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)
August 3, 2022
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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75240-2620
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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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□
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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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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common stock
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NL
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule
12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02
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Results of Operations and Financial Condition.
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The registrant hereby furnishes the information set forth in its press release entitled “NL Reports Second Quarter 2022 Results” that
the registrant issued on August 3, 2022, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The press release the registrant furnishes as Exhibit 99.1 to this current 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 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 entitled “NL Industries Announces Quarterly Dividend for
the Third Quarter of 2022 at $.07 Per Share” that the registrant also issued on August 3, 2022, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference.
The press release the registrant furnishes as Exhibit 99.2 to this current 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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Description
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99.1
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99.2
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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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/ Amy A. Samford
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Date: August 3, 2022
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Amy A. Samford, Executive Vice President and
Chief Financial Officer
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Exhibit 99.1
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NL Industries, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, TX 75240-2697
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Contact: Janet G. Keckeisen
Investor Relations
(972) 233-1700
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News Release
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FOR IMMEDIATE RELEASE
DALLAS, TEXAS – August 3, 2022 - NL Industries, Inc. (NYSE: NL) today reported net income attributable to NL stockholders of $30.2 million, or $.62 per
share, in the second quarter of 2022 compared to net income attributable to NL stockholders of $12.7 million, or $.26 per share, in the second quarter of 2021. NL results include an unrealized gain of $19.2 million in the second quarter of 2022
related to the change in value of marketable equity securities compared to a $4.5 million unrealized gain in the second quarter of 2021. For the first six months of 2022, NL reported net income attributable to NL stockholders of $48.8 million, or
$1.00 per share, compared to net income attributable to NL stockholders of $26.0 million, or $.53 per share for the first six months of 2021. NL results include an unrealized gain of $19.9 million in the first six months of 2022 related to the change
in value of marketable equity securities compared to a $10.9 million unrealized gain in the first six months of 2021.
Net sales were $41.6 million for the second quarter of 2022 compared to $36.3 million in the second quarter of 2021 and $83.7 million for
the six months ended June 30, 2022, compared to $72.2 million for the same prior year period. The increase in sales for both periods is due to higher Marine Components sales primarily to the towboat market and, to a lesser extent, higher Security
Products sales across a variety of markets. Income from operations attributable to CompX was $7.7 million for the second quarter of 2022 compared to $5.8 million for the second quarter of 2021 and $14.0 million for the first six months of
2022 compared to $11.6 million for the same prior year period. Income from operations increased for both comparative periods primarily due to the favorable effect of higher
sales partially offset by increased production costs including increased raw material costs, higher shipping costs, and increased labor.
The Company recognized equity in earnings of Kronos of $14.0 million in the second quarter of 2022 compared to $7.8 million in the second quarter of 2021
and $31.5 million in the first six months of 2022 compared to $13.8 million in the same period of 2021. Kronos’ net sales of $565.3 million in the second quarter of 2022 were $86.7 million, or 18%, higher than in the second quarter of 2021. Kronos’
net sales of $1.1 billion in the first six months of 2022 were $184.6 million, or 20%, higher than in the first six months of 2021. Kronos’ net sales increased in the 2022 periods compared to the same periods in 2021 primarily due to higher average
TiO2 selling prices. Kronos’ TiO2 sales volumes were 1% lower in the second quarter of 2022 as compared to the second quarter of 2021 and Kronos’ sales volumes in the first six months of 2022 were comparable to the first six
months of 2021. Kronos’ average TiO2 selling prices were 26% higher in the second quarter of 2022 as compared to the second quarter of 2021 and 25% higher in the first six months of 2022 as compared to the first six months of 2021.
Kronos’s average TiO2 selling prices at the end of the second quarter of 2022 were 12% higher than the end of 2021. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, decreasing net sales by
approximately $29 million in the second quarter of 2022 and approximately $51 million in the first six months of 2022, as compared to the same periods in 2021. 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 second quarter of 2022 was $65.2 million as compared to $43.8 million in the second quarter of 2021. For the
year-to-date period, Kronos’ income from operations was $148.5 million as compared to $77.8 million in the first six months of 2021. Kronos’ income from operations increased in the 2022 periods as compared to the same periods in 2021 primarily due to
the net effect of higher average TiO2 selling prices and higher production costs, including raw material and energy costs. Kronos’ TiO2 production volumes were 4% lower in the second quarter of 2022 compared to the second
quarter of 2021 and 1% higher in the first six months of 2022 compared to the same period of 2021. The lower production volumes in the second quarter of 2022 were primarily due to maintenance activities and availability of certain raw materials
which temporarily reduced its productions rates. Kronos operated its production facilities at 98% of practical capacity utilization in the first six months of 2022 (100% and 95% in the first and second quarters of 2022, respectively) compared to 99%
in the first six months of 2021 (97% and 100% in the first and second quarters of 2021, respectively). Fluctuations in currency exchange rates (primarily the euro) increased Kronos’ income from operations approximately $12 million in the second
quarter of 2022 as compared to the second quarter of 2021 and increased Kronos’ income from operations approximately $7 million in the first six months of 2022 as compared to the first six months of 2021.
