sales, it is a smaller percent of military than the domestic military.

Ken Lane: That's growing off of a small base, so as a percentage of our total military sales, you know, it is a smaller percent of military than the domestic military. But we expect to see that continue to grow in 2026. All of that gets diluted by that project revenue, though, that you see coming through related to the Lake City project. We are seeing the fruits of some of the actions that we have taken in the second half of last year by being more disciplined in what we're producing and shifting our model to more of a make to order. You know, if we don't see the orders, we're not making the rounds. We've got to have visibility to that demand. And so that has helped us pull our inventories down.

That's growing off of a small base, so as a percentage of our total military sales, you know, it is a smaller percent of military than the domestic military. But we expect to see that continue to grow in 2026. All of that gets diluted by that project revenue, though, that you see coming through related to the Lake City project. We are seeing the fruits of some of the actions that we have taken in the second half of last year by being more disciplined in what we're producing and shifting our model to more of a make to order. You know, if we don't see the orders, we're not making the rounds. We've got to have visibility to that demand. And so that has helped us pull our inventories down.

Speaker #6: But we expect to see that continue to grow in 2026. All of that gets diluted by that project revenue, though, that you see coming through related to the Lake City project.

Speaker #6: We are seeing, I guess, the fruits of some of the actions that we have taken in the second half of last year by being more disciplined in what we're producing and shifting our model to more of a make-to-order.

Speaker #6: If we don't see the orders, we're not making the rounds. We've got to have visibility to that demand, and so that has helped us pull our inventories down.

Speaker #6: We've seen in the value chains at the retailers, their inventories have come down. And now we've got to start the process to be able to rebuild our margins.

Ken Lane: We've seen in the value chains, you know, at the retailers, their inventories have come down, and now we've got to start the process to be able to rebuild our margins. We've got to start passing through a lot of these cost increases that we saw in 2025 that are continuing into 2026. You know, brass and copper are real headwinds for us, and so that has got to get absorbed in the market. And so we're being... Again, we're being very disciplined about implementation of these price increases, and, you know, where we're not seeing that, then we're not gonna be making the rounds. So we're gonna continue with that.

We've seen in the value chains, you know, at the retailers, their inventories have come down, and now we've got to start the process to be able to rebuild our margins. We've got to start passing through a lot of these cost increases that we saw in 2025 that are continuing into 2026. You know, brass and copper are real headwinds for us, and so that has got to get absorbed in the market. And so we're being... Again, we're being very disciplined about implementation of these price increases, and, you know, where we're not seeing that, then we're not gonna be making the rounds. So we're gonna continue with that.

Speaker #6: We've got to start passing through a lot of these cost increases that we saw in 2025 and that are continuing into 2026. Brass and copper are real headwinds for us.

Speaker #6: And so that has got to get absorbed in the market. And so we're being again, we're being very disciplined about implementation of these price increases.

Speaker #6: And where we're not seeing that, then we're not going to be making the rounds. So we're going to continue with that. The green shoot that I'll comment on, though, is that we are seeing, since the end of December—and it has been continuing—we are seeing weekly improvements in out-the-door sales at retailers.

Ken Lane: The green shoot that I'll comment on, though, is that we are seeing, since the end of December, and it has been continuing, you know, we are seeing weekly improvements in out-the-door sales at retailers. And so that is a very positive sign. I think that you are starting to see things get more balanced in that market. And Winchester being the leading brand, you know, we're going to be very disciplined because we're gonna leverage that brand value. We're the leading brand in the industry, and we've got to make sure that we get the margins that, you know, reflect that.

The green shoot that I'll comment on, though, is that we are seeing, since the end of December, and it has been continuing, you know, we are seeing weekly improvements in out-the-door sales at retailers. And so that is a very positive sign. I think that you are starting to see things get more balanced in that market. And Winchester being the leading brand, you know, we're going to be very disciplined because we're gonna leverage that brand value. We're the leading brand in the industry, and we've got to make sure that we get the margins that, you know, reflect that.

Speaker #6: And so, that is a very positive sign. I think that you are starting to see things get more balanced in that market. And Winchester, being the leading brand, we're going to be very disciplined because we're going to leverage that brand value.

Speaker #6: We're the leading brand in the industry, and we've got to make sure that we get the margins that reflect that.

Speaker #6: that. Our

Speaker #1: next question comes from Patrick Cunningham with City. Please go ahead.

Operator: Our next question comes from Patrick Cunningham with Citi. Please go ahead.

Speaker #8: Hi, good morning. Just in terms last year, you started the PVC tolling arrangement. Now you have the brass cam EDC. Any updated thinking on additional downstream participation in chlor vinyls, whether it be expanded tolling arrangements or perhaps investing in your own PVC

Patrick Cunningham: Hi, good morning. Just in terms, you know, last year you, you started the PVC tolling arrangement, now you have the Braskem EDC. You know, any updated thinking on additional downstream participation in chlorovinyls, you know, whether it be expanded tolling arrangements or, you know, perhaps investing in your own PVC assets?

Speaker #8: assets? Good morning,

Ken Lane: Good morning, Patrick. Listen, vinyls obviously is a very important market for us. As, as you know, we've talked a lot about that. You know, we continue to participate in the PVC market at a low level of volume, but it is giving us the ability to see and learn a lot of things around the customers, around the product portfolio, and really educate ourselves on that decision. We haven't taken anything off of the table in terms of our options that we are considering looking at. We continue to make very good progress on looking at potential expansion into PVC, which would include joint ventures, some sort of a joint investment or partnership. You know, we're looking at technology providers and potential locations to be able to execute that.

Kenneth Lane: Good morning, Patrick. Listen, vinyls obviously is a very important market for us. As, as you know, we've talked a lot about that. You know, we continue to participate in the PVC market at a low level of volume, but it is giving us the ability to see and learn a lot of things around the customers, around the product portfolio, and really educate ourselves on that decision. We haven't taken anything off of the table in terms of our options that we are considering looking at. We continue to make very good progress on looking at potential expansion into PVC, which would include joint ventures, some sort of a joint investment or partnership. You know, we're looking at technology providers and potential locations to be able to execute that.

Speaker #6: Patrick, listen, vinyls obviously is a very important market for us, as you know. We've talked a lot about that. We continue to participate in the PVC market at a low level of volume, but it is giving us the ability to see and learn a lot of things around the customers and around the product portfolio, and really educate ourselves on that decision.

Speaker #6: We haven't taken anything off of the table in terms of our options that we are considering and that we're looking at. We continue to make very good progress on looking at potential expansion into PVC, which would include joint ventures, some sort of a joint investment or partnership.

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