Compx International Inc 10-Q for FY2023 Q3

Compx International Inc (CIX)

10-Q 2023-11-01 For: 2023-09-30

Added on April 08, 2026

About this 10-Q

Compx International Inc filed this 10-Q on November 1, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

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

Revenue: $40.36M; down 5.9% from $42.86M a year earlier
Net income: $5.76M; up 16.3% from net income of $4.95M a year earlier
Diluted EPS: $0.47; up 17.5% from $0.40 a year earlier


Item No.		Exhibit Index

3.1		Amended and Restated Bylaws of CompX International Inc. (effective November 1, 2023) – incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on November 1, 2023.
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 September 30, 2023 (unaudited)	- 3 -

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

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

	Condensed Consolidated Statements of Cash Flows (unaudited) – Nine months ended September 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,		September 30,
ASSETS	2022		2023
			(unaudited)
Current assets:
Cash and cash equivalents	$	26,748	$	17,595
Marketable securities		33,147		46,774
Accounts receivable, net		17,840		19,735
Inventories, net		31,290		34,282
Prepaid expenses and other		2,136		2,152
Total current assets		111,161		120,538

Other assets:
Note receivable from affiliate		13,200		12,000
Goodwill		23,742		23,742
Other noncurrent assets		590		738
Total other assets		37,532		36,480

Property and equipment:
Land		5,390		5,390
Buildings		23,181		23,181
Equipment		74,113		74,486
Construction in progress		722		512
		103,406		103,569
Less accumulated depreciation		74,712		77,347
Net property and equipment		28,694		26,222
Total assets	$	177,387	$	183,240

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	15,618	$	15,047
Income taxes payable to affiliate		1,035		1,351
Total current liabilities		16,653		16,398

Noncurrent liabilities:
Deferred income taxes		2,230		1,651
Other		68		43
Total noncurrent liabilities		2,298		1,694

Stockholders' equity:
Preferred stock		—		—
Class A common stock		123		123
Additional paid-in capital		53,155		53,275
Retained earnings		105,175		111,839
Accumulated other comprehensive loss - unrealized loss on marketable securities		(17)		(89)
Total stockholders' equity		158,436		165,148
Total liabilities and stockholders’ equity	$	177,387	$	183,240


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2023		2022		2023

	(unaudited)
Net sales	$	42,864	$	40,355	$	126,589	$	118,122
Cost of sales		30,928		27,736		88,944		82,526
Gross margin		11,936		12,619		37,645		35,596
Selling, general and administrative expense		6,016		6,074		17,674		17,644
Operating income		5,920		6,545		19,971		17,952
Interest income		558		1,064		1,109		3,003
Income before income taxes		6,478		7,609		21,080		20,955
Provision for income taxes		1,528		1,852		4,970		5,058
Net income	$	4,950	$	5,757	$	16,110	$	15,897

Other comprehensive gain (loss), marketable securities adjustment:
Unrealized gain (loss) arising during year, net		—		30		—		(72)
Comprehensive income	$	4,950	$	5,787	$	16,110	$	15,825

Basic and diluted net income per common share	$	.40	$	.47	$	1.30	$	1.29

Basic and diluted weighted average shares outstanding		12,307		12,314		12,352		12,310


	Three months ended September 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 June 30, 2022	$	123	$	53,155	$	123,155	$	—	$	—	$	176,433
Net income		—		—		4,950		—		—		4,950
Cash dividends ($2.00 per share)		—		—		(24,614)		—		—		(24,614)
Balance at September 30, 2022	$	123	$	53,155	$	103,491	$	—	$	—	$	156,769

Balance at June 30, 2023	$	123	$	53,275	$	109,160	$	(119)	$	—	$	162,439
Net income		—		—		5,757		—		—		5,757
Cash dividends ($.25 per share)		—		—		(3,078)		—		—		(3,078)
Other comprehensive income		—		—		—		30		—		30
Balance at September 30, 2023	$	123	$	53,275	$	111,839	$	(89)	$	—	$	165,148


