Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

As of October 28, ~~2020,~~2021, the registrant had ~~12,451,157~~12,405,657 shares of Class A common stock, $.01 par value per share, outstanding.

	December 31,		September 30,		December 31,		September 30,
	2019		2020		2020		2021
ASSETS			(unaudited)				(unaudited)
Current assets:
Cash and cash equivalents	$	63,255	$	65,075	$	70,637	$	75,959
Accounts receivable, net		11,870		12,277		10,731		15,106
Inventories, net		18,348		19,166		18,337		23,536
Prepaid expenses and other		1,624		1,254		1,541		3,056
Total current assets		95,097		97,772		101,246		117,657
Other assets:
Note receivable from affiliate		28,100		30,500		29,500		21,800
Goodwill		23,742		23,742		23,742		23,742
Other noncurrent		590		590		607		598
Total other assets		52,432		54,832		53,849		46,140
Property and equipment:
Land		4,940		4,940		4,940		5,070
Buildings		23,047		23,057		23,146		23,161
Equipment		67,718		68,047		68,227		69,974
Construction in progress		1,002		763		1,010		1,240
		96,707		96,807		97,323		99,445
Less accumulated depreciation		65,692		67,445		68,373		70,902
Net property and equipment		31,015		29,362		28,950		28,543
Total assets	$	178,544	$	181,966	$	184,045	$	192,340

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	12,078	$	11,075	$	12,198	$	14,294
Income taxes payable to affiliates		984		658
Income taxes payable to affiliate						952		1,391
Total current liabilities		13,062		11,733		13,150		15,685
Noncurrent liabilities -
Deferred income taxes		3,287		3,486		3,239		3,665
Stockholders' equity:
Preferred stock		—		—		—		—
Class A common stock		124		124		124		124
Additional paid-in capital		55,869		55,987		55,987		55,336
Retained earnings		106,202		110,636		111,545		117,530
Total stockholders' equity		162,195		166,747		167,656		172,990
Total liabilities and stockholders’ equity	$	178,544	$	181,966	$	184,045	$	192,340

	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2019		2020		2019		2020		2020		2021		2020		2021
	(unaudited)				(unaudited)				(unaudited)
Net sales	$	29,703	$	28,426	$	94,610	$	84,537	$	28,426	$	34,556	$	84,537	$	106,733
Cost of sales		20,227		21,098		64,571		59,412		21,098		23,634		59,412		73,470
Gross margin		9,476		7,328		30,039		25,125		7,328		10,922		25,125		33,263
Selling, general and administrative expense		5,210		5,246		15,860		15,654		5,246		5,791		15,654		16,557
Operating income		4,266		2,082		14,179		9,471		2,082		5,131		9,471		16,706
Interest income		848		360		2,512		1,337		360		289		1,337		945
Income before taxes		5,114		2,442		16,691		10,808
Income before income taxes										2,442		5,420		10,808		17,651
Provision for income taxes		1,227		610		3,923		2,640		610		1,288		2,640		4,214
Net income	$	3,887	$	1,832	$	12,768	$	8,168	$	1,832	$	4,132	$	8,168	$	13,437

Basic and diluted net income per common share	$	0.31	$	0.15	$	1.03	$	0.66	$	0.15	$	0.33	$	0.66	$	1.08

Basic and diluted weighted average shares outstanding		12,433		12,451		12,439		12,447		12,451		12,406		12,447		12,417

	Three months ended September 30, 2020 and 2021 (unaudited)
	Class A		Additional									Total
	common		paid-in			Retained			Treasury			stockholders'
	stock		capital			earnings			stock			equity

Balance at June 30, 2020	$	124	$	55,987		$	110,049		$	—		$	166,160
Net income		—		—			1,832			—			1,832
Cash dividends ($0.10 per share)		—		—			(1,245	)		—			(1,245	)
Balance at September 30, 2020	$	124	$	55,987		$	110,636		$	—		$	166,747

Balance at June 30, 2021	$	124	$	55,336		$	115,879		$	—		$	171,339
Net income		—		—			4,132			—			4,132
Cash dividends ($0.20 per share)		—		—			(2,481	)		—			(2,481	)
Balance at September 30, 2021	$	124	$	55,336		$	117,530		$	—		$	172,990

	Nine months ended September 30, 2020 and 2021 (unaudited)
	Class A		Additional									Total
	common		paid-in			Retained			Treasury			stockholders'
	stock		capital			earnings			stock			equity

Balance at December 31, 2019	$	124	$	55,869		$	106,202		$	—		$	162,195
Net income		—		—			8,168			—			8,168
Issuance of common stock		—		118			—			—			118
Cash dividends ($0.30 per share)		—		—			(3,734	)		—			(3,734	)
Balance at September 30, 2020	$	124	$	55,987		$	110,636		$	—		$	166,747

Balance at December 31, 2020	$	124	$	55,987		$	111,545		$	—		$	167,656
Net income		—		—			13,437			—			13,437
Issuance of common stock		—		104			—			—			104
Cash dividends ($0.60 per share)		—		—			(7,452	)		—			(7,452	)
Treasury stock:
Acquired		—		—			—			(755	)		(755	)
Retired		—		(755	)		—			755			—
Balance at September 30, 2021	$	124	$	55,336		$	117,530		$	—		$	172,990

Three months ended September 30, 2019 and 2020 (unaudited)

Class A

Additional

Total

common

paid-in

Retained

stockholders'

stock

capital

earnings

equity

Balance at June 30, 2019
$
124

$
55,869

$
100,826

$
156,819

Net income

—

—

3,887

3,887

Cash dividends ($0.07 per share)

—

—

(871
)

(871
)
Balance at September 30, 2019
$
124

$
55,869

$
103,842

$
159,835

Balance at June 30, 2020
$
124

$
55,987

$
110,049

$
166,160

Net income

—

—

1,832

1,832

Cash dividends ($0.10 per share)

—

—

(1,245
)

(1,245
)
Balance at September 30, 2020
$
124

$
55,987

$
110,636

$
166,747

Nine months ended September 30, 2019 and 2020 (unaudited)

