NL Industries, Inc. (NL) Bundle
A Brief History of NL Industries
As of 2024, NL Industries has experienced significant financial performance improvements compared to previous years. In the third quarter of 2024, the company reported a net income attributable to NL stockholders of $36.0 million, or $0.74 per share, an increase from a net loss of $0.1 million, or nil per share, in the same quarter of 2023. For the first nine months of 2024, net income attributable to NL stockholders reached $50.7 million, or $1.04 per share, compared to a net loss of $9.9 million, or ($0.20) per share, in the same period of 2023.
Financial Highlights
The substantial growth in net income is primarily attributed to several factors:
- Equity in earnings of Kronos amounted to $21.9 million in 2024, a significant turnaround from equity losses of $6.2 million in 2023.
- An unrealized gain in the value of marketable equity securities was $18.6 million in 2024, compared to $0.4 million in 2023.
- Higher insurance recoveries increased to $1.1 million in 2024 from $0.3 million in 2023.
Income from Operations
Income from operations for the third quarter of 2024 was $2.1 million, down from $3.7 million in the third quarter of 2023. For the nine months ended September 30, 2024, income from operations was $4.2 million, a decline from $9.3 million in 2023.
| Period | Net Income ($ millions) | Net Income per Share ($) | Income from Operations ($ millions) |
|---|---|---|---|
| Q3 2023 | (0.1) | 0.00 | 3.7 |
| Q3 2024 | 36.0 | 0.74 | 2.1 |
| 9M 2023 | (9.9) | (0.20) | 9.3 |
| 9M 2024 | 50.7 | 1.04 | 4.2 |
Debt and Liquidity
As of September 30, 2024, NL Industries had outstanding debt obligations of $0.5 million under its secured revolving credit facility with Valhi. CompX did not have any outstanding debt obligations. The company is in compliance with all covenants contained in its financing agreements.
Dividends
In 2024, the board of directors declared a quarterly dividend of $0.08 per share in each of the first three quarters, totaling $11.7 million in dividends paid to NL shareholders. In August 2024, a special dividend of $0.43 per share was also declared, amounting to $21.0 million.
Operational Adjustments
In response to market conditions, NL Industries has undertaken strategic operational adjustments, including workforce reductions and restructuring initiatives to align with current demand levels across its business units. This includes recognizing non-cash charges related to accelerated depreciation and workforce adjustments.
Market Trends
The company has noted a significant increase in demand across major markets, particularly within its TiO2 segment, which has seen a 22% increase in net sales in Q3 2024 compared to Q3 2023. This growth has been bolstered by favorable market conditions and strategic acquisitions.
A Who Owns NL Industries, Inc. (NL)
Ownership Structure
As of September 30, 2024, Valhi, Inc. (NYSE: VHI) holds approximately 83% of the outstanding common stock of NL Industries, Inc. Additionally, a wholly-owned subsidiary of Contran Corporation owns about 91% of Valhi’s outstanding common stock.
Key Shareholders
The major shareholders of NL Industries can be summarized as follows:
| Shareholder | Ownership Percentage | Type of Interest |
|---|---|---|
| Valhi, Inc. | 83% | Common Stock |
| Contran Corporation | 91% (of Valhi) | Common Stock |
| Lisa K. Simmons and Family | Majority Voting Stock | Common Stock |
Financial Overview
For the third quarter of 2024, NL Industries reported a net income attributable to stockholders of $36.0 million, or $0.74 per share, compared to a net loss of $0.1 million in the same quarter of 2023. For the first nine months of 2024, the net income was $50.7 million, or $1.04 per share, compared to a net loss of $9.9 million in the previous year.
Equity Holdings
As of September 30, 2024, NL Industries holds significant equity stakes in its subsidiaries:
| Entity | Shares Owned | Market Value (in millions) |
|---|---|---|
| Kronos Worldwide, Inc. | 35.2 million shares | $438.5 million |
| Valhi, Inc. | 1.2 million shares | $40.0 million |
Dividends and Financial Performance
In 2024, NL Industries declared dividends totaling $32.7 million for the first nine months, with a special dividend of $21.0 million declared in August. The company maintains a strong liquidity position with cash and cash equivalents amounting to $176.2 million at the end of September 2024.
Net Income and Earnings Per Share
NL Industries' income from operations is detailed as follows:
| Period | Net Income (in millions) | Earnings Per Share |
|---|---|---|
| Q3 2023 | $0.7 | $0.014 |
| Q3 2024 | $36.0 | $0.74 |
| 9M 2023 | ($9.9) | ($0.20) |
| 9M 2024 | $50.7 | $1.04 |
Conclusion of Shareholder Structure
The ownership of NL Industries is primarily concentrated in Valhi, Inc., with significant control from Contran Corporation and family stakeholders, ensuring a stable governance structure. The financial performance reflects a recovery trajectory with increased profitability and robust liquidity.
