NLI HOLDINGS, INC.

Previous wording

Our net income attributable to NLI stockholders was $9.0 million, or $.18 per share, in the second quarter of 2026 compared to $.3 million, or $.01 per share, in the second quarter of 2025. As more fully described below, the increase in our net income attributable to NLI stockholders from 2025 to 2026 is primarily due to the net effects of:

Current wording

Our net income attributable to NLI stockholders was $12.7 million, or $.26 per share, in the third quarter of 2026 compared to a net loss of $7.8 million, or $.16 per share, in the third quarter of 2025. As more fully described below, the increase in our net income attributable to NLI stockholders from 2025 to 2026 is primarily due to the net effects of:

Previous wording

Six months ended June 30, 2026 compared to six months ended June 30, 2025

Current wording

Nine months ended September 30, 2026 compared to nine months ended September 30, 2025

Previous wording

Our net income attributable to NLI stockholders was $13.3 million, or $.27 per share, in the first six months of 2026 compared to $1.0 million, or $.02 per share, in the first six months of 2025. As more fully described below, the increase in our earnings attributable to NLI stockholders from 2025 to 2026 is primarily due to the net effects of:

Current wording

Our net income attributable to NLI stockholders was $26.0 million, or $.53 per share, in the first nine months of 2026 compared to a net loss of $6.8 million, or $.14 per share, in the first nine months of 2025. As more fully described below, the increase in our earnings attributable to NLI stockholders from 2025 to 2026 is primarily due to the net effects of:

Previous wording

CompX’s segment profit in the second quarter of 2026 was $8.9 million compared to $6.3 million in the same period of 2025. CompX’s segment profit for the first six months of 2026 was $16.0 million compared to $12.2 million for the comparable prior year period. CompX’s segment profit increased in the second quarter and for the first six months of 2026 due to higher sales and gross margins, predominantly at the Security Products reporting unit, and to a lesser extent, at the Marine Components reporting unit.

Current wording

CompX’s segment profit in the third quarter of 2026 was $6.4 million compared to $4.8 million in the same period of 2025. CompX’s segment profit for the first nine months of 2026 was $22.4 million compared to $17.0 million for the comparable prior year period. CompX’s segment profit increased in the third quarter and for the first nine months of 2026 due to higher sales and gross margin at Security Products and Marine Components reporting units.

Previous wording

Net sales– CompX’s net sales increased $3.3 million and $3.6 million in the second quarter and for the first six months of 2026, respectively, compared to the same periods in 2025 due to higher Security Products sales across a variety of markets and higher Marine Components sales to the industrial market. See discussion of reporting units below.

Current wording

Net sales– CompX’s net sales increased $4.0 million in the third quarter of 2026 compared to the same period in 2025 primarily due to higher Marine Components sales to the towboat and industrial markets, and to a lesser extent, higher Security Products sales to the healthcare and tool storage markets. Net sales increased $7.6 million for the first nine months of 2026 compared to the same period in 2025 primarily due to higher Marine Components sales to the industrial market and higher Security Products sales to various markets including the healthcare, tool storage, transportation and distribution markets. See discussion of reporting units below.

Previous wording

Cost of sales and gross margin– CompX’s cost of sales as a percentage of net sales improved by 3.7% and 3.1% in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. As a result, CompX’s gross margin as a percentage of sales increased over the same periods. The improvement in CompX’s gross margin percentage for the second quarter and first six months of 2026 was primarily due to a higher gross margin percentage at Security Products. In addition, improved gross margin performance at Marine Components contributed favorably to the increase in the second-quarter comparative period. See discussion of reporting units below.

Current wording

Cost of sales and gross margin– CompX’s cost of sales as a percentage of net sales improved by 2.0% and 2.7% in the third quarter and first nine months of 2026, respectively, compared to the same periods in 2025. As a result, gross margin as a percentage of sales increased over the same periods. The improvement in gross margin percentage for the third quarter was due to higher gross margin percentages at both Security Products and Marine Components, while the improvement for the first nine months of 2026 was primarily due to the improvement in 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 sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales, administrative costs relating to CompX’s business unit and corporate management activities, and gains and losses on property and equipment. CompX’s selling, general and administrative expenses for the second quarter and first six months of 2026 were comparable to the same periods in 2025. CompX’s selling, general and administrative expenses as a percentage of net sales decreased in the second quarter and first six months of 2026 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 sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales, administrative costs relating to CompX’s business unit and corporate management activities, and gains and losses on property and equipment. CompX’s selling, general and administrative expenses for the third quarter and first nine months of 2026 increased $.4 million and $.3 million, respectively, compared to the same periods in 2025 primarily due to higher employee related costs, including salaries, benefits and travel expenses. CompX’s selling, general and administrative expenses as a percentage of net sales decreased in the third quarter and first nine months of 2026 due to higher coverage of operating costs and expenses as a result of higher sales, partially offset by higher operating costs as noted above.

