VALHI REPORTS SECOND QUARTER 2023 RESULTS
03 Agosto 2023 - 3:15PM
Valhi, Inc. (NYSE: VHI) reported a net loss attributable to
Valhi stockholders of $5.1 million, or $.18 per share, in the
second quarter of 2023 compared to net income of $28.0 million, or
$.98 per share, in the second quarter of 2022. For the first six
months of 2023, Valhi reported a net loss attributable to Valhi
stockholders of $10.0 million, or $.35 per share, compared to net
income of $73.4 million, or $2.57 per share, in the first six
months of 2022. Net income attributable to Valhi stockholders
decreased in the second quarter and first six months of 2023
compared to the same periods of 2022 primarily due to the net
effects of lower operating results from our Chemicals and Component
Products Segments in 2023 and the impairment of our Real Estate
Management and Development Segment’s water delivery system fixed
assets in the second quarter of 2022.
The Chemicals Segment’s net sales of $443.2
million in the second quarter of 2023 were $122.1 million, or 22%,
lower than in the second quarter of 2022 and net sales of $869.5
million in the first six months of 2023 were $258.7 million, or
23%, lower than in the first six months of 2022. The Chemicals
Segment’s net sales decreased in the second quarter of 2023
compared to the second quarter of 2022 due to the effects of lower
sales volumes in all major markets and slightly lower average TiO2
selling prices. The Chemicals Segment’s net sales decreased in the
first six months of 2023 compared to the first six months of 2022
due to the net effects of lower sales volumes in all major markets
and slightly higher average TiO2 selling prices. The Chemicals
Segment’s TiO2 sales volumes were 26% lower in the second quarter
of 2023 as compared to the second quarter of 2022 and 28% lower in
the first six months of 2023 as compared to the first six months of
2022. Average TiO2 selling prices were 2% lower in the second
quarter of 2023 as compared to the second quarter of 2022 and 1%
higher in the first six months of 2023 as compared to the first six
months of 2022. Average TiO2 selling prices at the end of the
second quarter of 2023 were 5% lower than at the end of 2022. The
Chemicals Segment’s changes in product mix positively contributed
to net sales, primarily due to modest growth in its complementary
businesses which somewhat offset declines in TiO2 sales volumes in
both the second quarter and first six months of 2023. Fluctuations
in currency exchange rates (primarily the euro) also affected net
sales comparisons, decreasing our Chemicals Segment’s net sales by
approximately $12 million in the first six months of 2023 as
compared to the first six months of 2022. Changes in currency
exchange rates had a nominal effect on net sales in the second
quarter of 2023 as compared to the second quarter of 2022. The
table at the end of this press release shows how each of these
items impacted our Chemical Segment’s net sales.
The Chemicals Segment’s operating loss in the
second quarter of 2023 was $2.6 million as compared to operating
income of $69.2 million in the second quarter of 2022 and an
operating loss of $17.7 million for the six months ended June 30,
2023 compared to operating income of $155.6 million for the same
prior year period. The Chemicals Segment’s operating income
decreased in the second quarter and first six months of 2023
compared to the same periods in 2022 primarily due to lower sales
volumes and higher production costs (primarily raw material and
energy costs). The net sales decline in the first six months of
2023 was somewhat offset by higher average TiO2 selling prices. In
addition, the Chemicals Segment’s cost of sales in the second
quarter and first six months of 2023 includes $22 million and $54
million, respectively, of unabsorbed fixed production and other
manufacturing costs associated with production curtailments at its
facilities during the first six months of 2023 as the Chemicals
Segment adjusted its TiO2 production volumes to align inventory
levels with lower demand. TiO2 production volumes were 33% lower in
the second quarter of 2023 compared to the second quarter of 2022
and 28% lower in the first six months of 2023 compared to the same
period of 2022. As a result of reduced demand and scheduled
maintenance activities, the Chemicals Segment operated its
production facilities at 70% of practical capacity utilization in
the first six months of 2023 (76% and 64% in the first and second
quarters of 2023, respectively) compared to 98% in the first six
months of 2022 (100% and 95% in the first and second quarters of
2022, respectively). Fluctuations in currency exchange rates
(primarily the euro) decreased the Chemicals Segment’s operating
loss by approximately $2 million in the second quarter of 2023 and
approximately $21 million in the first six months of 2023 as
compared to the same prior year periods.
The Chemicals Segment’s operating loss in 2023
includes an insurance settlement gain of $2.2 million related to a
2020 business interruption insurance claim.
The Component Products Segment’s net sales were
$36.6 million in the second quarter of 2023 compared to $41.6
million in the second quarter of 2022 and $77.8 million in the
first six months of 2023 compared to $83.7 million in the same
period of 2022. The decrease in the Component Products Segment’s
sales for both periods is predominantly due to lower security
products sales to the government security market and, to a lesser
extent, lower marine component sales to the towboat market.
Operating income attributable to the Component Products Segment was
$4.4 million in the second quarter of 2023 compared to $7.7 million
in the second quarter of 2022 and $11.4 million for the six months
ended June 30, 2023 compared to $14.0 million for the same prior
year period. The Component Products Segment’s operating income
decreased for both comparative periods primarily due to lower sales
and gross margin in the second quarter of 2023 for both security
products and marine components.
