Valhi Reports First Quarter Results

Apr 26, 2001, 01:00 ET from Valhi, Inc.

    DALLAS, April 26 /PRNewswire/ -- Valhi, Inc. (NYSE:   VHI) reported net
 income of $31.6 million, or $.27 per diluted share, in the first quarter of
 2001 compared to net income of $10.5 million, or $.09 per diluted share, in
 the first quarter of 2000.  Excluding the effects of the unusual items
 discussed in the next paragraph, the Company would have reported net income of
 $13.2 million in the first quarter of 2001.  Total operating income in the
 first quarter of 2001 approximated the first quarter of 2000 as higher
 chemicals earnings at NL Industries was offset by lower component products
 operating income at CompX International and a higher waste management
 operating loss at Waste Control Specialists.
     The Company's results in the first quarter of 2001 include pre-tax gains
 aggregating $30.7 million ($18.4 million, or $.16 per diluted share, net of
 income taxes and minority interest) related to NL's legal settlements with
 certain of its former insurance carriers and the settlement of certain
 litigation to which Waste Control Specialists was a party.
     Chemicals operating income increased in the first quarter of 2001 compared
 to the first quarter of 2000 due primarily to higher average TiO2 selling
 prices and higher TiO2 production volumes, partially offset by lower TiO2
 sales volumes.  Excluding the effect of fluctuations in the value of the U.S.
 dollar relative to other currencies, NL's average TiO2 selling prices (in
 billing currencies) during the first quarter of 2001 were 5% higher compared
 to the first quarter of 2000.  NL's TiO2 sales volumes in the first quarter of
 2001 were 7% lower than the record first quarter of 2000, with higher sales
 volumes in export markets more than offset by the effect of lower volumes in
 Europe and North America.  NL's TiO2 production volumes in the first quarter
 of 2001 were 2% higher than the first quarter of 2000, with operating rates
 near full capacity in both periods.
     NL's average TiO2 selling prices (in billing currencies) in the first
 quarter of 2001 were 1% lower than the fourth quarter of last year.  NL
 believes that market conditions in the TiO2 industry have generally stalled
 NL's efforts to increase selling prices, and worldwide economic conditions
 will determine whether any price increases will be realized during the
 remainder of the year.  NL believes TiO2 industry fundamentals have weakened
 due to the slowing worldwide economies, and NL expects its chemicals operating
 income in the second quarter of 2001 will be lower than the first quarter of
 2001.
     Production at NL's TiO2 production facility in Leverkusen, Germany was
 adversely affected late in the first quarter of 2001 by the previously-
 reported fire that occurred on March 20th.  Production rates at the facility's
 chloride-process plant returned to full capacity on April 8, 2001, and NL
 expects the facility's sulfate-process plant will be over 50% operational in
 August 2001 and fully operational in October 2001.  NL believes the damages to
 property and the business interruption losses caused by the fire are covered
 by its insurance.  No insurance proceeds have been recognized during the first
 quarter of 2001 for the business interruption portion of the loss because the
 amount of such proceeds is presently not determinable.  No provision for
 impairment of the damaged fixed assets has been recognized because NL believes
 the insurance proceeds will exceed their carrying value.
     Component products sales and operating income decreased in the first
 quarter of 2001 compared to the first quarter of 2000 due primarily to
 continued weak economic conditions in the manufacturing sector in North
 America and Europe.  CompX's efforts to reduce manufacturing and other costs
 partially offset the effect of the decline in sales.  While CompX expects to
 continue to control costs appropriately throughout its organization, CompX
 remains concerned regarding the duration and severity of the weak economic
 environment and the impact on its business.
     Waste management sales decreased in the first quarter of 2001 compared to
 the first quarter of 2000 due primarily to the effect of weak demand for Waste
 Control Specialists' waste management services.  Mechanical problems with
 certain equipment hampered the treatment and disposal of certain types of
 hazardous and toxic waste streams and also contributed to the lower level of
 sales.
     The Company reported $.1 million of equity in income of Titanium Metals
 Corporation ("TIMET") in the first quarter of 2001 compared to equity in
 losses of TIMET of $4.3 million in the first quarter of 2000.  TIMET reported
 higher sales and a lower operating loss in the first quarter of 2001 compared
 to the first quarter of 2000.  TIMET's operating results improved in 2001 as
 the first quarter of 2000 included a net $9.2 million of previously-reported
 special charges.  The improvement in TIMET's operating results was also due in
 part to higher sales volumes for TIMET's titanium mill and melted products.
 During the first quarter of 2001, TIMET's mill products sales volumes
 increased 18% compared to the first quarter of 2000, and sales volumes of its
 melted products (ingot and slab) increased 75%.  TIMET's average selling
 prices (in billing currencies) for its mill products decreased 1% in the first
 quarter of 2001 compared to the first quarter of 2000, and melted product
 selling prices decreased 3%.
     In April 2001, TIMET announced that it has reached a settlement of the
 litigation between TIMET and The Boeing Company relating to their long-term
 titanium purchase and supply agreement.  TIMET will receive a cash payment
 pursuant to the settlement.  TIMET and Boeing have also entered into an
 amended long-term agreement that, among other things, provides Boeing with the
 right to purchase up to 7.5 million pounds of titanium products annually from
 TIMET through 2007.  Under a separate agreement, TIMET will establish and hold
 titanium buffer stock for Boeing at TIMET's facilities.  TIMET expects to
 report pre-tax income of approximately $60 million to $65 million in the
 second quarter of 2001 in connection with this settlement, including the cash
 settlement net of associated legal, profit sharing, and other costs.
     The Company's effective income tax rate declined in the first quarter of
 2001 compared to the first quarter of 2000 due primarily to the favorable tax
 effects resulting from the inclusion of NL and Tremont in the same income tax
 group of which Valhi is a member effective January 1, 2001.
 
