Dallas, Texas, May 04, 2022 (GLOBE NEWSWIRE) -- NL Industries, Inc. (NYSE: NL) today reported net income attributable to NL stockholders of $18.6 million, or $.38 per share, in the first quarter of 2022 compared to net income attributable to NL stockholders of $13.3 million, or $.27 per share, in the first quarter of 2021. NL results include an unrealized gain of $.7 million in the first quarter of 2022 related to the change in value of marketable equity securities compared to an unrealized gain of $6.4 million in the first quarter of 2021.
CompX net sales were $42.1 million in the first quarter of 2022 compared to $35.9 million in the first quarter of 2021. CompX net sales increased primarily due to higher Security Product sales across a variety of markets and to a lesser extent higher Marine Components sales primarily to the towboat market. Income from operations attributable to CompX increased to $6.3 million in the first quarter of 2022 compared to $5.8 million in the first quarter of 2021 due to the higher sales offset by increased production costs including increased raw material costs, higher shipping costs, and increased labor costs due to higher wages, overtime, and increased headcount.
NL recognized equity in earnings of Kronos of $17.5 million in the first quarter of 2022 compared to $6.0 million in the first quarter of 2021. Kronos’ net sales of $562.9 million in the first quarter of 2022 were $97.9 million, or 21% higher than in the first quarter of 2021 primarily due to higher average TiO2 selling prices and higher sales volumes. Kronos’ TiO2 sales volumes were 2% higher in the first quarter of 2022 as compared to the first quarter of 2021 due to the effects of continuing high demand and improvements in its delivery and distribution networks in 2022. Kronos’ average TiO2 selling prices were 24% higher in the first quarter of 2022 as compared to the first quarter of 2021 and were 7% higher at the end of the first quarter of 2022 than at the end of 2021. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, decreasing net sales by approximately $22 million in the first quarter of 2022, as compared to the first quarter of 2021. The table at the end of this press release shows how each of these items impacted Kronos’ net sales.
Kronos’ income from operations in the first quarter of 2022 was $83.3 million as compared to $34.0 million in the first quarter of 2021. Kronos’ income from operations increased in the first quarter of 2022 compared to the first quarter of 2021 primarily due to higher average TiO2 selling prices and higher sales volumes, partially offset by higher production costs, including raw material and energy costs. Kronos’ TiO2 production volumes were 6% higher in the first quarter of 2022 compared to the first quarter of 2021. Kronos operated its production facilities at full practical capacity in the first quarter of 2022 compared to 97% in the first quarter of 2021. Fluctuations in currency exchange rates (primarily the euro) decreased income from operations approximately $5 million in the first quarter of 2022 as compared to the first quarter of 2021.
Corporate expenses increased $.6 million in the first quarter of 2022 compared to the first quarter of 2021 primarily due to higher litigation fees and related costs and higher environmental remediation and related costs. Interest and dividend income declined slightly in the first quarter of 2022 compared to the same period of 2021 primarily due to lower average balances on the note receivable from affiliate. 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:
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, | ||||||
2021 | 2022 | |||||
(unaudited) | ||||||
Net sales | $ | 35.9 | $ | 42.1 | ||
Cost of sales | 24.9 | 30.0 | ||||
Gross margin | 11.0 | 12.1 | ||||
Selling, general and administrative expense | 5.2 | 5.8 | ||||
Corporate expense | 1.8 | 2.4 | ||||
Income from operations | 4.0 | 3.9 | ||||
Equity in earnings of Kronos Worldwide, Inc. | 6.0 | 17.5 | ||||
Other income (expense): | ||||||
Interest and dividend income | .4 | .3 | ||||
Marketable equity securities | 6.4 | .7 | ||||
Other components of net periodic pension and OPEB cost | (.1) | (.2) | ||||
Interest expense | (.3) | (.3) | ||||
Income before income taxes | 16.4 | 21.9 | ||||
Income tax expense | 2.5 | 2.7 | ||||
Net income | 13.9 | 19.2 | ||||
Noncontrolling interest in net income of subsidiary | .6 | .6 | ||||
Net income attributable to NL stockholders | $ | 13.3 | $ | 18.6 | ||
Net income per share attributable to NL stockholders | $ | .27 | $ | .38 | ||
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)
Three months ended | |||||
March 31, | |||||
2021 | 2022 | ||||
(unaudited) | |||||
CompX - component products | $ | 5.8 | $ | 6.3 | |
Corporate expense | (1.8) | (2.4) | |||
Income from operations | $ | 4.0 | $ | 3.9 |
CHANGE IN KRONOS’ NET SALES
(unaudited)
Three months ended | ||
March 31, | ||
2022 vs. 2021 | ||
Percentage change in net sales: | ||
TiO2 product pricing | 24 | % |
TiO2 sales volume | 2 | |
Changes in currency exchange rates | (5) | |
Total | 21 | % |