The Real Estate Management and Development
Segment had sales of $27.3 million in the second quarter of 2023
compared to $27.7 million in the second quarter of 2022. For the
first six months of 2023 the Real Estate Management and Development
Segment had sales of $52.5 million compared to sales of $51.7
million in the same period of 2022. Land sales revenue is generally
recognized over time based on cost inputs, and land sales revenues
are dependent on spending for development activities. Land sales
revenues are also impacted by the relative timing of when new land
parcel sales are closed. Recognition of infrastructure
reimbursement of $.8 million ($.4 million, or $.02 per share, net
of income taxes and noncontrolling interest) in the second quarter
of 2022 is included in the determination of operating income. Due
to historically low levels at Lake Mead, Nevada at the end of the
second quarter of 2022, our Real Estate Management and Development
Segment ceased operations at its water intake facility for the
foreseeable future, and as a result our Real Estate Management and
Development Segment recognized an impairment of $16.0 million ($8.0
million, or $.28 per share, net of income taxes and noncontrolling
interest) of its water delivery system fixed assets which is
included in determination of its operating income. Sales
comparisons between the first six months of 2023 and 2022 are also
affected by Basic Water Company and its subsidiaries which was
deconsolidated following the date it voluntarily filed for Chapter
11 bankruptcy protection in the United States Bankruptcy Court for
the District of Nevada on September 10, 2022.
Corporate expenses were 9% lower in the second
quarter of 2023 and 7% lower in the first six months of 2023
compared to the same periods of 2022. Corporate expenses decreased
in both periods primarily due to lower environmental remediation
and related costs in 2023 compared to 2022. Interest income and
other increased to $4.7 million in the second quarter of 2023
compared to $1.4 million in the second quarter of 2022 and $9.6
million in the first six months of 2023 compared to $2.3 million in
the same period of 2022 primarily due to higher average interest
rates and increased investment balances.
Our net loss
attributable to Valhi stockholders for the second quarter and for
the first six months of 2023 includes a non-cash loss of $6.2
million ($3.8 million, or $.13 per share, net of income taxes and
noncontrolling interest) related to the termination of our United
Kingdom pension plan and a gain of $1.5 million ($1.1 million, or
$.04 per share, net of income taxes and noncontrolling interest) on
the sale of land not used in our operations.
The statements in this press release relating to
matters that are not historical facts are forward-looking
statements that represent management’s beliefs and assumptions
based on currently available information. Although we believe the
expectations reflected in such forward-looking statements are
reasonable, we cannot give any assurances that these expectations
will 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 predicted. While it is not possible to identify all
factors, we continue to face many risks and uncertainties. Among
the factors that could cause our actual future results to differ
materially include, but are not limited to, the following:
- Future supply
and demand for our products;
- The extent of
the dependence of certain of our businesses on certain market
sectors;
- The cyclicality
of certain of our businesses (such as Kronos’ TiO2
operations);
- Customer and
producer inventory levels;
- Unexpected or
earlier-than-expected industry capacity expansion (such as the TiO2
industry);
- Changes in raw
material and other operating costs (such as ore, zinc, brass,
aluminum, steel and energy costs);
- Changes in the
availability of raw materials (such as ore);
- General global
economic and political conditions that harm the worldwide economy,
disrupt our supply chain, increase material and energy costs,
reduce demand or perceived demand for TiO2, component products and
land held for development or impair our ability to operate our
facilities (including changes in the level of gross domestic
product in various regions of the world, natural disasters,
terrorist acts, global conflicts and public health crises such as
COVID-19);
- Operating
interruptions (including, but not limited to, labor disputes,
leaks, natural disasters, fires, explosions, unscheduled or
unplanned downtime, transportation interruptions, cyber-attacks,
certain regional and world events or economic conditions and public
health crises such as COVID-19);
- Competitive
products and substitute products;
- Customer and
competitor strategies;
- Potential
difficulties in integrating future acquisitions;
- Potential
difficulties in upgrading or implementing accounting and
manufacturing software systems;
- Potential
consolidation of our competitors;
- Potential
consolidation of our customers;
- The impact of
pricing and production decisions;
- Competitive
technology positions;
- Our ability to
protect or defend intellectual property rights;
- The introduction
of trade barriers or trade disputes;
- The ability of
our subsidiaries to pay us dividends;
- Uncertainties
associated with new product development and the development of new
product features;
- Fluctuations in
currency exchange rates (such as changes in the exchange rate
between the U.S. dollar and each of the euro, the Norwegian krone
and the Canadian dollar and between the euro and the Norwegian
krone) or possible disruptions to our business resulting from
uncertainties associated with the euro or other currencies;
- Decisions to
sell operating assets other than in the ordinary course of
business;
- The timing and
amounts of insurance recoveries;
- Our ability to
renew, amend, refinance or establish credit facilities;
- Increases in
interest rates;
- Our ability to
maintain sufficient liquidity;
- The ultimate
outcome of income tax audits, tax settlement initiatives or other
tax matters, including future tax reform;
- Our ability to
utilize income tax attributes, the benefits of which may or may not
have been recognized under the more-likely-than-not recognition
criteria;
- Environmental
matters (such as those requiring compliance with emission and
discharge standards for existing and new facilities, or new
developments regarding environmental remediation or decommissioning
obligations at sites related to our former operations);
- Government laws
and regulations and possible changes therein (such as changes in
government regulations which might impose various obligations on
former manufacturers of lead pigment and lead-based paint,
including NL, with respect to asserted health concerns associated
with the use of such products) including new environmental health
and safety or other regulations (such as those seeking to limit or
classify TiO2 or its use);
- The ultimate
resolution of pending litigation (such as NL’s lead pigment and
environmental matters);
- Our ability to
comply with covenants contained in our revolving bank credit
facilities;
- Our ability to
complete and comply with the conditions of our licenses and
permits;
- Changes in real
estate values and construction costs in Henderson, Nevada; and
- Possible future
litigation.
