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
April 28, 1999
(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 April 28, 1999, 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 April 28, 1999
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: April 28, 1999
FOR IMMEDIATE RELEASE CONTACT:
VALHI, INC. BOBBY D. O'BRIEN
THREE LINCOLN CENTRE VICE PRESIDENT
5430 LBJ FREEWAY, SUITE 1700 (972) 233-1700
DALLAS, TEXAS 75240-2697
(972) 233-1700
VALHI REPORTS FIRST QUARTER RESULTS
DALLAS, TEXAS . . April 28, 1999. Valhi, Inc. (NYSE: VHI) reported income
before extraordinary item of $2.4 million, or $.02 per diluted share, in the
first quarter of 1999 compared to income of $204.7 million, or $1.76 per diluted
share, in the first quarter of 1998. The first quarter 1998 results include
gains related to the sale of the specialty chemicals business unit of 58%-owned
NL Industries and the initial public offering of CompX International common
stock aggregating $196 million, or $1.69 per diluted share, net of income taxes
and minority interest.
Total operating income in the first quarter of 1999 decreased 15% compared
to the first quarter of 1998 as higher component products operating income
reported by CompX was more than offset by lower chemicals operating income at
NL. Chemicals operating income declined due primarily to lower sales and
production volumes for titanium dioxide pigments ("TiO2"), partially offset by
higher average selling prices for TiO2. NL's TiO2 sales volumes in the first
quarter of 1999 were 16% lower than the record first quarter of 1998 as
worldwide demand weakened, particularly in Europe. In response to this lower
demand, NL reduced its Ti02 production rates in 1999 to more closely match its
sales volumes. Average TiO2 selling prices in the first quarter of 1999 were 5%
higher than the first quarter of 1998, but were even with selling prices in the
third and fourth quarters of last year. The Company's first quarter 1998 results
of operations include net sales of $12.7 million and operating income of $2.7
million related to NL's disposed specialty chemicals business unit.
Component products sales increased in the first quarter of 1999 compared to
the same period in 1998 due primarily to sales generated by the Thomas Regout
slide operations acquired in January 1999 and sales generated by two lock
competitors acquired in March and November 1998. Component products operating
income in the first quarter of 1998 included a $3.3 million non-recurring pre-
tax charge related to certain stock awards made in conjunction with CompX's
initial public offering. Excluding the effect of these acquisitions and the
stock award charge, net sales increased 1% and operating income increased 4%
compared to the first quarter of 1998 as an 11% increase in net sales of locking
systems was offset by lower sales of ergonomic and slide products reflecting
reduced sales to the office furniture industry.
As previously-reported, in the second quarter of 1998 the Company acquired
48% of Tremont Corporation's outstanding common stock, and the Company commenced
reporting equity in Tremont's earnings in the third quarter of 1998. Waste
Control Specialists continued to report losses due primarily to expenditures
associated with the ongoing pursuit of permits for the disposal of low-level and
mixed radioactive wastes.
General corporate interest and dividend income decreased in the first
quarter of 1999 due primarily to a lower level of funds available for
investment, and interest expense declined due primarily to a lower level of
outstanding indebtedness. Minority interest in after-tax earnings in both
periods relates to NL and CompX, and the extraordinary item in 1998 relates to
the early extinguishment of certain NL indebtedness.
The statements in this release relating to matters that are not historical
facts are forward-looking statements based on management's belief and
assumptions using currently available information. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it cannot give any assurances that these expectations will prove to
be correct. Such statements involve a number of risks and uncertainties,
including, but not limited to, future supply and demand for the Company's
products (including cyclicality thereof), general global economic conditions,
competitive products and substitute products, customer and competitor
strategies, the impact of pricing and production decisions, potential
difficulties in integrating completed acquisitions, environmental matters,
governmental regulations and possible changes therein, the ultimate resolution
of pending litigation and possible future litigation, possible disruptions of
normal business activity from Year 2000 issues and other risks and uncertainties
detailed in the Company's SEC filings. Should one or more of these risks
materialize (or the consequences of such a development worsen), or should the
underlying assumptions prove incorrect, actual results could differ materially
from those forecasted or expected. The Company assumes no duty to publicly
update such statements.
Valhi, Inc. is engaged in the titanium dioxide pigments, component products
(ergonomic computer support systems, precision ball bearing slides and locking
systems), titanium metals products and waste management industries.
* * * * *
VALHI, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
QUARTERS ENDED MARCH 31, 1998 AND 1999
(IN MILLIONS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
1998 1999
<S> <C> <C>
NET SALES
Chemicals $235.3 $201.6
Component products 32.1 55.2
$267.4 $256.8
OPERATING INCOME
Chemicals $ 37.4 $ 26.0
Component products 4.3 9.5
TOTAL OPERATING INCOME 41.7 35.5
Equity in:
Tremont Corporation - (.7)
Waste Control Specialists (3.2) (5.2)
Gain on:
Disposal of specialty chemicals business unit 330.2 -
Reduction in interest in CompX 67.9 -
General corporate items, net:
Interest and dividend income 17.2 10.6
Securities transactions .1 -
Expenses, net (7.8) (6.4)
Interest expense (25.4) (18.4)
INCOME BEFORE INCOME TAXES 420.7 15.4
Provision for income taxes 181.6 5.1
Minority interest in after-tax earnings 34.4 7.9
INCOME BEFORE EXTRAORDINARY ITEM 204.7 2.4
Extraordinary item (1.3) -
NET INCOME $203.4 $ 2.4
</TABLE>
VALHI, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS (CONTINUED)
(UNAUDITED)
QUARTERS ENDED MARCH 31, 1998 AND 1999
(IN MILLIONS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
1998 1999
<S> <C> <C>
BASIC EARNINGS PER COMMON SHARE
Income before extraordinary item $ 1.78 $ .02
Extraordinary item (.01) -
NET INCOME $ 1.77 $ .02
DILUTED EARNINGS PER COMMON SHARE
Income before extraordinary item $ 1.76 $ .02
Extraordinary item (.01) -
NET INCOME $ 1.75 $ .02
SHARES USED IN CALCULATION OF PER SHARE AMOUNTS
Basic earnings 115.1 115.0
Diluted earnings 116.1 116.2
</TABLE>
