Compx International Inc 10-Q for FY2023 Q2

Compx International Inc (CIX)

10-Q 2023-08-01 For: 2023-06-30

Added on April 08, 2026

About this 10-Q

Compx International Inc filed this 10-Q on August 1, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $36.62M; down 12.1% from $41.68M a year earlier
Net income: $4.07M; down 34.1% from net income of $6.18M a year earlier
Diluted EPS: $0.33; down 34.0% from $0.50 a year earlier


Item No.		Exhibit Index

31.1		Certification
31.2		Certification
32.1		Certification
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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DELAWARE		57-0981653
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock	CIX	NYSE American


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐


		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – December 31, 2022 and June 30, 2023 (unaudited)	- 3 -

	Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) – Three and six months ended June 30, 2022 and 2023	- 4 -

	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three and six months ended June 30, 2022 and 2023	- 5 -

	Condensed Consolidated Statements of Cash Flows (unaudited) –Six months ended June 30, 2022 and 2023	- 6 -

	Notes to Condensed Consolidated Financial Statements (unaudited)	- 7 -

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	- 11 -

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	- 17 -

Item 4.	Controls and Procedures	- 17 -

Part II.	OTHER INFORMATION

Item 1A.	Risk Factors	- 18 -

Item 6.	Exhibits	- 18 -


	December 31,		June 30,
ASSETS	2022		2023
			(unaudited)
Current assets:
Cash and cash equivalents	$	26,748	$	17,958
Marketable securities		33,147		46,794
Accounts receivable, net		17,840		15,044
Inventories, net		31,290		33,765
Prepaid expenses and other		2,136		1,673
Total current assets		111,161		115,234

Other assets:
Note receivable from affiliate		13,200		12,200
Goodwill		23,742		23,742
Other noncurrent assets		590		747
Total other assets		37,532		36,689

Property and equipment:
Land		5,390		5,390
Buildings		23,181		23,181
Equipment		74,113		74,525
Construction in progress		722		434
		103,406		103,530
Less accumulated depreciation		74,712		76,407
Net property and equipment		28,694		27,123
Total assets	$	177,387	$	179,046

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	15,618	$	13,954
Income taxes payable to affiliate		1,035		827
Total current liabilities		16,653		14,781

Noncurrent liabilities:
Deferred income taxes		2,230		1,778
Other		68		48
Total noncurrent liabilities		2,298		1,826

Stockholders' equity:
Preferred stock		—		—
Class A common stock		123		123
Additional paid-in capital		53,155		53,275
Retained earnings		105,175		109,160
Accumulated other comprehensive loss - unrealized loss on marketable securities		(17)		(119)
Total stockholders' equity		158,436		162,439
Total liabilities and stockholders’ equity	$	177,387	$	179,046


	Three months ended				Six months ended
	June 30,				June 30,
	2022		2023		2022		2023

	(unaudited)
Net sales	$	41,675	$	36,616	$	83,725	$	77,767
Cost of sales		28,046		26,343		58,016		54,790
Gross margin		13,629		10,273		25,709		22,977
Selling, general and administrative expense		5,884		5,906		11,658		11,570
Operating income		7,745		4,367		14,051		11,407
Interest income		337		992		551		1,939
Income before income taxes		8,082		5,359		14,602		13,346
Provision for income taxes		1,906		1,287		3,442		3,206
Net income	$	6,176	$	4,072	$	11,160	$	10,140

Other comprehensive loss, marketable securities adjustment:
Unrealized loss arising during year, net		—		(72)		—		(102)
Comprehensive income	$	6,176	$	4,000	$	11,160	$	10,038

Basic and diluted net income per common share	$	.50	$	.33	$	.90	$	.82

Basic and diluted weighted average shares outstanding		12,367		12,310		12,374		12,309


	Three months ended June 30, 2022 and 2023 (unaudited)
							Accumulated
	Class A		Additional				other				Total
	common		paid-in		Retained		comprehensive		Treasury		stockholders'
	stock		capital		earnings		loss		stock		equity
Balance at March 31, 2022	$	124	$	54,780	$	120,073	$	—	$	—	$	174,977
Net income		—		—		6,176		—		—		6,176
Issuance of common stock		—		118		—		—		—		118
Treasury stock:
Acquired		—		—		—		—		(1,744)		(1,744)
Retired		(1)		(1,743)		—		—		1,744		—
Cash dividends ($.25 per share)		—		—		(3,094)		—		—		(3,094)
Balance at June 30, 2022	$	123	$	53,155	$	123,155	$	—	$	—	$	176,433

Balance at March 31, 2023	$	123	$	53,155	$	108,166	$	(47)	$	—	$	161,397
Net income		—		—		4,072		—		—		4,072
Issuance of common stock		—		120		—		—		—		120
Cash dividends ($.25 per share)		—		—		(3,078)		—		—		(3,078)
Other comprehensive loss		—		—		—		(72)		—		(72)
Balance at June 30, 2023	$	123	$	53,275	$	109,160	$	(119)	$	—	$	162,439


