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PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
CompX International Inc. David A. Bowers
5430 LBJ Freeway, Suite 1700 President & CEO
Dallas, Texas 75240 Tel. 864-286-1122
COMPX REPORTS HIGHER SALES, PROFITS
FOR FIRST QUARTER 2005
Dallas, TEXAS ... May 2, 2005 ... CompX International Inc. (NYSE: CIX) announced
today sales of $46.8 million for the first quarter of 2005, a 7% increase from
$43.6 million in the comparable 2004 quarter. Income from continuing operations
for the first quarter of 2005 increased 42% to $2.2 million, or $0.14 per
diluted share, from $1.6 million, or $0.10 per diluted share, in the comparable
2004 quarter. Operating income increased from $2.3 million in the first quarter
of 2004 to $4.2 million in the first quarter of 2005 due to the net effect of a
favorable change in product mix for security products, higher raw material costs
and the continuing benefit of cost control initiatives previously undertaken.
"We are pleased to see many of the markets we serve experiencing increased
strength in the past quarter. Improved margins resulted from a change in product
mix, as volumes increased on more profitable products," commented David A.
Bowers, President & CEO. "Also adding to the improvement in profitability is our
continued focus on cost control and production efficiency."
Due to certain limitations on the utilization of foreign tax credits, the
Company's effective income tax rate was higher in the first quarter of 2005 as
compared to the same period of 2004.
On January 24, 2005, CompX completed the sale of its Thomas Regout operations in
Europe for approximately $22.3 million in net proceeds which included cash (net
of expenses) of approximately $18.1 million at closing and a subordinated note
for approximately $4.2 million payable over a period of four years. Accordingly,
the results of the European operations of Thomas Regout (which reported a
nominal amount of net income in the first quarter of 2004) are classified as
discontinued operations for all periods presented. Discontinued operations in
2005 relates primarily to additional expenses associated with the disposal of
the Thomas Regout operations. The net proceeds from the sale approximated the
net realizable value previously estimated.
Mr. Bowers concluded, "With the sale of the Thomas Regout operations completed
and a positive start for 2005, we are allocating significant management effort
to areas that will provide new opportunities for growth and diversification. The
proceeds from the Thomas Regout sale, as well as borrowing availability under
our credit agreement, provide the liquidity to take advantage of new
opportunities as they are identified."
CompX is a leading manufacturer of precision ball bearing slides, security
products and ergonomic computer support systems. It operates from seven
locations in the U.S., Canada and Taiwan and employs more than 1,400 people.
Statements in this release relating to matters that are not historical facts are
forward-looking statements based upon management's belief and assumptions using
currently available information. Although CompX believes the expectations
reflected in such forward-looking statements are reasonable, it cannot give any
assurances that these expectations will prove to be correct. Such statements, by
their nature, involve substantial risks and uncertainties that could
significantly impact expected results, and actual future results could differ
materially from those described in such forward-looking statements. While it is
not possible to identify all factors, CompX continues to face many risks and
uncertainties. Among the factors that could cause actual future results to
differ materially include, but are not limited to, general economic and
political conditions, demand for office furniture, service industry employment
levels, competitive products and prices, fluctuations in currency exchange
rates, the introduction of trade barriers, potential difficulties in integrating
completed acquisitions, the timing and amount of future cost savings from
restructuring actions, the ability to sustain or increase operating income
improvement resulting from cost control initiatives, uncertainties associated
with new product development and other risks and uncertainties detailed in
CompX's Securities and Exchange Commission filings. Should one or more of these
risks materialize (or the consequences of such a development worsen), or should
the underlying assumptions prove incorrect, actual results could differ
materially from those forecast or expected. CompX disclaims any intention or
obligation to publicly update or revise such statements whether as a result of
new information, future events or otherwise.
* * * * *
COMPX INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three months ended
March 31,
-----------------------------
2004 2005
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Net sales $ 43.6 $ 46.8
Cost of goods sold 35.2 36.5
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Gross margin 8.4 10.3
Selling, general and administrative 6.1 6.1
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Operating income 2.3 4.2
Interest expense (0.2) (0.1)
Other general corporate income 0.6 0.2
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Income from continuing operations
before income taxes 2.7 4.3
Income tax expense 1.1 2.1
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Income from continuing operations 1.6 2.2
Discontinued operations, net of tax - (0.5)
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Net income $ 1.6 $ 1.7
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Net income per diluted common share
Continuing operations $ 0.10 $ 0.14
Discontinued operations 0.00 (0.03)
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$ 0.10 $ 0.11
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Weighted average diluted common
shares outstanding 15.1 15.2
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COMPX INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
December 31, March 31,
2004 2005
----------------- --------------
Assets (Unaudited)
Current assets:
Cash and equivalents $ 16.8 $ 30.4
Accounts receivable, net 19.2 21.6
Inventories 20.8 20.8
Prepaid expenses and other 1.5 2.1
Deferred income taxes 1.4 1.6
Assets held for sale 18.0 -
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Total current assets 77.7 76.5
Intangibles 30.7 30.8
Net property and equipment 66.1 68.7
Note receivable - 4.2
Assets held for sales 11.0 -
Other assets 0.2 0.2
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Total assets $ 185.7 $ 180.4
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 17.7 $ 18.1
Accrued income taxes and other 2.7 0.9
Liabilities related to assets held for sale 5.0 -
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Total current liabilities 25.4 19.0
Long-term debt 0.1 0.1
Deferred income taxes 4.9 5.0
Stockholders' equity 155.3 156.3
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Total liabilities and stockholders' equity $ 185.7 $ 180.4
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