SEC Filing Html Data
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)
October
30, 2008
CompX
International Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-13905
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57-0981653
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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5430
LBJ Freeway, Suite 1700, Dallas, Texas
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75240-2697
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(972)
448-1400
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(Former
name or former address, if changed since last report.)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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Item
7.01
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Regulation
FD Disclosure.
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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 October 30, 2008, 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.
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Item
9.01
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Financial
Statements and Exhibits.
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(c) Exhibits.
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Item
No.
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Exhibit
Index
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99.1
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Press
Release dated October 30, 2008 issued by the
registrant.
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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: October
30, 2008
INDEX
TO EXHIBITS
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Exhibit
No.
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Description
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99.1
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Press
Release dated October 30, 2008 issued by the
registrant.
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PRESS
RELEASE
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FOR
IMMEDIATE RELEASE:
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CONTACT:
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CompX
International Inc.
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David
A. Bowers
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5430
LBJ Freeway, Suite 1700
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President
& CEO
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Dallas,
Texas 75240
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Tel.
864-286-1122
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COMPX
REPORTS THIRD QUARTER 2008 RESULTS
DALLAS,
TEXAS … October 30, 2008 … CompX International Inc. (NYSE: CIX) announced today
sales of $43.9 million for the third quarter of 2008 compared to $46.4 million
in the same period of 2007. Excluding a non-cash goodwill impairment
charge of $9.9 million relating to the Marine Components segment, operating
income was $4.9 million for the third quarter of 2008 compared to operating
income of $4.3 million for the same period in 2007. Including the
goodwill impairment charge, operating loss for the third quarter of 2008 was
$4.9 million. The impairment charge is not deductible for tax
purposes, and therefore there is no income tax benefit associated with the
charge for financial reporting purposes. As a result, the Company
reported a net loss of $7.5 million, or $0.61 per diluted share, for the third
quarter of 2008 compared to net income of $2.8 million, or $0.18 per diluted
share, in 2007. The goodwill impairment charge impacted the third
quarter 2008 net loss by $9.9 million or $0.80 per share. The
non-cash goodwill impairment charge did not affect the Company’s liquidity, cash
flows or debt covenants and will not have any impact on future
operations.
U.S.
generally accepted accounting principles (“GAAP”) require an annual evaluation
of goodwill for impairment which the Company performs in the third quarter of
each year. The evaluation during the third quarter of 2008 resulted
in a charge for the impairment of goodwill relating to the Marine Components
segment noted above. The primary factor impacting the evaluation of
goodwill is a significant reduction in the sales outlook for Marine Components
due to the continued decline in consumer spending in the marine market and the
recent acceleration in the deterioration of the overall economic outlook, which
negatively impacted near-term cash flow forecasts.
Net sales
for the nine months ended September 30, 2008 were $128.1 million compared to
$135.2 million in the previous year. Excluding the goodwill
impairment charge, operating income was $12.9 million for the nine months ended
September 30, 2008 compared to $14.3 million for 2007. Including the
goodwill impairment charge, operating income was $3.1 million. The
net loss for the nine months ended September 30, 2008 was $3.8 million, or $0.31
per diluted share, compared to net income for the nine months of 2007 of $8.5
million, or $0.56 per diluted share. The goodwill impairment charge
impacted the 2008 net loss by $9.9 million or $0.80 per share.
Net sales
comparisons were unfavorably impacted by lower order rates from most customers
across all business segments due to general economic
conditions. However, despite lower sales in 2008, operating income,
excluding the goodwill impairment charge, increased in the third quarter of 2008
as compared to the same period in 2007.
“We are
pleased that our Security Products and Furniture Components segments showed
improvement in operating income during the quarter compared to last year as the
favorable effects of our ongoing focus on reducing costs and the absence of
facility consolidation expenses in 2008 more than offset the unfavorable effects
of the lower sales volume, a related reduction in coverage of fixed costs and
the impact of higher raw material costs,” commented David A. Bowers, President
and Chief Executive Officer. “While a downturn in the marine industry
resulted in the non-cash goodwill impairment charge for our Marine Components
business, we continue to believe in the long-term prospects for that
segment.”
Mr.
Bowers continued, “Although recessionary pressures are building in the overall
economy, we expect to generate positive cash flow in the foreseeable future
giving us sufficient confidence in our liquidity position to have made $7
million in prepayments on our long-term debt during the third quarter and
approve our regular $0.125 quarterly dividend.”
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 more than 1,000 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 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 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.
Explanation
of CompX’s Use of Non-GAAP Financial Measures
In
addition to results presented in accordance with GAAP, this news release
includes non-GAAP financial measures relating to excluding the goodwill
impairment charge from GAAP operating income. CompX believes this
non-GAAP financial measure provides information useful to investors in
understanding the underlying operational performance of the company, its
business and performance trends. Specifically, the Company believes the
exclusion of goodwill impairment permits evaluation and a comparison of results
for on-going business operations, and it is on this basis that CompX’s
management internally assesses the company's performance. The goodwill
impairment is excluded from CompX’s segment measures used internally to evaluate
segment performance in accordance with GAAP because management does not consider
the impairment particularly relevant or useful in evaluating the operating
performance of our business segments. Although CompX believes the
above non-GAAP financial measure enhances investors' understanding of its
business and performance, this non-GAAP financial measure should not be
considered an alternative to GAAP basis financial measures.
