DALLAS, Aug. 2 /PRNewswire-FirstCall/ -- CompX International Inc. announced today sales of $34.4 million for the second quarter of 2010 compared to $29.2 million in the same period of 2009. Operating income was $2.9 million in the second quarter of 2010 compared to an operating loss of $949,000 in the same period in 2009. Net income for the second quarter of 2010 was $1.7 million, or $0.14 per diluted share, compared to a net loss of $1.6 million, or $0.13 per diluted share, in the second quarter of 2009.
For the six months ended June 30, 2010 sales were $67.2 million compared to $57.7 million in the previous year. Operating income was $4.7 million for the six months ended June 30, 2010 compared to an operating loss of $1.9 million for 2009. Net income for the six months ended June 30, 2010 was $757,000, or $0.06 per diluted share, compared to a net loss of $2.2 million, or $0.18 per diluted share, in 2009. The 2010 six month period net income was impacted by a $1.9 million ($0.15 per diluted share) income tax charge in the first quarter of 2010 resulting from a change in the Company's expectation relating to the repatriation of certain non-U.S. earnings.
Net sales increased principally due to improved order rates from customers across all business segments as a result of a positive change in the economic conditions in North America. The increase in operating income in the second quarter of 2010 over the comparable 2009 quarter is primarily due to the effects of (i) the higher sales increasing the utilization of production capacity and improving the coverage of fixed manufacturing costs, (ii) lower litigation expense for the quarter and (iii) a $700K write-down related to assets held for sale recorded in the second quarter of 2009, partially offset by the negative effects of relative changes in foreign currency exchange rates. The above items also impacted the six-month period comparison, except that litigation expense was higher in the 2010 year-to-date period.
"The second quarter sustained our positive trend in sales from the prior quarter which enabled us to continue to capitalize on our efficient cost structure," commented David A. Bowers, President & CEO. "While we are experiencing some cost pressure from raw materials, our gross margin for the quarter was 26% which is well above the prior year margin of 21%. Going forward, we expect to remain diligent in maintaining an efficient cost structure especially in light of the uncertainty as to the rate of economic recovery."
Mr. Bowers continued, "We are also pleased with the recently issued final ruling by the International Trade Commission that determined our Furniture Components business did not infringe on certain competitor patents and found those patents to be invalid. While there is still an open action in U.S. Federal District Court regarding these patents, and the District Court is not bound by these determinations, we were pleased the International Trade Commission affirmed our position."
CompX is a leading manufacturer of security products, furniture components and performance marine components. It operates from six locations in the U.S., Canada and Taiwan and employs approximately 800 people.
Forward-Looking Statements
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 the development of new product features 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 ended Six months ended June 30, June 30, 2009 2010 2009 2010 -- -- -- -- Net sales $29.2 $34.4 $57.7 $67.2 Cost of goods sold 23.0 25.5 46.7 49.2 ---- ---- ---- ---- Gross margin 6.2 8.9 11.0 18.0 Selling, general and administrative expense 5.5 5.5 11.1 11.3 Litigation expense 0.9 0.4 1.0 1.9 Assets held for sale write-down 0.7 - 0.7 - Other operating expense, net - 0.1 0.1 0.1 --- --- --- --- Operating income (loss) (0.9) 2.9 (1.9) 4.7 Interest expense (0.3) (0.2) (0.6) (0.4) Other non-operating income, net - 0.1 - 0.1 --- --- --- --- Income (loss) before income taxes (1.2) 2.8 (2.5) 4.4 Provision (benefit) for income taxes 0.4 1.1 (0.3) 3.6 --- --- ---- --- Net income (loss) $(1.6) $1.7 $(2.2) $0.8 ===== ==== ===== ==== Net income (loss) per diluted common share $(0.13) $0.14 $(0.18) $0.06 ====== ===== ====== ===== Weighted average diluted common 12.4 12.4 12.4 12.4 shares outstanding ==== ==== ==== ==== COMPX INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) December 31, June 30, 2009 2010 Assets (Unaudited) Current assets: Cash and equivalents $20.8 $7.6 Accounts receivable, net 11.7 16.8 Inventories, net 16.3 18.0 Deferred income taxes and other 6.3 5.3 --- --- Total current assets 55.1 47.7 Intangibles 32.4 32.1 Net property and equipment 63.6 61.2 Promissory note receivable - 15.0 Assets held for sale 2.8 2.8 Other assets 0.1 - --- --- Total assets $154.0 $158.8 ====== ====== Liabilities and Stockholders' Equity Current liabilities: Current maturities of note payable to affiliate $- $0.5 Accounts payable and accrued liabilities 14.6 15.0 Interest payable to affiliate - 0.6 Income taxes - 1.0 --- --- Total current liabilities 14.6 17.1 Long-term debt 42.2 46.7 Deferred income taxes and other 12.2 12.3 Stockholders' equity 85.0 82.7 ---- ---- Total liabilities and stockholders' equity $154.0 $158.8 ====== ======
CompX International Inc.
CONTACT: David A. Bowers, President & CEO of CompX International Inc.,
+1-864-286-1122
