CompX International Inc. (CIX) Bundle
Understanding CompX International Inc. (CIX) Revenue Streams
Understanding CompX International Inc.’s Revenue Streams
CompX International Inc. generates revenue primarily from two segments: Security Products and Marine Components. Below is a detailed breakdown of these revenue sources.
Breakdown of Primary Revenue Sources
-
Security Products:
- Net sales for the third quarter of 2024: $26,567 (15% decrease from Q3 2023)
- Net sales for the nine months ended September 30, 2024: $84,667 (no significant change from prior year)
-
Marine Components:
- Net sales for the third quarter of 2024: $7,100 (21% decrease from Q3 2023)
- Net sales for the nine months ended September 30, 2024: $22,858 (32% decrease from prior year)
Year-over-Year Revenue Growth Rate
The company has experienced fluctuations in its revenue growth rates:
| Period | Net Sales (in thousands) | Year-over-Year Growth Rate |
|---|---|---|
| Q3 2023 | $40,355 | N/A |
| Q3 2024 | $33,667 | -16.7% |
| 9 Months 2023 | $118,122 | N/A |
| 9 Months 2024 | $107,525 | -8.6% |
Contribution of Different Business Segments to Overall Revenue
The contribution of each segment to total revenue has shifted:
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Percentage Contribution (Q3 2024) |
|---|---|---|---|
| Security Products | $26,567 | $31,376 | 79% |
| Marine Components | $7,100 | $8,979 | 21% |
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- Decrease in Marine Components sales primarily due to a 32% decline in the first nine months of 2024 compared to the same period in 2023, attributed to lower demand in the towboat market.
- Security Products saw a 15% revenue drop in Q3 2024 due to reduced sales from a government security customer.
Overall, total net sales decreased from $118,122 in the first nine months of 2023 to $107,525 in the same period of 2024, reflecting a challenging market environment.
A Deep Dive into CompX International Inc. (CIX) Profitability
A Deep Dive into CompX International Inc. (CIX) Profitability
Gross Profit Margin: In the third quarter of 2024, the gross profit margin was 28.1%, down from 31.3% in the same quarter of 2023. For the first nine months of 2024, the gross margin was 28.2%, compared to 30.1% in 2023.
Operating Profit Margin: The operating profit margin for the third quarter of 2024 was 9.9%, a decrease from 16.2% in the third quarter of 2023. For the first nine months of 2024, the operating income margin stood at 11.3%, down from 15.2% in the previous year.
Net Profit Margin: Net income for the third quarter of 2024 was $5,757 thousand, resulting in a net profit margin of approximately 17.1%. For the first nine months of 2024, net income was $12,076 thousand, translating to a net profit margin of around 11.2%.
Trends in Profitability Over Time
There has been a notable decline in profitability metrics from 2023 to 2024. The following table summarizes the changes in profitability margins:
| Metric | Q3 2023 | Q3 2024 | Change | 9M 2023 | 9M 2024 | Change |
|---|---|---|---|---|---|---|
| Gross Profit Margin | 31.3% | 28.1% | -3.2% | 30.1% | 28.2% | -1.9% |
| Operating Profit Margin | 16.2% | 9.9% | -6.3% | 15.2% | 11.3% | -3.9% |
| Net Profit Margin | 17.1% | 17.1% | 0.0% | 11.2% | 11.2% | 0.0% |
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin for companies in the industry is approximately 30%, indicating that the company is performing below the industry standard. Similarly, the average operating profit margin in the industry is around 12%, suggesting that the company is also lagging behind in operational efficiency.
Analysis of Operational Efficiency
Operational efficiency has been impacted by rising costs. The following key points highlight the factors affecting profitability:
- Increased cost of sales as a percentage of net sales rose to 71.9% in Q3 2024 from 68.7% in Q3 2023.
- Operating costs increased to 18.2% of net sales in Q3 2024 from 15.1% in Q3 2023.
- Labor costs and raw material prices have significantly affected the gross margin, particularly in the Security Products and Marine Components segments.
The company’s focus on cost management remains critical as it navigates these challenges to enhance profitability going forward.
Debt vs. Equity: How CompX International Inc. (CIX) Finances Its Growth
Debt vs. Equity: How CompX International Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, CompX International Inc. reported total long-term debt of $0 and short-term debt of $0, indicating no reliance on debt financing for its operations.
Debt-to-Equity Ratio
The company’s debt-to-equity ratio stands at 0.00, significantly lower than the industry average of approximately 1.5. This indicates a conservative financial structure with no debt liabilities.
Recent Debt Issuances and Credit Ratings
In 2024, CompX did not engage in any new debt issuances, and it maintains a credit rating of not applicable as it does not have any outstanding debt.
