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What changed in NL INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NL INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+439 added−391 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-06)

Top changes in NL INDUSTRIES INC's 2024 10-K

439 paragraphs added · 391 removed · 323 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

97 edited+9 added−10 removed101 unchanged
Biggest changeThe factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Annual Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following: ● Future supply and demand for our products; ● The extent of the dependence of certain of our businesses on certain market sectors; ● The cyclicality of our businesses (such as Kronos’ TiO 2 operations); ● Customer and producer inventory levels; ● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO 2 industry); ● Changes in raw material and other operating costs (such as energy, ore, zinc, aluminum, steel and brass costs) and our ability to pass those costs on to our customers or offset them with reductions in other operating costs; ● Changes in the availability of raw material (such as ore); -2- ​ ● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs or reduce demand or perceived demand for Kronos’ TiO 2 and our products or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises); ● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises); ● Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades, or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders; ● Competitive products and substitute products; ● Price and product competition from low-cost manufacturing sources (such as China); ● Customer and competitor strategies; ● Potential consolidation of Kronos’ competitors; ● Potential consolidation of Kronos’ customers; ● The impact of pricing and production decisions; ● Competitive technology positions; ● Our ability to protect or defend intellectual property rights; ● Potential difficulties in integrating future acquisitions; ● Potential difficulties in upgrading or implementing accounting and manufacturing software systems; ● The introduction of trade barriers or trade disputes; ● Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone), or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies; ● Decisions to sell operating assets other than in the ordinary course of business; ● Kronos’ ability to renew or refinance credit facilities; ● Increases in interest rates; ● Our ability to maintain sufficient liquidity; ● The timing and amounts of insurance recoveries; ● The ability of our subsidiaries or affiliates to pay us dividends; ● Uncertainties associated with CompX’s development of new products and product features; ● The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform; ● Our ability to utilize income tax attributes or changes in income tax rates related to such attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria; -3- ​ ● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations); ● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including us, with respect to asserted health concerns associated with the use of such products), including new environmental, health, safety, sustainability or other regulations (such as those seeking to limit or classify TiO 2 or its use); ● The ultimate resolution of pending litigation (such as our lead pigment and environmental matters); and ● Pending or possible future litigation or other actions.
Biggest changeThe factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Annual Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following: ● Future supply and demand for our products; ● Kronos’ ability to realize expected cost savings from strategic and operational initiatives; ● Kronos’ ability to integrate acquisitions, including Louisiana Pigment Company, L.P., into its operations and realize expected synergies and innovations; ● The extent of the dependence of certain of our businesses on certain market sectors; ● The cyclicality of our businesses (such as Kronos’ TiO 2 operations); ● Customer and producer inventory levels; ● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO 2 industry); -2- ​ ● Changes in raw material and other operating costs (such as energy, ore, zinc, aluminum, steel and brass costs) or the implementation of tariffs on imported raw materials and our ability to pass those costs on to our customers or offset them with reductions in other operating costs; ● Changes in the availability of raw material (such as ore); ● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs or reduce demand or perceived demand for TiO 2 and our products or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, tariffs, natural disasters, terrorist acts, global conflicts and public health crises); ● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises); ● Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades, or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders; ● Competitive products and substitute products; ● Competition from Chinese suppliers with less stringent regulatory and environmental compliance requirements; ● Customer and competitor strategies; ● Potential consolidation of Kronos’ competitors; ● Potential consolidation of Kronos’ customers; ● The impact of pricing and production decisions; ● Competitive technology positions; ● Our ability to protect or defend intellectual property rights; ● Potential difficulties in integrating future acquisitions; ● Potential difficulties in upgrading or implementing accounting and manufacturing software systems; ● The introduction of new, or changes in existing, tariffs, trade barriers or trade disputes (including tariffs imposed by the U.S. federal government on imports from Canada, where Kronos has a manufacturing facility); ● Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone), or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies; ● Decisions to sell operating assets other than in the ordinary course of business; ● Kronos’ ability to renew or refinance credit facilities or other debt instruments in the future; ● Changes in interest rates; ● Kronos’ ability to comply with covenants contained in its revolving bank credit facility; ● Our ability to maintain sufficient liquidity; ● The timing and amounts of insurance recoveries; ● The ability of our subsidiaries or affiliates to pay us dividends; -3- ​ ● Uncertainties associated with CompX’s development of new products and product features; ● The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform; ● Our ability to utilize income tax attributes or changes in income tax rates related to such attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria; ● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations); ● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including us, with respect to asserted health concerns associated with the use of such products), including new environmental, sustainability, health and safety or other regulations (such as those seeking to limit or classify TiO 2 or its use); ● The ultimate resolution of pending litigation (such as our lead pigment and environmental matters); and ● Pending or possible future litigation (such as litigation related to CompX’s use of certain permitted chemicals in its productions process) or other actions.
KRONOS ® purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP and BP (United States Pharmacopoeia and British Pharmacopoeia) and the FDA (United States Food and Drug Administration).
KRONOS ® purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP (United States Pharmacopoeia) and BP (British Pharmacopoeia) and the FDA (United States Food and Drug Administration).
Kronos and CompX expect their manufacturing facilities to produce products safely and in compliance with local regulations, policies, standards and practices intended to protect the environment and their people -17- ​ and have established global policies designed to promote compliance. Kronos and CompX require their employees to comply with such requirements.
Kronos and CompX expect their manufacturing facilities to produce products safely and in -17- ​ compliance with local regulations, policies, standards and practices intended to protect the environment and people and have established global policies designed to promote such compliance. Kronos and CompX require their employees to comply with such requirements.
CompX’s major trademarks and brand names in addition to CompX ® include: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security Products Security Products Marine Components CompX ® Security Products™ ​ Lockview ® ​ CompX Marine ® ​ National Cabinet Lock ® ​ System 64 ® ​ Custom Marine ® ​ Fort Lock ® ​ SlamCAM ® ​ Livorsi ® Marine ​ Timberline ® Lock ® ​ RegulatoR ® ​ Livorsi II ® Marine ​ Chicago Lock ® ​ CompXpress ® ​ CMI Industrial ® ​ STOCK LOCKS ® ​ GEM ® ​ Custom Marine ® Stainless Exhaust ​ KeSet ® ​ Turbine™ ​ The #1 Choice in Performance Boating ® ​ TuBar ® ​ NARC iD ® ​ Mega Rim ® ​ StealthLock ® ​ NARC ® ​ Race Rim ® ​ ACE ® ​ ecoForce ® ​ Vantage View ® ​ ACE ® II ​ Pearl ® ​ GEN-X ® ​ CompX eLock ® ​ ​ ​ ​ ​ ​ -6- ​ Sales, marketing and distribution - A majority of CompX’s component sales are direct to large OEM customers through its factory-based sales and marketing professionals supported by engineers working in concert with field salespeople and independent manufacturer’s representatives.
CompX’s major trademarks and brand names in addition to CompX ® include: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security Products Security Products Marine Components CompX ® Security Products™ ​ Lockview ® ​ CompX Marine ® ​ National Cabinet Lock ® ​ System 64 ® ​ Custom Marine ® ​ Fort Lock ® ​ SlamCAM ® ​ Livorsi ® Marine ​ Timberline ® Lock ® ​ RegulatoR ® ​ Livorsi II ® Marine ​ Chicago Lock ® ​ CompXpress ® ​ CMI Industrial ® ​ STOCK LOCKS ® ​ GEM ® ​ Custom Marine ® Stainless Exhaust ​ KeSet ® ​ Turbine ® ​ The #1 Choice in Performance Boating ® ​ TuBar ® ​ NARC iD ® ​ Mega Rim ® ​ StealthLock ® ​ NARC ® ​ Race Rim ® ​ ACE ® ​ ecoForce ® ​ Vantage View ® ​ ACE ® II ​ Pearl ® ​ GEN-X ® ​ CompX eLock ® ​ ​ ​ ​ ​ ​ Sales, marketing and distribution – A majority of CompX’s component sales are direct to large OEM customers through its factory-based sales and marketing professionals supported by engineers working in concert with field salespeople and independent manufacturer’s representatives.
Should one or more of these risks materialize or if the consequences of such a development worsen, or should the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.
Should one or more of these risks materialize (or the consequences of such development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.
In addition, Kronos operates a rutile slurry manufacturing plant near Lake Charles, Louisiana, which converts dry pigment primarily manufactured for Kronos at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers. Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium, and France.
In addition, Kronos operates a rutile slurry manufacturing plant near its Lake Charles, Louisiana, facility, which converts dry pigment primarily manufactured for Kronos at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers. Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium, and France.
TiO 2 is considered a “quality-of-life” product. Demand for TiO 2 has generally been driven by worldwide gross domestic product and has generally increased with rising standards of living in various regions of the world. According to industry estimates, TiO 2 consumption has grown at a compound annual growth rate of approximately 2% since 2000.
TiO 2 is considered a “quality-of-life” product. Demand for TiO 2 has generally been driven by worldwide gross domestic product and has generally increased with rising standards of living in various regions of the world. According to industry estimates, TiO 2 consumption has grown at a compound annual growth rate of approximately 3% since 2000.
The U.S. government and various non-U.S. governmental agencies of countries in which Kronos operates have adopted or are contemplating regulatory changes relating to certain ESG topics, such as the Corporate Social Responsibility -16- ​ Directive adopted by the European Union on November 28, 2022 (EU CSRD).
The U.S. government and various non-U.S. governmental agencies of countries in which Kronos operates have adopted or are contemplating regulatory changes relating to certain ESG topics, such as the Corporate Social Responsibility Directive adopted by the European Union on November 28, 2022 (EU CSRD).
From time to time, new environmental, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 . Kronos believes that it is in substantial compliance with laws applicable to the regulation of TiO 2 .
From time to time, new environmental, sustainability, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 . Kronos believes that it is in substantial compliance with laws applicable to the regulation of TiO 2 .
CompX’s Security Products business has one manufacturing facility in Mauldin, South Carolina and one in Grayslake, Illinois which is shared with its Marine Components business. CompX believes it is a North -4- ​ American market leader in the manufacture and sale of cabinet locks and other locking mechanisms.
CompX’s Security Products business has one manufacturing facility in Mauldin, South Carolina and one in Grayslake, Illinois which is shared with its Marine Components business. CompX believes it is a North American market leader in the manufacture and sale of cabinet locks and other locking mechanisms.
Commodity market prices are cyclical, reflecting overall economic trends, specific developments in consuming industries and speculative investor activities. Patents and trademarks - CompX holds a number of patents relating to its component products, certain of which it believes to be important to CompX and its continuing business activity.
Commodity market prices are cyclical, reflecting overall economic trends, specific developments in consuming industries and speculative investor activities. -6- ​ Patents and trademarks – CompX holds a number of patents relating to its component products, certain of which it believes to be important to CompX and its continuing business activity.
TiO 2 is the largest commercially used whitening pigment because it has a high refractive rating, giving it more hiding power than any other commercially produced white pigment. In addition, TiO 2 has excellent resistance to interaction -7- ​ with other chemicals, good thermal stability and resistance to ultraviolet degradation.
TiO 2 is the largest commercially used whitening pigment because it has a high refractive rating, giving it more hiding power than any other commercially produced white pigment. In addition, TiO 2 has excellent resistance to interaction with other chemicals, good thermal stability and resistance to ultraviolet degradation.
Overall, Kronos is one of the top five producers of TiO 2 in the world. Kronos offers its customers a broad portfolio of products that include over 50 different TiO 2 pigment grades under the KRONOS ® trademark, which provide a variety of performance properties to meet customers’ specific requirements.
Overall, Kronos is one of the top five producers of TiO 2 in the world. -8- ​ Kronos offers its customers a broad portfolio of products that include over 50 different TiO 2 pigment grades under the KRONOS ® trademark, which provide a variety of performance properties to meet customers’ specific requirements.
In other instances, we have disposed of the acquired interest in a company prior to gaining control. We intend to consider such activities in the future and may, in connection with such activities, consider issuing additional equity securities and increasing our indebtedness. Available information - Our fiscal year ends December 31.
In other instances, we have disposed of the acquired interest in a company prior to gaining control. We -18- ​ intend to consider such activities in the future and may, in connection with such activities, consider issuing additional equity securities and increasing our indebtedness. Available information – Our fiscal year ends December 31.
A third-party operator of the manufacturing complex provides some raw materials including chlorine, auxiliary and operating materials, utilities and services necessary to operate the Leverkusen facility under separate supplies and services agreements. (2) The Fredrikstad facility is located on public land and is leased until 2063.
A third-party operator of the manufacturing complex provides some raw materials including chlorine, auxiliary and operating materials, utilities and services necessary to operate the Leverkusen facility under separate supplies and services agreements. -11- ​ (2) The Fredrikstad facility is located on public land and is leased until 2063.
These specialty chemicals are used in applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices and natural gas pipe and other specialty applications. -9- ​ Manufacturing, operations and properties - Kronos produces TiO 2 in two crystalline forms: rutile and anatase.
These specialty chemicals are used in applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices and natural gas pipe and other specialty applications. Manufacturing, operations and properties Manufacturing – Kronos produces TiO 2 in two crystalline forms: rutile and anatase.
We and other entities that may be affiliated with Contran routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies that provide strategic opportunities and synergies or that we perceive to be undervalued in the marketplace. These companies may or may not be engaged in businesses related to our -18- ​ current businesses.
We and other entities that may be affiliated with Contran routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies that provide strategic opportunities and synergies or that we perceive to be undervalued in the marketplace. These companies may or may not be engaged in businesses related to our current businesses.
The amount of TiO 2 used in coatings varies widely depending -8- ​ on the opacity, color and quality desired. In general, the higher the opacity requirement of the coating, the greater the TiO 2 content. TiO 2 for plastics – Kronos produces TiO 2 pigments that improve the optical and physical properties of plastics, including whiteness and opacity.
The amount of TiO 2 used in coatings varies widely depending on the opacity, color and quality desired. In general, the higher the opacity requirement of the coating, the greater the TiO 2 content. TiO 2 for plastics – Kronos produces TiO 2 pigments that improve the optical and physical properties of plastics, including whiteness and opacity.
CompX has three production facilities in the United States. ​ Chemicals Kronos Worldwide, Inc. - 31% owned at December 31, 2023 Kronos is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO 2, a base industrial product used in imparting whiteness, brightness, opacity and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, cosmetics, pharmaceuticals and other industrial and consumer “quality-of-life” products.
CompX has three production facilities in the United States. ​ Chemicals Kronos Worldwide, Inc. – 31% owned at December 31, 2024 Kronos is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO 2, a base industrial product used in imparting whiteness, brightness, opacity and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, cosmetics, pharmaceuticals and other industrial and consumer “quality-of-life” products.
LB Group. Ltd. previously announced it plans to add an additional 200,000 tons of chloride capacity which we expect will be added incrementally over the next several years.
LB Group previously announced it plans to add an additional 200,000 tons of chloride capacity which we expect will be added incrementally over the next several years.
Some of these laws hold current or previous owners or operators of real property liable for the costs of cleaning up contamination, even if these owners or operators did not know of, and were not responsible for, such contamination.
Some of these laws -15- ​ hold current or previous owners or operators of real property liable for the costs of cleaning up contamination, even if these owners or operators did not know of, and were not responsible for, such contamination.
In pharmaceuticals, Kronos’ TiO 2 is used commonly as a colorant in tablet and capsule coatings as well as in liquid medicines to provide uniformity of color and appearance.
In pharmaceuticals, Kronos’ TiO 2 is used commonly as a colorant in tablet and capsule coatings as well as in liquid medicines -9- ​ to provide uniformity of color and appearance.
CompX operates three low-emission manufacturing facilities and CompX’s production processes requiring waste-water discharge are consolidated at its Mauldin, South Carolina facility. This facility has received a ReWa Compliance Excellence Award from Renewable Water Resources, an organization which sets regulatory and water policies for the Mauldin facility’s geographic region, for multiple years for its exemplary performance.
CompX operates three manufacturing facilities and CompX’s production processes requiring waste-water discharge are consolidated at its Mauldin, South Carolina facility. This facility has received a ReWa Compliance Excellence Award from Renewable Water Resources, an organization which sets regulatory and water policies for the Mauldin facility’s geographic region, for multiple years for its exemplary performance.
Kronos’ TiO 2 business is enhanced by the following three complementary businesses, which comprised approximately 10% of its net sales in 2023: ● Kronos owns and operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term. Ilmenite is a raw material used directly as a feedstock by some sulfate-process TiO 2 plants.
Kronos’ TiO 2 business is enhanced by the following three complementary businesses, which comprised approximately 10% of its net sales in 2024: ● Kronos owns and operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term. Ilmenite is a raw material used directly as a feedstock by some sulfate-process TiO 2 plants.
Organization At December 31, 2023, Valhi, Inc. (NYSE: VHI) held approximately 83% of our outstanding common stock and a wholly-owned subsidiary of Contran Corporation held approximately 91% of Valhi’s outstanding common stock. As discussed in Note 1 to our Consolidated Financial Statements, Lisa K. Simmons and a trust established for the benefit of Ms.
Organization At December 31, 2024, Valhi, Inc. (NYSE: VHI) held approximately 83% of our outstanding common stock and a wholly-owned subsidiary of Contran Corporation held approximately 91% of Valhi’s outstanding common stock. As discussed in Note 1 to our Consolidated Financial Statements, Lisa K. Simmons and a trust established for the benefit of Ms.
HUMAN CAPITAL RESOURCES Employees - We operate through our subsidiaries and affiliate and through our intercorporate services agreement with Contran (see Note 15 to our Consolidated Financial Statements). We have no direct employees. Our operating results depend in part on Kronos’ and CompX’s ability to successfully manage their human capital resources, including attracting, identifying and retaining key talent.
HUMAN CAPITAL RESOURCES Employees – We operate through our subsidiaries and affiliate and through our intercorporate services agreement with Contran (see Note 16 to our Consolidated Financial Statements). We have no direct employees. Our operating results depend in part on Kronos’ and CompX’s ability to successfully manage their human capital resources, including attracting, identifying and retaining key talent.
CompX’s Marine Components business manufactures and distributes wake enhancement systems, stainless steel exhaust components, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats (tow boats) and performance boats. CompX’s Marine Components business has a facility in Neenah, Wisconsin and a facility in Grayslake, Illinois which is shared with Security Products.
CompX’s Marine Components business manufactures and distributes wake enhancement systems, stainless steel exhaust components, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats (towboats) and performance boats. CompX’s Marine Components business has a facility in Neenah, Wisconsin and a facility in Grayslake, Illinois which is shared with Security Products.
Business summary We are primarily a holding company. We operate in the component products industry through our majority-owned subsidiary, CompX International Inc. (NYSE American: CIX). We operate in the chemicals industry through our noncontrolling interest in Kronos Worldwide, Inc. CompX and Kronos (NYSE: KRO) each file periodic reports with the Securities and Exchange Commission (SEC).
Business summary We are primarily a holding company. We operate in the component products industry through our majority-owned subsidiary, CompX International Inc. (NYSE American: CIX). We operate in the chemicals industry through our noncontrolling interest in Kronos Worldwide, Inc. CompX and Kronos (NYSE: KRO) each file periodic reports with the Securities and Exchange Commission (“SEC”).
Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels. On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety. That decision is currently under appeal.
Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels. On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety, which decision is currently under appeal.
Kronos’ major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. Kronos ships TiO 2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier. Sales of Kronos’ core TiO 2 pigments represented approximately 90% of its net sales in 2023.
Kronos’ major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. Kronos ships TiO 2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier. Sales of Kronos’ core TiO 2 pigments represented approximately 90% of its net sales in 2024.
Component Products CompX International Inc. - 87% owned at December 31, 2023 CompX manufactures engineered components that are sold to a variety of industries including postal, recreational transportation (including boats), office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment.
Component Products CompX International Inc. – 87% owned at December 31, 2024 CompX manufactures engineered components that are sold to a variety of industries including postal, recreational transportation (including boats), office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment.
Products and end-use markets - Kronos, including its predecessors, has produced and marketed TiO 2 in North America and Europe, its primary markets, for over 100 years. Kronos believes it is the largest chloride process TiO 2 producer in Europe with 44% of its 2023 sales volumes attributable to markets in Europe.
Products and end-use markets – Kronos, including its predecessors, has produced and marketed TiO 2 in North America and Europe, its primary markets, for over 100 years. Kronos believes it is the largest chloride process TiO 2 producer in Europe with 44% of its 2024 sales volumes attributable to markets in Europe.
Diversity and inclusion - We recognize that everyone deserves respect and equal treatment. Kronos and CompX embrace diversity and collaboration in their workforces and business initiatives.
We recognize that everyone deserves respect and equal treatment. Kronos and CompX embrace diversity and collaboration in their workforces and business initiatives.
Regulatory and environmental matters - We discuss regulatory and environmental matters in the respective business sections contained elsewhere herein and in Item 3 - “Legal Proceedings.” In addition, the information included in Note 16 to our Consolidated Financial Statements under the captions “Lead pigment litigation” and “Environmental matters and litigation” is incorporated herein by reference.
Regulatory and environmental matters – We discuss regulatory and environmental matters in the respective business sections contained elsewhere herein and in Item 3 – “Legal Proceedings.” In addition, the information included in Note 17 to our Consolidated Financial Statements under the captions “Lead pigment litigation” and “Environmental matters and litigation” is incorporated herein by reference.
Kronos has production facilities in Europe and North America. Sales of its core TiO 2 pigments represented approximately 90% of Kronos’ net sales in 2023, with sales of other products that are complementary to Kronos’ TiO 2 business comprising the remainder. ​ COMPONENT PRODUCTS - COMPX INTERNATIONAL INC.
Kronos has production facilities in Europe and North America. Sales of its core TiO 2 pigments represented approximately 90% of Kronos’ net sales in 2024, with sales of other products that are complementary to Kronos’ TiO 2 business comprising the remainder. ​ COMPONENT PRODUCTS – COMPX INTERNATIONAL INC.
As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates a rock ilmenite mine in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2023. Kronos expects ilmenite production from its mine to meet its European sulfate process feedstock requirements for the foreseeable future.
As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates a rock ilmenite mine in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2024. Kronos expects ilmenite production from its mine to meet its sulfate process feedstock requirements for the foreseeable future.
If actual developments differ from Kronos’ expectations, the TiO 2 industry’s and Kronos’ performance could be unfavorably affected. Research and development - Kronos employs scientists, chemists, process engineers and technicians who are engaged in research and development, process technology and quality assurance activities in Leverkusen, Germany.
If actual developments differ from Kronos’ expectations, the TiO 2 industry and Kronos’ performance could be unfavorably affected. Research and development – Kronos employs scientists, chemists, process engineers and technicians who are engaged in research and development, process technology and quality assurance activities in Leverkusen, Germany.
CompX also has a standardized product line suitable for many customers, which is offered through a North American distribution network to locksmith and smaller original equipment manufacturer (OEM) distributors via its STOCK LOCKS ® distribution program.
CompX also has a standardized product line suitable for many customers, which is offered through a North American distribution network to locksmith and smaller original equipment manufacturer (“OEM”) distributors via its STOCK LOCKS ® distribution program.
Kronos’ U.S. patent portfolio includes patents having remaining terms ranging from one year to 18 years. Trademarks - Kronos trademarks, including KRONOS ® , are covered by issued and/or pending registrations, including in Canada and the United States.
Kronos’ U.S. patent portfolio includes patents having remaining terms ranging from one year to 19 years. Trademarks – Kronos trademarks, including KRONOS ® , are covered by issued and/or pending registrations, including in Canada and the United States.
Kronos purchases feedstock for its chloride process TiO 2 from the following primary suppliers for certain contractually specified volumes for delivery extending, in some cases, through 2026: ​ ​ ​ ​ ​ ​ ​ ​ Supplier ​ Product ​ ​ Renewal Terms Rio Tinto Iron and Titanium Ltd ​ Chloride process grade slag ​ ​ Auto-renews bi-annually Rio Tinto Iron and Titanium Ltd ​ Upgraded slag ​ ​ Auto-renews annually Eramet SA ​ Chloride process grade slag ​ Renewal terms upon negotiations Sierra Rutile Limited ​ Rutile ore ​ Renewal terms upon negotiations Iluka Resources Limited ​ Rutile ore ​ Renewal terms upon negotiations Saraf Agencies Private Limited ​ Chloride process grade slag ​ Renewal terms upon negotiations In the past Kronos has been, and expects it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts.
Kronos purchases feedstock for its chloride process TiO 2 from the following primary suppliers for certain contractually specified volumes for delivery extending, in some cases, through 2026: ​ ​ ​ ​ ​ ​ ​ ​ Supplier ​ Product ​ ​ Renewal Terms Rio Tinto Iron and Titanium Ltd ​ Chloride process grade slag ​ ​ Auto-renews bi-annually Rio Tinto Iron and Titanium Ltd ​ Upgraded slag ​ ​ Auto-renews annually Sierra Rutile Limited ​ Rutile ore ​ Renewal terms upon negotiations Iluka Resources Limited ​ Rutile ore ​ Renewal terms upon negotiations In the past Kronos has been, and expects it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts.
These individuals have the responsibility for improving Kronos’ chloride and sulfate production processes, improving product quality and strengthening Kronos’ competitive position by developing new products and applications. Kronos’ expenditures for these activities were approximately $17 million in 2021, $15 million in 2022 and $18 million in 2023. Kronos expects to spend approximately $14 million on research and development in 2024.
These individuals have the responsibility for improving Kronos’ chloride and sulfate production processes, improving product quality and strengthening Kronos’ competitive position by developing new products and applications. Kronos’ expenditures for these activities were approximately $15 million in 2022, $18 million in 2023 and $14 million in 2024. Kronos expects to spend approximately $15 million on research and development in 2025.
Insurance - We maintain insurance for our businesses and operations, with customary levels of coverage, deductibles and limits. See also Item 3 – “Legal Proceedings – Insurance coverage claims” and Note 16 to our Consolidated Financial Statements.
Insurance – We maintain insurance for our businesses and operations, with customary levels of coverage, deductibles and limits. See also Item 3 – “Legal Proceedings – Insurance coverage claims” and Note 17 to our Consolidated Financial Statements.
The table below shows Kronos’ estimated market share for its significant markets, Europe and North America, for the last three years. ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 2022 2023 Europe 15 % 14 % 12 % North America 17 % 17 % 16 % ​ Kronos believes it is the leading seller of TiO 2 in several countries, including Germany.
The table below shows Kronos’ estimated market share for its significant markets, Europe and North America, for the last three years. ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2023 2024 Europe 14 % 12 % 14 % North America 17 % 16 % 17 % ​ Kronos believes it is the leading seller of TiO 2 in several countries, including Germany.
The chloride process is the preferred form for use in coatings and plastics, the two largest end-use markets. Due to environmental factors and customer considerations, the proportion of TiO 2 industry sales represented by chloride process pigments has remained stable relative to sulfate process pigments, and in 2023, chloride process production facilities represented approximately 43% of industry capacity.
The chloride process is the preferred form for use in coatings and plastics, the two largest end-use markets. Due to environmental factors and customer considerations, the proportion of TiO 2 industry sales represented by chloride process pigments has remained stable relative to sulfate process pigments, and in 2024, chloride process production facilities represented approximately 41% of industry capacity.
In addition, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulphate process capacity.
However, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulfate process capacity.
In the event CompX is unable to offset raw material cost increases with other cost reductions, it may be difficult to recover those cost increases through increased product selling prices or raw material surcharges due to the competitive nature of the markets served by its products. Consequently, overall operating margins can be negatively affected by commodity-related raw material cost pressures.
In the event CompX is unable to offset raw material cost increases with other cost reductions, it may be difficult to recover those cost increases through increased product selling prices or raw material surcharges due to the competitive nature of the markets in which CompX competes. Consequently, overall operating margins can be negatively affected by commodity-related raw material cost pressures.
Kronos sells to a diverse customer base with only one customer representing 10% or more of its net sales in 2023 (Behr Process Corporation – 12%). Kronos’ largest ten customers accounted for approximately 35% of net sales in 2023. Neither Kronos’ business as a whole nor any of its principal product groups is seasonal to any significant extent.
Kronos sells to a diverse customer base with only one customer representing 10% or more of its net sales in 2024 (Behr Process Corporation – 10%). Kronos’ largest ten customers accounted for approximately 39% of net sales in 2024. Neither Kronos’ business as a whole nor any of its principal product groups is seasonal to any significant extent.
Kronos continually seeks to improve the quality of its grades and has been successful in developing new grades for existing and new applications to meet the needs of its customers and increase product life cycles. Since the beginning of 2019, Kronos has added seven new grades for pigments and other applications.
Kronos continually seeks to improve the quality of its grades and has been successful in developing new grades for existing and new applications to meet the needs of its customers and increase product life cycles. Since the beginning of 2020, Kronos has added six new grades for pigments and other applications.
The joint venture owns the land and facility. Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above. Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.
Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above. Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.
CompX uses lost time incidents as a key measure of worker safety. CompX defines lost time incidents as work-related accidents where a worker sustains an injury that results in time away from work. CompX had one lost time incident in 2021, three in 2022 and one in 2023.
CompX uses lost time incidents as a key measure of worker safety. CompX defines lost time incidents as work-related accidents where a worker sustains an injury that results in time away from work. CompX had three lost time incidents in 2022 and one in each of 2023 and 2024.
Kronos owns its Leverkusen facility, which represents about one-third of Kronos’ current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050. Lease payments are periodically negotiated for periods of at least two years at a time.
Kronos owns its Leverkusen facility, which represents approximately 29% of Kronos’ current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050. Lease payments are periodically negotiated for periods of at least two years at a time.
During 2023, Kronos had an estimated 6% share of worldwide TiO 2 sales volume, and based on sales volume Kronos believes it is the leading seller of TiO 2 in several countries, including Germany. Kronos’ principal competitors are The Chemours Company, Tronox Incorporated, LB Group Co. Ltd. and Venator Materials PLC. The top five TiO 2 producers (i.e.
During 2024, Kronos had an estimated 7% share of worldwide TiO 2 sales volume, and based on sales volume Kronos believes it is the leading seller of TiO 2 in several countries, including Germany. Kronos’ principal competitors are LB Group Co. Ltd, The Chemours Company, Tronox Holdings PLC and Venator Materials PLC. The top five TiO 2 producers (i.e.
These raw materials are purchased from several suppliers, are readily available from numerous sources and accounted for approximately 13% of our total cost of sales for 2023. Total material costs, including purchased components, represented approximately 48% of our cost of sales in 2023.
These raw materials are purchased from several suppliers, are readily available from numerous sources and accounted for approximately 13% of our total cost of sales for 2024. Total material costs, including purchased components, represented approximately 46% of our cost of sales in 2024.
In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste. CompX’s operations are subject to federal, state, and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal, remediation of and exposure to hazardous and non-hazardous substances, materials and wastes.
In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste. CompX’s operations are subject to federal, state, and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal, remediation of and exposure to hazardous and non-hazardous substances, materials and wastes, some of which are becoming stricter over time.
Kronos and its four principal competitors) account for approximately 52% of the world’s production capacity.
Kronos and its four principal competitors) account for approximately 51% of the world’s production capacity.
The following tables show Kronos’ approximate TiO 2 sales volume by geographic region and end-use for the year ended December 31, 2023: ​ ​ ​ ​ Sales volume percentages by geographic region ​ Sales volume percentages by end-use Europe ​ 44 % ​ Coatings ​ 57 % North America ​ 41 % ​ Plastics ​ 30 % Asia Pacific ​ 9 % ​ Paper ​ 9 % Rest of World ​ 6 % ​ Other ​ 4 % ​ Some of the principal applications for Kronos’ products include the following: TiO 2 for coatings – Kronos’ TiO 2 is used to provide opacity, durability, tinting strength and brightness in industrial coatings, as well as coatings for commercial and residential interiors and exteriors, automobiles, aircraft, machines, appliances, traffic paint and other special purpose coatings.
The following tables show Kronos’ approximate TiO 2 sales volume by geographic region and end-use for the year ended December 31, 2024: ​ ​ ​ ​ Sales volume percentages by geographic region ​ Sales volume percentages by end-use Europe ​ 44 % ​ Coatings ​ 60 % North America ​ 40 % ​ Plastics ​ 27 % Asia Pacific ​ 9 % ​ Paper ​ 9 % Rest of World ​ 7 % ​ Other ​ 4 % ​ Some of the principal applications for Kronos’ products include the following: TiO 2 for coatings – Kronos’ TiO 2 is used to provide opacity, durability, tinting strength and brightness in industrial coatings, as well as coatings for commercial and residential interiors and exteriors, automobiles, aircraft, machines, appliances, traffic paint and other special purpose coatings.
Kronos’ capital expenditures related to ongoing environmental compliance, protection and improvement programs, including capital expenditures which are primarily focused on increasing operating efficiency but also result in improved environmental protection such as lower emissions from its manufacturing facilities, were $11.2 million in 2023 and are currently expected to be approximately $28 million in 2024.
Kronos’ capital expenditures related to ongoing environmental compliance, protection and improvement programs, including capital expenditures which are primarily focused on increasing operating efficiency but also result in improved environmental protection such as lower emissions from its manufacturing facilities, were $17 million in 2024 and are currently expected to be approximately $24 million in 2025.
Kronos believes Western Europe and North America currently account for approximately 14% and 15% of global TiO 2 consumption, respectively.
Kronos believes Western Europe and North America each account for approximately 15% of global TiO 2 consumption, respectively.
Kronos and CompX conduct their businesses in ways that provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve these results.
Kronos and CompX are conducting their businesses in ways that provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve such results.
Patents generally have a term of 20 years and CompX’s patents have remaining terms ranging from one year to 17 years at December 31, 2023.
Patents generally have a term of 20 years and CompX’s patents have remaining terms ranging from one year to 16 years at December 31, 2024.
Ltd. expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by Kronos or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.
Other than through debottlenecking projects and the LB Group expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by Kronos or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.
The joint venture operates on a break-even basis and therefore Kronos does not have any equity in earnings of the joint venture. Kronos is required to purchase one half of the TiO 2 produced by the joint venture.
The joint venture operated on a break-even basis and therefore Kronos did not have any equity in earnings of the joint venture. Kronos was required to purchase one half of the TiO 2 produced by the joint venture.
Germany and Belgium are members of the EU and follow its initiatives. Norway is not a member but generally patterns its environmental regulatory actions after those of the EU. From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under U.S. and non-U.S. statutes. Typically Kronos establishes compliance programs to resolve these matters.
Germany and Belgium are members of the EU and follow its initiatives. Norway is not a member but generally patterns its environmental regulatory actions after those of the EU. From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under local or national laws. Typically, Kronos updates its compliance programs to resolve these matters.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2024 to be relatively stable. When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2025 to be relatively stable, although governmental actions such as tariffs may impact markets. When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.
CompX sells to a diverse customer base with only one customer representing 10% or more of its sales in 2023 (United States Postal Service representing 24% of which 11% related to a pilot project). CompX’s largest ten customers accounted for approximately 52% of its sales in 2023. Competition - The markets in which CompX participates are highly competitive.
CompX sells to a diverse customer base with only one customer representing 10% or more of its sales in 2024 (United States Postal Service representing 21%). CompX’s largest ten customers accounted for approximately 47% of its sales in 2024. Competition – The markets in which CompX participates are highly competitive.
The following chart shows Kronos’ estimate of worldwide production capacity in 2023: ​ ​ ​ ​ ​ Worldwide production capacity – 2023 Chemours 14 % Tronox 12 % LB Group Co.Ltd. 12 % Kronos 7 % Venator 7 % Other 48 % ​ Chemours has approximately one-half of total North American TiO 2 production capacity and is Kronos’ principal North American competitor.
The following chart shows Kronos’ estimate of worldwide production capacity in 2024: ​ ​ ​ ​ ​ Worldwide production capacity – 2024 LB Group 13 % Chemours 13 % Tronox 12 % Kronos 7 % Venator 6 % Other 49 % ​ Chemours has approximately one-half of total North American TiO 2 production capacity and is Kronos’ principal North American competitor.
Because TiO 2 represents a significant input cost for its customers, the purchasing decisions are often made by its customers’ senior management. Kronos works to maintain close relationships with the key decision makers through in-depth and frequent contact.
Sales and marketing – Kronos’ marketing strategy is aimed at developing and maintaining strong relationships with new and existing customers. Because TiO 2 represents a significant input cost for its customers, the purchasing decisions are often made by its customers’ senior management. Kronos works to maintain close relationships with the key decision makers through in-depth and frequent contact.
All costs and capital expenditures are shared equally with Venator with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced. Kronos’ share of net costs is reported as cost of sales as the TiO 2 is sold.
All costs and capital expenditures were shared equally with Venator, with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced. Kronos’ share of net costs was reported as cost of sales as the TiO 2 was sold. See Note 6 to our Consolidated Financial Statements.
Certain employees at each of Kronos’ production facilities are organized by labor unions. Kronos strives to maintain good relationships with all its employees, including the unions and workers’ councils representing those employees. In Europe, Kronos’ union employees are covered by master collective bargaining agreements for the chemical industry that are generally renewed annually.
Kronos strives to maintain good relationships with all its employees, including the unions and workers’ councils representing those employees. In Europe, Kronos’ union employees are covered by master collective bargaining agreements for the chemical industry that are generally renewed annually. At December 31, 2024, approximately 75% of Kronos’ worldwide workforce is organized under collective bargaining agreements.
The TiO 2 industry is characterized by high barriers to entry consisting of high capital costs, proprietary technology and significant lead times required to construct new facilities or to expand existing capacity.
In addition, in 2024 Kronos closed its sulfate production line in Varennes, Canada. The TiO 2 industry is characterized by high barriers to entry consisting of high capital costs, proprietary technology and significant lead times required to construct new facilities or to expand existing capacity.
Therefore, over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects; however, this increase only partly compensated for the shut-down of various TiO 2 plants throughout the world. Although overall industry demand is expected to increase in 2024, other than through debottlenecking projects and the LB Group Co.
Therefore, over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects; however, this increase only partly compensated for the shut-down of various TiO 2 plants throughout the world.
