UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of
Report (Date of the earliest event reported)
May
3, 2007
NL
Industries, Inc.
(Exact
name of registrant as specified in its charter)
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New
Jersey
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1-640
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13-5267260
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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5430
LBJ Freeway, Suite 1700, Dallas, Texas
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75240-2697
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(972)
233-1700
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(Former
name or former address, if changed since last report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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Item
7.01
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Regulation
FD Disclosure.
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The
registrant hereby furnishes the information set forth in its press release
issued on May 3, 2007, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The
information, including the exhibit, the registrant furnishes in this report
is
not deemed “filed” for purposes of section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that section.
Registration statements or other documents filed with the U.S. Securities and
Exchange Commission shall not incorporate this information by reference, except
as otherwise expressly stated in such filing.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated May 3, 2007 issued by the
registrant.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NL
Industries, Inc.
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(Registrant)
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By: /s/
Gregory M. Swalwell
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Date:
May 8, 2007
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Gregory
M. Swalwell, Vice President, Finance and
Chief
Financial
Officer
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INDEX
TO EXHIBITS
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated May 3, 2007 issued by the
registrant.
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NL
REPORTS FIRST QUARTER RESULTS
DALLAS,
TEXAS - May 3, 2007 - NL Industries, Inc. (NYSE:NL) today reported net income
of
$5.8 million, or $.12 per diluted share, in the first quarter of 2007 compared
to $6.6 million, or $.14 per diluted share, in the first quarter of
2006.
Component
products sales decreased in the first quarter of 2007 as compared to the first
quarter of 2006. The decrease is due mainly to lower sales to the office
furniture market where, for certain products, Asian competitors have established
selling prices below a level which CompX considers would return an acceptable
profit, partially
offset by higher marine component sales resulting
from an acquisition in April 2006.
Despite
the lower level of component product sales and the effect of increasing raw
materials costs, component products segment profit increased in the first
quarter of 2007 as compared to the first quarter of 2006 due to a
more
favorable product mix and a continued focused on reducing costs and improving
efficiency.
Kronos’
net
sales
of $314.0 million in the first quarter of 2007 were $9.7 million, or 3%, higher
than the first quarter of 2006 due primarily to the net effect of favorable
fluctuations in foreign currency exchange rates, which increased sales by
approximately $16 million, and lower average TiO2
selling
prices. Kronos’ average selling prices were 3% lower in the first quarter of
2007 as compared to the first quarter of 2006. Kronos’ sales volumes increased
less than 1% from the first quarter of 2006, with higher sales volumes in Europe
and export markets offsetting the effect of lower sales volumes in the United
States. The table at the end of this press release shows how each of these
items
impacted the overall increase in sales.
Kronos’
income from operations declined $6.1 million in the first quarter of 2007 as
compared to the same period in 2006 due primarily to the effect of lower
TiO2
selling
prices and higher raw material and energy costs, partially offset by the
favorable effects of fluctuations in foreign currency exchange rates, which
increased income from operations by approximately $3 million, and higher
TiO2
production volumes. Kronos’ TiO2
production volumes were 5% higher in the first quarter of 2007 as compared
to
the first quarter of 2006, with operating rates at near full capacity in both
periods. Both TiO2
sales
and production volumes in the first quarter of 2007 were new records for a
first
quarter.
Insurance
recoveries in the first quarter of 2007 of $2.5 million ($1.6 million or $.03
per diluted share, net of tax) and $2.2 million ($1.5 million or $.03 per
diluted share, net of tax) in the first quarter of 2006 represent amounts NL
recovered from certain former insurance carriers in settlement of claims related
to prior lead paint litigation defense costs.
Corporate
expenses were higher in the first quarter of 2007 as compared to the first
quarter of 2006 due to higher litigation and related expenses and to higher
environmental remediation expenses.