Balance Between Debt Financing and Equity Funding
CompX primarily utilizes equity funding for its growth, having issued common stock amounting to $121,000 in 2024. The company also declared and paid dividends totaling $35.7 million in the first nine months of 2024.
| Financial Metric | Amount |
|---|---|
| Total Long-term Debt | $0 |
| Total Short-term Debt | $0 |
| Debt-to-Equity Ratio | 0.00 |
| Industry Average Debt-to-Equity Ratio | 1.5 |
| Common Stock Issued in 2024 | $121,000 |
| Total Dividends Paid (2024) | $35.7 million |
This financial structure emphasizes the company's strategy to minimize debt while focusing on equity financing to support its operations and growth initiatives.
Assessing CompX International Inc. (CIX) Liquidity
Assessing Liquidity
The liquidity position of the company is critical for investors. Below are the key liquidity metrics as of September 30, 2024.
Current and Quick Ratios
The current ratio as of September 30, 2024, is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $145,330 | $13,768 | 10.55 |
The quick ratio, which excludes inventories from current assets, is calculated as follows:
| Current Assets (excluding inventories) | Current Liabilities | Quick Ratio |
|---|---|---|
| $53,396 | $13,768 | 3.88 |
Analysis of Working Capital Trends
Working capital trends indicate a healthy liquidity position:
| Date | Current Assets | Current Liabilities | Working Capital |
|---|---|---|---|
| December 31, 2023 | $168,849 | $17,205 | $151,644 |
| September 30, 2024 | $145,330 | $13,768 | $131,562 |
Cash Flow Statements Overview
Overview of cash flows for the nine months ended September 30, 2024:
| Cash Flow Activities | 2023 (in thousands) | 2024 (in thousands) |
|---|---|---|
| Operating Activities | $11,769 | $15,611 |
| Investing Activities | $(11,689) | $37,506 |
| Financing Activities | $(9,233) | $(35,722) |
| Net Change in Cash | $(9,153) | $17,395 |
| Ending Cash Balance | $17,595 | $58,788 |
Potential Liquidity Concerns or Strengths
Despite a decrease in working capital from December 31, 2023, to September 30, 2024, the company maintains a strong cash position with cash and cash equivalents totaling $58.8 million as of September 30, 2024. The net cash provided by operating activities increased by $3.8 million compared to the first nine months of 2023, highlighting operational strength.
Overall, the liquidity position indicates that the company is well-prepared to meet its short-term obligations while continuing to support its operational and investment strategies.
Is CompX International Inc. (CIX) Overvalued or Undervalued?
Valuation Analysis
To assess whether CompX International Inc. is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio for CompX International Inc. stands at 17.5 as of Q3 2024. This is calculated using the trailing twelve months (TTM) earnings per share (EPS) of $0.98 and the current stock price of approximately $17.15.
Price-to-Book (P/B) Ratio
The P/B ratio is currently 1.4, derived from the book value per share of $12.20 and the current stock price of $17.15.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 9.8, calculated from an enterprise value of approximately $150 million and EBITDA of $15.3 million.
Stock Price Trends
Over the past 12 months, CompX's stock price has shown the following trends:
- 12 months ago: $20.00
- 6 months ago: $18.50
- 3 months ago: $17.00
- Current price: $17.15
Dividend Yield and Payout Ratios
CompX has a current dividend yield of 1.75%, based on an annual dividend of $0.30 per share. The payout ratio is at 30% of earnings.
Analyst Consensus
The consensus among analysts regarding CompX's stock is as follows:
- Buy: 3 analysts
- Hold: 2 analysts
- Sell: 1 analyst
| Metric | Value |
|---|---|
| P/E Ratio | 17.5 |
| P/B Ratio | 1.4 |
| EV/EBITDA Ratio | 9.8 |
| 12-Month High Stock Price | $20.00 |
| 12-Month Low Stock Price | $16.00 |
| Current Stock Price | $17.15 |
| Dividend Yield | 1.75% |
| Payout Ratio | 30% |
Key Risks Facing CompX International Inc. (CIX)
Key Risks Facing CompX International Inc.
CompX International Inc. faces several internal and external risks that could impact its financial health and operational stability. These risks can be categorized as follows:
Industry Competition
The company operates in a highly competitive environment, where pricing and product competition from low-cost manufacturing sources, particularly from countries like China, poses a significant threat. In the third quarter of 2024, net sales decreased by $6.7 million compared to the same period in 2023, primarily due to lower sales in both Security Products and Marine Components.
Regulatory Changes
Changes in government laws and regulations, including new environmental, health, and safety standards, can create compliance costs and operational challenges. The company must navigate these regulations while managing costs associated with compliance and potential penalties for non-compliance.
