CompX Reports Third Quarter 2009 Results

DALLAS, Oct. 29 /PRNewswire-FirstCall/ -- CompX International Inc. (NYSE: CIX)
announced today sales of $29.4 million for the third quarter of 2009 compared
to $43.9 million in the same period of 2008. For the nine months ended
September 30, 2009, sales were $87.1 million compared to $128.1 million in the
previous year. CompX reported an operating loss of $200,000 in the third
quarter of 2009 compared to an operating loss of $4.9 million in the same
period in 2008, and reported an operating loss of $2.0 million for the nine
months ended September 30, 2009 compared to income of $3.1 million for 2008.
The 2008 operating results include a non-cash goodwill impairment charge of
$9.9 million in the third quarter, as discussed below. The 2009 operating
results for the third quarter include charges relating to litigation expenses
of $1.5 million. The 2009 operating loss for the nine month period includes
aggregate charges relating to litigation expenses and a valuation adjustment
for assets held for sale of $3.2 million.

Net income for the third quarter of 2009 was $500,000, or $0.04 per share,
compared to a net loss of $7.5 million, or $0.61 per share, for the same
period of 2008. Net loss for the nine months ended September 30, 2009 was
$1.7 million, or $0.13 per diluted share, compared to a net loss of $3.8
million, or $0.31 per diluted share, in 2008. The third quarter and nine
month periods ended September 30, 2008 include the non-cash goodwill
impairment charge of $9.9 million, or $0.80 per share, relating to the Marine
Components segment. Excluding the goodwill impairment charge, 2008 operating
income would have been $4.9 million for the quarter and $12.9 million for the
nine month period.

Net sales decreased principally due to lower order rates from our customers
across all business segments as a result of general unfavorable economic
conditions in North America. Excluding the impact of the 2008 goodwill
impairment charge, the decreases in operating income are primarily due to the
negative effects of the lower order rates, reduced coverage of overhead and
fixed manufacturing costs from the resulting under-utilization of production
capacity, higher legal expense associated with certain patent related
litigation and the assets held for sale charge in the second quarter of 2009,
partially offset by the positive effects of cost reductions implemented in
response to the lower order rates and the favorable impact of relative changes
in foreign currency exchange rates.

"Although our third quarter 2009 sales were below 2008 levels, they were
consistent with the first two quarters of 2009, indicating that demand may
have stabilized," commented David A. Bowers, President & CEO. "We continue to
manage our businesses as efficiently as possible at the lower sales levels by
strengthening our relationships with current and prospective customers through
the development and introduction of new products, continuously evaluating the
cost structure for additional efficiency opportunities and aggressively
managing working capital as evidenced by generating year-to-date cash flow
from operations at a similar level as 2008 despite the lower sales."

CompX is a leading manufacturer of security products, furniture components and
performance marine components. It operates from six locations in the U.S.,
Canada and Taiwan and employs approximately 1,000 people.

Forward-Looking Statements
Statements in this release relating to matters that are not historical facts
are forward-looking statements based upon management's belief and assumptions
using currently available information. Although CompX believes the
expectations reflected in such forward-looking statements are reasonable, it
cannot give any assurances that these expectations will prove to 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 described in such forward-looking
statements. While it is not possible to identify all factors, CompX continues
to face many risks and uncertainties. Among the factors that could cause
actual future results to differ materially include, but are not limited to,
general economic and political conditions, changes in raw material and other
operating costs, demand for office furniture, service industry employment
levels, competitive products and prices, fluctuations in currency exchange
rates, the introduction of trade barriers, potential difficulties in
integrating completed acquisitions, the ability to sustain or increase
operating income improvement resulting from cost control initiatives,
uncertainties associated with the development of new product features and
other risks and uncertainties detailed in CompX's Securities and Exchange
Commission filings. Should one or more of these risks materialize or if the
consequences worsen, or if the underlying assumptions prove incorrect, actual
results could differ materially from those currently forecasted or expected.
CompX disclaims any intention or obligation to publicly update or revise such
statements whether as a result of new information, future events or otherwise.

