DALLAS, Aug. 3 /PRNewswire-FirstCall/ -- NL Industries,
Inc. (NYSE: NL) today reported net income attributable to NL
stockholders of $4.3 million, or
$.09 per share, in the second quarter
of 2010 compared to a net loss of $2.2
million, or $.04 per share, in
the second quarter of 2009. For the first six months of 2010,
NL reported net income attributable to NL stockholders of
$2.0 million, or a loss of
$.01 per share (after the effect of
an adjustment referenced below), compared to a net loss of
$14.0 million, or $.29 per share, in the first six months of
2009.
Net sales increased 18% and 16%, respectively, in the second
quarter and first six months of 2010 compared to the same periods
in 2009. Net sales increased due to an increase in order
rates from CompX's customers resulting from improving economic
conditions in North America.
Net sales were also impacted by relative changes in currency
exchange rates, which increased sales by $.3
million for the quarter and $.7
million for the year-to-date period. Income from
operations attributable to CompX increased in the second quarter
and first six months of 2010 to $3.0
million and $4.7 million,
respectively, compared to a loss from operations of $1.0 million and $1.9
million for the same periods of 2009. Income from
operations improved primarily due to the impact of higher sales,
partially offset by $.9 million
higher patent litigation expenses in the 2010 year-to-date period.
Changes in currency exchange rates negatively impacted
CompX's income from operations by $.4
million for the quarter and by $1.1
million year-to-date compared to the same periods of
2009.
Kronos' net sales of $380.1
million in the second quarter of 2010 were $98.1 million, or 35%, higher than in the second
quarter of 2009. Kronos' net sales of $699.8 million in the first six months of 2010
were $169.7 million, or 32%, higher
than in the first six months of 2009. Net sales increased in
the second quarter and first six months of 2010 due primarily to
higher sales volumes and higher average TiO2 selling prices.
Kronos' sales volumes in the second quarter and first six months of
2010 are both new records for Kronos for their respective periods.
The increase in sales volume for the second quarter and first
six months is a result of increased demand in all markets.
Kronos' average TiO2 selling prices increased 6% in the
second quarter of 2010, and increased 3% in the first six months of
the year, and Kronos' average TiO2 selling prices at the end of the
second quarter of 2010 were 4% higher than at the end of the first
quarter of the year, continuing the improvement in selling prices
that began in the second half of 2009. Fluctuations in
currency exchange rates also impacted Kronos' net sales, decreasing
net sales by approximately $6 million
in the second quarter and increasing net sales approximately
$4 million in the first six months of
2010. The table at the end of this press release shows how
each of these items impacted Kronos' net sales.
Kronos' income from operations increased by $60.7 million from a loss of $21.9 million in the second quarter of 2009 to
income of $38.8 million in the second
quarter of 2010. For the year-to-date period, Kronos' income
from operations increased by $108.7
million from a loss of $48.2
million in 2009 to income of $60.5
million 2010. Results from operations in both periods
improved due to higher sales volumes, higher selling prices and
lower manufacturing costs per ton resulting from higher production
volumes. Kronos' operating rates were approximately 58% of
capacity for the first half of 2009 as compared to operating rates
at near full capacity for the first half of 2010. Temporary
plant curtailments in the first half of 2009 resulted in
approximately $80 million of
unabsorbed fixed production costs which were charged directly to
cost of sales. Changes in currency exchange rates negatively
impacted Kronos' income from operations by $12 million for the quarter and by $20 million year-to-date compared to the same
periods of 2009.
Kronos' income tax benefit in 2010 includes a $35.2 million (NL's equity interest was
$12.7 million, or $.17 per share, net of income taxes) non-cash
deferred income tax benefit in the first quarter related to a
European Court ruling that resulted in the favorable resolution of
certain income tax issues in Germany and an increase in the amount of
Kronos' German corporate and trade tax net operating loss
carryforwards.
Litigation settlement expense in 2010 of $32.2 million ($20.8
million, or $.43 per share,
net of income taxes) relates to the settlement of certain legal
proceedings in April 2010.
Insurance recoveries reflect in part amounts we received from
certain of our former insurance carriers and relate to the recovery
of prior lead pigment and asbestos litigation defense costs
incurred by us. In addition, a substantial portion of the
insurance recoveries we recognized in 2010 relates to the
litigation settlement referred to above. Insurance recoveries
aggregated $18.3 million in 2010
($11.8 million, or $.24 per share, net of income taxes) and
$2.7 million in 2009 ($1.8 million, or $.04 per share, net of income taxes).