Class A

Additional

Total

common

paid-in

Retained

stockholders'

stock

capital

earnings

equity

Balance at December 31, 2018
$
124

$
55,751

$
93,687

$
149,562

Net income

—

—

12,768

12,768

Issuance of common stock

—

118

—

118

Cash dividends ($0.21 per share)

—

—

(2,613
)

(2,613
)
Balance at September 30, 2019
$
124

$
55,869

$
103,842

$
159,835

Balance at December 31, 2019
$
124

$
55,869

$
106,202

$
162,195

Net income

—

—

8,168

8,168

Issuance of common stock

—

118

—

118

Cash dividends ($0.30 per share)

—

—

(3,734
)

(3,734
)
Balance at September 30, 2020
$
124

$
55,987

$
110,636

$
166,747

	Nine months ended
	September 30,
	2020			2021
	(unaudited)
Cash flows from operating activities:
Net income	$	8,168		$	13,437
Depreciation and amortization		2,872			2,861
Deferred income taxes		199			426
Other, net		256			323
Change in assets and liabilities:
Accounts receivable, net		(423	)		(4,374	)
Inventories, net		(937	)		(5,417	)
Accounts payable and accrued liabilities		(934	)		1,908
Accounts with affiliates		239			523
Prepaids and other, net		(195	)		(1,592	)
Net cash provided by operating activities		9,245			8,095
Cash flows from investing activities:
Capital expenditures		(1,291	)		(2,266	)
Note receivable from affiliate:
Collections		22,828			33,100
Advances		(25,228	)		(25,400	)
Net cash provided by (used in) investing activities		(3,691	)		5,434
Cash flows from financing activities:
Dividends paid		(3,734	)		(7,452	)
Treasury stock acquired		—			(755	)
Net cash used in financing activities		(3,734	)		(8,207	)
Cash and cash equivalents - net change from:
Operating, investing and financing activities		1,820			5,322
Balance at beginning of period		63,255			70,637
Balance at end of period	$	65,075		$	75,959
Supplemental disclosures -
Cash paid for income taxes	$	2,767		$	3,361

Nine months ended

September 30,

2019

2020

(unaudited)

Cash flows from operating activities:

Net income
$
12,768

$
8,168

Depreciation and amortization

2,738

2,872

Deferred income taxes

245

199

Other, net

428

256

Change in assets and liabilities:

Accounts receivable, net

(1,308
)

(423
)
Inventories, net

(1,888
)

(937
)
Accounts payable and accrued liabilities

(130
)

(934
)
Accounts with affiliates

(432
)

239

Prepaids and other, net

34

(195
)
Net cash provided by operating activities

12,455

9,245

Cash flows from investing activities:

Capital expenditures

(2,453
)

(1,291
)
Proceeds from sale of fixed assets

121

—

Note receivable from affiliate:

Collections

25,400

22,828

Advances

(28,100
)

(25,228
)
Net cash used in investing activities

(5,032
)

(3,691
)
Cash flows from financing activities -

Dividends paid

(2,613
)

(3,734
)
Cash and cash equivalents - net change from:

Operating, investing and financing activities

4,810

1,820

Balance at beginning of period

45,414

63,255

Balance at end of period
$
50,224

$
65,075

Supplemental disclosures -

Cash paid for income taxes
$
4,020

$
2,767

Organization. We (NYSE American: CIX) were approximately ~~86%~~87% owned by NL Industries, Inc. (NYSE: NL) at September 30, ~~2020.~~2021. We manufacture and sell component products (security products and recreational marine components). At September 30, ~~2020,~~2021, Valhi, Inc. (NYSE: VHI) owned approximately 83% of NL’s outstanding common stock and a wholly-owned subsidiary of Contran Corporation owned approximately 92% of Valhi’s outstanding common stock. A majority of Contran's outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) and their children and for which Ms. Simmons or Mr. Connelly, as applicable, serve as trustee (collectively, the “Other Trusts”). With respect to the Other Trusts for which Mr. Connelly serves as trustee, he is required to vote the shares of Contran voting stock held in such trusts in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at September 30, ~~2020~~2021 Ms. Simmons and the Family Trust may be deemed to control Contran, and therefore may be deemed to indirectly control the wholly-owned subsidiary of Contran, Valhi, NL and us.

Basis of presentation. Consolidated in this Quarterly Report are the results of CompX International Inc. and its subsidiaries. The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 that we filed with the Securities and Exchange Commission (“SEC”) on ~~February 26, 2020~~March 3, 2021 (the ~~“2019~~“2020 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments) in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, ~~2019~~2020 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, ~~2019)~~2020) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim periods ended September 30, ~~2020~~2021 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our ~~2019~~2020 Consolidated Financial Statements contained in our ~~2019~~2020 Annual Report.

Our operations are reported on a 52 or 53-week year. For presentation purposes, annual and quarterly information in the Condensed Consolidated Financial Statements and accompanying notes are presented as ended September 30, ~~2019,~~2020, December 31, ~~2019~~2020 and September 30, ~~2020.~~2021. The actual dates of our annual and quarterly periods are September ~~30, 2019, December 29, 2019~~27, 2020, January 3, 2021 and ~~September 27, 2020,~~October 3, 2021, respectively. Unless otherwise indicated, references in this report to “we”, “us” or “our” refer to CompX International Inc. and its subsidiaries, taken as a whole.

Our results of operations for the first nine months of 2020 were significantly impacted by the COVID-19 pandemic, primarily in the second and third quarters, due to government mandated closures and reduced demand for many of our products resulting from the rapid contraction of vast areas of the economy. The extent of the COVID-19 impact on our future operations will depend on the time period and degree to which the COVID-19 pandemic persists in the economy thereby reducing customer demand for certain of our products, including the timing and extent to which our customers’ operations continue to be impacted, our customers’ perception as to when consumer demand for their products will return to pre-pandemic levels and on any future disruptions in our operations or our suppliers’ operations, all of which are difficult to predict.

