Valhi, Inc. (VHI) Bundle
A Brief History of VHI
Company Overview
VHI, a diversified holding company, operates in various sectors including chemicals, real estate, and component products. As of 2024, VHI has shown significant financial recovery and operational adjustments following a challenging prior year.
Financial Performance
For the nine months ending September 30, 2024, VHI reported a net income of $128.9 million, a substantial increase from a net loss of $6.6 million in the same period of 2023. This translates to a diluted net income per share of $2.99, compared to a loss of $0.52 per share in 2023.
| Period | Net Income (Loss) (in millions) | Diluted EPS |
|---|---|---|
| Q3 2023 | ($5.8) | ($0.21) |
| Q3 2024 | $57.5 | $2.01 |
| 9M 2023 | ($6.6) | ($0.52) |
| 9M 2024 | $128.9 | $2.99 |
Segment Performance
VHI's Chemicals Segment experienced a notable recovery, reporting an operating income of $105.9 million for the first nine months of 2024, a turnaround from an operating loss of $39.5 million in the previous year. The increase in operating income was largely driven by a 22% rise in net sales, amounting to $484.7 million in Q3 2024 compared to $396.9 million in Q3 2023.
| Segment | Net Sales (in millions) | Operating Income (in millions) |
|---|---|---|
| Chemicals Q3 2023 | $396.9 | ($21.8) |
| Chemicals Q3 2024 | $484.7 | $42.6 |
| Chemicals 9M 2023 | $1,266.4 | ($39.5) |
| Chemicals 9M 2024 | $1,464.0 | $105.9 |
Cost Management and Investments
VHI's cost of sales for the Chemicals Segment in Q3 2024 was $384.4 million, representing a 6% increase from $362.8 million in Q3 2023. However, the gross margin improved significantly from $34.1 million (9% of net sales) in Q3 2023 to $100.3 million (21% of net sales) in Q3 2024.
Real Estate Management and Development
The Real Estate Management and Development Segment reported net sales of $15.3 million in Q3 2024, down from $31.3 million in Q3 2023. This decrease is attributed to a slower pace of development activity in the residential/planned community sector, with significant delays in city permits and environmental approvals.
| Period | Net Sales (in millions) | Cost of Sales (in millions) | Gross Margin (in millions) |
|---|---|---|---|
| Real Estate Q3 2023 | $31.3 | $17.8 | $13.9 |
| Real Estate Q3 2024 | $15.3 | $8.8 | $6.5 |
| Real Estate 9M 2023 | $83.2 | $48.0 | $36.2 |
| Real Estate 9M 2024 | $52.2 | $29.8 | $22.6 |
Debt and Interest Expense
Interest expense rose significantly, totaling $15.2 million in the first nine months of 2024, driven by increased debt levels following the acquisition of LPC in July 2024 and the refinancing of existing debts. This increase in interest expense is expected to persist as VHI continues to manage its financial obligations in the face of rising rates.
Future Outlook
VHI anticipates continued improvement in operating results for 2024, with projections for higher sales volumes in the Chemicals Segment and ongoing efforts to optimize production costs. The company remains focused on integrating its recent acquisitions and enhancing operational efficiencies across its segments.
A Who Owns Valhi, Inc. (VHI)
Ownership Structure
As of 2024, Valhi, Inc. (VHI) has a diverse ownership structure predominantly influenced by its parent company, Contran Corporation. The following table summarizes the significant shareholders and their respective ownership stakes:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| Contran Corporation | Approximately 85% | Controlling Shareholder |
| Public Float | Approximately 15% | Public Shareholders |
Financial Performance Overview
Valhi, Inc. has demonstrated notable financial performance in 2024, with a significant increase in net income attributable to stockholders. The following financial data highlights key metrics:
| Metric | 2023 (Nine Months) | 2024 (Nine Months) |
|---|---|---|
| Net Income (Loss) Attributable to Valhi Stockholders | $(14.8) million | $85.2 million |
| Net Income Per Diluted Share | $(0.52) | $2.99 |
| Total Revenues | $1,499.8 million | $1,665.0 million |
| Operating Income | $(39.5) million | $105.9 million |
Recent Developments and Shareholder Actions
In 2024, Valhi has made several strategic decisions impacting its financial structure:
- Repayment of $48.3 million under the Contran credit facility.
- Dividend payments to stockholders totaling $6.8 million ($0.24 per share).
- Acquisition of remaining interest in the TiO2 manufacturing joint venture for $156.8 million.
