SEC Filing Html Data
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: August 4, 2003
COMPX INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-13905 57-0981653
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, TX 75240-2697
(Address of principal executive offices) (Zip Code)
(972) 233-1700
(Registrant's telephone number, including area code)
(Former name or address, if changed since last report)
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibit
Item No. Exhibit Index
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99.1 Press release dated August 4, 3003
issued by CompX International Inc.
Item 9: Regulation FD Disclosure
The registrant hereby furnishes the information set forth in the press
release issued on August 4, 2003, a copy of which is attached hereto as Exhibit
99.1 and incorporated herein by reference. The registrant furnishes this
information under this Item 9 and under "Item 12. Results of Operations and
Financial Condition," pursuant to the interim guidance contained in the
Securities and Exchange Commission Release 34-47583 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), among other
statutes.
The information, including the exhibit, the registrant furnishes in
this report is not deemed "filed" for purposes of section 18 of the Exchange Act
or otherwise subject to the liabilities of that section. Registration statements
or other documents filed with the Securities and Exchange Commission shall not
incorporate this information by reference, except as otherwise expressly stated
in such filing.
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
----------------------
A. Andrew R. Louis
Secretary
Date: August 4, 2003
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press release dated August 4, 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 SECOND QUARTER
2003 OPERATING RESULTS
Dallas, TEXAS ... August 4, 2003 ... CompX International Inc. (NYSE: CIX)
announced today net sales for the second quarter of 2003 of $49.7 million and
net income of $300,000, compared to net sales of $51.0 million and net income of
$800,000 for the comparable 2002 period. Second quarter 2003 net income per
diluted share was $0.02 as compared to $0.05 second quarter 2002 net income per
diluted share.
CompX's results in the second quarter 2003 as compared to the second quarter of
2002 were impacted by fluctuations in currency exchange rates which favorably
impacted net sales by $1.9 million, but negatively impacted operating income by
$1.3 million ($0.05 per diluted share, net of income tax benefit). The impact on
net sales is primarily due to relative changes in the U.S. dollar exchange rate
to both the euro and the Canadian dollar. The impact on operating income is
primarily due to the effect of relative changes in the exchange rate between the
U.S. dollar and the Canadian dollar on the Company's Canadian operations, where
the majority of net sales are denominated in U.S. dollars while the majority of
expenses are denominated in Canadian dollars.
Net sales for the six-month period ended June 30, 2003 were $100.7 million
compared to $99.6 million for the first six months of the previous year. Net
income for the six-month period was $900,000, or $0.06 per diluted share,
compared to $2.2 million, or $0.14 per diluted share for the same period in
2002.
The fluctuations in currency exchange rates discussed above favorably affected
net sales by $3.6 million in the six-month period ending June 30, 2003 as
compared to the same period in 2002, but negatively impacted operating income by
$1.9 million ($0.07 per diluted share, net of income tax benefit).
"The substantial completion of the plant consolidation in Kitchener, Ontario,
Canada, during the second quarter of 2003 marked another important step forward
for the Company in addressing the ongoing soft demand conditions in our key
markets through improved operating efficiency," commented David A. Bowers,
President & CEO. "The retooled Byron Center facility, which was completed in
January, continues to achieve improved operating results in relation to the
comparable prior year period as well as in comparison to the previous quarter.
Completion of these two cost improvement initiatives facilitates the Company's
ability to address future North American precision slide and ergonomic product
opportunities."
The CompX Security Products segment experienced a 2% decrease in net sales in
the second quarter of 2003 to $18.8 million compared to the same quarter last
year; however, operating income increased by 4% to $2.5 million primarily due to
efforts to improve manufacturing efficiencies that have resulted in reductions
in manufacturing costs for this segment. Operating income was 13.1% of net sales
for the second quarter of 2003 which compares favorably to operating income of
12.3% of net sales for the comparable prior period. Net sales on a year-to-date
basis for the security products segment are down slightly from the prior year to
$37.3 million however operating profit as a percentage of net sales increased to
12.6% compared to 12% for the same period in 2002.
