NL INDUSTRIES INC

Previous wording

Our net income attributable to NL stockholders was $.3 million, or $.01 per share, in the second quarter of 2025 compared to $7.9 million, or $.16 per share, in the second quarter of 2024. As more fully described below, the decrease in our net income attributable to NL stockholders from 2024 to 2025 is primarily due to the net effects of:

Current wording

Our net loss attributable to NL stockholders was $7.8 million, or $.16 per share, in the third quarter of 2025 compared to net income attributable to NL stockholders of $36.0 million, or $.74 per share, in the third quarter of 2024. As more fully described below, the decrease in our earnings attributable to NL stockholders from 2024 to 2025 is primarily due to the net effects of:

Previous wording

Our 2024 net income per share attributable to NL includes a loss of $.01 per share due to Kronos’recognition of an aggregate charge related to a write-off of deferred financing costs.

Current wording

Our 2024 net income per share attributable to NL stockholders includes:

Previous wording

Six months ended June 30, 2025 compared to six months ended June 30, 2024

Current wording

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024

Previous wording

Our net income attributable to NL stockholders was $1.0 million, or $.02 per share, in the first six months of 2025 compared to $14.7 million, or $.30 per share, in the first six months of 2024. As more fully described below, the decrease in our earnings attributable to NL stockholders from 2024 to 2025 is primarily due to the net effects of:

Current wording

Our net loss attributable to NL stockholders was $6.8 million, or $.14 per share, in the first nine months of 2025 compared to net income attributable to NL stockholders of $50.7 million, or $1.04 per share, in the first nine months of 2024. As more fully described below, the decrease in our earnings attributable to NL stockholders from 2024 to 2025 is primarily due to the net effects of:

Previous wording

The following table shows the components of our income before income taxes exclusive of our income from operations.

Current wording

The following table shows the components of our income (loss) before income taxes exclusive of our income from operations.

Previous wording

CompX’s segment profit in the second quarter of 2025 was $6.3 million compared to $5.1 million in the same period of 2024. CompX’s segment profit for the first six months of 2025 was $12.2 million compared to $8.8 million for the comparable prior year period. CompX’s segment profit increased in the second quarter and for the first six months of 2025 due to higher sales and gross margin at each of the Security Products and Marine Components segments.

Current wording

CompX’s segment profit in the third quarter of 2025 was $4.8 million compared to $3.3 million in the same period of 2024. CompX’s segment profit for the first nine months of 2025 was $17.0 million compared to $12.1 million for the comparable prior year period. CompX’s segment profit increased in the third quarter and for the first nine months of 2025 due to higher sales and gross margin at each of the Security Products and Marine Components reporting units.

Previous wording

Net sales– CompX’s sales increased $4.4 million and $6.7 million in the second quarter and for the first six months of 2025, respectively, compared to the same periods in 2024 due to higher Security Products sales to the government security market and higher Marine Component sales to the government and towboat markets. See discussion of reporting units below.

Current wording

Net sales– CompX’s net sales increased $6.4 million and $13.1 million in the third quarter and for the first nine months of 2025, respectively, compared to the same periods in 2024 due to higher Security Products sales to the government security market and higher Marine Component sales to various markets including the towboat, government and industrial markets. See discussion of reporting units below.

Previous wording

Cost of sales and gross margin– CompX’s cost of sales as a percentage of sales improved 1% in the second quarter of 2025 compared to the same period in 2024. As a result, CompX’s gross margin as a percentage of sales increased over the same period. CompX’s gross margin percentage increased in the second quarter of 2025 compared to the same period in 2024 primarily due to higher Marine Components gross margin percentage partially offset by lower Security Products gross margin percentage. CompX’s cost of sales as a percentage of sales improved 3% for the first six months of 2025 compared to the same period in 2024. As a result, CompX’s gross margin as a percentage of sales increased over the same period. The increase in CompX’s gross margin percentage for the six-month comparative period is primarily due to higher gross margin percentage at Marine Components, primarily in the first quarter. See discussion of reporting units below.