	Three months ended						Nine months ended						Three months ended						Nine months ended
	September 30,						September 30,						September 30,						September 30,
	2019			2020			2019			2020			2020			2021			2020			2021
	(In thousands)						(In thousands)						(In thousands)
Net sales:
Security Products	$	23,405		$	21,209		$	75,036		$	65,251		$	21,209		$	25,829		$	65,251		$	79,301
Marine Components		6,298			7,217			19,574			19,286			7,217			8,727			19,286			27,432
Total net sales	$	29,703		$	28,426		$	94,610		$	84,537		$	28,426		$	34,556		$	84,537		$	106,733

Operating income (loss):
Security Products	$	4,866		$	2,797		$	15,990		$	11,871		$	2,797		$	5,529		$	11,871		$	16,864
Marine Components		1,042			1,129			3,223			3,010			1,129			1,255			3,010			4,796
Corporate operating expenses		(1,642	)		(1,844	)		(5,034	)		(5,410	)		(1,844	)		(1,653	)		(5,410	)		(4,954	)
Total operating income		4,266			2,082			14,179			9,471			2,082			5,131			9,471			16,706
Interest income		848			360			2,512			1,337			360			289			1,337			945
Income before taxes	$	5,114		$	2,442		$	16,691		$	10,808
Income before income taxes													$	2,442		$	5,420		$	10,808		$	17,651

	December 31,		September 30,		December 31,		September 30,
	2019		2020		2020		2021
	(In thousands)				(In thousands)
Raw materials:
Security Products	$	2,134	$	2,542	$	2,318	$	3,768
Marine Components		807		816		902		1,228
Total raw materials		2,941		3,358		3,220		4,996
Work-in-process:
Security Products		9,138		9,721		9,214		11,088
Marine Components		2,633		2,434		2,454		3,960
Total work-in-process		11,771		12,155		11,668		15,048
Finished goods:
Security Products		2,582		2,376		2,235		2,183
Marine Components		1,054		1,277		1,214		1,309
Total finished goods		3,636		3,653		3,449		3,492
Total inventories, net	$	18,348	$	19,166	$	18,337	$	23,536

	Three months ended						Nine months ended
	September 30,						September 30,						Three months ended						Nine months ended
	2019			2020			2019			2020			September 30,						September 30,
	(In thousands)						(In thousands)						2020			2021			2020			2021
													(In thousands)
Expected tax expense, at the U.S. federal statutory income tax rate of 21%	$	1,074		$	513		$	3,505		$	2,270		$	513		$	1,138		$	2,270		$	3,707
State income taxes		185			90			588			384			90			170			384			570
FDII benefit		(22	)		(7	)		(170	)		(39	)		(7	)		(33	)		(39	)		(73	)
Other, net		(10	)		14			-			25			14			13			25			10
Total income tax expense	$	1,227		$	610		$	3,923		$	2,640
Total provision for income taxes													$	610		$	1,288		$	2,640		$	4,214

Our board of directors has previously authorized the repurchase of our Class A common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time. We ~~qualify for~~may repurchase our common stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, we may terminate the ~~foreign derived intangible income (FDII) deduction.~~program prior to its completion. We ~~recognized a current~~will use cash ~~tax benefit of $39,000 in~~on hand to acquire the shares. Repurchased shares will be added to our treasury and cancelled.

During the first ~~nine months~~quarter of ~~2020 and $170,000 in the first nine months of 2019 ($98,000~~2021, we purchased 50,000 shares of our ~~2019 current cash tax benefit is related~~Class A common stock in a market transaction for approximately $755,000. We cancelled these treasury shares and allocated their cost to ~~2018).~~

~~On March 27, 2020, the “Coronavirus Aid, Relief~~common stock at par value and Economic Security (CARES) Act” was signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, modifications to the limitation of business interestadditional paid-in capital. At September 30, 2021, 627,547 shares were available for 2019 and 2020 and technical corrections to tax depreciation methods for qualified improvement property. We have evaluated the relevant provisions of the CARES Act and determined the impact is not material to our tax provision.

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure:

Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value.

From time to time, we may have loans and advances outstanding between us and various related parties pursuant to term and demand notes. We generally enter into these loans and advances for cash management purposes. When we loan funds to related parties, we are generally able to earn a higher rate of return on the loan than we would earn if we invested the funds in other instruments, and when we borrow from related parties, we are generally able to pay a lower rate of interest than we would pay if we had incurred third-party indebtedness. While certain of these loans to affiliates may be of a lesser credit quality than cash equivalent instruments otherwise available to us, we believe we have considered the credit risks in the terms of the applicable loans. In this regard, we have an unsecured revolving demand promissory note with Valhi whereby we agreed to loan Valhi up to $40 million. Our loan to Valhi, as amended, bears interest at prime plus 1.00%, payable quarterly, with all principal due on demand, but in any event no earlier than December 31, ~~2021.~~2022. Loans made to Valhi at any time under the agreement are at our discretion. At September 30, ~~2020,~~2021, the outstanding principal balance receivable from Valhi under the promissory note was ~~$30.5~~$21.8 million. Interest income (including unused commitment fees) on our loan to Valhi was ~~$1.9~~$1.1 million and ~~$1.1~~$0.9 million for the nine months ended September 30, ~~2019 and 2020, respectively.~~

~~In December 2019, the Financial Accounting Standards Board issued ASU 2019-12,~~ ~~Simplifying the Accounting for Income Taxes~~, which changes the accounting for certain income tax transactions and reduces complexity in accounting for income taxes in certain areas. The ASU introduces new guidance including providing a policy election for an entity to not allocate consolidated current and deferred tax expense when a member of a consolidated tax return is not subject to income tax in its separate financial statements and is a disregarded entity by the taxing authority; and providing guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The ASU also changes existing guidance in a number of areas, including: the method of making an intraperiod allocation of total income tax expense if there is a loss in continuing operations and gains outside of continuing operations; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income. We adopted this ASU in the first quarter of 2020 and ~~the adoption of this standard did not have a material effect on our Condensed Consolidated Financial Statements.~~

We are a leading manufacturer of engineered components utilized in a variety of applications and industries. Through our Security Products segment we manufacture mechanical and ~~electronic~~electrical cabinet locks and other locking mechanisms used in recreational transportation, postal, office and institutional furniture, cabinetry, tool storage and healthcare applications. We also manufacture stainless steel exhaust systems, gauges, throttle controls, wake enhancement systems, ~~and~~ trim tabs and related hardware and accessories for the recreational marine and other industries through our Marine Components segment.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Statements in this Quarterly Report that are not historical facts are forward-looking in nature and represent management’s beliefs and assumptions based on currently available information. In some cases, you can identify forward-looking statements by the use of words such as “believes,” “intends,” “may,” “should,” “could,” “anticipates,” “expects” or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we do not know if these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results. Actual future results could differ materially from those predicted. The factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Quarterly Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following:

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. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.

