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)
August 2, 2010

COMPX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
 
Delaware	1-13905	57-0981653	
(State or other jurisdiction of incorporation)	(Commission
File Number)	(IRS Employer
Identification No.)	

5430 LBJ Freeway, Suite 1700, Dallas, Texas	75240-2697	
(Address of principal executive offices)	(Zip Code)	
 
Registrant’s telephone number, including area code
(972) 448-1400

 	(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):
 
o	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 August 2, 2010, 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                                                                                                                                                            	
 	 	99.1	Press Release dated August 2, 2010 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, 2010

 

 

INDEX TO EXHIBITS

Exhibit No.	Description                                                                                             	

99.1	Press Release dated August 2, 2010 issued by the registrant.	

 

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 2010 RESULTS

DALLAS, TEXAS …August 2, 2010 … CompX International Inc. (NYSE: CIX) announced today sales of $34.4 million for the second quarter of 2010 compared to $29.2 million in the same period of 2009.  Operating income was $2.9 million in the second quarter of 2010 compared to an operating loss of $949,000 in the same period in 2009.  Net income for the second quarter of 2010 was $1.7 million, or $0.14 per diluted share, compared to a net loss of $1.6 million, or $0.13 per diluted share, in the second quarter of 2009.

For the six months ended June 30, 2010 sales were $67.2 million compared to $57.7 million in the previous year.  Operating income was $4.7 million for the six months ended June 30, 2010 compared to an operating loss of $1.9 million for 2009.  Net income for the six months ended June 30, 2010 was $757,000, or $0.06 per diluted share, compared to a net loss of $2.2 million, or $0.18 per diluted share, in 2009.  The 2010 six month period net income was impacted by a $1.9 million ($0.15 per diluted share) income tax charge in the first quarter of 2010 resulting from a change in the Company’s expectation relating to the repatriation of certain non-U.S. earnings.
Net sales increased principally due to improved order rates from customers across all business segments as a result of a positive change in the economic conditions in North America.  The increase in operating income in the second quarter of 2010 over the comparable 2009 quarter is primarily due to the effects of (i) the higher sales increasing the utilization of production capacity and improving the coverage of fixed manufacturing costs, (ii) lower litigation expense for the quarter and (iii) a $700K write-down related to assets held for sale recorded in the second quarter of 2009, partially offset by the negative effects of relative changes in foreign currency exchange rates. The above items also impacted the six-month period comparison, except that litigation expense was higher in the 2010 year-to-date period.
 
“The second quarter sustained our positive trend in sales from the prior quarter which enabled us to continue to capitalize on our efficient cost structure,” commented David A. Bowers, President & CEO.  “While we are experiencing some cost pressure from raw materials, our gross margin for the quarter was 26% which is well above the prior year margin of 21%.  Going forward, we expect to remain diligent in maintaining an efficient cost structure especially in light of the uncertainty as to the rate of economic recovery.”

Mr. Bowers continued, “We are also pleased with the recently issued final ruling by the International Trade Commission that determined our Furniture Components business did not infringe on certain competitor patents and found those patents to be invalid.  While there is still an open action in U.S. Federal District Court regarding these patents, and the District Court is not bound by these determinations, we were pleased the International Trade Commission affirmed our position.”

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 approximately 800 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 the development of new product features 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.

 

- 1 -

 

COMPX INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)

 	 	Three months ended	 	 	Six months ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2009	 	 	2010	 	 	2009	 	 	2010	 	

Net sales	 	$	29.2	 	 	$	34.4	 	 	$	57.7	 	 	$	67.2	 	
Cost of goods sold	 	 	23.0	 	 	 	25.5	 	 	 	46.7	 	 	 	49.2	 	
Gross margin	 	 	6.2	 	 	 	8.9	 	 	 	11.0	 	 	 	18.0	 	
Selling, general and administrative expense	 	 	5.5	 	 	 	5.5	 	 	 	11.1	 	 	 	11.3	 	
Litigation expense	 	 	0.9	 	 	 	0.4	 	 	 	1.0	 	 	 	1.9	 	
Assets held for sale write-down	 	 	0.7	 	 	 	-	 	 	 	0.7	 	 	 	-	 	
Other operating expense, net	 	 	-	 	 	 	0.1	 	 	 	0.1	 	 	 	0.1	 	
Operating income (loss)	 	 	(0.9	)	 	 	2.9	 	 	 	(1.9	)	 	 	4.7	 	
Interest expense	 	 	(0.3	)	 	 	(0.2	)	 	 	(0.6	)	 	 	(0.4	)	
Other non-operating income, net	 	 	-	 	 	 	0.1	 	 	 	-	 	 	 	0.1	 	
Income (loss) before income taxes	 	 	(1.2	)	 	 	2.8	 	 	 	(2.5	)	 	 	4.4	 	
Provision (benefit) for income taxes	 	 	 0.4	 	 	 	 1.1	 	 	 	 (0.3	)	 	 	 3.6	 	
Net income (loss)	 	$	(1.6	)	 	$	1.7	 	 	$	(2.2	)	 	$	0.8	 	

Net income (loss) per diluted common share	 	$	(0.13	)	 	$	0.14	 	 	$	(0.18	)	 	$	0.06	 	

Weighted average diluted common shares outstanding	 	 	 12.4	 	 	 	 12.4	 	 	 	12.4	 	 	 	12.4	 	

 

 
- 2 -

 

COMPX INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)

 	 	December 31,	 	 	June 30,	 	
 	 	2009	 	 	2010	 	
Assets	 	 	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
  Cash and equivalents	 	$	20.8	 	 	$	7.6	 	
  Accounts receivable, net	 	 	11.7	 	 	 	16.8	 	
  Inventories, net	 	 	16.3	 	 	 	18.0	 	
  Deferred income taxes and other	 	 	6.3	 	 	 	5.3	 	
    Total current assets	 	 	55.1	 	 	 	47.7	 	
 	 	 	 	 	 	 	 	 	
Intangibles	 	 	32.4	 	 	 	32.1	 	
Net property and equipment	 	 	63.6	 	 	 	61.2	 	
Promissory note receivable	 	 	-	 	 	 	15.0	 	
Assets held for sale	 	 	2.8	 	 	 	2.8	 	
Other assets	 	 	0.1	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	
    Total assets	 	$	154.0	 	 	$	158.8	 	
 	 	 	 	 	 	 	 	 	
Liabilities and Stockholders’ Equity	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
  Current maturities of note payable to affiliate	 	$	-	 	 	$	0.5	 	
  Accounts payable and accrued liabilities	 	 	14.6	 	 	 	15.0	 	
  Interest payable to affiliate	 	 	-	 	 	 	0.6	 	
  Income taxes	 	 	-	 	 	 	1.0	 	
    Total current liabilities	 	 	14.6	 	 	 	17.1	 	
 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	42.2	 	 	 	46.7	 	
Deferred income taxes and other	 	 	12.2	 	 	 	12.3	 	
Stockholders’ equity	 	 	 85.0	 	 	 	 82.7	 	
 	 	 	 	 	 	 	 	 	
    Total liabilities and stockholders’ equity	 	$	154.0	 	 	$	158.8