NL REPORTS FIRST QUARTER 2021 RESULTS
May 05 2021 - 4:20PM
NL Industries, Inc. (NYSE: NL) today reported net income
attributable to NL stockholders of $13.3 million, or $.27 per
share, in the first quarter of 2021 compared to net income
attributable to NL stockholders of $1.9 million, or $.04 per share,
in the first quarter of 2020. NL results include an
unrealized gain of $6.4 million in the first quarter of 2021
related to the change in value of marketable equity securities
compared to an unrealized loss of $12.1 million in the first
quarter of 2020.
CompX net sales were $35.9 million in the first
quarter of 2021 compared to $32.3 million in the first quarter of
2020. CompX net sales increased primarily due to higher
Marine Component sales to the towboat market and to a lesser extent
higher Security Products sales. Marine Components continues
to benefit from an overall increase in demand in the recreational
marine market which began in late spring 2020. Income from
operations attributable to CompX increased to $5.8 million in the
first quarter of 2021 compared to $5.0 million in the first quarter
of 2020 due to the higher Marine Components sales as well as lower
overall medical expenses, partially offset by higher costs of sales
at Security Products.
NL recognized equity in earnings of Kronos of
$6.0 million in the first quarter of 2021 compared to $8.2 million
in the first quarter of 2020. Kronos’ net sales of $465.0
million in the first quarter of 2021 were $44.0 million, or 10%
higher than in the first quarter of 2020 primarily due to higher
sales volumes partially offset by lower average TiO2 selling
prices. Kronos’ TiO2 sales volumes were 3% higher in the
first quarter of 2021 as compared to the first quarter of 2020
primarily due to higher demand in its North American and Latin
American markets, partially offset by lower demand in its European
market. Kronos’ average TiO2 selling prices were 1% lower in
the first quarter of 2021 as compared to the first quarter of
2020. Kronos’ average TiO2 selling prices at the end of the
first quarter of 2021 were 1% higher than its average TiO2 selling
prices at the end of 2020. Fluctuations in currency exchange
rates (primarily the euro) also affected net sales comparisons,
increasing net sales by approximately $20 million in the first
quarter of 2021 compared to the first quarter of 2020. The
table at the end of this press release shows how each of these
items impacted the overall change in Kronos’ net sales.
Kronos’ income from operations in the first
quarter of 2021 was $34.0 million as compared to $43.5 million in
the first quarter of 2020. Kronos’ income from operations
decreased in the first quarter of 2021 compared to the first
quarter of 2020 primarily due to lower income from operations
resulting from the net effects of fluctuations in currency exchange
rates, which decreased income from operations by approximately $16
million in the first quarter of 2021 as compared to the first
quarter of 2020, lower average TiO2 selling prices, higher sales
volumes and lower production costs. Due to the phase-out of
sulfate production at one of Kronos’ facilities in the fourth
quarter of 2020, Kronos’ TiO2 production volumes were 1% lower in
the first quarter of 2021 as compared to the first quarter of 2020.
Kronos operated its production facilities at overall average
capacity utilization rates of 97% and 95% in the first quarters of
2021 and 2020, respectively.
Kronos’ other income (expense) in the first
quarter of 2020 includes a pre-tax insurance settlement gain of
$1.5 million (NL’s equity interest was $.4 million, or $.01 per
share, net of income tax expense) related to a property damage
claim.
Corporate expenses decreased $.7 million in the
first quarter of 2021 compared to the first quarter of 2020
primarily due to lower litigation fees and related costs and lower
administrative expenses. Interest and dividend income decreased $.7
million in the first quarter of 2021 compared to the first quarter
of 2020 primarily due to lower dividend income and lower interest
income related to lower average interest rates on invested balances
and lower average interest rates, and to a lesser extent lower
average outstanding balances, under CompX’s revolving promissory
note receivable from Valhi. Marketable equity securities represent
the change in 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 we believe
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. 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, aluminum, steel 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 that harm the
worldwide economy, disrupt our supply chain, increase material
costs or reduce demand or perceived demand for Kronos’ TiO2 and our
products or impair our ability to operate our facilities (including
changes in the level of gross domestic product in various regions
of the world, natural disasters, terrorist acts, global conflicts
and public health crises such as COVID-19)
- 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
- The introduction of trade barriers or trade disputes
- 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 and between the euro and
the Norwegian krone), or possible disruptions to our business
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, cyber-attacks
and public health crises such as COVID-19)
- 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 ability of our subsidiaries or affiliates to pay us
dividends
- Uncertainties associated with CompX’s development of new
products and product features
- The ultimate outcome of income tax audits, tax settlement
initiatives or other tax matters, including future tax reform
- 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 such as those seeking
to limit or classify TiO2 or its use
- 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 component
products (security products and recreational marine components) and
chemicals (TiO2) businesses.
