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
February 15, 2000
-----------------------
(Date of Report, date of earliest event reported)
VALHI, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-5467 87-0110150
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, TX 75240-2697
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(Address of principal executive offices) (Zip Code)
(972) 233-1700
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or address, if changed since last report)
<PAGE>
Item 5: Other Events
On February 15, 2000, 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 February 15, 2000
issued by the Registrant
<PAGE>
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: February 15, 2000
[LOGO GOES HERE]
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 1999 RESULTS
DALLAS, TEXAS . . February 15, 2000 . . Valhi, Inc. (NYSE: VHI)
reported income from continuing operations of $47.4 million, or $.41 per diluted
share, in 1999 compared to income of $225.8 million, or $1.94 per diluted share,
in 1998. Excluding the effect of the non-recurring items discussed in the next
paragraph, the Company would have reported income from continuing operations in
1999 of $27.6 million, or $.24 per diluted share, compared to income of $46.1
million, or $.39 per diluted share, in 1998. For the fourth quarter of 1999, the
Company reported a loss from continuing operations of $25.0 million, or $.22 per
diluted share, compared to income of $10.1 million, or $.09 per diluted share,
in the fourth quarter of 1998. Excluding the effect of the non-recurring
impairment charge discussed in the next paragraph, the Company would have
reported income from continuing operations in the fourth quarter of 1999 of $7.5
million, or $.06 per diluted share.
The 1999 year-to-date results include (i) a $90 million non-cash income
tax benefit ($52 million, or $.45 per diluted share, net of minority interest)
recognized by NL Industries and (ii) a fourth quarter non-cash impairment charge
of $50 million ($32 million, or $.28 per diluted share, net of income taxes) for
an other than temporary decline in the market value of Titanium Metals
Corporation ("TIMET"). The 1998 year-to-date results include net gains
aggregating $374 million ($180 million, or $1.55 per diluted share, net of
income taxes and minority interest).
Total operating income in the fourth quarter and full year of 1999
decreased compared to the same periods in 1998 as higher component products
operating income reported by CompX was more than offset by lower chemicals
operating income at NL.
Chemicals operating income in the fourth quarter of 1999 declined
compared to the same period in 1998 due primarily to lower average selling
prices for titanium dioxide pigments ("TiO2"), partially offset by higher Ti02
sales and production volumes. For the full year, chemicals operating income
declined in 1999 compared to 1998 due primarily to lower Ti02 average selling
prices and production volumes, offset in part by higher TiO2 sales volumes.
After three consecutive quarters of declining average TiO2 selling prices, NL's
average selling prices in the fourth quarter of 1999 increased 1% compared to
the third quarter of this year. NL's average TiO2 selling prices in the fourth
quarter of 1999 were 3% lower than the fourth quarter of 1998. For the full
year, NL's average TiO2 selling prices were 1% lower than 1998. NL's Ti02 sales
volumes in the fourth quarter of 1999 increased 21% compared to the fourth
quarter of 1998, and increased 5% for the full year of 1999, with strong demand
in all major regions. NL's TiO2 production volumes in the fourth quarter of 1999
were 4% higher than the comparable period in 1998, while full-year 1999
production volumes were 5% lower than 1998. NL believes that TiO2 demand in the
fourth quarter of 1999 may have reflected a certain amount of customer buying in
advance of anticipated price increases, however NL expects its annual Ti02 sales
volumes in 2000 will approximate its 1999 volumes. NL stated that it expects to
continue to phase-in TiO2 price increases during the first quarter of 2000, and
that if demand remains strong, additional price increase announcements are
possible later in 2000. As a result of anticipated higher average selling prices
for TiO2 and continued focus on controlling costs, NL expects its chemicals
operating income in 2000 will be higher than in 1999; the extent of the increase
will be determined by the magnitude of realized price increases. The Company's
1998 year-to-date results of operations include 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 fourth quarter of 1999
compared to the fourth quarter of 1998 due to increased demand for CompX's
office furniture products, market share gains in slide products and the effect
of acquisitions. Excluding the effect of acquisitions, and adjusting for one
additional week in the fourth quarter of 1998 under CompX's 52- or 53-week
fiscal year, component products net sales increased 14% in the fourth quarter of
1999 compared to the same period in 1998, with slide and ergonomic products
sales increasing 21% and security products sales increasing 5%. Excluding the
effect of acquisitions and adjusting for the additional week in 1998, slide and
ergonomic products sales increased 7% for the full year 1999 compared to 1998,
and security products sales increased 6%. Component products operating income in
1998 included a $3.3 million first quarter non-recurring pre-tax charge related
to certain stock awarded in conjunction with CompX's March 1998 initial public
offering.
Waste Control Specialists reported a lower operating loss in the fourth
quarter of 1999 compared to the third quarter of the year for its waste disposal
services. The improvement in Waste Control Specialists' results in the last half
of the year compared to the first half of the year are due in part to the
favorable effect of certain cost control measures implemented.
The Company commenced reporting equity in earnings of Tremont
Corporation in the third quarter of 1998. Tremont directly owns 20% of NL and
39% of TIMET, and Tremont accounts for such interests by the equity method. The
Company's equity in losses of Tremont in the fourth quarter of 1999 includes the
impairment charge related to TIMET. Equity in losses of Tremont in the fourth
quarter of 1999 also includes the impact of special pre-tax charges aggregating
$11 million recorded by TIMET related to, among other things, personnel
reductions, slow-moving inventories and write-downs associated with TIMET's
investments in certain start-up joint ventures. TIMET's operating results in the
fourth quarter of 1999 continued to be impacted by lower sales volumes and
selling prices caused by lower demand in both its aerospace and industrial
markets, and continued production-related problems. In view of the continued
weak market conditions, TIMET has targeted further personnel reductions for the
first quarter of 2000, and TIMET anticipates recording an additional $10 million
restructuring charge in the first quarter to primarily cover termination costs
associated with this headcount reduction.
