NL INDUSTRIES INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
NL$7.13+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001104659-25-107766
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001104659-26-056285
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 108 current paragraphs.
50 unchanged; 40 reworded; 17 added; 41 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 85 previous and 64 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Net income overview
Current report
CompX’s segment profit in the first quarter of 2026 was $7.1 million compared to $5.9 million in the same period of 2025. The increase in segment profit in the first quarter of 2026 compared to 2025 is primarily due to higher gross margin at the Security Products reporting unit and, to a lesser extent, the impact of higher sales at the Marine Components reporting unit.
Current report
Security Products– Security Products net sales decreased 1% in the first quarter of 2026 compared to the same period last year primarily due to lower sales across a variety of markets. The decrease was driven by $.3 million lower sales to the healthcare market and $.2 million lower sales to each of the general cabinetry, electric control panel, and gas station security markets. These decreases were partially offset by $.3 million higher sales to the tool storage market and $.2 million higher sales to the institutional furniture market. Gross margin as a percentage of net sales increased in the first quarter primarily due to a more favorable customer and product mix. Reporting unit profit margin also increased primarily due to the improvement in gross margin discussed above.
Current report
Outlook**–**CompX’s net sales for the first quarter of 2026 exceeded the prior year period, primarily driven by improved demand in the industrial market at CompX’s Marine Components reporting unit. CompX’s Security Products reporting unit sales reflected mixed performance across the original equipment manufacturer (“OEM”) markets, driven by differences in customer demand cycles and project timing, resulting in slightly lower net sales compared to the prior year period. CompX’s segment profit increased compared to the prior
Current report
For the full year 2026, CompX expects modest net sales growth* *as it continues to align pricing, product features, and service levels with market conditions and customer requirements. CompX’s net sales growth at Marine Components is expected to be driven primarily by the industrial market. Recreational marine sales have largely stabilized and CompX’s sales to the towboat market in 2026 are expected to be generally comparable to 2025 (excluding the impact of the one-time stocking event noted above). At Security Products, CompX expects net sales to be consistent with the prior year, reflecting anticipated continued variability across multiple OEM markets.
Current report
CompX expects gross margin and reporting unit proft margins across both reporting units in 2026 to remain generally comparable to 2025. Reporting unit profit margin at Security Products benefited from favorable mix in the first quarter; however, margins are expected to moderate over the remainder of the year. CompX increased inventory levels across both reporting units during 2025 to support customer demand. These actions included an insourcing initiative at Security Products and a shift in customer mix at Marine Components. Inventory levels at the end of the first quarter of 2026 were comparable to those at December 31, 2025, and are expected to remain at these levels, consistent with near-term operating requirements.
Current report
During the fourth quarter of 2025, Kronos implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve its cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. As a result, beginning in the first quarter of 2026, Kronos’ normal production capacity range has been adjusted to reflect its production capabilities under this new cost structure.
Current report
Kronos’ sales volumes increased 4% in the first quarter of 2026 as compared to the first quarter of 2025 primarily due to higher sales volumes in its North American, Latin American and export markets partially offset by lower sales volumes in its European market. The incremental market share gains Kronos achieved in its European market during the second half of 2025, primarily as a result of competitor plant closures, continued into the first quarter of 2026. However, gains were not sufficient to offset the underlying decline in overall European demand.
Current report
Cost of sales and gross margin– Kronos’ costof sales increased by $43.5 million, or 11%, in thefirst quarter of 2026 compared to thefirst quarter of 2025 due to the effects of a 4% increase in sales volumesand the unfavorable impact from changes in currency exchange rates partially offset by lower production costs driven primarily by the cost reduction initiatives as well as lower raw material and energy costs. In addition, unabsorbed fixed costs were not material in the first quarter of 2026 compared to $10 million of unabsorbed fixed costs in the first quarter of 2025.
Current report
Kronos’ cost of sales as a percentage of net sales increased to 84% in the first quarter of 2026 compared to 78% in the same period of 2025, as the unfavorable impact of lower average TiO 2 selling prices more than offset the favorable effects of lower production costs.
Current report
Selling, general and administrative expense– Kronos’ selling, general and administrative expense increased $2.0 million, or 3%, in the first quarter of 2026 compared to the first quarter of 2025 as the negative impact of currency exchange rates exceeded the benefits of lower costs during the quarter. Excluding the effects of currency exchange rates, Kronos realized lower selling, general and administrative expenses as a result of its (i) realization of cost savings as a result of the fourth quarter of 2025 restructuring, (ii) lower warehousing costs due to lower average finished products inventory volumes and (iii) non-recurring distribution costs incurred in the first quarter of 2025 associated with tariff mitigation strategies. Selling, general and administrative expense as a percentage of net sales decreased to 12% in thefirst quarter of 2026 compared to 13% in the first quarter of 2025 due to the effects of higher sales.