Litigation settlement gain in 2009 relates to an $11.3 million pre-tax gain ($7.3 million, or $.15 per share, net of income taxes) recognized
in the second quarter related to the second closing associated with
the settlement of condemnation proceedings on certain real property
we formerly owned that is subject to environmental remediation.
Corporate expenses were lower in the second quarter and first
six months of 2010 as compared to the second quarter and first six
months of 2009 primarily due to lower litigation and related costs
and lower environmental expense.
Our income tax expense in the first quarter of 2010 includes an
aggregate $1.9 million provision for
deferred income taxes ($1.6 million,
or $.03 per share, net of
noncontrolling interest) associated with a determination that
certain undistributed earnings of a non-U.S. subsidiary can no
longer be considered to be permanently reinvested.
The statements in this release relating to matters that are not
historical facts are forward-looking statements that represent
management's beliefs and assumptions based on currently available
information. Although NL believes that the expectations
reflected in such forward-looking statements are reasonable, we
cannot give any assurances that these expectations will prove to be
correct. Such statements by their nature involve substantial
risks and uncertainties that could significantly impact expected
results, and actual future results could differ materially from
those described in such forward-looking statements. While it
is not possible to identify all factors, we continue to face many
risks and uncertainties. Among the factors that could cause
actual future results to differ materially include, but are not
limited to:
- Future supply and demand for our products,
- The extent of the dependence of certain of our businesses on
certain market sectors,
- The cyclicality of our businesses (such as Kronos' titanium
dioxide pigments ("TiO2") operations),
- Customer inventory levels (such as the extent to which Kronos'
customers may, from time to time, accelerate purchases of TiO2 in
advance of anticipated price increases or defer purchases of TiO2
in advance of anticipated price decreases),
- Changes in raw material and other operating costs (such as
energy and steel costs),
- General global economic and political conditions (such as
changes in the level of gross domestic product in various regions
of the world and the impact of such changes on demand for, among
other things, TiO2 and component products),
- Possible disruption of our business or increases in the cost of
doing business resulting from terrorist activities or global
conflicts,
- Competitive products and substitute products, including
increased competition from low-cost manufacturing sources (such as
China),
- Customer and competitor strategies,
- Potential consolidation or solvency of our competitors,
- Demand for office furniture,
- Demand for high performance marine components,
- Substitute products,
- The impact of pricing and production decisions,
- Competitive technology positions,
- The introduction of trade barriers,
- Service industry employment levels,
- Fluctuations in currency exchange rates (such as changes in the
exchange rate between the U.S. dollar and each of the euro, the
Norwegian krone, the Canadian dollar and the New Taiwan
dollar),
- Operating interruptions (including, but not limited to, labor
disputes, leaks, natural disasters, fires, explosions, unscheduled
or unplanned downtime and transportation interruptions),
- The timing and amounts of insurance recoveries,
- Our ability to maintain sufficient liquidity,
- The extent to which our subsidiaries were to become unable to
pay us dividends,
- CompX's and Kronos' ability to renew or refinance credit
facilities,
- CompX's ability to comply with covenants contained in its
revolving bank credit facility,
- The ultimate outcome of income tax audits, tax settlement
initiatives or other tax matters,
- Potential difficulties in integrating completed or future
acquisitions,
- Decisions to sell operating assets other than in the ordinary
course of business,
- Uncertainties associated with new product development,
- Our ability to utilize income tax attributes or changes in
income tax rates related to such attributes, the benefits of which
have been recognized under the more-likely-than-not recognition
criteria,
- Environmental matters (such as those requiring compliance with
emission and discharge standards for existing and new facilities or
new developments regarding environmental remediation at sites
related to our former operations),
- Government laws and regulations and possible changes therein
(such as changes in government regulations which might impose
various obligations on present and former manufacturers of lead
pigment and lead-based paint, including us, with respect to
asserted health concerns associated with the use of such
products),
- The ultimate resolution of pending litigation (such as our lead
pigment and environmental matters) and
- Possible future litigation.
Should one or more of these risks materialize (or the
consequences of such a development worsen), or should the
underlying assumptions prove incorrect, actual results could differ
materially from those currently forecasted or expected. We
disclaim any intention or obligation to update or revise any
forward-looking statement whether as a result of changes in
information, future events or otherwise.
