DALLAS, TEXAS - March 12, 2013 - NL Industries,
Inc. (NYSE: NL) today reported income from continuing operations
attributable to NL stockholders of $2.7 million, or $.05 per share,
in the fourth quarter of 2012 compared to income from continuing
operations of $19.7 million, or $.40 per share, in the fourth
quarter of 2011. For the full year 2012, NL reported income
from continuing operations attributable to NL stockholders of $56.6
million, or $1.16 per share compared to income from continuing
operations of $78.1 million, or $1.61 per share, in 2011.
Net sales increased 3% in the fourth
quarter of 2012 as compared to the fourth quarter 2011 and
increased 4% in the full year 2012 compared to 2011. Net
sales increased principally due to growth in customer demand within
both of CompX's businesses resulting from somewhat improved
economic conditions in North America. Income from continuing
operations attributable to CompX decreased to nil and $5.4 million,
in the fourth quarter and full year of 2012, respectively, compared
to income from continuing operations of $1.4 million and $6.4
million in the same periods of 2011. Income from continuing
operations comparisons were negatively impacted by higher
self-insured medical costs in 2012. In addition, the 2011 and
2012 full-year periods include the impact of write-downs on assets
held for sale of $1.1 million and $1.2 million, respectively ($.02
per share, net of income taxes and noncontrolling interest, in both
periods).
Kronos' net sales of $396.8 million
in the fourth quarter of 2012 were $40.6 million, or 9%, lower than
in the fourth quarter of 2011. Kronos' net sales of $1,976.3
million in the full year of 2012 were $33.0 million, or 2%, higher
than in the full year 2011. Net sales decreased in the fourth
quarter of 2012 as compared to the fourth quarter of 2011 due to
lower average TiO2 selling
prices partially offset by higher sales volumes. Net sales
increased in the full year of 2012 primarily due to higher average
TiO2 selling
prices, partially offset by lower sales volumes. Kronos'
average TiO2 selling
prices decreased 14% in the fourth quarter of 2012 as compared to
the fourth quarter of 2011, and increased 10% for the full year as
compared to 2011. Kronos' average TiO2 selling
prices at the end of 2012 were 17% lower than at the end of 2011
and were 10% lower than at the end of the third quarter of
2012. TiO2 sales volumes
in the fourth quarter of 2012 were 6% higher than in the fourth
quarter of 2011, while sales volumes for the full year 2012 were 6%
lower than in 2011. Fluctuations in currency exchange rates
also impacted net sales comparisons, decreasing net sales by
approximately $12 million in the fourth quarter and approximately
$82 million in the full year 2012 as compared to 2011. The
table at the end of this press release shows how each of these
items impacted Kronos' overall change in sales.
Kronos' income from operations decreased by $142.2
million, from $143.3 million in the fourth quarter of 2011 to $1.1
million in the fourth quarter of 2012. For the full year,
Kronos' income from operations decreased by $186.9 million from
$546.5 million in 2011 to $359.6 million in 2012. Income from
operations decreased in the fourth quarter period primarily due to
the negative effects of lower TiO2 selling
prices, lower production volumes and higher raw material costs
offset in part by increased sales volume. Income from
operation decreased for the full year primarily due to lower sales
and production volumes, higher raw material costs and the
unfavorable effects of unabsorbed fixed production costs resulting
from reduced production volumes, partially offset by higher average
sales prices. Changes in currency exchange rates decreased
Kronos' income from operations by approximately $9 million in the
fourth quarter and $10 million in the full year 2012 as compared to
the same periods in 2011.
As previously reported, in March 2011 Kronos
redeemed €80 million principal amount of its 6.5% Senior Secured
Notes due 2013, and in the third and fourth quarters of 2011,
Kronos repurchased in open market transactions an aggregate €40.8
million principal amount of its Senior Notes. As a result of
these redemptions and open market purchases, Kronos' results in
2011 include a net charge of $3.1 million (NL's equity interest was
$.4 million, or $.01 per share, net of income tax benefit)
consisting of the call premium, the write-off of unamortized
deferred financing costs and original issue discount associated
with the redeemed and purchased Notes. In June 2012, Kronos
entered into a new $400 million term loan and used a portion of the
net proceeds to redeem the remaining €279.2 million principal
amount of Senior Notes outstanding. As a result, Kronos
recognized a second quarter 2012 charge of $7.2 million (NL's
equity interest was $.9 million or $.02 per share, net of income
tax) associated with the early extinguishment of such remaining
Senior Notes.
Kronos' income tax expense in 2011 includes a
provision for income taxes of $17.2 million (NL's equity was $3.4
million, or $.07 per share, net of income taxes) for U.S.
incremental income taxes on earnings repatriated from its German
subsidiary, which earnings were used to fund a portion of the
repurchases of Kronos' Senior Secured Notes.
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. Such insurance recoveries
aggregated $3.3 million ($2.2 million, or $.04 per share, net of
income taxes) in 2012 as compared to $16.9 million ($11.0 million,
or $.23 per share, net of income taxes) in 2011. A
substantial portion of the insurance recoveries we recognized in
2011 relates to a settlement we reached for a portion of our past
lead pigment litigation costs.
