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: November 4, 2005
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)
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 2.02 Results of Operations and Financial Condition.
Item 7.01 Regulation FD Disclosure.
Pursuant to Items 2.02 and 7.01 of this current report, the registrant
hereby furnishes the information set forth in its press release issued on
November 4, 2005, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The information, including the exhibit, the registrant furnishes in
this report 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.
(c) Exhibits.
Item No. Exhibit Index
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99.1 Press Release dated November 4, 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/ A. Andrew R. Louis
----------------------
A. Andrew R. Louis
Secretary
Date: August 2, 2005
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- --------------------------------------------------
99.1 Press Release dated November 4, 2005 issued by the registrant.
[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 THIRD QUARTER 2005 RESULTS
AND DECLARES REGULAR QUARTERLY DIVIDEND
Dallas, TEXAS ... November 4, 2005 ... CompX International Inc. (NYSE: CIX)
announced today sales of $47.1 million for the third quarter of 2005 compared to
$46.2 million in the third quarter of 2004. Operating income was $5.0 million in
the third quarter of 2005 compared to $5.1 million in the third quarter of 2004.
Due to a change in the Company's expectation relating to the repatriation of
non-U.S. earnings, the Company incurred a non-cash income tax charge during the
quarter of approximately $9.0 million ($0.59 per diluted share), as discussed
below. As a result, CompX recorded a loss from continuing operations of $6.1
million for the third quarter of 2005, or $0.40 per diluted share, compared to
income of $3.5 million, or $0.24 per diluted share, in the third quarter of
2004.
CompX also announced today that its board of directors declared CompX's regular
quarterly dividend of twelve and one-half cents ($0.125) per share on its class
A and class B common stock, payable on December 27, 2005 to stockholders of
record at the close of business on December 9, 2005
Net sales for the nine-month period ended September 30, 2005 increased to $139.7
million from $136.0 million for same period of the previous year. Operating
income was $13.8 million for the nine-month period of 2005 compared to $12.2
million for the comparable period of 2004. Loss from continuing operations for
the nine-month period in 2005, which was impacted by the noted tax charge, was
$1.5 million, or $0.10 per diluted share, compared to income of $8.1 million, or
$0.54 per diluted share in 2004. Net sales comparisons were primarily impacted
by sales volume associated with the acquisition of a small components business
in August 2005, the positive effect of fluctuations in currency exchange rates
and increases in selling prices for certain products across all segments to
recover volatile raw material prices, which were partially offset by sales
volume decreases for certain products caused by Asian competition. Operating
income comparisons were primarily impacted by the favorable impact of a
continuous focus on reducing costs partially offset by a negative impact of
currency exchange rates. As a result of certain limitations on the ability to
utilize foreign tax credits, the Company's effective income tax rate, excluding
the tax charged noted above, was higher in the first nine months of 2005 as
compared to the same period of 2004.
With the continued positive cash flow of its non-U.S. operations and the
Company's strategic plans to grow and diversify domestically, the Company has
determined that certain earnings from its foreign subsidiaries would no longer
be considered permanently reinvested outside of the United States for the
foreseeable future. In accordance with accounting principles generally accepted
in the United States, such a change in business plans requires CompX to
recognize the $9.0 million deferred income tax liability with respect to the
incremental U.S. income taxes (federal and state) and foreign withholding taxes
that would be incurred when such prior undistributed foreign earnings are
subsequently repatriated.
"While the non-cash tax charge had a negative impact on our third quarter
earnings, it results from our plans to reallocate capital amongst our various
businesses and maximize shareholder returns," commented David A. Bowers,
President & CEO. "We completed a relatively small acquisition in August, and we
continue to actively seek additional opportunities for growth and
diversification which will utilize our strong balance sheet. Our cash position
is up significantly from a year ago and we have minimal debt outstanding. We
remain confident in the strength of our company as is evident by our board's
declaration today of our regular quarterly dividend."
CompX is a leading manufacturer of precision ball bearing slides, security
products and ergonomic computer support systems. It operates from eight
locations in the U.S., Canada and Taiwan and employs more than 1,300 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, 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 timing and amount of future cost savings from
restructuring actions, 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 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 OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2004 2005 2004 2005
------------------------ -----------------------
Net sales $ 46.2 $ 47.1 $ 136.0 $ 139.7
Cost of goods sold 35.9 36.1 106.4 107.9
------------------------ -----------------------
Gross profit 10.3 11.0 29.6 31.8
Selling, general and administrative 5.2 6.0 17.4 18.0
------------------------ -----------------------
Operating income 5.1 5.0 12.2 13.8
Interest expense (0.1) (0.1) (0.4) (0.2)
Other income, net 0.2 0.1 1.4 0.4
------------------------ ----------------------
Income from continuing operations
before income taxes 5.2 5.0 13.2 14.0
Income tax expense 1.7 11.1 5.1 15.5
------------------------ -----------------------
Income (loss) from continuing
operations 3.5 (6.1) 8.1 (1.5)
Discontinued operations, net of tax 0.3 - 0.6 (0.5)
------------------------ ----------------------
Net income (loss) $ 3.8 $ (6.1) $ 8.7 $ (2.0)
======================== =======================
Net income (loss) per diluted common share
Continuing operations $ 0.24 $ (0.40) $ 0.54 $ (0.10)
Discontinued operations 0.02 - 0.04 (0.03)
------------------------ ----------------------
$ 0.26 $ (0.40) $ 0.58 $ (0.13)
======================== ======================
Weighted average diluted common
shares outstanding 15.2 15.2 15.2 15.2
======================== ======================
COMPX INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
December 31, September 30,
2004 2005
----------------- --------------
Assets (Unaudited)
Current assets:
Cash and equivalents $ 16.8 $ 28.3
Accounts receivable, net 19.2 22.3
Inventories 20.8 22.7
Prepaid expenses and other 2.1 3.8
Deferred income taxes 1.4 2.9
Assets held for sale 18.0 -
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Total current assets 78.3 80.0
Intangibles 30.7 38.2
Net property and equipment 66.1 69.1
Note receivable - 2.9
Assets held for sales 11.0 -
Other assets 0.2 0.1
----------- -----------
Total assets $ 186.3 $ 190.3
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 18.3 22.3
Accrued income taxes and other 2.7 0.6
Liabilities related to assets held for sale 5.0 -
----------- -----------
Total current liabilities 26.0 22.9
Long term debt 0.1 1.5
Deferred income taxes 4.9 16.7
Stockholders' equity 155.3 149.2
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Total liabilities and stockholders' equity $ 186.3 $ 190.3
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