DALLAS, TEXAS .November 6, 2012 . CompX International Inc. (NYSE MKT: CIX) announced today sales of $37.1 million for the third quarter of 2012 compared to $35.7 million in the same period of 2011.  Operating income was $4.3 million in the third quarter of 2012 compared to $1.5 million in the same period in 2011.  Net income for the third quarter of 2012 was $2.6 million, or $0.21 per diluted share, compared to $1.1 million, or $0.09 per diluted share, in the third quarter of 2011.    

For the nine months ended September 30, 2012 sales were $110.2 million compared to $105.7 million in the previous year.  Operating income was $11.2 million for the nine months ended September 30, 2012 compared to $13.4 million for 2011.  Operating income for the first nine months of 2011 was favorably impacted by a first quarter $7.5 million litigation settlement gain.  Net income for the nine months ended September 30, 2012 was $6.2 million or $0.50 per diluted share, compared to $6.7 million, or $0.54 per diluted share, in 2011.  The effect of the litigation settlement gain on net income in the 2011 year-to-date period was $3.4 million, or $0.27 per diluted share. 

Net sales increased in 2012 due to $400,000 and $2.7 million, respectively, in new ergonomics healthcare product line sales during the quarter and nine month period relating to the Furniture Components business acquired in July 2011, as well as from general growth in customer demand within our Security Products and Marine Components segments.  Operating income for the third quarter of 2012 increased primarily due to the net effects of:

  • The gross margin improvement in our Furniture Components segment from 16% in 2011 to 24% in 2012 primarily as a result of a favorable change in product mix and improved production efficiencies related to a facility consolidation;

  •  2012 other operating income as a result of the reversal of the accrued contingent consideration related to the ergonomics healthcare product line acquired in July 2011;

  •  A lower asset held for sale write-down recorded in 2012 compared to 2011; and

  •  An increase in customer order rates across most business segments due to somewhat improved economic conditions in North America.

The decrease in operating income for the nine month period of 2012 compared to the same period in 2011 is primarily due to the net effects of:

  • The 2011 litigation settlement gain, net of related expenses;

  • 2011 facility consolidating costs of $2.0 million;

  • The gross margin improvement in our Furniture Components segment from 19% in 2011 to 23% in 2012 primarily as a result of a favorable change in product mix and improved production efficiencies related to the facility consolidation;

  •  An increase in customer order rates across most business segments due to somewhat improved economic conditions in North America;

  • 2012 other operating income as a result of the reversal of the accrued contingent consideration related to the ergonomics healthcare product line acquired in July 2011; and

  • A lower asset held for sale write-down recorded in 2012 compared to 2011.

"We are particularly pleased with the improvement in gross margin achieved in our Furniture Components segment, which resulted in part by an increase in the percentage of sales from higher margin ergonomics sales, including the healthcare product line acquired last year, as well as improved production efficiencies achieved as a result of the prior year facility consolidation," commented David A. Bowers, President & CEO.  "Sales across all of our business units showed improvement over the prior year as each continues to do the right things to grow in a challenging overall economic environment.  Future order visibility is still an issue as our customers deal with uncertainty in their own business environment, but we are confident that the strength of our customer relationships and efficient cost structure position us well to be successful regardless of the near term economic challenges."

CompX is a leading manufacturer of security products, furniture components and performance marine components.  It operates from six locations in the U.S., Canada and Taiwan and employs approximately 800 people.

Forward-Looking Statements
Statements in this release relating to matters that are not historical facts are forward-looking statements based upon management's belief and assumptions using currently available information.  Although CompX believes the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct.  Such statements, by their nature, involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements.  While it is not possible to identify all factors, CompX continues to face many risks and uncertainties.  Among the factors that could cause actual future results to differ materially include, but are not limited to, general economic and political conditions, changes in raw material and other operating costs, demand for office furniture, service industry employment levels, competitive products and prices, fluctuations in currency exchange rates, the introduction of trade barriers, potential difficulties in integrating completed acquisitions, the ability to sustain or increase operating income improvement resulting from cost control initiatives, uncertainties associated with the development of new product features and other risks and uncertainties detailed in CompX's Securities and Exchange Commission filings.  Should one or more of these risks materialize or if the consequences worsen, or if the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected.  CompX disclaims any intention or obligation to publicly update or revise such statements whether as a result of new information, future events or otherwise. 

Three months ended Nine months ended
 September 30, September 30,
  2011   2012   2011   2012  
Net sales  $   35.7  $   37.1  $   105.7  $   110.2
Cost of goods sold       27.2       26.9         78.7         80.5
Gross profit        8.5       10.2         27.0         29.7
Selling, general and administrative expense        5.7        6.3         17.8         18.9
Other operating income (expense):
  Reversal of accrued contingent consideration           -         0.8             -            0.8
  Asset held for sale write-down       (1.1)       (0.4)         (1.1)         (0.4)
  Litigation settlement gain           -            -            7.5             - 
  Litigation expense           -            -          (0.2)             - 
  Facility consolidation costs       (0.2)           -          (2.0)             - 
Operating income        1.5        4.3         13.4         11.2
Other non-operating expenses, net       (0.1)       (0.1)         (0.3)         (0.5)
Income before income taxes        1.4        4.2         13.1         10.7
Provision for income taxes        0.3        1.6           6.4           4.5
Net income  $     1.1  $     2.6  $       6.7  $       6.2
Net income per diluted common share  $   0.09  $   0.21  $     0.54  $     0.50
Weighted average diluted common                 
   shares outstanding       12.4       12.4         12.4         12.4

December 31, September 30,
      2011            2012      
Assets (Unaudited)
Current assets:
  Cash and equivalents  $               10.1  $              7.0
  Accounts receivable, net                   14.2                17.2
  Inventories, net                   19.6                19.3
  Deferred income taxes and other                    3.5                  5.0
    Total current assets                   47.4                48.5
Intangibles                   36.3                36.1
Net property and equipment                   51.1                51.4
Assets held for sale                    6.6                  6.2
Other assets                    0.1                  0.2
    Total assets  $             141.5  $          142.4
Liabilities and Stockholders' Equity
Current liabilities:
  Current maturities of long-term debt  $                 1.0  $              1.0
  Accounts payable and accrued liabilities                   16.3                15.1
  Income taxes                    1.5                  1.0
    Total current liabilities                   18.8                17.1
Long-term debt                   23.2                21.5
Deferred income taxes                   14.1                16.5
Other noncurrent liabilities                    0.7                    - 
Stockholders' equity                   84.7                87.3
    Total liabilities and stockholders' equity  $             141.5  $          142.4

CONTACT:  David A. Bowers, President & CEO, 864-286-1122


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