Current wording

Cost of sales and gross margin– CompX’s cost of sales as a percentage of sales increased .5% in the third quarter of 2025 compared to the same period in 2024. As a result, CompX’s gross margin as a percentage of net sales decreased over the same period. CompX’s gross margin percentage decreased in the third quarter of 2025 compared to the same period in 2024 primarily due to lower Security Products gross margin percentage partially offset by higher Marine Components gross margin percentage. CompX’s cost of sales as a percentage of net sales improved 1.7% for the first nine months of 2025 compared to the same period in 2024. As a result, CompX’s gross margin as a percentage of net sales increased over the same period. The increase in CompX’s gross margin percentage for the nine-month comparative period is primarily due to higher gross margin percentage at Marine Components, partially offset by lower Security Products gross margin percentage. See discussion of reporting units below.

Previous wording

Selling, general and administrative expenses– CompX’s selling, general and administrative expenses consist primarily of personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to CompX’s business unit and corporate management activities, as well as any gains and losses on property and equipment. CompX’s selling, general and administrative expenses for the second quarter and the first six months of 2025 increased $.6 million and $.9 million,

Current wording

Selling, general and administrative expenses– CompX’s selling, general and administrative expenses consist primarily of personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to CompX’s business unit and corporate management activities, as well as any gains and losses on property and equipment. CompX’s selling, general and administrative expenses for the third quarter of 2025 were comparable to the same period in 2024. CompX’s selling, general and administrative expenses for the first nine months of 2025 increased $.9 million compared to the same period in 2024 primarily due to higher employee-related costs including salaries, benefits and medical expenses at both segments. Selling, general and administrative expenses as a percentage of net sales decreased for the third quarter and for the first nine months of 2025 due to higher coverage of operating costs and expenses as a result of higher sales.

Previous wording

Segment profit– As a percentage of net sales, CompX’s segment profit for the second quarter and the first six months of 2025 increased compared to the same periods of 2024 and was primarily impacted by the factors affecting sales, cost of sales, gross margin and selling, general and administrative expenses discussed above. See discussion of reporting units below.

Current wording

Segment profit– As a percentage of net sales, CompX’s segment profit for the third quarter and the first nine months of 2025 increased compared to the same periods of 2024 and was primarily impacted by the factors affecting sales, cost of sales, gross margin and selling, general and administrative expenses discussed above. See discussion of reporting units below.

Previous wording

The key performance indicators for CompX’s reporting units is the level of their reporting unit profit (see discussion below). Reporting unit results exclude CompX corporate expenses.

Current wording

The key performance indicator for CompX’s reporting units is the level of their reporting unit profit (see discussion below). Reporting unit results exclude CompX corporate expenses.

Previous wording

Security Products– Security Products net sales increased 9% and 5% in the second quarter and the first six months of 2025, respectively, compared to the same periods in 2024. Relative to prior year, the increase in second quarter sales was primarily due to $3.3 million higher sales to the government security market and $.5 million higher sales to the healthcare market, partially offset by $.9 million lower sales to the transportation market, $.3 million lower sales to the tool storage market and $.2 million lower sales to distributors. Relative to prior year, the increase in sales for the first six months was primarily due to $4.9 million higher sales to the government security market and $.8 million higher sales to the healthcare market, partially offset by $1.5 million lower sales to the transportation market, $.6 million lower sales to the tool storage market and $.4 million lower sales to distributors.

Current wording

Security Products– Security Products net sales increased 14% and 8% in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. Relative to prior year, the increase in third quarter sales was primarily due to $4.0 million higher sales to the government security market and $.3 million higher sales to the gas station security market, partially offset by $.7 million lower sales to the healthcare market and $.3 million lower sales to the tool storage market. Relative to prior year, the increase in sales for the first nine months was primarily due to $8.9 million higher sales to the government security market and $.5 million higher sales to the gas station security market, partially offset by lower sales to a variety of other markets including $1.3 million lower sales to the transportation market, $.9 million lower sales to the tool storage market and $.4 million lower contract plating sales.

