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CompX (CIX) Earnings Increase Y/Y in Q2, Revenues Decline
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CompX International Inc. (CIX - Free Report) has reported its financial results for the second quarter of 2024, showcasing an impressive year-over-year increase in earnings per share and significant strategic financial moves. The company's performance was bolstered by strong growth in its Security Products segment, partially offset by challenges in the Marine Components segment.
Additionally, CompX announced a substantial increase in its regular quarterly dividend and a special dividend, reflecting its robust cash flow and commitment to returning value to shareholders.
CompX International Inc. Price, Consensus and EPS Surprise
Let us delve into the key financial metrics, segment performance, profitability and management's forward-looking guidance, providing a comprehensive overview of CompX's second-quarter performance.
Q2 Results
CompX reported second-quarter 2024 earnings per share of 39 cents, increasing 18.2% from 33 cents in the year-ago quarter.
Total quarterly revenues of $35.9 million declined 1.9% from $36.6 million in the year-ago quarter.
The strong quarterly earnings were driven by increased sales in the Security Products segment, primarily to the government security market. The positives were partially offset by lower sales in the Marine Components segment, particularly in the towboat market.
Dividend Hike
In February 2024, the board of directors increased the regular quarterly dividend from 25 cents to 30 cents per share. Furthermore, a special dividend of $2 per share was declared in August 2024, payable Aug 28, 2024, to shareholders of record at the close of business on Aug 19, 2024.
Segment Performance
CompX’s financial performance in the second quarter was marked by a divergence between its two main segments.
Security Products: This segment saw a 10% increase in net sales to $28.2 million from $25.7 million in the second quarter of 2023. The rise was largely caused by higher sales to the government security market. The gross margin in Security Products improved due to increased sales and better coverage of fixed costs despite a less favorable customer and product mix.
Marine Components: Net sales dropped sharply to $7.7 million from $10.9 million in the second quarter of 2023. The decline was driven by lower demand in the market, which also led to a reduction in the gross margin for this segment.
Profitability
The gross margin improved in the second quarter of 2024 to $11.2 million from $10.3 million in the second quarter of 2023, reflecting higher margins in the Security Products segment despite lower sales and margins in Marine Components.
The company saw an increase in operating income to $5.1 million in the second quarter from $4.4 million in the prior-year quarter. Net income rose to $4.9 million from $4 million in the second quarter of 2023.
Expenses
Selling, general and administrative expenses increased to $6.1 million in the second quarter of 2024 from $5.9 million in the second quarter of 2023. The rise was primarily caused by higher employee salaries and benefits, particularly in the Security Products segment. Despite the increase in expenses, the overall operating income improved due to the strong performance in the Security Products segment.
Cash & Debt
As of Jun 30, 2024, CompX held cash and cash equivalents totaling $70.2 million, a significant increase from $41.4 million at the end of 2023. This rise in cash was driven by higher operating cash flow and proceeds from marketable securities. The company's debt levels remain low, with no significant long-term debt recorded, underscoring a strong liquidity position and financial stability.
Management Guidance
The company expects capital expenditure of $2.2 million for 2024 primarily to meet existing customer demand, and maintain facilities and technology infrastructure. As of Jun 30, 2024, CompX held $82.1 million in cash, cash equivalents and marketable securities, all in the United States. The company believes that its liquidity, together with cash generated from operations and external financing, will be sufficient to meet its needs for the next 12 months and the next five years.
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CompX (CIX) Earnings Increase Y/Y in Q2, Revenues Decline
CompX International Inc. (CIX - Free Report) has reported its financial results for the second quarter of 2024, showcasing an impressive year-over-year increase in earnings per share and significant strategic financial moves. The company's performance was bolstered by strong growth in its Security Products segment, partially offset by challenges in the Marine Components segment.
Additionally, CompX announced a substantial increase in its regular quarterly dividend and a special dividend, reflecting its robust cash flow and commitment to returning value to shareholders.
CompX International Inc. Price, Consensus and EPS Surprise
CompX International Inc. price-consensus-eps-surprise-chart | CompX International Inc. Quote
Let us delve into the key financial metrics, segment performance, profitability and management's forward-looking guidance, providing a comprehensive overview of CompX's second-quarter performance.
Q2 Results
CompX reported second-quarter 2024 earnings per share of 39 cents, increasing 18.2% from 33 cents in the year-ago quarter.
Total quarterly revenues of $35.9 million declined 1.9% from $36.6 million in the year-ago quarter.
The strong quarterly earnings were driven by increased sales in the Security Products segment, primarily to the government security market. The positives were partially offset by lower sales in the Marine Components segment, particularly in the towboat market.
Dividend Hike
In February 2024, the board of directors increased the regular quarterly dividend from 25 cents to 30 cents per share. Furthermore, a special dividend of $2 per share was declared in August 2024, payable Aug 28, 2024, to shareholders of record at the close of business on Aug 19, 2024.
Segment Performance
CompX’s financial performance in the second quarter was marked by a divergence between its two main segments.
Security Products: This segment saw a 10% increase in net sales to $28.2 million from $25.7 million in the second quarter of 2023. The rise was largely caused by higher sales to the government security market. The gross margin in Security Products improved due to increased sales and better coverage of fixed costs despite a less favorable customer and product mix.
Marine Components: Net sales dropped sharply to $7.7 million from $10.9 million in the second quarter of 2023. The decline was driven by lower demand in the market, which also led to a reduction in the gross margin for this segment.
Profitability
The gross margin improved in the second quarter of 2024 to $11.2 million from $10.3 million in the second quarter of 2023, reflecting higher margins in the Security Products segment despite lower sales and margins in Marine Components.
The company saw an increase in operating income to $5.1 million in the second quarter from $4.4 million in the prior-year quarter. Net income rose to $4.9 million from $4 million in the second quarter of 2023.
Expenses
Selling, general and administrative expenses increased to $6.1 million in the second quarter of 2024 from $5.9 million in the second quarter of 2023. The rise was primarily caused by higher employee salaries and benefits, particularly in the Security Products segment. Despite the increase in expenses, the overall operating income improved due to the strong performance in the Security Products segment.
Cash & Debt
As of Jun 30, 2024, CompX held cash and cash equivalents totaling $70.2 million, a significant increase from $41.4 million at the end of 2023. This rise in cash was driven by higher operating cash flow and proceeds from marketable securities. The company's debt levels remain low, with no significant long-term debt recorded, underscoring a strong liquidity position and financial stability.
Management Guidance
The company expects capital expenditure of $2.2 million for 2024 primarily to meet existing customer demand, and maintain facilities and technology infrastructure. As of Jun 30, 2024, CompX held $82.1 million in cash, cash equivalents and marketable securities, all in the United States. The company believes that its liquidity, together with cash generated from operations and external financing, will be sufficient to meet its needs for the next 12 months and the next five years.