Exhibit 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -
For the fiscal year ended December 31, 1999
Commission file number 1-13905
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
NATIONAL CABINET LOCK, INC.
CONTRIBUTORY RETIREMENT PLAN
200 Old Mill Road
Mauldin, South Carolina 29662
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
COMPX INTERNATIONAL INC.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060-2544
<PAGE>
NATIONAL CABINET LOCK, INC.
CONTRIBUTORY RETIREMENT PLAN
INDEX
Page
Signature Page 2
Financial Statements and Supplemental Schedules
with Report of Independent Accountants 3 - 9
Exhibit I - Consent of Independent Accountants
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Administrator has duly caused this Annual Report to be signed by the undersigned
thereunto duly authorized.
NATIONAL CABINET LOCK, INC.
CONTRIBUTORY RETIREMENT PLAN
By: ADMINISTRATIVE COMMITTEE OF THE
NATIONAL CABINET LOCK, INC.
CONTRIBUTORY RETIREMENT PLAN
By: /s/ Keith A. Johnson
-------------------------------------
Keith A. Johnson
Committee Member
June 15, 2000
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY
RETIREMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
December 31, 1999
with
REPORT OF INDEPENDENT ACCOUNTANTS
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY RETIREMENT PLAN
Index of Financial Statements and Supplemental Schedules
Page
Report of Independent Accountants 2
Financial Statements
Statements of Net Assets Available for Benefits -
December 31, 1998 and 1999 3
Statement of Changes in Net Assets Available for Benefits -
Year ended December 31, 1999 4
Notes to Financial Statements 5-8
Supplemental Schedules
Schedule H - Schedule of Assets Held for Investment Purposes -
December 31, 1999 9
<PAGE>
Report of Independent Accountants
To the Administrative Committee of
National Cabinet Lock, Inc. Contributory Retirement Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of National Cabinet Lock, Inc. Contributory Retirement Plan (the "Plan") at
December 31, 1998 and 1999 and the changes in net assets available for benefits
for the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Schedule of
Assets Held for Investment Purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers LLP
May 26, 2000
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 and 1999
<TABLE>
<CAPTION>
1998 1999
---- ----
Assets:
<S> <C> <C>
Investments at fair value .................. $10,053,598 $13,624,943
Contributions receivable:
Employer ................................... 343,182 377,261
Participant ................................ -- 4,639
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Net assets available for benefits ........ $10,396,780 $14,006,843
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</TABLE>
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 1999
<TABLE>
<CAPTION>
Additions:
Investment income:
<S> <C>
Net appreciation in fair value
of investments .......................................... $ 2,352,929
Interest and dividends ................................... 1,180,467
-----------
3,533,396
Contributions:
Employer ................................................. 377,261
Participants ............................................. 524,356
-----------
901,617
Total additions ........................................ 4,435,013
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Deductions:
Benefits to participants ................................... 823,702
Administrative expenses .................................... 1,248
-----------
Total deductions ....................................... 824,950
-----------
Net increase in net assets available for benefits ............ 3,610,063
Net assets available for benefits:
Beginning of year .......................................... 10,396,780
-----------
End of year ................................................ $14,006,843
===========
</TABLE>
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan and significant accounting policies:
General. The following description of the National Cabinet Lock, Inc.
Contributory Retirement Plan (the "Plan"), provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
The Plan is a defined contribution plan which covers eligible salaried
and hourly U.S. employees of CompX International, Inc. (the "Employer").
Employees are eligible to participate in the Plan as of the first entry date, as
defined, concurrent with or next following the completion of one year of
employment and attaining 20 years of age. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Employer is a 64%-owned subsidiary of Valhi, Inc. Valhi is a
93%-owned subsidiary of Contran Corporation. Substantially all of Contran's
outstanding voting stock is held either by trusts established for the benefit of
certain children and grandchildren of Harold C. Simmons, of which Mr. Simmons is
sole trustee, or by Mr. Simmons directly. Mr. Simmons, Chairman of the Board and
Chief Executive Officer of each of Contran and Valhi, may be deemed to control
each of such companies and the Employer.