CompX’s operations also are subject to federal, state and local laws and regulations relating to worker health and safety. CompX believes it is in substantial compliance with all such laws and regulations. To date, the costs of maintaining compliance with such laws and regulations have not significantly impacted its results.
CompX’s operations are also subject to federal, state and local laws and regulations relating to worker health and safety. CompX believes it is in substantial compliance with all such laws and regulations.
At December 31, 2023, approximately 78% of Kronos’ worldwide workforce is organized under collective bargaining agreements. Kronos did not experience any work stoppages during 2023, although it is possible that there could be future work stoppages or other labor disruptions that could materially and adversely affect its business, results of operations, financial position or liquidity.
Kronos did not experience any work stoppages during 2024, although it is possible that there could be future work stoppages or other labor disruptions that could materially and adversely affect its business, results of operations, financial position or liquidity.
Beginning in the fourth quarter of 2022 and continuing throughout 2023, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties.
Beginning in the fourth quarter of 2022 and continuing throughout the first quarter of 2024, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties. Kronos increased production levels to align with higher overall customer demand in 2024. Properties – Kronos operates facilities throughout North America and Europe.
Kronos operated its facilities at reduced capacities in the fourth quarter of 2022 and through 2023. ​ -10- ​ The following table presents the division of Kronos’ expected 2024 manufacturing capacity by plant location and type of manufacturing process: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of capacity by TiO 2 manufacturing process Facility ​ Description ​ Chloride Sulfate Leverkusen, Germany (1) ​ TiO 2 production, chloride process, co-products ​ ​ 32 % ​ ​ — % Nordenham, Germany ​ TiO 2 production, sulfate process, co-products ​ ​ — ​ ​ ​ 11 ​ Langerbrugge, Belgium ​ TiO 2 production, chloride process, co-products, titanium chemicals products ​ ​ 16 ​ ​ ​ — ​ Fredrikstad, Norway (2) ​ TiO 2 production, sulfate process, co-products ​ ​ — ​ ​ ​ 6 ​ Varennes, Canada ​ TiO 2 production, chloride and sulfate process, slurry facility, titanium chemicals products ​ ​ 18 ​ ​ ​ 3 ​ Lake Charles, LA, US (3) ​ TiO 2 production, chloride process ​ ​ 14 ​ ​ ​ — ​ Total ​ ​ ​ ​ 80 % ​ ​ 20 % ​ (1) The Leverkusen facility is located within a more extensive manufacturing complex.
The following table presents the division of Kronos’ expected 2025 manufacturing capacity by plant location and type of manufacturing process: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of capacity by TiO 2 manufacturing process Facility ​ Description ​ Chloride Sulfate Leverkusen, Germany (1) ​ TiO 2 production, chloride process, co-products ​ ​ 29 % ​ ​ — % Nordenham, Germany ​ TiO 2 production, sulfate process, co-products ​ ​ — ​ ​ ​ 10 ​ Langerbrugge, Belgium ​ TiO 2 production, chloride process, co-products, titanium chemicals products ​ ​ 15 ​ ​ ​ — ​ Fredrikstad, Norway (2) ​ TiO 2 production, sulfate process, co-products ​ ​ — ​ ​ ​ 5 ​ Varennes, Canada (3) ​ TiO 2 production, chloride process, slurry facility, titanium chemicals products ​ ​ 15 ​ ​ ​ — ​ Lake Charles, LA, US (4) ​ TiO 2 production, chloride process ​ ​ 26 ​ ​ ​ — ​ Total ​ ​ ​ ​ 85 % ​ ​ 15 % ​ (1) The Leverkusen facility is located within a more extensive manufacturing complex.
Kronos and CompX promote a respectful, diverse and inclusive workplace in which all individuals are treated with respect and dignity. OTHER In addition to our 87% ownership of CompX and our 31% ownership of Kronos at December 31, 2023, we also hold certain marketable securities and other investments. See Note 5 to our Consolidated Financial Statements.
OTHER In addition to our 87% ownership of CompX and our 31% ownership of Kronos at December 31, 2024, we also hold certain marketable securities and other investments. See Note 5 to our Consolidated Financial Statements.
The following table sets forth the location, size and business operations for each of CompX’s principal operating facilities at December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Business ​ ​ ​ Size Facility Name Operations Location (square feet) Owned Facilities : National (1) SP Mauldin, SC 198,000 Grayslake (1) SP/MC Grayslake, IL 133,000 Custom (1) MC Neenah, WI 95,000 ​ SP – Security Products business MC – Marine Components business (1) ISO-9001 registered facilities CompX believes all of its facilities are well maintained and satisfactory for their intended purposes. -5- ​ Raw materials - The primary raw materials used in CompX’s manufacturing processes are: ● Security Products - zinc and brass (for the manufacture of locking mechanisms). ● Marine Components - stainless steel (for the manufacture of exhaust headers and pipes and wake enhancement systems), aluminum (for the manufacture of throttles and trim tabs) and other components.
These products include: ● original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers and other exhaust components; ● high performance gauges such as GPS speedometers and tachometers; ● mechanical and electronic controls and throttles; ● wake enhancement devices, trim tabs, steering wheels and billet aluminum accessories; ● dash panels, LED indicators and wire harnesses; and ● grab handles, pin cleats and other accessories. ​ -5- ​ The following table sets forth the location, size and business operations for each of CompX’s principal operating facilities at December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Business ​ ​ ​ Size Facility Name Operations Location (square feet) Owned Facilities : National (1) SP Mauldin, SC 198,000 Grayslake (1) SP/MC Grayslake, IL 133,000 Custom (1) MC Neenah, WI 95,000 SP – Security Products business MC – Marine Components business (1) ISO-9001 registered facilities CompX believes all of its facilities are well maintained and satisfactory for their intended purposes.
These teams are responsible for maintaining ISO 50001:2018 certifications (where applicable), performing regular reviews of local energy consumption, making recommendations regarding capital projects that reduce energy consumption and associated Greenhouse Gas (GHG) emissions or enhance efficiency. When possible, Kronos looks for opportunities to partner with local government authorities through grant opportunities to reduce energy consumption and associated GHG emissions.
Four of its six production facilities maintain certifications to the ISO 50001:2018 Energy Management standard and all locations have local energy teams in place. These teams are responsible for maintaining ISO 50001:2018 certifications (where applicable), performing regular reviews of local energy consumption, making recommendations regarding capital projects that reduce energy consumption and associated Greenhouse Gas (GHG) emissions or enhance efficiency.
CompX continuously seeks to diversify into new markets and identify new applications and features for its products, which it believes provide a greater potential for higher rates of earnings growth as well as diversification of risk.
CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries. -4- ​ CompX continuously seeks to diversify into new markets and identify new applications and features for its products, which it believes provide a greater potential for higher rates of earnings growth as well as diversification of risk.
Water-critical processes are identified and ongoing efforts to minimize water use are incorporated into environmental planning. -15- ​ Kronos’ U.S. manufacturing operations are governed by federal, state and local environmental and worker health and safety laws and regulations.
Kronos’ U.S. manufacturing operations are governed by federal, state and local environmental and worker health and safety laws and regulations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeKronos may encounter difficulties enforcing agreements or other legal rights and the effective tax rate may fluctuate based on the variability of geographic earnings and statutory tax rates. TiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions.
Biggest changeTiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions. These risks, individually or in the aggregate, could have an adverse effect on Kronos’ results of operations and financial condition. Kronos is experiencing increasing competition from China.
See also Item 3 - “Legal Proceedings - Environmental matters and litigation.” If some or all of Kronos’ or CompX’s intellectual property were to be declared invalid, held to be unenforceable or copied by competitors, or some or all of Kronos’ or CompX’s confidential information become known to competitors, or if Kronos’ or CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.
See also Item 3 – “Legal Proceedings – Environmental matters and litigation.” -23- ​ If some or all of Kronos’ or CompX’s intellectual property were to be declared invalid, held to be unenforceable or copied by competitors, or some or all of Kronos’ or CompX’s confidential information become known to competitors, or if Kronos’ or CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.
Kronos also may not be able to readily detect breaches of such agreements. The failure of Kronos’ confidentiality agreements to protect its proprietary technology, -23- ​ know-how or trade secrets could result in a material loss of its competitive position, which could lead to significantly lower revenues, reduced profit margins or loss of market share.
Kronos also may not be able to readily detect breaches of such agreements. The failure of Kronos’ confidentiality agreements to protect its proprietary technology, know-how or trade secrets could result in a material loss of its competitive position, which could lead to significantly lower revenues, reduced profit margins or loss of market share.
While CompX will continue to emphasize the introduction of innovative new product features that target customer-specific opportunities, it does not know if any new product features it introduces will achieve the same degree of success that it has achieved with its existing products. At times CompX works with new and existing customers on specific product innovations.
While CompX will continue to emphasize the introduction of innovative -20- ​ new product features that target customer-specific opportunities, it does not know if any new product features it introduces will achieve the same degree of success that it has achieved with its existing products. At times CompX works with new and existing customers on specific product innovations.
Since expenditures for these types of activities are not considered research and development expense under accounting principles generally accepted in -20- ​ the United States of America (“GAAP”), the amount of CompX’s research and development expenditures, which is not significant, is not indicative of the overall effort involved in the development of new product features.
Since expenditures for these types of activities are not considered research and development expense under accounting principles generally accepted in the United States of America (“GAAP”), the amount of CompX’s research and development expenditures, which is not significant, is not indicative of the overall effort involved in the development of new product features.
Furthermore, periods of extended inclement weather or associated droughts or flooding may inhibit Kronos’ or CompX’s facility operations and delay or hinder shipments of products to customers. Any such events could have a material adverse effect on Kronos’ or CompX’s costs or results of operations. -25- ​ ​
Furthermore, periods of extended inclement weather or associated droughts or flooding may inhibit Kronos’ or CompX’s facility operations and delay or hinder shipments of products to customers. Any such events could have a material adverse effect on Kronos’ or CompX’s costs or results of operations. ​
Until the timing, scope and extent -24- ​ of any new or future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.
Until the timing, scope and extent of any new or future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.
If we were required to liquidate our subsidiaries’ and affiliate’s securities in order to generate funds to satisfy our liabilities, we may be required to sell such securities at a time or times for less than what we believe to be the long-term value of such assets. Kronos’ leverage may impair our financial condition.
If we were required to liquidate our subsidiaries’ and affiliate’s securities in order to generate funds to satisfy our liabilities, we may be required to sell such securities at a time or times for less than what we believe to be the long-term value of such assets. Financial Risk Factors Kronos’ leverage may impair our financial condition.
Operational Risk Factors Demand for, and prices of, certain of Kronos’ products are influenced by changing market conditions for its products, which may result in reduced earnings or in operating losses. Kronos’ sales and profitability are largely dependent on the TiO 2 industry. In 2023, approximately 90% of Kronos’ sales were attributable to sales of TiO 2 .
Operational Risk Factors Demand for, and prices of, certain of Kronos’ products are influenced by changing market conditions for its products, which may result in reduced earnings or in operating losses. Kronos’ sales and profitability are largely dependent on the TiO 2 industry. In 2024, approximately 90% of Kronos’ sales were attributable to sales of TiO 2 .
If Kronos or Kronos’ worldwide vendors are unable to meet their planned or contractual obligations and Kronos was unable to obtain necessary raw materials, Kronos could incur higher costs for raw materials or may be required to reduce production levels. Kronos experienced increases in feedstock costs in 2022 and 2023, for example, which affected its margins.
If Kronos or Kronos’ worldwide vendors are unable to meet their planned or contractual obligations and Kronos was unable to obtain necessary raw materials, Kronos could incur higher costs for raw materials or may be required to reduce production levels. Kronos experienced increases in feedstock costs in 2023 and 2024, for example, which affected its margins.
The global market in which Kronos operates its business is concentrated, with the top five TiO 2 producers accounting for approximately 52% of the world’s production capacity and is highly competitive. Competition is based on a number of factors, such as price, product quality and service.
The global market in which Kronos operates its business is concentrated, with the top five TiO 2 producers accounting for approximately 51% of the world’s production capacity and is highly competitive. Competition is based on -19- ​ a number of factors, such as price, product quality and service.
Kronos’ current agreements require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $583 million beginning in 2024 and extending through 2026. In addition, Kronos has other long-term supply and service contracts that provide for various raw materials and services.
Kronos’ current agreements require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $542 million beginning in 2025 and extending through 2026. In addition, Kronos has other long-term supply and service contracts that provide for various raw materials and services.
Kronos’ level of debt could have important consequences to its stockholders and creditors, including: ● making it more difficult for Kronos to satisfy its obligations with respect to its liabilities; ● increasing its vulnerability to adverse general economic and industry conditions; ● requiring that a portion of its cash flows from operations be used for the payment of interest on its debt, which reduces its ability to use its cash flow to fund working capital, capital expenditures, dividends on its common stock, acquisitions or general corporate requirements; ● limiting the ability of Kronos’ subsidiaries to pay dividends to it; ● limiting Kronos’ ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or general corporate requirements; ● limiting Kronos’ flexibility in planning for, or reacting to, changes in its business and the industry in which it operates; and ● placing Kronos at a competitive disadvantage relative to other less leveraged competitors.
Kronos’ level of debt could have important consequences to our stockholders and creditors, including: ● making it more difficult for Kronos to satisfy its obligations with respect to its liabilities; ● increasing its vulnerability to adverse general economic and industry conditions; ● requiring that a portion of its cash flows from operations be used for the payment of interest on its debt, which reduces its ability to use its cash flow to fund working capital, capital expenditures, dividends on its common stock, acquisitions or general corporate requirements; ● limiting the ability of Kronos’ subsidiaries to pay dividends to it; ● limiting Kronos’ ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or general corporate requirements; ● limiting Kronos’ flexibility in planning for, or reacting to, changes in its business and the industry in which it operates; and ● placing Kronos at a competitive disadvantage relative to other less leveraged competitors. -22- ​ Indebtedness outstanding under Kronos’ Global Revolver accrues interest at variable rates.
In addition to Kronos’ indebtedness, Kronos is party to various lease and other agreements (including feedstock purchase contracts and other long-term supply and service contracts, as discussed above) pursuant to which, along with its indebtedness, Kronos is committed to pay approximately $543 million in 2024.
In addition to Kronos’ indebtedness, Kronos is party to various lease and other agreements (including feedstock purchase contracts and other long-term supply and service contracts, as discussed above) pursuant to which, along with its indebtedness, Kronos is committed to pay approximately $701 million in 2025.
We formerly manufactured lead pigments for use in paint. We and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
Legal, Compliance and Regulatory Risk Factors We could incur significant costs related to legal and environmental matters. We formerly manufactured lead pigments for use in paint. We and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
Indebtedness outstanding under Kronos’ global revolving credit facility (Global Revolver) accrues interest at variable rates. To the extent market interest rates rise, the cost of Kronos’ debt could increase, even if the amount borrowed remains the same, adversely affecting its financial condition, results of operations and cash flows.
To the extent market interest rates rise, the cost of Kronos’ debt could increase, even if the amount borrowed remains the same, adversely affecting its financial condition, results of operations and cash flows.
Due to the increase in global cybersecurity incidents it has become increasingly difficult to obtain insurance coverage on reasonable pricing terms to mitigate some risks associated with technology failures or cybersecurity breaches, and Kronos and CompX are experiencing such difficulties in obtaining insurance coverage. ​ Physical impacts of climate change could have a material adverse effect on Kronos’ or CompX’s costs and operations.
Due to the increase in global cybersecurity incidents it has become increasingly difficult to obtain insurance coverage on reasonable pricing terms to mitigate some risks associated with technology failures or cybersecurity breaches, and Kronos and CompX are experiencing such difficulties in obtaining insurance coverage.
As a result, Kronos may need to refinance all or a portion of its debt before maturity, as we have done in the past. Kronos may not be able to refinance any of its debt in a timely manner on favorable terms, if at all, in the current credit markets.
Kronos may not be able to refinance any of its debt in a timely manner on favorable terms, if at all, in the current credit markets.
Kronos’ ability to further increase capacity without additional investment in greenfield or brownfield capacity may be limited and as a result, Kronos’ profitability may become even more dependent upon the selling prices of its products. -19- ​ The TiO 2 industry is concentrated and highly competitive and Kronos faces price pressures in the markets in which it operates, which may result in reduced earnings or operating losses.
Kronos’ ability to further increase capacity without additional investment in greenfield or brownfield capacity may be limited and as a result, Kronos’ profitability may become even more dependent upon the selling prices of its products.
Environmental, health and safety laws and regulations, particularly as they relate to Kronos, may result in increased regulatory scrutiny which could decrease demand for Kronos’ products, increase Kronos’ manufacturing and compliance costs or obligations and result in unanticipated losses which could negatively impact its financial results or limit its ability to operate its business.
If Kronos or CompX must take legal action to protect, defend or enforce intellectual property rights, any suits or proceedings could result in significant costs, including attorney’s fees and diversion of resources and management’s attention, and Kronos or CompX may not prevail in any such suits or proceedings. -24- ​ Environmental, health and safety laws and regulations, particularly as they relate to Kronos, may result in increased regulatory scrutiny which could decrease demand for Kronos’ products, increase Kronos’ manufacturing and compliance costs or obligations and result in unanticipated losses which could negatively impact its financial results or limit its ability to operate its business.
In addition, Kronos’ ability to borrow funds under its Global Revolver in the future, in some instances, will depend in part on its ability to maintain specified financial ratios and satisfy certain financial covenants contained in the credit agreement governing the Global Revolver. -22- ​ Kronos’ business may not generate cash flows from operating activities sufficient to enable it to pay its debts when they become due and to fund its other liquidity needs.
In addition, Kronos’ ability to borrow funds under its Global Revolver in the future, in some instances, will depend in part on its ability to maintain specified financial ratios and satisfy certain financial covenants contained in the credit agreement governing the Global Revolver.
Climate change may increase both the frequency and severity of extreme weather conditions and natural disasters, such as hurricanes, thunderstorms, tornadoes, drought and snow or ice storms. Extreme weather conditions may increase our costs or cause damage to Kronos’ or CompX’s facilities, and any damage resulting from extreme weather may not be fully insured.
Extreme weather conditions may increase our costs or cause damage to Kronos’ or CompX’s facilities, and any damage resulting from extreme weather may not be fully insured.
Any inability to generate sufficient cash flows or to refinance its debt on favorable terms could have a material adverse effect on its financial condition and impact its ability to pay a dividend to us. Legal, Compliance and Regulatory Risk Factors We could incur significant costs related to legal and environmental matters.
Any inability to generate sufficient cash flows or to refinance its debt on favorable terms could have a material adverse effect on its financial condition and impact its ability to pay a dividend to us. Changes in currency exchange rates and interest rates can adversely affect Kronos’ net sales, profits and cash flows.
Kronos has a significant amount of debt, primarily related to its Senior Secured Notes issued in September 2017 and February 2024. As of December 31, 2023, Kronos’ total consolidated debt was approximately $441 million.
Kronos has a significant amount of debt, primarily related to its 9.50% Senior Secured Notes due 2029 and its 3.75% Senior Secured Notes due 2025, its term loan from Contran, and borrowings on its global revolving credit facility (“Global Revolver”). As of December 31, 2024, Kronos’ total consolidated debt was approximately $507.4 million.
