NL REPORTS FIRST QUARTER 2018 RESULTS
May 08 2018 - 4:25PM
DALLAS, TEXAS - May 8, 2018 - NL
Industries, Inc. (NYSE: NL) today reported net income attributable
to NL stockholders of $14.3 million, or $.29 per share, in the
first quarter of 2018 compared to net income attributable to NL
stockholders of $8.4 million, or $.17 per share, in the first
quarter of 2017.
Net sales decreased to $28.4
million in the first quarter of 2018 from $29.9 million in the
first quarter of 2017 primarily due to lower security products
sales volumes to existing government security customers and to a
lesser extent lower sales to an original equipment manufacturer of
recreational transportation products, partially offset by higher
marine components sales for the quarter. Income from
operations attributable to CompX decreased slightly to $4.4 million
in the first quarter of 2018 from $4.5 million in the first quarter
of 2017 due to lower Security Products sales.
Kronos' net sales of $430.4
million in the first quarter of 2018 were $60.6 million, or 16%,
higher than in the first quarter of 2017. Kronos' net sales
increased in the first quarter of 2018 as compared to the same
period in 2017 due to higher average TiO2 selling
prices partially offset by lower sales volumes. Kronos'
average TiO2 selling
prices were 26% higher in the first quarter of 2018 as compared to
the first quarter of 2017 with higher prices in all major
markets. Kronos' average TiO2 selling
prices at the end of the first quarter of 2018 were 4% higher than
at the end of 2017 with higher prices in the European, North
American and export markets, partially offset by lower prices in
Latin America. TiO2 sales volumes
in the first quarter of 2018 were 13% lower as compared to the
record first quarter sales volumes of 2017 due to lower sales in
all major markets. Fluctuations in currency exchange rates
(primarily the euro) also affected net sales comparisons,
increasing net sales by approximately $31 million in the first
quarter of 2018 as compared to the first quarter of 2017. The
table at the end of this press release shows how each of these
items impacted the overall increase in sales.
Kronos' TiO2 income
from operations in the first quarter of 2018 was $107.5 million as
compared to $56.4 million in the first quarter of 2017.
Kronos' income from operations increased in the first quarter of
2018 primarily due to higher average TiO2 selling
prices partially offset by lower sales and production volumes and
higher costs for certain raw materials and other production
costs. Kronos' TiO2 production
volumes were 8% lower in the first quarter as compared to the same
period in 2017. Kronos' production facilities operated at 95%
of practical capacity in 2018 compared to full practical capacity
utilization rates in 2017. Fluctuations in currency exchange
rates also affected segment profit comparisons, which increased
income from operations by approximately $1 million in the first
quarter of 2018 as compared to the first quarter of 2017.
Kronos' income tax expense in 2017
includes a $5.0 million (NL's equity interest was $1.0 million, or
$0.2 per share) non-cash deferred income tax benefit as a result of
a net decrease in its deferred income tax asset valuation allowance
related to its German and Belgian operations.
Corporate expenses increased $2.7
million in the first quarter of 2018 as compared to the first
quarter of 2017 primarily due to higher litigation fees and related
costs and higher environmental remediation and related costs in
2018. Interest and dividend income increased $.4 million in
the first quarter of 2018 as compared to the first quarter of 2017
primarily due to interest earned on CompX's loan to an affiliate
which was entered into in August 2016.
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 ore, zinc, brass, aluminum, steel and energy 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 accounting and manufacturing software systems
(such as Kronos' new enterprise resource planning system)
-
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 or other
currencies
-
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, including future tax
reform
-
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 may or may not 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 OPERATIONS |
(In
millions, except earnings per share) |
|
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
|
2017 |
|
2018 |
|
|
(unaudited) |
|
|
|
|
|
|
Net sales |
$
29.9 |
|
$
28.4 |
|
Cost of sales |
20.2 |
|
18.9 |
|
|
|
|
|
|
Gross margin |
9.7 |
|
9.5 |
|
|
|
|
|
|
Selling, general and
administrative expense |
5.2 |
|
5.1 |
|
Other operating income
(expense): |
|
|
|
|
Insurance recoveries |
.1 |
|
.2 |
|
Other income, net |
- |
|
.6 |
|
Corporate expense |
(5.3) |
|
(8.0) |
|
|
|
|
|
|
Loss
from operations |
(.7) |
|
(2.8) |
|
|
|
|
|
|
Equity in earnings of Kronos
Worldwide, Inc. |
11.2 |
|
21.5 |
|
|
|
|
|
|
General corporate items: |
|
|
|
|
Other components of net
periodic pension and OPEB |
(.2) |
|
(0.1) |
|
Securities
transactions |
- |
|
(1.6) |
|
Interest and dividend
income |
.7 |
|
1.1 |
|
|
|
|
|
|
Income before income
taxes |
11.0 |
|
18.1 |
|
|
|
|
|
|
Income tax expense |
2.2 |
|
3.3 |
|
|
|
|
|
|
Net income |
8.8 |
|
14.8 |
|
|
|
|
|
|
Noncontrolling interest in net
income of subsidiary |
.4 |
|
.5 |
|
|
|
|
|
|
Net income attributable to NL
stockholders |
$
8.4 |
|
$
14.3 |
|
|
|
|
|
|
Net income per share attributable
to NL stockholders |
$
0.17 |
|
$
0.29 |
|
|
|
|
|
|
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, |
|
2017 |
|
2018 |
|
|
|
|
CompX - component products |
$
4.5 |
|
$ 4.4 |
Insurance recoveries |
.1 |
|
.2 |
Other income, net |
- |
|
.6 |
Corporate expense |
(5.3) |
|
(8.0) |
|
|
|
|
Loss from operations |
$
(.7) |
|
$ (2.8) |
CHANGE IN KRONOS'
TiO2
SALES
(unaudited)
|
Three months |
|
ended March 31, |
|
2018 vs. 2017 |
|
|
|
|
Percentage change in sales: |
|
|
|
TiO2 product
pricing |
|
26 |
% |
TiO2 sales
volume |
|
(13) |
|
TiO2 product
mix/other |
|
(5) |
|
Changes in currency
exchange rates |
|
8 |
|
|
|
|
|
Total |
|
16 |
% |
|
|
|
|
SOURCE: NL Industries, Inc.
CONTACT: Janet G. Keckeisen, Vice President - Corporate
Strategy and Investor Relations, 972.233.1700
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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
NL Industries (NYSE:NL)
Historical Stock Chart
From Jun 2024 to Jul 2024
NL Industries (NYSE:NL)
Historical Stock Chart
From Jul 2023 to Jul 2024