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)
November
2, 2009
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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|
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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 November 2, 2009, 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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||
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Item
No.
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Exhibit
Index
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||
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99.1
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Press
release dated November 2, 2009 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: November
2, 2009
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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 November 2, 2009 issued by the
registrant.
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NL
Industries, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
TX 75240-2697
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Contact: Gregory
M. Swalwell
Vice President, Finance and Chief
Financial Officer
(972)
233-1700
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|
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News
Release
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||
FOR IMMEDIATE
RELEASE
NL
REPORTS THIRD QUARTER RESULTS
DALLAS,
TEXAS – November 2, 2009 - NL Industries, Inc. (NYSE:NL) today reported net
income attributable to NL stockholders of $3.1 million, or $.06 per share, in
the third quarter of 2009 compared to a net loss of $6.7 million, or $.14 per
share, in the third quarter of 2008. For the first nine months of
2009, NL reported a net loss attributable to NL stockholders of $10.9 million,
or $.22 per share, compared to a net loss of $3.1 million, or $.06 per share, in
the first nine months of 2008.
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 North America. Component products
sales were also unfavorably impacted by relative changes in currency exchange
rates, which decreased sales by $.1 million for the quarter and $1.1 million for
the year-to-date period. During the third quarter of 2008, we
recorded a noncash impairment charge of $10.1 million for our marine components
reporting unit. Excluding this goodwill impairment charge, income
from operations attributable to CompX decreased in the third quarter and first
nine months of 2009 to a loss of $.2 million and a loss of $2.0 million,
respectively, compared to income of $4.9 million and $12.3 million for the same
periods of 2008. The decrease is primarily due to reduced coverage of
overhead and fixed manufacturing costs as well as selling and general
administrative costs as a result of lower sales volumes and approximately $1.5
million and $2.5 million in patent litigation expenses incurred in the third
quarter and first nine months, respectively, of 2009. Changes in
currency exchange rates positively impacted component products income from
operations comparisons by a negligible amount for the quarter and by $1.3
million in the year-to-date period.
Kronos’
net sales of $310.1 million in the third quarter of 2009 were $35.5 million, or
10%, lower than in the third quarter of 2008. Kronos’ net sales
of $840.2 million for the first nine months of 2009 were $229.8 million, or 21%,
lower than in the first nine months of 2008. Net sales decreased in
the third quarter of 2009 primarily due to lower average TiO2 selling
prices and to unfavorable changes in product mix, partially offset by the
favorable impact of higher TiO2 sales
volumes. Net sales were lower in the first nine months of 2009
primarily due to a 14% decrease in sales volumes and to unfavorable changes in
product mix. Additionally, the unfavorable effect of fluctuations in
currency exchange rates decreased the Kronos’ sales by approximately $17 million
for the quarter and $56 million in the year-to-date period. Although
Kronos’ average selling prices were 5% lower in the third quarter of 2009 as
compared to the third quarter of 2008, the average selling prices at the end of
the third quarter 2009 were 1% higher than at the end of the second quarter
2009. The table at the end of this release shows how each of these
items impacted the overall decrease in sales.
Kronos’
income from operations improved by $13.2 million from $7.9 million in the third
quarter of 2008 to $21.1 million in the third quarter of 2009. For
the year-to-date period, Kronos’ income from operations declined $54.2 million
from income of $27.3 million in 2008 to a loss from operations of $26.9 million
in 2009. Income from operations increased in the third quarter of
2009 as compared to the third quarter of 2008 as the unfavorable effect of lower
average TiO2 selling
prices was more than offset by the favorable effect of lower maintenance and
other costs as well as higher sales volumes and fluctuations in currency
exchange rates, which increased income from operations by approximately $2
million. For the first nine months of 2009, income from operations
declined primarily due to the negative effects of production curtailments which
resulted in significantly higher manufacturing costs per ton of pigment
production during the first nine months of the year, as well as to the effect of
lower sales volumes. This was partially offset by lower maintenance
costs and the favorable effects of fluctuations in currency exchange rates,
which increased income from operations by approximately $50
million. Kronos’ TiO2 production
volumes were 3% higher in the third quarter of 2009 and 28% lower in first nine
months of 2009 as compared to the same periods in 2008.
Kronos’
income tax benefit in 2008 includes a $7.2 million (NL’s equity interest was
$1.7 million, or $.03 per share, net of tax) non-cash deferred income tax
benefit in the second quarter related to a European Court ruling that resulted
in the favorable resolution of certain income tax issues related to its German
operations and an increase in the amount of its German corporate and trade tax
net operating loss carryforwards.
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 $4.1 million in the first nine months of 2009 ($2.6 million, or $.05
per share, net of income taxes) and $2.4 million in the first nine months of
2008 ($1.5 million, or $.03 per share, net of income taxes).
