Dallas, Texas, Nov. 04, 2021 (GLOBE NEWSWIRE) -- NL Industries, Inc. (NYSE: NL) today reported net income attributable to NL stockholders of $10.3 million, or $.21 per share, in the third quarter of 2021 compared to net income attributable to NL stockholders of $3.9 million, or $.08 per share, in the third quarter of 2020. NL results include an unrealized loss of $1.2 million in the third quarter of 2021 related to the change in value of marketable equity securities compared to a $3.2 million unrealized gain in the third quarter of 2020. For the first nine months of 2021, NL reported net income attributable to NL stockholders of $36.3 million, or $.74 per share, compared to net income of $10.4 million, or $.21 per share for the first nine months of 2020. NL results include an unrealized gain of $9.7 million in the first nine months of 2021 related to the change in value of marketable equity securities compared to an $11.1 million unrealized loss in the first nine months of 2020.
CompX net sales were $34.5 million for the third quarter of 2021 compared to $28.4 million in the third quarter of 2020 and $106.7 million for the nine months ended September 30, 2021 compared to $84.5 million for the same prior year period. Income from operations attributable to CompX was $5.1 million for the third quarter of 2021 compared to $2.1 million for the third quarter of 2020 and $16.7 million for the first nine months of 2021 compared to $9.5 million for the same prior year period. CompX third quarter 2021 net sales increased over the 2020 comparable period primarily due to higher Security Products sales across a variety of markets and to a lesser extent higher Marine Component sales primarily to the towboat market. CompX net sales increased for the first nine months of 2021 compared to the same period in 2020 primarily due to higher sales volumes at both of CompX’s reporting units, particularly in the second quarter of 2021, as many of its customers were temporarily closed or reduced production during the second quarter of 2020 due to government ordered closures or reduced demand resulting from the COVID-19 pandemic. CompX income from operations was negatively impacted by the COVID-19 pandemic in the second and third quarters of 2020, which significantly impacts income from operations comparisons for the third quarter and the nine-month comparative periods. Income from operations increased for both comparative periods due to the favorable effect of higher production and sales volumes, partially offset by higher production costs including increased raw materials, shipping, and labor costs.
NL recognized equity in earnings of Kronos of $10.9 million in the third quarter of 2021 compared to $2.4 million in the same period of 2020 and $24.7 million in the first nine months of 2021 compared to $16.3 million in the same period of 2020. Kronos’ net sales of $499.8 million in the third quarter of 2021 were $82.9 million, or 20%, higher than in the third quarter of 2020. Kronos’ net sales of $1,443.4 million in the first nine months of 2021 were $219.5 million, or 18%, higher than in the first nine months of 2020. Kronos’ net sales increased in the 2021 periods primarily due to higher sales volumes and higher average TiO2 selling prices. Kronos’ TiO2 sales volumes were 6% higher in the third quarter of 2021 as compared to the third quarter of 2020 due to higher demand in its European and North American markets and 8% higher in the first nine months of 2021 as compared to the same prior year period due to higher demand in all major markets. Increased demand resulted from continuing improvements in global economic activity in the 2021 periods compared to the negative impact from the COVID-19 pandemic on the same periods in 2020. Kronos’ average TiO2 selling prices were 11% higher in the third quarter of 2021 as compared to the third quarter of 2020 and 4% higher in the first nine months of 2021 as compared to the first nine months of 2020. Kronos’ average TiO2 selling prices at the end of the third quarter of 2021 were 10% 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 $5 million in the third quarter of 2021 and increasing net sales by approximately $47 million in the first nine months of 2021, as compared to the same periods in 2020. 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 third quarter of 2021 was $57.3 million as compared to $19.3 million in the third quarter of 2020. For the year-to-date period, Kronos’ income from operations was $135.1 million as compared to $95.8 million in the first nine months of 2020. Kronos’ income from operations increased in the 2021 periods primarily due to higher average TiO2 selling prices and higher sales volumes, partially offset by higher manufacturing and other production costs, including higher costs for raw materials and energy. Kronos’ TiO2 production volumes were 13% higher in the third quarter of 2021 as compared to the third quarter of 2020 and 4% higher in the year-to-date period. Kronos decreased production levels in 2020 (primarily in the third quarter) to correspond to the temporary decline in demand resulting from the COVID-19 pandemic. Kronos operated its production facilities at overall average capacity utilization rates of 99% in the first nine months of 2021 (97%, 100% and 100% in the first, second and third quarters of 2021, respectively) compared to 92% in 2020 (95%, 96% and 86% in the first, second and third quarters of 2020, respectively). Fluctuations in currency exchange rates (primarily the euro) increased income from operations approximately $2 million in the third quarter of 2021 as compared to the third quarter of 2020. Fluctuations in currency exchange rates (primarily the Canadian dollar) also affected Kronos’ year-to-date income from operations comparison, which decreased income from operations by approximately $15 million in the year-to-date 2021 period as compared to the same period of 2020.
