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CompX International Inc. Reports Operating Results (10-Q)

May 04, 2010 | About:
10qk

10qk

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CompX International Inc. (CIX) filed Quarterly Report for the period ended 2010-03-31.

Compx International Inc. has a market cap of $143.1 million; its shares were traded at around $11.69 with a P/E ratio of 116.9 and P/S ratio of 1.2. The dividend yield of Compx International Inc. stocks is 4.3%.CIX is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net sales. Net sales increased $4.3 million, or 15%, to $32.8 million in the first quarter of 2010 as compared to $28.5 million in the first quarter of 2009. Net sales increased due to an increase in order rates from our customers resulting from improving economic conditions in North America. Our Furniture Components, Security Products and Marine Components segments accounted for approximately 51%, 32% and 17%, respectively, of the $4.3 million total increase in sales. Furniture Components sales was a greater percentage of the total increase because this segment experienced a greater contraction in demand during the economic downturn in 2009, resulting in a greater increase as customer demand began to return. The Marine Segment accounted for a smaller percentage of the total increase due to the smaller sales volume associated with that segment.

Operating income (loss). Operating income (loss) in the first quarter of 2010 improved to income of $1.7 million compared to a loss of $937,000 for the first quarter of 2009. As a percentage of net sales, operating income (loss) improved for the first quarter of 2010 compared to the first quarter of 2009 due to the impact of higher sales partially offset by higher litigation expenses as discussed above and the negative impact of relative changes in currency exchange rates.

Furniture Components. Furniture Components net sales increased 19% to $14.1 million in the first quarter of 2010 compared to $11.9 million in the same period last year. The increase in sales is primarily due to an increase in customer order rates across most customers resulting from improved economic conditions in North America. Gross margin percentage increased from 13% in the first three months of 2009 to 24% in the first three months of 2010. The increase in gross margin percentage was primarily achieved as a result of the positive impact of (i) a seven percentage point increase in our variable contribution margin through more efficient use of labor and overhead due to the higher sales in 2010 and (ii) a four percentage point increase relating to improved coverage of fixed manufacturing costs from higher sales volume each net of the negative impact of changes in currency exchange rates. With respect to operating income, the improved gross margin was partially offset by a $1.5 million increase in litigation expenses. See Note 8 to the Condensed Consolidated Financial Statements. As a result, operating income increased from a loss of $22,000 in the first quarter of 2009 to income of $7,000 in the first quarter of 2010.

Marine Components. Marine Components net sales increased 56% to $2.0 million during the first quarter of 2010 as compared to $1.3 million in the same period last year. The increase in sales is primarily due to improved economic conditions in North America. As a result of the improved labor efficiency and coverage of overhead and fixed cost from the higher sales, gross margin increased from a loss of $509,000 in the first quarter of 2009 to income of $224,000 in the first quarter of 2010, and the operating loss decreased from $1.2 million to a loss of $369,000 in the first three months of 2010 compared to the same period in 2009.

Investing activities. Net cash used by investing activities totaled $333,000 in the first quarter of 2009 compared to net cash used by investing activities of $4.4 million in the first quarter of 2010 due primarily to net advances on a loan to an affiliate.

Financing activities. Net cash used by financing activities was comparable at $1.9 million in the first quarter of 2009 and $1.6 million in the first quarter of 2010. We paid quarterly dividends of $1.5 million, or $.125 per share, in each of the first quarters of 2009 and 2010.

Read the The complete Report

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