Current report
During the first quarter of 2026, Kronos’ sales volumes improved compared to the same period in 2025, primarily driven by higher sales volumes in its North American, Latin American, and export markets. While Kronos gained market share in Europe as a result of competitor capacity reductions in 2025, these gains were not sufficient to offset further weakening end-market demand in the region. Although customers remain reluctant to build inventory, order lead times have increased which provides Kronos with greater flexibility in near- and intermediate-term production planning. Kronos’ order backlog at the beginning of 2026 was generally higher than the comparable prior-year period and has continued to show positive trends entering the second quarter. However, overall demand
Current report
remains below historical levels, and the timing and sustainability of a broader market recovery remain uncertain. Kronos implemented price increases during the first quarter of 2026; however, selling prices remain below 2025 levels, and additional price increases will be required to improve its operating margins.
Current report
During the fourth quarter of 2025, Kronos implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve its cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. Kronos operated its facilities slightly below normal capacity during the first quarter of 2026. Kronos’ operating model balances improved cost efficiency with flexibility to respond to changes in demand. During the first quarter of 2026, Kronos sold through higher cost inventory produced in the fourth quarter of 2025 and expects gross margin to improve as it realizes the benefit of lower cost inventory produced during 2026.
Current report
Industry supply conditions tightened during the first quarter of 2026 due to the recent geopolitical conflict in the Middle East and related supply chain disruptions, including sulfuric acid pricing pressures, and higher energy costs, particularly in Europe. As a result, Kronos is beginning to experience higher shipping and production costs driven primarily by increased energy, utility and raw material costs, especially in Europe. These cost pressures are expected to persist as long as uncertainty related to the conflict in the Middle East and broader global conditions continue. In response to rising costs, Kronos implemented surcharges in most major markets and announced price increases effective in the second quarter of 2026. Kronos expects TiO₂ selling prices to continue to rise during 2026, which would help mitigate increases in distribution, raw material, energy, and other production costs, although margins will remain below historical levels.
Current report
Kronos is focused on improving operating margins through pricing actions, disciplined cost management, and continued execution of its operating cost structural realignment initiatives. Kronos is also continuing to pursue targeted market share opportunities in regions and markets impacted by competitor curtailments, closures, logistical disruptions, or trade measures such as tariffs or duties that have reduced the competitiveness of low-cost imports. These actions are intended to support improved operating performance while maintaining flexibility in the event of continued demand volatility.
Current report
Kronos’ liquidity and capital resources remain sufficient to support its operations and planned capital investments. While Kronos typically experiences significant seasonal cash usage in the first quarter, it expects cash on hand to improve over the remainder of the year. Kronos will continue to actively manage working capital, including inventories and receivables, to bolster operating cash flows and maintain financial flexibility. Kronos believes its revolver availability, combined with the absence of near-term debt maturities and improved operating cash flows, will provide adequate liquidity for expected working capital needs and capital allocation requirements.
Removed paragraphs (41)
Previous report
Net income (loss) overview
Previous report
Our 2025 net loss per share attributable to NL stockholders includes:
Previous report
Our 2024 net income per share attributable to NL stockholders includes:
Previous report
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024
Previous report
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 report
Our 2025 net loss per share attributable to NL stockholders includes:
Previous report
Our 2024 net income per share attributable to NL includes:
Previous report
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 report
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 report
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 report
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 report
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 report
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 report
Thousands of metric tons
Previous report
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 report
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 report
The following table shows Kronos’ capacity utilization rates during 2024 and 2025.
Previous report
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 report
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 report
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 report
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 report
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 report
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.
Previous report
Kronos’ gross margin as a percentage of net sales decreased to 15% in the first nine months of 2025 compared to 19% in the first nine months of 2024. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to the unfavorable effects of lower fixed cost absorption and lower average selling prices.
Previous report
Selling, general and administrative expense– Kronos’ selling, general and administrative expense in the third quarter of 2025 was comparable to the third quarter of 2024. Kronos’ selling, general and administrative expense in the third quarter of 2024 also includes $2.2 million of transaction costs incurred in connection with Kronos’ LPC acquisition. Selling, general and administrative expense as a percentage of net sales remained consistent at 13% in thethird quarters of 2025 and 2024.
Previous report
Kronos’ selling, general and administrative expense increased $10.9 million, or 6%, in the first nine months of 2025 compared to the first nine months of 2024 primarily due to an increase in warehousing costs related to carrying a higher level of overall finished goods inventory volumes in 2025 compared to 2024 in addition to incremental warehousing costs incurred during the first quarter of 2025 to position finished products inventory in the U.S. in response to anticipated U.S. federal government tariff announcements. Kronos’ selling, general and administrative expense in the first nine months of 2024 also includes $2.2 million of transactions costs incurred in connection with Kronos’ LPC acquisition. Kronos’ selling, general and administrative expense as a percentage of net sales increased 1% in the first nine months of 2025 compared to the same period of 2024 as a result of thefactors described above.
Previous report
Income (loss) from operations– Kronos’ income from operations decreased by $58.1 million to a loss from operations of $19.2 million in the third quarter of 2025 compared to income from operations of $38.9 million in the third quarter of 2024 as a result of the factors impacting gross margin discussed above. Kronos estimates that changes in currency exchange rates increased its loss from operations by approximately $4 million in the third quarter of 2025 as compared to the same period in 2024, as discussed in the effects of currency exchange rates section below.
