VALHI REPORTS SECOND QUARTER RESULTS
DALLAS, TEXAS . . July 24, 1997 . . Valhi, Inc. (NYSE: VHI) reported income
from continuing operations of $2.6 million, or $.02 per share, for the second
quarter of 1997 compared to income of $5.5 million, or $.05 per share, in the
second quarter of 1996. For the first six months of 1997, Valhi reported a loss
from continuing operations of $20.5 million, or $.18 per share, compared to
income of $14.1 million, or $.12 per share, in the first six months of 1996.
The 1997 year-to-date loss includes a $30 million first quarter pre-tax charge
($19.5 million, or $.17 per share, net-of-tax), included in general corporate
expenses, related to the adoption of a new accounting standard regarding
accounting for environmental remediation liabilities at NL Industries, Inc.
Chemicals operating income at 56%-owned NL Industries in the second quarter
of 1997, while lower than the second quarter of 1996, increased $10.4 million
compared to the first quarter of 1997 due primarily to higher average selling
prices for titanium dioxide pigments ("TiO2"). Average TiO2 selling prices for
the second quarter of 1997 were 3% higher than the first quarter of 1997 and 8%
lower than the second quarter of 1996. Selling prices at the end of the second
quarter of 1997 were 1% higher than the average for the quarter. NL achieved
record second quarter and first six months TiO2 sales volume reflecting
continued strong TiO2 demand, as second quarter and six month sales volumes
increased 9% and 14%, respectively, from the year-earlier periods, with higher
volumes worldwide. NL expects further increases in its TiO2 selling prices
during the second half of 1997. In other operations, the Company's component
products business reported higher sales and operating income due primarily to
higher volumes in all three of its major product lines (ergonomic workstations,
drawer slides and locks).
Securities earnings increased in 1997 due to cash distributions received
from The Amalgamated Sugar Company LLC, which are reported as dividend income,
as well as a higher level of funds available for investment, including interest
earned on the debt financing Valhi provided to Snake River Sugar Company.
Interest expense increased in 1997 due primarily to Valhi's loans from Snake
River.
Discontinued operations include both the results of Medite Corporation's
building products operations and Sybra, Inc.' s fast food operations, and in the
second quarter of 1997 include a net-of-tax gain on disposal of approximately
$19 million related to the previously-reported disposition of the Company's fast
food operations.
The extraordinary loss relates to the write-off of unamortized deferred
financing costs resulting from the early retirement of $27.6 million of Valcor's
9 5/8% Senior Notes in connection with the tender offer completed in April 1997.
The statements in this release relating to matters that are not historical
facts are forward-looking statements that involve risks and uncertainties,
including, but not limited to, future supply and demand for the Company's
products (including cyclicality thereof), future global economic conditions,
changes in government regulations, competitive products, customer and competitor
strategies, the impact of pricing and production decisions, environmental
matters, the ultimate resolution of pending litigation and any possible future
litigation, completion of pending asset/business unit dispositions and other
risks and uncertainties detailed in the Company's SEC filings.
Valhi, Inc. is engaged in the chemicals, component products and waste
management industries.
* * * * *
VALHI, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(Unaudited)
(In millions, except earnings per share)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996* 1997 1996* 1997
NET SALES
Chemicals $263.2 $252.7 $503.6 $492.2
Component products 21.7 27.5 42.9 53.3
$284.9 $280.2 $546.5 $545.5
OPERATING INCOME
Chemicals $ 30.8 $ 23.9 $ 67.4 $ 37.4
Component products 5.0 6.9 9.4 13.2
TOTAL OPERATING INCOME 35.8 30.8 76.8 50.6
Equity in Waste Control Specialists (1.3) (2.8) (2.4) (5.5)
Equity in Amalgamated 1.0 - 4.6 -
General corporate items, net:
Securities earnings 2.4 16.6 5.1 31.3
Expenses, net (2.1) (8.2) (8.8) (43.1)
Interest expense (24.3) (30.6) (49.1) (61.3)
Income (loss) before taxes 11.5 5.8 26.2 (28.0)
Income taxes (benefit) 3.7 3.2 7.5 (7.5)
Minority interest 2.3 -
INCOME (LOSS) FROM CONTINUING 5.5 2.6 14.1 (20.5)
OPERATIONS
Discontinued operations 3.3 19.8 (11.0) 35.4
Extraordinary item - (.4) - (.4)
NET INCOME $ 8.8 $ 22.0 $ 3.1 $ 14.5
INCOME (LOSS) PER COMMON SHARE
Continuing operations $ .05 $ .02 $ .12 $ (.18)
Discontinued operations .03 .17 (.09) .31
Extraordinary item - -
NET INCOME $ .08 $ .19 $ .03 $ .13
Weighted average common shares 114.6 115.0 114.6 114.9
outstanding
[FN]
*Reclassified.