Litigation settlement gain in 2012 relates to a
$15.0 million gain ($9.7 million, or $.20 per share, net of income
taxes) recognized in the second quarter related to the third and
final closing associated with certain real property we formerly
owned in New Jersey.
Other operating income in the fourth quarter of
2012 includes a $3.2 million gain ($2.1 million, or $.04 per share
after taxes) on the sale of certain real property owned by us.
In addition, we recognized a $6.4 million goodwill impairment
charge ($.13 per share) in the fourth quarter of 2012 associated
with our insurance brokerage subsidiary. There is no income
tax benefit associated with such charge.
Corporate expenses were comparable in the 2011 and
2012 fourth quarter periods, and increased $4.0 million, or 16%, in
the full year 2012 compared to 2011 primarily related to higher
environmental and related costs in the first quarter of 2012.
Securities transactions gains in the fourth
quarter of 2012 consist of a $16.6 million gain ($10.8 million, or
$.22 per share after taxes) on the sale, pursuant to a cash tender
offer by a third party, of all of our shares of Titanium Metals
Corporation (TIMET) common stock for $23.9 million.
In December 2012, we completed the
sale of CompX's Furniture Components operations to a competitor for
proceeds, net of expenses, of approximately $58.0 million in
cash. We recognized a pre-tax gain of approximately $23.7
million in the fourth quarter of 2012 ($14.5 million, or $.30 per
share, net of income taxes and noncontrolling interests).
Discontinued operations also includes full-year income related to
the operations of such disposed unit of $3.5 million, or $.07 per
share, in 2011 and $3.3 million, or $.07 per share in 2012, net of
income taxes and noncontrolling interest. We have
reclassified our Condensed Consolidated Statement of Operations to
reflect the disposed business as discontinued operations for all
periods.
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' TiO2
operations)
-
Unexpected or earlier-than-expected industry
capacity expansion (such as the TiO2
industry)
-
Changes in raw material and other operating
costs (such as energy, ore, zinc and brass costs) and our ability
to pass those costs on to our customers or offset them with
reductions in other operating costs
-
Changes in the availability of raw material
(such as ore)
-
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)
-
Competitive pricing, products and substitute
products
-
Customer and competitor strategies
-
Uncertainties associated with the development of
new product features
-
Potential consolidation of Kronos'
competitors
-
The impact of pricing and production
decisions
-
Competitive technology positions
-
Potential difficulties in integrating future
acquisitions
-
Potential difficulties in upgrading or
implementing new manufacturing and accounting software
systems
-
The introduction of trade barriers
-
Possible disruption of Kronos' or CompX's
business, or increases in our cost of doing business
resulting from terrorist activities or global conflicts
-
The impact of current or future government
regulations (including employee healthcare benefit related
regulations
-
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 and the Canadian dollar), or possible
disruptions to our business resulting from potential instability
resulting from uncertainties associated with the euro
-
Operating interruptions (including, but not
limited to, labor disputes, leaks, natural disasters, fires,
explosions, unscheduled or unplanned downtime, transportation
interruptions and cyber attacks)
-
Decisions to sell operating assets other than in
the ordinary course of business
-
CompX's and Kronos' ability to renew or
refinance debt
-
Our ability to maintain sufficient
liquidity
-
The timing and amounts of insurance
recoveries
-
The extent to which our subsidiaries or
affiliates were to become unable to pay us dividends
-
The ultimate outcome of income tax audits, tax
settlement initiatives or other tax matters
-
Uncertainties associated with the development of
new product features
-
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)
-
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 and performance marine components),
chemicals (TiO2) and other
businesses.
Source: NL Industries, Inc.