Previous report
Kronos recognized a non-cash gain of $4.6 million in the first nine months of 2025 due to the remeasurement of its earn-out liability in the third quarter of 2025. In the first nine months of 2024, Kronos recognized a gain on the remeasurement of its investment in LPC of $64.5 million as a result of the acquisition. Kronos’ interest expense in the first nine months of 2025 increased $7.7 million compared to interest expense in the first nine months of 2024 primarily due to higher overall debt levels and higher average interest rates as the result of debt transactions entered into in 2024. Kronos’ interest expense for the first nine months of 2024 includes a charge of $1.5 million for the write-off of deferred financing costs. Kronos recognized an unrealized loss of $1.1 million in the first nine months of 2025 compared to an unrealized gain of $2.6 million in the first nine months of 2024 related to the change in market price of its marketable equity securities.
Previous report
At December 31, 2024, Kronos had significant German corporate and trade net operating loss (NOL) carryforwards of $449.3 million (deferred tax asset “DTA” of $71.1 million) and $41.8 million (DTA of $4.5 million), respectively. Prior to December 31, 2024, and using all available evidence, Kronos had concluded that no deferred income tax asset valuation allowance was required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have an indefinite carryforward period, (ii) Kronos has utilized a portion of such carryforwards during the most recent three-year period and (iii) Kronos currently expects to utilize the remainder of such carryforwards over the long term. At September 30, 2025, Kronos continues to conclude no valuation allowance is required to be recognized for its German DTAs although prior to the complete utilization of such carryforwards, if Kronos were to generate additional losses in its German operations for an extended period of time, or if applicable laws were to change such that the carryforward periods were more limited, it is possible that Kronos might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point it would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.
Previous report
first quarter of 2025, Kronos entered into a currency forward contract to purchase €25 million at an exchange rate of €1.05 per U.S. dollar. The contract was settled in August 2025, resulting in a $2.8 million currency transaction gain for the nine months ended September 30, 2025, and
Previous report
Overall Kronos’ customer demand remained weak in the third quarter of 2025, continuing the softening trend that began earlier in the year. High interest rates and sustained economic uncertainty, driven by global tariff and trade tensions, continue to contribute to cautious customer spending. Kronos does not expect sales volumes to improve meaningfully in the near term and, although it believes customer inventory levels remain low, Kronos is taking additional actions in the fourth quarter of 2025 to reduce its inventory levels by further lowering its operating rates to better align with current demand levels. Given the current depressed demand environment and margins, Kronos believes it is prudent to reduce its operating rates in the fourth quarter to reduce inventory and position its plants to improve operating costs at lower utilization rates. These measures are expected to improve operating cash flows as Kronos focuses on maximizing liquidity to manage through the current challenging demand market and to be positioned to respond when market dynamics improve.
Previous report
In 2025, the TiO 2 market has experienced significant capacity reductions, including previously announced shutdowns or curtailments by multiple producers, such as recently announced facility closures in China and certain European jurisdictions in the third quarter of 2025. Kronos believes it may gain market share from these developments both from current and potential customers primarily in Europe. Although Kronos believes customer inventories are low, its customers’ near-term outlook remains uncertain. Certain customers have notified Kronos that they intend to curtail production in the fourth quarter due to expected low downstream demand. In North America, downstream demand remains below historical norms across all end-use customers driven by low consumer confidence and lack of housing market mobility driven by high mortgage rates and home prices, which continue to delay the housing market recovery.
Previous report
Given the challenging market environment discussed above, Kronos remains committed to implementing additional cost reduction initiatives to improve its long-term cost structure, to ensure it remains competitive and to capitalize on potential market share opportunities. Kronos is currently implementing targeted workforce reductions, across its operating locations impacting both manufacturing and selling, general and administrative costs. These reductions include union supported employees which take longer to negotiate and Kronos cannot yet quantify the impact of such initiatives. However, Kronos expects these workforce reductions will have a more significant financial impact than its 2023 and 2024 reductions. Beyond headcount cost savings, Kronos is reviewing costs with all its partners, suppliers and vendors which it expects to result in cost reductions that will contribute to its cost savings.
Previous report
Pressure from lower demand and favorable TiO 2 availability has caused Kronos’ selling prices to decrease since the beginning of 2025. Raw material, energy, and other input costs continue to trend lower, and Kronos expects this moderation to continue through the remainder of 2025 as lower cost inventory works its way through cost of sales. However, Kronos expects fourth quarter operating results to be lower than the third quarter and to report lower operating results for the full year of 2025 as compared to 2024 due to weaker than expected demand, continued pricing pressure, and lower fixed cost absorption as a result of reduced operating rates. The capacity reductions noted above and the implementation of anti-dumping duties in various jurisdictions, among other factors, should lead to pricing upside in 2026. Kronos’ current profit margins are unsustainable, and it will need to achieve price increases, targeted market share gain opportunities, and successfully execute on its cost reduction efforts noted above to achieve reasonable profit margins.
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Kronos acquired full control of LPC in July 2024. Kronos believes this acquisition adds value to its customers and enables it to better serve the North American marketplace by expanding its product offerings and increasing sales to new and existing customers while realizing significant synergies, including commercial, overhead, and supply chain optimization. Kronos is in the process of fully integrating the additional LPC production capacity and expects the acquisition to positively impact its earnings. However, soft demand, competitive pressures and additional debt service costs from increased borrowings will limit this impact in the near term. During Kronos’ planned fourth quarter curtailment, it is investing in technological and manufacturing improvements to the LPC facility which are expected to improve the flexibility, quality and cost effectiveness of the facility over the long term.
