DALLAS, Nov. 1 /PRNewswire-FirstCall/ -- CompX International Inc. announced today sales of $46.4 million for the third quarter of 2007 compared to $48.8 million in the same period of 2006. Operating income was $4.3 million in the third quarter of 2007 compared to $6.2 million in the same period of 2006. Net income from continuing operations for the third quarter of 2007 was $2.8 million, or $0.18 per diluted share, compared to $3.8 million, or $0.25 per diluted share, in 2006.
Net sales for the nine-month period ended September 30, 2007 were $135.2 million compared to $146.0 million in the previous year. Operating income was $14.3 million for the nine-month period ended September 30, 2007 compared to $16.8 million for the comparable period of 2006. Income from continuing operations for the nine-month period in 2007 was $8.5 million, or $0.56 per diluted share, compared to $10.1 million, or $0.66 per diluted share, in 2006.
Net sales comparisons continued to be unfavorably impacted both by lower sales volume for certain products resulting from competition from lower priced Asian manufacturers and by the effect of lower order rates from many of our customers across all of our segments due to general economic conditions. Operating income decreased in 2007 as compared to the same periods in 2006 as the unfavorable effects of lower sales volume and relative changes in foreign currency exchange rates more than offset the favorable effects of an improved product mix and our ongoing focus on reducing costs.
"The current economic environment in North America continues to negatively impact our sales," commented David A. Bowers, President & CEO. "Additionally, the stronger Canadian dollar is adversely affecting our costs. We expect both of these conditions to continue to exist well into 2008. In response, we are focused on appropriately managing our cost structure and developing new sales opportunities in order to gain market share. As part of managing our cost structure, we incurred approximately $600,000 in expenses during the quarter relating to the move of two of our northern Illinois Security Products facilities. We expect this move to provide additional opportunities for synergies and cost reductions in 2008 and beyond. The move will be completed during the fourth quarter with additional move related spending in the range of what we incurred during the third quarter."
CompX is a leading manufacturer of security products, furniture components and performance marine components. It operates from eight locations in the U.S., Canada and Taiwan and employs more than 1,100 people.
Statements in this release relating to matters that are not historical facts are forward-looking statements based upon management's belief and assumptions using currently available information. Although CompX believes 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, CompX 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, general economic and political conditions, changes in raw material and other operating costs, demand for office furniture, service industry employment levels, competitive products and prices, fluctuations in currency exchange rates, the introduction of trade barriers, potential difficulties in integrating completed acquisitions, the ability to sustain or increase operating income improvement resulting from cost control initiatives, uncertainties associated with new product development and other risks and uncertainties detailed in CompX's Securities and Exchange Commission filings. Should one or more of these risks materialize or if the consequences worsen, or if the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected. CompX disclaims any intention or obligation to publicly update or revise such statements whether as a result of new information, future events or otherwise.
COMPX INTERNATIONAL INC. SUMMARY OF CONSOLIDATED OPERATIONS (In millions, except per share amounts) (Unaudited) Three months Nine months ended ended September 30, September 30, 2006 2007 2006 2007 Net sales $48.8 $46.4 $146.0 $135.2 Cost of goods sold 35.9 35.1 109.2 100.0 Gross margin 12.9 11.3 36.8 35.2 Selling, general and administrative 6.7 6.6 19.8 19.8 Other operating expense, net - (0.4) (0.2) (1.1) Operating income 6.2 4.3 16.8 14.3 Other non-operating income, net 0.3 0.2 0.9 0.8 Income from continuing operations before income taxes 6.5 4.5 17.7 15.1 Provision for income tax 2.7 1.7 7.6 6.6 Income from continuing operations 3.8 2.8 10.1 8.5 Discontinued operations , net of tax - - (0.5) - Net income $3.8 $2.8 $9.6 $8.5 Net income per diluted common share: Continuing operations $0.25 $0.18 $0.66 $0.56 Discontinued operations - - (0.03) - $0.25 $0.18 $0.63 $0.56 Weighted average diluted common shares outstanding 15.3 15.3 15.3 15.3 COMPX INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) December 31, September 30, Assets 2006 2007 (Unaudited) Current assets: Cash and equivalents $29.7 $25.2 Accounts receivable, net 20.0 20.4 Inventories, net 21.7 26.6 Deferred income taxes and other 3.5 3.9 Note receivable 1.3 1.3 Total current assets 76.2 77.4 Intangibles 43.9 43.4 Net property and equipment 69.7 74.8 Other assets 2.2 1.0 Total assets $192.0 $196.6 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $16.8 $20.6 Income taxes 1.0 0.2 Total current liabilities 17.8 20.8 Deferred income taxes 20.5 17.4 Stockholders' equity 153.7 158.4 Total liabilities and stockholders' equity $192.0 $196.6