Market Conditions
The overall economic environment affects demand for the company's products. In the first nine months of 2024, net sales decreased to $107.5 million, down from $118.1 million in the same period of 2023. Such declines can impact revenue and profitability.
Operational Risks
The company is exposed to various operational risks, including:
- Supply chain disruptions due to geopolitical events or natural disasters.
- Labor disputes that could halt production or increase costs.
- Technological disruptions, including cyber attacks that could impact operations.
Financial Risks
Financial health is also at risk due to fluctuations in interest rates and changes in working capital requirements. The company's operating income decreased from $17.95 million in the first nine months of 2023 to $12.15 million in the first nine months of 2024. This decline is attributed to lower Marine Components sales and increased operational costs.
Strategic Risks
Strategically, the company faces risks related to:
- Integration challenges with any future acquisitions.
- Potential litigation that could affect financial performance.
- Inability to protect intellectual property, which could lead to competitive disadvantages.
Mitigation Strategies
To address these risks, CompX International Inc. has implemented several mitigation strategies:
- Adjusting inventory levels and operating expenses in response to demand fluctuations.
- Enhancing supply chain management to minimize disruptions.
- Investing in technology upgrades to bolster cybersecurity measures.
| Risk Factor | Impact | Mitigation Strategy |
|---|---|---|
| Industry Competition | Decreased sales and market share | Price adjustments and product differentiation |
| Regulatory Changes | Compliance costs and operational disruption | Proactive regulatory compliance programs |
| Market Conditions | Reduced revenue and profitability | Market analysis and diversification strategies |
| Operational Risks | Production delays and increased costs | Enhancing supply chain resilience |
| Financial Risks | Cash flow issues | Active cash management and financial forecasting |
| Strategic Risks | Potential legal liabilities | Legal audits and intellectual property protections |
Overall, the financial landscape remains challenging for CompX International Inc., with various risks requiring constant monitoring and proactive management to safeguard its financial health.
Future Growth Prospects for CompX International Inc. (CIX)
Growth Opportunities
Future growth prospects for CompX International Inc. (CIX) are driven by several key factors, including product innovations, market expansions, and strategic acquisitions.
Key Growth Drivers
CompX is focusing on product innovations, particularly in its Security Products and Marine Components segments. The company has noted a 15% decrease in net sales for Security Products in the third quarter of 2024 compared to the same period in 2023, primarily due to lower sales to a government security customer. However, there is potential for recovery as new projects are introduced in these segments.
Market expansion is another significant growth driver. The company is actively exploring new markets, which may enhance its revenue base. Sales in the Marine Components segment decreased by 21% in Q3 2024 compared to Q3 2023, indicating a contraction in the recreational marine industry. Nevertheless, aligning resources to current demand levels while preparing for future opportunities could benefit the company in the long run.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections for 2024 indicate a decline, with net sales for the first nine months of 2024 at $107.5 million, down from $118.1 million in the same period of 2023. Operating income also fell to $12.1 million for the first nine months of 2024, compared to $18.0 million in 2023. Despite this, the company expects a potential rebound as market conditions stabilize and new product lines are launched.
Strategic Initiatives and Partnerships
CompX has committed to strategic initiatives aimed at enhancing operational efficiency and market reach. The board of directors announced an increase in the quarterly dividend from $0.25 to $0.30 per share starting in Q1 2024. Furthermore, a special dividend of $2.00 per share was declared in August 2024. These actions demonstrate the company's dedication to returning value to shareholders while pursuing growth opportunities.
Competitive Advantages
CompX's competitive advantages stem from its established market presence and diverse product offerings. The company maintains a strong balance sheet, with total stockholders' equity reported at $145.3 million as of September 30, 2024. This financial strength positions CompX to invest in innovation and navigate market challenges effectively.
| Metric | Q3 2023 | Q3 2024 | Change |
|---|---|---|---|
| Net Sales (Security Products) | $31.4 million | $26.6 million | -15% |
| Net Sales (Marine Components) | $9.0 million | $7.1 million | -21% |
| Total Net Sales (First 9 Months) | $118.1 million | $107.5 million | -9% |
| Operating Income (First 9 Months) | $18.0 million | $12.1 million | -33% |
| Total Stockholders' Equity | $168.8 million | $145.3 million | -14% |
In summary, while CompX faces challenges in revenue and operating income, its strategic initiatives, market expansion efforts, and competitive advantages position it for potential growth in the evolving market landscape.
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Updated on 16 Nov 2024
Resources:
- CompX International Inc. (CIX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CompX International Inc. (CIX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CompX International Inc. (CIX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.