SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
January 27, 1998
(Date of Report, date of earliest event reported)
VALHI, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-5467 87-0110150
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, TX 75240-2697
(Address of principal executive offices) (Zip Code)
(972) 233-1700
(Registrant's telephone number, including area code)
Not applicable
(Former name or address, if changed since last report)
Item 5: Other Events
On January 27, 1998, the Registrant issued the press release attached
hereto as Exhibit 99.1 which is incorporated herein by reference.
Item 7: Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibit
Item No. Exhibit Index
99.1 Press release dated January 27, 1998
issued by the Registrant
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VALHI, INC.
(Registrant)
By: /s/ Bobby D. O'Brien
Bobby D. O'Brien
Vice President
Date: January 27, 1998
VALHI REPORTS 1997 RESULTS
DALLAS, TEXAS . . January 27, 1998 . . Valhi, Inc. (NYSE: VHI) reported
income from continuing operations of $39.2 million, or $.34 per basic share, in
the fourth quarter of 1997 compared to a loss from continuing operations of $6.2
million, or $.05 per basic share, in the fourth quarter of 1996. For the full
year, the Company reported income from continuing operations of $27.1 million,
or $.24 per basic share, in 1997 compared to income of $.1 million, or nil per
basic share, in 1996.
Chemicals operating income at 57%-owned NL Industries, Inc. improved in
1997 due in part to higher sales and production volumes for titanium dioxide
pigments ("TiO2"). In addition, NL's average TiO2 selling prices in the fourth
quarter of 1997 were 10% higher than the fourth quarter of 1996 and were 5%
higher than the third quarter of 1997. For the full year, average TiO2 selling
prices were 4% lower in 1997 compared to 1996. NL achieved record TiO2 sales
volumes in 1997 reflecting strong demand, particularly in Europe, with fourth
quarter and full year sales volumes increasing 5% and 10%, respectively,
compared with the same periods in 1996. Chemicals operating income in 1997
includes $12.9 million ($3.2 million in the fourth quarter) resulting from
refunds of German franchise taxes related to prior years. In December 1997, NL
announced the sale of its specialty chemicals business unit for $465 million
cash. The completion of the transaction is subject to regulatory approvals and
is expected to occur in the first quarter of 1998. The Company's 1997 results
include net sales of $147 million and operating income of $43 million related to
this business unit.
The Company's component products business, CompX International Inc.,
reported higher sales and operating income due primarily to higher sales volumes
in all three of its major product lines (ergonomic computer support systems,
drawer slides and locks). The Company's equity in Waste Control Specialists'
losses was higher in 1997 due principally to start-up expenses associated with
its new facility for the treatment, storage and disposal of hazardous and toxic
wastes, as well as larger expenditures in conjunction with its on-going pursuit
of permits for the treatment, storage and disposal of low-level and mixed
radioactive wastes.
Securities earnings increased in 1997 due to (i) security transaction gains
of $48.9 million, principally in the fourth quarter, resulting primarily from
the exercise by certain holders of the Company's LYONs debt obligation of their
right to exchange such LYONs for a portion of the shares of Dresser Industries
common stock held by the Company, (ii) dividends received from The Amalgamated
Sugar Company LLC and (iii) a higher level of funds available for investment,
including interest earned on debt financing Valhi provided to Snake River Sugar
Company in 1997 and the investment of funds generated from the disposition of
discontinued operations. Interest expense increased in 1997 due primarily to
Valhi's loans from Snake River Sugar Company. General corporate expenses in
1997 include a first quarter noncash charge of $30 million related to the
adoption of a new accounting standard regarding accounting for environmental
remediation liabilities at NL Industries.
Discontinued operations include the results of the Company's former
building products and fast food operations. The extraordinary loss relates
principally to the premium paid and unamortized deferred financing costs in
connection with the September 1997 early retirement of $66.2 million principal
amount of Valcor's 9 5/8% Senior Notes.
The statements in this release relating to matters that are not historical
facts are forward-looking statements that involve risks and uncertainties,
including, but not limited to, future supply and demand for the Company's
products (including cyclicality thereof), competitive products, customer and
competitor strategies, the impact of pricing and production decisions,
environmental matters, the ultimate resolution of pending litigation and any
possible future litigation and other risks and uncertainties detailed in the
Company's SEC filings. Actual results could differ materially from those
forecasted or expected.
Valhi, Inc. is engaged in the chemicals, component products and waste
management industries. The Company's 1997 results are subject to final audit.
* * * * *
VALHI, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(Unaudited)
(In millions, except earnings per share)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996* 1997 1996* 1997
<S> <C> <C> <C> <C>
Net sales
Chemicals $234.0 $243.9 $ 986.1 $ 984.4
Component products 24.0 28.4 88.7 108.7
$258.0 $272.3 $1,074.8 $1,093.1
Operating income
Chemicals $ 10.5 $ 37.2 $ 92.0 $ 106.7
Component products
Total operating income 17.8 45.4 114.1 135.0
Equity in Waste Control Specialist (2.4) (3.8) (6.4) (12.7)
Equity in Amalgamated 5.1 - 10.0 -
General corporate items, net:
Securities earnings 3.4 60.5 10.9 109.1
Expenses, net (7.8) (6.9) (22.0) (57.8)
Interest expense (24.9) (27.4) (98.5) (118.9)
Income (loss) before taxes (8.8) 67.8 8.1 54.7
Income taxes (benefit) (2.6) 28.6 1.1 27.6
Minority interest - - 6.9 -
Income (loss) from continuing
operations (6.2) 39.2 .1 27.1
Discontinued operations 50.1 (.9) 42.0 33.6
Extraordinary item - - - (4.3)
Net income $ 43.9 $ 38.3 $ 42.1 $ 56.4
Basic earnings per common share
Continuing operations $ (.05) $ .34 $ - $ .24
Discontinued operations .43 (.01) .37 .29
Extraordinary item -
Net income $ .38 $ .33 $ .37 $ .49
Weighted average common shares
outstanding 115.2 115.0 114.6 114.6
</TABLE>
*Reclassified.