Previous wording

Gross margin and reporting unit profit as a percentage of net sales for the second quarter of 2025 decreased slightly as compared to the same period in 2024 primarily due to higher employee related costs including salaries, benefits and medical expense partially offset by increased coverage of fixed costs and operating costs and expenses as a result of higher sales. Gross margin as a percentage of net sales in the first six months of 2025 was comparable to the same period in 2024. Reporting unit profit as a percentage of net sales in the first six months of 2025 decreased slightly compared to the same period in prior year due to higher employee related costs including salaries, benefits and medical expenses.

Current wording

Gross margin as a percentage of net sales for the third quarter of 2025 decreased compared to the same period in 2024 primarily due to higher cost inventory produced during the second quarter of 2025 and sold in the third quarter of 2025 and higher employee-related costs including salaries, benefits and medical expense partially offset by increased coverage of fixed costs as a result of higher sales. Gross margin as a percentage of net sales for the first nine months of 2025 decreased compared to the same period in 2024 primarily due to higher employee-related costs including salaries, benefits and medical expense partially offset by increased coverage of fixed costs as result of higher sales. Reporting unit profit margin for the third quarter and for the first nine months of 2025 decreased primarily due to the decreases in gross margin discussed above partially offset by increased coverage of selling, general and administrative expenses on higher sales.

Previous wording

Marine Components– Marine Components net sales increased 26% in the second quarter of 2025 compared to the same period in 2024. Relative to prior year, the increase in second quarter sales was primarily due to $1.3 million higher sales to the government market and $.6 million higher sales to the towboat market. Marine Components net sales increased 25% in the first six months of 2025 compared to the same period in 2024. Relative to prior year, the increase in sales for the first six months was primarily due to $2.5 million higher sales to the government market and $2.4 million higher sales to the towboat market, partially offset by $.7 million lower sales to the center console market.

Current wording

Marine Components– Marine Components net sales increased 36% in the third quarter of 2025 compared to the same period in 2024. Relative to prior year, the increase in third quarter sales was primarily due to $1.2 million higher sales to the industrial market, $.9 million higher sales to the towboat market and $.5 million higher sales to the government market. Marine Components net sales increased 29% in the first nine months of 2025 compared to the same period in 2024. Relative to prior year, the increase in sales for the first nine months was primarily due to $3.2 million higher sales to the towboat market, $3.1 million higher sales to the government market and $1.0 million higher sales to the industrial market, partially offset by $.9 million lower sales to the center console market.

Previous wording

Gross margin as a percentage of net sales increased in the second quarter and for the first six months of 2025 compared to the same periods last year primarily due to increased coverage of fixed costs as a result of higher sales and to a lesser extent a more favorable customer and product mix. Reporting unit profit margin increased primarily due to increases in gross margin discussed above partially offset by higher employee related costs including salaries, benefits and medical expense.

Current wording

Gross margin as a percentage of net sales increased in the third quarter and for the first nine months of 2025 compared to the same periods last year primarily due to increased coverage of fixed costs as a result of higher sales and to a lesser extent a more favorable customer and product mix. Reporting unit profit margin increased primarily due to the increases in gross margin discussed above and increased coverage of selling, general and administrative expenses on higher sales.

Previous wording

Outlook**–**CompX’s sales for the first half of 2025 reflect continued robust demand across both of CompX’s reporting units, surpassing the first half of 2024 sales. CompX’s Marine Components sales and reporting unit profit for the first six months of 2025 exceeded prior year on the strength of improved demand to the government market as well as increased sales to the towboat market primarily in the first quarter of 2025 related to a one-time stocking event for a towboat OEM customer. CompX’s Security Products sales improved from prior year predominantly due to increased sales to the government security market and to a lesser extent increased sales to the healthcare market. The raw material price increases CompX began experiencing in the third quarter of 2024 have continued through the first half of 2025, and it is starting to see some surcharges related to tariffs on certain components, primarily electronic components from Asia.

Current wording

Outlook**–**CompX’s sales for the first nine months of 2025 reflect sustained demand across both of its reporting units, with year-to-date results exceeding those for the same period in 2024. CompX’s Marine Components reporting unit sales and profit for the first nine months of 2025 exceeded prior year levels, driven by improved demand in the government and industrial markets as well as increased sales to the towboat market primarily in the first quarter of 2025 related to a one-time stocking event for a towboat OEM customer. CompX’s Security Products reporting unit sales improved from prior year primarily due to increased sales to the government security market. Raw material price increases that began in the third quarter of 2024 have persisted through the first nine months of 2025. Additionally, CompX began incurring tariff-related surcharges on certain components, primarily electronic components from Asia, beginning late in the second quarter of 2025. CompX expects these cost pressures to continue through the remainder of the year.