We experienced normal sales volumes and operations during the first quarter of 2020. Beginning in late March 2020 as a result of the COVID-19 pandemic, we began receiving requests from certain customers of both our Security Products and Marine Components segments to postpone shipments, in some cases because our customers’ production facilities were temporarily closed. We operate three facilities, each of which specializes in certain manufacturing processes and is therefore dependent upon the other facilities to some extent to manufacture finished goods. With the onset of COVID-19, within each facility we enhanced cleaning and sanitization procedures, mandated social distancing and implemented other health and safety protocols. For our sales, the second quarter of 2020 was the quarter most impacted by COVID-19 related order cancellations and delays. In the third quarter ~~we experienced significant recovery in sales, particularly in our Marine Segment, though not to the level we would have expected prior to the pandemic. Our~~of 2021 operating income ~~has not recovered~~increased to ~~the extent our sales have recovered due~~$5.1 million compared to ~~a decline in gross margins discussed below.~~

~~We reported operating income of~~ $2.1 million in the third quarter of ~~2020 compared to $4.3 million in the same period of 2019.~~2020. Operating income for the first nine months of ~~2020~~2021 was ~~$9.5~~$16.7 million compared to ~~$14.2~~$9.5 million in the first nine months of 2020. The increase in operating income in the third quarter and first nine months of 2021 compared to the same periods in 2020 primarily resulted from higher sales volumes at both of our business segments. Our operating income was negatively impacted by the COVID-19 pandemic in the second and third quarters of 2020, which significantly impacts operating income comparisons for the ~~comparable period~~third quarter and nine-month comparative periods. We sustained the greatest negative sales impact from COVID-19 in ~~2019.~~the second quarter of 2020. Beginning in the third quarter of 2020 and continuing through the third quarter of 2021, Marine Components sales exceeded pre-pandemic levels. Security Products sales generally improved since the third quarter of 2020, but did not recover to pre-pandemic levels until the second quarter of 2021 when sales improved in markets that had been slower to recover from the COVID-19 pandemic, particularly sales to distributors and the office furniture market.

We sell a large number of products that have a wide variation in selling price and manufacturing cost, which results in certain practical limitations on our ability to quantify the impact of changes in individual product sales quantities and selling prices on our net sales, cost of ~~goods sold~~sales and gross ~~profit.~~margin. In addition, small variations in period-to-period net sales, cost of sales and gross margin can result from changes in the relative mix of our products sold.

	Three months ended										Three months ended
	September 30,										September 30,
	2019		%			2020		%			2020		%			2021		%
	(Dollars in thousands)										(Dollars in thousands)
Net sales	$	29,703		100.0	%	$	28,426		100.0	%	$	28,426		100.0	%	$	34,556		100.0	%
Cost of sales		20,227		68.1			21,098		74.2			21,098		74.2			23,634		68.4
Gross margin		9,476		31.9			7,328		25.8			7,328		25.8			10,922		31.6
Operating costs and expenses		5,210		17.5			5,246		18.5			5,246		18.5			5,791		16.8
Operating income	$	4,266		14.4	%	$	2,082		7.3	%	$	2,082		7.3		$	5,131		14.8

	Nine months ended										Nine months ended
	September 30,										September 30,
	2019		%			2020		%			2020		%			2021		%
	(Dollars in thousands)										(Dollars in thousands)
Net sales	$	94,610		100.0	%	$	84,537		100.0	%	$	84,537		100.0	%	$	106,733		100.0	%
Cost of sales		64,571		68.2			59,412		70.3			59,412		70.3			73,470		68.8
Gross margin		30,039		31.8			25,125		29.7			25,125		29.7			33,263		31.2
Operating costs and expenses		15,860		16.8			15,654		18.5			15,654		18.5			16,557		15.5
Operating income	$	14,179		15.0	%	$	9,471		11.2	%	$	9,471		11.2		$	16,706		15.7

Net sales. Net sales ~~decreased $1.3~~increased $6.1 million in the third quarter of ~~2020~~2021 compared to the same period in ~~2019 as~~2020 primarily due to higher ~~Marine Component sales to the towboat market were more than offset by lower~~ Security Products sales across a variety of ~~markets.~~markets and to a lesser extent higher Marine Components sales primarily to the towboat market. Net sales ~~decreased $10.1~~increased $22.2 million infor the first nine months of ~~2020~~2021 compared to the same period in ~~2019~~2020 primarily due to ~~lower Security Products~~higher sales volumes at both of our segments, particularly in the second quarter of ~~2020~~2021, as many of our customers were temporarily closed or reduced production during the second quarter of 2020 due to government ordered closures or reduced demand resulting from the COVID-19 pandemic. ~~Relative changes in selling prices did not have a material impact on net sales comparisons.~~

Cost of sales and gross margin. Cost of sales as a percentage of sales for the third quarter and for the first nine months of ~~2020~~2021 was ~~approximately 6% and 2% higher~~lower than the same periods in ~~2019, respectively.~~2020. As a result, gross margin as a percentage of sales ~~decreased~~increased over the same periods. ~~Gross~~The increase in gross margin ~~percentages decreased~~percentage in the third quarter and for the first nine months of ~~2020 compared to the same periods in 2019~~2021 is primarily due to the ~~decline~~increase in the Security Products ~~gross margin percentage and to a lesser extent the Marine Components~~ gross margin percentage. See segment discussion below.

