NL REPORTS THIRD QUARTER 2023 RESULTS
DALLAS, TEXAS – November 2, 2023 – NL Industries, Inc. (NYSE: NL) today reported a net loss attributable to NL stockholders of $.1 million, or nil per share, in the third quarter of 2023 compared to a net loss attributable to NL stockholders of $8.9 million, or $.18 per share, in the third quarter of 2022. NL results include an unrealized gain of $.4 million in the third quarter of 2023 related to the change in value of marketable equity securities compared to an unrealized loss of $24.2 million in the third quarter of 2022. For the first nine months of 2023, NL reported a net loss attributable to NL stockholders of $9.9 million, or $.20 per share, compared to net income attributable to NL stockholders of $39.9 million, or $.82 per share, for the first nine months of 2022. NL results include an unrealized loss of $10.5 million in the first nine months of 2023 related to the change in value of marketable equity securities compared to a $4.3 million unrealized loss in the first nine months of 2022.
Net sales were $40.3 million for the third quarter of 2023 compared to $42.9 million in the third quarter of 2022 and $118.1 million for the first nine months of 2023, compared to $126.6 million for the same prior year period. The decrease in sales for both periods is predominantly due to lower Marine Components sales primarily to the towboat market, partially offset by higher Security Products sales in the third quarter of 2023. Income from operations attributable to CompX was $6.6 million for the third quarter of 2023 compared to $6.0 million for the third quarter of 2022 and $18.0 million for the first nine months of 2023 compared to $20.0 million for the same prior year period. Income from operations increased in the third quarter of 2023 compared to the same period in 2022 due to higher Security Products sales and improved gross margin percentages at both reporting units, partially offset by lower Marine Components sales. Income from operations decreased in the first nine months of 2023 compared to the same period in 2022 primarily due to lower Marine Component sales and, to a lesser extent, lower Security Products sales somewhat offset by an improvement in the Marine Component gross margin percentage.
NL recognized equity in losses of Kronos of $6.2 million in the third quarter of 2023 compared to equity in earnings of $6.4 million in the third quarter of 2022. NL recognized equity in losses of $13.4 million in the first nine months of 2023 compared to equity in earnings of $37.9 million in the same period of 2022. Kronos’ net sales of $396.9 million in the third quarter of 2023 were $62.7 million, or 14%, lower than in the third quarter of 2022. Kronos’ net sales of $1.3 billion in the first nine months of 2023 were $321.4 million, or 20%, lower than in the first nine months of 2022. Kronos’ net sales decreased in the third quarter and first nine months of 2023 compared to the same periods of 2022 due to the effects of lower sales volumes in all its major markets and lower average TiO2 selling prices. Kronos’ TiO2 sales volumes were 6% lower in the third quarter of 2023 as compared to the third quarter of 2022 and 22% lower in the first nine months of 2023 as compared to the first nine months of 2022. Kronos’ average TiO2 selling prices were 8% lower in the third quarter of 2023 as compared to the third quarter of 2022 and 2% lower in the first nine months of 2023 as compared to the first nine months of 2022. Kronos’s average TiO2 selling prices at the end of the third quarter of 2023 were 9% lower than at the end of 2022. Changes in product mix positively contributed to Kronos’ net sales, primarily due to higher average selling prices in its complementary businesses which somewhat offset declines in TiO2 sales volumes in the first nine months of 2023. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, increasing net sales by approximately $12 million in the third quarter of 2023 as compared to the third quarter of 2022. Changes in currency exchange rates had a nominal effect on net sales in the first nine months of 2023 as compared to the first nine months of 2022. The table at the end of this press release shows how each of these items impacted Kronos’ net sales.
Kronos’ loss from operations in the third quarter of 2023 was $25.3 million as compared to income from operations of $30.8 million in the third quarter of 2022. For the year-to-date period, Kronos’ loss from operations was $50.3 million as compared to income from operations of $179.3 million in the first nine months of 2022. Kronos’ income from operations decreased in the third quarter of 2023 compared to the same period in 2022 primarily due to lower sales volumes and lower average TiO2 selling prices. Kronos’ income from operations decreased in the first nine months of 2023 as compared to the first nine months in 2022 as a result of the combination of lower sales volumes, higher production costs (primarily raw material costs) and lower average TiO2 selling prices. In addition, cost of sales in the third quarter and first nine months of 2023 includes $20 million and $74 million, respectively, of unabsorbed fixed production and other manufacturing costs associated with production curtailments at Kronos’ facilities during the first nine months of 2023 as it adjusted its TiO2