Previous wording

CompX expects Security Products net sales in 2025 to improve over 2024 primarily due to continued higher sales to the government security and healthcare markets; however, it expects these increases will be offset somewhat by certain other markets that continue to be challenging including transportation and distribution. CompX’s Security Products gross margin and reporting unit profit margin percentages will be challenged during the last half of 2025 primarily due to higher cost inventory it began producing late in the second quarter due to higher raw material costs and tariff related surcharges on certain raw materials, primarily electronic components, which CompX expects to continue in the second half of 2025. As a result, CompX expects gross margin and reporting unit profit margin at Security Products to be in-line with prior year. CompX expects Marine Components net sales to increase in 2025 predominantly due to higher expected sales to the government market as well as higher expected sales to the industrial market in the second half of the year. Overall, CompX expects Marine Components to have improved gross margin and reporting unit profit margin percentages in 2025 compared to 2024 due to increased coverage of fixed costs on higher expected sales volumes.

Current wording

CompX expects Security Products net sales in 2025 to improve over 2024 primarily due to continued higher sales to the government security market. However, CompX expects softness in various other markets to partially offset these gains, primarily the transportation and tool storage markets. CompX’s Security Products gross margin and reporting unit profit percentages are expected to be slightly below prior year levels due to the impact of higher-cost inventory and tariff-related surcharges. CompX expects Marine Components net sales to increase in 2025 predominantly due to higher expected sales to the government and industrial markets as well as the one-time stocking event for a towboat OEM customer in the first quarter of 2025. Overall, CompX expects the Marine Components reporting unit to have improved gross margin and reporting unit percentages in 2025 compared to 2024 due to increased coverage of fixed costs on higher expected sales volumes.

Previous wording

CompX manufactures substantially all of its products in the U.S. and sources a substantial majority of its raw materials from U.S. suppliers. CompX also sources certain components, primarily electronic components from Asia, including China. Early in the first quarter of 2025, in anticipation of the U.S. federal government tariffs announcements, CompX increased purchases of certain electronic components and other components to mitigate the potential near-term impact of tariffs. As noted above, late in the second quarter CompX began incurring tariff related surcharges on certain raw materials, primarily electronic components. CompX is working to increase selling prices to its customers to recoup these increased raw material costs, although the extent to which it can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, the length of time tariffs are in effect, and the ability of its customers to substitute alternative products. CompX will continue to monitor current and anticipated near-term customer demand levels to ensure its production capabilities and inventories are aligned accordingly.

Current wording

CompX manufactures substantially all of its products in the U.S. and sources a substantial majority of its raw materials from U.S. suppliers. CompX also sources certain components, primarily electronic components from Asia, including China. Early in the first quarter of 2025, in anticipation of the U.S. federal government tariffs announcements, CompX increased purchases of certain electronic components and other components to mitigate the potential near-term impact of tariffs. As noted above, late in the second quarter CompX began incurring tariff related surcharges on certain raw materials, primarily electronic components. In addition to tariffs on imported raw materials and components, some of CompX’s U.S. based suppliers have recently begun to implement tariff-related surcharges on certain U.S. based purchases. Where possible, CompX is increasing selling prices to its customers to recoup these increased raw material costs, although the extent to which it can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, the length of time tariffs are in effect, and the ability of its customers to substitute alternative products. CompX will continue to monitor current and anticipated near-term customer demand levels to ensure its production capabilities and inventories are aligned accordingly.

Previous wording

CompX’s expectations for its operations and the markets it serves are based on a number of factors outside its control. Currently, CompX’s supply chains are stable and transportation and logistical delays are minimal. CompX has in the past experienced global and domestic supply chain challenges, and any future impacts on its operations will depend on, among other things, any future disruption in its operations or its suppliers’ operations, the effect of tariffs and the impact of economic conditions, consumer confidence and geopolitical events on demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.