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In July 2025, Kronos increased the maximum borrowings under its credit facility from $300 million to $350 million to provide additional liquidity for general corporate purposes. In September 2025, Kronos successfully refinanced its €75 million 3.75% Senior Secured Notes due in September 2025 by issuing €75 million in additional 9.50% Senior Secured Notes due 2029 at an effective rate of 7.8%. Kronos expects its cash on hand to improve as it reduces inventory levels over the next several quarters. With no near-term debt
Previous report
maturities, significant borrowing availability under Kronos’ revolving credit facility and cash on hand, Kronos believes it is well-positioned to finance its working capital and capital expenditure needs.
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During the first nine months of 2024, we received gross proceeds from U.S. treasury bill maturities totaling $54.0 million.
Previous report
On September 15, 2025, Kronos issued an additional €75 million principal amount of 9.50% Senior Secured Notes due 2029 (the “Additional Notes”), the proceeds of which were used to refinance Kronos’ 3.75% Senior Secured Notes (€75 million aggregate principal amount) that matured in September 2025. The Additional Notes were issued as additional notes to the existing €351.174 million aggregate principal amount of 9.50% Senior Secured Notes due 2029 issued on February 12, 2024 and July 30, 2024 (the “Existing Notes”). The Additional Notes were issued at a premium of 105.0% of their principal amount, resulting in net proceeds of approximately $90 million after fees and estimated expenses. The Additional Notes are fungible with the Existing Notes, are treated as a single series and have the same terms as the Existing Notes, other than their date of issuance and issue price.
Previous report
At September 30, 2025, Kronos had $70.2 million outstanding on its revolving credit facility (the “Global Revolver”). Availability under the Global Revolver is subject to a borrowing base calculation, as defined in the agreement. Effective July 17, 2025, Kronos completed an amendment to its Global Revolver (the “Fourth Amendment”). Among other things, the Fourth Amendment increased the maximum borrowing amount from $300 million to $350 million. The maturity date of the facility remains July 2029. At September 30, 2025, Kronos had total availability for borrowing of approximately $342 million less any amounts outstanding under this facility. Kronos’ Senior Secured Notes, the Contran Term Loan and Kronos’ Global Revolver contain a number of covenants and
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Previous wording
CompX is a leading manufacturer of engineered components utilized in a variety of applications and industries. Through its Security Products operations, CompX manufactures mechanical and electronic cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries through its Marine Components operations.
Current wording
CompX is a leading manufacturer of engineered components utilized in a variety of applications and industries. Through its Security Products operations, CompX manufactures mechanical and electronic cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. CompX also manufactures wake enhancement systems, stainless steel exhaust systems, custom metal fabricated parts, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries through its Marine Components operations.
Previous 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:
Current wording
Our net income attributable to NL stockholders was $4.3 million, or $0.9 per share, in the first quarter of 2026 compared to $.7 million, or $.01 per share, in the first quarter of 2025. As more fully described below, the increase in our net income attributable to NL stockholders from 2025 to 2026 is primarily due to the net effects of:
Previous wording
The following table shows the components of our income (loss) before income taxes exclusive of our income from operations.
Current wording
The following table shows the components of our income before income taxes exclusive of our income from operations.
Previous 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.
Current wording
Net sales– CompX’s net sales increased $.3 million in the first quarter of 2026 compared to the same period in 2025 primarily due to higher Marine Components sales to the industrial market partially offset by lower Security Products sales. See discussion of reporting units below.
Previous 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.
Current wording
Cost of sales and gross margin– CompX’s cost of sales as a percentage of sales decreased 3% in the first quarter of 2026 compared to the same period in 2025. As a result, gross margin as a percentage of net sales increased over the same period. Gross margin percentage increased in the first quarter of 2026 compared to the same period in 2025 primarily due to higher gross margin percentage at Security Products. 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 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.
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 first quarter of 2026 were comparable to the same period in 2025. CompX’s selling, general and administrative expenses as a percentage of net sales for the first quarter of 2026 decreased slightly due to increased coverage of selling, general and administrative expenses as a result of higher sales.
Previous 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.
Current wording
Segment profit– As a percentage of net sales, CompX’s segment profit for the first quarter of 2026 increased compared to the same period of 2025 and was primarily impacted by the factors impacting sales, cost of sales, gross margin and selling, general and administrative expenses. See discussion of reporting units below.
Previous 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.
Current wording
Marine Components– Marine Components net sales increased 6% in the first quarter of 2026 compared to the same period last year primarily due to $1.9 million higher sales to the industrial market partially offset by $1.4 million lower sales to the towboat market. Towboat market sales in the first quarter of 2025 benefitted from a one-time customer stocking event that did not repeat in 2026. Gross margin as a percentage of net sales decreased in the first quarter of 2026 compared to the same period last year primarily due to higher cost inventory produced during the fourth quarter of 2025 and sold in the first quarter of 2026, partially offset by increased coverage of fixed costs on higher sales. Reporting unit profit margin decreased primarily due to the factors impacting gross margin discussed above, partially offset by increased coverage of selling, general and administrative expenses on higher sales.