Operating costs and expenses. Operating costs and expenses consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to business unit and corporate management activities, as well as gains and losses on property and equipment. Operating costs and expenses for the

third quarter and first nine months of ~~2020~~2021 were ~~comparable to~~higher than the same periods last year. The increase was predominantly due to higher salary and benefit costs which increased by $0.4 million and $0.9 million for the third quarter and first nine months, respectively,

compared to the same prior year periods. Operating costs and expenses as a percentage of net sales ~~increased~~decreased in both periods as a result of ~~2020 due to the lower~~higher sales.

Operating income. As a percentage of net sales, operating income for the third quarter and first nine months of ~~2020 decreased~~2021 increased compared to the same periods of ~~2019~~2020 and was primarily impacted by the factors impacting cost of ~~goods sold,~~sales, gross margin and operating costs. See segment discussion below.

Provision for income taxes. A tabular reconciliation of our actual tax provision to the U.S. federal statutory income tax rate is included in Note 6 to the Condensed Consolidated Financial Statements. Our operations are wholly within the U.S. and therefore our effective income tax rate is primarily reflective of the U.S. federal statutory rate and applicable state taxes.

	Three months ended									Nine months ended
	September 30,									September 30,									Three months ended									Nine months ended
	2019			2020			% Change			2019			2020			% Change			September 30,						%			September 30,						%
	(Dollars in thousands)									(Dollars in thousands)									2020			2021			Change			2020			2021			Change
																			(Dollars in thousands)									(Dollars in thousands)
Security Products:
Net sales	$	23,405		$	21,209			(9)	%	$	75,036		$	65,251			(13)	%	$	21,209		$	25,829			22	%	$	65,251		$	79,301			22	%
Cost of sales		15,737			15,714			-			50,470			45,304			(10)			15,714			17,055			9			45,304			53,445			18
Gross margin		7,668			5,495			(28)			24,566			19,947			(19)			5,495			8,774			60			19,947			25,856			30
Operating costs and expenses		2,802			2,698			(4)			8,576			8,076			(6)			2,698			3,245			20			8,076			8,992			11
Operating income	$	4,866		$	2,797			(43)		$	15,990		$	11,871			(26)		$	2,797		$	5,529			98		$	11,871		$	16,864			42


Gross margin		32.8	%		25.9	%					32.7	%		30.6	%					25.9	%		34.0	%					30.6	%		32.6	%
Operating income margin		20.8			13.2						21.3			18.2						13.2			21.4						18.2			21.3

Security Products. Security Products net sales in the third quarter of ~~2020 decreased 9%~~2021 increased 22% compared to the same period in ~~2019. Certain market segments have been slower to recover from~~2020 when it experienced reduced demand ~~related~~across a variety of markets attributed to ~~COVID-19, including transportation which had $1.3~~COVID-19. Relative to prior year, third quarter sales were $2.1 million lower sales than the same period in 2019, distribution customers which were $0.7 million lower than the same period in 2019, and office furniture which was $0.6 million lower than the same period in 2019. These declines were partially offset by $0.7 million higher ~~sales~~ to the government security ~~market. Similarly,~~market, $1.3 million higher to the transportation market, and $0.6 million higher to distribution customers. Security Products net sales ~~decreased 13%~~increased 22% in the first nine months of ~~2020~~2021 compared to the same period last year primarily due to ~~$4.4~~the higher second and third quarter 2021 sales as compared to second and third quarter 2020 sales. Relative to prior year, sales for the first nine months of 2021 were $5.6 million ~~in lower sales~~higher to the government security market, $4.5 million higher to the transportation market, ~~$2.5~~and $2.0 million ~~in lower sales~~higher to distribution customers, and $1.2 million in lower sales to the office furniture market primarily as a result of the negative impact of COVID-19 on second quarter 2020 sales and the slower recovery of these markets in the third quarter as noted above.customers.

Gross margin as a percentage of net sales for the third quarter was lower than the same period last year as higher cost inventory produced during the second quarter was sold in the third quarter. Security Products inventory produced during the second quarter of 2020 had a higher carrying value compared to prior periods due higher fixed cost per unit of production as a result of lower production volumes during the second quarter of 2020. This negatively impacted our cost of sales during the third quarter of 2020 compared to the same period in the prior year as this higher cost inventory was sold. Gross margin for theand first nine months of 2020 decreased compared to the same period in the prior year primarily due to the decline in gross margin in the third quarter of 2020 noted above. Additionally, gross margin was unfavorably impacted by2021 increased ~~medical costs of $0.5 million for the third quarter and $0.9 million for the first nine months of 2020~~as compared to the same periods ~~in prior year. Operating~~last year due to increased coverage of fixed costs from higher production, partially offset by higher production costs including increased raw materials costs across a variety of commodities and component inputs, higher shipping costs, and ~~expenses in the third quarter of 2020 were comparable to the same period in the prior year. Operating~~increased labor costs ~~decreased in the first nine months of 2020 compared to the same period last year predominantly~~primarily due to ~~decreased expenses related to travel~~higher overtime costs and ~~cancelled or postponed advertising expenses which were $0.4 million lower in aggregate.~~increased headcount. Operating income as a percentage of net sales for the third quarter and first nine months of ~~2020 decreased~~2021 increased compared to the same periods of ~~2019 as a result of the factors impacting gross margin as well as reduced~~2020 due to increased coverage of operating costs and expenses ~~from lower~~on higher sales, ~~for both comparative periods.~~partially offset by the factors impacting gross margin.