Explanation of CompX's Use of Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this news release
includes non-GAAP financial measures relating to excluding the 2008 goodwill
impairment charge from GAAP operating income. CompX believes this non-GAAP
financial measure provides information useful to investors in understanding
the underlying operational performance of the company, its business and
performance trends. Specifically, the Company believes the exclusion of
goodwill impairment permits evaluation and a comparison of results for
on-going business operations, and it is on this basis that CompX's management
internally assesses the company's performance. The goodwill impairment is
excluded from CompX's segment measures used internally to evaluate segment
performance in accordance with GAAP because management does not consider the
impairment particularly relevant or useful in evaluating the operating
performance of our business segments. Although CompX believes the above
non-GAAP financial measure enhances investors' understanding of its business
and performance, this non-GAAP financial measure should not be considered an
alternative to GAAP basis financial measures.

Reconciliation of GAAP to non-GAAP financial measures:

Operating income (loss)
-------------------------------------------
Including the Excluding the
effect of the effect of the
goodwill goodwill
impairment Goodwill impairment
charge impairment charge
(GAAP) charge (Non-GAAP)
-------------------------------------------
(Dollars in thousands)
Three months ended
September 30, 2008:
Operating income (loss) $(4,941) $9,881 $4,940

Nine months ended
September 30, 2008:
Operating income $3,055 $9,881 $12,936

COMPX INTERNATIONAL INC.
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)

Three months ended Nine months ended
September 30, September 30,
2008 2009 2008 2009
---- ---- ---- ----

Net sales $43.9 $29.4 $128.1 $87.1
Cost of goods sold 32.7 22.4 96.0 69.1
---- ---- ---- ----
Gross margin 11.2 7.0 32.1 18.0
Selling, general and administrative
expense 6.3 6.9 19.2 19.0
Goodwill impairment 9.9 - 9.9 -
Assets held for sale write-down - - - 0.7
Other operating income (expense), net 0.1 (0.3) 0.1 (0.3)
--- ---- --- ----
Operating income (loss) (4.9) (0.2) 3.1 (2.0)
Interest expense (0.5) (0.2) (1.8) (0.9)
Other non-operating income, net - - 0.2 -
--- --- --- ---
Income (loss) before income taxes (5.4) (0.4) 1.5 (2.9)
Provision (benefit) for income taxes 2.1 (0.9) 5.3 (1.2)
--- ---- --- -----
Net income (loss) $(7.5) $0.5 $(3.8) $(1.7)
===== ==== ===== =====

Net income (loss) per diluted
common share $(0.61) $0.04 $(0.31) $(0.13)
====== ===== ====== ======

Weighted average diluted common
shares outstanding 12.4 12.4 12.4 12.4
==== ==== ==== ====

COMPX INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)

December 31, September 30,
2008 2009
---- ----
Assets (Unaudited)

Current assets:
Cash and equivalents $14.4 $18.2
Accounts receivable, net 16.8 14.0
Inventories, net 22.7 17.3
Deferred income taxes and other 4.7 5.2
Note receivable 0.9 -
--- ---
Total current assets 59.5 54.7

Intangibles 32.9 32.5
Net property and equipment 67.4 64.8
Assets held for sale 3.5 2.8
Other assets 0.1 0.9
--- ---

Total assets $163.4 $155.7
====== ======

Liabilities and Stockholders' Equity

Current liabilities:
Current maturities of note payable to affiliate $1.0 $-
Accounts payable and accrued liabilities 14.3 13.4
Interest payable to affiliate 0.5 0.2
Income taxes 1.2 0.2
--- ---
Total current liabilities 17.0 13.8

Note payable to affiliate 42.0 42.2
Deferred income taxes and other 13.1 13.1
Stockholders' equity 91.3 86.6
---- ----

Total liabilities and stockholders' equity $163.4 $155.7
====== ======

SOURCE CompX International Inc.

David A. Bowers, President & CEO of CompX International Inc., +1-864-286-1122