Previous wording

Segment profit– As a percentage of net sales, CompX’s segment profit for the second quarter and the first six months of 2026 increased compared to the same periods of 2025 and was primarily impacted by the factors impacting CompX’s sales, cost of sales, gross margin and selling, general and administrative expenses. 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 2026 increased compared to the same periods of 2025 and was primarily impacted by the factors impacting CompX’s sales, cost of sales, gross margin and selling, general and administrative expenses. See discussion of reporting units below.

Previous wording

Security Products– Security Products net sales increased 9% in the second quarter of 2026 compared to the same period in 2025 primarily due to $.9 million higher sales to the healthcare market, $.7 million higher sales to the transportation market, $.5 million higher sales to distributors and $.4 million higher sales to the tool storage market. Security Products net sales increased 4% in the first six months of 2026 compared to the same period in 2025 primarily due to $.8 million higher sales to the transportation market, $.7 million higher sales to the tool storage market, $.6 million higher sales to the healthcare market and $.4 million higher sales to distributors. Sales to the government security market in the second quarter and in the first six months of 2026 were comparable to the same periods in 2025.

Current wording

Security Products– Security Products net sales increased 5% in the third quarter of 2026 compared to the same period in 2025 primarily due to $1.4 million higher sales to the healthcare market and $.6 million higher sales to the tool storage market, partially offset by $.8 million lower sales to the government security market. Security Products net sales increased 4% in the first nine months of 2026 compared to the same period in 2025 primarily due to $2.0 million higher sales to the healthcare market, $1.3 million higher sales to the tool storage market, $1.1 million higher sales to the transportation market and $.6 million higher sales to distributors, partially offset by $1.1 million lower sales to the government security market.

Previous wording

Gross margin as a percentage of net sales increased in the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to a more favorable customer and product mix and lower cost of sales driven by lower employer-related medical expenses and the one-time recovery of prior-period import costs recognized during the second quarter of 2026. Reporting unit profit margin increased for both periods, primarily due to the improvement in gross margin and increased coverage of selling, general and administrative expenses on higher sales.

Current wording

same period in 2025 primarily due to a more favorable customer and product mix and lower cost of sales driven by lower employer-related medical expenses and the one-time recovery of prior-period import costs recognized during the second quarter of 2026. Security Products reporting unit profit margin increased for the first nine months of 2026 primarily due to the improvement in gross margin discussed above and increased coverage of selling, general and administrative expenses on higher sales.

Previous wording

Marine Components– Marine Components net sales increased 6% in both the second quarter and first six months of 2026 compared to the same periods in 2025. The increase in second quarter sales was primarily due to $1.6 million higher sales to the industrial market, partially offset by $1.0 million lower sales to the government market. The increase in sales for the first six months of 2026 was primarily due to $3.5 million higher sales to the industrial market, partially offset by $1.5 million lower sales to the towboat market and $1.0 million lower sales to the government market. Towboat market sales in the first quarter of 2025 benefited from a one-time customer stocking event that did not repeat in 2026.

Current wording

Marine Components– Marine Components net sales increased 27% in the third quarter of 2026 compared to the same period in 2025. The increase in third quarter sales was primarily due to $1.1 million higher sales to the towboat market and $.9 million higher sales to the industrial market. Marine Components net sales increased 13% in the first nine months of 2026 compared to the same period in 2025. The increase in sales for the first nine months of 2026 was primarily due to $4.4 million higher sales to the industrial market and $.5 million higher sales to the engine builder market, partially offset by $.7 million lower sales to the government market and $.5 million lower sales to each of the towboat and the center console markets. Towboat market sales in the first quarter of 2025 benefited from a one-time customer stocking event that did not repeat in 2026.