Corporate expenses increased $.5 million in the third quarter of 2021 compared to the third quarter of 2020 primarily due to higher environmental remediation and related costs and higher litigation fees and related costs in 2021. Corporate expenses increased $.3 million in the first nine months of 2021 compared to the same period of 2020 primarily due to higher environmental remediation and related costs partially offset by lower administrative expenses. Interest and dividend income was comparable in the third quarter and decreased $.8 million in the first nine months of 2021 compared to the prior year periods primarily due to lower dividend income and lower interest income related to lower average interested rates on invested balances, and 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 investment in Valhi common stock 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)(unaudited)
Three months ended | Nine months ended | ||||||||||||||
September | September | ||||||||||||||
2020 | 2021 | 2020 | 2021 | ||||||||||||
Net sales | $ | 28.4 | $ | 34.5 | $ | 84.5 | $ | 106.7 | |||||||
Cost of sales | 21.1 | 23.6 | 59.4 | 73.4 | |||||||||||
Gross margin | 7.3 | 10.9 | 25.1 | 33.3 | |||||||||||
Selling, general and administrative expense | 5.2 | 5.8 | 15.6 | 16.6 | |||||||||||
Other operating income (expense): | |||||||||||||||
Insurance recoveries | - | - | .1 | .1 | |||||||||||
Corporate expense | (2.4 | ) | (2.9 | ) | (7.4 | ) | (7.7 | ) | |||||||
Income (loss) from operations | (.3 | ) | 2.2 | 2.2 | 9.1 | ||||||||||
Equity in earnings of Kronos Worldwide, Inc. | 2.4 | 10.9 | 16.3 | 24.7 | |||||||||||
Other income (expense): | |||||||||||||||
Interest and dividend income | .5 | .4 | 2.1 | 1.3 | |||||||||||
Marketable equity securities | 3.2 | (1.2 | ) | (11.1 | ) | 9.7 | |||||||||
Other components of net periodic pension and OPEB cost | (.2 | ) | (.1 | ) | (.6 | ) | (.4 | ) | |||||||
Interest expense | (.3 | ) | (.3 | ) | (1.0 | ) | (.9 | ) | |||||||
Income before income taxes | 5.3 | 11.9 | 7.9 | 43.5 | |||||||||||
Income tax expense (benefit) | 1.2 | 1.1 | (3.6 | ) | 5.5 | ||||||||||
Net income | 4.1 | 10.8 | 11.5 | 38.0 | |||||||||||
Noncontrolling interest in net income of subsidiary | .2 | .5 | 1.1 | 1.7 | |||||||||||
Net income attributable to NL stockholders | $ | 3.9 | $ | 10.3 | $ | 10.4 | $ | 36.3 | |||||||
Net income per share attributable to NL stockholders | $ | .08 | $ | .21 | $ | .21 | $ | .74 | |||||||
Weighted average shares used in the calculation | |||||||||||||||
of net income per share | 48.8 | 48.8 | 48.8 | 48.8 |
NL INDUSTRIES, INC.COMPONENTS OF INCOME (LOSS) FROM OPERATIONS(In millions)(unaudited)
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2020 | 2021 | 2020 | 2021 | ||||||||||||
CompX - component products | $ | 2.1 | $ | 5.1 | $ | 9.5 | $ | 16.7 | |||||||
Insurance recoveries | - | - | .1 | .1 | |||||||||||
Corporate expense | (2.4 | ) | (2.9 | ) | (7.4 | ) | (7.7 | ) | |||||||
Income (loss) from operations | $ | (.3 | ) | $ | 2.2 | $ | 2.2 | $ | 9.1 |
CHANGE IN KRONOS’ TiO2 SALES(unaudited)
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2021 vs. 2020 | 2021 vs. 2020 | ||||||||||
Percentage change in net sales: | |||||||||||
TiO2 sales volume | 6 | % | 8 | % | |||||||
TiO2 product pricing | 11 | 4 | |||||||||
TiO2 product mix/other | 2 | 2 | |||||||||
Changes in currency exchange rates | 1 | 4 | |||||||||
Total | 20 | % | 18 | % |