Kronos has significant international operations which, along with its customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, terrorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas), natural disasters, pandemics or other health crises and political conditions.
Kronos has significant international operations which, along with its customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including: ● global or regional economic downturns; ● changes in tariffs, trade barriers, and regulatory requirements, such as the enactment of tariffs on goods imported into the U.S. including, but not limited to, the recently enacted tariff on goods imported from Canada where Kronos manufactures a significant portion of the TiO 2 it sells in North America.
These agreements require Kronos to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $72 million at December 31, 2023.
These agreements require Kronos to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $67 million at December 31, 2024. Kronos’ commitments under these contracts could adversely affect our financial results if Kronos significantly reduces its production and was unable to modify the contractual commitments.
Kronos’ commitments under these contracts could adversely affect our financial results if Kronos significantly reduces its production and was unable to modify the contractual commitments. -21- ​ Our assets consist primarily of investments in our operating subsidiaries and affiliate, and we are dependent upon distributions from our subsidiaries and affiliate.
Our assets consist primarily of investments in our operating subsidiaries and affiliate, and we are dependent upon distributions from our subsidiaries and affiliate.
General Risk Factors Kronos’ operating as a global business presents risks associated with global and regional economic, political, and regulatory environments.
General Risk Factors Kronos’ operating as a global business presents risks associated with global and regional economic, political, and regulatory environments. Kronos manufactures and distributes its products globally. Revenue from non-U.S. markets accounted for approximately 68%, 66%, and 66% of Kronos’ revenue for the years ended December 31, 2022, 2023 and 2024, respectively.
These risks, individually or in the aggregate, could have an adverse effect on Kronos’ results of operations and financial condition. Technology failures or cybersecurity breaches could have a material adverse effect on our operations.
The ultimate impact of any tariffs will depend on various factors, including the length of time tariffs are ultimately implemented and the amount, scope and nature of the tariffs. Technology failures or cybersecurity breaches could have a material adverse effect on our operations.
Removed
If Kronos or CompX must take legal action to protect, defend or enforce intellectual property rights, any suits or proceedings could result in significant costs, including attorney’s fees and diversion of resources and management’s attention, and Kronos or CompX may not prevail in any such suits or proceedings.
Added
The TiO 2 industry is concentrated and highly competitive and Kronos faces price pressures in the markets in which it operates, which may result in reduced earnings or operating losses.
Added
Kronos’ recent acquisition of the remaining 50% interest in LPC may not generate benefits it anticipates and may otherwise affect its business and prospects. Kronos recently completed the LPC acquisition in which it purchased the 50% ownership interest in LPC it did -21- ​ not previously own.
Added
If Kronos experiences unforeseen technological, operation or other difficulties in managing the integration of LPC as its wholly-owned subsidiary, it may not be able to implement the process innovations at the facility that it expects. In addition, Kronos may not be able to achieve the synergies or improve efficiency and product quality that it expects.
Added
With or without such difficulties, the integration of the LPC facility into Kronos’ operations may divert significant management time and attention from its other operations.
Added
If Kronos fails to successfully integrate LPC into its operations, or if the LPC acquisition does not provide expected synergies or sales increases, or if LPC has unexpected legal or financials liabilities, its business, financial condition, result of operations and prospects could be adversely affected.
Added
Kronos’ business may not generate cash flows from operating activities sufficient to enable it to pay its debts when they become due and to fund its other liquidity needs. As a result, Kronos may need to refinance all or a portion of its debt before maturity, as it has done in the past.
Added
Kronos operates its businesses in several different countries and sells its products worldwide. For example, during both 2023 and 2024, approximately 44% of Kronos’ sales volumes were sold into European markets.
Added
The majority (but not all) of Kronos’ sales from its operations outside the United States are denominated in currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.
Added
Therefore, Kronos is exposed to risks related to the need to convert currencies we receive from the sale of its products into the currencies required to pay for certain of its operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of Kronos’ results of operations between periods.
Added
Tariffs could make Kronos’ products more expensive which would reduce demand or require it to absorb the increased costs reducing its operating margins; -25- ​ ● protectionist laws, policies, and business practices and nationalistic campaigns such as economic sanctions and exchange controls; ● U.S. relations with the governments of the other countries in which Kronos operates; ● t errorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas); ● natural disasters, pandemics or other health crises, climate change, and other events beyond Kronos’ control; ● difficulties enforcing agreements or other legal rights; and ● Kronos’ effective tax rate may fluctuate based on the variability of geographic earnings and statutory rates.
Added
Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices. China has dumped lower cost sulfate process TiO 2 into the markets Kronos serves.
Added
In some cases, the TiO 2 industry has been successful in getting anti-competitive duties enacted on Chinese imports such as the European duties enacted in 2024. ​ The U.S. federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.
Added
For example, on March 4, 2025, the U.S. government implemented a 25% tariff on all imports from Mexico and Canada into the U.S.
Added
As Kronos currently manufactures a significant portion of its North American TiO 2 in Canada, if sustained for an extended period of time, the 25% tariff on Kronos’ imports into the U.S. from Canada, without exclusion, will make its products manufactured in Canada and sold into the U.S. more expensive.
Added
As a result, demand for these products could be reduced, or Kronos could be required to absorb the increased costs or increase prices of such products.
Added
Such tariffs and, if enacted, any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs, trade barriers and other protectionist or retaliatory measures taken in response, could adversely impact Kronos’ ability to sell its products in the U.S. or reduce its revenues and gross margins.
Added
These measures may also increase Kronos’ costs of Canadian feedstock imported into the U.S. and could adversely impact its gross margins or require Kronos to raise prices thereby making its products less competitive.
Added
Additional tariffs imposed by the U.S or any retaliatory or reciprocal tariffs imposed by other countries could also increase the cost of feedstock and other raw materials that go into making TiO 2 , the extent of which is unknown.
Added
Physical impacts of climate change could have a material adverse effect on Kronos’ or CompX’s costs and operations. -26- ​ Climate change may increase both the frequency and severity of extreme weather conditions and natural disasters, such as hurricanes, thunderstorms, tornadoes, drought and snow or ice storms.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

18 edited+0 added−1 removed0 unchanged
Biggest changeWe, Kronos and CompX each have a Cybersecurity Incident Disclosure and Controls Committee (CIDAC) which is central to the response and evaluation of cybersecurity incidents. Our CIDAC is comprised of the Contran CIO and senior executives including our chief executive officer, chief financial officer and general counsel.
Biggest changeOur CIDAC is comprised of our CIO and other senior executives including our chief executive officer, chief financial officer and general counsel. Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation.
Both the Contran CIO and the director of IT have extensive information technology and program management experience and lead teams that have many years of experience with each organization. Cybersecurity risks at each company are also reviewed and tested annually through third-party assessments and internal and external information technology audits.
Both our CIO and the director of IT have extensive information technology and program management experience and lead teams that have many years of experience with each organization. Cybersecurity risks at each company are also reviewed and tested annually through third-party assessments and internal and external information technology audits.
For more information about the cybersecurity risks we face, see the risk factor entitled “Technology failures or cybersecurity breaches could have a material adverse effect on our operations.” in Item 1A- “Risk Factors”. ​
For more information about the cybersecurity risks we face, see the risk factor entitled “Technology failures or cybersecurity breaches could have a material adverse effect on our operations.” in Item 1A- “Risk Factors.”
ITEM 1C. CYBERSECURITY We operate through our subsidiaries and affiliate and receive services through our intercorporate services agreement (ISA) with Contran (see Note 15 to our Consolidated Financial Statements). We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats.
ITEM 1C. CYBERSECURITY We operate through our subsidiaries and affiliate and receive services through our intercorporate services agreement (ISA) with Contran (see Note 16 to our Consolidated Financial Statements). We recognize the importance of proactively assessing, identifying and managing material risks associated with cybersecurity threats.
The Contran CIO, who also serves as the Kronos CIO, reports to the chief executive officer of Contran and Kronos, respectively. CompX’s cybersecurity program is led by the director of information technology (IT). The director of IT reports to CompX’s vice president in charge of coordinating operational activities within CompX’s two operating business segments.
Our CIO, who also serves as the Kronos CIO, reports to our and Kronos’ chief executive officers, respectively. CompX’s cybersecurity program is led by the director of information technology (IT). The director of IT reports to CompX’s vice president in charge of coordinating operational activities within CompX’s two operating business segments.
These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. Our cybersecurity programs are built on operations and compliance foundations. Operations focus on continuous detection, prevention, measurement, analysis, and response to cybersecurity alerts and incidents and on emerging threats.
These risks include, among other things: operational disruptions, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. Our cybersecurity programs are built on both operational and compliance foundations. The operational component focuses on continuous detection, prevention, measurement, analysis and response to cybersecurity alerts and incidents, and on emerging threats.
Our corporate cybersecurity program is led by the chief information officer (CIO) of Contran who provides services to us under the ISA, and who is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. Our corporate information systems are owned and operated by Contran and provided to us through the ISA.
Our corporate cybersecurity program is led by our chief information officer (CIO), who is responsible for developing and executing our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. Our corporate information systems are owned and operated by Contran and provided to us through the ISA.
Compliance establishes oversight of our cybersecurity programs by creating risk-based controls to protect the integrity, confidentiality, accessibility, and availability of company data stored, processed, or transferred. Our cybersecurity program is integrated within our overall risk management processes. Kronos and CompX each have their own cybersecurity programs.
The compliance component establishes oversight of our cybersecurity programs by creating risk-based controls to protect the integrity, confidentiality, accessibility and availability of company data stored, processed or transferred. Our cybersecurity program is fully integrated into our enterprise-wide risk management framework. Kronos and CompX each have their own cybersecurity programs.
Our, Kronos’ and CompX’s information technology teams review enterprise risk management level cybersecurity risks annually. We, Kronos and CompX continually enhance our security structure with the ultimate goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing our system resilience in an effort to minimize the business impact should an incident occur.
Our, Kronos’ and CompX’s information technology teams review cybersecurity risks at least annually, integrating findings into strategic risk assessments. We, Kronos and CompX continually enhance our cyber defense strategy with the ultimate goal of preventing cybersecurity incidents to the extent feasible, while simultaneously bolstering our system resilience in an effort to minimize the business impact should an incident occur.
Our full board retains oversight of cybersecurity because of its importance to us and visibility with our customers. ​ In the event of an incident, we intend to follow our detailed incident response playbook, which outlines the steps to be followed from incident detection to mitigation, recovery, and notification.
Our full board retains oversight of cybersecurity because of its importance to us and visibility with our customers. ​ In the event of an incident, we follow a structured incident response playbook, which outlines clear and defined steps to be followed from incident detection to mitigation, recovery and notification, including notifying functional areas (such as legal and human resources), senior leadership, and the board, as appropriate.
Our CIDAC, as well as the Kronos and CompX CIDAC, performs simulations and tabletop exercises at a management level to evaluate our readiness and response to cybersecurity incidents. External resources and advisors are incorporated as needed.
Our CIDAC, as well as the Kronos and CompX CIDAC, performs simulations and tabletop exercises at a -27- ​ management level to evaluate our readiness and response to cybersecurity incidents. As needed, we collaborate with external cybersecurity experts and legal advisors to help ensure a robust response strategy.
Third parties also play a role in our cybersecurity. We, Kronos and CompX engage third-party services to conduct evaluations of our security controls through penetration testing, red team testing, consulting on best practices, and to address new challenges. These evaluations include testing both the design and operational effectiveness of security controls.
Third parties also play a role in our cybersecurity. We, Kronos and CompX engage reputable third-party security firms for consultation on industry best practices and regulatory standards and to conduct routine evaluations of our cybersecurity, such as through penetration testing and security audits; these evaluations include testing both the design and operational effectiveness of security controls.
Our board of directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives.
Our board of directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our chief financial officer and CIO, provides regular updates to the board of directors on our cybersecurity posture, emerging threats and our risk mitigation efforts.
The board has delegated some of its primary risk oversight to board committees, including that -26- ​ our audit committee facilitates the board’s process of oversight of our overall risk management approach.
Our board of directors is apprised of cybersecurity incidents deemed to have significant business impact, even if they are not material to us. The board has delegated some of its primary risk oversight to board committees, including that our audit committee facilitates the board’s process of oversight of our overall risk management approach.
All employees are required to complete cybersecurity training at least once a year and have access to more frequent cybersecurity training through online training. We also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings.
All employees are required to complete cybersecurity training at least once a year and have access to more frequent cybersecurity training through periodic updates. Employees in certain roles also receive additional role-based, specialized cybersecurity training. We, Kronos and CompX each have a Cybersecurity Incident Disclosure and Controls Committee (CIDAC) which is central to the response and evaluation of cybersecurity incidents.
This includes notifying functional areas (such as legal and human resources), senior leadership, and the board as appropriate. We, Kronos and CompX face a number of cybersecurity risks. To date, such risks have not materially affected us, including our business strategy, results of operations or financial condition.
We also conduct post-incident reviews to identify lessons learned and implement continuous improvements. We, Kronos and CompX face a number of cybersecurity risks. To date, such risks have not materially affected us, including our business strategy, results of operations or financial condition.
Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. The IT teams are responsible for categorizing cybersecurity incidents, with incidents evaluated to be high or critical security risks brought to the CIDAC for review and evaluation. Incidents are evaluated to determine materiality as well as operational and business impact.
The IT teams are responsible for categorizing cybersecurity incidents, and those deemed high-risk or critical are escalated to the CIDAC for review and response coordination. Incidents are evaluated to determine materiality and for operational, financial and reputational impact.
While we have not experienced any breaches, we have encountered occasional attempts, albeit of minor significance, targeting our data and systems, including instances of malware and computer virus infiltration. Thus far all such incidents have been minor.
While we have not experienced any major breaches, we actively monitor and mitigate cyber threats, including phishing attempts, malware and targeted attacks. Thus far all such incidents have been minor, isolated and promptly contained.
Removed
Senior leadership, including our chief financial officer, and the Contran CIO regularly brief the board of directors on our cybersecurity and information security posture, and our board of directors is apprised of cybersecurity incidents deemed to have a high or critical business impact, even if immaterial to us.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

38 edited+16 added−16 removed38 unchanged
Biggest changePursuant to the settlement agreement, we placed an additional $9.0 million into an escrow account which is included in noncurrent restricted cash on our Consolidated Balance Sheets. For financial reporting purposes, using a discount rate of 1.9% per annum, we discounted the aggregate $101.7 million settlement to the estimated net present value of $96.3 million.
Biggest changeFor financial reporting purposes, using a discount rate of 1.9% per annum, we discounted the aggregate $101.7 million settlement to the estimated net present value of $96.3 million. We made the initial $25.0 million payment in September 2019 and five annual installment payments of $12.0 million beginning in September 2020 and each September thereafter through 2024.
In the future, if new information regarding such matters becomes available to us (such as a final, non-appealable adverse verdict -28- ​ against us or otherwise ultimately being found liable with respect to such matters), at that time we would consider such information in evaluating any remaining cases then-pending against us as to whether it might then have become probable we have incurred liability with respect to these matters, and whether such liability, if any, could have become reasonably estimable.
In the future, if new information regarding such matters becomes available to us (such as a final, non-appealable adverse verdict against us or otherwise ultimately being found liable with respect to such matters), at that time we would consider such information in evaluating any remaining cases then-pending against us as to whether it might then have become probable we have incurred liability with respect to these matters, and whether such liability, if any, could have become reasonably estimable.
The global settlement agreement provides that an aggregate $305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between us and our co-defendants in respect to the case.
The global settlement agreement provides that an aggregate $305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and -28- ​ future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between us and our co-defendants in respect to the case.
We, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (LIA), which discontinued business operations in 2002, have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
We, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (LIA), which discontinued business operations in 2002, have previously been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
The lawsuit remains pending. NL continues to deny liability and will defend vigorously against all claims. In 2011, we were served in ASARCO LLC v. NL Industries, Inc., et al. (United States District Court, Western District of Missouri, Case No. 4:11-cv-00138-DGK) and ASARCO LLC v. NL Industries, Inc., et al.
The lawsuit remains pending. NL continues to deny liability and will defend vigorously against all claims. -31- ​ In 2011, we were served in ASARCO LLC v. NL Industries, Inc., et al. (United States District Court, Western District of Missouri, Case No. 4:11-cv-00138-DGK) and ASARCO LLC v. NL Industries, Inc., et al.
We record liabilities related to environmental remediation and related matters (including costs associated with damages for personal injury or property damage and/or damages for injury to natural resources) when estimated future expenditures are probable and reasonably estimable. We adjust such accruals as further information becomes available to -29- ​ us or as circumstances change.
We record liabilities related to environmental remediation and related matters (including costs associated with damages for personal injury or property damage and/or damages for injury to natural resources) when estimated future expenditures are probable and reasonably estimable. We adjust such accruals as further information becomes available to us or as circumstances change.
The complaint seeks compensatory and punitive damages and alleges, among other things, trespass, private nuisance, negligence, strict liability, and claims under CERCLA and the New Jersey Spill Act. We have denied liability and will defend vigorously against all of the claims.
The complaint seeks compensatory and punitive damages and alleges, among other things, trespass, private nuisance, negligence, strict liability, and claims under CERCLA and the New Jersey Spill Act. We have denied liability and will defend vigorously against all claims.
This is a citizen’s suit filed by two local environmental groups pursuant to the Resource Conservation and Recovery Act and the Clean Water -30- ​ Act against NL, current owners, developers and state and local government entities.
This is a citizen’s suit filed by two local environmental groups pursuant to the Resource Conservation and Recovery Act and the Clean Water Act against NL, current owners, developers and state and local government entities.
Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity. In June 2008, we received a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection (NJDEP) regarding the Margaret’s Creek site in Old Bridge Township, New Jersey.
Any such adjustment could result in the recognition of an accrual that would have a material effect on our Consolidated Financial Statements, results of operations and liquidity. In June 2008, we received a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection (“NJDEP”) regarding the Margaret’s Creek site in Old Bridge Township, New Jersey.
On a quarterly basis, we evaluate the potential range of our liability for environmental remediation and related costs at sites where we have been named as a PRP or defendant, including sites for which our wholly-owned environmental management subsidiary, NL Environmental Management Services, Inc., (EMS), has contractually assumed our obligations.
On a quarterly basis, we evaluate the potential range of our liability for environmental remediation and related costs at sites where we have been named as a PRP or defendant, including sites for which our wholly-owned environmental management subsidiary, NL Environmental Management Services, Inc., (“EMS”), has contractually assumed our obligations.
ITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings. In addition to information that is included below, we have included certain of the information required for this Item in Note 16 to our Consolidated Financial Statements, and we are incorporating that information here by reference.
ITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings. In addition to information that is included below, we have included certain of the information required for this Item in Note 17 to our Consolidated Financial Statements, and we are incorporating that information here by reference.
Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (PRP) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (CERCLA), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors, our subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (EPA) Superfund National Priorities List or similar state lists.
Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (“PRP”) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (“CERCLA”), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors, our subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (“EPA”) Superfund National Priorities List or similar state lists.
