SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): January 22, 1999
NL INDUSTRIES, INC.
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 423-3300
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On January 22, 1999, 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 January 22, 1999.
* * * * *
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: January 22, 1999
Dennis G. Newkirk
(281) 423-3332
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NL REPORTS FOURTH QUARTER RESULTS
HOUSTON, TEXAS -- January 22, 1999 -- NL Industries, Inc. (NYSE:NL) reported
income from continuing operations for the fourth quarter of 1998 of $18.8
million, or $.36 per diluted share, compared to income from continuing
operations in the fourth quarter of 1997 of $9.8 million, or $.19 per diluted
share. For the full year, NL reported income from continuing operations of $89.9
million, or $1.72 per diluted share, compared to a 1997 loss from continuing
operations of $29.9 million, or $.58 per share. The 1997 results include a
first-quarter $30 million noncash charge, or $.59 per share, related to the
adoption of the AICPA's Statement of Position No. 96-1, "Environmental
Remediation Liabilities." Net income for the fourth quarter of 1998 was $13.0
million, or $.25 per diluted share, compared to net income in the fourth quarter
of 1997 of $14.2 million, or $.28 per diluted share.
Operating income of Kronos' titanium dioxide pigments ("TiO2") business in the
fourth quarter of 1998 was $40.0 million, $11.1 million more than the fourth
quarter of 1997 excluding $3.2 million of fourth-quarter 1997 income from
refunds of German franchise taxes. Kronos' operating income for 1998 increased
to $171.2 million compared to $82.5 million in 1997. Kronos' improved operating
income in 1998 was due to higher average TiO2 selling prices partially offset by
lower sales volume and $12.9 million of 1997 income from refunds of German
franchise taxes. Kronos' average TiO2 selling prices for the fourth quarter of
1998 were 11% higher than the fourth quarter of 1997 and even with the third
quarter of 1998. Average selling prices for full-year 1998 were 16% higher than
1997. Kronos' fourth-quarter sales volume decreased 11% from the year-earlier
period as demand weakened, particularly in Europe and Asia. Full-year sales
volume decreased 4% from the record sales volume in 1997 reflecting lower sales
volume in Asia and Latin America.
Corporate expenses in the fourth quarter of 1998 included $3.0 million of
nonrecurring costs ($2.0 million after tax, or $.04 per diluted share) related
to the termination of its agreement to acquire certain TiO2 operations and
production facilities owned by Tioxide, a subsidiary of Imperial Chemical
Industries plc.
J. Landis Martin, President & Chief Executive Officer, stated, "NL's strong
performance during 1998 was driven by improving TiO2 prices despite continued
weakness in Asia and a slowdown in European demand that began to impact sales
volumes in the second half of the year. We expect that NL's operating income in
1999 will be lower than 1998 as Kronos reduces its production rates to better
match demand for TiO2."
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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 $5.8 million extraordinary item in
fourth quarter 1998 resulted from early extinguishment of debt related to the
October 1998 redemption of the Company's 13% Senior Secured Discount Notes. The
Company's net debt at December 31, 1998 was $227 million (total debt of $394
million less cash of $167 million), declining from $652 million net debt at
December 31, 1997.
A conference call for the investment community is scheduled for January 22, 1999
at 10:00 a.m., Eastern Standard Time. Mr. J. Landis Martin will host the call.
Participants can access the call by dialing 1-888-455-9745 (domestic) and
212-547-0224 (international). A taped replay of the call will be available after
12:00 p.m., Eastern Standard Time, the day of the call through February 21, 1999
by calling 1-888-473-0148 (domestic) and 402-998-1362 (international), and using
access code 56489.
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 are based on management's beliefs and
assumptions made by management based on currently available information.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it cannot assure that these
expectations will prove to be correct. Such statements 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. Should one or more of these risks materialize, or should the underlying
assumptions prove incorrect, actual results could differ materially from those
forecasted or expected. The Company assumes no duty to update any
forward-looking statements. The Company's 1998 results are subject to final
audit.
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NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarters ended Years ended
December 31, December 31,
------------- -------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues and other income:
Net sales $208.1 $208.9 $837.2 $894.7
Other income, excluding corporate 2.9 1.4 12.4 6.1
------ ------ ------ ------
211.0 210.3 849.6 900.8
Cost of sales 147.5 142.4 649.9 618.4
Selling, general and administrative,
excluding corporate 31.4 27.9 117.2 111.2
------ ------ ------ ------
Operating income 32.1 40.0 82.5 171.2
Corporate income (expense):
Securities earnings 3.6 2.2 5.4 14.9
Expenses, net (5.5) (6.6) (49.8) (18.3)
Interest expense (16.6) (11.2) (65.8) (58.1)
------ ------ ------ ------
Income (loss) from continuing
operations before income taxes 13.6 24.4 (27.7) 109.7
Income tax expense 3.8 5.6 2.2 19.8
------ ------ ------ ------
Income (loss) from continuing
operations 9.8 18.8 (29.9) 89.9
Discontinued operations - Rheox 4.4 - 20.4 287.4
Extraordinary item - (5.8) - (10.6)
------ ------ ------ ------
Net income (loss) $ 14.2 $ 13.0 $ (9.5) $366.7
====== ====== ====== ======
</TABLE>
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<PAGE>
NL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, Continued
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarters ended Years ended
December 31, December 31,
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1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic earnings per common share:
Continuing operations $ .19 $ .36 $ (.58) $ 1.75
Discontinued operations .09 - .39 5.59
Extraordinary item - (.11) - (.21)
----- ------- ------ ------
Net income (loss) $ .28 $ .25 $ (.19) $ 7.13
===== ====== ====== ======
Diluted earnings per common share:
Continuing operations $ .19 $ .36 $ (.58) $ 1.72
Discontinued operations .09 - .39 5.52
Extraordinary item - (.11) - (.20)
----- ------ ------ ------
Net income (loss) $ .28 $ .25 $ (.19) $ 7.04
===== ====== ====== ======
Shares used in the calculation of
earnings per share:
Basic shares 51.2 51.8 51.2 51.5
Dilutive impact of stock options .5 .2 - .6
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Diluted shares 51.7 52.0 51.2 52.1
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</TABLE>
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