Previous 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.
Current wording
year primarily due to a more favorable customer and product mix at Security Products and, to a lesser extent, the impact of higher sales at Marine Components.
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. 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.
Current wording
CompX manufactures substantially all 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 suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the first quarter of 2026, CompX incurred tariff-related surcharges on certain raw materials, primarily electronic components. In addition, some of CompX’s U.S.-based suppliers are applying tariff-related surcharges on certain domestically sourced materials. Where possible, CompX increases selling prices to recover these higher 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, duration of tariffs, and its customers’ ability 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 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.
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. Any future impacts on CompX’s operations will depend on, among other things, disruption to its operations or its suppliers’ operations, the effect of tariffs, and the impact of broader economic conditions, consumer confidence, and geopolitical events affecting 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 $3.0 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:
Current wording
Corporate expense– Corporate expenses were $3.0 million in the first quarter of 2026, slightly higher than in the first quarter of 2025 primarily due to higher general and administrative costs. Included in corporate expense in the first quarter of 2025 and 2026 are:
Previous wording
Overall, we currently expect that our net general corporate expenses in 2025 will be higher than in 2024 primarily due to income recognized in 2024 related to the settlement of a liability for an environmental remediation site in the fourth quarter of 2024. See Note 15 to our Condensed Consolidated Financial Statements.
Current wording
Overall, we currently expect that our net general corporate expenses in 2026 will be higher than in 2025 primarily due to expected increases in litigation fees and related costs. See Note 14 to our Condensed Consolidated Financial Statements.
Previous 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.
Current wording
Interest and dividend income– Interest and dividend income decreased in the first quarter of 2026 compared to the same period of 2025 primarily due to decreased average investment balances and lower average interest rates.
Previous 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.
Current wording
Marketable equity securities– We recognized an unrealized gain of $2.7 million on the change in value of our marketable equity securities in the first quarter of 2026 compared to an unrealized loss of $8.5 million in the first quarter of 2025. See Note 5 to our Condensed Consolidated Financial Statements.
Previous 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.
Current wording
Income tax expense– We recognized income tax expense of $1.5 million in the first quarter of 2026 compared to an income tax benefit of less than $.1 million in the first quarter of 2025. 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 $1.8 million in each of the first quarters of 2025 and 2026, respectively.
Previous 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.
Current 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 22.7% in the first three months of 2026 compared to 15.2% in the first three months of 2025. The change in our effective rate from 2025 to 2026 is primarily attributable to Kronos’ anticipated higher full year earnings in 2026 as compared to 2025. See Note 12 to our Condensed Consolidated Financial Statements for more information about our 2026 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 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.
Current wording
Noncontrolling interest– Noncontrolling interest in net income of CompX increased during the first quarter of 2026 compared to the same prior year period. The noncontrolling interest we recognize in each period is directly related to the level of earnings at CompX for the period.
Previous 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.
Current wording
Kronos started 2026 with average TiO 2 selling prices lower than at the beginning of 2025; however, its average TiO 2 selling prices increased 2% during the first quarter of 2026. Kronos’ average TiO 2 selling prices in the first quarter of 2026 were 6% lower than average TiO 2 selling prices during the first quarter of 2025. Overall, Kronos’ sales volumes increased in the first quarter of 2026 compared to the same period in 2025 due to higher overall sales volumes in the North American, Latin American and export markets partially offset by lower sales volumes in its European market.
Previous 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.
Current wording
Excluding the effect of changes in currency exchange rates, Kronos’ cost of sales per metric ton of TiO 2 sold in the first quarter of 2026 was lower as compared to the first quarter of 2025 due to decreases in per metric ton production costs driven primarily by the cost reduction initiatives discussed above, as well as lower raw material and energy costs.
Previous 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.
Current wording
Net sales– Kronos’ net sales in the first quarter of 2026 increased 4%, or $20.0 million, compared to the first quarter of 2025 primarily due to the effects of a 4% increase in sales volumes (which increased net sales by approximately $20 million) and the favorable impact of changes in currency exchange rates (primarily the euro) which Kronos estimates increased its net sales by approximately $30 million. These increases were partially offset by a 6% decrease in average TiO 2 selling prices (which decreased net sales by approximately $30 million). 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’ 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.
Current wording
Kronos’ gross margin as a percentage of net sales decreased to 16% in the first quarter of 2026 compared to 22% in the first quarter of 2025. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costs and changes in currency exchange rates.
Previous wording
Kronos’ income from operations decreased by $67.7 million to $26.6 million in the first nine months of 2025 compared to $94.3 million in the first nine months of 2024 as a result of the factors impacting gross margin discussed above. Kronos estimates that changes in currency exchange rates increased its income from operations by approximately $5 million in the first nine months of 2025 as compared to the same period in 2024, as discussed in the effects of currency exchange rates section below.
Current wording
Income (loss) from operations– Kronos’ income from operations decreased by $25.8 million to $12.6 million in the first quarter of 2026 compared to $38.4 million in the first quarter of 2025, primarily as a result of the factors impacting gross margin discussed above. Kronos estimates that changes in currency exchange rates decreased its income from operations by approximately $6 million in the first quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.