NL Industries, Inc. (NL) Mission Statement
The mission statement of NL Industries, Inc. focuses on enhancing shareholder value through strategic investments in its subsidiaries and the management of its investments in marketable securities. The company emphasizes operational excellence, sustainability, and compliance with regulatory requirements to maintain its competitive edge in the market.
Financial Performance Overview
As of September 30, 2024, NL Industries reported a significant turnaround in its financial performance compared to the previous year. The net income attributable to NL stockholders was $50.7 million, or $1.04 per share, for the first nine months of 2024, compared to a net loss of $9.9 million, or $0.20 per share, for the same period in 2023.
| Metric | 2023 | 2024 |
|---|---|---|
| Net Income (Loss) Attributable to NL Stockholders | ($9.9 million) | $50.7 million |
| Net Income (Loss) Per Share | ($0.20) | $1.04 |
| Equity in Earnings of Kronos | ($13.4 million) | $30.4 million |
| Unrealized Gains (Losses) on Marketable Securities | ($10.5 million) | $21.8 million |
| Insurance Recoveries | $0.4 million | $1.3 million |
Revenue Streams
NL Industries generates revenue primarily through its subsidiaries, notably Kronos Worldwide, which is a leading producer of titanium dioxide. The company also engages in the manufacture of security products and marine components through its subsidiary CompX.
| Revenue Source | 2023 (9 Months) | 2024 (9 Months) |
|---|---|---|
| Security Products | $84.4 million | $84.7 million |
| Marine Components | $33.7 million | $22.9 million |
| Total Net Sales | $118.1 million | $107.5 million |
Dividend Policy
NL Industries has maintained a consistent dividend policy, declaring dividends based on its financial performance. In 2024, the company declared a quarterly dividend of $0.08 per share in each of the first three quarters. Additionally, a special dividend of $0.43 per share was declared in August 2024.
| Year | Quarterly Dividend | Special Dividend |
|---|---|---|
| 2023 | $0.07 | N/A |
| 2024 | $0.08 | $0.43 |
Market Position and Strategic Initiatives
NL Industries is strategically positioned in the market by leveraging its investments in subsidiaries and focusing on operational efficiencies. The company continues to invest in cost reduction initiatives and improving its production capacity to meet growing demand for its products.
Liquidity and Capital Structure
As of September 30, 2024, NL Industries had total cash and cash equivalents of $176.2 million. The company maintains a secured revolving credit facility of $50 million, of which $0.5 million was outstanding at the end of the reporting period.
| Liquidity Metric | Amount |
|---|---|
| Cash and Cash Equivalents | $176.2 million |
| Outstanding Debt | $0.5 million |
| Available Credit | $49.5 million |
NL Industries continues to evaluate its capital structure to ensure adequate liquidity for ongoing operations and future growth initiatives.
How NL Industries, Inc. (NL) Works
Company Overview
NL Industries, Inc. operates primarily through its subsidiaries, including Kronos Worldwide, Inc. and CompX International Inc. The company is involved in the production of titanium dioxide (TiO2) and various security products.
Financial Performance
As of September 30, 2024, NL Industries reported a net income attributable to stockholders of $36.0 million, or $0.74 per share, compared to a net loss of $0.1 million, or nil per share, for the same period in 2023. For the nine months ended September 30, 2024, the net income attributable to NL stockholders was $50.7 million, or $1.04 per share, compared to a net loss of $9.9 million, or $0.20 per share, in the previous year.
| Metric | Q3 2023 | Q3 2024 | Change | 9M 2023 | 9M 2024 | Change |
|---|---|---|---|---|---|---|
| Net Income (Loss) ($ millions) | -0.1 | 36.0 | +36.1 | -9.9 | 50.7 | +60.6 |
| Net Income (Loss) per Share ($) | 0.00 | 0.74 | +0.74 | -0.20 | 1.04 | +1.24 |
Equity in Earnings
The increase in net income is primarily due to the equity in earnings of Kronos, which was $21.9 million in Q3 2024 compared to a loss of $6.2 million in Q3 2023. For the nine months, equity in earnings was $30.4 million in 2024 versus a loss of $13.4 million in 2023.
Marketable Securities
NL Industries also reported an unrealized gain on marketable equity securities of $18.6 million in Q3 2024 compared to $0.4 million in Q3 2023. For the nine months ended September 30, 2024, the unrealized gain was $21.8 million compared to a loss of $10.5 million in the previous year.
Insurance Recoveries
Insurance recoveries increased to $1.1 million in Q3 2024 from $0.3 million in Q3 2023, and for the nine months, recoveries were $1.3 million compared to $0.4 million in the same period last year.
