Compx International Inc 10-Q for FY2021 Q2

Compx International Inc (CIX)

10-Q 2021-08-03 For: 2021-06-30

Added on April 08, 2026

About this 10-Q

Compx International Inc filed this 10-Q on August 3, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $36.25M; up 52.3% from $23.8M a year earlier
Net income: $4.62M; up 123.7% from net income of $2.07M a year earlier

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Delaware		57-0981653
(State or other jurisdiction of Incorporation or organization)		(IRS Employer Identification No.)
5430 LBJ Freeway, Suite 1700, Three Lincoln Centre, Dallas, Texas		75240-2620
(Address of principal executive offices)		(Zip Code)

Part I.	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets – December 31, 2020 and June 30, 2021 (unaudited)	- 3 -
	Condensed Consolidated Statements of Income (unaudited) – Three and six months ended June 30, 2020 and 2021	- 4 -
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three and six months ended June 30, 2020 and 2021	- 5 -
	Condensed Consolidated Statements of Cash Flows (unaudited) – Six months ended June 30, 2020 and 2021	- 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	- 16 -
Item 4.	Controls and Procedures	- 16 -
Part II.	OTHER INFORMATION
Item 1A.	Risk Factors	- 18 -
Item 6.	Exhibits	- 18 -
Items 2, 3, 4 and 5 of Part II are omitted because there is no information to report.

	December 31,		June 30,
	2020		2021
ASSETS			(unaudited)
Current assets:
Cash and cash equivalents	$	70,637	$	70,374
Accounts receivable, net		10,731		16,642
Inventories, net		18,337		19,948
Prepaid expenses and other		1,541		1,886
Total current assets		101,246		108,850
Other assets:
Note receivable from affiliate		29,500		26,000
Goodwill		23,742		23,742
Other noncurrent		607		598
Total other assets		53,849		50,340
Property and equipment:
Land		4,940		4,940
Buildings		23,146		23,146
Equipment		68,227		69,317
Construction in progress		1,010		1,246
		97,323		98,649
Less accumulated depreciation		68,373		69,940
Net property and equipment		28,950		28,709
Total assets	$	184,045	$	187,899

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	12,198	$	11,874
Income taxes payable to affiliate		952		980
Total current liabilities		13,150		12,854
Noncurrent liabilities -
Deferred income taxes		3,239		3,706
Stockholders' equity:
Preferred stock		—		—
Class A common stock		124		124
Additional paid-in capital		55,987		55,336
Retained earnings		111,545		115,879
Total stockholders' equity		167,656		171,339
Total liabilities and stockholders’ equity	$	184,045	$	187,899

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2021		2020		2021
	(unaudited)
Net sales	$	23,800	$	36,253	$	56,111	$	72,177
Cost of sales		16,434		24,947		38,314		49,836
Gross margin		7,366		11,306		17,797		22,341
Selling, general and administrative expense		4,997		5,548		10,408		10,766
Operating income		2,369		5,758		7,389		11,575
Interest income		370		318		977		656
Income before income taxes		2,739		6,076		8,366		12,231
Provision for income taxes		674		1,456		2,030		2,926
Net income	$	2,065	$	4,620	$	6,336	$	9,305

Basic and diluted net income per common share	$	0.17	$	0.37	$	0.51	$	0.75

Basic and diluted weighted average shares outstanding		12,446		12,403		12,445		12,423

	Three months ended June 30, 2020 and 2021 (unaudited)
	Class A		Additional									Total
	common		paid-in			Retained			Treasury			stockholders'
	stock		capital			earnings			stock			equity

Balance at March 31, 2020	$	124	$	55,869		$	109,229		$	—		$	165,222
Net income		—		—			2,065			—			2,065
Issuance of common stock		—		118			—			—			118
Cash dividends ($0.10 per share)		—					(1,245	)		—			(1,245	)
Balance at June 30, 2020	$	124	$	55,987		$	110,049		$	—		$	166,160

Balance at March 31, 2021	$	124	$	55,232		$	113,740		$	—		$	169,096
Net income		—		—			4,620			—			4,620
Issuance of common stock		—		104			—			—			104
Cash dividends ($0.20 per share)		—		—			(2,481	)					(2,481	)
Balance at June 30, 2021	$	124	$	55,336		$	115,879		$	—		$	171,339

	Six months ended June 30, 2020 and 2021 (unaudited)
	Class A		Additional									Total
	common		paid-in			Retained			Treasury			stockholders'
	stock		capital			earnings			stock			equity