Previous wording
Other non-operating income (expense)– Kronos’ interest expense in the third quarter of 2025 increased $2.3 million compared to interest expense in the third quarter of 2024 primarily due to higher average debt balances and higher interest rates. Kronos recognized an unrealized loss of $.1 million in the third quarter of 2025 related to the change in marketable equity securities compared to an unrealized gain of $2.2 million in the same period of 2024. In the third quarter of 2025, Kronos recognized a non-cash gain of $4.6 million due to the remeasurement of its earn-out liability. Kronos recognized a gain on the remeasurement of its investment in LPC of $64.5 million in the third quarter of 2024 as a result of the acquisition.
Current wording
Other non-operating income (expense)– Kronos’ interest expense in the first quarter of 2026 increased $2.7 million compared to the first quarter of 2025 primarily due to higher average debt balances and higher interest rates. Kronos recognized an unrealized gain of $.3 million in the first quarter of 2026 related to the change in marketable equity securities compared to an unrealized loss of $1.0 million in the same period of 2025.
Previous wording
Income tax expense– Kronos recognized income tax expense of $7.9 million in the third quarter of 2025 compared to income tax expense of $22.7 million in the third quarter of 2024. The difference is primarily due to Kronos’ lower earnings in the third quarter of 2025 and the jurisdictional mix of such earnings, partially offset by the impact of the German tax rate change on its German net deferred tax asset. Kronos’ earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of its non-U.S. operations are generally higher than the income tax rates applicable to its U.S. operations. Kronos would generally expect its overall effective tax rate, excluding the effect of any increase or decrease in its deferred income tax asset valuation allowance, changes in its reserve for uncertain tax positions, or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of its sizeable non-U.S. operations.
Current wording
Income tax expense– Kronos recognized income tax expense of $2.8 million in the first quarter of 2026 compared to income tax expense of $7.6 million in the first quarter of 2025. The decrease is primarily due to lower earnings in the first quarter of 2026 and the jurisdictional mix of such earnings somewhat offset by a net uncertain tax position of $2.0 million recognized in the first quarter of 2026. Kronos’ earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of its non-U.S. operations are generally higher than the income tax rates applicable to its U.S. operations. Kronos would generally expect its overall effective tax rate, excluding the effect of any increase or decrease in its deferred income tax asset valuation allowance, changes in its reserve for uncertain tax positions, or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of its sizeable non-U.S. operations.
Previous wording
Kronos has substantial operations and assets located outside the United States (primarily in Germany, Belgium, Norway and Canada). The majority of Kronos’ sales from non-U.S. operations are denominated in currencies other than the U.S. dollar, principally the euro, other major European currencies and the Canadian dollar. A portion of Kronos’ sales generated from its non-U.S. operations is denominated in the U.S. dollar (and consequently Kronos’ non-U.S. operations will generally hold U.S. dollars from time to time). Certain raw materials used in all Kronos production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies. Consequently, the translated U.S. dollar value of Kronos’ non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings and may affect the comparability of period-to-period operating results. In addition to the impact of the translation of sales and expenses over time, Kronos’ non-U.S. operations also generate currency transaction gains and losses which primarily relate to (i) the difference between the currency exchange rates in effect when non-local currency sales or operating costs (primarily U.S. dollar denominated) are initially accrued and when such amounts are settled with the non-local currency, (ii) changes in currency exchange rates during time periods when Kronos’ non-U.S. operations are holding non-local currency (primarily U.S. dollars), and (iii) relative changes in the aggregate fair value of currency forward contracts held from time to time. Kronos periodically uses currency forward contracts to manage a portion of its currency exchange risk, and relative changes in the aggregate fair value of any currency forward contracts it holds from time to time serves in part to mitigate the currency transaction gains or losses it would recognize from the first two items described above.
Current wording
the euro, other major European currencies and the Canadian dollar. A portion of Kronos’ sales generated from its non-U.S. operations is denominated in the U.S. dollar (and consequently Kronos’ non-U.S. operations will generally hold U.S. dollars from time to time). Certain raw materials used in all Kronos production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies. Consequently, the translated U.S. dollar value of Kronos’ non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings and may affect the comparability of period-to-period operating results. In addition to the impact of the translation of sales and expenses over time, Kronos’ non-U.S. operations also generate currency transaction gains and losses which primarily relate to (i) the difference between the currency exchange rates in effect when non-local currency sales or operating costs (primarily U.S. dollar denominated) are initially accrued and when such amounts are settled with the non-local currency, (ii) changes in currency exchange rates during time periods when Kronos’ non-U.S. operations are holding non-local currency (primarily U.S. dollars), and (iii) relative changes in the aggregate fair value of currency forward contracts held from time to time. Kronos periodically uses currency forward contracts to manage a portion of its currency exchange risk, and relative changes in the aggregate fair value of any currency forward contracts it holds from time to time serves in part to mitigate the currency transaction gains or losses it would recognize from the first two items described above.
Previous wording
Fluctuations in currency exchange rates had the following effects on Kronos’ sales and income (loss) from operations for the periods indicated.
