NL REPORTS FIRST QUARTER 2015 RESULTS
May 07 2015 - 5:45PM
DALLAS, TEXAS - May 7, 2015 - NL Industries,
Inc. (NYSE:NL) today reported net income attributable to NL
stockholders of $10.0 million, or $.21 per share, in the first
quarter of 2015 compared to $3.8 million, or $.08 per share, in the
first quarter of 2014.
Net sales increased $2.1 million
in the first quarter of 2015 compared to the same period in 2014,
led by strong demand within CompX's Security Products business for
an existing government customer and to a lesser extent increased
demand for fuel security products as well as increased sales to the
office equipment market. Sales from CompX's Marine Components
business also contributed to the increase in sales primarily as a
result of gains in market share for products sold to the
ski/wakeboard boat market. Income from operations
attributable to CompX increased to $3.7 million in the first
quarter of 2015 compared to $3.3 million in the first quarter of
2014, primarily due to sales growth in both CompX's Security
Products and Marine Components businesses offset by increased
administrative personnel costs for CompX's Security Products
business.
Kronos' net sales of $365.1
million in the first quarter of 2015 were $55.0 million, or 13%
lower than in the first quarter of 2014 primarily due to lower
average TiO2 selling
prices, partially offset by higher sales volumes. Kronos' average
TiO2 selling
prices were 11% lower in the first quarter of 2015 as compared to
the first quarter of 2014, and average selling prices at the end of
the first quarter of 2015 were 7% lower than at the end of 2014,
with lower prices in all major markets. TiO2 sales
volumes for the first quarter of 2015 increased 7% as compared to
the first quarter of 2014, with higher volumes in all major
markets, particularly in European and export markets.
Fluctuations in currency exchange rates (primarily the euro) also
affected Kronos' net sales comparisons, decreasing net sales by
approximately $33 million as compared to the first quarter of
2014. The table at the end of this press release summarizes
how each of these items impacted the overall decrease in Kronos'
sales.
Kronos' income from operations
increased by $6.2 million from income of $26.0 million in the first
quarter of 2014 to income of $32.2 million in the first quarter of
2015 primarily due to the net effects of lower manufacturing and
other production costs (primarily raw materials), higher sales and
production volumes and lower average TiO2 selling prices. Kronos
operated its production facilities at overall average capacity
utilization rates of 90% and 93% in the first quarter of 2014 and
2015, respectively. Kronos' production capacity utilization rates
in the first quarter of 2014 were impacted by a union labor lockout
at its Canadian production facility that ended in December 2013, as
restart of production at the facility did not begin until February
2014. Kronos' production capacity utilization in the first quarter
of 2015 was impacted by the implementation of certain
productivity-enhancing improvement projects at certain facilities,
as well as necessary improvements to ensure continued compliance
with our permit regulations, which resulted in longer-than-normal
maintenance shutdowns in some instances. Fluctuations in
currency exchange rates increased Kronos' income from operations by
approximately $14 million in the first quarter of 2015 compared to
the first quarter of 2014.
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 $3.1 million (or $.04 per share, net of
income taxes) in the first quarter of 2015 compared to $.8 million
(or $.01 per share, net of income taxes) in the first quarter of
2014. Substantially all of the insurance recoveries we
recognized in the first quarter 2015 relate to a new settlement we
reached with one of our insurance carriers in which they agreed to
reimburse us for a portion of our past lead pigment litigation
defense costs.
Corporate expenses were lower in
the first quarter of 2015 compared to the first quarter of 2014
primarily due to lower litigation and related costs in 2015.
Our income tax benefit in the
first quarter of 2015 includes a non-cash income tax benefit of
$3.0 million (or $.06 per share) related to a net reduction in our
reserve for uncertain tax positions.
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)
-
Customer and
producer inventory levels
-
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
products and substitute products
-
Price and
product competition from low-cost manufacturing sources (such as
China)
-
Customer and
competitor strategies
-
Potential
consolidation of Kronos' competitors
-
Potential
consolidation of Kronos' customers
-
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
-
Kronos'
ability to renew or refinance credit facilities
-
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 CompX's 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
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.
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except earnings per share)
(Unaudited)
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2015 |
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
25.8 |
|
|
$ |
27.9 |
|
Cost of
sales |
|
|
18.0 |
|
|
|
19.3 |
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
7.8 |
|
|
|
8.6 |
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
|
|
4.5 |
|
|
|
4.9 |
|
Other
operating income (expense): |
|
|
|
|
|
|
|
|
Insurance recoveries |
|
|
.8 |
|
|
|
3.1 |
|
Other income, net |
|
|
.1 |
|
|
|
- |
|
Corporate expense and other, net |
|
|
(4.3 |
) |
|
|
(3.8 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
(.1 |
) |
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of Kronos Worldwide, Inc. |
|
|
4.3 |
|
|
|
5.6 |
|
|
|
|
|
|
|
|
|
|
General
corporate items: |
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
.8 |
|
|
|
.3 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
5.0 |
|
|
|
8.9 |
|
|
|
|
|
|
|
|
|
|
Income
tax expense (benefit) |
|
|
1.0 |
|
|
|
(1.4 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
4.0 |
|
|
|
10.3 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in net income of subsidiary |
|
|
.2 |
|
|
|
.3 |
|
|
|
|
|
|
|
|
|
|
Net
income attributable to NL stockholders |
|
$ |
3.8 |
|
|
$ |
10.0 |
|
|
|
|
|
|
|
|
|
|
Net
income per share attributable to NL stockholders |
|
$ |
.08 |
|
|
$ |
.21 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in the |
|
|
|
|
|
|
|
|
calculation of net income per share |
|
|
48.7 |
|
|
|
48.7 |
|
NL INDUSTRIES, INC.
COMPONENTS OF INCOME (LOSS) FROM OPERATIONS
(In millions)
(Unaudited)
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2015 |
|
|
|
|
|
|
|
|
CompX -
component products |
|
$
|
3.3
|
|
|
$
|
3.7
|
|
Insurance
recoveries |
|
|
.8
|
|
|
|
3.1
|
|
Other
income, net |
|
|
.1
|
|
|
|
-
|
|
Corporate
expense |
|
|
(4.3
|
)
|
|
|
(3.8
|
)
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
$
|
(.1
|
)
|
|
$
|
3.0
|
|
CHANGE IN KRONOS' TiO2 SALES
(Unaudited)
|
Three months ended |
|
March 31, |
|
2015 vs. 2014 |
|
|
|
|
Percentage change in sales: |
|
|
|
TiO2 product
pricing |
|
(11) |
% |
TiO2 sales
volume |
|
7 |
% |
TiO2 product
mix |
|
(1) |
% |
Changes in currency exchange rates |
|
(8) |
% |
|
|
|
|
Total |
|
(13) |
% |
Source: NL Industries, Inc.
Contact: Gregory M. Swalwell, Executive Vice
President and Chief Financial Officer, 972-233-1700
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: NL Industries via Globenewswire
HUG#1918633
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