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CI

COMPX INTERNATIONAL INC (CIX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered revenue of $40.3M and EPS of $0.42, up versus Q1 2024 ($38.0M, $0.31) as Marine Components strength (towboat and government) and improved gross margin lifted operating income to $5.9M from $3.7M .
  • Gross margin expanded to 30.2% (from 25.5%) and segment operating mix improved, with Marine Components operating margin rising to 22.3% from 0.4% on higher volumes and lower-cost inventory sold in Q1; Security Products grew modestly on government security demand .
  • Management highlighted continued raw material cost inflation and emerging tariff-related surcharges; Security Products pricing actions and better mix are expected to lift full-year gross margin/operating margin modestly over 2024, while Marine Components should post higher net sales and margins YoY (towboat demand normalizes after a one-time stocking event) .
  • The Board declared a regular quarterly dividend of $0.30 per share payable June 17, 2025; no quantitative revenue/EPS guidance was issued; Q1 cash from operations was modestly negative on working capital seasonality .
  • No earnings call transcript was available for Q1 2025; results comparison vs Street is limited as S&P Global consensus EPS/revenue was unavailable; therefore no beat/miss determination can be made . Values retrieved from S&P Global.*

What Went Well and What Went Wrong

  • What Went Well

    • Marine Components net sales +24% YoY and operating margin 22.3% (vs 0.4%), driven by towboat and government markets and lower-cost Q4 inventory sold in Q1; segment operating income rose to $2.241M .
    • Security Products net sales +1% YoY on $1.6M higher sales to government security and $0.3M to healthcare; margins held steady (gross margin 29.8%, operating margin 18.3%) .
    • Consolidated gross margin expanded 470 bps YoY to 30.2%, lifting operating income to $5.869M (+$2.154M YoY) and net income to $5.131M (+$1.377M YoY) .

  • What Went Wrong

    • Management is seeing raw material price increases that began in Q3 2024 continue, and is “starting to see some surcharges related to tariffs on certain commodity raw materials” .
    • Security Products softness persists across several OEM markets (transportation, tool storage, bank equipment, vending/gaming) largely offsetting strength in government security .
    • Working capital headwinds: DSO increased to 41 days consolidated (Security Products 43, Marine 34) and Q1 cash from operations was -$0.137M, reflecting seasonal patterns and receivables/inventory build .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$37.971 $38.4 $40.272
Gross Margin ($USD Millions)$9.667 $11.0 $12.163
Gross Margin %25.5% —30.2%
Operating Income ($USD Millions)$3.715 $4.9 $5.869
Operating Margin %9.8% —14.6%
Interest Income ($USD Millions)$1.224 $0.9 $0.873
Net Income ($USD Millions)$3.754 $4.5 $5.131
Diluted EPS ($USD)$0.31 $0.37 $0.42

Segment breakdown

Segment MetricQ1 2024Q1 2025
Security Products Net Sales ($USD Thousands)$29,887 $30,230
Security Products Gross Margin ($USD Thousands)$8,772 $8,998
Security Products Gross Margin %29.4% 29.8%
Security Products Operating Income ($USD Thousands)$5,450 $5,521
Security Products Operating Margin %18.2% 18.3%
Marine Components Net Sales ($USD Thousands)$8,084 $10,042
Marine Components Gross Margin ($USD Thousands)$895 $3,165
Marine Components Gross Margin %11.1% 31.5%
Marine Components Operating Income ($USD Thousands)$34 $2,241
Marine Components Operating Margin %0.4% 22.3%