Current wording

CompX’s expectations for its operations and the markets it serves are based on a number of factors outside its control. Currently, CompX’s supply chains are stable and transportation and logistical delays are minimal. CompX has experienced global and domestic supply chain challenges in the past, and any future impacts on its operations will depend on, among other things, any future disruption in its operations or its suppliers’ operations, the effect of tariffs and the impact of economic conditions, consumer confidence and geopolitical events on demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.

Previous wording

Corporate expense– Corporate expenses were $3.5 million in the second quarter of 2025, $.8 million lower than in the second quarter of 2024, primarily due to lower litigation fees and related costs and lower environmental remediation and related costs. Included in corporate expense in the second quarter of 2024 and 2025 are:

Current wording

Corporate expense– Corporate expenses were $3.0 million in the third quarter of 2025, $.7 million higher than in the third quarter of 2024, primarily due to higher litigation fees and related costs. Included in corporate expense in the third quarter of 2024 and 2025 are:

Previous wording

Corporate expenses were $6.2 million in the first six months of 2025, $.5 million lower than in the first six months of 2024, primarily due to lower litigation and related costs, partially offset by higher environmental remediation and related costs. Included in corporate expense in the first six months of 2024 and 2025 are:

Current wording

Corporate expenses were $9.2 million in each of the first nine months of 2025 and 2024. Included in corporate expense in the first nine months of 2024 and 2025 are:

Previous wording

Interest and dividend income– Interest and dividend income income decreased in the second quarter and for the first six months of 2025 compared to the same periods of 2024 primarily due to lower average interest rates and decreased cash balances.

Current wording

Interest and dividend income– Interest and dividend income decreased in the third quarter and for the first nine months of 2025 compared to the same periods of 2024 primarily due to lower average interest rates and decreased cash balances.

Previous wording

Marketable equity securities– We recognized an unrealized loss of $.1 million on the change in value of our marketable equity securities in the second quarter of 2025 compared to an unrealized gain of $.8 million in the second quarter of 2024. We recognized an unrealized loss of $8.6 million on the change in value of our marketable equity securities in the first six months of 2025 compared to an unrealized gain of $3.2 million in the first six months of 2024. See Note 5 to our Condensed Consolidated Financial Statements.

Current wording

Marketable equity securities– We recognized an unrealized loss of $.5 million on the change in value of our marketable equity securities in the third quarter of 2025 compared to an unrealized gain of $18.6 million in the third quarter of 2024. We recognized an unrealized loss of $9.1 million on the change in value of our marketable equity securities in the first nine months of 2025 compared to an unrealized gain of $21.8 million in the first nine months of 2024. See Note 5 to our Condensed Consolidated Financial Statements.

Previous wording

Income tax expense– We recognized an income tax benefit of less than $.1 million in the second quarter of 2025 compared to income tax expense of $1.3 million in the second quarter of 2024 and an income tax benefit of $.1 million in the first half of 2025 compared to income tax expense of $2.3 million in the first half of 2024. In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings of Kronos. Because we and Kronos are part of the same U.S. federal income tax group, any dividends we receive from Kronos are nontaxable to us. Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos. Therefore, our full-year effective income tax rate will generally be lower than the U.S. federal statutory income tax rate in years during which we receive dividends from Kronos and recognize equity in earnings of Kronos. Conversely, our effective income tax rate will generally be higher than the U.S. federal statutory income tax rate in years during which we receive dividends from Kronos and recognize equity in losses of Kronos. During interim periods, our effective income tax rate may not necessarily correspond to the foregoing due to the application of accounting for income taxes in interim periods which requires us to

Current wording

Income tax expense– We recognized an income tax benefit of $.9 million in the third quarter of 2025 compared to income tax expense of $8.5 million in the third quarter of 2024 and an income tax benefit of $.9 million in the first nine months of 2025 compared to income tax expense of $10.8 million in the first nine months of 2024. In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings of Kronos. Because we and Kronos are part of the same U.S. federal income tax group, any dividends we receive from Kronos are nontaxable to us. Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos. Therefore, our full-year effective income tax rate will generally be lower than the U.S. federal statutory income tax rate in years during which we receive dividends from Kronos and recognize equity in earnings of Kronos. Conversely, our effective income tax rate will generally be higher than the U.S. federal statutory income tax rate in years during which we receive dividends from Kronos and recognize equity in losses of Kronos. During interim periods, our effective income tax rate may not necessarily correspond to the foregoing due to the application of accounting for income taxes in interim periods which requires us to base our effective rate on full year projections. We received dividends from Kronos of $15.1 million and $5.3 million in the first nine months of 2024 and 2025, respectively.

