SEC Filing Html Data
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 earliest event reported): February 13, 2003
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COMPX INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13905 57-0981653
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(State of other (Commission File) (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
5430 LBJ Freeway, Suite 1700
Dallas, TX 75240-2697
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 233-1700
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(Former name or address, if changed since last report)
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Item 9: Regulation FD Disclosure
On February 13, 2003, CompX International Inc. issued a press release, a
copy of which is attached hereto as Exhibit 99.1 and incorporated herein by
reference. The furnishing of this information pursuant to Regulation FD is not
an admission as to the materiality of the information included in this Current
Report.
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.
COMPX INTERNATIONAL INC.
(Registrant)
By: /s/ A. Andrew R. Louis
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A. Andrew R. Louis
Secretary
Date: February 13, 2003
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press release dated February 13, 2003 issued by CompX International
Inc.
[LOGO GOES HERE]
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
CompX International Inc. David A. Bowers
5430 LBJ Freeway, Suite 1700 President & CEO
Dallas, Texas 75240 Tel. 864-286-1122
COMPX REPORTS FOURTH QUARTER AND FULL YEAR 2002 OPERATING RESULTS
Dallas, TEXAS ... February 13, 2003 ... CompX International Inc. (NYSE: CIX)
announced today net sales for the fourth quarter of 2002 of $47.7 million and
net loss of $1.8 million compared to net sales of $47.0 million and net loss of
$1.4 million for the comparable 2001 period. Fourth quarter 2002 loss per
diluted share was $0.12 as compared to fourth quarter 2001 loss per diluted
share of $0.09.
The following items impacted CompX's results in the fourth quarter 2002:
o a $1.6 million pre-tax charge related to the previously disclosed
retooling of our Byron Center, Michigan precision slide facility
($0.07 per diluted share, net of income tax benefit). Approximately
$1.0 million of the expense was non-cash in nature relating to the
disposal of fixed assets and was recorded as other expense. The
remaining $600,000, recorded as cost of goods sold, related to the
cost of moving and installing machinery and equipment as well as the
disposal of obsolete inventory; and
o $1.9 million in pre-tax charges, recorded as cost of goods sold,
primarily for various changes in estimates with respect to obsolete
and slow-moving inventory, inventory overhead absorption rates and
other items ($0.08 per diluted share, net of income tax benefit).
Additionally, fourth quarter 2002 earnings were positively impacted by an amount
equal to $0.03 per diluted share from the elimination of goodwill amortization.
Net loss in the fourth quarter of 2002 was negatively impacted by an increase in
the effective income tax rate primarily as a result of lower income levels and
an increased proportion of foreign sourced dividend income taxed at a higher
effective tax rate.
For comparability purposes, the following items impacted CompX's results in the
fourth quarter 2001:
o a $2.7 million pre-tax charge related to the restructuring of the
European production operations ($0.10 per diluted share, net of income
tax benefit);
o a $2.2 million pre-tax gain recorded as other income on the
sale/leaseback of the production facility located in Maastricht, the
Netherlands ($0.08 per diluted share, net of income taxes); and
o $3.0 million in pre-tax charges, primarily recorded as cost of goods
sold, for changes in estimates with respect to reserves related to
obsolete and slow-moving inventory and other items ($0.11 per diluted
share, net of income tax benefit).
Net sales for the year-ended December 31, 2002 were $196.1 million compared to
$211.4 million for the prior year. Net income for the full year 2002 was
$638,000, or $0.04 per diluted share, compared to $7.1 million, or $0.47 per
diluted share, for the full year 2001.
On January 22, 2003, CompX signed a new $47.5 million three year secured credit
agreement to replace a prior credit facility. The Company currently has $32.0
million of debt outstanding under the credit agreement.
"2002 was a challenging year for CompX as a result of weak overall economic and
industry specific conditions," commented David A. Bowers, President & CEO. "We
commenced several cost control initiatives during the year in response to
continuing soft market demand. We expect to see the full impact of these
initiatives phased into operating results in the first part of 2003. One of the
more significant projects completed was the retooling of our Byron Center,
Michigan precision slide facility. We expect to achieve significant operating
efficiencies at the facility as a result of the retooling through the
rationalization of our precision slide product family. Our precision slide
results in 2002 were also negatively impacted by substantial increases in steel
prices during the year, and action has been taken to attempt to recover these
cost increases in the marketplace during the first quarter of 2003 by increasing
selling prices."
Mr. Bowers continued, "We have recently finalized a plan to consolidate our two
Kitchener, Ontario plants into a single facility. Substantial completion of this
initiative is expected during the second quarter of 2003. Expenses relating to
this consolidation are expected to primarily consist of the cost to move
machinery and equipment and are not anticipated to include a significant net
cost for the disposal of fixed assets. Other rationalization evaluations
associated with previously acquired facilities are also under review. These
other evaluations could result in additional charges for asset impairment and
other costs in future quarters. The new credit agreement, along with a strong
balance sheet, places the Company in a favorable position to make the cost
structure changes necessary to maintain and improve profitability in this
challenging economic environment and beyond."
The CompX Security Products segment experienced a 4% increase in net sales in
the fourth quarter of 2002 over the same quarter last year. Net sales for the
full year 2002 for this segment were comparable to the prior year. Performance
in this segment continues to be a strong contributor due in part to the broad
scope of markets served with our various lock products.
Net sales for the CompX Waterloo/Regout segment in the fourth quarter of 2002
were flat in comparison to the prior year. Net sales for the full year 2002 for
this segment declined by 11% over last year as customers in the prime market for
this segment, the office furniture industry, continued to struggle with
dramatically lower demand for their products, and accordingly for our
components.
Mr. Bowers concluded, "During the past two years, we have experienced an
extremely difficult market picture and at the same time we have continued to
absorb acquisitions made in 1998 and 1999. Actions being taken are eliminating
duplicate product lines and excess capacity. We are optimistic that these moves,
along with necessary personnel reductions, have put us in a position for the
coming year to more effectively concentrate on both new product and new customer
opportunities that will result in returning the company to improved
profitability."
CompX is a leading manufacturer of precision ball bearing slides, security
products and ergonomic computer support systems.
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, 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 and other risks and uncertainties detailed in CompX's
Securities and Exchange Commission filings. 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 forecast 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's 2002 results are subject to
completion of an audit and the filing of its 2002 Annual Report on Form 10-K.
* * * * *
COMPX INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2001 2002 2001 2002
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Net sales $ 47.0 $ 47.7 $ 211.4 $ 196.1
Cost of goods sold 40.8 41.9 167.9 163.2
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Gross profit 6.2 5.8 43.5 32.9
Selling, general and administrative 7.3 6.0 28.3 26.7
Restructuring 2.7 - 2.7 -
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Operating income (loss) (3.8) (0.2) 12.5 6.2
Interest expense (0.6) (0.3) (2.9) (1.9)
Other income (expense) 0.2 (0.9) 1.1 (0.9)
Gain on sale of Maastricht facility 2.2 - 2.2 -
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Income (loss) before income taxes (2.0) (1.4) 12.9 3.4
Income tax expense (0.6) 0.4 5.8 2.8
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Net income (loss) $ (1.4) $ (1.8) $ 7.1 $ 0.6
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Net income (loss) per
diluted common share $ (0.09) $ (0.12) $ 0.47 $ 0.04
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Weighted average diluted common
shares outstanding 15.1 15.1 15.2 15.1
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