Contributions. The Plan permits participants to defer 1% to 15% of their
pre-tax annual compensation as contributions, not to exceed a deferral of
$10,000 in 1999 (subject to adjustment in future years), through payroll
deductions. The Employer's contribution is based upon a profit-sharing formula
and the Employer's profit, as defined, during the Plan year. The Employer's
contribution is allocated to participants' accounts on a percentage or matching
basis relative to the participants' contributions for the year. The Employer's
contribution is reduced, as provided by the Plan, by nonvested amounts forfeited
by participants who withdraw from the Plan. At December 31, 1998 and 1999,
unallocated forfeited nonvested accounts were $6,407 and $12,601 respectively.
For the years ended December 31, 1998 and 1999 there were no forfeitures
allocated to participant accounts.
Vesting and benefits. Salary deferrals (including earnings thereon) are
immediately vested while Employer contributions (including earnings thereon)
vest at the rate of 20% per year of service, as defined.
Upon termination of employment, retirement, death or disability, a
participant (or beneficiary, if applicable) may elect to receive either (i) a
lump sum amount equal to the vested value of the participant's accounts or (ii)
installments over a period of not more than 30 years. With the consent of the
Plan administrators, participants can borrow amounts from their vested account
balances, subject to certain limitations under the Plan.
Participants' accounts. Participants can direct the Plan administrator
to invest, in 1% increments, their account balance in publicly-traded registered
investment companies or pooled funds administered by Putnam Investments or in
CompX International Inc. common stock. Below are the investment fund options
available to participants:
Putnam Voyager Fund (trading symbol PVOYX) - Aggressively seeks capital
appreciation. Invests primarily in common stocks.
<PAGE>
Putnam Vista Fund (PVISX) - Seeks capital appreciation. Invests
primarily in common stocks.
Putnam OTC and Emerging Growth Fund (POEGX) - Seeks capital
appreciation. Invests primarily in common stocks of small- to
medium-sized "emerging growth" companies traded in the over-the-counter
("OTC") market.
Putnam Global Growth Fund (PEQUX) - Seeks capital appreciation. Invests
primarily in U.S. and international common stocks.
The George Putnam Fund of Boston (PGEOX) - Seeks to provide a balanced
investment which will produce both capital growth and current income.
Invests in a diversified group of stocks and bonds.
Putnam High Yield Advantage Fund (PHYIX) - Seeks high current income.
Invests primarily in high-yielding, lower-rated fixed income
securities.
Putnam Diversified Income Fund (PDINX)- Seeks high current income
consistent with preservation of capital. Invests primarily in U.S.
government, high-yield and international fixed securities.
Putnam Stable Value Fund - This pooled fund seeks stable principal and
relatively high current income. Invests primarily in high-quality
fixed-income investments.
Company Stock Fund - Invests in CompX International Inc. common stock.
*Putnam Asset Allocation Fund (PAEAX) - Growth Portfolio - Seeks
capital appreciation. Invests in both stocks and bonds.
*Putnam Asset Allocation Fund (PAEBX) - Balanced Portfolio - Seeks
total return. Invests in both stocks and bonds.
*Putnam S&P 500 Index Fund - Seeks to mirror the performance and
composition of Standard & Poor's 500 Composite Index.
*Equity Income Fund (PEYAX) - seeks to provide current income by
investing primarily in Diversified Portfolio of income producing equity
securities.
*Putnam International Growth Fund (PDUSX) - Seeks capital appreciation.
Invests in growth and value stocks outside of the United States.
*Putnam Asset Allocation Fund (PAECX) - Conservative Portfolio - Seeks
total return with preservation of capital. Invests in both stocks and
bonds.
*First available to participants February 1, 1999.
The above fund descriptions provide only general information.
Participants should refer to the Prospectus of each fund for a more complete
description.
In addition to the Putnam Funds, a "Loan Fund" is maintained to account
for loans to participants, as permitted by the Plan. These loans, with interest
rates ranging from 7.0% to 10.0%, mature through 2009.
<PAGE>
Plan termination. The Employer has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan, in
compliance with the provisions of ERISA. In the event the Plan is terminated,
the accounts of all participants will become fully vested.
Basis of accounting. The financial statements of the Plan are prepared
in accordance with accounting principles generally accepted in the United
States. Valuation of investments is more fully described in Note 2.
