NL REPORTS THIRD QUARTER 2024 RESULTS
Rhea-AI Summary
NL Industries (NYSE: NL) reported Q3 2024 net income of $36.0 million ($.74 per share), compared to a net loss of $.1 million in Q3 2023. The results include an $18.6 million unrealized gain from marketable equity securities. CompX net sales decreased to $33.6 million in Q3 2024 from $40.3 million in Q3 2023. Kronos reported higher net sales of $484.7 million in Q3 2024, up 22% year-over-year, driven by increased TiO2 sales volumes (+21%) despite lower average selling prices. Kronos acquired the remaining 50% stake in Louisiana Pigment Company, resulting in a non-cash gain of $64.5 million.
Positive
- Net income improved to $36.0 million in Q3 2024 from a loss in Q3 2023
- Kronos' net sales increased 22% to $484.7 million in Q3 2024
- Kronos' TiO2 sales volumes increased 21% in Q3 2024
- Kronos' production utilization improved to 93% in first nine months of 2024
- $64.5 million non-cash gain from Louisiana Pigment Company acquisition
Negative
- CompX net sales declined 17% to $33.6 million in Q3 2024
- CompX's income from operations decreased to $3.3 million from $6.6 million in Q3 2023
- Kronos' average TiO2 selling prices were 1% lower in Q3 2024
- $4 million non-cash charges related to sulfate process line closure in Canada
News Market Reaction 1 Alert
On the day this news was published, NL declined 8.50%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Dallas, Texas, Nov. 06, 2024 (GLOBE NEWSWIRE) -- NL Industries, Inc. (NYSE: NL) today reported net income attributable to NL stockholders of
CompX net sales were
NL recognized equity in earnings of Kronos of
As previously reported, effective July 16, 2024, Kronos acquired the
Kronos’ net sales of
Kronos’ income from operations in the third quarter of 2024 was
Corporate expenses decreased $.9 million in the third quarter of 2024 compared to the third quarter of 2023 primarily due to lower litigation fees and related costs and lower environmental remediation and related costs. Corporate expenses in the first nine months of 2024 were comparable to the same period of 2023. Interest and dividend income increased in the third quarter and for the first nine months of 2024 compared to the same periods of 2023 primarily due to higher average interest rates and higher average investment balances, somewhat offset by lower average balances on 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.
Net income attributable to NL stockholders for the third quarter of 2024 includes income of
Net loss attributable to NL stockholders for the first nine months of 2023 includes a non-cash loss of
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;
- Kronos’ ability to realize expected cost savings from strategic and operational initiatives;
- Kronos’ ability to integrate acquisitions, including Louisiana Pigment Company, L.P. (“LPC”) into its operations and realize expected synergies and innovations;
- 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 materials (such as ore);
- General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy 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);
- Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises);
- Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades, or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders;
- 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;
- 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;
- Decisions to sell operating assets other than in the ordinary course of business;
- Kronos’ ability to renew or refinance credit facilities or other debt instruments in the future;
- Changes in interest rates;
- 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 or decommissioning obligations 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, sustainability or other 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); and
- Pending or possible future litigation or other actions.
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.
Investor Relations Contact
Bryan A. Hanley
Senior Vice President and Treasurer
(972) 233-1700
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except earnings per share)
(unaudited)
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||
| Net sales | $ | 40.3 | $ | 33.6 | $ | 118.1 | $ | 107.5 | ||||
| Cost of sales | 27.7 | 24.1 | 82.5 | 77.2 | ||||||||
| Gross margin | 12.6 | 9.5 | 35.6 | 30.3 | ||||||||
| Selling, general and administrative expense | 6.0 | 6.2 | 17.6 | 18.2 | ||||||||
| Other operating income (expense): | ||||||||||||
| Insurance recoveries | .3 | 1.1 | .4 | 1.3 | ||||||||
| Corporate expense | (3.2) | (2.3) | (9.1) | (9.2) | ||||||||
| Income from operations | 3.7 | 2.1 | 9.3 | 4.2 | ||||||||
| Equity in earnings (losses) of Kronos Worldwide, Inc. | (6.2) | 21.9 | (13.4) | 30.4 | ||||||||
| Other income (expense): | ||||||||||||
| Interest and dividend income | 2.4 | 2.7 | 6.5 | 7.9 | ||||||||
| Marketable equity securities | .4 | 18.6 | (10.5) | 21.8 | ||||||||
| Loss on pension plan termination | — | — | (4.9) | — | ||||||||
| Other components of net periodic pension and OPEB cost | (.4) | (.3) | (1.1) | (.9) | ||||||||
| Interest expense | (.2) | (.2) | (.6) | (.5) | ||||||||
| Income (loss) before income taxes | (.3) | 44.8 | (14.7) | 62.9 | ||||||||
| Income tax expense (benefit) | (.9) | 8.5 | (6.8) | 10.8 | ||||||||
| Net income (loss) | .6 | 36.3 | (7.9) | 52.1 | ||||||||
| Noncontrolling interest in net income of subsidiary | .7 | .3 | 2.0 | 1.4 | ||||||||
| Net income (loss) attributable to NL stockholders | $ | (.1) | $ | 36.0 | $ | (9.9) | $ | 50.7 | ||||
| Net income (loss) per share attributable to NL stockholders | $ | — | $ | .74 | $ | (.20) | $ | 1.04 | ||||
| Weighted average shares used in the calculation of net income (loss) per share | 48.8 | 48.8 | 48.8 | 48.8 | ||||||||
NL INDUSTRIES, INC.
COMPONENTS OF INCOME FROM OPERATIONS
(In millions)
(unaudited)
| Three months ended | Nine months ended | ||||||||||
| September 30, | September 30, | ||||||||||
| 2023 | 2024 | 2023 | 2024 | ||||||||
| CompX - component products | $ | 6.6 | $ | 3.3 | $ | 18.0 | $ | 12.1 | |||
| Insurance recoveries | .3 | 1.1 | .4 | 1.3 | |||||||
| Corporate expense | (3.2) | (2.3) | (9.1) | (9.2) | |||||||
| Income from operations | $ | 3.7 | $ | 2.1 | $ | 9.3 | $ | 4.2 | |||
CHANGE IN KRONOS’ NET SALES
(unaudited)
| Three months ended | Nine months ended | ||||
| September 30, | September 30, | ||||
| 2024 vs. 2023 | 2024 vs 2023 | ||||
| Percentage change in net sales: | |||||
| TiO2 sales volume | 21 | % | 26 | % | |
| TiO2 product pricing | (1) | (7) | |||
| TiO2 product mix/other | 2 | (3) | |||
| Changes in currency exchange rates | — | — | |||
| Total | 22 | % | 16 | % |
FAQ
What was NL Industries' earnings per share in Q3 2024?
How much did Kronos' TiO2 sales volumes increase in Q3 2024?
What was the impact of the Louisiana Pigment Company acquisition on NL's earnings?
How did CompX's sales performance change in Q3 2024?
