UNITED
STATES
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 the earliest event reported)
May
7, 2008
Valhi,
Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-5467
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87-0110150
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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5430
LBJ Freeway, Suite 1700, Dallas, Texas
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75240-2697
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(972)
233-1700
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(Former
name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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Item
7.01
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Regulation
FD Disclosure.
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The
registrant hereby furnishes the information set forth in its press release
issued on May 7, 2008, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The
information, including the exhibit, the registrant furnishes in this report is
not deemed “filed” for purposes of section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that
section. Registration statements or other documents filed with the
U.S. Securities and Exchange Commission shall not incorporate this information
by reference, except as otherwise expressly stated in such filing.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated May 7, 2008 issued by the
registrant.
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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 hereunto
duly authorized.
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Valhi,
Inc.
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(Registrant)
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By: /s/ Gregory M. Swalwell
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Date: May
7, 2008
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Gregory
M. Swalwell, Vice President and
Controller
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INDEX
TO EXHIBITS
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated May 7, 2008 issued by the
registrant.
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VALHI
REPORTS FIRST QUARTER 2008 RESULTS
DALLAS, TEXAS . . May 7,
2008. Valhi, Inc. (NYSE: VHI) reported a net loss of $5.9 million, or
$.05 per diluted share, in the first quarter of 2008 as compared to net income
of $26.1 million, or $.22 per diluted share, in the first quarter of
2007. The Company’s results in 2007 include $.01 per diluted share in
insurance recoveries.
The
Chemicals Segment’s sales increased $18.5 million in the first quarter of 2008
as compared to the first quarter of 2007, as the favorable effect of
fluctuations in currency exchange rates, which increased chemicals sales by
approximately $20 million, and increases in sales volumes were more than offset
by decreased average Ti02 selling
prices. Kronos’ average TiO2 selling
prices in the first quarter of 2008 were 4% lower than the first quarter of
2007. Kronos' TiO2 sales
volumes in the first quarter of 2008 increased 2% as compared to the first
quarter of 2007, with higher volumes in export markets more than offsetting
lower demand in Europe. Kronos’ TiO2 sales
volumes in 2008 were a new first quarter record for Kronos. The table at the end
of this press release shows how each of these items impacted the overall
increase in the Chemicals Segment’s sales.
The
Chemicals Segment’s operating income declined $19.3 million in the first quarter
of 2008, as compared to the same period in 2007 due primarily to lower average
TiO2
selling prices, higher utility costs, lower production volumes and higher raw
material costs, partially offset by the favorable effect of higher TiO2 sales
volumes. Kronos’ TiO2 production
volumes were 1% lower in the first quarter of 2008 as compared to the first
quarter of 2007. Chemicals operating income comparisons were also
impacted by fluctuations in foreign currency exchange rates, which decreased
chemicals operating income by approximately $7 million for the
quarter.
The Component Products Segment’s sales
decreased $3.0 million in the first quarter of 2008 as compared to the same
quarter of 2007, primarily due to lower order rates from many customers due to
unfavorable economic conditions in North America, offset in part by the effect
of sales price increases for certain products to mitigate the effect of higher
raw material costs. The Component Products Segment’s operating income
declined $2.6 million in the quarter due the unfavorable effect of lower sales,
changes in product mix and higher raw material costs. Component
product operating income comparisons were also negatively impacted by relative
changes in foreign currency exchange rates, which decreased operating income by
$.6 million for the quarter.
Waste
management sales decreased, and its operating loss increased, due to lower
utilization of waste management services in 2008, primarily due to the
completion in 2007 of a few projects that have not yet been replaced with new
business. The Company is continuing to seek opportunities to obtain
certain types of new business that, if obtained, would increase our waste
management sales and decrease our waste management operating loss. In
this regard, in October 2007 the Company received notification that the Texas
Commission on Environmental Quality (“TCEQ”) has prepared a draft license and
made a preliminary decision that this license meets all statutory and regulatory
requirements for the disposal of byproduct material at the Company’s site in
Andrews County, Texas. Byproduct material includes uranium or thorium
mill tailings as well as equipment, pipe and other materials used to handle and
process the mill tailings. The byproduct draft license has been
scheduled for a May 21, 2008 TCEQ Commissioners meeting where it will be decided
if any of the parties that have requested a public hearing will be granted their
request. If no parties are granted a hearing, the Commissioners may
determine that the byproduct license is approved as a final license at the May
21st meeting. If the Commissioners grant a hearing, it will be limited by
law to enable a final decision by December 31, 2008. When approved,
this license would allow the Company to safely dispose of approximately 3,800
canisters received from the Fernald, Ohio site remediation and currently in
storage at the Company’s West Texas site, as well as provide a more economical
disposal facility for uranium miners in Texas and New Mexico.