Cash and Liquidity Position
As of September 30, 2024, NL Industries had total cash and cash equivalents of $176.2 million, with $58.8 million held by CompX and $117.4 million by NL Parent. The company also holds approximately 35.2 million shares of Kronos common stock valued at $438.5 million and 1.2 million shares of Valhi common stock valued at $40.0 million.
| Entity | Cash & Cash Equivalents ($ millions) | Marketable Securities ($ millions) |
|---|---|---|
| NL Parent | 117.4 | 40.0 (Valhi) |
| CompX | 58.8 | 438.5 (Kronos) |
| Total | 176.2 | 478.5 |
Dividend Payments
During the first nine months of 2024, NL Industries declared dividends of $0.51 per share, totaling approximately $24.9 million. In comparison, dividends paid in the same period of 2023 were $0.21 per share, totaling $10.3 million.
Operating Segments
NL Industries operates through two main segments: Security Products and Marine Components. In Q3 2024, net sales for Security Products were $26.6 million, down 15% from $31.4 million in Q3 2023. Marine Components reported net sales of $7.1 million, down 21% from $8.9 million in the same quarter of 2023.
| Segment | Q3 2023 Net Sales ($ millions) | Q3 2024 Net Sales ($ millions) | Change (%) |
|---|---|---|---|
| Security Products | 31.4 | 26.6 | -15% |
| Marine Components | 8.9 | 7.1 | -21% |
Debt Obligations
As of September 30, 2024, NLKW had outstanding debt obligations of $0.5 million under its secured revolving credit facility with Valhi. CompX had no outstanding debt obligations and was in compliance with all covenants at that date.
Conclusion on Market Outlook
Kronos is expected to see improved operating results for the full year 2024 compared to 2023, driven by higher demand and cost reduction initiatives. However, challenges remain in achieving TiO2 selling price increases necessary to align with historical margins.
How NL Industries, Inc. (NL) Makes Money
Overview of Revenue Streams
NL Industries, Inc. generates revenue primarily through its subsidiaries, with significant contributions from Kronos Worldwide, Inc. and CompX International Inc. The company’s revenue sources include:
- Kronos Worldwide, Inc. (TiO2 production)
- CompX International Inc. (security products and marine components)
Financial Performance as of 2024
As of September 30, 2024, NL Industries reported a net income attributable to stockholders of $50.7 million, or $1.04 per share, compared to a net loss of $9.9 million or $(0.20) per share for the same period in 2023.
Revenue Breakdown
The following table summarizes NL Industries' net sales by reporting unit for the third quarter and the first nine months of 2024 compared to 2023:
| Reporting Unit | Three Months Ended September 30, 2023 (in thousands) | Three Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) |
|---|---|---|---|---|
| Security Products | $31,376 | $26,567 | $84,390 | $84,667 |
| Marine Components | $8,979 | $7,100 | $33,732 | $22,858 |
| Total Net Sales | $40,355 | $33,667 | $118,122 | $107,525 |
Operating Income and Margins
NL Industries' operating income for the third quarter of 2024 was $2.0 million, compared to $3.7 million in the same quarter of 2023. The operating income margin decreased from 9% to 6% over the same period.
Kronos Worldwide Contributions
Kronos Worldwide, Inc. significantly impacted NL's financial performance in 2024, contributing $30.4 million in equity earnings compared to a loss of $13.4 million in 2023. This improvement is attributed to better demand in the TiO2 market and operational efficiencies.
Marketable Securities and Investment Income
NL Industries reported an unrealized gain in marketable equity securities of $21.8 million in 2024, a notable increase from an unrealized loss of $10.5 million in 2023. This indicates a recovery in the market value of the company’s investments.
Cost Structure and Operating Expenses
Operating costs for the first nine months of 2024 totaled $18.2 million, compared to $17.6 million in the same period of 2023. The increase reflects higher employee salaries and benefits.
Insurance Recoveries
Insurance recoveries increased significantly, with $1.3 million recognized in the first nine months of 2024, up from $0.4 million in 2023. This indicates improved recoveries from previous claims.
Cash Flow from Operations
Net cash provided by operating activities for NL Industries in the first nine months of 2024 was $16.6 million, compared to $15.5 million in 2023.
Dividend Payments
In 2024, NL Industries declared a quarterly dividend of $0.08 per share for the first three quarters, totaling approximately $11.7 million in dividends paid to shareholders.
Debt Obligations
As of September 30, 2024, NL Industries reported outstanding debt obligations of $0.5 million under its secured revolving credit facility.
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Resources:
- NL Industries, Inc. (NL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NL Industries, Inc. (NL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NL Industries, Inc. (NL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.