Key KPIs

KPIQ1 2024Q4 2024Q1 2025
Days Sales Outstanding (Consolidated)42 days 33 days 41 days
DSO – Security Products43 days 36 days 43 days
DSO – Marine Components35 days 23 days 34 days
Days in Inventory (Consolidated)89 days 94 days 94 days
Cash & Cash Equivalents (End of Period, $USD Thousands)$51,866 $60,782 $56,128
Cash from Operations ($USD Thousands)$1,672 —$(137)
Dividend Declared ($/share)$0.30 $0.30 $0.30 (payable 6/17/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Security Products net salesFY 2025None providedExpect modest improvement vs 2024; price increases implemented; margins slightly above 2024 New qualitative outlook
Security Products marginsFY 2025None providedGross margin and operating income % slightly above 2024 on pricing/mix New qualitative outlook
Marine Components net salesFY 2025None providedIncrease YoY, led by government/industrial; towboat demand to be consistent with 2024 after Q1 one-time stocking event New qualitative outlook
Marine Components marginsFY 2025None providedImproved gross margin and operating income % vs 2024 on higher volumes New qualitative outlook
Tariffs/raw material costsFY 2025Continued inflation noted in late 2024 Starting to see tariff-related surcharges; plan price increases to recoup costs Worsened cost environment
Capital ExpendituresFY 2025None provided~$3.4M expected in 2025 New quantitative outlook
DividendQ2 2025Regular $0.30/share in Q4/Q1 $0.30/share payable June 17, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024; Q-1: Q4 2024)Current Period (Q1 2025)Trend
Government security customer impact2023 pilot sales did not continue in 2024; weighed on Security Products sales/margins Government security demand supported modest Security Products growth Improving mix
Towboat marketLower sales in 2024; demand softness noted Q1 benefited from a one-time towboat OEM stocking; rest of 2025 expected consistent with 2024 Near-term boost, normalizing
Raw material/tariff pressuresRising raw material costs from Q3 2024; tariff risk flagged Cost increases persist; surcharges beginning; proactive price actions planned Cost pressures intensifying
Supply chain/logisticsChallenges noted historically; stable more recently Supply chains currently stable; monitoring tariffs and demand alignment Stable but monitored
Segment margin trajectoryBoth segments faced margin pressure in 2024 Marine margin step-up on volume and lower-cost inventory; Security margin slightly higher Positive inflection

Management Commentary

  • “Operating income increased in the first quarter of 2025 compared to 2024 primarily due to higher Marine Components sales and gross margin” .
  • “We expect Security Products net sales in 2025 to improve modestly over 2024, and we expect gross margin and operating income percentages in 2025 to be slightly above 2024 due to price increases implemented in the first quarter and an improved Security Products product mix” .
  • “In the first quarter Marine Components benefited from an increase in sales related to a one-time stocking event at a towboat OEM customer… Overall, we expect Marine Components to have improved gross margins and operating income percentages in 2025 compared to 2024 due to increased coverage of fixed costs on higher expected sales volumes” .
  • “The raw material price increases we began experiencing in the third quarter of 2024 have continued through the first quarter of 2025 and we are starting to see some surcharges related to tariffs on certain commodity raw materials” .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available in the document set; therefore Q&A themes and guidance clarifications cannot be assessed [ListDocuments earnings-call-transcript=0].

Estimates Context

  • S&P Global consensus for Q1 2025 EPS and revenue was unavailable; only actual revenue was populated (reflecting reported net sales). As a result, we cannot determine a beat/miss versus Street for EPS or revenue. Values retrieved from S&P Global.* [GetEstimates]
MetricQ1 2025 ActualQ1 2025 S&P Global Consensus
Revenue ($USD)$40,272,000 —*
Primary EPS ($USD)$0.42 —*

Key Takeaways for Investors

  • Marine Components is the swing factor: volume recovery and lower-cost inventory drove a margin step-change; watch sustainability as towboat demand normalizes post Q1 stocking event .
  • Security Products mix is improving via government security; pricing actions are in place to offset cost inflation, but softness across several OEM categories caps upside near term .
  • Cost inflation and tariff surcharges are tangible; management intends to pass through costs, but recovery depends on tariff duration and customer substitution ability—monitor gross margin trajectory across 2025 .
  • Working capital dynamics matter for cash flow: DSO elevated and Q1 CFO negative on seasonal effects; expect improvement as receivables convert and inventories normalize .
  • Capital allocation remains shareholder-friendly: regular $0.30 dividend maintained; ~$3.4M capex plan indicates investment in capacity/maintenance with ample liquidity ($56.1M cash) .
  • Absence of a call transcript and unavailable Street consensus reduce near-term “beat/miss” catalysts; focus on segment margin progression and tariff developments as narrative drivers [GetEstimates] .
  • For medium-term thesis, consolidation of improved Marine profitability and modest Security Products uplift supports margin expansion and earnings resilience, contingent on managing input costs and executing price/mix .