     The statements in this release relating to matters that are not historical
 facts are forward-looking statements that represent management's beliefs and
 assumptions based on currently available information.  Although the Company
 believes that the expectations reflected in such forward-looking statements
 are reasonable, it cannot give any assurances that these expectations will
 prove to be correct.  Such statements by their nature involve substantial
 risks and uncertainties that could significantly impact expected results, and
 actual future results could differ materially from those described in such
 forward-looking statements.  While it is not possible to identify all factors,
 the Company continues to face many risks and uncertainties.  Among the factors
 that could cause actual future results to differ materially include, but are
 not limited to, future supply and demand for the Company's products, the
 extent of the dependence of certain of the Company's businesses on certain
 market sectors, the cyclicality of certain of the Company's businesses, the
 impact of certain long-term contracts with customers and vendors on certain of
 the Company's businesses and such customers and vendors performance
 thereunder, customer inventory levels, changes in raw material and other
 operating costs, including energy costs, general global economic conditions,
 competitive products and substitute products, customer and competitor
 strategies, the impact of pricing and production decisions, competitive
 technology positions, fluctuations in currency exchange rates, operating
 interruptions (including, but not limited to, labor disputes, leaks, fires,
 explosions, unscheduled downtime and transportation interruptions), the amount
 and timing of recoveries from insurance claims, potential difficulties in
 integrating completed acquisitions, uncertainties associated with new product
 development, environmental matters, government laws and regulations and
 possible changes therein, the ultimate resolution of pending litigation and
 possible future litigation.  Should one or more of these risks materialize (or
 the consequences of such a development worsen), or should the underlying
 assumptions prove incorrect, actual results could differ materially from those
 forecasted or expected.  The Company disclaims any intention or obligation to
 update or revise any forward-looking statement whether as a result of new
 information, future events or otherwise.
 
     Valhi, Inc. is engaged in the titanium dioxide pigments, component
 products (ergonomic computer support systems, precision ball bearing slides
 and security products), titanium metals products and waste management
 industries.
 
 
                          VALHI, INC. AND SUBSIDIARIES
 
                             SUMMARY OF OPERATIONS
 
                                  (Unaudited)
 
                     Quarters ended March 31, 2000 and 2001
                    (In millions, except earnings per share)
 
                                                      2000          2001
 
     Net sales
       Chemicals                                      $231.0        $226.1
       Component products                               66.1          59.6
       Waste management                                  4.6           3.1
 
                                                      $301.7        $288.8
 
     Operating income
       Chemicals                                      $ 39.8        $ 45.4
       Component products                               10.9           7.0
       Waste management                                 (1.6)         (3.2)
 
         Total operating income                         49.1          49.2
 
     Equity in:
       TIMET                                            (4.3)           .1
       Other                                              .3            .7
 
     General corporate items, net
       Legal settlement gains, net                       ---          30.7
       Interest and dividend income                     11.5          10.3
       Expenses, net                                    (7.6)         (9.2)
     Interest expense                                  (17.3)        (17.1)
 
         Income before income taxes                     31.7          64.7
 
     Provision for income taxes                         14.8          23.7
 
     Minority interest in after-tax earnings             6.4           9.4
 
         Net income                                   $ 10.5        $ 31.6
 
     Basic and diluted earnings per share             $  .09        $  .27
 
     Shares used in calculation of per share amounts
       Basic earnings                                  115.1         115.2
 