Net sales for the CompX Waterloo/Regout segment in the second quarter of 2003
decreased 2.7% in comparison to the prior year. Excluding the impact of the
change in currency exchange rates from the second quarter of 2002, net sales
declined 8.8%. Net sales on a year-to-date basis increased slightly to $63.5
million. However, excluding the impact of the change in currency exchange rates
from the same period in 2002, net sales declined 3.7%. The net sales decreases
compared to the prior year periods are primarily attributable to decreases in
precision slide and ergonomic product shipments to office furniture
manufacturers. The declines in sales are consistent with the report of the
Business and Institutional Furniture Manufacturer's Association (BIFMA), which
indicated that North American office furniture shipments were down 8.5% for the
first five months of 2003. The operating loss for this segment of $1.6 million
for the second quarter of 2003 reflects the negative impact of the previously
mentioned $1.3 million currency exchange rate fluctuation as well as by relative
changes in product mix, lower European operating results and plant consolidation
costs. Year-to-date operating loss for this segment was $2.0 million, which
reflects the negative impact of the previously mentioned $1.9 million currency
exchange rate fluctuation as well as by relative changes in product mix, a
decline in the European operating results and plant consolidation costs.
Mr. Bowers continued, "Results of our European Thomas Regout operations continue
to be adversely impacted by the recent significant downturn in the European
office furniture market. In response, a strategic review has been initiated to
evaluate alternatives for rationalizing these operations. This analysis, which
is expected to be completed by the end of the third quarter of 2003, may result
in charges for asset impairment, including goodwill, and other restructuring
charges during the second half of 2003."
He concluded, "We are encouraged by the continuing strength in our security
products segment, even though in the current economic environment, significant
challenges remain in the markets we serve. We are confident that the investments
being made to address capacity and cost issues in the North American precision
ball bearing slide area, the continued development of our Taiwan slide
production capability, as well as the introduction of new products to strengthen
our ergonomic product offering are appropriate measures to address the current
market environment and provide flexibility for the future. Throughout the past
three years of market difficulty, our balance sheet has enabled spending on
growth and profitability improvement initiatives and continues to provide us
with the ability to take advantage of new business opportunities as they arise."
Cash provided by operating activities improved to $8.4 million for the first six
months compared to $7.8 million in the same period in the prior year. The
improvement in cash provided by operating activities was primarily due to
efficient management of working capital. Capital expenditures decreased from
$7.5 million in 2002 to $4.2 million in 2003. The 2002 capital spending was
higher than 2003 primarily due to the purchase of equipment to increase
manufacturing capacity in response to specific customer contracts. The Company's
cash position remains strong totaling $13.6 million as of June 30, 2003 compared
to $11.1 million as of June 30, 2002. During the quarter ended June 30, 2003,
the Company reduced its revolving bank debt by $2.0 million.
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, negotiations with employee and government groups
relating to employee severance 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 INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share
amounts) (Unaudited)
Three months ended Six months ended
June 30, June 30,
2002 2003 2002 2003
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Net sales $ 51.0 $ 49.7 $ 99.6 $ 100.7
Cost of goods sold 41.3 41.8 80.1 84.0
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Gross profit 9.7 7.9 19.5 16.7
Selling, general and administrative 7.1 7.1 14.3 14.0
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Operating income 2.6 0.8 5.2 2.7
Interest expense (0.7) (0.3) (1.3) (0.6)
Other expense (0.4) - (0.2) (0.5)
------------------------ ------------------------
Income before income taxes 1.5 0.5 3.7 1.6
Income tax expense 0.7 0.2 1.5 0.7
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Net income $ 0.8 $ 0.3 $ 2.2 $ 0.9
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Net income per diluted
common share $ 0.05 $ 0.02 $ 0.14 $ 0.06
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Weighted average diluted common
shares outstanding 15.1 15.1 15.2 15.1
======================== =======================
COMPX INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
December 31, June 30,
2002 2003
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Assets (Unaudited)
Current assets:
Cash and equivalents $ 12.4 $ 13.6
Accounts receivable, net 22.9 24.4
Inventories 28.9 30.6
Prepaid expenses and other 7.1 7.2
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Total current assets 71.3 75.8
Net property and equipment 85.2 87.0
Intangibles 42.9 44.0
Other assets 0.7 0.4
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Total assets $ 200.1 $ 207.2
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 21.3 $ 22.9
Accrued income taxes and other 0.8 1.0
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Total current liabilities 22.1 23.9
Long-term debt 31.0 30.0
Other non-current liabilities 5.0 3.8
Stockholders' equity 142.0 149.5
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Total liabilities and stockholders' equity $ 200.1 $ 207.2
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