	Six months ended June 30, 2022 and 2023 (unaudited)
							Accumulated
	Class A		Additional				other				Total
	common		paid-in		Retained		comprehensive		Treasury		stockholders'
	stock		capital		earnings		loss		stock		equity
Balance at December 31, 2021	$	124	$	54,780	$	118,184	$	—	$	—	$	173,088
Net income		—		—		11,160		—		—		11,160
Issuance of common stock		—		118		—		—		—		118
Treasury stock:
Acquired		—		—		—		—		(1,744)		(1,744)
Retired		(1)		(1,743)		—		—		1,744		—
Cash dividends ($.50 per share)		—		—		(6,189)		—		—		(6,189)
Balance at June 30, 2022	$	123	$	53,155	$	123,155	$	—	$	—	$	176,433

Balance at December 31, 2022	$	123	$	53,155	$	105,175	$	(17)	$	—	$	158,436
Net income		—		—		10,140		—		—		10,140
Issuance of common stock		—		120		—		—		—		120
Cash dividends ($.50 per share)		—		—		(6,155)		—		—		(6,155)
Other comprehensive loss		—		—		—		(102)		—		(102)
Balance at June 30, 2023	$	123	$	53,275	$	109,160	$	(119)	$	—	$	162,439


			Amortized		Unrealized
	Market value		cost basis		loss, net

	(In thousands)
December 31, 2022:
Current assets	$	33,147	$	33,164	$	(17)

June 30, 2023:
Current assets	$	46,794	$	46,944	$	(150)


	COMPX INTERNATIONAL INC.
	(Registrant)

Date: August 1, 2023	By:	/s/ Amy A. Samford
		Amy A. Samford
		Executive Vice President and Chief Financial Officer


	By:	/s/ Amy E. Ruf
		Amy E. Ruf
		Vice President and Controller

By:	/s/ Scott C. James
	Scott C. James
	President and Chief Executive Officer


	Six months ended
	June 30,
	2022		2023

	(unaudited)
Cash flows from operating activities:
Net income	$	11,160	$	10,140
Depreciation and amortization		1,956		2,009
Deferred income taxes		(486)		(421)
Noncash interest income		—		(855)
Other, net		201		232
Change in assets and liabilities:
Accounts receivable, net		(2,033)		2,794
Inventories, net		(7,735)		(2,585)
Accounts payable and accrued liabilities		446		(1,619)
Accounts with affiliates		(667)		(208)
Prepaids and other, net		(1,316)		281
Net cash provided by operating activities		1,526		9,768

Cash flows from investing activities:
Capital expenditures		(2,215)		(478)
Marketable securities:
Purchases		—		(24,925)
Proceeds from maturities		—		12,000
Note receivable from affiliate:
Collections		12,400		14,700
Advances		(10,300)		(13,700)
Net cash used in investing activities		(115)		(12,403)

Cash flows from financing activities:
Dividends paid		(6,189)		(6,155)
Treasury stock acquired		(1,744)		—
Net cash used in financing activities		(7,933)		(6,155)

Cash and cash equivalents - net change from:
Operating, investing and financing activities		(6,522)		(8,790)
Balance at beginning of period		76,579		26,748
Balance at end of period	$	70,057	$	17,958


	December 31,		June 30,
	2022		2023

	(In thousands)
Raw materials:
Security Products	$	4,172	$	4,548
Marine Components		2,073		2,000
Total raw materials		6,245		6,548
Work-in-process:
Security Products		14,193		16,032
Marine Components		5,790		5,992
Total work-in-process		19,983		22,024
Finished goods:
Security Products		3,163		3,332
Marine Components		1,899		1,861
Total finished goods		5,062		5,193
Total inventories, net	$	31,290	$	33,765


	December 31,		June 30,
	2022		2023

	(In thousands)
Accounts payable:
Security Products	$	2,663	$	4,018
Marine Components		874		1,206
Accrued liabilities:
Employee benefits		10,489		7,220
Taxes other than on income		279		339
Insurance		255		268
Deferred revenue		243		189
Customer tooling		135		178
Advances from customers		298		156
Other		382		380
Total accounts payable and accrued liabilities	$	15,618	$	13,954


	Three months ended								Six months ended
	June 30,						%		June 30,						%
	2022			2023			Change		2022			2023			Change

	(Dollars in thousands)								(Dollars in thousands)
Security Products:
Net sales	$	28,837		$	25,672		(11)	%	$	58,418		$	53,014		(9)	%
Cost of sales		18,888			18,253		(3)			39,388			37,128		(6)
Gross margin		9,949			7,419		(25)			19,030			15,886		(17)
Operating costs and expenses		3,218			3,285		2			6,289			6,373		1
Operating income	$	6,731		$	4,134		(39)		$	12,741		$	9,513		(25)

Gross margin		34.5	%		28.9	%				32.6	%		30.0	%
Operating income margin		23.3			16.1					21.8			17.9