	Nine months ended September 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		—		—		16,110		—		—		16,110
Issuance of common stock		—		118		—		—		—		118
Treasury stock:
Acquired		—		—		—		—		(1,744)		(1,744)
Retired		(1)		(1,743)		—		—		1,744		—
Cash dividends ($2.50 per share)		—		—		(30,803)		—		—		(30,803)
Balance at September 30, 2022	$	123	$	53,155	$	103,491	$	—	$	—	$	156,769

Balance at December 31, 2022	$	123	$	53,155	$	105,175	$	(17)	$	—	$	158,436
Net income		—		—		15,897		—		—		15,897
Issuance of common stock		—		120		—		—		—		120
Cash dividends ($.75 per share)		—		—		(9,233)		—		—		(9,233)
Other comprehensive loss		—		—		—		(72)		—		(72)
Balance at September 30, 2023	$	123	$	53,275	$	111,839	$	(89)	$	—	$	165,148


			Amortized		Unrealized
	Market value		cost basis		loss, net

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

September 30, 2023:
Current assets	$	46,774	$	46,886	$	(112)


	COMPX INTERNATIONAL INC.
	(Registrant)

Date: November 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


	Nine months ended
	September 30,
	2022		2023

	(unaudited)
Cash flows from operating activities:
Net income	$	16,110	$	15,897
Depreciation and amortization		2,962		2,996
Deferred income taxes		(742)		(556)
Noncash interest income		—		(1,397)
Other, net		287		332
Change in assets and liabilities:
Accounts receivable, net		(3,634)		(1,900)
Inventories, net		(7,846)		(3,199)
Accounts payable and accrued liabilities		1,454		(526)
Accounts with affiliates		(347)		316
Prepaids and other, net		(122)		(194)
Net cash provided by operating activities		8,122		11,769

Cash flows from investing activities:
Capital expenditures		(3,008)		(564)
Marketable securities:
Purchases		—		(36,325)
Proceeds from maturities		131		24,000
Note receivable from affiliate:
Collections		21,100		21,900
Advances		(17,100)		(20,700)
Net cash provided by (used in) investing activities		1,123		(11,689)

Cash flows from financing activities:
Dividends paid		(30,803)		(9,233)
Treasury stock acquired		(1,744)		—
Net cash used in financing activities		(32,547)		(9,233)

Cash and cash equivalents - net change from:
Operating, investing and financing activities		(23,302)		(9,153)
Balance at beginning of period		76,579		26,748
Balance at end of period	$	53,277	$	17,595


	December 31,		September 30,
	2022		2023

	(In thousands)
Raw materials:
Security Products	$	4,172	$	3,464
Marine Components		2,073		2,109
Total raw materials		6,245		5,573
Work-in-process:
Security Products		14,193		17,476
Marine Components		5,790		5,562
Total work-in-process		19,983		23,038
Finished goods:
Security Products		3,163		3,233
Marine Components		1,899		2,438
Total finished goods		5,062		5,671
Total inventories, net	$	31,290	$	34,282


	December 31,		September 30,
	2022		2023

	(In thousands)
Accounts payable:
Security Products	$	2,663	$	3,156
Marine Components		874		835
Accrued liabilities:
Employee benefits		10,489		8,703
Taxes other than on income		279		489
Insurance		255		264
Deferred revenue		243		574
Customer tooling		135		199
Advances from customers		298		440
Other		382		387
Total accounts payable and accrued liabilities	$	15,618	$	15,047


	Three months ended								Nine months ended
	September 30,						%		September 30,						%
	2022			2023			Change		2022			2023			Change

	(Dollars in thousands)								(Dollars in thousands)
Security Products:
Net sales	$	28,493		$	31,376		10	%	$	86,911		$	84,390		(3)	%
Cost of sales		20,241			21,347		5			59,629			58,475		(2)
Gross margin		8,252			10,029		22			27,282			25,915		(5)
Operating costs and expenses		3,348			3,533		6			9,637			9,906		3
Operating income	$	4,904		$	6,496		32		$	17,645		$	16,009		(9)

Gross margin		29.0	%		32.0	%				31.4	%		30.7	%
Operating income margin		17.2			20.7					20.3			19.0