Litigation
settlement gain relates to an $11.3 million pre-tax gain ($7.3 million, or $.15
per share, net of income taxes) recognized in the second quarter of 2009 related
to the second closing associated with the settlement of condemnation proceedings
on certain real property we formerly owned that is subject to environmental
remediation.
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 $4.3 million ($.06 per share) related to interest
received in the second quarter related to certain escrow funds.
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:
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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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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 or solvency 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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·
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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 (including, but not limited to, labor disputes, leaks,
natural disasters, fires, explosions, unscheduled or unplanned downtime
and transportation 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, amend, refinance or comply with credit
facilities,
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·
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The
ability of the Company to maintain sufficient
liquidity,
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·
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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),
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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. 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. 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 ended
September
30,
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Nine
months ended
September
30,
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|||||||||||||||
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2008
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2009
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2008
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2009
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|||||||||||||
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Net
sales
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$ | 43.9 | $ | 29.4 | $ | 128.1 | $ | 87.1 | ||||||||
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Cost
of sales
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32.7 | 22.4 | 96.5 | 69.1 | ||||||||||||
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Gross
margin
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11.2 | 7.0 | 31.6 | 18.0 | ||||||||||||
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Selling,
general and administrative expense
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6.3 | 6.9 | 19.2 | 19.0 | ||||||||||||
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Other
operating income (expense):
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||||||||||||||||
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Insurance
recoveries
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.7 | 1.4 | 2.4 | 4.1 | ||||||||||||
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Litigation
settlement gain
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- | - | - | 11.3 | ||||||||||||
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Assets
held for sale write-down
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- | - | - | (.7 | ) | |||||||||||
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Goodwill
impairment
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(10.1 | ) | - | (10.1 | ) | - | ||||||||||
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Corporate
expense and other, net
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(3.0 | ) | (5.3 | ) | (13.9 | ) | (14.6 | ) | ||||||||
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Loss
from operations
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(7.5 | ) | (3.8 | ) | (9.2 | ) | (.9 | ) | ||||||||
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Equity
in net income (loss) of Kronos Worldwide, Inc.
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(1.3 | ) | 3.1 | .7 | (14.4 | ) | ||||||||||
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General
corporate items:
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||||||||||||||||
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Interest
and dividends
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.8 | .7 | 6.9 | 2.1 | ||||||||||||
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Interest
expense
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(.6 | ) | (.2 | ) | (1.8 | ) | (.8 | ) | ||||||||
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Loss
before income taxes
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(8.6 | ) | (.2 | ) | (3.4 | ) | (14.0 | ) | ||||||||
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Provision
for income taxes (benefit)
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(.9 | ) | (3.4 | ) | .2 | (2.9 | ) | |||||||||
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Net
income (loss)
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(7.7 | ) | 3.2 | (3.6 | ) | (11.1 | ) | |||||||||
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Noncontrolling
interest in net income (loss) of
subsidiary
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(1.0 | ) | .1 | (.5 | ) | (.2 | ) | |||||||||
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Net
income (loss) attributable to
NL stockholders
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$ | (6.7 | ) | $ | 3.1 | $ | (3.1 | ) | $ | (10.9 | ) | |||||
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Basic
and diluted net income (loss) per share
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$ | (.14 | ) | $ | .06 | $ | (.06 | ) | $ | (.22 | ) | |||||
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Basic
and diluted average shares outstanding
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48.6 | 48.6 | 48.6 | 48.6 | ||||||||||||
NL
INDUSTRIES, INC.
COMPONENTS
OF INCOME (LOSS) FROM OPERATIONS
(In
millions)
(Unaudited)
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
|
2008
|
2009
|
2008
|
2009
|
|||||||||||||
|
CompX
– component products
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$ | (5.2 | ) | $ | (.2 | ) | $ | 2.2 | $ | (2.0 | ) | |||||
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Insurance
recoveries
|
.7 | 1.4 | 2.4 | 4.1 | ||||||||||||
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Litigation
settlement gain
|
- | - | - | 11.3 | ||||||||||||
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Corporate
expense and other, net
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(3.0 | ) | (5.0 | ) | (13.8 | ) | (14.3 | ) | ||||||||
|
|
||||||||||||||||
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Income
(loss) from operations
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$ | (7.5 | ) | $ | (3.8 | ) | $ | (9.2 | ) | $ | (.9 | ) | ||||
CHANGE
IN KRONOS’ TiO2
SALES
(Unaudited)
|
Three
months ended
September
30,
2009 vs. 2008
|
Nine
months ended
September
30,
2009 vs. 2008
|
|||||||
|
Percentage
change in sales:
|
||||||||
|
TiO2
product pricing
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(5 | )% | - | % | ||||
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TiO2
sales volumes
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3 | % | (14 | )% | ||||
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TiO2
product mix
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(3 | )% | (2 | )% | ||||
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Changes
in currency exchange rates
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(5 | )% | (5 | )% | ||||
|
Total
|
(10 | )% | (21 | )% | ||||