Debt Obligations
Valhi's consolidated debt obligations as of September 30, 2024, are detailed below:
| Debt Type | Amount (In Millions) |
|---|---|
| Contran Credit Facility | $45.1 |
| Kronos 9.50% Senior Secured Notes due 2029 | $391.7 |
| Kronos 3.75% Senior Secured Notes due 2025 | $83.9 |
| Subordinated, Unsecured Term Loan from Contran | $53.7 |
| Total Long-term Debt | $526.6 |
Equity Position
The equity position of Valhi, Inc. at the end of September 2024 is summarized as follows:
| Equity Component | Amount (In Millions) |
|---|---|
| Common Stock | $0.3 |
| Additional Paid-in Capital | $669.9 |
| Retained Earnings | $554.2 |
| Accumulated Other Comprehensive Loss | $(152.3) |
| Total Valhi Stockholders' Equity | $1,022.5 |
Valhi, Inc. (VHI) Mission Statement
Overview of Valhi, Inc.
Valhi, Inc. operates through its subsidiaries and is involved in various sectors including chemicals, component products, and real estate management. The company focuses on delivering high-quality products and services to its customers while ensuring sustainable practices.
Current Mission Statement
As of 2024, Valhi, Inc. emphasizes its commitment to innovation, operational excellence, and sustainable development. The mission statement reflects a dedication to enhancing shareholder value while maintaining a responsible approach to environmental stewardship.
Key Financial Metrics
| Metric | 2023 | 2024 |
|---|---|---|
| Net Sales (in millions) | $1,468.7 | $1,623.9 |
| Operating Income (in millions) | $17.0 | $154.0 |
| Net Income Attributable to Valhi Stockholders (in millions) | $(14.8) | $85.2 |
| Basic and Diluted Net Income (loss) per Share | $(0.52) | $2.99 |
| Total Assets (in millions) | $2,737.0 | $2,787.2 |
| Total Equity (in millions) | $1,276.2 | $1,366.6 |
Strategic Goals
- Enhance operational efficiency across all business segments.
- Invest in sustainable technologies and practices.
- Expand product offerings to meet evolving customer needs.
- Increase market share in the chemicals and real estate sectors.
- Foster a culture of continuous improvement and innovation.
Recent Developments
In 2024, Valhi, Inc. reported an increase in net income attributable to stockholders, reflecting a strong recovery from the previous year's losses. The company's operational improvements and strategic investments in its Chemicals Segment significantly contributed to this turnaround.
Environmental Commitment
Valhi, Inc. is dedicated to minimizing its environmental footprint. The mission includes responsible resource management and compliance with environmental regulations, which align with broader sustainability goals.
Summary of Financial Performance
For the nine months ended September 30, 2024, Valhi reported:
| Metric | 2023 | 2024 |
|---|---|---|
| Net Income (in millions) | $(6.6) | $128.9 |
| Depreciation and Amortization (in millions) | $40.7 | $51.2 |
| Cash Dividends Paid (in millions) | $6.8 | $6.8 |
| Capital Expenditures (in millions) | $42.7 | $18.4 |
| Total Debt (in millions) | $546.5 | $611.3 |
Conclusion
Valhi, Inc. continues to align its operations with its mission statement, focusing on growth and sustainability while fostering value for its shareholders.
How Valhi, Inc. (VHI) Works
Company Overview
Valhi, Inc. operates through several segments, primarily focusing on chemicals, component products, and real estate management. The company is publicly traded on the New York Stock Exchange under the ticker symbol VHI.
Financial Performance
As of September 30, 2024, Valhi reported significant improvements in its financial performance compared to the previous year. The following table outlines key financial metrics for the third quarter of 2023 and 2024:
| Metric | Q3 2023 | Q3 2024 | % Change |
|---|---|---|---|
| Net Sales | $468.9 million | $533.6 million | 14.5% |
| Cost of Sales | $408.3 million | $417.3 million | 2.5% |
| Gross Margin | $60.6 million | $116.3 million | 92.1% |
| Operating Income | $2.5 million | $67.7 million | 2708% |
| Net Income | ($1.7 million) | $85.6 million | 5117.6% |
Segment Performance
Chemicals Segment
The Chemicals Segment is vital for Valhi's operations, primarily producing titanium dioxide (TiO2). The segment's operating income for the third quarter of 2024 was $42.6 million compared to an operating loss of $21.8 million in the third quarter of 2023. This turnaround is attributed to improved demand and lower manufacturing costs.
Component Products Segment
This segment reported a decrease in operating income, with third-quarter 2024 results showing $3.3 million compared to $6.6 million in 2023. The decline is largely due to lower sales in security products and marine components.
Real Estate Management and Development Segment
Valhi's real estate segment showed solid performance with operating income of $21.8 million in Q3 2024, up from $17.7 million in Q3 2023. This increase was driven by land sales and infrastructure reimbursements.