       Diluted earnings                                116.2         116.0
 
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SOURCE Valhi, Inc.
    DALLAS, April 26 /PRNewswire/ -- Valhi, Inc. (NYSE:   VHI) reported net
 income of $31.6 million, or $.27 per diluted share, in the first quarter of
 2001 compared to net income of $10.5 million, or $.09 per diluted share, in
 the first quarter of 2000.  Excluding the effects of the unusual items
 discussed in the next paragraph, the Company would have reported net income of
 $13.2 million in the first quarter of 2001.  Total operating income in the
 first quarter of 2001 approximated the first quarter of 2000 as higher
 chemicals earnings at NL Industries was offset by lower component products
 operating income at CompX International and a higher waste management
 operating loss at Waste Control Specialists.
     The Company's results in the first quarter of 2001 include pre-tax gains
 aggregating $30.7 million ($18.4 million, or $.16 per diluted share, net of
 income taxes and minority interest) related to NL's legal settlements with
 certain of its former insurance carriers and the settlement of certain
 litigation to which Waste Control Specialists was a party.
     Chemicals operating income increased in the first quarter of 2001 compared
 to the first quarter of 2000 due primarily to higher average TiO2 selling
 prices and higher TiO2 production volumes, partially offset by lower TiO2
 sales volumes.  Excluding the effect of fluctuations in the value of the U.S.
 dollar relative to other currencies, NL's average TiO2 selling prices (in
 billing currencies) during the first quarter of 2001 were 5% higher compared
 to the first quarter of 2000.  NL's TiO2 sales volumes in the first quarter of
 2001 were 7% lower than the record first quarter of 2000, with higher sales
 volumes in export markets more than offset by the effect of lower volumes in
 Europe and North America.  NL's TiO2 production volumes in the first quarter
 of 2001 were 2% higher than the first quarter of 2000, with operating rates
 near full capacity in both periods.
     NL's average TiO2 selling prices (in billing currencies) in the first
 quarter of 2001 were 1% lower than the fourth quarter of last year.  NL
 believes that market conditions in the TiO2 industry have generally stalled
 NL's efforts to increase selling prices, and worldwide economic conditions
 will determine whether any price increases will be realized during the
 remainder of the year.  NL believes TiO2 industry fundamentals have weakened
 due to the slowing worldwide economies, and NL expects its chemicals operating
 income in the second quarter of 2001 will be lower than the first quarter of
 2001.
     Production at NL's TiO2 production facility in Leverkusen, Germany was
 adversely affected late in the first quarter of 2001 by the previously-
 reported fire that occurred on March 20th.  Production rates at the facility's
 chloride-process plant returned to full capacity on April 8, 2001, and NL
 expects the facility's sulfate-process plant will be over 50% operational in
 August 2001 and fully operational in October 2001.  NL believes the damages to
 property and the business interruption losses caused by the fire are covered
 by its insurance.  No insurance proceeds have been recognized during the first
 quarter of 2001 for the business interruption portion of the loss because the
 amount of such proceeds is presently not determinable.  No provision for
 impairment of the damaged fixed assets has been recognized because NL believes
 the insurance proceeds will exceed their carrying value.
     Component products sales and operating income decreased in the first
 quarter of 2001 compared to the first quarter of 2000 due primarily to
 continued weak economic conditions in the manufacturing sector in North
 America and Europe.  CompX's efforts to reduce manufacturing and other costs
 partially offset the effect of the decline in sales.  While CompX expects to
 continue to control costs appropriately throughout its organization, CompX
 remains concerned regarding the duration and severity of the weak economic
 environment and the impact on its business.
     Waste management sales decreased in the first quarter of 2001 compared to
 the first quarter of 2000 due primarily to the effect of weak demand for Waste
 Control Specialists' waste management services.  Mechanical problems with
 certain equipment hampered the treatment and disposal of certain types of
 hazardous and toxic waste streams and also contributed to the lower level of
 sales.
     The Company reported $.1 million of equity in income of Titanium Metals
 Corporation ("TIMET") in the first quarter of 2001 compared to equity in
 losses of TIMET of $4.3 million in the first quarter of 2000.  TIMET reported
 higher sales and a lower operating loss in the first quarter of 2001 compared
 to the first quarter of 2000.  TIMET's operating results improved in 2001 as
 the first quarter of 2000 included a net $9.2 million of previously-reported
 special charges.  The improvement in TIMET's operating results was also due in
 part to higher sales volumes for TIMET's titanium mill and melted products.
 During the first quarter of 2001, TIMET's mill products sales volumes
 increased 18% compared to the first quarter of 2000, and sales volumes of its
 melted products (ingot and slab) increased 75%.  TIMET's average selling
 prices (in billing currencies) for its mill products decreased 1% in the first
 quarter of 2001 compared to the first quarter of 2000, and melted product
 selling prices decreased 3%.
     In April 2001, TIMET announced that it has reached a settlement of the
 litigation between TIMET and The Boeing Company relating to their long-term
 titanium purchase and supply agreement.  TIMET will receive a cash payment
 pursuant to the settlement.  TIMET and Boeing have also entered into an
 amended long-term agreement that, among other things, provides Boeing with the
 right to purchase up to 7.5 million pounds of titanium products annually from
 TIMET through 2007.  Under a separate agreement, TIMET will establish and hold
 titanium buffer stock for Boeing at TIMET's facilities.  TIMET expects to
 report pre-tax income of approximately $60 million to $65 million in the
 second quarter of 2001 in connection with this settlement, including the cash
 settlement net of associated legal, profit sharing, and other costs.
     The Company's effective income tax rate declined in the first quarter of
 2001 compared to the first quarter of 2000 due primarily to the favorable tax
 effects resulting from the inclusion of NL and Tremont in the same income tax
 group of which Valhi is a member effective January 1, 2001.
 