Previous wording

Our effective tax rate attributable to our equity in earnings of Kronos, including the effect of the nontaxable dividends we received from Kronos, was a negative effective tax rate of .9% in the first six months of 2025 compared to an effective tax rate of 2.6% in the first six months of 2024. The change in our effective rate from 2024 to 2025 is primarily attributable to Kronos’ anticipated lower full year earnings and the effect of lower dividends in 2025 as compared to 2024. See Note 13 to our Condensed Consolidated Financial Statements for more information about our 2025 income tax items, including a tabular reconciliation of our statutory tax expense to our actual expense.

Current wording

Our effective tax rate attributable to our equity in earnings (losses) of Kronos, including the effect of the nontaxable dividends we received from Kronos, was an effective tax rate of 18.0% in the first nine months of 2025 compared to an effective tax rate of 12.7% in the first nine months of 2024. The change in our effective rate from 2024 to 2025 is primarily attributable to Kronos’ anticipated lower full year earnings and the effect of lower dividends in 2025 as compared to 2024. See Note 13 to our Condensed Consolidated Financial Statements for more information about our 2025 income tax items, including a tabular reconciliation of our statutory tax expense to our actual expense.

Previous wording

Noncontrolling interest– Noncontrolling interest in net income of CompX increased during the second quarter and for the first six months of 2025 compared to the same prior year periods. The noncontrolling interest we recognize in each period is directly related to the level of earnings at CompX for the period.

Current wording

Noncontrolling interest– Noncontrolling interest in net income of CompX increased during the third quarter and for the first nine months of 2025 compared to the same prior year periods. The noncontrolling interest we recognize in each period is directly related to the level of earnings at CompX for the period.

Previous wording

Equity in earnings of Kronos Worldwide, Inc.

Current wording

Equity in earnings (losses) of Kronos Worldwide, Inc.

Previous wording

As previously reported, effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50% joint venture interest in Louisiana Pigment Company, L.P. (“LPC”) previously held by Venator Investments, Ltd. Prior to the acquisition, Kronos held a 50% joint venture interest in LPC. Following the acquisition, LPC became a wholly-owned subsidiary of Kronos. Kronos accounted for the

Current wording

As previously reported, effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50% joint venture interest in Louisiana Pigment Company, L.P. (“LPC”) previously held by Venator Investments, Ltd. Prior to the acquisition, Kronos held a 50% joint venture interest in LPC. Following the acquisition, LPC became a wholly-owned subsidiary of Kronos. Kronos accounted for the acquisition as a business combination. The results of operations of LPC have been included in Kronos’ results of operations beginning as of the Acquisition Date. See Note 6 to our Condensed Consolidated Financial Statements.

Previous wording

The first six months of 2025 have seen unprecedented global uncertainty related to U.S. trade policies and geopolitical tensions. Kronos’ customers have been hesitant to build inventories, given these uncertainties, which has prolonged the market downturn and which has impacted its sales volumes and pricing momentum. Kronos started 2025 with average TiO 2 selling prices 2% higher than at the beginning of 2024 but its average TiO 2 selling prices declined 4% during the first six months of 2025. Kronos’ average TiO 2 selling prices in the first six months of 2025 were comparable to the average selling prices during the first six months of 2024. Kronos had higher overall sales volumes in its European and North American markets somewhat offset by lower sales volumes in its export markets in the first six months of 2025 compared to the first six months of 2024.