Previous wording

Gross margin as a percentage of net sales increased in the second quarter of 2026 compared to the same period in 2025 primarily due to a more favorable customer and product mix, partially offset by higher cost of sales, including increased maintenance and supply costs. Reporting unit profit margin increased in the second quarter of 2026 primarily due to the factors impacting gross margin. Gross margin as a percentage of net sales for the first six months of 2026 was comparable to the same period in 2025 as a more favorable customer and product mix and increased coverage of fixed costs on higher sales were largely offset by higher cost of sales, including sales of higher-cost inventory and increased maintenance and supply costs. Reporting unit profit margin increased for the first six months of 2026 primarily due to increased coverage of selling, general and administrative expenses on higher sales.

Current wording

Gross margin as a percentage of net sales increased in the third quarter of 2026 compared to the same period in 2025 primarily due to increased coverage of fixed costs on higher sales, partially offset by a less favorable customer and product mix. Marine Components reporting unit profit margin increased in the third quarter of 2026 primarily due to the factors impacting gross margin and increased coverage of selling, general and administrative expenses on higher sales. Gross margin as a percentage of net sales for the first nine months of 2026 was comparable to the same period in 2025 as increased coverage of fixed costs on higher sales were largely offset by a less favorable customer and product mix. Marine Components reporting unit profit margin increased for the first nine months of 2026 primarily due to increased coverage of operating costs and expenses on higher sales.

Previous wording

Outlook**–CompX’s **results for the first six months of 2026 reflected higher sales and favorable customer and product mix for both the Security Products and Marine Components reporting units. CompX expects these trends to continue through the remainder of 2026, and it currently expects net sales for the full year of 2026 to exceed 2025 levels (excluding the impact of the one-time stocking event noted above). Within Security Products, CompX expects demand from several end markets, including healthcare, transportation and tool storage, to remain strong in the second half of 2026. Within Marine Components, CompX expects increased demand will continue to be driven by industrial market demand, particularly aeroderivative demand, while recreational marine and towboat-related demand is expected to remain relatively consistent with 2025 levels. Based on CompX’s first-half operating performance, it currently expects full-year gross margin and segment profit margin to exceed 2025 levels, although margins during the second half of 2026 may be challenged by the factors discussed below. CompX’s future operating results will continue to be influenced by product and customer mix, raw material costs and overall demand levels in the markets it serves.

Current wording

Outlook**–CompX’s **results for the first nine months of 2026 reflected higher sales and improved profitability in both the Security Products and Marine Components reporting units. Demand remained strong in several key Security Products end markets, including healthcare, tool storage, and transportation. Marine Components continued to benefit primarily from industrial market demand as well as increased towboat demand in the third quarter. CompX expects these favorable trends to continue throughout the remainder of 2026 and it expects net sales, gross margin and segment profit for the full year 2026 to exceed 2025 levels. At Security Products, CompX expects healthcare demand to remain strong, while government security sales are expected to remain slightly below prior year levels. At Marine Components, CompX expects demand to remain driven primarily by the industrial market, while towboat market sales are expected to remain relatively consistent with prior year levels.

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 suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the second quarter of 2026, CompX experienced cost increases for certain imported raw materials, primarily electronic components, including increases in tariffs and shipping costs. In addition, inflationary pressures have increased costs for certain domestically-sourced raw 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 CompX’s customers’ ability to substitute alternative products. Accordingly, CompX continues to closely monitor raw material costs, including zinc, brass, aluminum, steel and energy, as well as current and anticipated customer demand levels, to ensure its production capacity and inventory levels remain aligned with market conditions.

Current wording

and the availability of alternative sources. CompX continues to monitor potential changes in tariff policies and their impact on raw material costs, sourcing decisions and customer demand. Accordingly, CompX continues to closely monitor raw material costs, including zinc, brass, aluminum, steel and energy, as well as customer demand levels, to ensure its production capacity and inventory levels remain aligned with market conditions.

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. 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.