Reconciliation
of GAAP to non-GAAP financial measures:
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Operating
income (loss)
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||||||||||||
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Including
the effect of the goodwill impairment charge
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Goodwill
impairment charge
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Excluding
the effect of the goodwill impairment charge
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||||||||||
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(GAAP)
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(Non-GAAP)
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|||||||||||
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(Dollars
in thousands)
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||||||||||||
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Three
months ended September 30, 2008:
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||||||||||||
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Operating
income (loss)
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$ | (4,941 | ) | $ | 9,881 | $ | 4,940 | |||||
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Nine
months ended September 30, 2008:
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||||||||||||
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Operating
income
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$ | 3,055 | $ | 9,881 | $ | 12,936 | ||||||
* * * *
*
COMPX
INTERNATIONAL INC.
SUMMARY
OF CONSOLIDATED OPERATIONS
(In
millions, except per share amounts)
(Unaudited)
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Three
months ended
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Nine
months ended
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|||||||||||||||
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September
30,
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September
30,
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|||||||||||||||
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2007
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2008
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2007
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2008
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Net
sales
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$ | 46.4 | $ | 43.9 | $ | 135.2 | $ | 128.1 | ||||||||
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Cost
of goods sold
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34.4 | 32.7 | 99.3 | 96.0 | ||||||||||||
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Gross
margin
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12.0 | 11.2 | 35.9 | 32.1 | ||||||||||||
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Selling,
general and administrative expense
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6.5 | 6.3 | 19.7 | 19.2 | ||||||||||||
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Goodwill
impairment
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- | 9.9 | - | 9.9 | ||||||||||||
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Facility
consolidation costs
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0.8 | - | 0.8 | - | ||||||||||||
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Other
operating income (expense), net
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(0.4 | ) | 0.1 | (1.1 | ) | 0.1 | ||||||||||
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Operating
income (loss)
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4.3 | (4.9 | ) | 14.3 | 3.1 | |||||||||||
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Interest
expense
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(0.1 | ) | (0.5 | ) | (0.1 | ) | (1.8 | ) | ||||||||
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Other
non-operating income, net
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0.3 | - | 0.9 | 0.2 | ||||||||||||
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Income
(loss) before income taxes
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4.5 | (5.4 | ) | 15.1 | 1.5 | |||||||||||
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Provision
for income taxes
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1.7 | 2.1 | 6.6 | 5.3 | ||||||||||||
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Net
income (loss)
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$ | 2.8 | $ | (7.5 | ) | $ | 8.5 | $ | (3.8 | ) | ||||||
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Net
income per diluted common share
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$ | 0.18 | $ | (0.61 | ) | $ | 0.56 | $ | (0.31 | ) | ||||||
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Weighted
average diluted common shares
outstanding
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15.3 | 12.4 | 15.3 | 12.4 | ||||||||||||
COMPX
INTERNATIONAL INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
millions)
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December
31,
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September
30,
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|||||||
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2007
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2008
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|||||||
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Assets
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||||||||
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Current
assets:
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||||||||
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Cash
and equivalents
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$ | 18.4 | $ | 12.6 | ||||
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Accounts
receivable, net
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20.4 | 21.0 | ||||||
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Inventories,
net
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24.3 | 25.4 | ||||||
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Deferred
income taxes and other
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3.8 | 4.7 | ||||||
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Note
receivable
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1.3 | 1.0 | ||||||
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Total
current assets
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68.2 | 64.7 | ||||||
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Intangibles
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43.3 | 33.1 | ||||||
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Net
property and equipment
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72.2 | 69.9 | ||||||
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Assets
held for sale
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3.1 | 3.5 | ||||||
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Other
assets
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0.9 | 0.1 | ||||||
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Total
assets
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$ | 187.7 | $ | 171.3 | ||||
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Liabilities
and Stockholders’ Equity
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||||||||
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Current
liabilities:
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||||||||
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Current
maturities of note payable to affiliate
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$ | 0.3 | $ | 0.8 | ||||
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Accounts
payable and accrued liabilities
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17.7 | 18.9 | ||||||
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Interest
payable to affiliate
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0.5 | 0.4 | ||||||
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Income
taxes
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0.4 | 0.8 | ||||||
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Total
current liabilities
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18.9 | 20.9 | ||||||
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Note
payable to affiliate
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49.7 | 42.2 | ||||||
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Deferred
income taxes
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15.0 | 13.9 | ||||||
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Stockholders’
equity
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104.1 | 94.3 | ||||||
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Total
liabilities and stockholders’ equity
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$ | 187.7 | $ | 171.3 | ||||