Current wording

The first nine months of 2025 have seen unprecedented global uncertainty related to U.S. trade policies and geopolitical tensions. Kronos’ customers have been hesitant to build inventories, given these uncertainties, which has prolonged the market downturn and impacted its sales volumes and pricing momentum. Kronos started 2025 with average TiO 2 selling prices 2% higher than at the beginning of 2024 but its average TiO 2 selling prices declined 6% during the first nine months of 2025. Kronos’ average TiO 2 selling prices in the first nine months of 2025 were 2% lower than average prices during the first nine months of 2024. Overall, Kronos’ sales volumes have been comparable in the first nine months of 2025 and 2024 with higher overall sales volumes in both the European and North American markets offset by lower sales volumes in Kronos’ export market.

Previous wording

Kronos operated its production facilities at 93% of practical capacity utilization in the first half of 2024. In the first half of 2025, Kronos’ practical capacity utilization was 87% as it reduced operating rates at certain of its manufacturing facilities.

Current wording

Kronos operated its production facilities at 93% of practical capacity utilization in the first nine months of 2024. In the first nine months of 2025, Kronos’ practical capacity utilization was 85% as itreduced operating rates at certain of its manufacturing facilities in response to lower demand.

Previous wording

Excluding the effect of changes in currency exchange rates, Kronos’ cost of sales per metric ton of TiO 2 sold in the second quarter and the first half of 2025 was higher as compared to the same periods in 2024 due to increases in per metric ton production costs (primarily unabsorbed fixed costs due to reduced operating rates in 2025).

Current wording

Excluding the effect of changes in currency exchange rates and unabsorbed fixed costs, Kronos’ cost of sales per metric ton of TiO 2 sold in the third quarter and the first nine months of 2025 was lower as compared to the same periods in 2024 due to decreases in per metric ton production costs.

Previous wording

Net sales– Kronos’sales in the second quarter of 2025 decreased 1%, or $6.1 million, compared to the second quarter of 2024 primarily due to the effects of a 1% decrease in average TiO 2 selling prices (which decreased net sales by approximately $7 million), changes in product mix (which decreased net sales by approximately $4 million) and a 1% decrease in sales volumes (which decreased net sales by approximately $3 million). In addition, Kronos estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $8 million in the second quarter of 2025 as compared to the second quarter of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.

Current wording

Net sales– Kronos’ net sales in the third quarter of 2025 decreased 6%, or $27.8 million, compared to the third quarter of 2024 primarily due to the net effects of a 7% decrease in average TiO 2 selling prices (which decreased net sales by approximately $33 million), a 3% decrease in sales volumes (which decreased net sales by approximately $13 million) and changes in product mix (which increased net sales by approximately $4 million). In addition, Kronos estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $14 million in the third quarter of 2025 as compared to the third quarter of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.

Previous wording

Kronos’ sales volumes decreased 1% in the second quarter of 2025 as compared to the second quarter of 2024 primarily due to lower sales volumes in its export markets somewhat offset by higher sales volumes in its North American market.

Current wording

Kronos’ sales volumes decreased 3% in the third quarter of 2025 as compared to the third quarter of 2024 primarily due to lower sales volumes in its European and export markets somewhat offset by higher sales volumes in its North American market.

Previous wording

Kronos’ net sales in the first six months of 2025 increased 1%, or $4.9 million, compared to the first six months of 2024 primarily due to the net effects of a 2% increase in sales volumes (which increased net sales by approximately $21 million), and changes in product mix (which decreased net sales by approximately $14 million). In addition, Kronos estimates that changes in currency exchange rates (primarily the euro) decreased its net sales by approximately $3 million in the first six months of 2025 as compared to the first six months of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.

Current wording

Kronos’ net sales in the first nine months of 2025 decreased 2%, or $22.9 million, compared to the first nine months of 2024 primarily due to the effects of a 2% decrease in average TiO 2 selling prices (which decreased net sales by approximately $32 million) and changes in product mix (which decreased net sales by approximately $2 million). In addition, Kronos estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $11 million in the first nine months of 2025 as compared to the first nine months of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.

Previous wording

Kronos’ sales volumes increased 2% in the first six months of 2025 as compared to the same period in 2024 due to higher overall sales volumes in its North American and European markets somewhat offset by lower sales volumes in its export markets.