Current wording
Fluctuations in currency exchange rates had the following effects on Kronos’ sales and income from operations for the periods indicated.
Previous wording
The $14 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2025 as compared to 2024. The strengthening of the U.S. dollar relative to the Canadian dollar and weakening of the U.S. dollar relative to the Norwegian krone in 2025 did not have a significant effect on Kronos’ net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.
Current wording
The $30 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2026 as compared to 2025. The weakening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2026 did not have a significant effect on Kronos’ net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.
Previous wording
The $5 million increase in income from operations was comprised of the following:
Current wording
The $6 million decrease in income from operations was comprised of the following:
Previous wording
Kronos’ expectations for the TiO 2 industry and its operations are based on certain factors beyond its control. Kronos’ operations are affected by global and regional economic, political, and regulatory factors, and it has experienced global market disruptions. Future impacts on Kronos’ operations will depend on, among other things, future energy costs, the effects of newly enacted tariffs in jurisdictions where Kronos or its customers and suppliers operate, its success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on Kronos’ operations or those of its customers and suppliers, all of which remain uncertain and cannot be predicted.
Current wording
Kronos’ expectations for the TiO 2 industry and its operations are based on a number of factors outside its control. Kronos’ operations are affected by global and regional economic, political and regulatory factors, and it has experienced global market disruptions. Future impacts on Kronos’ operations will depend on, among other things, future energy costs, the effect of newly enacted tariffs in jurisdictions where it or its customers and suppliers operate, its success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on its operations or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous wording
Net cash used in operating activities was $32.3 million in the first nine months of 2025 compared to net cash provided by operating activities of $16.6 million in the first nine months of 2024. The decrease in cash provided by operating activities in the first nine months of 2025 includes:
Current wording
Net cash used in operating activities was $3.5 million in the first three months of 2026 compared to net cash used in operating activities of $47.5 million in the first three months of 2025. The decrease in net cash used in operating activities in the first three months of 2026 is primarily due to the net effects of:
Previous wording
Relative changes in working capital can have a significant effect on cash flows from operating activities. As shown below, average days sales outstanding increased from December 31, 2024 to September 30, 2025 primarily as a result of a seasonal increase in CompX’s sales during the third quarter as compared to the fourth quarter and the timing of CompX’s sales and collections relative to the end of the quarter. Total average number of days in inventory increased from December 31, 2024 to September 30, 2025 primarily due to increased inventory at CompX’s Security Products reporting unit as a result of higher raw material and production costs and to meet expected customer demand, partially offset by lower days in inventory at CompX’s Marine Components reporting unit primarily due to higher sales volumes for the third quarter of 2025 as compared to the fourth quarter of 2024. For comparative purposes, we have provided December 31, 2023 and September 30, 2024 numbers below.
Current wording
Relative changes in working capital can have a significant effect on cash flows from operating activities. As shown below, the change in average days sales outstanding increased from December 31, 2025 to March 31, 2026 primarily as a result of relative changes in the timing of sales and collections relative to the end of the quarter. Total average number of days in inventory decreased from December 31, 2025 to March 31, 2026 primarily due to higher sales volumes in the first quarter of 2026 as compared to the fourth quarter of 2025 at CompX’s Marine Components reporting unit. For comparative purposes, we have provided December 31, 2024 and March 31, 2025 numbers below.
Previous wording
Our capital expenditures, all of which relate to CompX, were $3.1 million in the first nine months of 2025 compared to $1.2 million in the first nine months of 2024. During the first nine months of 2025, Valhi repaid a net $1.2 million under the promissory note ($10.7 million of gross borrowings and $11.9 million of gross repayments). During the first nine months of 2024, Valhi repaid a net $2.7 million under the promissory note ($17.7 million of gross borrowings and $20.4 million of gross repayments).
Current wording
Our capital expenditures, all of which relate to CompX, were $.4 million in the first three months of 2026 compared to $.8 million in the first three months of 2025. During the first three months of 2026, Valhi repaid a net $.6 million under the promissory note ($3.1 million of gross borrowings and $3.7 million of gross repayments). During the first three months of 2025, the promissory note balance with Valhi had net activity of nil ($.5 million of gross borrowings and $.5 million of gross repayments).
Previous wording
Our board of directors declared a quarterly dividend of $.09 per share in each of the first, second, and third quarters of 2025, and our board of directors declared a quarterly dividend of $.08 per share in each of the first, second, and third quarters of 2024. During the first nine months of 2025 and 2024, we paid aggregate quarterly dividends to NL shareholders of $13.2 million and $11.7 million, respectively. Additionally, in August 2025 and August 2024, our board of directors declared a special dividend of $.21 per share ($10.3 million) and $.43 per share ($21.0 million), respectively, on our common stock, par value $.125 per share. The declaration and payment of future dividends, and the amount thereof, is discretionary and is dependent upon our financial condition, cash requirements, contractual obligations and restrictions and other factors deemed relevant by our board of directors. The amount and timing of past dividends is not necessarily indicative of the amount or timing of any future dividends which might be paid. There are currently no contractual restrictions on the amount of dividends which we may pay.