	Three months ended									Nine months ended									Three months ended									Nine months ended,
	September 30,									September 30,									September 30,						%			September 30,						%
	2019			2020			% Change			2019			2020			% Change			2020			2021			Change			2020			2021			Change
	(Dollars in thousands)									(Dollars in thousands)									(Dollars in thousands)									(Dollars in thousands)

Marine Components:
Net sales	$	6,298		$	7,217			15	%	$	19,574		$	19,286			(1)	%	$	7,217		$	8,727			21	%	$	19,286		$	27,432			42	%
Cost of sales		4,490			5,384			20			14,101			14,108			-			5,384			6,579			22			14,108			20,025			42
Gross margin		1,808			1,833			1			5,473			5,178			(5)			1,833			2,148			17			5,178			7,407			43
Operating costs and expenses		766			704			(8	)		2,250			2,168			(4)			704			893			27			2,168			2,611			20
Operating income	$	1,042		$	1,129			8		$	3,223		$	3,010			(7)		$	1,129		$	1,255			11		$	3,010		$	4,796			59


Gross margin		28.7	%		25.4	%					28.0	%		26.8	%					25.4	%		24.6	%					26.8	%		27.0	%
Operating income margin		16.5			15.6						16.5			15.6						15.6			14.4						15.6			17.5

Marine Components. Marine Components net sales in the third quarter and first nine months of ~~2020~~2021 increased ~~15%~~21% and 42%, respectively, compared to the same ~~period~~periods in ~~2019~~2020 primarily due to increased sales ~~of $1.2 million~~ to the towboat market. ~~Marine Components net sales decreased 1% in~~Sales to the towboat market were $1.4 million higher for the third quarter and $6.5 million higher for the first nine months of ~~2020~~2021 compared to the same ~~period~~periods in the prior year as increases in first and third quarter sales primarily to the towboat and center console boat markets were more than offset by lower sales in the second quarter 2020, the quarter most impacted by COVID-19.2020. As a percentage of net sales, gross margin ~~decreased in~~and operating income for the third quarter of ~~2020~~2021 decreased compared to the same period in ~~2019. Similar to Security Products, inventory sold in the third quarter~~2020 as increased coverage of ~~2020 was~~fixed costs from higher production were more than offset by higher production costs including increased raw materials costs, primarily ~~produced in the second quarter of 2020~~stainless steel, higher shipping costs, and ~~had a~~increased labor costs resulting from higher carrying value compared to prior periods due to higher fixed cost per unit of production as a result of lower production volumes during the second quarter of 2020. The gross margin percentage decreased inovertime costs and increased headcount. For the first nine months of ~~2020 compared~~2021, gross margin as a percentage of net sales was comparable to the same period ~~last year primarily~~in 2020 as the favorable impact from the increased coverage of fixed costs due to ~~the decline in gross margin in the third quarter of 2020 noted above.~~higher production volumes was offset by increased production costs. Operating income as a percentage of net sales for the ~~third quarter and~~ first nine months of ~~2020 decreased~~2021 increased compared to the same ~~periods~~period in 2020 due to increased coverage of ~~2019 as a result of~~operating costs and expenses from higher sales and the factors impacting gross ~~margin slightly offset by lower operating costs and expenses.~~margin.

Outlook. InBeginning in the ~~third quarter~~second half of 2020, our sales began to recover from the historically low levels we experienced during the second quarter of 2020, with sales steadily improving for the remainder of last year. Throughout the first nine months of 2021, we have experienced strong demand, particularly at our Marine Components segment. During the second and third quarters of 2021, our Security Products segment has seen improved demand from distributors and the office furniture market that had been slower to recover. In the first nine months of 2021, our manufacturing facilities operated at elevated production rates in line with improved demand, although labor markets are tight in each of the regions in which we operate and, as a result, we have experienced and continue to have challenges maintaining staffing levels aligned with current and forecasted demand, particularly at our Marine Components segment.

Based on current market conditions, we expect demand levels to remain strong for the remainder of 2021 and we expect to report increased sales and operating income in 2021 compared to 2020. Our supply chains remain intact, although the COVID-19 pandemic continues to impact our operations and demand for our products. In the third quarter, our manufacturing operations returned to more normal production rates as demand from our customers began to return, although for the most part, below pre-pandemic levels. Ourcurrent global and domestic supply ~~chains remain intact,~~chain disruptions continue to present challenges in sourcing certain raw materials due to increased lead times, availability shortages and transportation and logistics delays. Thus far we have ~~experienced~~been able to manage through these disruptions with minimal ~~supply chain disruptions. The markets~~impact on our operations. In addition, we ~~sell to have recovered to varying degrees,~~are experiencing increased production costs including higher labor, shipping, and ~~we continue to work closely with all~~increasing costs of our customers and monitor their progress as they continue to adjust their operations. Marine sales have outpaced prior year performance in the third quarter while the transportation, distribution and office furniture markets our Securities Products Segment serves have been slow to recover. We expect these trends to continue for the remaindermany of the ~~year.~~

~~Considerable effort continues at all of our locations to manage current COVID-19 conditions including enhanced health~~raw materials we use. In response, we implemented price increases and safety protocols and additional cleaning and disinfecting efforts. Throughout the course of the COVID-19 pandemic, we have focused our efforts on maintaining efficient operations while closely managing our expenses and capital projects. In this regard, we are constantly evaluating our staffing levels and we believe our current staffing levels are aligned with our sales and production forecasts for the remainder of the year.

The advance of the COVID-19 pandemic and the global efforts to mitigate its spread have resulted in sharp contractions of vast areas of the global economy and are expected to continue to challenge workers, businesses and governments for the foreseeable future. Government actions in various regions have generally permitted the gradual resumption of commercial activities following various regional shutdowns, but further government action restricting economic activity is possible in an effort to mitigate increases in COVID-19 cases in certain regions. The success and timing of these mitigating actions will depend in part on deployment of effective tools to fight COVID-19, including increased testing, enhanced monitoring, data analysis, effective treatments and a safe vaccine, before economic growth is likely to return to pre-pandemic levels. Even as these measures are implemented and become effective, they will not directly address the business and employment losses already experienced. As a result, we expect U.S. and worldwide gross domestic product to be significantly impacted for an indeterminate period.

Based on current conditions, we expect to report reduced revenue and operating income in 2020 compared to 2019. We believe the second quarter of 2020 will be the period most impacted by reduced demand for our products due to COVID-19 as compared to 2019; however, due to the negative impact of higher fixed costs per unit of production in the third quarter as the result of lower production volumessurcharges in the second and third quarters of ~~2020 as discussed above, we expect operating income for~~2021; however, the ~~remainder of~~

~~2020 to continue to be lower than comparable periods. The severity of the impact of COVID-19 on the remainder of the year will depend on customer demand for our products, including the timing and~~ extent to which ~~our customers’ operations continue to be impacted, on our customers’ perception~~the price increases and surcharges will mitigate the rising costs is uncertain and we expect increasing production costs will negatively impact gross margins in the fourth quarter as ~~to when consumer demand for their products will return to pre-pandemic levels and on any future disruptions in our operations or our suppliers’ operations, all of which~~higher cost inventories are ~~difficult to predict.~~sold. Our operations teams meet ~~daily~~frequently to ensure we are taking appropriate actions to maintain a safe working environment for all of our employees, minimize material or supply related operational disruptions, ~~and~~ manage inventory ~~levels. We increased inventory at both~~levels and improve operating margins.