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 generally 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 $2.8 million in the second quarter of 2026, $.7 million lower than in the second quarter of 2025, primarily due to lower environmental remediation and related costs. Included in corporate expense in the second quarter of 2025 and 2026 are:

Current wording

Corporate expense– Corporate expenses were $3.2 million in the third quarter of 2026, $.2 million higher than in the third quarter of 2025, primarily due to higher environmental remediation and related costs. Included in corporate expense in the third quarter of 2025 and 2026 are:

Previous wording

Corporate expenses were $5.8 million in the first six months of 2026, $.4 million lower than in the first six months of 2025, primarily due to lower environmental remediation and related costs, partially offset by higher general and administrative costs. Included in corporate expense in the first six months of 2025 and 2026 are:

Current wording

Corporate expenses were $9.0 million in the first nine months of 2026, $.2 million lower than in the first nine months of 2025, primarily due to lower environmental remediation and related costs, partially offset by higher general and administrative costs. Included in corporate expense in the first nine months of 2025 and 2026 are:

Previous 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, predominantly in the second half of the year. See Note 14 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, predominantly in the fourth quarter of the year. See Note 14 to our Condensed Consolidated Financial Statements.

Previous wording

Interest and dividend income– Interest and dividend income decreased in the second quarter and first six months of 2026 compared to the same periods of 2025 primarily due to decreased average investment balances and lower average interest rates.

Current wording

Interest and dividend income– Interest and dividend income decreased in the third quarter of 2026 compared to the third quarter of 2025 due to decreased interest rates. Interest and dividend income decreased in the first nine months 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 gain of $.5 million on the change in value of our marketable equity securities in the second quarter of 2026 compared to an unrealized loss of $.1 million in the second quarter of 2025. We recognized an unrealized gain of $3.1 million on the change in value of our marketable equity securities in the first six months of 2026 compared to an unrealized loss of $8.6 million in the first six months of 2025. See Note 5 to our Condensed Consolidated Financial Statements.

Current wording

Marketable equity securities– We recognized an unrealized gain of $.9 million on the change in value of our marketable equity securities in the third quarter of 2026 compared to an unrealized loss of $.5 million in the third quarter of 2025. We recognized an unrealized gain of $4.0 million on the change in value of our marketable equity securities in the first nine months of 2026 compared to an unrealized loss of $9.1 million in the first nine months of 2025. See Note 5 to our Condensed Consolidated Financial Statements.

Previous wording

Other components of net periodic pension and OPEB costs -Other components of net periodic pension and OPEB costs decreased in the second quarter and first six months of 2026 compared to the same periods of 2025 as a result of the pension plan liability settlement completed in the fourth quarter of 2025.

Current wording

Other components of net periodic pension and OPEB costs -Other components of net periodic pension and OPEB costs decreased in the third quarter and first nine months of 2026 compared to the same periods of 2025 as a result of the pension plan termination and buy-out completed in the fourth quarter of 2025.

Previous wording

Interest expense– Interest expense decreased in the second quarter and first six months of 2026 compared to the same periods of 2025 primarily due to the final payment of a structured settlement obligation in October of 2025.

Current wording

Interest expense– Interest expense was less than $.1 million in each of the third quarters of 2026 and 2025, respectively. Interest expense decreased in the first nine months of 2026 compared to the same period of 2025 primarily due to the final payment of a structured settlement obligation in October of 2025.

Previous wording

Income tax expense– We recognized income tax expense of $2.5 million in the second quarter of 2026 compared to an income tax benefit of less than $.1 million in the second quarter of 2025 and income tax expense of $3.9 million in the first half of 2026 compared to an income tax benefit of $.1 million in the first half 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 $3.5 million in the first six months of 2025 and 2026, respectively.

Current wording

Income tax expense– We recognized income tax expense of $2.5 million in the third quarter of 2026 compared to an income tax benefit of $.9 million in the third quarter of 2025 and income tax expense of $6.4 million in the first nine months of 2026 compared to an income tax benefit of $.9 million in the first nine months 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 $5.3 million in each of the first nine months of 2025 and 2026, 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 an effective tax rate of 12.4% in the first six months of 2026 compared to a negative effective tax rate of .9% in the first six 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.

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 an effective tax rate of 12.5% in the first nine months of 2026 compared to 18% in the first nine 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 second quarter and first six months 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.