NL INDUSTRIES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In millions, except earnings per
share)
|
Three months ended |
|
|
March 31, |
|
|
2020 |
|
|
2021 |
|
|
(unaudited) |
|
Net sales |
$ |
32.3 |
|
|
$ |
35.9 |
|
Cost of sales |
|
21.9 |
|
|
|
24.9 |
|
|
|
|
|
|
|
|
|
Gross
margin |
|
10.4 |
|
|
|
11.0 |
|
|
|
|
|
|
|
|
|
Selling, general and administrative
expense |
|
5.4 |
|
|
|
5.2 |
|
|
|
|
|
|
|
|
|
Corporate expense |
|
2.5 |
|
|
|
1.8 |
|
|
|
|
|
|
|
|
|
Income from
operations |
|
2.5 |
|
|
|
4.0 |
|
|
|
|
|
|
|
|
|
Equity in earnings of Kronos Worldwide,
Inc. |
|
8.2 |
|
|
|
6.0 |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
Interest and
dividend income |
|
1.1 |
|
|
|
.4 |
|
Marketable equity securities |
|
(12.1 |
) |
|
|
6.4 |
|
Other components of net periodic pension
and OPEB cost |
|
(.2 |
) |
|
|
(.1 |
) |
Interest
expense |
|
(.3 |
) |
|
|
(.3 |
) |
|
|
|
|
|
|
|
|
Income (loss)
before income taxes |
|
(.8 |
) |
|
|
16.4 |
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
(3.3 |
) |
|
|
2.5 |
|
|
|
|
|
|
|
|
|
Net income |
|
2.5 |
|
|
|
13.9 |
|
|
|
|
|
|
|
|
|
Noncontrolling interest in net income of
subsidiary |
|
.6 |
|
|
|
.6 |
|
|
|
|
|
|
|
|
|
Net income attributable to NL
stockholders |
$ |
1.9 |
|
|
$ |
13.3 |
|
|
|
|
|
|
|
|
|
Net income per
share attributable to NL stockholders |
$ |
.04 |
|
|
$ |
.27 |
|
|
|
|
|
|
|
|
|
Weighted average shares used in the
calculation |
|
|
|
|
|
|
|
of net income per share |
|
48.8 |
|
|
|
48.8 |
|
NL INDUSTRIES,
INC.COMPONENTS OF INCOME FROM
OPERATIONS(In
millions)(unaudited)
|
Three months ended |
|
|
March 31, |
|
|
2020 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
CompX -
component products |
$ |
5.0 |
|
|
$ |
5.8 |
|
Corporate
expense |
|
(2.5 |
) |
|
|
(1.8 |
) |
|
|
|
|
|
|
|
|
Income from operations |
$ |
2.5 |
|
|
$ |
4.0 |
|
CHANGE IN KRONOS’ TiO2
SALES(unaudited)
|
Three months ended |
|
|
March 31, |
|
|
2021 vs. 2020 |
|
|
|
|
|
|
|
|
Percentage
change in net sales: |
|
|
|
|
|
|
TiO2 sales volume |
|
|
3 |
|
% |
|
TiO2 product pricing |
|
|
(1 |
) |
|
|
TiO2 product mix/other |
|
|
3 |
|
|
|
Changes in currency exchange
rates |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
10 |
|
% |
|
SOURCE: NL Industries, Inc.
CONTACT: Janet G. Keckeisen, Vice President - Corporate Strategy and Investor Relations, 972.233.1700
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