Financial Statement Presentation. On September 15, 1999, the American
Institute of Certified Public Accountants issued Statement of Position 99-3,
Accounting for and Reporting of Certain Defined Contribution Plan Investments
and Other Disclosure Matters ("SOP 99-3") which, among other things, eliminated
previous requirements for defined contribution plans to present plan investments
by general type for investment programs. SOP 99-3 is effective for financial
statements for Plan years ending after December 15, 1999. Accordingly, the Plan
has adopted SOP 99-3 and the accompanying financial statements do not include
details of the Plan's participant-directed investment programs.
Management estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results may, in some instances, differ from previously
estimated amounts.
Risk and uncertainties. The Plan provides for various investment options
in a variety of stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various risks, such
as interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect participants' account balances and the
amounts reported in the Plan's statement of net assets available for benefits.
Expenses of administering the Plan. The Plan provides that the Employer
will generally reimburse the Plan for administrative expenses paid by the Plan.
The Employer paid a significant portion of the 1999 administrative expenses.
Tax status. The Plan has been notified by the Internal Revenue Service
that it is a qualified plan under Section 401(a) and Section 401(k) of the
Internal Revenue Code, and is therefore exempt from federal income taxes under
provisions of Section 501(a) of the Code.
Note 2 - Investments:
General. The assets of the Plan are held and the related investment
transactions are executed by Putnam Fiduciary Trust Company as trustee (the
"Trustee") of the National Cabinet Lock, Inc. Master 401(k) Plan Trust (the
"Trust"). The Trust invests in publicly-traded registered investment companies
or pooled funds administered by Putnam Investments and CompX International, Inc.
common stock (see Note 1). The Plan's investments are stated at fair value based
on quoted market prices and net appreciation (depreciation) for the year is
reflected in the Plan's statement of changes in net assets available for plan
benefits. The net appreciation (depreciation) consists of realized gains or
losses and unrealized appreciation or depreciation on investments.
The following presents investments that represent 5 percent or more of
the Plan's net assets at year end:
<TABLE>
<CAPTION>
December 31,
1998 1999
---- ----
<S> <C> <C>
Putnam Investments Voyager Fund .............. $3,379,426 $4,474,486
Putnam Investments Vista Fund ................ $2,830,550 $3,305,917
Putnam Investments Stable Value
(pooled fund) ............................... $ 978,239 $2,466,267
Putnam Investments Diversified
Income Fund ................................. $ 903,961 $ 777,536
Putnam Investments The George Putnam
Fund of Boston ............................. $1,074,041 $ 699,005
</TABLE>
<PAGE>
NATIONAL CABINET LOCK, INC. CONTRIBUTORY RETIREMENT PLAN
SCHEDULE H - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999
<TABLE>
<CAPTION>
Fair
Cost value
*Putnam Funds:
<S> <C> <C>
Voyager Fund ..................................... $2,493,695 $4,474,486
Vista Fund ....................................... 2,022,335 3,305,917
OTC and Emerging Growth Fund ..................... 201,635 370,054
Global Growth Fund ............................... 323,179 508,947
George Putnam Fund ............................... 750,324 699,005
High Yield Advantage Fund ........................ 109,814 101,088
Diversified Income Fund .......................... 854,876 777,536
Stable Value Fund ................................ 2,466,267 2,466,267
Asset Allocation Fund - Growth Portfolio ......... 8,367 8,981
Asset Allocation Fund - Balanced Portfolio ....... 85,447 88,778
S&P 500 Index Fund ............................... 34,543 38,838
Equity Income Fund ............................... 107,213 89,696
International Growth Fund ........................ 14,697 17,176
Asset Allocation Fund - Conservative Portfolio ... 16,896 16,999
*CompX International Inc. common stock ............. 140,712 145,540
*Loans to participants, mature through 2009 ........ - 515,635
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$9,630,000 $13,624,943
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</TABLE>
* party in interest
EXHIBIT I
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-56163) of CompX International Inc. of our report
dated May 26, 2000, relating to the financial statements of the National Cabinet
Lock, Inc. Contributory Retirement Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Dallas, Texas
June 15, 2000
