COMPX REPORTS THIRD QUARTER 2024 RESULTS

Rhea-AI Summary

CompX International reported Q3 2024 financial results showing declining performance across key metrics. Sales decreased to $33.6 million from $40.3 million in Q3 2023. Operating income fell to $3.3 million from $6.6 million, while net income dropped to $3.5 million ($0.28 per share) from $5.8 million ($0.47 per share). The decline was primarily attributed to lower Security Products sales to a government security customer and reduced Marine Components sales in the towboat market. Year-to-date sales through September 30, 2024, were $107.5 million, down from $118.1 million in 2023.

Positive

• Interest and investment income contributed positively to net income

Negative

• Q3 2024 sales decreased 16.6% year-over-year to $33.6 million
• Q3 2024 operating income dropped 50% to $3.3 million
• Q3 2024 EPS declined 40.4% to $0.28 per share
• Nine-month sales decreased 9% to $107.5 million
• Lower sales and gross margins in both Security Products and Marine Components segments
• Loss of government security customer pilot project

Insights

Financial Analyst

CompX's Q3 2024 results show concerning declines across key metrics. Sales dropped by 16.6% to $33.6 million, while operating income fell by 50% to $3.3 million. The earnings per share decreased by 40.4% to $0.28.

The decline stems from two main factors: the loss of a government security customer's pilot project and reduced towboat market sales. The company's gross margins contracted in both Security Products and Marine Components divisions, suggesting pricing pressure and operational inefficiencies. With a market cap of $361 million, the company's year-to-date performance shows similar weakness, with revenue down 9% and net income declining by 23.9%.

Dallas, Texas, Nov. 06, 2024 (GLOBE NEWSWIRE) -- CompX International Inc. (NYSE American: CIX) announced today sales of $33.6 million for the third quarter of 2024 compared to $40.3 million in the same period of 2023. Operating income was $3.3 million in the third quarter of 2024 compared to $6.6 million in the same period of 2023. Net income was $3.5 million, or $.28 per basic and diluted common share, for the third quarter of 2024 compared to $5.8 million, or $.47 per basic and diluted common share, in the same period of 2023.

For the nine months ended September 30, 2024, sales were $107.5 million compared to $118.1 million in the previous year. Operating income was $12.1 million for the first nine months of 2024 compared to $18.0 million for the same period in 2023. Net income for the nine months ended September 30, 2024 was $12.1 million, or $.98 per basic and diluted share, compared to $15.9 million, or $1.29 per basic and diluted share, for the same period in 2023.

Third quarter 2024 net sales decreased over the comparable 2023 period predominantly due to lower Security Products sales to a government security customer and to a lesser extent lower Marine Components sales primarily to the towboat market. Security Products third quarter 2023 net sales include sales to a government security customer for a pilot project that did not continue in 2024. Net sales decreased for the first nine months of 2024 compared to the same period in 2023 primarily due to lower Marine Components sales to the towboat market. Operating income decreased in the third quarter of 2024 compared to the same period in 2023 due to lower sales and gross margin at both Security Products and Marine Components. Operating income decreased in the first nine months of 2024 compared to the same period in 2023 primarily due to lower Marine Components sales and gross margin.

CompX is a leading manufacturer of security products and recreational marine components. It operates from three locations in the U.S. and employs approximately 524 people.

Forward-Looking Statements

The statements in this press release relating to matters that are not historical facts are forward-looking statements that represent management’s belief and assumptions based on currently available information. Although we believe the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will 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 predicted. While it is not possible to identify all factors, we continue to face many risks and uncertainties.

The factors that could cause our actual future results to differ materially include, but are not limited to, the following:

• Future demand for our products,
• Changes in our raw material and other operating costs (such as zinc, brass, aluminum, steel and energy costs) and our ability to pass those costs on to our customers or offset them with reductions in other operating costs,
• Price and product competition from low-cost manufacturing sources (such as China),
• The impact of pricing and production decisions,
• Customer and competitor strategies including substitute products,
• Uncertainties associated with the development of new products and product features,
• Pending or possible future litigation,
• Our ability to protect or defend our intellectual property rights,
• Potential difficulties in integrating future acquisitions,
• Decisions to sell operating assets other than in the ordinary course of business,
• Environmental matters (such as those requiring emission and discharge standards for existing and new facilities),
• The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform,
• Government laws and regulations and possible changes therein including new environmental, health and safety, sustainability or other regulations,
• General global economic and political conditions that disrupt our supply chain, reduce demand or perceived demand for component products or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises),
• Operating interruptions (including, but not limited to labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises);
• Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders; and
• Possible disruption of our business or increases in the cost of doing business resulting from terrorist activities or global conflicts.
  
  

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

Investor Relations Contact

Bryan A. Hanley
Senior Vice President and Treasurer
Tel. 972-233-1700

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COMPX INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)

	Three months ended						Nine months ended
	September 30,						September 30,
	2023			2024			2023			2024
	(unaudited)
Net sales	$	40.3		$	33.6		$	118.1		$	107.5
Cost of sales		27.7			24.1			82.5			77.2
Gross margin		12.6			9.5			35.6			30.3
Selling, general and administrative expense		6.0			6.2			17.6			18.2
Operating income		6.6			3.3			18.0			12.1
Interest income		1.1			1.3			3.0			3.8
Income before taxes		7.7			4.6			21.0			15.9
Provision for income taxes		1.9			1.1			5.1			3.8
Net income	$	5.8		$	3.5		$	15.9		$	12.1
Basic and diluted net income per common share	$	.47		$	.28		$	1.29		$	.98
Weighted average diluted common shares outstanding		12.3			12.3			12.3			12.3

FAQ

What was CompX International's (CIX) revenue in Q3 2024?

CompX International reported revenue of $33.6 million in Q3 2024, compared to $40.3 million in Q3 2023.

How much did CompX International (CIX) earn per share in Q3 2024?

CompX International earned $0.28 per basic and diluted share in Q3 2024, down from $0.47 in Q3 2023.

What caused CompX International's (CIX) sales decline in Q3 2024?

The sales decline was primarily due to lower Security Products sales to a government security customer and reduced Marine Components sales to the towboat market.

What were CompX International's (CIX) year-to-date sales as of September 30, 2024?

CompX International's sales for the first nine months of 2024 were $107.5 million, compared to $118.1 million in the same period of 2023.