CompX International (CIX) 10-Q 4 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 28, 2016
Document And Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	CIX
Entity Registrant Name	COMPX INTERNATIONAL INC
Entity Central Index Key	1,049,606
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Class A Common Stock
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		2,411,107
Class B Common Stock
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		10,000,000

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 48,058	$ 52,347
Accounts receivable, net	11,875	8,760
Inventories, net	14,419	15,098
Prepaid expenses and other	1,380	704
Total current assets	75,732	76,909
Other assets:
Goodwill	23,742	23,742
Other noncurrent	590	590
Total other assets	24,332	24,332
Property and equipment:
Land	4,928	4,928
Buildings	21,231	21,231
Equipment	64,233	63,539
Construction in progress	2,116	1,567
Gross property and equipment	92,508	91,265
Less accumulated depreciation	58,623	57,714
Net property and equipment	33,885	33,551
Total assets	133,949	134,792
Current liabilities:
Accounts payable and accrued liabilities	8,575	11,618
Income taxes payable to affiliates	1,118	470
Total current liabilities	9,693	12,088
Noncurrent liabilities -
Deferred income taxes	$ 4,973	$ 5,001
Stockholders' equity:
Preferred stock
Additional paid-in capital	$ 55,422	$ 55,422
Retained earnings	63,737	62,157
Total stockholders' equity	119,283	117,703
Total liabilities and stockholders’ equity	$ 133,949	$ 134,792
Commitments and contingencies (Note 1)
Class A Common Stock
Stockholders' equity:
Common stock	$ 24	$ 24
Total stockholders' equity	24	24
Class B Common Stock
Stockholders' equity:
Common stock	100	100
Total stockholders' equity	$ 100	$ 100

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net sales	$ 27,075	$ 27,891
Cost of goods sold	18,870	19,325
Gross profit	8,205	8,566
Selling, general and administrative expense	4,852	4,866
Operating income	3,353	3,700
Interest income	32	9
Income before taxes	3,385	3,709
Provision for income taxes	1,185	1,295
Net income	$ 2,200	$ 2,414
Basic and diluted net income per common share	$ 0.18	$ 0.19
Cash dividends per share	$ 0.05	$ 0.05
Basic and diluted weighted average shares outstanding	12,411	12,404

CONDENSED CONSOLIDATED STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 2,200	$ 2,414
Depreciation and amortization	909	886
Deferred income taxes	(28)	(101)
Other, net	58	80
Change in assets and liabilities:
Accounts receivable, net	(3,121)	(3,427)
Inventories, net	627	(34)
Accounts payable and accrued liabilities	(3,066)	(3,537)
Accounts with affiliates	648	688
Prepaids and other, net	(675)	26
Net cash used by operating activities	(2,448)	(3,005)
Cash flows from investing activities -
Capital expenditures	(1,221)	(790)
Cash flows from financing activities -
Dividends paid	(620)	(620)
Cash and cash equivalents - net change from:
Operating, investing and financing activities	(4,289)	(4,415)
Balance at beginning of period	52,347	45,570
Balance at end of period	48,058	41,155
Supplemental disclosures - cash paid for:
Income taxes	$ 565	$ 701

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Additional paid-in Capital	Retained Earnings
Balance at Dec. 31, 2015	$ 117,703	$ 24	$ 100	$ 55,422	$ 62,157
Net income	2,200				2,200
Cash dividends	(620)				(620)
Balance at Mar. 31, 2016	$ 119,283	$ 24	$ 100	$ 55,422	$ 63,737

