Net sales decreased 33% and 32%, respectively, in the third quarter and first nine months of 2009 compared to the same periods in 2008. Net sales decreased principally due to lower order rates from our customers resulting from unfavorable economic conditions in
Kronos' net sales of
Kronos' income from operations improved by
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 the recovery of prior lead pigment and asbestos litigation defense costs incurred by us. These recoveries aggregated
Litigation settlement gain relates to an
Corporate expenses were higher in the third quarter and first nine months of 2009 as compared to the same periods of 2008 primarily due to higher defined benefit pension expense and higher environmental expense.
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 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 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,
-- 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 (including, but not limited to, labor disputes,
leaks, natural disasters, fires, explosions, unscheduled or unplanned
downtime and transportation interruptions),
-- The timing and amount of insurance recoveries,
-- The ability of the Company to renew, amend, refinance or comply with
credit facilities,
-- The ability of the Company to maintain sufficient liquidity,
-- The extent to which the Company's subsidiaries and affiliates were to
become unable to pay dividends to the Company (such as Kronos'
suspension of its dividend in 2009),
-- 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. 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except earnings (loss) per share)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2008 2009 2008 2009
---- ---- ---- ----
Net sales $43.9 $29.4 $128.1 $87.1
Cost of sales 32.7 22.4 96.5 69.1
---- ---- ---- ----
Gross margin 11.2 7.0 31.6 18.0
Selling, general and
administrative expense 6.3 6.9 19.2 19.0
Other operating income
(expense):
Insurance recoveries .7 1.4 2.4 4.1
Litigation settlement gain - - - 11.3
Assets held for sale
write-down - - - (.7)
Goodwill impairment (10.1) - (10.1) -
Corporate expense and
other, net (3.0) (5.3) (13.9) (14.6)
----- ----- ------ ------
Loss from operations (7.5) (3.8) (9.2) (.9)
Equity in net income
(loss) of Kronos
Worldwide, Inc. (1.3) 3.1 .7 (14.4)
General corporate items:
Interest and dividends .8 .7 6.9 2.1
Interest expense (.6) (.2) (1.8) (.8)
---- ---- ----- ----
Loss before income taxes (8.6) (.2) (3.4) (14.0)
Provision for income taxes
(benefit) (.9) (3.4) .2 (2.9)
---- ----- -- -----
Net income (loss) (7.7) 3.2 (3.6) (11.1)
Noncontrolling interest in
net income (loss) of
subsidiary (1.0) .1 (.5) (.2)
----- -- ---- ----
Net income (loss)
attributable to NL
stockholders $(6.7) $3.1 $(3.1) $(10.9)
====== ==== ====== =======
Basic and diluted net
income (loss) per share $(.14) $.06 $(.06) $(.22)
======== ======= ======= ========
Basic and diluted average
shares outstanding 48.6 48.6 48.6 48.6
==== ==== ==== ====
NL INDUSTRIES, INC.
COMPONENTS OF INCOME (LOSS) FROM OPERATIONS
(In millions)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2008 2009 2008 2009
---- ---- ---- ----
CompX - component products $(5.2) $(.2) $2.2 $(2.0)
Insurance recoveries .7 1.4 2.4 4.1
Litigation settlement gain - - - 11.3
Corporate expense and other,
net (3.0) (5.0) (13.8) (14.3)
----- ----- ------ ------
Income (loss) from
operations $(7.5) $(3.8) $(9.2) $(.9)
====== ====== ====== =====
CHANGE IN KRONOS' TiO2 SALES
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2009 vs. 2008 2009 vs. 2008
------------- -------------
Percentage change in sales:
TiO2 product pricing (5)% - %
TiO2 sales volumes 3 % (14)%
TiO2 product mix (3)% (2)%
Changes in currency exchange rates (5)% (5)%
---- ----
Total (10)% (21)%
===== =====
SOURCE
Gregory M. Swalwell, Vice President, Finance and Chief Financial Officer of NL Industries, Inc., +1-972-233-1700