Current wording

Noncontrolling interest– Noncontrolling interest in net income of CompX increased during the third quarter and first nine months of 2026 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

Kronos started 2026 with average TiO 2 selling prices lower than at the beginning of 2025; however, its average TiO 2 selling prices increased 4% during the first six months of 2026. During the second quarter of 2026, Kronos announced and implemented various price increases and surcharges in response to higher operating costs. Kronos’ average TiO 2 selling prices for the first six months of 2026 were 4% lower than its average TiO 2 selling prices for the first six months of 2025. Overall, Kronos’ sales volumes increased in the first six months of 2026 compared to the same period in 2025 primarily due to market share gains across all markets resulting from changing competitive and supply conditions and the continued effect of anti-dumping duties which remain in effect in certain markets.

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 11% during the first nine months of 2026. Throughout this period, Kronos has successfully implemented price increases and surcharges in response to rising operating costs, including energy and distribution costs. As a result, Kronos’ average TiO 2 selling prices for the first nine months of 2026 were 1% lower than the corresponding period of 2025, while average TiO 2 selling prices for the third quarter of 2026 were 5% higher than in the third quarter of 2025. Overall, Kronos’ sales volumes increased in the first nine months of 2026 compared to the same period in 2025 primarily due to market share gains in its European and North American markets, reflecting the effect of anti-dumping duties that remain in effect in certain markets and changing supply conditions. These conditions allowed Kronos to expand its customer base and supported implementation of its pricing initiatives. Despite these gains, overall TiO 2 demand remains below historical levels.

Previous wording

Excluding the effect of changes in currency exchange rates, Kronos’ cost of sales per metric ton of TiO 2 sold in the first half of 2026 was lower than the comparable period 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 costs (primarily feedstock costs) and lower unabsorbed fixed costs.

Current wording

Excluding the effects of changes in currency exchange rates, Kronos’ cost of sales per metric ton of TiO 2 sold in the first nine months of 2026 was lower than the comparable period of 2025 due to decreases in per metric ton production costs, primarily driven by the cost reduction initiatives discussed above, as well as lower raw material costs (primarily feedstock costs) and lower unabsorbed fixed costs, partially offset by higher energy costs.

Previous wording

Net sales– Kronos’ net sales in the second quarter of 2026 increased 13%, or $63.7 million, compared to the second quarter of 2025 primarily due to the effects of a 16% increase in sales volumes (which increased net sales by approximately $79 million) and the favorable impact of changes in currency exchange rates (primarily the euro) which it estimates increased its net sales by approximately $10 million. These increases were partially offset by a 3% decrease in average TiO 2 selling prices (which decreased net sales by approximately $15 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in Kronos’ complementary businesses. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Current wording

Net sales– Kronos’ net sales in the third quarter of 2026 increased 18%, or $84.2 million, compared to the third quarter of 2025 primarily due to the effects of a 14% increase in sales volumes (which increased net sales by approximately $64 million) and a 5% increase in average TiO 2 selling prices (which increased net sales by approximately $23 million). TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Previous wording

Kronos’ net sales in the first six months of 2026 increased 9%, or $83.7 million, compared to the first six months of 2025 primarily due to the effects of a 10% increase in sales volumes (which increased net sales by approximately $98 million) and the favorable impact of changes in currency exchange rates (primarily the euro), which Kronos estimates increased its net sales by approximately $41 million. These increases were partially offset by a 4% decrease in average TiO 2 selling prices (which decreased net sales by approximately $39 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in Kronos’ complementary businesses. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Current wording

Kronos’ net sales in the first nine months of 2026 increased 12%, or $167.9 million, compared to the first nine months of 2025 primarily due to an 11% increase in sales volumes (which increased net sales by approximately $159 million) partially offset by a 1% decrease in average TiO 2 selling prices (which decreased net sales by approximately $14 million). Additionally, Kronos estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $39 million in the first nine months of 2026 as compared to the first nine months of 2025. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Previous wording

Cost of sales and gross margin– Kronos’ costof sales increased by $23.7 million, or 5%, in thesecond quarter of 2026 compared to thesecond quarter of 2025 due to a 16% increase in sales volumesand the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock) and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in thesecond quarter of 2026 compared to approximately $20 million in thesecond quarter of 2025.