Should one or more of these risks materialize (or the
consequences of such development worsen), or should the underlying
assumptions prove incorrect, actual results could differ materially
from those currently forecasted or expected. We disclaim any
intention or obligation to update or revise any forward-looking
statement whether as a result of changes in information, future
events or otherwise.
Valhi, Inc. is engaged in the chemicals
(TiO2), component products (security products and recreational
marine components) and real estate management and development
industries.
*****
Investor Relations Contact
Bryan A. HanleySenior Vice President and TreasurerTel.
972-233-1700
VALHI, INC. AND SUBSIDIARIES
CONDENSED SUMMARY OF
OPERATIONS(In millions, except earnings per
share)
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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2022 |
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2023 |
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2022 |
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2023 |
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(unaudited) |
Net
sales |
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Chemicals |
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$ |
565.3 |
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$ |
443.2 |
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$ |
1,128.2 |
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$ |
869.5 |
Component products |
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41.6 |
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36.6 |
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83.7 |
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77.8 |
Real estate management and development |
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27.7 |
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27.3 |
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51.7 |
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52.5 |
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Total net sales |
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$ |
634.6 |
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$ |
507.1 |
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$ |
1,263.6 |
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$ |
999.8 |
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Operating income (loss) |
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Chemicals |
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$ |
69.2 |
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$ |
(2.6) |
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$ |
155.6 |
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$ |
(17.7) |
Component products |
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7.7 |
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4.4 |
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14.0 |
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11.4 |
Real estate management and development |
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(5.0) |
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10.2 |
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3.0 |
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20.8 |
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Total operating income |
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71.9 |
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12.0 |
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172.6 |
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14.5 |
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General
corporate items: |
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Interest income and other |
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1.4 |
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4.7 |
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2.3 |
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9.6 |
Gain on land sales |
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— |
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1.5 |
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— |
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1.5 |
Other components of net periodic pension and OPEB
expense |
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(3.3) |
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(7.5) |
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(6.6) |
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(8.7) |
Changes in market value of Valhi common stock held
by subsidiaries |
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3.9 |
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(1.1) |
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4.0 |
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(2.2) |
General expenses, net |
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(10.5) |
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(9.5) |
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(18.7) |
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(17.4) |
Interest expense |
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(7.0) |
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(7.2) |
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(13.9) |
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(14.2) |
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Income (loss) before income taxes |
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56.4 |
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(7.1) |
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139.7 |
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(16.9) |
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Income tax
expense (benefit) |
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14.0 |
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(4.9) |
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33.9 |
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(11.0) |
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Net income (loss) |
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42.4 |
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(2.2) |
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105.8 |
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(5.9) |
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Noncontrolling
interest in net income of subsidiaries |
|
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14.4 |
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2.9 |
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32.4 |
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4.1 |
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Net income (loss) attributable to Valhi stockholders |
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$ |
28.0 |
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$ |
(5.1) |
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$ |
73.4 |
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$ |
(10.0) |
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Amounts
attributable to Valhi stockholders: |
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Basic and
diluted net income (loss) per share |
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$ |
.98 |
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$ |
(.18) |
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$ |
2.57 |
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$ |
(.35) |
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Basic and
diluted weighted average shares outstanding |
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28.5 |
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28.5 |
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28.5 |
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28.5 |
VALHI, INC. AND SUBSIDIARIES
IMPACT OF PERCENTAGE CHANGE IN CHEMICAL SEGMENT'S NET
SALES (unaudited)
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Three months ended |
Six months ended |
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June 30, |
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June 30, |
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2023 vs. 2022 |
|
2023 vs. 2022 |
Percentage change in TiO2 net sales: |
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TiO2 sales volumes |
|
(26) |
% |
|
(28) |
% |
TiO2 product pricing |
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(2) |
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1 |
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TiO2 product mix/other |
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6 |
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5 |
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Changes in currency exchange rates |
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— |
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(1) |
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Total |
|
(22) |
% |
|
(23) |
% |
Valhi (NYSE:VHI)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Valhi (NYSE:VHI)
Gráfica de Acción Histórica
De May 2023 a May 2024