Our expectations for our operations and the markets we serve are based on a number of factors outside our ~~segments during the second quarter~~control. As noted above, there are global and domestic supply chain challenges and any future impacts of ~~2020 to keep~~COVID-19 on our ~~workforce productive by focusing~~operations will depend on, ~~high-demand~~among other things, any future disruption in our operations or our suppliers’ operations, demand for our products and ~~components. As expected, inventory balances declined over~~ the ~~third quarter~~timing and ~~we expect inventory to further decline over the remainder~~effectiveness of the ~~year as we align our production~~global measures deployed to ~~current demand levels. It is possible we may temporarily close one or more~~fight COVID-19, all of ~~our facilities for the health~~which remain uncertain and safety of our employees before the COVID-19 crisis is over. We have significant cash balances of approximately $65.1 million at September 30, 2020, and we believe we are well positioned to navigate the uncertainty ahead.cannot be predicted.

Operating activities. Trends in cash flows from operating activities, excluding changes in assets and liabilities, have generally been similar to the trends in operating earnings. Changes in assets and liabilities result primarily from the timing of production, sales and purchases. Changes in assets and liabilities generally tend to even out over time. However, period-to-period relative changes in assets and liabilities can significantly affect the comparability of cash flows from operating activities.

~~Net~~Our net cash provided by operating activities for the first nine months of ~~2020~~2021 decreased by ~~$3.2~~$1.2 million as compared to the first nine months of ~~2019. Changes in working capital were not material.~~2020. The decrease is primarily due to the net effects of:

Relative changes in working capital can have a significant effect on cash flows from operating activities. As shown below, the change in our average days sales outstanding from December 31, ~~2019~~2020 to September 30, ~~2020~~2021 varied by segment, primarily as a result of relative changes in the timing of ~~collections.~~collections but is in line with prior year on a consolidated basis. For comparative purposes, we have provided December 31, ~~2018~~2019 and September 30, ~~2019~~2020 numbers below.

Our average number of days in inventory increased from December 31, 2020 to September 30, 2021 due to increased raw material and production costs as well as increased purchases of certain components and raw materials that have longer lead times or for which we have experienced availability issues. For comparative purposes, we have provided December 31, 2019 and September 30, 2020 numbers below.

~~Our total average~~number of days in inventory increased from December 31, 2019 to September 30, 2020 as Security Products inventory, which was unusually high during the second quarter and had not yet fully returned to normalized levels at September 30. Conversely, the average number of days in inventory for Marine Components decreased primarily as a result of rapid sales growth for the quarter. For comparative purposes, we have provided December 31, 2018 and September 30, 2019 numbers below.

Investing activities. Our capital expenditures were $2.3 million in the first nine months of 2021 compared to $1.3 million in the first nine months of ~~2020 compared to $2.5 million~~2020. We limited expenditures in ~~the first nine months of 2019 as we have~~ ~~limited expenditures~~2020 to those required to meet our expected customer demand and those required to properly maintain our facilities and technology infrastructure as a result of the COVID-19 ~~pandemic~~pandemic. Our capital expenditures in the first nine months of 2021 are in line with pre-pandemic levels. During the first nine months of 2021, Valhi repaid a net $7.7 million under the promissory note ($25.4 million of gross borrowings and $33.1 million of gross repayments). During the first nine months of 2020, Valhi borrowed a net $2.4 million under the promissory note ($25.2 million of gross borrowings and $22.8 million of gross repayments). ~~During the first nine months of 2019, Valhi borrowed a net $2.7 million under the promissory note ($28.1 million of gross borrowings and $25.4 million of gross repayments).~~ See Note 89 to the Condensed Consolidated Financial Statements.

Financing activities. ~~Financing activities consisted only of quarterly cash dividends.~~ In ~~February 2020,~~March 2021, our board of directors increased our regular quarterly dividend from ~~$.07~~$.10 per share to ~~$.10~~$.20 per share beginning in the first quarter of ~~2020.~~2021. The declaration and payment of future dividends and the amount thereof, if any, is discretionary and is dependent upon our results of operations, financial condition, cash requirements for our businesses, contractual requirements and restrictions and other factors deemed relevant

by our board of directors. The amount and timing of past dividends is not necessarily indicative of the amount or timing of any future dividends which we might pay.

In addition, during the first quarter of 2021, we acquired 50,000 shares of our Class A common stock in a market transaction for $0.8 million.

Liquidity. Our primary source of liquidity on an ongoing basis is our cash flow from operating activities, which is generally used to (i) fund capital expenditures, (ii) repay short-term or long-term indebtedness incurred primarily for capital expenditures, investment

activities or reducing our outstanding stock, (iii) provide for the payment of dividends (if declared), and (iv) lend to affiliates. From time-to-time, we will incur indebtedness, primarily to fund capital expenditures or business combinations.

Periodically, we evaluate liquidity requirements, alternative uses of capital, capital needs and available resources in view of, among other things, our capital expenditure requirements, dividend policy and estimated future operating cash flows. As a result of this process, we have in the past and may in the future seek to raise additional capital, refinance or restructure indebtedness, issue additional securities, modify our dividend policy or take a combination of such steps to manage our liquidity and capital resources. In the normal course of business, we may review opportunities for acquisitions, joint ventures or other business combinations in the component products industry. In the event of any such transaction, we may consider using available cash, issuing additional equity securities or increasing our indebtedness or that of our subsidiaries.

We believe that cash generated from operations together with cash on hand, as well as our ability to obtain external financing, will be sufficient to meet our liquidity needs for working capital, capital expenditures, debt service, dividends (if declared) and any amounts we might loan from time to time under the terms of our revolving loan to Valhi discussed in Note 89 to our Condensed Consolidated Financial Statements (which loans would be solely at our discretion) for both the next 12 months and five years. To the extent that our actual operating results or other developments differ from our expectations, our liquidity could be adversely affected.