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,
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| · |
The
extent of the dependence of the Company’s businesses on certain market
sectors,
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| · |
The
cyclicality of certain of the Company's businesses,
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| · |
The
impact of certain long-term contracts on certain of the Company's
businesses,
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| · |
Customer
inventory levels,
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| · |
Changes
in raw material and other operating costs,
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| · |
The
possibility of labor disruptions,
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| · |
General
global economic and political conditions,
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| · |
Competitive
products and substitute products,
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| · |
Possible
disruption of business or increases in the cost of doing business
resulting from terrorist activities or global
conflicts,
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| · |
Customer
and competitor strategies,
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| · |
Potential
consolidation of competitors,
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| · |
The
impact of pricing and production decisions,
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| · |
Competitive
technology positions,
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| · |
The
introduction of trade barriers,
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| · |
Fluctuations
in currency exchange rates,
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| · |
Operating
interruptions,
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| · |
The
timing and amount of insurance
recoveries,
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| · |
The
ability of the Company to renew or refinance credit
facilities,
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| · |
The
extent to which the Company’s subsidiaries were to become unable to pay
dividends to the Company,
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| · |
Uncertainties
associated with new product development,
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| · |
The
ultimate outcome of income tax audits, tax settlement initiatives
or other
tax matters,
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| · |
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,
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| · |
Environmental
matters,
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| · |
Government
laws and regulations and possible changes
therein,
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| · |
The
ultimate resolution of pending litigation, and
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| · |
Possible
future litigation.
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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.
In
an
effort to provide investors with additional information regarding the Company’s
results of operations as determined by accounting principles generally accepted
in the United States of America (“GAAP”), the Company has disclosed certain
non-GAAP information, which the Company believes provides useful information
to
investors:
| · |
The
Company discloses segment profit, which is used by the Company’s
management to assess the performance of its component products operations.
The Company believes disclosure of segment profit provides useful
information to investors because it allows investors to analyze the
performance of the Company’s operations
in the same way that the Company’s management assesses performance. The
Company defines segment profit as income before income taxes, interest
expense and certain general corporate items. Corporate items excluded
from
the determination of segment profit include corporate expense and
interest
income not attributable to the Company’s operations.
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NL
Industries, Inc. is engaged in the component products (security products,
furniture components and performance marine components), chemicals (titanium
dioxide pigments) and other businesses.
NL
INDUSTRIES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In
millions, except earnings per share)
(Unaudited)
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Three
months ended
March
31,
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|||||||
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2006
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2007
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Net
sales
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$
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47.0
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$
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43.6
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Cost
of sales
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35.4
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31.5
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Gross
margin
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11.6
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12.1
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Selling,
general and administrative expense
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6.7
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6.7
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Other
operating income (expense):
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|||||||
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Insurance
recoveries
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2.2
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2.5
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|||||
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Other
expense
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(.1
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)
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(.1
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)
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General
corporate expenses, net
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(4.1
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)
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(4.9
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)
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Income
from operations
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2.9
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2.9
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Equity
in earnings of Kronos Worldwide, Inc.
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5.6
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4.6
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General
corporate items:
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Interest
and dividends
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1.4
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1.1
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|||||
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Securities
transactions, net
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.1
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.1
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|||||
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Interest
expense
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(.1
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)
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-
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Income
before income taxes and
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|||||||
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minority
interest
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9.9
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8.7
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|||||
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Provision
for income taxes
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2.6
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2.0
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|||||
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Minority
interest in after-tax earnings
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.7
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.9
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Net
income
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$
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6.6
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$
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5.8
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Basic
and diluted net income per share
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$
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.14
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$
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.12
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Basic
and diluted weighted-average shares used in the calculation of net
income
per share
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48.6
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48.6
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NL
INDUSTRIES, INC.
RECONCILIATION
OF SEGMENT PROFIT TO
INCOME
FROM OPERATIONS
(In
millions)
(Unaudited)
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Three
months ended
March
31,
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|||||||
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2006
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2007
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||||||
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Segment
profit - component products
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$
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4.8
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$
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5.5
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Insurance
recoveries
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2.2
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2.5
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Corporate
expense
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(4.1
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)
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(4.9
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)
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Other,
net
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-
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(.2
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)
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Income
from operations
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$
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2.9
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$
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2.9
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NL
INDUSTRIES, INC.
CHANGE
IN KRONOS’ TiO2
SALES
(Unaudited)
|
Three
months ended
March
31,
2007
vs. 2006
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Percentage
change in sales:
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||||
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TiO2
product pricing
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(3)
%
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TiO2
sales volume
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- %
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TiO2
product mix
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1 %
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Changes
in foreign currency exchange rates
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5 %
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Total
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3 %
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