Current wording

Cost of sales and gross margin– Kronos’ costof sales increased by $3.8 million, or 1%, in thethird quarter of 2026 compared to thethird quarter of 2025 due to the net effects of a 14% increase in sales volumes, higher energy costs, higher production rates resulting in reduced unabsorbed fixed production costs, lower raw material costs (primarily feedstock) and lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025. Kronos’ cost of sales in thethird quarter of 2025 included approximately $27 million of unabsorbed fixed costs as it adjusted its TiO 2 production volumes lower to align inventory levels with lower demand. Unabsorbed fixed costs in thethird quarter of 2026 were not material.

Previous wording

Kronos’ gross margin as a percentage of net sales increased to 18% in the second quarter of 2026 compared to 13% in the second quarter of 2025. Kronos’ gross margin as a percentage of net sales increased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costs as discussed above, and the unfavorable impact from changes in currency exchange rates.

Current wording

Kronos’ gross margin as a percentage of net sales increased to 24% in the third quarter of 2026 compared to 10% in the third quarter of 2025. Kronos’ gross margin as a percentage of net sales increased based on the factors affecting net sales and cost of sales, discussed above.

Previous wording

Kronos’ cost of sales increased by $67.3 million, or 8%, in thefirst six months of 2026 compared to thefirst six months of 2025 due to a 10% increase in sales volumesand the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock), and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in the first six months of 2026 compared to $30 million in the first six months of 2025.

Current wording

Kronos’ cost of sales increased by $71.0 million, or 6%, in thefirst nine months of 2026 compared to thefirst nine months of 2025 primarily due to an 11% increase in sales volume and theunfavorable impact from changes in currency exchange rates, partially offset by higher production rates resulting in reduced unabsorbed fixed production costs, lower raw material costs (primarily feedstock) and lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025. Kronos’ cost of sales for the first nine months of 2025 includes approximately $45 million of unabsorbed fixed costs. Unabsorbed fixed costs for the first nine months of 2026 were not material.

Previous wording

Kronos’ cost of sales as a percentage of net sales improved to 82% in the second quarter of 2026 compared to 87% in the same period of 2025, primarily due to the favorable effects of higher sales volumes and lower production costs, discussed above. These favorable impacts were partially offset by lower average TiO 2 selling prices and the unfavorable impact of lower average selling prices and sales volumes within Kronos’ complementary businesses.

Current wording

Kronos’ cost of sales as a percentage of net sales improved to 81% in the first nine months of 2026 compared to 85% in the same period of 2025, primarily due to the favorable effects of lower production costs, partially offset by lower average TiO 2 selling prices and the unfavorable impact of changes in currency exchange rates.

Previous wording

Kronos’ gross margin as a percentage of net sales was comparable at 17% in the first six months of 2026 and 2025 based on the factors affecting net sales and cost of sales, discussed above.

Current wording

Kronos’ gross margin as a percentage of net sales increased to 19% in the first nine months of 2026 compared to 15% in the comparable period of 2025 based on the factors affecting net sales and cost of sales, discussed above.

Previous wording

Selling, general and administrative expense– Kronos’ selling, general and administrative expense increased $2.4 million, or 4%, in the second quarter of 2026 compared to the second quarter of 2025, as the unfavorable impact of changes in currency exchange rates and higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of changes in currency exchange rates, Kronos’ distribution costs increased primarily due to higher sales volumes and elevated U.S. freight rates beginning early in the second quarter of 2026. Kronos’ selling, general and administrative expense as a percentage of net sales decreased to 12% in the second quarter of 2026 compared to 13% in the second quarter of 2025, primarily due to the effects of higher sales.

Current wording

Selling, general and administrative expense– Kronos’ selling, general and administrative expense increased $5.2 million, or 8%, in the third quarter of 2026 compared to the third quarter of 2025, as higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of currency exchange rates, distribution costs increased primarily due to higher freight rates associated with sales volumes in Kronos’ complementary businesses, higher TiO 2 sales volumes and elevated U.S. freight rates which began to increase in the second quarter and continued into the third quarter of 2026. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the third quarter of 2026 compared to 13% in the third quarter of 2025, primarily due to higher sales volumes and the factors described above.