Organization and Basis of Prese

Organization and Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Basis of Presentation	Note 1 – Organization and basis of presentation: Organization . We (NYSE MKT: CIX) are 87% owned by NL Industries, Inc. (NYSE: NL) at March 31, 2016. We manufacture and sell component products (security products and recreational marine components). At March 31, 2016, Valhi, Inc. (NYSE: VHI) owns 83% of NL’s outstanding common stock and a wholly-owned subsidiary of Contran Corporation owns 93% of Valhi’s outstanding common stock. All of Contran’s outstanding voting stock is held by a family trust established for the benefit of Lisa K. Simmons and Serena Simmons Connelly and their children, for which Ms. Simmons and Ms. Connelly are co-trustees, or is held directly by Ms. Simmons and Ms. Connelly or entities related to them. Consequently, Ms. Simmons and Ms. Connelly may be deemed to control 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, 2015 that we filed with the Securities and Exchange Commission (“SEC”) on March 3, 2016 (the “2015 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, 2015 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, 2015) 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 period ended March 31, 2016 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 2015 Consolidated Financial Statements contained in our 2015 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 March 31 and December 31, as applicable. Unless otherwise indicated, references in this report to “we”, “us” or “our” refer to CompX International Inc. and its subsidiaries, taken as a whole.

Business Segment Information

Business Segment Information	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Business Segment Information	Note 2 – Business segment information: Three months ended March 31, 2015 2016 (In thousands) Net sales: Security Products $ 24,658 $ 23,414 Marine Components 3,233 3,661 Total net sales $ 27,891 $ 27,075 Operating income (loss): Security Products $ 4,946 $ 4,471 Marine Components 259 334 Corporate operating expenses (1,505 ) (1,452 ) Total operating income 3,700 3,353 Interest income 9 32 Income before taxes $ 3,709 $ 3,385 Intersegment sales are not material.

Accounts Receivable, Net

Accounts Receivable, Net	3 Months Ended
	Mar. 31, 2016
Receivables [Abstract]
Accounts Receivable, Net	Note 3 – Accounts receivable, net: December 31, March 31, 2015 2016 (In thousands) Accounts receivable, net: Security Products $ 7,995 $ 10,482 Marine Components 852 1,471 Allowance for doubtful accounts (87 ) (78 ) Total accounts receivable, net $ 8,760 $ 11,875

Inventories, Net

Inventories, Net	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventories, Net	Note 4 – Inventories, net: December 31, March 31, 2015 2016 (In thousands) Raw materials: Security Products $ 2,426 $ 2,473 Marine Components 381 367 Total raw materials 2,807 2,840 Work-in-process: Security Products 7,732 7,601 Marine Components 1,614 1,445 Total work-in-process 9,346 9,046 Finished goods: Security Products 2,041 1,784 Marine Components 904 749 Total finished goods 2,945 2,533 Total inventories, net $ 15,098 $ 14,419

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	3 Months Ended
	Mar. 31, 2016
Payables And Accruals [Abstract]
Accounts Payable and Accrued Liabilities	Note 5 – Accounts payable and accrued liabilities: December 31, March 31, 2015 2016 (In thousands) Accounts payable $ 2,671 $ 3,018 Accrued liabilities: Employee benefits 7,652 3,951 Taxes other than on income 253 436 Customer tooling 320 325 Professional 75 228 Insurance 244 186 Other 403 431 Total accounts payable and accrued liabilities $ 11,618 $ 8,575

Provision for Income Taxes

Provision for Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Provision for Income Taxes	Note 6 – Provision for income taxes: Three months ended March 31, 2015 2016 (In thousands) Expected tax expense, at the U.S. federal statutory income tax rate of 35% $ 1,298 $ 1,185 Domestic production activities deduction (120 ) (105 ) State income taxes 110 98 Other, net 7 7 Total income tax expense $ 1,295 $ 1,185

Financial Instruments

Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Financial Instruments	Note 7 – Financial instruments: The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure: December 31, March 31, 2015 2016 Carrying Fair Carrying Fair amount value amount value (In thousands) Cash and cash equivalents $ 52,347 $ 52,347 $ 48,058 $ 48,058 Accounts receivable, net 8,760 8,760 11,875 11,875 Accounts payable 2,671 2,671 3,018 3,018 Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value.