NL Industries, Inc. is engaged in the component products
(security products, furniture components and performance marine
components), chemicals (TiO2) and other businesses.
NL INDUSTRIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except earnings
per share)
(Unaudited)
|
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$29.2
|
|
$34.4
|
|
$57.7
|
|
$67.2
|
|
Cost of sales
|
23.0
|
|
25.5
|
|
46.7
|
|
49.2
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
6.2
|
|
8.9
|
|
11.0
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
6.4
|
|
6.0
|
|
12.1
|
|
13.3
|
|
Other operating income
(expense):
|
|
|
|
|
|
|
|
|
Insurance recoveries
|
2.0
|
|
.1
|
|
2.7
|
|
18.3
|
|
Litigation settlement
gain
|
11.3
|
|
-
|
|
11.3
|
|
-
|
|
Litigation settlement
expense
|
-
|
|
-
|
|
-
|
|
(32.2)
|
|
Assets held for sale
write-down
|
(.7)
|
|
-
|
|
(.7)
|
|
-
|
|
Corporate expense and other,
net
|
(5.0)
|
|
(2.5)
|
|
(9.4)
|
|
(7.2)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
7.4
|
|
.5
|
|
2.8
|
|
(16.4)
|
|
|
|
|
|
|
|
|
|
|
Equity in net income (loss) of
Kronos Worldwide, Inc.
|
(7.9)
|
|
6.9
|
|
(17.4)
|
|
22.3
|
|
|
|
|
|
|
|
|
|
|
General corporate
items:
|
|
|
|
|
|
|
|
|
Interest and
dividends
|
.7
|
|
.6
|
|
1.4
|
|
1.2
|
|
Interest expense
|
(.3)
|
|
(.3)
|
|
(.6)
|
|
(.5)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
(.1)
|
|
7.7
|
|
(13.8)
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
2.3
|
|
3.2
|
|
.5
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
(2.4)
|
|
4.5
|
|
(14.3)
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in net
income (loss) of subsidiary
|
(.2)
|
|
.2
|
|
(.3)
|
|
.1
|
|
Net income (loss) attributable
to NL
stockholders
|
$(2.2)
|
|
$
4.3
|
|
$(14.0)
|
|
$
2.0
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income
(loss)per
share(a)
|
$(.04)
|
|
$
.09
|
|
$(.29)
|
|
$(.01)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted average shares
outstanding
|
48.6
|
|
48.6
|
|
48.6
|
|
48.6
|
|
|
|
(a) Refer to Note 13 of
our Condensed Consolidated Financial Statements included in our
Quarterly Report on Form 10-Q for
the period ended June 30, 2010
for the computation of our per share amounts.
|
|
|
|
|
|
|
|
|
|
NL INDUSTRIES,
INC.
COMPONENTS OF
INCOME (LOSS) FROM
OPERATIONS
(In millions)
(Unaudited)
|
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
CompX – component
products
|
$(1.0)
|
|
$ 3.0
|
|
$ (1.9)
|
|
$ 4.7
|
|
Insurance recoveries
|
2.0
|
|
.1
|
|
2.7
|
|
18.3
|
|
Litigation settlement
gain
|
11.3
|
|
-
|
|
11.3
|
|
-
|
|
Litigation settlement
expense
|
-
|
|
-
|
|
-
|
|
(32.2)
|
|
Corporate expense and other,
net
|
(4.9)
|
|
(2.6)
|
|
(9.3)
|
|
(7.2)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$7.4
|
|
$ .5
|
|
$2.8
|
|
$(16.4)
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE IN KRONOS' TiO2
SALES
(Unaudited)
|
|
|
Three months
ended
June 30,
2010 vs. 2009
|
|
Six months ended
June 30,
2010 vs. 2009
|
|
Percentage change in
sales:
|
|
|
|
|
TiO2 product pricing
|
6%
|
|
3%
|
|
TiO2 sales volumes
|
30 %
|
|
28 %
|
|
TiO2 product mix
|
1 %
|
|
- %
|
|
Changes in currency exchange
rates
|
(2)%
|
|
1 %
|
|
|
|
|
|
|
Total
|
35 %
|
|
32 %
|
|
|
|
|
|
|
|
SOURCE NL Industries, Inc.
Copyright g. 3 PR Newswire