Previous wording

Kronos’ selling, general and administrative expense increased $4.4 million, or 4%, in the first six months of 2026 compared to the first six months of 2025, as the unfavorable impact of changes in currency exchange rates and slightly higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of changes in currency exchange rates, Kronos’ distribution costs increased primarily due to higher sales volumes and elevated U.S. freight rates beginning early in the second quarter of 2026. These increases more than offset the benefit of the restructuring implemented in the fourth quarter of 2025 and the one-time impact of additional warehousing costs in the first quarter of 2025 to position finished goods inventory in the U.S. in advance of anticipated U.S. federal government tariff announcements. Kronos’ selling, general and administrative expense as a percentage of net sales decreased to 12% in the first six months of 2026 compared to 13% in the same period of 2025, primarily due to the effects of higher sales.

Current wording

Kronos’ selling, general and administrative expense increased $9.6 million, or 5%, in the first nine months of 2026 compared to the first nine months of 2025, as the unfavorable impact of currency exchange rates and higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of currency exchange rates, distribution costs increased primarily due to higher freight rates associated with sales volumes in Kronos’ complementary businesses, higher TiO 2 sales volumes and elevated U.S. freight rates primarily impacting the second and third quarters of 2026. These increases more than offset the benefits of the cost reduction initiatives and were greater than the additional warehousing costs incurred during the first quarter of 2025 to position finished goods inventory in the U.S. in advance of anticipated U.S. federal government tariff announcements. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the first nine months of 2026 compared to 13% in the same period of 2025, primarily due to higher sales volumes and the factors described above.

Previous wording

Income from operations– Kronos’ income from operations increased by $30.2 million to $37.6 million in the second quarter of 2026 compared to $7.4 million in the second quarter of 2025, primarily as a result of the factors impacting gross margin discussed above. Kronos estimates that changes in currency exchange rates decreased income from operations by approximately $12 million in the second quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.

Current wording

Income from operations– Kronos’ income from operations increased by $77.1 million to $57.9 million in the third quarter of 2026 compared to a $19.2 million loss in the third quarter of 2025, primarily as a result of the factors impacting gross margin and selling, general and administrative expense discussed above. Kronos estimates that changes in currency exchange rates decreased income from operations by approximately $5 million in the third quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.

Previous wording

Kronos’ income from operations increased by $4.4 million to $50.2 million in the first six months of 2026 compared to $45.8 million in the first six months of 2025, primarily as a result of the factors impacting gross margin discussed above. Kronos estimates that changes in currency exchange rates decreased income from operations by approximately $18 million in the first six months of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.

Current wording

Kronos’ income from operations increased by $81.5 million to $108.1 million in the first nine months of 2026 compared to $26.6 million in the first nine months of 2025, primarily as a result of the factors impacting gross margin and selling, general and administrative costs discussed above. Kronos estimates that changes in currency exchange rates decreased income from operations by approximately $23 million in the first nine months 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 second quarter of 2026 increased by $1.4 million compared to the second quarter of 2025 primarily due to higher average debt balances and higher interest rates. Other components of net periodic pension and OPEB cost in the second quarter of 2026 increased $.2 million compared to the second quarter of 2025 primarily due to lower expected return on plan assets.

Current wording

Other non-operating income (expense)– Kronos’ interest expense in the third quarter of 2026 decreased by $.7 million compared to the third quarter of 2025, primarily due to lower overall average debt balances. Other components of net periodic pension and OPEB cost in the third quarter of 2026 increased $.3 million compared to the third quarter of 2025 primarily due to lower expected return on plan assets. 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.

Previous wording

Kronos’ interest expense in the first six months of 2026 increased by $4.1 million compared to the first six months of 2025 primarily due to higher average debt balances and higher interest rates. Other components of net periodic pension and OPEB costs in the first six months of 2026 increased $.5 million compared to the first six months of 2025 primarily due to lower expected return on plan assets. Kronos recognized an unrealized gain of $.3 million in the first six months 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.

Current wording

Kronos’ interest expense in the first nine months of 2026 increased by $3.4 million compared to the first nine months of 2025 primarily due to higher average interest rates. In the first nine months of 2025, Kronos recognized a non-cash gain of $4.6 million due to the remeasurement of its earn-out liability. Other components of net periodic pension and OPEB costs in the first nine months of 2026 increased $.8 million compared to the first nine months of 2025 primarily due to lower expected return on plan assets. Kronos recognized an unrealized gain of $.4 million in the first nine months of 2026 related to the change in marketable equity securities compared to an unrealized loss of $1.1 million in the same period of 2025.