Current wording
In February 2026, our board of directors declared a quarterly dividend of $.10 per share and in February 2025 our board of directors declared a quarterly dividend of $.09 per share. The declaration and payment of future dividends, and the amount thereof, is discretionary and is dependent upon our financial condition, cash requirements, contractual obligations and restrictions and other factors deemed relevant by our board of directors. The amount and timing of past dividends is not necessarily indicative of the amount or timing of any future dividends which might be paid. There are currently no contractual restrictions on the amount of dividends which we may pay.
Previous wording
Cash flows from financing activities in the first nine months of each of 2025 and 2024 also include CompX dividends paid to its stockholders other than us.
Current wording
Cash flows from financing activities in each of the first three months of 2025 and 2026 also include CompX dividends paid to its stockholders other than us.
Previous wording
At September 30, 2025, we had aggregate restricted and unrestricted cash and cash equivalents of $123.6 million, all of which was held in the U.S. A detail by entity is presented in the table below.
Current wording
At March 31, 2026, we had aggregate restricted and unrestricted cash and cash equivalents of $105.4 million, all of which was held in the U.S. A detail by entity is presented in the table below.
Previous wording
In addition, at September 30, 2025 we owned approximately 1.2 million shares of Valhi common stock with an aggregate market value of $18.9 million. See Note 5 to our Condensed Consolidated Financial Statements. We also owned approximately 35.2 million shares of Kronos common stock at September 30, 2025 with an aggregate market value of $202.2 million. See Note 6 to our Condensed Consolidated Financial Statements.
Current wording
In addition, at March 31, 2026 we owned approximately 1.2 million shares of Valhi common stock with an aggregate market value of $17.1 million. See Note 5 to our Condensed Consolidated Financial Statements. We also owned approximately 35.2 million shares of Kronos common stock at March 31, 2026 with an aggregate market value of $231.4 million. See Note 6 to our Condensed Consolidated Financial Statements.
Previous wording
Firm purchase commitments for capital projects in process at September 30, 2025 totaled $1.2 million. CompX expects to spend approximately $4 million during 2025 on capital investments, primarily those expenditures required to meet CompX’s existing customer demand and to properly maintain its facilities and technology infrastructure.
Current wording
Firm purchase commitments for capital projects in process at March 31, 2026 totaled $.4 million. CompX expects to spend approximately $4.3 million during 2026 on capital investments, primarily those expenditures required to meet CompX’s existing customer demand and to properly maintain its facilities and technology infrastructure.
Previous wording
Because our operations are conducted primarily through subsidiaries and affiliates, our long-term ability to meet parent company-level corporate obligations is largely dependent on the receipt of dividends or other distributions from our subsidiaries and affiliates. A detail of annual dividends we expect to receive from our subsidiaries and affiliates in 2025, based on the number of shares of common stock of these affiliates we own as of September 30, 2025 and their current regular quarterly dividend rate, is presented in the table below. Additionally, CompX’s board of directors declared a special dividend on its Class A common stock of $1.00 per share payable on August 27, 2025. We received $10.8 million from this dividend which is not included in the table below because it is not expected to be recurring.
Current wording
Because our operations are conducted primarily through subsidiaries and affiliates, our long-term ability to meet parent company-level corporate obligations is largely dependent on the receipt of dividends or other distributions from our subsidiaries and affiliates. A detail of annual dividends we expect to receive from our subsidiaries and affiliates in 2026, based on the number of shares of common stock of these affiliates we own as of March 31, 2026 and their current regular quarterly dividend rate, is presented in the table below.
Previous wording
For a discussion of our critical accounting policies, refer to Part I, — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report. There have been no changes in our critical accounting policies during the first nine months of 2025.
Current wording
For a discussion of our critical accounting policies, refer to Part I, — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report. There have been no changes in our critical accounting policies during the first three months of 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Kronos has substantial operations and assets located outside the United States (primarily in Germany, Belgium, Norway and Canada). The majority of Kronos’ sales from non-U.S. operations are denominated in currencies other than the U.S. dollar, principally
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Kronos’ recognized income tax expense of $19.0 million in the first nine months of 2025 compared to income tax expense of $34.7 million in the first nine months of 2024. The difference is primarily due to Kronos’ lower earnings in the first nine months of 2025 and the jurisdictional mix of such earnings, partially offset by the impact of the German tax rate change on its German net deferred tax asset. Kronos’ earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of its non-U.S. operations are generally higher than the income tax rates applicable to its U.S. operations. Kronos would generally expect its overall effective tax rate, excluding the effect of any increase or decrease in its deferred income tax asset valuation allowance, changes in its reserve for uncertain tax positions or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of its sizeable non-U.S. operations. However, in the first nine months of 2024, Kronos’ consolidated effective income tax rate, excluding the effect of the valuation allowance and change in reserves for uncertain tax positions, was lower than the U.S federal statutory rate of 21% due to the effect of Kronos’ lower earnings and tax benefits associated with losses incurred in certain high tax jurisdictions.
Previous report — wording carried elsewhere
The $4 million increase in loss from operations was comprised of the following:
Previous report — wording carried elsewhere
The $11 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2025 as compared to 2024. The strengthening of the U.S. dollar relative to the Canadian dollar and the weakening of the U.S. dollar relative to the Norwegian krone in 2025 did not have a significant effect on Kronos’ net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.