Our sixth installment will be made with funds already on deposit at the court, which is included in noncurrent restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by us (and any amounts on deposit in excess of the final payment would be returned to us).
Our sixth installment due in September 2025 will be made with funds already on deposit at the court, which is included in current restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by us (and any amounts on deposit in excess of the final payment would be returned to us).
At December 31, 2023, we had accrued approximately $91 million related to approximately 33 sites associated with remediation and related matters we believe are at the present time and/or in their current phase reasonably estimable.
At December 31, 2024, we had accrued approximately $69 million related to approximately 30 sites associated with remediation and related matters we believe are at the present time and/or in their current phase reasonably estimable.
In March 2014, EPA issued a UAO to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.
In March 2014, EPA issued a unilateral administrative order (“UAO”) to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.
We believe it is not reasonably possible to estimate the range of costs for certain sites. At December 31, 2023, there were approximately five sites for which we are not currently able to reasonably estimate a range of costs.
These accruals have not been discounted to present value. -30- ​ We believe it is not reasonably possible to estimate the range of costs for certain sites. At December 31, 2024, there were approximately five sites for which we are not currently able to reasonably estimate a range of costs.
In June 2013, NL filed a contribution suit under CERCLA and the New Jersey Spill Act titled NL Industries, Inc. v. Old Bridge Township, et al .
In 2012, EPA notified NL of its potential liability at this site. In June 2013, NL filed a contribution suit under CERCLA and the New Jersey Spill Act titled NL Industries, Inc. v. Old Bridge Township, et al .
NL Industries, Inc. , (United States District Court for the Central District of California, Case 2:20-cv-11293). This complaint by a California state agency asserts claims under CERCLA, a state environmental statute, and the common law relating to lead contamination allegedly connected to a secondary lead smelter located in Vernon, California.
This complaint by a California state agency asserts claims under CERCLA, a state environmental statute, and the common law relating to lead contamination allegedly connected to a secondary lead smelter located in Vernon, California.
We have not accrued any amounts for this litigation because of the uncertainty of liability and inability to reasonably estimate the liability, if any. To date, we have not been adjudicated liable in any of these matters.
We do not expect these claims will be re-opened unless the plaintiffs meet the courts’ medical criteria for asbestos-related claims. We have not accrued any amounts for this litigation because of the uncertainty of liability and inability to reasonably estimate the liability, if any. To date, we have not been adjudicated liable in any of these matters.
We are not able to determine how much we will ultimately recover from these carriers for defense costs incurred by us because of certain issues that arise regarding which defense costs qualify for -32- ​ reimbursement.
We are not able to determine how much we will ultimately recover from these carriers for defense costs incurred by us because of certain issues that arise regarding which defense costs qualify for reimbursement. While we continue to seek additional insurance recoveries, we do not know if we will be successful in obtaining reimbursement for either defense costs or indemnity.
Certain of these actions have been filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others have been asserted as class actions.
Certain of these actions were filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others were asserted as class actions. We currently have no pending lead paint class action cases or pending lead paint cases brought by housing authorities, school districts or other government entities.
Other litigation We have been named as a defendant in various lawsuits in several jurisdictions, alleging personal injuries as a result of occupational exposure primarily to products manufactured by our former operations containing asbestos, silica and/or mixed dust. In addition, some plaintiffs allege exposure to asbestos from working in various facilities previously owned and/or operated by us.
NL has denied liability and will defend vigorously against all claims. -32- ​ Other litigation We have been named as a defendant in various lawsuits in several jurisdictions, alleging personal injuries as a result of occupational exposure primarily to products manufactured by our former operations containing asbestos, silica and/or mixed dust.
NL has denied liability and will defend vigorously against all claims while continuing to seek contribution from other PRPs. In August 2009, we were served with a complaint in Raritan Baykeeper, Inc. d/b/a NY/NJ Baykeeper et al. v. NL Industries, Inc. et al. (United States District Court, District of New Jersey, Case No. 3:09-cv-04117).
See Note 3 to the Consolidated Financial Statements. ​ In August 2009, we were served with a complaint in Raritan Baykeeper, Inc. d/b/a NY/NJ Baykeeper et al. v. NL Industries, Inc. et al. (United States District Court, District of New Jersey, Case No. 3:09-cv-04117).
The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control.
We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs. The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control.
In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from our operations.
Although we may be jointly and severally liable for these costs, in most cases we are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated. -29- ​ In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from our operations.
In 2023, the trial court granted partial summary judgment for NL and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit. We continue to deny liability and will defend vigorously against all claims. In December 2020, NL and several other defendants were sued in California Department of Toxic Substances v.
We continue to deny liability and will defend vigorously against all claims. In December 2020, NL and several other defendants were sued in California Department of Toxic Substances v. NL Industries, Inc. , (United States District Court for the Central District of California, Case 2:20-cv-11293).
NJDEP alleged that a waste hauler transported waste from one of our former facilities for disposal at the site in the early 1970s.
NJDEP alleged that a waste hauler transported waste from one of our former facilities for disposal at the site in the early 1970s. NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name Raritan Bay Slag Site (“RBS Site”).
In April 2019, EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site. NL believes that it has no liability at the site.
In April 2019, the EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site. In October 2024, we were served in Brooklyn Union Gas Co. v. Consolidated Edison Co . of New York, et al.
The plaintiff, a former insurance carrier of ours, is seeking a declaratory judgment of its obligations to us under insurance policies issued to us by the plaintiff with respect to certain lead pigment lawsuits. Other insurers have been added as parties to the case and have also sought a declaratory judgment regarding their obligations under certain insurance policies.
(Supreme Court of the State of New York, County of New York, Index No. 14/650103). The plaintiff, a former insurance carrier of ours, is seeking a declaratory judgment of its obligations to us under insurance policies issued to us by the plaintiff with respect to certain lead pigment lawsuits.
NL has filed a counterclaim seeking a declaratory judgment that all of the insurers are obligated to provide NL with certain coverage and seeking damages for breach of contract. In December 2020, the trial court denied the insurers’ motion for summary judgment, finding that the arguments raised by the insurers did not bar NL from coverage under the relevant policies.
In December 2020, the trial court denied the insurers’ motion for summary judgment, finding that the arguments raised by the insurers did not bar NL from coverage under the relevant policies. We intend to defend NL’s rights and prosecute NL’s claims in this action vigorously.
Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking contribution for any damages they may ultimately have to pay to the plaintiff. We believe we have substantial defenses to these claims under Wisconsin law and intend to defend ourselves vigorously. New cases may continue to be filed against us.
We believe we have substantial defenses to these claims under Wisconsin law and intend to defend ourselves vigorously. New cases may continue to be filed against us.
The upper end of the range of reasonably possible costs to us for remediation and related matters for which we believe it is possible to estimate costs is approximately $118 million, including the amount currently accrued. These accruals have not been discounted to present value.
Excluding the $56.1 million environmental remediation settlement payment made in the first quarter of 2025 (as discussed below), the upper end of the range of reasonably possible costs to us for remediation and related matters for which we believe it is possible to estimate costs is approximately $38 million, including amounts currently accrued.
In January 2024, NL was served with a third-party complaint in a matter titled Arrioena Beal v. Hattie Mitchell, et al. (Circuit Court of Milwaukee County, Wisconsin, Case No. 21-cv-3276). The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL.
We recognized an aggregate accretion expense of $.9 million, $.7 million and $.5 million in 2022, 2023 and 2024, respectively. In January 2024, NL was served with a third-party complaint in a matter titled Arrioena Beal v. Hattie Mitchell, et al. (Circuit Court of Milwaukee County, Wisconsin, Case No. 21-cv-3276).
There are 108 of these types of cases pending, involving a total of approximately 582 plaintiffs. In addition, the claims of approximately 8,715 plaintiffs have been administratively dismissed or placed on the inactive docket in Ohio state courts. We do not expect these claims will be re-opened unless the plaintiffs meet the courts’ medical criteria for asbestos-related claims.
In addition, some plaintiffs allege exposure to asbestos from working in various facilities previously owned and/or operated by us. There are 115 of these types of cases pending, involving a total of approximately 589 plaintiffs. In addition, the claims of approximately 8,715 plaintiffs have been administratively dismissed or placed on the inactive docket in Ohio state courts.
(United States District Court for the District of New Jersey, Civil Action No. 3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, and several federal and state entities NL alleges designed and operated the site and who have significant potential liability as compared to NL which is alleged to have been a potential source of material placed at the site by others.
(United States District Court for the District of New Jersey, Civil Action No. 3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, several federal and state entities, and a number of private companies. ​ On February 10, 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the RBS Site in Middlesex County, New Jersey.
We intend to defend NL’s rights and prosecute NL’s claims in this action vigorously. We have settled insurance coverage claims concerning environmental claims with certain of our principal former insurance carriers. We do not expect further material settlements relating to environmental remediation coverage. ​
We have settled insurance coverage claims concerning environmental claims with certain of our principal former insurance carriers.
In January 2014, we were served with a complaint in Certain Underwriters at Lloyds, London, et al v. NL Industries, Inc. (Supreme Court of the State of New York, County of New York, Index No. 14/650103).
Accordingly, we recognize insurance recoveries in income only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the recovery. -33- ​ In January 2014, we were served with a complaint in Certain Underwriters at Lloyds, London, et al v. NL Industries, Inc.
NL has been in discussions with EPA regarding a de minimis settlement and is otherwise taking actions necessary to respond to the UAO. If these discussions are ultimately unsuccessful, NL will continue to deny liability and will defend vigorously against all of the claims. In January 2020, we were sued in Atlantic Richfield, Co. v.
The plaintiff, a former gas manufacturer, seeks to recover a portion of investigation and remediation costs it allegedly incurred to address contamination at the Gowanus Canal Superfund Site. NL has denied liability and will defend vigorously against all claims. In January 2020, we were sued in Atlantic Richfield, Co. v.
Removed
These lawsuits seek recovery under a variety of theories, including public and private nuisance, negligent product design, negligent failure to warn, strict liability, breach of warranty, conspiracy/concert of action, aiding and abetting, enterprise liability, market share or risk contribution liability, intentional tort, fraud and misrepresentation, violations of state consumer protection statutes, supplier negligence and similar claims.
Added
Pursuant to the settlement agreement, we placed an additional $9.0 million into an escrow account which was previously included in noncurrent restricted cash on our Consolidated Balance Sheets. Following our fifth $12.0 million installment made in September 2024, these funds became available for use and were reclassified as cash equivalents on our Consolidated Balance Sheet.
Removed
The plaintiffs in these actions generally seek to impose on the defendants responsibility for lead paint abatement and health concerns associated with the use of lead-based paints, including damages for personal injury, contribution and/or indemnification for medical expenses, medical monitoring expenses and costs for educational programs.
Added
The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL. Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking contribution for any damages they may ultimately have to pay to the plaintiff.
Removed
To the extent the plaintiffs seek compensatory or punitive damages in these actions, such damages are generally unspecified. In some cases, the damages are unspecified pursuant to the requirements of applicable state law. A number of cases are inactive or have been dismissed or withdrawn. Most of the remaining cases are in various pre-trial stages.
Added
The consent decree requires the United States Army Corps of Engineers (and other federal agencies), the State of New Jersey, the Township of Old Bridge, NL, and twenty-two other private companies to pay a total of $151.1 million, plus interest, to resolve all federal and state law claims for past and future response costs under CERCLA and the New Jersey Spill Act, including natural resource damages, contribution, and indemnification, relating to the RBS Site.
Removed
Some are on appeal following dismissal or summary judgment rulings or a trial verdict in favor of either the defendants or the plaintiffs. We believe we have substantial defenses to these actions and we intend to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.
Added
The consent decree is a global settlement of all such claims relating to the RBS Site and resolves a lawsuit captioned United States of America, et al. v. NL Industries, Inc., et al.
Removed
We do not believe it is probable we have incurred any liability with respect to pending lead pigment litigation cases to which we are a party, and with respect to all such lead -27- ​ pigment litigation cases to which we are a party, we believe liability to us that may result, if any, in this regard cannot be reasonably estimated, because: ● we have never settled any of the market share, intentional tort, fraud, nuisance, supplier negligence, breach of warranty, conspiracy, misrepresentation, aiding and abetting, enterprise liability, or statutory cases (other than the Santa Clara case discussed below) , ● no final, non-appealable adverse judgments have ever been entered against us, and ● we have never ultimately been found liable with respect to any such litigation matters, including over 100 cases over a thirty-year period for which we were previously a party and for which we have been dismissed without any finding of liability.
Added
(United States District Court for the District of New Jersey, Civil Action No. 3:24-cv-08946) as well as all claims asserted by NL and the other settling parties in NL’s previously filed contribution lawsuit, NL Industries, Inc. v.
Removed
Accordingly, we have not accrued any amounts for any of the pending lead pigment and lead-based paint litigation cases filed by or on behalf of states, counties, cities or their public housing authorities and school districts, or those asserted as class actions.
Added
Old Bridge Township, et al., discussed above. ​ Under the terms of the consent decree, in the first quarter of 2025 we paid $56.1 million, plus $.5 million interest, toward the global settlement and received approximately $9.6 million from the other private companies participating in the settlement.
Removed
In addition, we have determined that liability to us which may result, if any, cannot be reasonably estimated at this time because there is no prior history of a loss of this nature on which an estimate could be made and there is no substantive information available upon which an estimate could be based.
Added
We recognized aggregate income of approximately $31.4 million in 2024 related to the adjustment of our environmental accrual related to this matter and the recording of a $9.6 million receivable for the funds received in the first quarter of 2025 from the other private companies participating in the settlement.
Removed
We made the initial $25.0 million payment in September 2019 and the first, second, third and fourth annual installment payments of $12.0 million each in September 2020, 2021, 2022, and 2023. We recognized an aggregate accretion expense of $1.1 million, $.9 million and $.7 million in 2021, 2022, and 2023 respectively.
Added
(United States District Court for the Eastern District of New York, Case No. 1:24-cv-06993). This complaint asserts claims under CERCLA and New York law against NL and a number of other private parties, federal and state agencies, and agencies of the City of New York.
Removed
Although we may be jointly and severally liable for these costs, in most cases we are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated.
Added
In 2023, the trial court granted partial summary judgment for NL based on the statute of limitations and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit. In January 2025, the Court of Appeals reversed the trial court’s grant of partial summary judgment and returned the matter to the trial court.
Removed
At December 31, 2022 and December 31, 2023, we had not recognized any receivables for recoveries. We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs.
Added
We have denied liability and will continue to defend vigorously against all claims. In May 2024, we were served in Philip Palmeri v. NL Industries, Inc. (Supreme Court of Niagara County, New York, Case No. E183238).
Removed
NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name “Raritan Bay Slag Site.” In 2012, EPA notified NL of its potential liability at this site. In May 2013, EPA issued its Record of Decision for the site.
Added
In this lawsuit, the plaintiff asserts that radioactive material allegedly originating at a former NL facility in Niagara Falls, New York, caused the wrongful death of plaintiff’s spouse and diminished the value of plaintiff’s residential property located in Lewiston, New York. The complaint alleges that NL is liable under theories of strict liability, negligence, private nuisance, and trespass.
Removed
NL’s suit also names certain former NL customers of the former NL facility alleged to be the source of some of the materials. In January 2014, EPA issued a Unilateral Administrative Order (UAO) to NL for clean-up of the site based on the EPA’s preferred remedy set forth in the Record of Decision.
Added
Other insurers have been added as parties to the case and have also sought a declaratory judgment regarding their obligations under certain insurance policies. NL has filed a counterclaim seeking a declaratory judgment that all of the insurers are obligated to provide NL with certain coverage and seeking damages for breach of contract.
Removed
We have denied liability and will continue to defend vigorously against all claims. In December 2023, NL and several other defendants were sued in Sunset Commercial, LLC v. Stauffer Management Co., et al. (United States District Court for the District of Nevada, Case 2:23-cv-02081).
Added
We do not expect further material settlements relating to environmental remediation coverage. ​ Litigation – CompX In 2024, CompX was served with four lawsuits by public water companies in South Carolina that seek recovery of future costs to remove perfluoroalkyl and polyfluoroalkyl substances (known as “PFAS”) from their water supplies.
Removed
The complaint -31- ​ asserts claims under CERCLA as well as claims for private nuisance, negligence, trespass, and strict liability. The plaintiff asserts that hazardous substances located on its property are attributable to a large industrial facility in the area.
Added
The lawsuits have been consolidated with other PFAS cases before a single judge in Spartanburg, South Carolina and were subsequently removed to federal court. The defendants in the lawsuits include the manufacturers of PFAS products, as well as companies that allegedly used PFAS-containing products in their manufacturing operations.
Removed
The plaintiff alleges NL is liable for once holding a lease on the industrial property and for its past partial ownership of another company. NL intends to deny liability and will defend vigorously against all claims.
Added
The four lawsuits naming CompX allege that CompX was one of many companies that used products containing PFAS in its manufacturing operations, and that such operations have collectively impacted drinking water supplies used by the water companies. The plaintiffs do not allege that CompX has failed to comply with, or has violated, any environmental regulation, permit or statute.
Removed
While we continue to seek additional insurance recoveries, we do not know if we will be successful in obtaining reimbursement for either defense costs or indemnity. Accordingly, we recognize insurance recoveries in income only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the recovery.
Added
The plaintiffs instead assert claims under common law theories of negligence, nuisance, trespass, failure to warn, and unfair trade practices. CompX intends to deny liability and will defend vigorously against all claims. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed0 unchanged
Biggest changeThe graph shows the value at December 31 of each year assuming an original investment of $100 at December 31, 2018 and the reinvestment of dividends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2018 2019 2020 2021 2022 2023 NL common stock ​ $ 100 ​ $ 111 ​ $ 142 ​ $ 228 ​ $ 227 ​ $ 197 S&P 500 Composite Stock Index ​ 100 ​ 131 ​ 156 ​ 200 ​ 164 ​ 207 S&P 500 Industrial Conglomerates Index ​ 100 ​ 125 ​ 138 ​ 145 ​ 133 ​ 165 ​ The information contained in the performance graph shall not be deemed “soliciting material” or “filed” with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act, except to the extent we specifically request that the material be treated as soliciting material or specifically incorporate this performance graph by reference into a document filed under the Securities Act or the Securities Exchange Act. -34- ​ Equity compensation plan information We have an equity compensation plan, which was approved by our shareholders, pursuant to which an aggregate of 200,000 shares of our common stock can be awarded to non-employee members of our board of directors.
Biggest changeThe graph shows the value at December 31 of each year assuming an original investment of $100 at December 31, 2019 and the reinvestment of dividends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2019 2020 2021 2022 2023 2024 NL common stock ​ $ 100 ​ $ 128 ​ $ 205 ​ $ 204 ​ $ 177 ​ $ 271 S&P 500 Composite Stock Index ​ 100 ​ 118 ​ 152 ​ 125 ​ 158 ​ 197 S&P 500 Industrial Conglomerates Index ​ 100 ​ 110 ​ 116 ​ 106 ​ 132 ​ 182 ​ The information contained in the performance graph shall not be deemed “soliciting material” or “filed” with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act, except to the extent we specifically request that the material be treated as soliciting material or specifically incorporate this performance graph by reference into a document filed under the Securities Act or the Securities Exchange Act. -35- ​ Equity compensation plan information We have an equity compensation plan, which was approved by our shareholders, pursuant to which an aggregate of 200,000 shares of our common stock can be awarded to non-employee members of our board of directors.