General corporate interest and dividend
income declined in 2008 as compared to the same periods of 2007 due primarily to
lower interest income in 2008 as well as a small loss on securities transactions
in 2008 compared to a small gain in 2007. Insurance recoveries relate
principally to NL’s recovery from certain former insurance carriers in
settlements of claims related to certain environmental, indemnity and past
litigation defense costs. These insurance recoveries (net of tax and
minority interest) aggregated $.01 per diluted share in 2007. General
corporate expenses were lower in the first quarter of 2008 as compared to the
same period in 2007 due to lower litigation and related expenses at
NL. Interest expense increased due to the promissory note CompX
issued in the fourth quarter of 2007 and the unfavorable effects of currency
exchange rates on Kronos’ Euro denominated Senior Notes.
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 the Company believes the expectations reflected
in such forward-looking statements are reasonable, it 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, the Company
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:
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Future
supply and demand for the Company’s
products,
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The
cyclicality of certain of the Company's
businesses,
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·
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Customer
inventory levels,
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Changes
in the Company’s raw material and other operating
costs,
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·
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The
possibility of labor disruptions,
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General
global economic and political
conditions,
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Competitive
products and substitute products,
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Possible
disruption of business or increases in the cost of doing business
resulting from terrorist activities or global
conflicts,
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Customer
and competitor strategies,
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The
impact of pricing and production
decisions,
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Competitive
technology positions,
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The
introduction of trade barriers,
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Restructuring
transactions involving us and our
affiliates,
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Potential
consolidation of our competitors,
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The
extent to which our subsidiaries were to become unable to pay us
dividends,
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Fluctuations
in currency exchange rates,
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Operating
interruptions,
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The
timing and amounts of insurance
recoveries,
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The
ability of the Company to renew or refinance credit
facilities,
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Uncertainties
associated with new product
development,
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The
ultimate outcome of income tax audits, tax settlement initiatives or other
tax matters,
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·
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The
ultimate ability to utilize income tax attributes or changes in income tax
rates related to such attributes, the benefit of which has been recognized
under the more likely than not recognition
criteria,
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Environmental
matters,
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Government
laws and regulations and possible changes
therein,
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The
ultimate resolution of pending litigation,
and
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·
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Possible
future litigation.
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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. The Company disclaims 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 titanium dioxide pigments, component products (security
products, furniture components and performance marine components) and waste
management industries.
* * * *
*
VALHI,
INC. AND SUBSIDIARIES
CONDENSED
SUMMARY OF OPERATIONS
(In
millions, except earnings per share)
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Three
months ended
March 31,
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2007
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2008
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(unaudited)
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Net
sales
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Chemicals
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$ | 314.0 | $ | 332.5 | ||||
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Component
products
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43.5 | 40.5 | ||||||
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Waste
management
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1.5 | .9 | ||||||
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Total net
sales
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$ | 359.0 | $ | 373.9 | ||||
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Operating
income (loss)
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Chemicals
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$ | 30.3 | $ | 11.0 | ||||
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Component
products
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5.6 | 3.0 | ||||||
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Waste
management
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(3.0 | ) | (4.4 | ) | ||||
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Total operating
income
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32.9 | 9.6 | ||||||
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Equity
in earnings of:
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TIMET
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26.9 | - | ||||||
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Other
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(.5 | ) | (.4 | ) | ||||
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General
corporate items, net:
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Securities
earnings
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8.2 | 6.6 | ||||||
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Insurance
recoveries
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2.5 | .1 | ||||||
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General
expenses, net
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(6.0 | ) | (5.6 | ) | ||||
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Interest
expense
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(15.6 | ) | (17.4 | ) | ||||
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Income (loss) before income
taxes
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48.4 | (7.1 | ) | |||||
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Provision
for income taxes (benefit)
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19.8 | (1.3 | ) | |||||
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Minority
interest in after-tax earnings
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2.5 | .1 | ||||||
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Net income
(loss)
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$ | 26.1 | $ | (5.9 | ) | |||
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Net
income (loss) per share
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Basic
earnings
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$ | .23 | $ | (.05 | ) | |||
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Diluted
earnings
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$ | .22 | $ | (.05 | ) | |||
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Shares
used in calculation of per share amounts
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Basic
earnings
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114.9 | 114.4 | ||||||
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Diluted
earnings
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115.2 | 114.4 | ||||||
VALHI,
INC. AND SUBSIDIARIES
IMPACT
OF PERCENTAGE CHANGE IN CHEMICALS SALES
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Three
months ended
March
31,
2007 vs. 2006
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(unaudited)
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Percent
change in sales:
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TiO2 product pricing
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(4 | )% | ||
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TiO2 sales volumes
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2 | |||
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TiO2 product mix
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1 | |||
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Changes in foreign currency exchange rates
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7 | |||
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Total
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6 | % | ||