Nl Industries Inc (NYSE: NL)

Nl Industries Inc is a holding company that primarily operates through its majority owned subsidiary CompX International Inc and holds a non controlling interest in Kronos Worldwide Inc. The company does not conduct significant manufacturing or service activities itself but derives its value from the performance of these two investments. Nl Industries Inc is based in the United States and its financial results are driven by the earnings of its subsidiaries and affiliates.

Nl Industries Inc generates revenue from several sources. It receives a share of the profits from CompX International Inc through its ownership stake. It also records equity in earnings or losses from Kronos Worldwide Inc based on its approximate thirty one percent interest. In addition the company earns interest and dividend income from its cash holdings and marketable equity securities. Unrealized gains or losses on the value of its marketable equity securities also affect its reported income.

The company operates through the following segments: CompX and Kronos.

• CompX International Inc is engaged in the manufacture of engineered components for diverse end markets. Through its Security Products unit CompX produces mechanical and electronic cabinet locks and other locking mechanisms used in postal recreational transportation office and institutional furniture cabinetry tool storage and healthcare applications. Through its Marine Components unit CompX makes wake enhancement systems stainless steel exhaust systems gauges throttle controls trim tabs and related hardware and accessories for the recreational marine and other industries. CompX sells its products to a range of customers including government agencies industrial manufacturers and specialty distributors.

• Kronos Worldwide Inc is a leading global producer and marketer of value added titanium dioxide pigments known as TiO 2. The pigment is used in a variety of manufacturing applications including paints plastics paper and other industrial and specialty products. Kronos operates production facilities in Europe North America and other regions and sells its TiO 2 to manufacturers that incorporate the pigment into finished goods. The company also pursues strategic initiatives such as acquisitions and cost reduction programs to maintain its competitive position.

In the component products industry CompX holds a strong position as a diversified manufacturer of both security and marine components. Its competitive advantages include a broad product line that serves multiple niche markets a substantial portion of its production located in the United States and a supply chain that sources most raw materials domestically while selectively importing electronic components from Asia. Kronos enjoys a leading status in the global titanium dioxide market due to its scale integrated operations and recent acquisition of full control of Louisiana Pigment Company L P which expands its product offerings and enhances supply chain efficiency. Both subsidiaries benefit from long standing customer relationships and investments in technology that support product quality and operational reliability.

The customer base of Nl Industries Inc is reflected in the markets served by its subsidiaries. CompX supplies security products to government agencies contractors and manufacturers of furniture tool storage and healthcare equipment. Its marine components are sold to boat builders industrial operators and government entities involved in maritime activities. Kronos sells titanium dioxide pigment to paint producers plastics processors paper manufacturers and other industrial users that require the pigment for color brightness and durability. While specific customer names are not disclosed in the filing the described end markets illustrate the broad and diversified nature of the company’s revenue sources.