Performance graph Set forth below is a table and line graph comparing the yearly change in our cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Composite Stock Price Index and the S&P 500 Industrial Conglomerates Index for the period from December 31, 2018 through December 31, 2023.
Performance graph Set forth below is a table and line graph comparing the yearly change in our cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Composite Stock Price Index and the S&P 500 Industrial Conglomerates Index for the period from December 31, 2019 through December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock is listed and traded on the New York Stock Exchange (NYSE: NL). As of February 29, 2024, there were approximately 1,500 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock is listed and traded on the New York Stock Exchange (NYSE: NL). As of February 28, 2025, there were approximately 1,423 holders of record of our common stock.
At December 31, 2023, 200,000 shares are available for award under this plan. See Note 14 to our Consolidated Financial Statements. ​
At December 31, 2024, 185,750 shares are available for award under this plan. See Note 15 to our Consolidated Financial Statements. ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

133 edited+72 added−39 removed66 unchanged
Biggest changeIncome from operations The following table shows the components of our income from operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ 2021 2022 2023 2021-22 2022-23 ​ ​ (Dollars in millions) ​ ​ ​ ​ ​ CompX $ 20.5 ​ $ 25.4 ​ $ 25.4 24 % — % Corporate expense (10.0) ​ (11.7) ​ (11.3) 17 (3) ​ Income from operations $ 10.5 ​ $ 13.7 ​ $ 14.1 31 3 ​ ​ The following table shows the components of our income (loss) before income taxes exclusive of our income from operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ 2021 2022 2023 2021-22 2022-23 ​ (Dollars in millions) ​ ​ ​ ​ Equity in earnings (losses) of Kronos $ 34.3 ​ $ 31.9 ​ $ (15.0) (7) % (147) % Marketable equity securities unrealized gain (loss) 16.2 ​ (8.1) ​ (8.1) (150) 1 ​ Loss on pension plan termination ​ — ​ ​ — ​ ​ (4.9) ​ — ​ n.m. ​ Other components of net periodic pension and OPEB cost (.6) ​ (1.1) ​ (1.4) 71 21 ​ Interest and dividend income 1.6 ​ 3.8 ​ 9.6 137 154 ​ Interest expense (1.1) ​ (1.0) ​ (.7) (18) (21) ​ -36- ​ CompX International Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ ​ 2021 2022 2023 2021-22 2022-23 ​ ​ (Dollars in millions) ​ ​ ​ ​ Net sales $ 140.8 ​ $ 166.6 ​ $ 161.3 18 % (3) % Cost of sales 98.1 ​ 117.8 ​ 112.1 20 (5) ​ Gross margin 42.7 ​ 48.8 ​ 49.2 14 1 ​ Operating costs and expenses 22.2 ​ 23.4 ​ 23.8 5 2 Income from operations $ 20.5 ​ $ 25.4 ​ $ 25.4 24 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales 69.7 % 70.7 % 69.5 % ​ Gross margin 30.3 ​ 29.3 ​ 30.5 Operating costs and expenses 15.8 ​ 14.0 ​ 14.7 Income from operations ​ 14.6 ​ 15.3 ​ 15.8 ​ ​ ​ ​ Net sales – CompX’s net sales decreased approximately $5.3 million in 2023 compared to 2022 due to lower Marine Components sales primarily to the towboat market, partially offset by higher Security Products sales largely in the fourth quarter of 2023 .
Biggest changeIncome from operations The following table shows the components of our income from operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ 2022 2023 2024 2022-23 2023-24 ​ ​ (Dollars in millions) ​ ​ ​ ​ ​ CompX segment profit $ 25.4 ​ $ 25.4 ​ $ 17.0 — % (33) % Insurance recoveries ​ .1 ​ ​ .5 ​ ​ 1.4 ​ 399 ​ 195 ​ Corporate income (expense), net (11.8) ​ (11.8) ​ 19.5 — (266) ​ Income from operations $ 13.7 ​ $ 14.1 ​ $ 37.9 3 168 ​ ​ The following table shows the components of our income (loss) before income taxes exclusive of our income from operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ 2022 2023 2024 2022-23 2023-24 ​ (Dollars in millions) ​ ​ ​ ​ Equity in earnings (losses) of Kronos $ 31.9 ​ $ (15.0) ​ $ 26.4 (147) % 276 % Marketable equity securities unrealized gain (loss) (8.1) ​ (8.1) ​ 9.8 1 220 ​ Loss on pension plan termination ​ — ​ ​ (4.9) ​ ​ — ​ n.m. ​ n.m. ​ Other components of net periodic pension and OPEB cost (1.1) ​ (1.4) ​ (1.2) 21 (12) ​ Interest and dividend income 3.8 ​ 9.6 ​ 11.0 154 14 ​ Interest expense (1.0) ​ (.7) ​ (.6) (21) (29) ​ n.m. not meaningful ​ -38- ​ CompX International Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ ​ 2022 2023 2024 2022-23 2023-24 ​ ​ (Dollars in millions) ​ ​ ​ ​ Net sales $ 166.6 ​ $ 161.3 ​ $ 145.9 (3) % (10) % Cost of sales 117.8 ​ 112.1 ​ 104.6 (5) (7) ​ Gross margin 48.8 ​ 49.2 ​ 41.3 1 (16) ​ Selling, general and administrative expenses 23.4 ​ 23.8 ​ 24.3 2 2 Segment profit (1) $ 25.4 ​ $ 25.4 ​ $ 17.0 — (33) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales 70.7 % 69.5 % 71.7 % ​ Gross margin 29.3 ​ 30.5 ​ 28.3 Selling, general and administrative expenses 14.0 ​ 14.7 ​ 16.7 Segment profit ​ 15.3 ​ 15.8 ​ 11.7 ​ ​ ​ ​ (1) We use segment profit to assess the performance of CompX.
Gross margin as a percentage of net sales decreased to 10% in 2023 compared to 20% in 2022. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to lower production and sales volumes, lower average TiO 2 selling prices, higher production costs and changes in currency exchange rates.
Kronos’ gross margin as a percentage of net sales decreased to 10% in 2023 compared to 20% in 2022. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to lower production and sales volumes, lower average TiO 2 selling prices, higher production costs and changes in currency exchange rates .
Kronos’ earnings are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of Kronos’ non-U.S. operations are generally higher than the income tax rates applicable to its U.S. operations.
Kronos’ earnings are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of its non-U.S. operations are generally higher than the income tax rates applicable to its U.S. operations.
Operations outside the United States Kronos - Kronos has substantial operations located outside the United States for which the functional currency is not the U.S. dollar. As a result, the reported amount of our net investment in Kronos will fluctuate based upon changes in currency exchange rates.
Operations outside the United States Kronos has substantial operations located outside the United States for which the functional currency is not the U.S. dollar. As a result, the reported amount of our net investment in Kronos will fluctuate based upon changes in currency exchange rates.
The $10.1 million net increase in cash provided by operating activities includes the effects of: ● lower net cash used for relative changes in receivables, inventories, prepaid expenses, payables and accrued liabilities in 2023 of $6.7 million; ● a $2.6 million increase in interest received in 2023 due to higher interest rates and increased investment balances, offset by lower average balances on CompX’s revolving promissory note receivable from affiliate; and ● a $1.4 million decrease in cash paid for taxes in 2023 due to the relative timing of payments.
The $10.1 million increase in cash provided by operating activities includes the net effects of: ● lower net cash used for relative changes in receivables, inventories, prepaid expenses, payables and accrued liabilities in 2023 of $6.7 million; ● a $2.6 million increase in interest received in 2023 due to higher interest rates and increased investment balances, offset by lower average balances on CompX’s revolving promissory note receivable from affiliate; and ● a $1.4 million decrease in cash paid for taxes in 2023 due to the relative timing of payments.
The $16 million decrease in loss from operations was comprised of the following: ● Lower net currency transaction gains of approximately $11 million primarily caused by relative changes in currency exchange rates at each applicable balance sheet date between the U.S. dollar and the euro, Canadian dollar and the Norwegian krone, and between the euro and the Norwegian krone, which causes increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held -45- ​ by Kronos’ non-U.S. operations, and in Norwegian krone denominated receivables and payables held by Kronos’ non-U.S. operations, and ● Approximately $27 million from net currency translation gains primarily caused by a strengthening of the U.S. dollar relative to the Canadian dollar and Norwegian krone, as local currency-denominated operating costs were translated into fewer U.S. dollars in 2023 as compared to 2022.
The $16 million decrease in loss from operations was comprised of the following: ● Lower net currency transaction gains of approximately $11 million primarily caused by relative changes in currency exchange rates at each applicable balance sheet date between the U.S. dollar and the euro, Canadian dollar and the Norwegian krone, and between the euro and the Norwegian krone, which causes increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held by Kronos’ non-U.S. operations, and in Norwegian krone denominated receivables and payables held by Kronos’ non-U.S. operations, and ● Approximately $27 million from net currency translation gains primarily caused by a strengthening of the U.S. dollar relative to the Canadian dollar and Norwegian krone, as local currency-denominated operating costs were translated into fewer U.S. dollars in 2023 as compared to 2022.
Our 2023 net loss per share attributable to NL stockholders includes: ● a loss of $.08 per share, net of tax, due to the termination of our U.K. pension plan recognized in the second quarter, ● a loss of $.02 per share, net of tax, due to Kronos’ recognition, primarily in the fourth quarter, of restructuring costs related to workforce reductions, -35- ​ ● income of $.01 per share, net of tax, due to Kronos’ recognition in the first, second and third quarters of a pre-tax insurance settlement gain related to a business interruption insurance claim arising from Hurricane Laura in 2020, and ● a loss of $.01 per share, net of tax, due to Kronos’ recognition in the fourth quarter of a fixed asset impairment related to the write-off of certain costs resulting from a capital project termination .
Our 2023 net loss per share attributable to NL stockholders includes: ● a loss of $.08 per share, net of tax, due to the termination of our U.K. pension plan recognized in the second quarter, ● a loss of $.02 per share, net of tax, due to Kronos’ recognition, primarily in the fourth quarter, of restructuring costs related to workforce reductions, ● income of $.01 per share, net of tax, due to Kronos’ recognition in the first, second and third quarters of a pre-tax insurance settlement gain related to a business interruption insurance claim arising from Hurricane Laura in 2020, and ● a loss of $.01 per share, net of tax, due to Kronos’ recognition in the fourth quarter of a fixed asset impairment related to the write-off of certain costs resulting from a capital project termination.
Other components of net periodic pension and OPEB cost in 2023 decreased $7.2 million compared to 2022 primarily due to the net effects of higher discount rates impacting interest cost, previously unrecognized actuarial losses and $1.3 million in settlement costs related to the termination and buy-out of its pension plan in the United Kingdom during the second quarter of 2023.
Kronos’ other components of net periodic pension and OPEB cost in 2023 decreased $7.2 million compared to 2022 primarily due to the net effects of higher discount rates impacting interest cost, previously unrecognized actuarial losses and $1.3 million in settlement costs related to the termination and buy-out of its pension plan in the United Kingdom during the second quarter of 2023.
The goodwill impairment test is subject to uncertainties arising from such events as changes in competitive conditions, the current general economic environment, material changes in growth rate assumptions that could positively or negatively impact anticipated future operating conditions and cash flows, changes in the discount rate, and the impact of strategic decisions.
The goodwill impairment test is subject to uncertainties arising from such events as changes in competitive conditions, the current general economic environment, material changes in growth rate assumptions that could positively or negatively impact anticipated future operating conditions and cash flows, changes in the discount rate, and the impact -51- ​ of strategic decisions.
We intend to consider such acquisition activities in the future and, in -53- ​ connection with this activity, may consider issuing additional equity securities and increasing indebtedness. From time to time, we also evaluate the restructuring of ownership interests among our respective subsidiaries and related companies.
We intend to consider such acquisition activities in the future and, in connection with this activity, may consider issuing additional equity securities and increasing indebtedness. From time to time, we also evaluate the restructuring of ownership interests among our respective subsidiaries and related companies.
In addition to the impact of sales volumes and average TiO 2 selling prices, Kronos estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $10 million in 2023 as compared to 2022.
In addition to the impact of sales volumes and average TiO 2 selling prices, Kronos -45- ​ estimates that changes in currency exchange rates (primarily the euro) increased its net sales by approximately $10 million in 2023 as compared to 2022.
While no legislation or regulations have been enacted to date that are expected to have a material -54- ​ adverse effect on our consolidated financial position, results of operations or liquidity, enactment of such legislation could have such an effect.
While no legislation or regulations have been enacted to date that are expected to have a material adverse effect on our consolidated financial position, results of operations or liquidity, enactment of such legislation could have such an effect.
We generally use these amounts to fund capital expenditures (substantially all of which relate to CompX), pay ongoing environmental remediation and litigation costs, and provide for the payment of dividends (if declared).
We generally use these amounts to fund capital expenditures -56- ​ (substantially all of which relate to CompX), pay ongoing environmental remediation and litigation costs, and provide for the payment of dividends (if declared).
In addition to those legal proceedings described in Note 16 to our Consolidated Financial Statements, various legislation and administrative regulations have, from time to time, been proposed that seek to (i) impose various obligations on present and former manufacturers of lead pigment and lead-based paint (including us) with respect to asserted health concerns associated with the use of such products and (ii) effectively overturn court decisions in which we and other pigment manufacturers have been successful.
In addition to those legal proceedings described in Note 17 to our Consolidated Financial Statements, various legislation and administrative regulations have, from time to time, been proposed that seek to (i) impose various obligations on present and former manufacturers of lead pigment and lead-based paint (including us) with respect to asserted health concerns associated with the use of such products and (ii) effectively overturn court decisions in which we and other pigment manufacturers have been successful.
Cost of sales and gross margin – Kronos’ cost of sales decreased $37.5 million, or 2%, in 2023 compared to 2022 due to the net effects of a 13% decrease in sales volumes, a 19% decrease in production volumes at certain of its manufacturing facilities to align inventory levels to anticipated near-term customer demand (which resulted in $96 million of unabsorbed fixed production costs) and higher production costs of approximately $65 million (primarily raw materials).
Kronos’ cost of sales decreased $37.5 million, or 2%, in 2023 compared to 2022 due to the net effects of a 13% decrease in sales volumes, a 19% decrease in production volumes at certain of its manufacturing facilities to align inventory levels to anticipated near-term customer demand (which resulted in $96 million of unabsorbed fixed production costs) and higher production costs of approximately $65 million (primarily raw materials).
The level of our litigation fees and related costs varies from period to period depending upon, among other things, the number of cases in which we are currently involved, the nature of such cases and the current stage of such cases (e.g. discovery, pre-trial motions, trial or appeal, if applicable). See Note 16 to our Consolidated Financial Statements.
The level of our litigation fees and related costs varies from period to period depending upon, among other things, the number of cases in which we are currently involved, the nature of such cases and the current stage of such cases (e.g. discovery, pre-trial motions, trial or appeal, if applicable). See Note 17 to our Consolidated Financial Statements.
We do not assess our property and equipment for impairment unless certain impairment indicators are present. We did not evaluate any long-lived assets for impairment during 2023 because no such impairment indicators were present. ● Goodwill - Our net goodwill totaled $27.2 million at December 31, 2023, all related to CompX’s Security Products reporting unit.
We do not assess our property and equipment for impairment unless certain impairment indicators are present. We did not evaluate any long-lived assets for impairment during 2024 because no such impairment indicators were present. ● Goodwill – Our net goodwill totaled $27.2 million at December 31, 2024, all related to CompX’s Security Products reporting unit.
The funding requirements for these defined benefit pension plans are generally based upon applicable regulations (such as ERISA in the U.S.) and will generally differ from pension expense recognized under GAAP for financial reporting purposes. We made contributions to our plans of approximately $1.2 million in each of 2021 and 2022.
The funding requirements for these defined benefit pension plans are generally based upon applicable regulations (such as ERISA in the U.S.) and will generally differ from pension expense recognized under GAAP for financial reporting purposes. We made contributions to our plans of approximately $1.2 million in 2022.
Based upon our expectations of operating performance, and the anticipated demands on our cash resources we expect to have sufficient liquidity to meet our short-term obligations (defined as the twelve-month period ending December 31, 2024). If actual developments differ materially from our expectations, our liquidity could be adversely affected.
Based upon our expectations of operating performance, and the anticipated demands on our cash resources we expect to have sufficient liquidity to meet our short-term obligations (defined as the twelve-month period ending December 31, 2025). If actual developments differ materially from our expectations, our liquidity could be adversely affected.
In this regard, Valhi has agreed to loan us up to $50 million on a revolving basis. At December 31, 2023, we had $.5 million in outstanding borrowings under this facility, and we had $49.5 million available for future borrowing under the facility. See Note 10 to our Consolidated Financial Statements.
In this regard, Valhi has agreed to loan us up to $50 million on a revolving basis. At December 31, 2024, we had $.5 million in outstanding borrowings under this facility, and we had $49.5 million available for future borrowing under the facility. See Note 10 to our Consolidated Financial Statements.
We may also evaluate the restructuring of ownership interests of our businesses among our subsidiaries and related companies. Commitments and contingencies We are subject to certain commitments and contingencies, as more fully described in Note 16 to our Consolidated Financial Statements or in Part I, Item 3 of this report.
We may also evaluate the restructuring of ownership interests of our businesses among our subsidiaries and related companies. Commitments and contingencies We are subject to certain commitments and contingencies, as more fully described in Note 17 to our Consolidated Financial Statements or in Part I, Item 3 of this report.
At December 31, 2023, Kronos had substantial net assets denominated in the euro, Canadian dollar and Norwegian krone. Critical accounting policies and estimates Our significant accounting policies are more fully described in Note 1 to our Consolidated Financial Statements.
At December 31, 2024, Kronos had substantial net assets denominated in the euro, Canadian dollar and Norwegian krone. Critical accounting policies and estimates Our significant accounting policies are more fully described in Note 1 to our Consolidated Financial Statements.
As more fully described below, the decrease in our earnings attributable to NL stockholders from 2022 to 2023 is primarily due to the net effects of: ● equity in losses from Kronos in 2023 of $15.0 million compared to equity in earnings of $31.9 million in 2022, ● higher interest and dividend income of $5.8 million in 2023, and ● a non-cash loss on the termination of our U.K. pension plan of $4.9 million in 2023 .
As more fully described below, the decrease in our earnings attributable to NL stockholders from 2022 to 2023 is primarily due to the net effects of: ● equity in losses from Kronos in 2023 of $15.0 million compared to equity in earnings of $31.9 million in 2022, ● higher interest and dividend income of $9.6 million in 2023 compared to $3.8 million in 2022, and ● a non-cash loss on the termination of our U.K. pension plan of $4.9 million in 2023 .
Capital expenditures were $4.1 million in 2021, $3.7 million in 2022 and $1.1 million in 2023. Capital expenditures in 2021 and 2022 were higher as CompX accelerated the timeline for certain projects designed to increase its capacity and improve its capabilities in response to strong customer demand.
