Compx International Inc. has a market cap of $158.6 million; its shares were traded at around $12.96 with a P/E ratio of 58.9 and P/S ratio of 1.4. The dividend yield of Compx International Inc. stocks is 3.9%.CIX is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:We reported operating income of $2.9 million in the second quarter of 2010 compared to an operating loss of $949,000 in the same period of 2009. We reported operating income of $4.7 million for the six-month period ended June 30, 2010 compared to an operating loss of $1.9 million for the comparable period of 2009. Our operating income increased in the second quarter of 2010 over the comparable 2009 quarter primarily due to the effects of (i) an increase in customer order rates across all business segments due to improved economic conditions in North America resulting in higher sales which increased utilization of production capacity and improved coverage of fixed manufacturing costs, (ii) lower litigation expense for the quarter and (iii) a $700K write-down related to assets held for sale recorded in the second quarter of 2009, partially offset by the negative effects of relative changes in foreign currency exchange rates. The above items also impacted the six-month period comparison, except that litigation expense was higher for the 2010 year-to-date period.
Litigation Expense. In the first six months of 2010, we recorded $1.9 million of patent litigation expense relating to Furniture Components compared to $970,000 in the same period of 2009. See Note 9 to the Condensed Consolidated Financial Statements.
Operating income (loss). Operating income improved to $2.9 million for the second quarter of 2010 compared to a loss of $949,000 for the second quarter of 2009 and improved to $4.7 million for the first six months of 2010 compared to a loss of $1.9 million for the same period in 2009. Operating income improved for both comparative periods primarily due to the impact of higher sales, partially offset by the negative impact of relative changes in currency exchange rates. Additionally, higher litigation expense negatively impacted the year-to-date period.
Interest expense. Interest expense decreased approximately $70,000 and $196,000 for the three and six month periods ending June 30, 2010, respectively. The decrease in interest expense is principally the result of a decrease in the average interest rates on the outstanding principal amount of our note payable to affiliate (1.29% at June 30, 2010 compared to 2.19% at June 30, 2009).
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