Balance at December 31, 2019	$	124	$	55,869		$	106,202		$	—		$	162,195
Net income		—		—			6,336			—			6,336
Issuance of common stock		—		118			—			—			118
Cash dividends ($0.20 per share)		—		—			(2,489	)		—			(2,489	)
Balance at June 30, 2020	$	124	$	55,987		$	110,049		$	—		$	166,160

Balance at December 31, 2020	$	124	$	55,987		$	111,545		$	—		$	167,656
Net income		—		—			9,305			—			9,305
Issuance of common stock		—		104			—			—			104
Cash dividends ($0.40 per share)		—		—			(4,971	)		—			(4,971	)
Treasury stock:													—
Acquired		—		—			—			(755	)		(755	)
Retired		—		(755	)		—			755			—
Balance at June 30, 2021	$	124	$	55,336		$	115,879		$	-		$	171,339

Days Sales Outstanding:	December 31, 2019	June 30, 2020	December 31, 2020	June 30, 2021
Security Products	38 Days	44 Days	35 Days	45 Days
Marine Components	27 Days	40 Days	24 Days	31 Days
Consolidated CompX	36 Days	43 Days	33 Days	42 Days

Days in Inventory:	December 31, 2019	June 30, 2020	December 31, 2020	June 30, 2021
Security Products	76 Days	120 Days	75 Days	71 Days
Marine Components	100 Days	125 Days	75 Days	78 Days
Consolidated CompX	81 Days	121 Days	75 Days	73 Days

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)

	COMPX INTERNATIONAL INC.
	(Registrant)

Date: August 3, 2021	By:	/s/ Michael S. Simmons
		Michael S. Simmons
		Senior Vice President and Chief Financial Officer


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

	Six months ended
	June 30,
	2020			2021
	(unaudited)
Cash flows from operating activities:
Net income	$	6,336		$	9,305
Depreciation and amortization		1,912			1,900
Deferred income taxes		60			467
Other, net		207			185
Change in assets and liabilities:
Accounts receivable, net		529			(5,910	)
Inventories, net		(3,555	)		(1,691	)
Accounts payable and accrued liabilities		(2,415	)		(393	)
Accounts with affiliates		1,674			112
Prepaids and other, net		197			(414	)
Net cash provided by operating activities		4,945			3,561
Cash flows from investing activities:
Capital expenditures		(861	)		(1,598	)
Note receivable from affiliate:
Collections		20,628			22,200
Advances		(23,028	)		(18,700	)
Net cash provided by (used in) investing activities		(3,261	)		1,902
Cash flows from financing activities:
Dividends paid		(2,489	)		(4,971	)
Treasury stock acquired		—			(755	)
Net cash used in financing activities		(2,489	)		(5,726	)
Cash and cash equivalents - net change from:
Operating, investing and financing activities		(805	)		(263	)
Balance at beginning of period		63,255			70,637
Balance at end of period	$	62,450		$	70,374
Supplemental disclosures -
Cash paid for income taxes	$	850		$	2,439

	December 31,		June 30,
	2020		2021
	(In thousands)
Raw materials:
Security Products	$	2,318	$	3,470
Marine Components		902		940
Total raw materials		3,220		4,410
Work-in-process:
Security Products		9,214		9,282
Marine Components		2,454		3,122
Total work-in-process		11,668		12,404
Finished goods:
Security Products		2,235		1,908
Marine Components		1,214		1,226
Total finished goods		3,449		3,134
Total inventories, net	$	18,337	$	19,948

	December 31,		June 30,
	2020		2021
	(In thousands)
Accounts payable:
Security Products	$	1,859	$	2,645
Marine Components		773		1,109
Accrued liabilities:
Employee benefits		8,431		6,806
Taxes other than on income		301		406
Customer tooling		393		266
Other		441		642
Total accounts payable and accrued liabilities	$	12,198	$	11,874

	Three months ended									Six months ended
	June 30,									June 30,
	2020			2021			% Change			2020			2021			% Change
	(Dollars in thousands)
Security Products:
Net sales	$	18,573		$	27,587			49	%	$	44,042		$	53,472			21	%
Cost of sales		12,679			18,738			48			29,590			36,390			23
Gross margin		5,894			8,849			50			14,452			17,082			18
Operating costs and expenses		2,533			3,004			19			5,378			5,747			7
Operating income	$	3,361		$	5,845			74		$	9,074		$	11,335			25


Gross margin		31.7	%		32.1	%					32.8	%		31.9	%
Operating income margin		18.1			21.2						20.6			21.2