Capital expenditures were $3.7 million in 2022, $1.1 million in 2023 and $1.4 million in 2024. Capital expenditures in 2022 were higher as CompX accelerated the timeline for certain projects designed to increase its capacity and improve its capabilities in response to strong customer demand.
However, if we had lowered the assumed discount rate by 25 basis points for our plan as of December 31, 2023, our aggregate projected benefit obligation would have increased by approximately $.6 million at that date. Such a change would not materially impact our defined benefit pension expense for 2024.
However, if we had lowered the assumed discount rate by 25 basis points for -53- ​ our plan as of December 31, 2024, our aggregate projected benefit obligation would have increased by approximately $.6 million at that date. Such a change would not materially impact our defined benefit pension expense for 2025.
As shown below, our total average days sales outstanding decreased from December 31, 2022 to December 31, 2023 and is primarily impacted by the timing of sales and collections in the last month of the year.
As shown below, our total average days sales outstanding decreased from December 31, 2023 to December 31, 2024 and is primarily impacted by the timing of sales and collections in the last month of the year.
In 2023, we made a net contribution of $.2 million to our plans (a contribution of approximately $1.1 million to our U.S. plan and a refund of approximately $.9 million as a result of the termination of the U.K. plan).
In 2023, we made a net contribution of $.2 million to our plans (a contribution of approximately $1.1 million to our U.S. plan and a refund of approximately $.9 million as a result of the termination of the U.K. plan). In 2024, we made a contribution of $1.0 to our U.S. plan.
Kronos’ Senior Secured Notes, Global Revolver and the Contran term loan contain a number of covenants and restrictions which, among other things, restrict its ability to incur additional debt, incur liens, pay dividends or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of this type.
Kronos’ Senior Secured Notes, the Contran Term Loan and Kronos’ Global Revolver contain a number of covenants and restrictions which, among other things, restrict its ability to incur additional debt, incur liens, pay dividends or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types.
If these events were to occur in 2024, our corporate expenses would be higher than we currently estimate. In addition, we adjust our environmental accruals as further information becomes available to us or as circumstances change. Such further information or changed circumstances could result in an increase in our accrued environmental costs. See Note 16 to our Consolidated Financial Statements.
If these events were to occur in 2025, our corporate expenses would be higher than we currently estimate. In addition, we adjust our environmental accruals as further information becomes available to us or as circumstances change. Such further information or changed circumstances could result in an increase in our accrued environmental costs. See Note 17 to our Consolidated Financial Statements.
Our effective tax rate attributable to our equity in earnings (losses) of Kronos, including the effect of non-taxable dividends we received from Kronos, was a 5.5% expense in 2021, a 3.4% expense in 2022 and a 58.5% expense in 2023.
Our effective tax rate attributable to our equity in earnings (losses) of Kronos, including the effect of non-taxable dividends we received from Kronos, was a 3.4% expense in 2022, a 58.5% expense in 2023 and a 7.5% expense in 2024.
Our assumed long-term rates of return on plan assets for 2021, 2022 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 2022 2023 United States 4.0 % 4.0 % 5.0 % United Kingdom (through date of plan termination) 1.3 % 1.3 % 4.3 % ​ Our long-term rate of return on plan asset assumptions in 2024 used for purposes of determining our 2024 defined benefit pension plan expense is 5.0%.
Our assumed long-term rates of return on plan assets for 2022, 2023 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2023 2024 United States 4.0 % 5.0 % 5.0 % United Kingdom (through date of plan termination) 1.3 % 4.3 % N/A ​ ​ Our long-term rate of return on plan asset assumptions in 2025 used for purposes of determining our 2025 defined benefit pension plan expense is 5.0%.
Operating costs and expenses – CompX’s operating costs and expenses consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to CompX’s businesses and its corporate management activities, as well as gains and losses on property and equipment.
Selling, general and administrative expenses – CompX’s selling, general and administrative expenses consist primarily of personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to CompX’s businesses and its corporate management activities, as well as gains and losses on property and equipment.
For comparative purposes, we have provided 2021 numbers below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 2022 2023 Days sales outstanding 42 days 41 days 36 days Days in inventory 96 days 99 days 95 days ​ Investing activities Capital expenditures, substantially all of which relate to CompX, have primarily emphasized improving manufacturing facilities and investing in manufacturing equipment, utilizing new technologies and increased automation of the manufacturing process, to provide for increased productivity and efficiency in order to meet expected customer demand and properly maintain facilities and technology infrastructure.
For comparative purposes, we have provided 2022 numbers below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2023 2024 Days sales outstanding 41 days 36 days 33 days Days in inventory 99 days 95 days 94 days ​ Investing activities Capital expenditures, substantially all of which relate to CompX, have primarily emphasized improving manufacturing facilities and investing in manufacturing equipment, utilizing new technologies and increased automation of the manufacturing process, to provide for increased productivity and efficiency in order to meet expected customer demand and properly maintain facilities and technology infrastructure.
See Note 5 to our Consolidated Financial Statements. Income tax expense (benefit) - We recognized income tax expense of $7.5 million in 2021 and $2.8 million in 2022 and an income tax benefit of $7.0 million in 2023. In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings of Kronos.
See Note 5 to our Consolidated Financial Statements. Income tax expense (benefit) – We recognized income tax expense of $2.8 million in 2022, an income tax benefit of $7.0 million in 2023 and income tax expense of $14.1 million in 2024. In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings of Kronos.
Beginning in the latter half of 2022 through 2023, CompX limited investments primarily to those expenditures required to meet its existing demand and to properly maintain its facilities and technology infrastructure.
Beginning in the latter half of 2022 and continuing through 2024, CompX limited investments primarily to those expenditures required to meet its existing demand and to properly maintain its facilities and technology infrastructure.
See Notes 1 and 13 to our Consolidated Financial Statements for a description of certain income tax contingencies.
See Notes 1 and 14 to our Consolidated Financial Statements for a description of certain income tax contingencies.
As noted above, during 2021 and 2022 and through the approximate plan termination date in 2023, all of the assets of the U.K. plan were invested primarily in insurance contracts. Based on the actuarial assumptions described above, we expect to recognize defined benefit pension expense of approximately $1.5 million in 2024.
As noted above, during 2022 and through the approximate plan termination date in 2023, all of the assets of the U.K. plan were invested primarily in insurance contracts. Based on the actuarial assumptions described above, we expect to recognize defined benefit pension expense of approximately $1.3 million in 2025.
Capital expenditures Capital expenditures for 2024 are estimated at approximately $3.0 million, substantially all of which relate to CompX. CompX’s 2024 capital investments are primarily to meet its expected customer demand and those required to properly maintain its facilities and technology infrastructure.
Capital expenditures Capital expenditures for 2025 are estimated at approximately $3.2 million, substantially all of which relate to CompX. CompX’s 2025 capital investments are primarily to meet its expected customer demand and those required to properly maintain its facilities and technology infrastructure.
The materials used in CompX’s products consist of purchased components and raw materials some of which are subject to fluctuations in the commodity markets such as zinc, brass, -37- ​ aluminum and stainless steel. Total material costs represented approximately 48% of CompX’s cost of sales in 2023, with commodity-related raw materials representing approximately 13% of its cost of sales.
The materials used in CompX’s products consist of purchased components and raw materials some of which are subject to fluctuations in the commodity markets such as zinc, brass, aluminum and stainless steel. Total material costs represented approximately 46% of CompX’s cost of sales in 2024, with commodity-related raw materials representing approximately 13% of its cost of sales.
During interim periods, our effective income tax rate may not necessarily correspond to the foregoing due to the application of accounting for income taxes in interim periods which requires us to base our effective rate on full year projections. We received aggregate dividends from Kronos of $25.4 million in 2021, and $26.8 million in each of 2022 and 2023.
During interim periods, our effective income tax rate may not necessarily correspond to the foregoing due to the application of accounting for income taxes in interim periods which requires us to base our effective rate on full year projections. We received aggregate dividends from Kronos of $26.8 million in each of 2022 and 2023 and $16.9 million in 2024.
We recognized consolidated defined benefit pension plan expense of $.9 million in 2021, $1.4 million in 2022 and $6.5 million in 2023, including the loss on the termination of the U.K. pension plan of $4.9 million discuss above.
We recognized consolidated defined benefit pension plan expense of $1.4 million in 2022, $6.5 million in 2023, including the loss on the termination of the U.K. pension plan of $4.9 million discussed above and $1.4 million in 2024.
Outstanding debt obligations At December 31, 2023, NL had outstanding debt obligations of $.5 million under its secured revolving credit facility with Valhi, and CompX did not have any outstanding debt obligations. We are in compliance with all of the -52- ​ covenants contained in our revolving credit facility with Valhi at December 31, 2023.
Outstanding debt obligations At December 31, 2024, NLKW had outstanding debt obligations of $.5 million under its secured revolving credit facility with Valhi, and CompX did not have any outstanding debt obligations. We are in compliance with all of the covenants contained in our secured revolving credit facility with Valhi at December 31, 2024.
Additionally, CompX has purchase obligations of $18.3 million ($17.5 million payable in 2024 and $.8 million payable in 2025/2026) which consists of open purchase orders and contractual obligations, primarily commitments to purchase raw materials and for capital projects in process at December 31, 2023.
Additionally, CompX has purchase obligations of $19.8 million ($19.3 million payable in 2025 and $.5 million payable in 2026/2027) which consists of open purchase orders and contractual obligations, primarily commitments to purchase raw materials and for capital projects in process at December 31, 2024.
The reference to NL Parent in the tables below is a reference to NL Industries, Inc., as the parent company of CompX and our other wholly-owned subsidiaries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2021 2022 2023 ​ ​ (In millions) Net cash provided by operating activities: ​ ​ ​ CompX ​ $ 10.5 ​ $ 16.9 ​ $ 25.8 NL Parent and wholly-owned subsidiaries ​ 15.7 ​ 39.6 ​ 21.9 Eliminations ​ (8.6) ​ (29.6) ​ (10.7) Total ​ $ 17.6 ​ $ 26.9 ​ $ 37.0 ​ Relative changes in working capital can have a significant effect on cash flows from operating activities.
The reference to NL Parent in the tables below is a reference to NL Industries, Inc., as the parent company of CompX and our other wholly-owned subsidiaries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2022 2023 2024 ​ ​ (In millions) Net cash provided by operating activities: ​ ​ ​ CompX ​ $ 16.9 ​ $ 25.8 ​ $ 22.9 NL Parent and wholly-owned subsidiaries ​ 39.6 ​ 21.9 ​ 37.1 Eliminations ​ (29.6) ​ (10.7) ​ (34.4) Total ​ $ 26.9 ​ $ 37.0 ​ $ 25.6 ​ -54- ​ Relative changes in working capital can have a significant effect on cash flows from operating activities.
Other operating income and expense, net - Kronos’ selling, general and administrative expenses decreased $20.1 million, or 9%, in 2023 compared to 2022 primarily due to lower distribution costs related to lower overall sales volumes during the year.
Kronos’ selling, general and administrative expenses decreased $20.1 million, or 9%, in 2023 compared to 2022 primarily due to lower distribution costs related to lower overall sales volumes during the year.
Such further information or changed circumstances could result in an increase in our accrued environmental costs. See Note 16 to our Consolidated Financial Statements. ● Long-lived assets - The net book value of our property and equipment totaled $25.9 million at December 31, 2023, all of which relates to CompX.
Such further information or changed circumstances could result in an increase in our accrued environmental costs. See Note 17 to our Consolidated Financial Statements. ● Long-lived assets – The net book value of our property and equipment totaled $24.0 million at December 31, 2024, all of which relates to CompX.
Overall, Kronos estimates that fluctuations in currency exchange rates had the following effects on its sales and income from operations for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of changes in currency exchange rates - 2023 vs 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ gains - ​ Total currency ​ ​ Transaction gains recognized ​ impact of ​ impact ​ 2022 2023 Change rate changes 2023 vs 2022 ​ ​ (In millions) Impact on: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ — ​ $ — ​ $ 10 ​ $ 10 Income (loss) from operations ​ 12 ​ 1 ​ (11) ​ 27 ​ 16 ​ The $10 million increase in Kronos’ net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2023 as compared to 2022.
Kronos fluctuations in currency exchange rates had the following effects on its sales and income from operations for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of changes in currency exchange rates - 2024 vs 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ gains - ​ Total currency ​ ​ Transaction gains recognized ​ impact of ​ impact ​ 2023 2024 Change rate changes 2024 vs 2023 ​ ​ (In millions) Impact on: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ — ​ $ — ​ $ 5 ​ $ 5 Income (loss) from operations ​ 1 ​ 2 ​ 1 ​ 9 ​ 10 ​ The $5 million increase in Kronos’ net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2024 as compared to 2023.
Interest income increased $2.2 million in 2022 compared to 2021 primarily due to higher interest rates and increased investment balances, somewhat offset by lower average balances on CompX’s revolving promissory note receivable from Valhi. ​ Marketable equity securities - Unrealized gains or losses on our marketable equity securities are recognized in Marketable equity securities on our Consolidated Statements of Operations.
Interest and dividend income – Interest income increased $1.4 million in 2024 compared to 2023 and increased $5.8 million in 2023 compared to 2022 primarily due to higher interest rates and increased investment balances, somewhat offset by lower average balances on CompX’s revolving promissory note receivable from Valhi. ​ Marketable equity securities – Unrealized gains or losses on our marketable equity securities are recognized in Marketable equity securities on our Consolidated Statements of Operations.
The $9.3 million net increase in cash provided by operating activities includes the net effects of: ● higher income from operations from CompX in 2022 of $4.9 million; ● lower net cash used for relative changes in receivables, inventories, prepaid expenses, payables and accrued liabilities in 2022 of $4.0 million; ● a $1.8 million increase in interest received in 2022 due to higher interest rates and increased investment balances, offset by lower average balances on CompX’s revolving promissory note receivable from affiliate; and ● a $1.1 million increase in cash paid for taxes in 2022 due to the relative timing of payments.
The $11.4 million decrease in cash provided by operating activities includes the net effects of: ● lower dividends received from Kronos in 2024 of $9.9 million; ● lower segment profit from CompX in 2024 of $8.4 million; ● a $4.1 million increase in interest received in 2024 due to higher interest rates and increased investment balances, offset by lower average balances on CompX’s revolving promissory note receivable from affiliate; ● lower net cash used for relative changes in receivables, inventories, prepaid expenses, payables and accrued liabilities in 2024 of $3.2 million; and ● a $.4 million increase in cash paid for taxes in 2024 due to the relative timing of payments.
See Note 5 to our Consolidated Financial Statements. We also owned 35.2 million shares of Kronos common stock at December 31, 2023 with an aggregate market value of $350.1 million. See Note 6 to our Consolidated Financial Statements.
See Note 5 to our Consolidated Financial Statements. We also owned 35.2 million shares of Kronos common stock at December 31, 2024 with an aggregate market value of $343.4 million. See Note 6 to our Consolidated Financial Statements.
Net income overview Our net loss attributable to NL stockholders was $2.3 million, or $.05 per share, in 2023 compared to net income of $33.8 million, or $.69 per share, in 2022 and net income of $51.2 million, or $1.05 per share, in 2021.
Net income overview Our net income attributable to NL stockholders was $67.2 million, or $1.38 per share, in 2024 compared to a net loss of $2.3 million, or $.05 per share, in 2023 and net income of $33.8 million, or $.69 per share, in 2022.
The decrease in our effective rate from 2021 to 2022 is attributable to the combined effects of Kronos’ lower earnings and the higher non-taxable dividend income we received from Kronos in 2022 as compared to 2021.
The decrease in our effective rate from 2023 to 2024 is attributable to the combined effects of Kronos’ earnings in 2024 as compared to loss in 2023 and the lower non-taxable dividend income we received from Kronos in 2024 as compared to 2023.
Other non-operating income (expense) - Kronos recognized unrealized losses of $1.0 million in each of 2023 and 2022 on the change in value of its marketable equity securities.
Kronos recognized unrealized losses of $1.0 million in each of 2023 and 2022 on the change in value of its marketable equity securities.
At December 31, 2023, we had aggregate restricted and unrestricted cash, cash equivalents and current marketable securities of $194.5 million, substantially all of which was held in the U.S.
At December 31, 2024, we had aggregate restricted and unrestricted cash, cash equivalents and current marketable securities of $184.2 million, substantially all of which was held in the U.S.
Investing activities also include net collections of $10.8 million ($29.8 million of gross borrowings and $40.6 million of gross repayments) in 2021, net collections of $5.5 million ($24.3 million of gross borrowings and $29.8 million of gross repayments) in 2022 and net collections of $2.6 million ($27.9 million of gross borrowings and $30.5 million of gross repayments) in 2023 under a promissory note receivable from an affiliate.
Investing activities also include net collections of $5.5 million ($24.3 million of gross borrowings and $29.8 million of gross repayments) in 2022, net collections of $2.6 million ($27 9 million of gross borrowings and $30.5 million of gross repayments) in 2023 and net collections of $1.3 million ($25.0 million of gross borrowings and $26.3 million of gross repayments) in 2024 under a promissory note receivable from an affiliate.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2024 to be relatively stable. CompX occasionally enters into short-term commodity-related raw material supply arrangements to mitigate the impact of future increases in commodity related raw material costs.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2025 to be relatively stable, although governmental actions such as tariffs may impact markets. CompX occasionally enters into short-term commodity-related raw material supply arrangements to mitigate the impact of future increases in commodity related raw material costs.
The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2022 did not have a significant effect on the reported amount of Kronos’ net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations are denominated in the U.S. dollar.
The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2024 did not have a significant effect on Kronos net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.
Kronos’ consolidated effective income tax rate in 2024 is expected to be higher than the U.S. federal statutory rate of 21% because the income tax rates applicable to the earnings (losses) of Kronos’ non-U.S. operations will be higher than the income tax rates applicable to its U.S. operations and due to the expected mix of earnings.
The difference is primarily due to lower earnings in 2023 and the jurisdictional mix of such earnings. -47- ​ Kronos’ consolidated effective income tax rate in 2025 is expected to be higher than the U.S. federal statutory rate of 21% because the income tax rates applicable to the earnings (losses) of Kronos’ non-U.S. operations will be higher than the income tax rates applicable to its U.S. operations and due to the expected mix of earnings.
Cost of sales and gross margin – CompX’s cost of sales decreased in 2023 compared to 2022 primarily due to the effects of lower production costs at both Security Products and Marine Components as well as lower Marine Components sales.
CompX’s cost of sales decreased in 2023 compared to 2022 primarily due to the effects of lower production costs at both Security Products and Marine Components as well as lower Marine Components sales. CompX’s gross margin as a percentage of sales increased over the same period primarily due to the factors affecting cost of sales .
As shown below, our average number of days in inventory decreased from December 31, 2022 to December 31, 2023 primarily due to a decrease at CompX’s Security Products reporting unit due to the fulfillment and shipping of a significant order during the fourth quarter of 2023, partially offset by an increase at CompX’s Marine Components reporting unit due to lower sales and -51- ​ increased inventory balances as a result of prior orders of certain raw materials with longer lead times discussed in CompX’s Outlook above.