Cash Flow and Capital Expenditures
Valhi's cash flows from operating activities for the nine months ended September 30, 2024, indicated a net cash used of $1.8 million compared to $61.2 million in 2023. The company also reported capital expenditures of $18.4 million in 2024, primarily within its Chemicals Segment.
Debt and Interest Expenses
As of September 30, 2024, Valhi's total long-term debt was $526.6 million, with significant components being the Senior Secured Notes due in 2029. Interest expense for the first nine months of 2024 increased to $36.6 million from $21.4 million in the previous year, largely due to refinancing activities and new debt incurred for acquisitions.
Stock Performance
Valhi's stock performance has shown resilience, with a diluted net income per share of $2.99 for the first nine months of 2024, compared to a net loss per share of $0.52 in the same period of 2023.
Outlook for 2024
The company anticipates continued growth in its Chemicals Segment, driven by improved demand for TiO2 and expected increases in infrastructure reimbursements from its Real Estate Management Segment. However, a decrease in operating income is projected for the Component Products Segment due to lower expected sales.
| Segment | Operating Income Q3 2023 | Operating Income Q3 2024 | % Change |
|---|---|---|---|
| Chemicals | ($21.8 million) | $42.6 million | 295% |
| Component Products | $6.6 million | $3.3 million | (49%) |
| Real Estate Management | $17.7 million | $21.8 million | 23.2% |
Valhi, Inc. continues to navigate the complexities of its diverse business segments while focusing on enhancing shareholder value through strategic growth initiatives and effective cost management.
How Valhi, Inc. (VHI) Makes Money
Chemicals Segment
The Chemicals Segment is the largest contributor to Valhi, Inc.'s revenue, primarily through the manufacturing of titanium dioxide (TiO2). In the first nine months of 2024, the Chemicals Segment reported net sales of $1,623.9 million, compared to $1,468.7 million in the same period of 2023, reflecting a growth of approximately 10.6%.
The cost of sales for this segment was $1,193.0 million, resulting in a gross margin of $271.0 million for the nine months ended September 30, 2024. The operating income for this segment turned around to $105.9 million in 2024 from an operating loss of $39.5 million in 2023.
| Financial Metric | 2023 (9 months) | 2024 (9 months) |
|---|---|---|
| Net Sales | $1,468.7 million | $1,623.9 million |
| Cost of Sales | $1,158.0 million | $1,193.0 million |
| Gross Margin | $108.4 million | $271.0 million |
| Operating Income | $(39.5) million | $105.9 million |
Component Products Segment
This segment includes the manufacture of security products and marine components. For the first nine months of 2024, net sales decreased to $107.5 million from $118.1 million in 2023, a decline of about 9%. The operating income also fell to $12.1 million from $18.0 million, reflecting a decrease of 32% year-over-year.
| Financial Metric | 2023 (9 months) | 2024 (9 months) |
|---|---|---|
| Net Sales | $118.1 million | $107.5 million |
| Cost of Sales | $82.5 million | $77.2 million |
| Gross Margin | $35.6 million | $30.3 million |
| Operating Income | $18.0 million | $12.1 million |
Real Estate Management and Development Segment
This segment focuses on land sales and infrastructure reimbursements. For the first nine months of 2024, net sales from land sales amounted to $52.2 million, down from $83.2 million in 2023. The cost of sales decreased to $29.6 million from $47.4 million, leading to a gross margin of $22.6 million compared to $36.2 million in the previous year.
Infrastructure reimbursement income was reported at $14.2 million in 2024, significantly higher than $4.8 million in 2023.
| Financial Metric | 2023 (9 months) | 2024 (9 months) |
|---|---|---|
| Net Sales (Land Sales) | $83.2 million | $52.2 million |
| Cost of Sales | $47.4 million | $29.6 million |
| Gross Margin | $36.2 million | $22.6 million |
| Infrastructure Reimbursement Income | $4.8 million | $14.2 million |
Overall Financial Performance
For the nine months ended September 30, 2024, Valhi reported a net income attributable to stockholders of $85.2 million, or $2.99 per diluted share, compared to a net loss of $14.8 million, or $0.52 per diluted share in the same period of 2023. This substantial improvement is attributed to the turnaround in the Chemicals Segment, which saw a significant increase in operating income and the recognition of a non-cash gain of $64.5 million from the remeasurement of its TiO2 manufacturing joint venture investment.
| Financial Metric | 2023 (9 months) | 2024 (9 months) |
|---|---|---|
| Net Income (Loss) | $(14.8) million | $85.2 million |
| Diluted Earnings (Loss) per Share | $(0.52) | $2.99 |
| Operating Income (Total) | $17.0 million | $154.0 million |
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Updated on 16 Nov 2024
Resources:
- Valhi, Inc. (VHI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Valhi, Inc. (VHI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Valhi, Inc. (VHI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.