     The statements in this release relating to matters that are not historical
 facts are forward-looking statements that represent management's beliefs and
 assumptions based on currently available information.  Although the Company
 believes that the expectations reflected in such forward-looking statements
 are reasonable, it cannot give any assurances that these expectations will
 prove to be correct.  Such statements by their nature involve substantial
 risks and uncertainties that could significantly impact expected results, and
 actual future results could differ materially from those described in such
 forward-looking statements.  While it is not possible to identify all factors,
 the Company continues to face many risks and uncertainties.  Among the factors
 that could cause actual future results to differ materially include, but are
 not limited to, future supply and demand for the Company's products, the
 extent of the dependence of certain of the Company's businesses on certain
 market sectors, the cyclicality of certain of the Company's businesses, the
 impact of certain long-term contracts with customers and vendors on certain of
 the Company's businesses and such customers and vendors performance
 thereunder, customer inventory levels, changes in raw material and other
 operating costs, including energy costs, general global economic conditions,
 competitive products and substitute products, customer and competitor
 strategies, the impact of pricing and production decisions, competitive
 technology positions, fluctuations in currency exchange rates, operating
 interruptions (including, but not limited to, labor disputes, leaks, fires,
 explosions, unscheduled downtime and transportation interruptions), the amount
 and timing of recoveries from insurance claims, potential difficulties in
 integrating completed acquisitions, uncertainties associated with new product
 development, environmental matters, government laws and regulations and
 possible changes therein, the ultimate resolution of pending litigation and
 possible future litigation.  Should one or more of these risks materialize (or
 the consequences of such a development worsen), or should the underlying
 assumptions prove incorrect, actual results could differ materially from those
 forecasted or expected.  The Company disclaims any intention or obligation to
 update or revise any forward-looking statement whether as a result of new
 information, future events or otherwise.
 
     Valhi, Inc. is engaged in the titanium dioxide pigments, component
 products (ergonomic computer support systems, precision ball bearing slides
 and security products), titanium metals products and waste management
 industries.
 
 
                          VALHI, INC. AND SUBSIDIARIES
 
                             SUMMARY OF OPERATIONS
 
                                  (Unaudited)
 
                     Quarters ended March 31, 2000 and 2001
                    (In millions, except earnings per share)
 
                                                      2000          2001
 
     Net sales
       Chemicals                                      $231.0        $226.1
       Component products                               66.1          59.6
       Waste management                                  4.6           3.1
 
                                                      $301.7        $288.8
 
     Operating income
       Chemicals                                      $ 39.8        $ 45.4
       Component products                               10.9           7.0
       Waste management                                 (1.6)         (3.2)
 
         Total operating income                         49.1          49.2
 
     Equity in:
       TIMET                                            (4.3)           .1
       Other                                              .3            .7
 
     General corporate items, net
       Legal settlement gains, net                       ---          30.7
       Interest and dividend income                     11.5          10.3
       Expenses, net                                    (7.6)         (9.2)
     Interest expense                                  (17.3)        (17.1)
 
         Income before income taxes                     31.7          64.7
 
     Provision for income taxes                         14.8          23.7
 
     Minority interest in after-tax earnings             6.4           9.4
 
         Net income                                   $ 10.5        $ 31.6
 
     Basic and diluted earnings per share             $  .09        $  .27
 
     Shares used in calculation of per share amounts
       Basic earnings                                  115.1         115.2
 
       Diluted earnings                                116.2         116.0
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X01142745
 
 SOURCE  Valhi, Inc.