As shown below, our average number of days in inventory at December 31, 2024 was comparable to December 31, 2023 primarily due to an increase at CompX’s Security Products reporting unit due to the fulfillment and shipping of a significant order during the fourth quarter of 2023, partially offset by a decrease at CompX’s Marine Components reporting unit due to elevated inventory balances at December 31, 2023 as a result of prior orders of certain raw materials with longer lead times delivered in the fourth quarter of 2023.
The $23 million increase in income from operations was comprised of the following: ● Higher net currency transaction gains of approximately $10 million primarily caused by relative changes in currency exchange rates at each applicable balance sheet date between the U.S. dollar and the euro, Canadian dollar and the Norwegian krone, and between the euro and the Norwegian krone, which causes increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held by Kronos’ non-U.S. operations, and in Norwegian krone denominated receivables and payables held by its non-U.S. operations, and ● Approximately $13 million from net currency translation gains primarily caused by a strengthening of the U.S. dollar relative to the Canadian dollar and Norwegian krone, as local currency-denominated operating costs were translated into fewer U.S. dollars in 2022 as compared to 2021, partially offset by net currency translation losses primarily caused by a strengthening of the U.S. dollar relative to the euro as the negative effects of the stronger U.S. dollar on euro-denominated sales more than offset the favorable effects of euro-denominated operating costs being translated into fewer U.S. dollars in 2022 as compared to 2021.
The $10 million increase in Kronos’ income from operations was comprised of the following: ● Higher net currency transaction gains of approximately $1 million primarily caused by relative changes in currency exchange rates at each applicable balance sheet date between the U.S. dollar and the euro, Canadian dollar and the Norwegian krone, and between the euro and the Norwegian krone, which causes increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held by Kronos’ non-U.S. operations, and in Norwegian krone denominated receivables and payables held by its non-U.S. operations, and ● Approximately $9 million from net currency translation gains primarily caused by a strengthening of the U.S. dollar relative to the Canadian dollar and Norwegian krone, as local currency-denominated operating costs were translated into fewer U.S. dollars in 2024 as compared to 2023.
We use different discount rate assumptions in determining our defined benefit pension plan obligations and expense for the plan we maintain in the United States and previously in the U.K. as the interest rate environment differs from country to country. -49- ​ We used the following discount rates for our defined benefit pension plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rates used for: ​ Obligations at Obligations at Obligations at ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ 2021 and ​ 2022 and ​ 2023 and ​ ​ expense in 2022 ​ expense in 2023 ​ expense in 2024 ​ United States 2.6 % 5.3 % 5.0 % United Kingdom (through date of plan termination) 1.3 % 4.3 % N/A ​ ​ The assumed long-term rate of return on plan assets represents the estimated average rate of earnings expected to be earned on the funds invested or to be invested from the plans’ assets provided to fund the benefit payments inherent in the projected benefit obligations.
We used the following discount rates for our defined benefit pension plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rates used for: ​ Obligations at Obligations at Obligations at ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ 2022 and ​ 2023 and ​ 2024 and ​ ​ expense in 2023 ​ expense in 2024 ​ expense in 2025 ​ United States 5.3 % 5.0 % 5.5 % United Kingdom (through date of plan termination) 4.3 % N/A ​ N/A ​ ​ The assumed long-term rate of return on plan assets represents the estimated average rate of earnings expected to be earned on the funds invested or to be invested from the plans’ assets provided to fund the benefit payments inherent in the projected benefit obligations.
Operating income as a percentage of net sales decreased slightly in 2023 compared to 2022 primarily due to the factors impacting gross margin, as well as decreased coverage of operating costs and expenses from lower sales. Marine Components net sales increased 46% in 2022 as compared to 2021.
Reporting unit profit as a percentage of net sales decreased slightly in 2023 compared to 2022 primarily due to the factors impacting gross margin, as well as decreased coverage of operating costs and expenses from lower sales.
Relative to prior year, sales were $12.8 million lower to the towboat market (primarily to original equipment boat manufacturers) and $2.0 million lower to the engine builder market, partially offset by $1.2 million higher industrial sales and $.8 million higher sales to the center console boat market.
Marine Components net sales decreased 23% in 2023 as compared to 2022. Relative to prior year, sales were $12.8 million lower to the towboat market (primarily to original equipment boat manufacturers) and $2.0 million lower to the engine builder market, partially offset by $1.2 million higher industrial sales and $.8 million higher sales to the center console boat market.
Income tax expense (benefit) - Kronos recognized an income tax benefit of $23.8 million in 2023 compared to income tax expense of $29.4 million in 2022. The difference is primarily due to lower earnings in 2023 and the jurisdictional mix of such earnings.
Kronos’ interest expense in 2023 was comparable to interest expense in 2022. Income tax expense (benefit) – Kronos recognized income tax expense of $63.4 million in 2024 compared to an income tax benefit of $23.8 million in 2023. The difference is primarily due to higher earnings in 2024 and the jurisdictional mix of such earnings.
As noted above, there continue to be some global and domestic supply chain challenges, and any future impacts on CompX’s operations will depend on, among other things, any future disruption in its operations or its suppliers’ operations, the impact of economic conditions and geopolitical events on demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
CompX has in the past experienced global and domestic supply chain challenges, and any future impacts on its operations will depend on, among other things, any future disruption in its operations or its suppliers’ operations, the effect of tariffs, and the impact of economic conditions and geopolitical events on demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
A detail (in millions) by entity is presented in the table below. ​ ​ ​ ​ ​ ​ Amount ​ ​ (In millions) CompX $ 76.7 NL Parent and wholly-owned subsidiaries ​ 117.8 Total ​ $ 194.5 ​ In addition, at December 31, 2023 we owned 1.2 million shares of Valhi common stock with an aggregate market value of $18.2 million.
A detail (in millions) by entity is presented in the table below. ​ ​ ​ ​ ​ ​ Amount ​ ​ (In millions) CompX $ 60.8 NL Parent and wholly-owned subsidiaries ​ 123.4 Total ​ $ 184.2 ​ In addition, at December 31, 2024 we owned 1.2 million shares of Valhi common stock with an aggregate market value of $28.0 million.
In comparison, we expect to be required to contribute approximately $1.0 million to such plans during 2024. As noted above, defined benefit pension expense and the amounts recognized as accrued pension costs are based upon the actuarial assumptions discussed above. We believe that all of the actuarial assumptions used are reasonable and appropriate.
In comparison, we do not expect to be required to make any contributions to such plan during 2025. As noted above, defined benefit pension expense and the amounts recognized as accrued pension costs are based upon the actuarial assumptions discussed above. We believe that all of the actuarial assumptions used are reasonable and appropriate.
Kronos estimates changes in currency exchange rates decreased its loss from operations by approximately $16 million in 2023 as compared to 2022, as discussed in the Effects of currency exchange rates section below. Kronos’ income from operations decreased by $27.5 million or 15%, from $187.1 million in 2021 to $159.6 million in 2022.
Kronos estimates changes in currency exchange rates decreased its loss from operations by approximately $16 million in 2023 as compared to 2022, as discussed in the Effects of currency exchange rates section below.
Net cash provided by operating activities was $26.9 million in 2022 compared to $17.6 million in 2021.
Net cash provided by operating activities was $37.0 million in 2023 compared to $26.9 million in 2022.
Kronos is in compliance with all of its debt covenants at December 31, 2023. Kronos believes that it will be able to continue to comply with the financial covenants contained in its credit facility through its maturity.
Kronos is in compliance with all of its debt covenants at December 31, 2024. Kronos believes that it will be able to continue to comply with the financial covenants contained in its credit facility through its maturity; however, if its future operating results differ materially from its expectations it may be unable to maintain compliance.
In February 2024 Kronos exchanged of €325 million principal amount of its outstanding 3.75% Senior Secured Notes due in September 2025 (the “Old Notes”) for newly issued €276.174 million aggregate outstanding 9.50% Senior Secured Notes due March 2029 (the “New Notes” and together with the Old Notes, the “Senior Secured Notes”) plus additional cash consideration of €50 million ($53.7 million).
In February 2024, Kronos exchanged €325 million principal amount of its outstanding 3.75% Senior Secured Notes due in September 2025 (the “Old Notes”) for newly issued €276.174 million 9.50% Senior Secured Notes due March 2029 (the “New Notes”) plus additional cash consideration of €48.75 million ($52.6 million) paid to the holders of the Old Notes and entered into a $53.7 million unsecured term loan from Contran Corporation due in September 2029 (the “Contran Term Loan”).
See Item 1 - “Business- Raw Materials.” Results by reporting unit The key performance indicator for CompX’s reporting units is the level of their income from operations (see discussion below). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ % Change ​ ​ 2021 2022 2023 2021-22 2022-23 ​ (Dollars in millions) ​ ​ ​ ​ ​ Security Products: ​ ​ ​ Net sales $ 105.1 ​ $ 114.5 ​ $ 121.2 9 % 6 % Cost of sales 71.5 ​ 79.1 ​ 82.8 11 5 Gross margin 33.6 ​ 35.4 ​ 38.4 5 8 Operating costs and expenses 12.0 ​ 12.7 ​ 13.5 5 6 Operating income $ 21.6 ​ $ 22.7 ​ $ 24.9 5 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin 32.0 % 31.0 % 31.7 % ​ ​ Operating income margin 20.6 ​ 19.9 ​ 20.6 ​ Security Products - Security Products net sales increased 6% to $121.2 million in 2023 compared to $114.5 million in 2022 primarily due to higher sales related to a pilot project for a government security customer.
See Item 1 – “Business- Raw Materials.” Results by reporting unit The key performance indicator for CompX’s reporting units is the level of their reporting unit profit (see discussion below). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ % Change ​ ​ 2022 2023 2024 2022-23 2023-24 ​ (Dollars in millions) ​ ​ ​ ​ ​ Security Products: ​ ​ ​ Net sales $ 114.5 ​ $ 121.2 ​ $ 115.2 6 % (5) % Cost of sales 79.1 ​ 82.8 ​ 80.5 5 (3) Gross margin 35.4 ​ 38.4 ​ 34.7 8 (10) Operating costs and expenses 12.7 ​ 13.5 ​ 13.9 6 3 Reporting unit profit (2) $ 22.7 ​ $ 24.9 ​ $ 20.8 10 (16) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin 31.0 % 31.7 % 30.1 % ​ ​ Reporting unit profit margin 19.9 ​ 20.6 ​ 18.1 ​ (2) Reporting unit profit includes reporting unit sales less cost of sales and operating costs and expenses directly attributable to the reporting unit.
We use these discount rates to determine the actuarial present value of the pension obligations as of December 31 of that year. We also use these discount rates to determine the interest component of defined benefit pension expense for the following year. As noted above, we terminated our UK pension plan in May 2023.
We also use these discount rates to determine the interest component of defined benefit pension expense for the following year. -52- ​ At December 31, 2024, our projected benefit obligations for our U.S. defined benefit plan is $26.6 million. As noted above, we terminated our U.K. pension plan in May 2023.
If our current expectations regarding the number of cases in which we expect to be involved during 2024 or the nature of such cases were to change, our corporate expenses could be higher than we currently estimate. -40- ​ Obligations for environmental remediation and related costs are difficult to assess and estimate and it is possible that actual costs for environmental remediation will exceed accrued amounts or that costs will be incurred in the future for sites in which we cannot currently estimate our liability.
Obligations for environmental remediation costs are difficult to assess and it is possible that actual costs for environmental remediation will exceed accrued amounts or that costs will be incurred in the future for sites in which we cannot currently estimate our liability. If these events were to occur in 2025, our corporate expenses would be higher than we currently estimate.
Operating income margin decreased for 2022 compared to 2021 primarily due to the factors impacting gross margin, as -38- ​ well as increased operating costs and expenses, resulting from higher salaries and employment related costs, partially offset by increased coverage of operating costs and expenses from higher sales. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ ​ 2021 2022 2023 2021-22 2022-23 ​ (Dollars in millions) ​ ​ Marine Components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales $ 35.7 ​ $ 52.1 ​ $ 40.1 ​ 46 % (23) % Cost of sales 26.6 ​ 38.7 ​ 29.3 45 (24) Gross margin 9.1 ​ 13.4 ​ 10.8 47 (19) Operating costs and expenses 3.5 ​ 3.8 ​ 3.6 9 (5) Operating income $ 5.6 ​ $ 9.6 ​ $ 7.2 71 (25) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin 25.4 % 25.6 % 27.0 % ​ ​ Operating income margin 15.7 ​ 18.4 ​ 18.0 ​ Marine Components - Marine Components net sales decreased 23% in 2023 as compared to 2022.
Reporting unit profit margin increased for 2023 compared to 2022 primarily due to the factors impacting gross margin, as well as increased coverage of operating costs and expenses from higher sales, partially offset by increased operating costs and expenses, including higher employee salaries and benefit costs of $.6 million. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, % Change ​ ​ 2022 2023 2024 2022-23 2023-24 ​ (Dollars in millions) ​ ​ Marine Components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales $ 52.1 ​ $ 40.1 ​ $ 30.7 ​ (23) % (23) % Cost of sales 38.7 ​ 29.3 ​ 24.1 (24) (18) Gross margin 13.4 ​ 10.8 ​ 6.6 (19) (39) Operating costs and expenses 3.8 ​ 3.6 ​ 3.3 (5) (8) Reporting unit profit (2) $ 9.6 ​ $ 7.2 ​ $ 3.3 (25) (54) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin 25.6 % 27.0 % 21.6 % ​ ​ Reporting unit profit margin 18.4 ​ 18.0 ​ 10.8 ​ Marine Components – Marine Components net sales decreased 23% in 2024 as compared to 2023 primarily due to $8.7 million lower sales to the towboat market through the first three quarters of 2024, partially offset by higher sales in the fourth quarter of 2024, including $1.1 million higher sales to the towboat market and $1.0 million higher sales to the government market.
The effect of the weakening of the U.S. dollar relative to the euro was nominal in 2023 as compared to 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of changes in currency exchange rates - 2022 vs 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ gains (losses)- Total currency ​ ​ Transaction gains recognized ​ impact of ​ impact ​ 2021 2022 Change rate changes 2022 vs 2021 ​ ​ ​ ​ ​ ​ ​ ​ (In millions) ​ ​ ​ ​ ​ ​ Impact on: ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ — ​ $ — ​ $ (106) ​ $ (106) Income from operations ​ 2 ​ 12 ​ 10 ​ 13 ​ 23 ​ The $106 million decrease in Kronos’ net sales (translation losses) was caused primarily by a strengthening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into fewer U.S. dollars in 2022 as compared to 2021.
The effect of the weakening of the U.S. dollar relative to the euro caused additional net translation gains as the positive effects of the weaker U.S. dollar on euro-denominated sales more than offset the unfavorable effects on euro-denominated operating costs being translated into more U.S. dollars in 2024 as compared to 2023. -48- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of changes in currency exchange rates - 2023 vs 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ gains - Total currency ​ ​ Transaction gains recognized ​ impact of ​ impact ​ 2022 2023 Change rate changes 2023 vs 2022 ​ ​ ​ ​ ​ ​ ​ ​ (In millions) ​ ​ ​ ​ ​ ​ Impact on: ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ — ​ $ — ​ $ 10 ​ $ 10 Income from operations ​ 12 ​ 1 ​ (11) ​ 27 ​ 16 ​ The $10 million increase in Kronos’ net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as Kronos’ euro-denominated sales were translated into more U.S. dollars in 2023 as compared to 2022.
Outlook Excluding any potential effects from changes in the relative value of marketable equity securities, we currently expect our net income attributable to NL stockholders in 2024 to be higher than 2023 primarily due to higher equity in earnings from Kronos, partially offset by lower expected income from operations attributable to CompX and higher litigation fees and related costs.
Outlook Excluding any potential effects from changes in the relative value of marketable equity securities, we currently expect our net income attributable to NL stockholders in 2025 to be lower than 2024 primarily due to income related to the settlement of a liability for an environmental remediation site recognized in the fourth quarter of 2024 partially offset by higher expected CompX segment profit.
Changes in estimates or the application of alternative assumptions could produce significantly different results. -48- ​ In 2023, CompX used the qualitative assessment for its annual impairment test and determined it was not necessary to perform the quantitative goodwill impairment test, as it concluded it is more-likely-than-not the fair value of the Security Products reporting unit exceeded its carrying amount.
In 2024, CompX used the qualitative assessment for its annual impairment test and determined it was not necessary to perform the quantitative goodwill impairment test, as it concluded it is more-likely-than-not the fair value of the Security Products reporting unit exceeded its carrying amount. See Notes 1 and 7 to our Consolidated Financial Statements.
As discussed and quantified above, Kronos’ gross margin as a percentage of net sales decreased primarily due to the net effects of higher average TiO 2 selling prices, lower production and sales volumes, higher production costs and fluctuations in currency exchange rates.
Kronos’ gross margin as a percentage of net sales increased to 19% in 2024 compared to 10% in 2023. As discussed and quantified above, Kronos’ gross margin as a percentage of net sales increased primarily due to higher sales and production volumes as well as lower production costs, partially offset by lower average TiO 2 selling prices.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023 we have $53.1 million invested in marketable debt securities, $35.4 held by CompX, at an average interest rate of approximately 4.6%. Marketable equity security prices - We are exposed to market risk due to changes in prices of the marketable equity securities which we own.
Biggest changeMarketable equity security prices – We are exposed to market risk due to changes in prices of the marketable equity securities which we own. The fair value of our equity securities at December 31, 2023 and 2024 was $18.2 million and $28.0 million, respectively.
We have an outstanding principal amount of indebtedness of $.5 million at December 31, 2023 bearing interest at prime plus 1.875% (10.4% at December 31, 2023) with a maturity date of December 31, 2030. The carrying value of such outstanding indebtedness approximates its fair value.
We have an outstanding principal amount of indebtedness of $.5 million at December 31, 2024 bearing interest at prime plus 1.875% -58- ​ (9.4% at December 31, 2024) with a maturity date of December 31, 2030. The carrying value of such outstanding indebtedness approximates its fair value.
The outstanding principal amount of the note receivable from affiliate of $10.6 million at December 31, 2023 bears interest at prime plus 1.0% (9.5% at December 31, 2023). We received interest income of $1.2 million from the note during 2023.
The outstanding principal amount of the note receivable from affiliate of $9.3 million at December 31, 2024 bears interest at prime plus 1.0% (8.5% at December 31, 2024). We received interest income of $1.0 million from the note during 2024.
Raw materials - CompX will occasionally enter into short-term commodity-related raw material supply arrangements to mitigate the impact of future increases in commodity-related raw material costs.
The potential change in the aggregate fair value of these investments, assuming a 10% change in prices, would be $1.8 million and $2.8 million at December 31, 2023 and 2024, respectively. Raw materials – CompX will occasionally enter into short-term commodity-related raw material supply arrangements to mitigate the impact of future increases in commodity-related raw material costs.
Removed
The fair value of our equity securities at December 31, 2022 and 2023 was $26.4 million and $18.2 million, respectively. The potential change in the aggregate fair value of these investments, assuming a 10% change in prices, would be $2.6 million and $1.8 million at December 31, 2022 and 2023, respectively.

Other NL 10-K year-over-year comparisons