General corporate interest and dividend income decreased in the fourth
quarter and full year of 1999 compared to the same periods in 1998 due primarily
to a lower level of funds available for investment. General corporate expenses
in the 1998 year-to-date period include a $32 million aggregate charge related
to the settlement of two lawsuits. Interest expense declined due primarily to a
lower level of outstanding indebtedness.
Minority interest in after-tax earnings relates principally to NL and
CompX. Discontinued operations in 1999 represents additional consideration
received by the Company related to the 1997 disposal of the Company's former
fast food operations. 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 that represent management's
belief and assumptions based on currently available information. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it cannot give any assurances that these expectations
will prove to be correct. Such statements by their nature involve substantial
risks and uncertainties that could significantly impact expected results, and
actual future results could differ materially from those described in such
forward-looking statements. While it is not possible to identify all factors,
the Company continues to face many risks and uncertainties. Among the factors
that could cause actual future results to differ materially include, but are not
limited to, future supply and demand for the Company's products, the extent of
the dependence of certain of the Company's businesses on certain market sectors,
the cyclicality of certain of the Company's businesses, the impact of certain
long-term contracts with customers and vendors on certain of the Company's
businesses, the possibility of labor disruptions, 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. Should one or more of
these risks materialize (or the consequences of such a development worsen), or
should the underlying assumptions prove incorrect, actual results could differ
materially from those forecasted or expected. The Company disclaims any
intention or obligation to update or revise any forward-looking statement
whether as a result of new information, future events or otherwise.
Valhi, Inc. is engaged in the titanium dioxide pigments, component
products (ergonomic computer support systems, precision ball bearing slides and
security products), titanium metals products and waste management industries.
The Company's 1999 results are subject to completion of an audit and the filing
of its Annual Report on Form 10-K.
* * * * *
<PAGE>
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,
--------------- ------------
1998 1999 1998 1999
---- ---- ---- ----
Net sales
<S> <C> <C> <C> <C>
Chemicals ................................ $ 208.9 $ 231.6 $ 907.3 $ 908.4
Component products ....................... 41.6 59.8 152.1 225.9
Waste management (after consolidation) ... -- 6.2 -- 10.9
-------- -------- -------- --------
$ 250.5 $ 297.6 $1,059.4 $1,145.2
======== ======== ======== ========
Operating income
Chemicals ................................ $ 35.0 $ 31.0 $ 154.6 $ 126.2
Component products ....................... 9.7 11.2 31.9 40.2
Waste management (after consolidation) ... -- (.3) -- (1.8)
-------- -------- -------- --------
Total operating income ................. 44.7 41.9 186.5 164.6
Equity in:
Tremont Corporation ...................... 4.4 (52.1) 7.4 (48.7)
Waste Control Specialists (prior to
consolidation) .......................... (5.9) -- (15.5) (8.5)
Gain on:
Disposal of business unit ................ -- -- 330.2 --
Reduction in interest in CompX ........... -- -- 67.9 --
General corporate items, net:
Interest and dividend income ............. 12.0 10.8 54.9 43.0
Securities transactions .................. -- .1 8.0 .8
Expenses, net ............................ (8.3) (7.1) (58.0) (24.1)
Interest expense ........................... (19.3) (17.6) (91.2) (72.0)
-------- -------- -------- --------
Income (loss) before income taxes ...... 27.6 (24.0) 490.2 55.1
Provision for income taxes (benefit) ....... 7.3 (9.5) 192.2 (71.3)
Minority interest in after-tax earnings .... 10.2 10.5 72.2 79.0
-------- -------- -------- --------
Income (loss) from continuing operations 10.1 (25.0) 225.8 47.4
Discontinued operations .................... -- -- -- 2.0
Extraordinary item ......................... (3.5) -- (6.2) --
-------- -------- -------- --------
Net income (loss) ...................... $ 6.6 $ (25.0) $ 219.6 $ 49.4
======== ======== ======== ========
</TABLE>
<PAGE>
VALHI, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS (CONTINUED)
(Unaudited)
(In millions, except earnings per share)
<TABLE>
<CAPTION>
Three months ended Years ended
December 31, December 31,
----------------- --------------
1998 1999 1998 1999
---- ---- ---- ----
Basic earnings per common share
<S> <C> <C> <C> <C>
Continuing operations .................... $ .09 $ (.22) $ 1.96 $ .41
Discontinued operations .................. -- -- -- .02
Extraordinary item ....................... (.03) -- (.05) --
-------- -------- -------- --------
Net income (loss) ...................... $ .06 $ (.22) $ 1.91 $ .43
======== ======== ======== ========
Diluted earnings per common share
Continuing operations .................... $ .09 $ (.22) $ 1.94 $ .41
Discontinued operations .................. -- -- -- .02
Extraordinary item ....................... (.03) -- (.05) --
-------- -------- -------- --------
Net income (loss) ...................... $ .06 $ (.22) $ 1.89 $ .43
======== ======== ======== ========
Shares used in calculation of
per share amounts
Basic earnings ........................... 115.0 115.1 115.0 115.0
======== ======== ======== ========
Diluted earnings ......................... 116.2 115.1 116.1 116.2
======== ======== ======== ========
</TABLE>