All of our ~~$65.1~~$76.0 million aggregate cash and cash equivalents at September 30, ~~2020~~2021 were held in the U.S.

Capital ~~Expenditures.~~expenditures. Firm purchase commitments for capital projects in process at September 30, ~~2020~~2021 totaled ~~$0.2~~$2.1 million. Our ~~2020~~2021 capital investments are ~~limited to those~~primarily expenditures ~~required~~ to meet our expected customer demand, improve capacity and ~~those required to~~efficiency and properly maintain our facilities and technology infrastructure. ~~It is possible~~

Stock repurchase program. During the first quarter of 2021, we ~~will curtail or eliminate planned capital projects based on~~purchased 50,000 shares of our Class A common stock in a market ~~conditions.~~transaction. At September 30, 2021, we have 627,547 shares available for repurchase under a stock repurchase program authorized by our board of directors. See Note 7 to our Condensed Consolidated Financial Statements.

Commitments and ~~Contingencies.~~contingencies. There have been no material changes in our contractual obligations since we filed our ~~2019~~2020 Annual Report and we refer you to that report for a complete description of these commitments.

There have been no changes in the first nine months of ~~2020~~2021 with respect to our critical accounting policies presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our ~~2019~~2020 Annual Report.

We are exposed to market risk from changes in interest rates and raw material prices. There have been no material changes in these market risks since we filed our ~~2019~~2020 Annual Report, and we refer you to Part I, Item 7A – “Quantitative and Qualitative Disclosure About Market Risk” in our ~~2019~~2020 Annual Report. See also Note 78 to the Condensed Consolidated Financial Statements.

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures which, as defined in Exchange Act Rule 13a-15(e), means controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934, as amended (the “Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and

procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit to the SEC under the Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions to be made regarding required disclosure. Our management with the participation of Scott C. James, our President and Chief

Executive Officer, and ~~Amy Allbach Samford,~~Michael S. Simmons, our Senior Vice President and Chief Financial Officer, has evaluated the design and operating effectiveness of our disclosure controls and procedures as of September 30, ~~2020.~~2021. Based upon their evaluation, these executive officers have concluded that our disclosure controls and procedures are effective as of the date of such evaluation.

Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting which, as defined in Exchange Act Rule 13a-15(f), means a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting during the quarter ended September 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Reference is made to the ~~2019~~2020 Annual Report ~~and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020~~ for a discussion of risk factors related to our businesses.

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 thereunto duly authorized.

Delaware		57-0981653
(State or other jurisdiction of Incorporation or organization)		(IRS Employer Identification No.)
5430 LBJ Freeway, Suite 1700, Three Lincoln Centre, Dallas, Texas		75240-2620
(Address of principal executive offices)		(Zip Code)

Part I.	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets – December 31, ~~2019~~2020 and September 30, ~~2020~~2021 (unaudited)	- 3 -
	Condensed Consolidated Statements of Income (unaudited) – Three and nine months ended September 30, ~~2019~~2020 and ~~2020~~2021	- 4 -
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three and nine months ended September 30, ~~2019~~2020 and ~~2020~~2021	- 5 -
	Condensed Consolidated Statements of Cash Flows (unaudited) -– Nine months ended September 30, ~~2019~~2020 and ~~2020~~2021	- 6 -
	Notes to Condensed Consolidated Financial Statements (unaudited)	- 7 -
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	- 11 -
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	- 16 -
Item 4.	Controls and Procedures	- 16 -
Part II.	OTHER INFORMATION
Item 1A.	Risk Factors	- 18 -
Item 6.	Exhibits	- 18 -
Items 2, 3, 4 and 5 of Part II are omitted because there is no information to report.

	December 31,		September 30,		December 31,		September 30,
	2019		2020		2020		2021
	(In thousands)				(In thousands)
Accounts payable:
Security Products	$	1,975	$	2,040	$	1,859	$	3,136
Marine Components		539		653		773		1,366
Accrued liabilities:
Employee benefits		8,331		7,010		8,431		8,137
Taxes other than on income						301		588
Customer tooling		264		184		393		527
Taxes other than on income		350		701
Other		619		487		441		540
Total accounts payable and accrued liabilities	$	12,078	$	11,075	$	12,198	$	14,294

Days Sales Outstanding:	December 31, ~~2018~~2019	September 30, 2020	December 31, 2020	September 30, 2021
Security Products	38 Days	41 Days	35 Days	42 Days
Marine Components	27 Days	35 Days	24 Days	33 Days
Consolidated CompX	36 Days	39 Days	33 Days	40 Days

Days in Inventory:	December 31, 2019	September 30, 2020
~~Security Products~~	~~43 Days~~	~~44 Days~~	~~38 Days~~	~~41 Days~~
~~Marine Components~~	~~30 Days~~	~~32 Days~~	~~27 Days~~	~~35 Days~~
~~Consolidated CompX~~	~~40 Days~~	~~41 Days~~	~~36 Days~~	~~39 Days~~

~~Days in Inventory:~~		December 31, ~~2018~~2020		September 30, ~~2019~~		~~December 31, 2019~~	~~September 30, 2020~~2021
Security Products		~~77 Days~~		~~83 Days~~		76 Days	85 Days
~~Marine Components~~	75 Days		91 Days
	~~90 Days~~Marine Components		100 Days		77 Days
~~Consolidated CompX~~		8075 Days		8590 Days
Consolidated CompX		81 Days		83 Days		75 Days	91 Days

Item No.		Exhibit Index

31.1		Certification
31.2		Certification
32.1		Certification
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	COMPX INTERNATIONAL INC.
	(Registrant)

Date: November ~~4, 2020~~3, 2021	By:	/s/ ~~Amy Allbach Samford~~Michael S. Simmons
		~~Amy Allbach Samford~~Michael S. Simmons
		Senior Vice President and Chief Financial Officer


	By:	/s/ Amy E. Ruf
		Amy E. Ruf
		Vice President and Controller