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): January 26, 2000
NL INDUSTRIES, INC.
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(Exact name of registrant as specified in charter)
New Jersey 1-640 13-5267260
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(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)
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Item 5. Other Events.
On January 26, 2000, 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 26, 2000.
* * * * *
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/Robert D. Hardy
Vice President & Controller
Dated: January 26, 2000
Susan E. Alderton
(281) 423-3332
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NL REPORTS FOURTH QUARTER RESULTS
HOUSTON, TEXAS -- January 26, 2000 -- NL Industries, Inc. (NYSE:NL) reported
income from continuing operations for the fourth quarter of 1999 of $16.9
million ($.33 per diluted share) compared to income from continuing operations
in the fourth quarter of 1998 of $18.8 million ($.36 per diluted share). For the
full year, NL reported income from continuing operations in 1999 of $159.8
million ($3.08 per diluted share) compared to income from continuing operations
in 1998 of $89.9 million ($1.73 per share). Excluding a second-quarter 1999
income tax benefit of $90 million ($1.73 per diluted share) and a third-quarter
1998 income tax benefit of $8.2 million ($.16 per diluted share), income from
continuing operations in 1999 would have been $69.8 million ($1.35 per diluted
share) compared to $81.7 million ($1.57 per diluted share) for 1998.
Operating income of Kronos' titanium dioxide pigments ("TiO2") business in the
fourth quarter of 1999 was $35.8 million, $4.2 million less than the fourth
quarter of 1998, primarily due to lower average TiO2 selling prices, partially
offset by higher sales volume and higher production volume. Kronos' operating
income for 1999 was $145.7 million, down from $171.2 million in 1998, due to
lower average TiO2 selling prices and lower production volume, partially offset
by higher sales volume.
After three consecutive quarters of declining average selling prices, Kronos'
average prices in the fourth quarter of 1999 increased 1% from the third quarter
of 1999. European and export average prices in the fourth quarter of 1999 rose
from the preceding quarter, while North American prices were unchanged. Average
prices in the fourth quarter of 1999 were 3% lower than the fourth quarter of
1998 and 1% lower than the average selling price for full-year 1999. Average
prices for the full-year 1999 were 1% lower than 1998. Prices at the end of the
fourth quarter were 1% higher than the average for the quarter. J. Landis
Martin, President and Chief Executive Officer, stated, "We are pleased that
pricing appears to have turned the corner and we expect to continue to phase-in
price increases during the first quarter of 2000. If demand remains strong,
additional price increase announcements are possible later in 2000."
Kronos' fourth-quarter and full-year sales volumes increased 21% and 5%,
respectively, from the comparable year-earlier periods, with strong demand in
all major regions. The Company's fourth-quarter 1999 production volume was 4%
higher than the comparable 1998 period, while full-year 1999 production volume
was 5% lower than 1998. Mr. Martin continued, "As we anticipated, we experienced
strong demand in the fourth quarter which allowed us to run our plants at full
capacity. Demand in the fourth quarter may have reflected a certain amount of
customer
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buying in advance of anticipated price increases. For 2000 we expect sales
volumes to approximate 1999. As a result of anticipated higher average prices
and our continued focus on controlling costs, we expect NL's operating income in
2000 to be higher than 1999. The extent of this improvement will be determined
by the magnitude of realized price increases."
Interest expense for fourth-quarter and full-year 1999 was down $2.5 million and
$21.2 million, respectively, from the comparable year-earlier periods reflecting
significantly lower levels of outstanding debt. During the fourth quarter of
1999 NL borrowed $26 million of short-term euro-denominated bank debt and used
the proceeds along with cash on hand to prepay DM 100 million ($52 million)
under its Deutsche mark-denominated bank credit agreement. The DM facility was
thereafter terminated. The refinancing reduced borrowing costs, released
collateral and eliminated certain restrictive loan covenants. The Company's net
debt at December 31, 1999 was $150 million (total debt of $302 million less cash
of $152 million), down $81 million from net debt of $231 million at December 31,
1998.
Minority interest relates to the Company's majority-owned environmental
management subsidiary. Discontinued operations in 1998 represent the Company's
former specialty chemical operations which were sold in January 1998. The
extraordinary item in 1998 resulted from early extinguishment of debt.
A conference call for the investment community is scheduled for January 26, 2000
at 10:00 a.m., (EST). Mr. J. Landis Martin will host the call. Participants can
access the call by dialing 800-288-8968 (domestic) and 612-332-0632
(international). The passcode is NL Earnings. A taped replay of the call will be
available after 5:00 p.m., (EST), the day of the call through February 2, 2000
by calling 800-475-6701 (domestic) and 320-365-3844 (international), and using
access code 497318. The call will also be broadcast live on the Internet at
StreetEvents.com and an online replay will be available approximately one hour
after the call.
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 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 substantial 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 1999
results are subject to completion of an audit and filing of Form 10-K.
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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,
------------------ -----------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues and other income:
Net sales $208.9 $231.6 $894.7 $908.4
Other income, excluding corporate 1.4 0.8 6.1 12.5
------ ------ ------ ------
210.3 232.4 900.8 920.9
Cost of sales 142.4 165.8 618.4 662.3
Selling, general and administrative,
excluding corporate 27.9 30.8 111.2 112.9
------ ------ ------ ------
Operating income 40.0 35.8 171.2 145.7
Corporate income (expense):
Securities earnings 2.2 1.8 14.9 6.6
Expenses, net (6.6) (4.7) (18.3) (16.9)
Interest expense (11.2) (8.7) (58.1) (36.9)
------ ------ ------ ------
Income from continuing operations
before income taxes and minority
interest 24.4 24.2 109.7 98.5
Income tax benefit (expense) (5.6) (6.2) (19.8) 64.6
------ ------ ------ ------
Income from continuing operations
before minority interest 18.8 18.0 89.9 163.1
Minority interest - 1.1 - 3.3
------ ------ ------ ------
Income from continuing operations 18.8 16.9 89.9 159.8
Discontinued operations - Rheox - - 287.4 -
Extraordinary item - early
extinguishment of debt (5.8) - (10.6) -
------ ------ ------ ------
Net income $ 13.0 $ 16.9 $366.7 $159.8
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</TABLE>
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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,
--------------- ---------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic earnings per share:
Continuing operations $ .36 $ .33 $1.75 $3.09
Discontinued operations - - 5.59 -
Extraordinary item (.11) - (.21) -
------ ----- ----- -----
Net income $ .25 $ .33 $7.13 $3.09
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Diluted earnings per share:
Continuing operations $ .36 $ .33 $1.73 $3.08
Discontinued operations - - 5.52 -
Extraordinary item (.11) - (.20) -
----- ----- ----- -----
Net income $ .25 $ .33 $7.05 $3.08
===== ===== ===== =====
Shares used in the calculation of earnings per share:
Basic shares 51.8 51.6 51.5 51.8
Dilutive impact of stock options .2 .2 .5 .1
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Diluted shares 52.0 51.8 52.0 51.9
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</TABLE>
