Component products net sales decreased 3% and 5%, respectively, in the
second quarter and first six months of 2008 compared to the same periods in
2007. Net sales decreased principally due to lower order rates from many of
our customers resulting from unfavorable economic conditions in
Kronos' net sales of
Kronos' income from operations for the second quarter of 2008 declined by
59% to
Kronos' TiO2 sales volumes were 3% higher in both the second quarter and first six months of 2008 as compared to the same periods in 2007, due primarily to higher sales volumes in export markets. Kronos' TiO2 production volumes were 4% and 2% higher in the second quarter and first six months of 2008, respectively, as compared to the same periods in 2007. Kronos' TiO2 sales and production volumes for both the second quarter and first six months of 2008 were each a new record for Kronos.
Kronos' income tax benefit in 2008 includes a
Insurance recoveries relate to amounts we received from certain of our
former insurance carriers, and relate principally to recovery of prior lead
pigment litigation defense costs incurred by us. These recoveries aggregated
Corporate expenses were lower in the second quarter and first six months of 2008 as compared to the second quarter and first six months of 2007 primarily due to lower litigation and related expenses.
Interest income in 2008 includes
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 the Company believes that the expectations reflected in such forward-looking statements are reasonable, it 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, the Company continues 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 the Company's products,
-- The extent of the dependence of the Company's businesses on certain
market sectors,
-- The cyclicality of certain of the Company's businesses,
-- The impact of certain long-term contracts on certain of the Company's
businesses,
-- Customer inventory levels,
-- Changes in raw material and other operating costs,
-- The possibility of labor disruptions,
-- General global economic and political conditions,
-- Competitive products and substitute products,
-- Possible disruption of business or increases in the cost of doing
business resulting from terrorist activities or global conflicts,
-- Customer and competitor strategies,
-- Potential consolidation or solvency of competitors,
-- The impact of pricing and production decisions,
-- Competitive technology positions,
-- Service industry employment levels,
-- Demand for high performance marine components,
-- The introduction of trade barriers,
-- Fluctuations in currency exchange rates,
-- Operating interruptions,
-- The timing and amount of insurance recoveries,
-- The ability of the Company to renew or refinance credit facilities,
-- The extent to which the Company's subsidiaries were to become unable to
pay dividends to the Company,
-- Uncertainties associated with new product development,
-- The ultimate outcome of income tax audits, tax settlement initiatives
or other tax matters,
-- The ultimate ability to utilize income tax attributes or changes in
income tax rates related to such attributes, the benefit of which has
been recognized under the more-likely-than-not recognition criteria,
-- Potential difficulties in integrating completed or future acquisitions,
-- Decisions to sell operating assets other than in the ordinary course of
business,
-- Environmental matters,
-- Government laws and regulations and possible changes therein,
-- The ultimate resolution of pending litigation, and
-- 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. The Company disclaims 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 the component products (security products, furniture components and performance marine components), chemicals (TiO2) and other businesses.
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except earnings (loss) per share)
(Unaudited)
Three months Six months
ended ended
June 30, June 30,
2007 2008 2007 2008
Net sales $45.2 $43.7 $88.8 84.2
Cost of sales 33.3 32.7 64.8 63.8
Gross margin 11.9 11.0 24.0 20.4
Selling, general and administrative
expense 6.5 6.5 13.2 12.9
Other operating income (expense):
Insurance recoveries .1 1.6 2.6 1.7
Corporate expense and other, net (9.3) (7.0) (14.3) (10.8)
Loss from operations (3.8) (.9) (.9) (1.6)
Equity in earnings of Kronos
Worldwide, Inc. - 2.1 4.6 1.9
General corporate items:
Interest and dividends 1.4 5.1 2.5 6.1
Interest expense (.1) (.5) (.1) (1.2)
Income (loss) before income
taxes and minority interest (2.5) 5.8 6.1 5.2
Provision for income taxes (benefit) (1.8) 1.5 .2 1.0
Minority interest in after-tax
earnings .8 .3 1.7 .5
Net income (loss) $(1.5) $4.0 $4.2 $3.7
Net income (loss) per basic and
diluted share $(.03) $.08 $.09 $.08
Basic and diluted weighted-average
shares used in the calculation of
net income per share 48.6 48.6 48.6 48.6
NL INDUSTRIES, INC.
COMPONENTS OF INCOME (LOSS) FROM OPERATIONS
(In millions)
(Unaudited)
Three months Six months
ended ended
June 30, June 30,
2007 2008 2007 2008
CompX - component products $4.4 $4.4 $9.9 $7.4
Insurance recoveries .1 1.6 2.6 1.7
Corporate expense (8.5) (7.0) (13.4) (10.7)
Other, net .2 .1 - -
Loss from operations $(3.8) $(.9) $(.9) $(1.6)
CHANGE IN KRONOS' TiO2 SALES
(Unaudited)
Three months Six months
ended ended
June 30, June 30,
2008 vs. 2007 2008 vs. 2007
Percentage change in sales:
TiO2 product pricing (1)% (3)%
TiO2 sales volume 3 % 3 %
TiO2 product mix 2 % 2 %
Changes in foreign currency exchange rates 10 % 8 %
Total 14 % 10 %
SOURCE NL Industries, Inc.