Contact: Gregory M. Swalwell, Vice President, Finance and
Chief Financial Officer, 972-233-1700
NL
INDUSTRIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(In
millions, except earnings per share) |
|
|
Three months
ended |
|
Year ended |
|
December
31, |
|
December
31, |
|
2011 |
|
2012 |
|
2011 |
|
2012 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ 18.7 |
|
$
19.3 |
|
$ 79.8 |
|
$
83.2 |
Cost of sales |
13.2 |
|
13.8 |
|
55.7 |
|
58.9 |
|
|
|
|
|
|
|
|
Gross
margin |
5.5 |
|
5.5 |
|
24.1 |
|
24.3 |
|
|
|
|
|
|
|
|
Selling, general and administrative
expense |
4.1 |
|
4.7 |
|
16.6 |
|
17.7 |
Other operating income
(expense): |
|
|
|
|
|
|
|
Insurance
recoveries |
.3 |
|
.7 |
|
16.9 |
|
3.3 |
Litigation
settlement gain |
- |
|
- |
|
- |
|
15.0 |
Assets held
for sale write-down |
- |
|
(.8) |
|
(1.1) |
|
(1.2) |
Other
income, net |
.9 |
|
3.6 |
|
1.0 |
|
3.6 |
Goodwill
impairment |
- |
|
(6.4) |
|
- |
|
(6.4) |
Corporate
expense |
(4.4) |
|
(4.4) |
|
(25.0) |
|
(29.0) |
|
|
|
|
|
|
|
|
Loss from
operations |
(1.8) |
|
(6.5) |
|
(.7) |
|
(8.1) |
|
|
|
|
|
|
|
|
Equity in earnings (loss) of Kronos
Worldwide, Inc. |
26.1 |
|
(5.6) |
|
97.6 |
|
66.4 |
|
|
|
|
|
|
|
|
General corporate items: |
|
|
|
|
|
|
|
Securities
transactions gains |
- |
|
16.6 |
|
- |
|
16.6 |
Interest and
dividends |
.8 |
|
.8 |
|
3.0 |
|
3.2 |
Interest
expense |
(.2) |
|
(.2) |
|
(1.5) |
|
(1.1) |
|
|
|
|
|
|
|
|
Income from
continuing operations
before income taxes |
24.9 |
|
5.1 |
|
98.4 |
|
77.0 |
|
|
|
|
|
|
|
|
Provision for income taxes |
5.1 |
|
2.4 |
|
19.8 |
|
19.9 |
|
|
|
|
|
|
|
|
Income from continuing
operations |
19.8 |
|
2.7 |
|
78.6 |
|
57.1 |
Income from discontinued
operations, net of tax |
.3 |
|
18.6 |
|
4.1 |
|
21.9 |
|
|
|
|
|
|
|
|
Net income |
20.1 |
|
21.3 |
|
82.7 |
|
79.0 |
|
|
|
|
|
|
|
|
Noncontrolling interest
in net income of subsidiary |
.2 |
|
3.7 |
|
1.0 |
|
4.5 |
|
|
|
|
|
|
|
|
Net income attributable to NL
stockholders |
$ 19.9 |
|
$
17.6 |
|
$ 81.7 |
|
$
74.5 |
|
|
|
|
|
|
|
|
NL
INDUSTRIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(In
millions, except earnings per share) |
|
|
Three months
ended |
|
Year ended |
|
December
31, |
|
December
31, |
|
2011 |
|
2012 |
|
2011 |
|
2012 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to NL
stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
$ 19.7 |
|
$ 2.7 |
|
$ 78.1 |
|
$
56.6 |
Income
from discontinued operations |
.2 |
|
14.9 |
|
3.6 |
|
17.9 |
Net income
attributable to NL stockholders |
$ 19.9 |
|
$
17.6 |
|
$ 81.7 |
|
$
74.5 |
|
|
|
|
|
|
|
|
Basic
and diluted net income per share: |
|
|
|
|
|
|
|
Income from
continuing operations |
$ .40 |
|
$ .05 |
|
$ 1.61 |
|
$
1.16 |
Discontinued
operations |
.01 |
|
.31 |
|
.07 |
|
.37 |
Net income per share attributable to NL stockholders |
$ .41 |
|
$ .36 |
|
$ 1.68 |
|
$
1.53 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding used |
|
|
|
|
|
|
|
in the calculation
of net income per share |
48.7 |
|
48.7 |
|
48.7 |
|
48.7 |
|
|
|
|
|
|
|
|
NL
INDUSTRIES, INC. |
COMPONENTS OF LOSS ATTRIBUTABLE |
TO
CONTINUING OPERATIONS |
(In
millions) |
(Unaudited) |
|
|
Three months
ended |
|
Year ended |
|
December
31, |
|
December
31, |
|
2011 |
|
2012 |
|
2011 |
|
2012 |
|
|
|
|
|
|
|
|
CompX - component products |
$ 1.4 |
|
$ - |
|
$ 6.4 |
|
$
5.4 |
Insurance recoveries |
.3 |
|
.7 |
|
16.9 |
|
3.3 |
Litigation settlement gain |
- |
|
- |
|
- |
|
15.0 |
Other income, net |
.9 |
|
3.6 |
|
1.0 |
|
3.6 |
Goodwill impairment |
- |
|
(6.4) |
|
- |
|
(6.4) |
Corporate expense |
(4.4) |
|
(4.4) |
|
(25.0) |
|
(29.0) |
|
|
|
|
|
|
|
|
Loss
from operations |
$ (1.8) |
|
$
(6.5) |
|
$ (.7) |
|
$
(8.1) |
|
|
|
|
|
|
|
|
CHANGE IN KRONOS' TiO2
SALES |
(Unaudited) |
|
|
Three months
ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
2012 vs.
2011 |
|
2012 vs.
2011 |
|
|
|
|
|
|
|
|
Percentage change in sales: |
|
|
|
|
|
|
|
TiO2 product
pricing |
|
(14) |
% |
|
|
10 |
% |
TiO2 sales
volume |
|
6 |
% |
|
|
(6) |
% |
TiO2 product
mix |
|
2 |
% |
|
|
2 |
% |
Changes in currency exchange rates |
|
(3) |
% |
|
|
(4) |
% |
|
|
|
|
|
|
|
|
Total |
|
(9) |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
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The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: NL Industries via Thomson Reuters ONE
HUG#1684734
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