Recent Accounting Pronouncement

Recent Accounting Pronouncements Not Yet Adopted	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]
Recent Accounting Pronouncements Not Yet Adopted	Note 8 – Recent accounting pronouncements not yet adopted: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606)

Organization and Basis of Pre14

Organization and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization	Organization . We (NYSE MKT: CIX) are 87% owned by NL Industries, Inc. (NYSE: NL) at March 31, 2016. We manufacture and sell component products (security products and recreational marine components). At March 31, 2016, Valhi, Inc. (NYSE: VHI) owns 83% of NL’s outstanding common stock and a wholly-owned subsidiary of Contran Corporation owns 93% of Valhi’s outstanding common stock. All of Contran’s outstanding voting stock is held by a family trust established for the benefit of Lisa K. Simmons and Serena Simmons Connelly and their children, for which Ms. Simmons and Ms. Connelly are co-trustees, or is held directly by Ms. Simmons and Ms. Connelly or entities related to them. Consequently, Ms. Simmons and Ms. Connelly may be deemed to control Contran, Valhi, NL and us.
Basis of Presentation	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, 201 5 that we filed with the Securities and Exchange Commission (“SEC”) on March 3, 2016 (the “2015 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, 2015 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, 2015) 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 period ended March 31, 2016 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 2015 Consolidated Financial Statements contained in our 2015 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 March 31 and December 31, as applicable. Unless otherwise indicated, references in this report to “we”, “us” or “our” refer to CompX International Inc. and its subsidiaries, taken as a whole.

Business Segment Information (T

Business Segment Information (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Schedule of Business Segment Information	Three months ended March 31, 2015 2016 (In thousands) Net sales: Security Products $ 24,658 $ 23,414 Marine Components 3,233 3,661 Total net sales $ 27,891 $ 27,075 Operating income (loss): Security Products $ 4,946 $ 4,471 Marine Components 259 334 Corporate operating expenses (1,505 ) (1,452 ) Total operating income 3,700 3,353 Interest income 9 32 Income before taxes $ 3,709 $ 3,385

Accounts Receivable, Net (Table

Accounts Receivable, Net (Tables)	3 Months Ended
	Mar. 31, 2016
Receivables [Abstract]
Schedule of Accounts Receivable, Net	December 31, March 31, 2015 2016 (In thousands) Accounts receivable, net: Security Products $ 7,995 $ 10,482 Marine Components 852 1,471 Allowance for doubtful accounts (87 ) (78 ) Total accounts receivable, net $ 8,760 $ 11,875

Inventories, Net (Tables)

Inventories, Net (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventories, Net	December 31, March 31, 2015 2016 (In thousands) Raw materials: Security Products $ 2,426 $ 2,473 Marine Components 381 367 Total raw materials 2,807 2,840 Work-in-process: Security Products 7,732 7,601 Marine Components 1,614 1,445 Total work-in-process 9,346 9,046 Finished goods: Security Products 2,041 1,784 Marine Components 904 749 Total finished goods 2,945 2,533 Total inventories, net $ 15,098 $ 14,419

Accounts Payable and Accrued 18

Accounts Payable and Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Payables And Accruals [Abstract]
Accounts Payable and Accrued Liabilities	December 31, March 31, 2015 2016 (In thousands) Accounts payable $ 2,671 $ 3,018 Accrued liabilities: Employee benefits 7,652 3,951 Taxes other than on income 253 436 Customer tooling 320 325 Professional 75 228 Insurance 244 186 Other 403 431 Total accounts payable and accrued liabilities $ 11,618 $ 8,575

Provision for Income Taxes (Tab

Provision for Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Provision for Income Taxes	Three months ended March 31, 2015 2016 (In thousands) Expected tax expense, at the U.S. federal statutory income tax rate of 35% $ 1,298 $ 1,185 Domestic production activities deduction (120 ) (105 ) State income taxes 110 98 Other, net 7 7 Total income tax expense $ 1,295 $ 1,185

