Exhibit 99.1
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)
January 24, 2004
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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 or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(972) 448-1400
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(Former name or former address, if changed since last report.)
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):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
Item 2.01. Completion of Acquisition or Disposition of Assets
On January 24, 2005 the registrant completed the disposition of
all of the net assets of its Thomas Regout precision slide and
window furnishing operations, conducted at its facility in the
Netherlands, to members of Thomas Regout management (through
Anchor Holdings B.V.) for proceeds of $22.9 million. The proceeds
consisted of $18.7 million in cash and a subordinated promissory
note of $4.2 million. The subordinated note is to be repaid over
a period of four years and bears interest at 7% per annum.
Item 7.01 Regulation FD Disclosure.
The registrant hereby furnishes the information set forth in its press
release issued on January 25, 2005, a copy of which is attached hereto as
Exhibit 99.2 and incorporated herein by reference.
The information, including the exhibit, the registrant furnishes under
this item 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 Securities and Exchange Commission shall not incorporate
this information by reference, except as otherwise expressly stated in such
filing.
Item 9.01. Financial Statements and Exhibits
(b) Pro forma financial information.
Pro forma condensed consolidated financial statements of the
Registrant, which present the pro forma effects of the transaction
described in Items 1.01 and 2.01 above, assuming such transaction had
occurred as of the dates set forth in the accompanying notes, are
included herein as Exhibit 99.1
(c) Exhibit
Item No. Exhibit Index
99.1 Pro forma financial information of the Registrant.
99.2 Press release dated January 25, 2005 issued by the registrant
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/ Darryl R. Halbert
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Darryl R. Halbert
Vice President, Chief Financial Officer
and Controller
Date: January 28, 2005
Exhibit 99.1
CompX International Inc.
Index to Pro Forma Condensed Consolidated Financial Statements
Page
Pro Forma Condensed Consolidated Balance Sheet -
September 30, 2004 F-2/F-3
Notes to Pro Forma Condensed Consolidated Balance Sheet F-4/F-5
Pro Forma Condensed Consolidated Statement of Income -
Nine months ended September 30, 2004 F-6
Pro Forma Condensed Consolidated Statement of Income -
Year ended December 31, 2003 F-7
Notes to Pro Forma Condensed Consolidated Statements of
Income F-8
These pro forma condensed consolidated financial statements should be read in
conjunction with the historical consolidated financial statements of CompX
International Inc. The pro forma condensed consolidated financial statements are
not necessarily indicative of what the Company's consolidated financial position
or results of continuing operations would have been had the Company completed
the transaction described in the accompanying notes at the dates indicated, nor
are they necessarily indicative of the Company's consolidated financial position
or results of continuing operations as they may be in the future.
F-1
CompX International Inc.
Pro Forma Condensed Consolidated Balance Sheet
September 30, 2004
(Unaudited)
(In thousands)
Pro forma
adjustments
---------------------
Assets Historical (I) Pro forma
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Current assets:
Cash and cash equivalents $ 16,071 $ 16,718 $ 32,789
Accounts receivable, net 28,181 (5,651) 22,530
Inventories 26,594 (6,037) 20,557
Other 3,320 (1,977) 1,343
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Total current assets 74,166 3,053 77,219
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Other assets:
Goodwill 43,022 (14,268) 28,754
Other 2,670 3,928 6,598
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Total other assets 45,692 (10,340) 35,352
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Property and equipment, net 73,444 (7,291) 66,153
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$193,302 $(14,578) $178,724
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F-2
CompX International Inc.
Pro Forma Condensed Consolidated Balance Sheet (Continued)
September 30, 2004
(Unaudited)
(In thousands)
Pro forma
adjustments
-------------------
Liabilities and Stockholders' Equity Historical (I) Pro forma
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Current liabilities:
Accounts payable and accrued
liabilities $ 23,706 $ (4,654) $ 19,052
Income taxes 2,151 (183) 1,968
Deferred income taxes 758 (509) 249
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Total current liabilities 26,615 (5,346) 21,269
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Noncurrent liabilities:
Deferred income taxes 3,393 - 3,393
Other 112 (21) 91
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Total noncurrent liabilities 3,505 (21) 3,484
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Stockholders' equity
Common stock and paid-in capital 108,861 - 108,861
Retained earnings 52,160 (12,143) 40,017
Accumulated other comprehensive
income - currency translation 2,161 2,932 5,093
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Total stockholders' equity 163,182 (9,211) 153,971
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$193,302 $(14,578) $178,724
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See accompanying notes to pro forma condensed consolidated balance sheet.
F-3
CompX International Inc.
Notes to Pro Forma Condensed Consolidated Balance Sheet
Note 1 - Basis of presentation
The Pro Forma Condensed Consolidated Balance Sheet assumes the following
transaction, more fully described in Item 2.01 of this Current Report on Form
8-K dated January 24, 2005, occurred on September 30, 2004:
The Company sells all of the net assets of its Thomas Regout's operations
for approximately euro 17.6 million ($21.6 million), net of selling expenses
totaling approximately $500,000. The euro net proceeds were translated into U.S.
dollars using the actual September 30, 2004 exchange rate of U.S. $1.2275 per
euro.
