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
5, 2008
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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||
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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 5, 2008, 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 5, 2008 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
5, 2008
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Gregory
M. Swalwell, Vice President and
Controller
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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 5, 2008 issued by the
registrant.
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NL
REPORTS FIRST QUARTER RESULTS
DALLAS,
TEXAS - May 5, 2008 - NL Industries, Inc. (NYSE:NL) today reported a net loss of
$.3 million, or $.01 per share, in the first quarter of 2008 compared to net
income of $5.8 million, or $.12 per diluted share, in the first quarter of
2007.
Component
products sales decreased 7% in the first quarter of 2008 as compared to the
first quarter of 2007. The decrease is due mainly to lower order
rates from many of our customers resulting from unfavorable economic conditions
in North America, offset in part by the effect of sales price increases for
certain products to mitigate the effect of higher raw material
costs. Component products income from operations decreased $2.5
million from the first quarter of 2007 primarily due to reduced coverage of
fixed manufacturing costs resulting from lower sales, higher raw material costs
not entirely passed on to customers and changes in product mix.
Kronos’
net sales of $332.5 million in the first quarter of 2008 were $18.5 million, or
6%, higher than in the first quarter of 2007 due primarily to the net effect of
favorable fluctuations in foreign currency exchange rates, which increased sales
by approximately $20 million, and higher sales volumes, partially offset by
lower average TiO2 selling
prices. Kronos’s average selling prices were 4% lower in the first
quarter of 2008 as compared to the first quarter of 2007. Kronos’
sales volumes increased 2% from the first quarter of 2007, as higher sales
volumes in export markets more than offset the impact of lower volumes in
Europe. The table at the end of this press release shows how each of these items
impacted the overall increase in Kronos’ sales.
Kronos’
income from operations for the first quarter of 2008 declined by 67% to $9.7
million compared to the same period in 2007 primarily due to lower average
TiO2
selling prices, higher raw material and energy costs and to the unfavorable
effects of fluctuations in foreign currency exchange rates, which decreased
income from operations by approximately $7 million. Kronos’ TiO2 production
volumes were 1% lower in the first quarter of 2008 as compared to the first
quarter of 2007, with operating rates at near full capacity in both
periods. TiO2 sales
volume in the first quarter of 2008 was a new record for a first
quarter.
Corporate
expenses were lower in the first quarter of 2008 as compared to the first
quarter of 2007 primarily due to lower litigation and related
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:
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·
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Future
supply and demand for the Company’s
products,
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·
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The
extent of the dependence of the Company’s businesses on certain market
sectors,
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·
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The
cyclicality of certain of the Company's
businesses,
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·
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The
impact of certain long-term contracts on certain of the Company's
businesses,
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·
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Customer
inventory levels,
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·
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Changes
in raw material and other operating
costs,
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·
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The
possibility of labor disruptions,
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·
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General
global economic and political
conditions,
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·
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Competitive
products and substitute products,
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·
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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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·
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Customer
and competitor strategies,
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·
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Potential
consolidation of competitors,
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·
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The
impact of pricing and production
decisions,
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·
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Competitive
technology positions,
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·
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Service
industry employment levels,
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| · | Demand for high performance marine components, |
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·
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The
introduction of trade barriers,
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·
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Fluctuations
in currency exchange rates,
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·
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Operating
interruptions,
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·
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The
timing and amount of insurance
recoveries,
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·
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The
ability of the Company to renew or refinance credit
facilities,
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·
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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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·
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Uncertainties
associated with new product
development,
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·
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The
ultimate outcome of income tax audits, tax settlement initiatives or other
tax matters,
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·
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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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·
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Potential
difficulties in integrating completed or future
acquisitions,
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·
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Decisions
to sell operating assets other than in the ordinary course of
business,
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·
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Environmental
matters,
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·
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Government
laws and regulations and possible changes
therein,
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·
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The
ultimate resolution of pending litigation,
and
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·
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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.
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 per share)
(Unaudited)
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Three
months ended
March
31,
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||||||||
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2007
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2008
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|||||||
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Net
sales
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$ | 43.6 | $ | 40.5 | ||||
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Cost
of sales
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31.5 | 31.1 | ||||||
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Gross
margin
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12.1 | 9.4 | ||||||
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Selling,
general and administrative expense
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6.7 | 6.4 | ||||||
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Other
operating income (expense):
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||||||||
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Insurance
recoveries
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2.5 | .1 | ||||||
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General
corporate expenses, net
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(4.9 | ) | (3.8 | ) | ||||
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Other,
net
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(.1 | ) | - | |||||
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Income
(loss) from operations
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2.9 | (.7 | ) | |||||
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Equity
in earnings (losses) of Kronos Worldwide, Inc.
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4.6 | (.1 | ) | |||||
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General
corporate items:
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||||||||
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Interest
and dividends
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1.1 | 1.0 | ||||||
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Securities
transactions, net
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.1 | - | ||||||
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Interest
expense
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- | (.8 | ) | |||||
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Income
(loss) before income taxes and
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||||||||
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minority
interest
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8.7 | (.6 | ) | |||||
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Provision
for income taxes (benefit)
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2.0 | (.5 | ) | |||||
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Minority
interest in after-tax earnings
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.9 | .2 | ||||||
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Net
income (loss)
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$ | 5.8 | $ | (.3 | ) | |||
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Net
income (loss) per basic and diluted share
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$ | .12 | $ | (.01 | ) | |||
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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 | 48.6 | ||||||
NL
INDUSTRIES, INC.
COMPONENTS
OF INCOME (LOSS) FROM OPERATIONS
(In
millions)
(Unaudited)
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Three
months ended
March
31,
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||||||||
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2007
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2008
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|||||||
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CompX
– component products
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$ | 5.5 | $ | 3.0 | ||||
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Insurance
recoveries
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2.5 | .1 | ||||||
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Corporate
expense
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(4.9 | ) | (3.8 | ) | ||||
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Other,
net
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(.2 | ) | - | |||||
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Income
(loss) from operations
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$ | 2.9 | $ | (.7 | ) | |||
CHANGE
IN KRONOS’ TiO2
SALES
(Unaudited)
|
Three
months ended
March
31,
2008 vs. 2007
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||||
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Percentage
change in sales:
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||||
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TiO2
product pricing
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(4 | )% | ||
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TiO2
sales volume
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2 | |||
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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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7 | |||
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Total
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6 | % | ||