Current wording

Kronos’ sales volumes in the first nine months of 2025 were comparable to the same period in 2024 with higher overall sales volumes in its North American and European markets offset by lower sales volumes in its export market.

Previous wording

Cost of sales and gross margin– Kronos’ costof sales increased by $31.3 million, or 8%, in the second quarter of 2025 compared to the second quarter of 2024 due to the effects of unfavorable fixed cost absorption due to reduced operating rates at certain of its manufacturing facilities, higher cost inventory produced in the first quarter and included in cost of sales in the second quarter and currency fluctuations (primarily the euro). Kronos’ unabsorbed fixed production costs related to decreased production volumes in the second quarter of 2025 were approximately $20 million. Kronos’ cost of sales in the second quarter of 2024 includes a charge of

Current wording

Cost of sales and gross margin– Kronos’ costof sales increased by $26.4 million, or 7%, in thethird quarter of 2025 compared to thethird quarter of 2024 due to the net effects of unfavorable fixed cost absorption due to reduced operating rates at certain of its manufacturing facilities, higher cost inventory produced in the second quarter relative to the same quarter of 2024 and included in cost of sales in thethird quarter and currency fluctuations (primarily the euro). Kronos’ unabsorbed fixed production costs related to decreased production volumes in thethird quarter of 2025 were approximately $27 million. Kronos’ cost of sales in thethird quarter of 2024 includes a charge of approximately $4 million in non-cash charges related to accelerated depreciation in connection with the closure of its sulfate process line in Canada.

Previous wording

Kronos’ cost of sales as a percentage of net sales increased to 87% in the second quarter of 2025 compared to 80% in the same period of 2024 primarily due to the unfavorable fixed cost absorption, higher production costs and currency fluctuations, as discussed above.

Current wording

Kronos’ cost of sales as a percentage of net sales increased to 90% in the third quarter of 2025 compared to 79% in the same period of 2024 primarily due to the unfavorable fixed cost absorption and currency fluctuations, as discussed above.

Previous wording

Kronos’ gross margin as a percentage of net sales decreased to 13% in the second quarter of 2025 compared to 20% in the second quarter of 2024. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to lower production volumes resulting in unfavorable fixed cost absorption.

Current wording

Kronos’ gross margin as a percentage of net sales decreased to 10% in the third quarter of 2025 compared to 21% in the third quarter of 2024. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to lower average TiO 2 selling prices and lower production volumes resulting in unfavorable fixed cost absorption.

Previous wording

Kronos’ cost of sales increased by $6.9 million, or 1%, in the first six months of 2025 compared to the first six months of 2024 due to the effectsof approximately$18 million in additional unabsorbed fixed production costs recognized as a result of operating its production facilities at reduced rates and a 2% increase in TiO 2 sales volumes somewhat offset by lower production costs (primarilyraw materials). Kronos’cost of sales in the first six months of 2024 includes a charge of approximately $2 million related to workforce reductions and approximately $10 million in non-cash charges primarily related to accelerated depreciation in connection with the closure of its sulfate process line in Canada.

Current wording

Kronos’ cost of sales increased by $33.4 million, or 3%, in the first nine months of 2025 compared to the first nine months of 2024 due to the effectsof approximately$45 million in additional unabsorbed fixed production costs recognized as a result of reduced operating rates at its production facilities somewhat offset by lower production costs of approximately $11 million (primarilyraw materials) and favorable currency fluctuations (primarily the euro). Kronos’ cost of sales in the first nine months of 2024 includes a charge of approximately $2 million related to workforce reductions and approximately $14 million in non-cash charges primarily related to accelerated depreciation in connection with the closure of its sulfate process line in Canada.

Previous wording

Kronos’ cost of sales as a percentage of net sales increased to 83% in the first six months of 2025 compared to 82% in the same period of 2024 primarily due to the unfavorable fixed cost absorption somewhat offset by lower production costs noted above.

Current wording

Kronos’ cost of sales as a percentage of net sales increased to 85% in the first nine months of 2025 compared to 81% in the same period of 2024 primarily due to unfavorable fixed cost absorption somewhat offset by lower production costs and currency fluctuations noted above.