Corporate expenses increased $.6 million in the second quarter of 2022 compared to the second quarter of 2021 primarily due to higher litigation fees and
related costs. Corporate expenses increased $1.2 million in the first six months of 2022 compared to the same period of 2021 primarily due to higher litigation fees and higher environmental remediation and related costs. Interest and dividend income
increased slightly in the second quarter of 2022 compared to the same period of 2021 primarily due to higher cash and cash equivalents available for investment as well as higher average interest rates. Interest and dividend income in the first six
months of 2022 is comparable to the same period in 2021. Marketable equity securities represent the change in unrealized gains on our portfolio of marketable equity securities 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:
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Future supply and demand for our products;
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The extent of the dependence of certain of our businesses on certain market sectors;
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The cyclicality of our businesses (such as Kronos’ TiO2 operations);
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Customer and producer inventory levels;
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Unexpected or earlier-than-expected industry capacity expansion (such as the TiO2 industry);
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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;
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Changes in the availability of raw material (such as ore);
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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 such as COVID-19);
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Competitive products and substitute products;
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Price and product competition from low-cost manufacturing sources (such as China);
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Customer and competitor strategies;
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Potential consolidation of Kronos’ competitors;
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Potential consolidation of Kronos’ customers;
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The impact of pricing and production decisions;
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Competitive technology positions;
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Our ability to protect or defend intellectual property rights;
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- 2 -
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Potential difficulties in integrating future acquisitions;
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Potential difficulties in upgrading or implementing accounting and manufacturing software systems;
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The introduction of trade barriers or trade disputes;
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The impact of current or future government regulations (including employee healthcare benefit related regulations);
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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;
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Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions,
unscheduled or unplanned downtime such as disruptions in energy supplies, transportation interruptions, cyber-attacks and public health crises such as COVID-19);
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Decisions to sell operating assets other than in the ordinary course of business;
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Kronos’ ability to renew or refinance credit facilities;
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Potential increases in interest rates;
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Our ability to maintain sufficient liquidity;
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The timing and amounts of insurance recoveries;
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The ability of our subsidiaries or affiliates to pay us dividends;
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Uncertainties associated with CompX’s development of new products and product features;
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The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform;
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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
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Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new
facilities or new developments regarding environmental remediation at sites related to our former operations);
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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 regulations
such as those seeking to limit or classify TiO2 or its use;
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The ultimate resolution of pending litigation (such as our lead pigment and environmental matters); and
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Possible future litigation.
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NL Industries, Inc. is engaged in component products (security products and recreational marine components) and chemicals (TiO2) businesses.
- 3 -
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except earnings per share)
(unaudited)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2021
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2022
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2021
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2022
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Net sales
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$
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36.3
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$
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41.6
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$
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72.2
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$
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83.7
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Cost of sales
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24.9
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28.0
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49.8
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58.0
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Gross margin
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11.4
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13.6
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22.4
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25.7
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Selling, general and administrative expense
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5.6
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5.9
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10.8
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11.7
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Corporate expense
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2.9
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3.5
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4.7
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5.9
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Income from operations
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2.9
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4.2
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6.9
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8.1
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Equity in earnings of Kronos Worldwide, Inc.
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7.8
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14.0
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13.8
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31.5
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Other income (expense):
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Interest and dividend income
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.5
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.6
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.9
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.9
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Marketable equity securities
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4.5
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19.2
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10.9
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19.9
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Other components of net periodic pension and OPEB cost
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(.2)
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(.3)
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(.3)
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(.5)
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Interest expense
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(.3)
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(.2)
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(.6)
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(.5)
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Income before income taxes
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15.2
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37.5
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31.6
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59.4
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Income tax expense
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1.9
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6.4
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4.4
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9.1
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Net income
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13.3
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31.1
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27.2
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50.3
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Noncontrolling interest in net income of subsidiary
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.6
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.9
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1.2
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1.5
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Net income attributable to NL stockholders
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$
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12.7
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$
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30.2
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$
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26.0
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$
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48.8
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Net income per share attributable to NL stockholders
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$
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.26
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$
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.62
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$
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.53
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$
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1.00
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Weighted average shares used in the calculation of
net income per share |
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48.8
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48.8
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48.8
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48.8
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- 4 -
NL INDUSTRIES, INC.
COMPONENTS OF INCOME FROM OPERATIONS
(In millions)
(unaudited)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2021
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2022
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2021
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2022
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CompX - component products
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$
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5.8
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$
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7.7
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$
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11.6
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$
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14.0
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Corporate expense
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(2.9)
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(3.5)
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(4.7)
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(5.9)
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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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4.2
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$
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6.9
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$
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8.1
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CHANGE IN KRONOS’ NET SALES
(unaudited)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2022 vs. 2021
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2022 vs. 2021
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Percentage change in net sales:
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TiO2 product pricing
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26
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%
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25
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%
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TiO2 sales volume
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(1)
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—
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TiO2 product mix/other
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(1)
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—
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Changes in currency exchange rates
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(6)
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(5)
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Total
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18
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%
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20
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%
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- 5 -
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NL Industries, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, TX 75240-2620
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Contact: Janet G. Keckeisen
Investor Relations
(972) 233-1700
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News Release
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FOR IMMEDIATE RELEASE
FOR THE THIRD QUARTER OF 2022 AT $.07 PER SHARE
DALLAS, TEXAS – August 3, 2022 – NL Industries, Inc. (NYSE: NL) today announced that its board of directors has declared a quarterly
dividend of seven cents ($0.07) per share on its common stock, payable on September 20, 2022 to shareholders of record at the close of business on September 1, 2022.
NL Industries, Inc. is engaged in the component products (security products and recreational marine components) and chemicals (TiO2) businesses.
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