Financial Instruments (Tables)

Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Carrying Value and Estimated Fair Value of Financial Instruments	The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure: December 31, March 31, 2015 2016 Carrying Fair Carrying Fair amount value amount value (In thousands) Cash and cash equivalents $ 52,347 $ 52,347 $ 48,058 $ 48,058 Accounts receivable, net 8,760 8,760 11,875 11,875 Accounts payable 2,671 2,671 3,018 3,018

Organization and Basis of Pre21

Organization and Basis of Presentation - Additional Information (Detail)	Mar. 31, 2016
NL Industries
Basis Of Presentation And Significant Accounting Policies [Line Items]
Percentage of ownership held by parent company	87.00%
NL Industries | Valhi Inc
Basis Of Presentation And Significant Accounting Policies [Line Items]
Percentage of ownership held by parent company	83.00%
Contran Corporation | Valhi Inc
Basis Of Presentation And Significant Accounting Policies [Line Items]
Percentage of ownership held by parent company	93.00%

Business Segment Information -

Business Segment Information - Schedule of Business Segment Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net sales:
Total net sales	$ 27,075	$ 27,891
Operating income (loss):
Total operating income	3,353	3,700
Interest income	32	9
Income before taxes	3,385	3,709
Operating Segments | Security Products
Net sales:
Total net sales	23,414	24,658
Operating income (loss):
Total operating income	4,471	4,946
Operating Segments | Marine Components
Net sales:
Total net sales	3,661	3,233
Operating income (loss):
Total operating income	334	259
Corporate
Operating income (loss):
Total operating income	$ (1,452)	$ (1,505)

Accounts Receivable, Net - Sche

Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Allowance for doubtful accounts	$ (78)	$ (87)
Total accounts receivable, net	11,875	8,760
Security Products
Accounts Notes And Loans Receivable [Line Items]
Accounts receivable, gross	10,482	7,995
Marine Components
Accounts Notes And Loans Receivable [Line Items]
Accounts receivable, gross	$ 1,471	$ 852

Inventories, Net - Inventories,

Inventories, Net - Inventories, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Total raw materials	$ 2,840	$ 2,807
Total work-in-process	9,046	9,346
Total finished goods	2,533	2,945
Total inventories, net	14,419	15,098
Security Products
Inventory [Line Items]
Total raw materials	2,473	2,426
Total work-in-process	7,601	7,732
Total finished goods	1,784	2,041
Marine Components
Inventory [Line Items]
Total raw materials	367	381
Total work-in-process	1,445	1,614
Total finished goods	$ 749	$ 904

Accounts Payable and Accrued 25

Accounts Payable and Accrued Liabilities - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Payables And Accruals [Abstract]
Accounts payable	$ 3,018	$ 2,671
Accrued liabilities:
Employee benefits	3,951	7,652
Taxes other than on income	436	253
Customer tooling	325	320
Professional	228	75
Insurance	186	244
Other	431	403
Total accounts payable and accrued liabilities	$ 8,575	$ 11,618

Provision for Income Taxes - Pr

Provision for Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Expected tax expense, at the U.S. federal statutory income tax rate of 35%	$ 1,185	$ 1,298
Domestic production activities deduction	(105)	(120)
State income taxes	98	110
Other, net	7	7
Total income tax expense	$ 1,185	$ 1,295

Provision for Income Taxes - 27

Provision for Income Taxes - Provision for Income Taxes (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	35.00%	35.00%

Financial Instruments - Carryin

Financial Instruments - Carrying Value and Estimated Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Cash and cash equivalents, Carrying amount	$ 48,058	$ 52,347	$ 41,155	$ 45,570
Accounts receivable, net, Carrying amount	11,875	8,760
Accounts payable, Carrying amount	3,018	2,671
Cash and cash equivalents, Fair value	48,058	52,347
Accounts receivable, net, Fair value	11,875	8,760
Accounts payable, Fair value	$ 3,018	$ 2,671