NL REPORTS FIRST QUARTER 2019 RESULTS
May 09 2019 - 4:16PM
DALLAS, TEXAS - May 9, 2019 - NL
Industries, Inc. (NYSE: NL) today reported net income attributable
to NL stockholders of $15.2 million, or $.31 per share, in the
first quarter of 2019 compared to net income attributable to NL
stockholders of $14.3 million, or $.29 per share, in the first
quarter of 2018.
Net sales at CompX increased to
$31.2 million in the first quarter of 2019 from $28.4 million in
the first quarter of 2018 primarily due to higher marine component
sales, primarily surf pipes and wake enhancement systems to an
original equipment boat manufacturer and to a lesser extent higher
security products sales to existing government security customers.
Income from operations attributable to CompX decreased slightly to
$4.3 million in the first quarter of 2019 from $4.4 million in the
first quarter of 2018 due to higher labor and medical costs for
security products and a less favorable customer and product mix for
marine components.
Kronos' net sales of $436.5
million in the first quarter of 2019 were $6.1 million, or 1%,
higher than in the first quarter of 2018. Kronos' net sales
increased in the first quarter of 2019 as compared to the same
period in 2018 due to the net effect of lower average
TiO2 selling
prices and higher sales volumes. Kronos' average
TiO2 selling
prices were 8% lower in the first quarter of 2019 as compared to
the first quarter of 2018. Kronos' average TiO2
selling prices at the end of the first quarter of 2019 were 4%
lower than at the end of 2018 with lower prices in the European,
North American and Latin American markets, partially offset by
higher prices in the export market. Kronos' TiO2
sales volumes in the first quarter of 2019 were 15% higher as
compared to the first quarter sales volumes of 2018 due to higher
sales in all major markets. Fluctuations in currency exchange
rates (primarily the euro) also affected net sales comparisons,
decreasing net sales by approximately $15 million in the first
quarter of 2019 as compared to the first quarter of 2018. The
table at the end of this press release shows how each of these
items impacted sales.
Kronos' income from operations in
the first quarter of 2019 was $49.0 million as compared to $107.5
million in the first quarter of 2018. Kronos' income from
operations decreased in the first quarter of 2019 as the
unfavorable effect of lower average TiO2 selling
prices and higher raw materials (primarily third-party feedstock
ore) and other production costs more than offset the favorable
impact of higher sales and production volumes. Kronos'
TiO2 production
volumes were 1% higher in the first quarter of 2019 as compared to
the first quarter of 2018. Kronos operated its production
facilities at average practical capacity utilization rates of 95%
and 97% in the first quarter of 2018 and 2019, respectively.
Fluctuations in currency exchange rates also affected income from
operations, which increased income from operations by approximately
$8 million in the first quarter of 2019 as compared to the first
quarter of 2018.
Corporate expenses decreased $5.9
million in the first quarter of 2019 as compared to the first
quarter of 2018 primarily due to lower environmental remediation
and related costs and lower litigation fees and related costs in
2019. Interest and dividend income increased $.4 million in
the first quarter of 2019 as compared to the first quarter of 2018
primarily due to interest earned on CompX's loan to an
affiliate. Marketable equity securities represents unrealized
gains (losses) on our portfolio of marketable equity securities
during the 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)
-
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, 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
-
Our ability to protect or defend intellectual
property rights
-
Potential difficulties in integrating future
acquisitions
-
Potential difficulties in upgrading or
implementing 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),
including new environmental health and safety regulations
-
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. |
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In millions,
except earnings per share) |
|
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|
Three
months ended |
|
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March 31, |
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|
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2018 |
|
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2019 |
|
|
|
(unaudited) |
|
|
|
|
|
|
Net sales |
$ |
28.4 |
|
|
$ |
31.2 |
|
|
Cost of sales |
|
18.9 |
|
|
|
21.6 |
|
|
|
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|
|
|
|
|
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Gross margin |
|
9.5 |
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|
|
9.6 |
|
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|
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|
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Selling, general and administrative
expense |
|
5.1 |
|
|
|
5.3 |
|
|
Other operating income (expense): |
|
|
|
|
|
|
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Insurance recoveries |
|
.2 |
|
|
|
.3 |
|
|
Other income, net |
|
.6 |
|
|
|
- |
|
|
Corporate expense |
|
(8.0 |
) |
|
|
(2.1 |
) |
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
(2.8 |
) |
|
|
2.5 |
|
|
|
|
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|
|
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Equity in earnings of Kronos Worldwide,
Inc. |
|
21.5 |
|
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9.2 |
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General corporate item - |
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Other components of net
periodic pension and
OPEB cost |
|
(.1 |
) |
|
|
(.4 |
) |
|
Marketable equity
securities |
|
(1.6 |
) |
|
|
5.5 |
|
|
Interest and dividend income |
|
1.1 |
|
|
|
1.5 |
|
|
|
|
|
|
|
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|
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Income before income taxes |
|
18.1 |
|
|
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18.3 |
|
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Income tax expense |
|
3.3 |
|
|
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2.6 |
|
|
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|
|
|
|
|
|
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Net income |
|
14.8 |
|
|
|
15.7 |
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in net income of
subsidiary |
|
.5 |
|
|
|
.5 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to NL
stockholders |
$ |
14.3 |
|
|
$ |
15.2 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to NL stockholders |
$ |
.29 |
|
|
$ |
.31 |
|
|
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|
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|
|
|
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Weighted average shares used in the
calculation of |
|
|
|
|
|
|
|
|
net income (loss) per share |
|
48.7 |
|
|
|
48.7 |
|
|
|
|
|
|
|
|
|
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|
NL INDUSTRIES,
INC.
COMPONENTS OF INCOME (LOSS) FROM
OPERATIONS
(In millions)
(unaudited)
|
Three
months ended |
|
|
|
March 31, |
|
|
|
2018 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
CompX - component products |
$ |
4.4 |
|
|
$ |
4.3 |
|
|
Insurance recoveries |
|
.2 |
|
|
|
.3 |
|
|
Other income, net |
|
.6 |
|
|
- |
|
|
Corporate expense |
|
(8.0 |
) |
|
|
(2.1 |
) |
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
$ |
(2.8 |
) |
|
$ |
2.5 |
|
|
|
|
|
|
|
|
|
|
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|
CHANGE
IN KRONOS' TiO2
SALES |
(Unaudited) |
|
|
|
|
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|
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|
Three
months ended |
|
|
March
31, |
|
|
2019 vs. 2018 |
|
|
|
|
|
|
|
|
Percentage change in sales: |
|
|
|
|
|
|
TiO2 product
pricing |
|
|
(8 |
) |
% |
|
TiO2 sales
volume |
|
|
15 |
|
|
|
TiO2 product
mix/other |
|
|
(3 |
) |
|
|
Changes in currency exchange rates |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
Total |
|
|
1 |
|
% |
|
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SOURCE: NL Industries, Inc.
CONTACT: Janet G. Keckeisen, Vice President - Corporate
Strategy and Investor Relations, 972.233.1700
This
announcement is distributed by West Corporation on behalf of West
Corporation 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
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