Note 2 - Pro forma adjustments:
I - Reflect the sale of substantially all of Thomas Regout's net assets as
follows:
Amount
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(In thousands)
Net proceeds $ 21,595
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Carrying value of assets sold and liabilities assumed:
Cash and cash equivalents 1,873
Accounts receivable, net 5,651
Inventories 6,037
Other current assets 1,977
Goodwill, net 14,268
Net property, plant, and equipment 7,291
Accounts payable and accrued liabilities (4,654)
Income taxes (183)
Deferred income taxes (509)
Long term debt and other noncurrent liabilities (21)
Accumulated other comprehensive income - foreign
currency translation 2,932
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34,662
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(13,067)
Income tax benefit (924)
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Net-of-tax loss $(12,143)
========================
The net proceeds consist of $17.7 million in cash and a long-term
subordinated note receivable of $3.9 million. The subordinated note receivable
bears interest at 7.0% per annun.
The pro forma adjustment to cash and cash equivalents consists of the net
effect of (i) $17.7 million of net proceeds, (ii) $1.9 million cash and cash
F-4
equivalents of Thomas Regout assumed to have been sold and (iii) $.9 million
income tax benefit from the sale. The pro forma adjustment to other noncurrent
assets represents the subordinated note receivable received as part of the
consideration from the sale.
The Company's actual net-of-tax loss on the sale of Thomas Regout's net
assets will differ from the amount shown above because of, among other things,
(a) differences in the net carrying value of the net assets sold as shown above
as compared to the date of sale and (b) differences in the U.S. dollar/euro
exchange rate as shown above as compared to the date of sale.
F-5
CompX International Inc.
Pro Forma Condensed Consolidated Statement of Income
Nine months ended September 30, 2004
(Unaudited)
(In thousands, except per share data)
Pro forma
adjustments
-----------------------------------------
Historical (I) (II) Pro forma
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Net sales $165,858 $(29,801) $ - $136,057
Cost of goods sold 130,022 (23,584) 106,438
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Gross margin 35,836 (6,217) - 29,619
Selling, general and
administrative expense 21,511 (4,088) - 17,423
Operating income 14,325 (2,129) - 12,196
Other general corporate (income)
expense, net (335) (1,143) (123) (1,601)
Interest expense 442 - - 442
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Income before income taxes 14,218 (986) 123 13,355
Provision for income taxes 5,491 (343) 49 5,197
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Income from continuing
operations $ 8,727 $ (643) $ 74 $ 8,158
================== =================== ================== ================
Basic and diluted earnings per
common share $ 0.58 $ 0.54
================== ================
Basic earnings per common share 15,141 15,141
Dilutive impact of outstanding
stock options 15 15
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Diluted common shares 15,156 15,156
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See accompanying notes to pro forma condensed consolidated income statement.
F-6
CompX International Inc.
Pro Forma Condensed Consolidated Statement of Income
Year ended December 31, 2003
(Unaudited)
(In thousands, except per share data)
Pro forma
Adjustments
----------------------------------------
Historical (I) (II) Pro forma
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Net sales $207,543 $(33,577) $ - $173,966
Cost of goods sold 172,843 (29,966) - 142,877
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Gross margin 34,700 (3,611) - 31,089
Selling, general and
administrative expense 27,288 (5,691) - 21,597
Restructuring expense 3,303 (3,303) - -
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Operating income 4,109 5,383 - 9,492
Other general corporate
(income) expense, net 532 (1,493) (237) (1,198)
Interest expense 1,301 (2) - 1,299
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Income before income taxes 2,276 6,878 237 9,391
Provision for income taxes 1,003 2,373 97 3,473
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Income from continuing
operations $ 1,273 $ 4,505 $ 140 $ 5,918
================= ================== ================== ===================
Basic and diluted earnings
(loss) per common share $ 0.08 $ 0.39
================= ===================
Basic earnings per common share 15,121 15,121
Dilutive impact of outstanding
stock options - -
----------------- -------------------
Diluted common shares 15,121 15,121
================= ===================
See accompanying notes to pro forma condensed consolidated income statement.
F-7
CompX International Inc.
Notes To Pro Forma Condensed Consolidated Statements of Income
Note 1 - Basis of presentation:
The Pro Forma Condensed Consolidated Statements of Income assume the
Company sells all of the net assets of its Thomas Regout's operations , more
fully described in Item 2.01 of the Current Report on Form 8-K dated January 24,
2005, occurred as of the beginning of 2003.
Note 2 - Pro forma adjustments:
I - Elminate Thomas Regout's historical results of operations
included in the Company's consolidated statements of operations.
In future filings, the Company will report Thomas Regout's
results of operations through the date of disposal as
discontinued operations.
II - Recognize interest income on the subordinated promissory note
received as partial consideration, net of income taxes using the
estimated combined federal and state income tax rate of 40%.
F-8
Exhibit 99.2
COMPX INTERNATIONAL INC.
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PRESS RELEASE
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FOR IMMEDIATE RELEASE: CONTACT:
CompX International Inc. David A. Bowers
Three Lincoln Centre Chief Executive Officer
5430 LBJ Freeway, Suite 1700 Tel.: 864.286.1122
Dallas, Texas 75240-2697
COMPX ANNOUNCES THE COMPLETION OF THE SALE OF THOMAS REGOUT
DALLAS, TEXAS . . . January 25, 2005 . . . CompX International Inc. (NYSE:
CIX) announced today that on January 24, 2005 it completed the sale of its
Thomas Regout operations, conducted at its facility in the Netherlands, to
members of Thomas Regout management for approximately $23 million. The
transaction is not expected to have a significant impact on CompX's results of
operations in 2005. As previously announced, CompX recorded a charge of
approximately $14 million in the fourth quarter of 2004 in order to write-down
its investment in Thomas Regout to the then estimated realizable value.
CompX is a leading manufacturer of precision ball bearing slides, security
products and ergonomic computer support systems.
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