SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 1998
NL INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
New Jersey 1-640 13-5267260
(State or other (Commission File No.) (Employer ID No.)
jurisdiction of
incorporation)
16825 Northchase Dr., Suite 1200, Houston, Texas 77060
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 423-3300
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On , the Registrant issued the press release attached hereto as Exhibit
99.1 and incorporated herein in its entirety by this reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
(i) Exhibit 99.1. Press Release dated October 19, 1998
* * * * *
SIGNATURE
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 thereunto duly authorized.
NL INDUSTRIES, INC.
(Registrant)
/s/ Dennis G. Newkirk
Dennis G. Newkirk
Vice President & Controller
Dated: October 20, 1998
Dennis G. Newkirk
(281) 423-3332
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NL REPORTS THIRD QUARTER RESULTS
AND REDEMPTION OF SENIOR SECURED DISCOUNT NOTES
HOUSTON, TEXAS -- October 19, 1998 -- NL Industries, Inc. (NYSE:NL) reported
income from continuing operations for the third quarter of 1998 of $31.4
million, or $.60 per diluted share, compared to income from continuing
operations in the third quarter of 1997 of $3.9 million, or $.08 per diluted
share. NL reported income from continuing operations for the first nine months
of 1998 of $71.1 million, or $1.37 per diluted share, compared to a loss from
continuing operations in the first nine months of 1997 of $39.7 million, or $.78
per diluted share. Net income for the third quarter of 1998 was $29.0 million,
or $.55 per diluted share, compared to net income in the third quarter of 1997
of $9.8 million, or $.19 per diluted share. The 1997 results include a
first-quarter $30 million noncash charge, or $.59 per diluted share, related to
the adoption of the AICPA's Statement of Position No. 96-1, "Environmental
Remediation Liabilities."
Operating income of Kronos' titanium dioxide pigments ("TiO2") business in the
third quarter of 1998 was $45.0 million, $29.8 million more than the third
quarter of 1997 excluding $9.7 million of income from refunds of German
franchise taxes reported in the third quarter of 1997. Kronos' improved
operating income was due to higher TiO2 selling prices partially offset by lower
sales volume. Kronos' average TiO2 selling prices for the third quarter of 1998
were 17% higher than the third quarter of 1997 and 2% higher than the second
quarter of 1998. Kronos' third-quarter sales volume decreased 9% from the record
sales volume in the year-earlier period as demand moderated. Sales volume in the
first nine months of 1998 was 2% lower than the 1997 period reflecting lower
sales volume in Asia, partially offset by higher sales volume in Europe.
Income taxes in the third quarter of 1998 include a tax benefit of $8.2 million
($.16 per diluted share) resulting from a refund of prior-year German dividend
withholding taxes.
As previously reported, the Company sold its Rheox specialty chemical operations
in the first quarter of 1998 and, as a result of the sale, Rheox's results are
reported as discontinued operations. The $2.4 million extraordinary item in
third quarter 1998 resulted from early extinguishment of debt related to $54
million of open-market purchases of the Company's 13% Senior Secured Discount
Notes. The remaining $121 million of Discount Notes were redeemed on October 15,
1998. The Company's net debt at September 30, 1998 was $204 million (total debt
of $524 million less cash of $320 million), declining from $652 million net debt
at December 31, 1997.
<PAGE>
J. Landis Martin, President and Chief Executive Officer, stated, "Kronos
continued to post impressive results in the third quarter with higher TiO2
prices and good capacity utilization overcoming a decline in third-quarter TiO2
demand. We expect TiO2 demand in the fourth quarter of 1998 will be moderately
below that of the fourth quarter of 1997, but that income from continuing
operations in the fourth quarter of 1998 should benefit from lower net interest
expense due to the redemption of our 13% Discount Notes on October 15, 1998. The
redemption of the 13% Discount Notes represents the attainment of an important
strategic goal and further strengthens NL's balance sheet, capital structure and
future cash flow."
A conference call for the investment community is scheduled for October 19, 1998
at 12:15 p.m., Eastern Daylight Time. Dr. Lawrence A. Wigdor, Chief Executive
Officer at Kronos, will host the call. Participants can access the call by
dialing 1-800-553-0327 (domestic) and 612-332-0634 (international). A taped
replay of the call will be available after 4:00 p.m., Eastern Daylight Time, the
day of the call through November 19, 1998 by calling 1-800-475-6701 (domestic)
and 320-365-3844 (international), and using access code 411349.
NL Industries, Inc. is a major international producer of titanium dioxide
pigments.
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 global economic and political conditions, global TiO2
production capacity and the amount and timing of capacity changes, competitive
products and prices, and other risks and uncertainties detailed in the Company's
Securities and Exchange Commission filings. Actual results could differ
materially from those forecasted or expected.
<PAGE>
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarters ended Nine months ended
September 30, September 30,
------------------ -----------------
1997 1998 1997 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues and other income:
Net sales ............................ $ 210.3 $ 221.5 $ 629.1 $ 685.8
Other income, excluding corporate .... 2.3 2.0 9.5 4.7
-------- -------- -------- --------
212.6 223.5 638.6 690.5
Cost of sales .......................... 162.5 151.8 502.4 476.0
Selling, general and administrative,
excluding corporate ................... 25.2 26.7 85.8 85.8
-------- -------- -------- --------
Operating income ................... 24.9 45.0 50.4 131.1
Corporate income (expense):
Securities earnings .................. .6 4.3 1.8 12.7
Expenses, net ........................ (5.7) (4.1) (44.3) (11.6)
Interest expense ..................... (16.4) (15.1) (49.2) (46.9)
-------- -------- -------- --------
Income (loss) from continuing
operations before income taxes .... 3.4 30.1 (41.3) 85.3
Income tax benefit (expense) ........... .5 1.3 1.6 (14.2)
-------- -------- -------- --------
Income (loss) from continuing
operations ........................ 3.9 31.4 (39.7 71.1
Discontinued operations - Rheox ........ 5.9 -- 16.0 287.4
Extraordinary item ..................... -- (2.4) -- (4.8)
-------- -------- -------- --------
Net income (loss) .................. $ 9.8 $ 29.0 $ (23.7) $ 353.7
-------- -------- -------- --------
</TABLE>
<PAGE>
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, Continued
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarters ended Nine months ended
September 30, September 30,
------------------ -----------------
1997 1998 1997 1998
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Basic earnings per common share:
Continuing operations ................. $ .08 $ .61 $ (.78) $ 1.38
Discontinued operations ............... .11 -- .32 5.60
Extraordinary item .................... -- (.05) -- (.09)
-------- -------- -------- ------
Net income (loss) ..................... $ .19 $ .56 $ (.46) $ 6.89
====== ====== ====== ======
Diluted earnings per common share:
Continuing operations ................. $ .08 $ .60 $ (.78) $ 1.37
Discontinued operations ............... .11 -- .32 5.52
Extraordinary item .................... -- (.05) -- (.09)
-------- -------- -------- -------
Net income (loss) ..................... $ .19 $ .55 $ (.46) $ 6.80
====== ====== ====== ======
Shares used in the calculation of
earnings per share:
Basic shares .......................... 51.1 51.4 51.1 51.4
Dilutive impact of stock options ...... .5 .8 -- .6
-------- -------- -------- -------
Diluted shares ........................ 51.6 52.2 51.1 52.0
====== ====== ====== ======
</TABLE>
