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May 9, 2019, 4:17 p.m. EDT

NL REPORTS FIRST QUARTER 2019 RESULTS

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    NL Industries Inc. (NL)

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(GLOBE NEWSWIRE via COMTEX) -- DALLAS, TEXAS - May 9, 2019 - NL Industries, Inc. /zigman2/quotes/210222881/composite NL -2.20% 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)

/zigman2/quotes/210222881/composite
US : U.S.: NYSE
$ 3.55
-0.08 -2.20%
Volume: 18,058
Jan. 17, 2020 6:30p
P/E Ratio
7.74
Dividend Yield
N/A
Market Cap
$173.08 million
Rev. per Employee
$216,119
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