Executive Summary

Q2 2025 was mixed: CompX net sales rose 12.3% year over year to $40.3M, but NL’s EPS fell to $0.01 on equity-in-losses from Kronos and lower marketable securities gains .
Kronos’ weak quarter (income from operations $7.4M vs $35.9M in Q2 2024) reflected unabsorbed fixed costs (~$20M), lower average TiO2 prices (-1% YoY), and reduced operating rates (81%) .
NL declared a special dividend of $0.21/share and a Q3 2025 quarterly dividend of $0.09/share, funded from excess cash flows; potential near-term stock catalyst for dividend-oriented investors .
No formal financial guidance was provided; management commentary emphasized demand strength in government security and marine markets at CompX, offset by TiO2 macro headwinds at Kronos .

What Went Well and What Went Wrong

CompX topline and profitability improved: net sales up to $40.3M (from $35.9M) and segment profit to $6.3M (from $5.1M) on strength in Security Products (government security) and Marine Components (government and towboat) .
CompX margin execution: higher gross margins in both Security Products and Marine Components drove the segment profit increase .
Capital returns: special dividend ($0.21) plus quarterly dividend ($0.09) signal balance sheet capacity and excess cash generation .

Kronos drag: NL recorded equity in losses of Kronos of $2.8M vs equity in earnings of $6.0M in Q2 2024, as Kronos’ income from operations fell to $7.4M on weaker pricing/mix and lower export volumes .
Unabsorbed fixed costs: Kronos recognized ~$20M of unabsorbed fixed production costs due to operating at reduced rates (81% in Q2), pressuring profitability .
Marketable securities: negligible unrealized loss of $0.1M in Q2 versus a $0.8M gain in Q2 2024, contributing to lower EPS .

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue (Net Sales, $USD Millions)	$38.4	$40.3	$40.3
Gross Profit ($USD Millions)	$11.0	$12.2	$12.9
Gross Margin %	28.6% (11.0/38.4)	30.3% (12.2/40.3)	32.1% (12.9/40.3)
Income from Operations ($USD Millions)	$33.7	$3.2	$2.8
EBIT Margin %	87.8% (33.7/38.4; includes Q4 settlement-related corporate income)	7.9% (3.2/40.3)	6.9% (2.8/40.3)
Net Income Attributable to NL ($USD Millions)	$16.5	$0.7	$0.3
Diluted EPS ($USD)	$0.34	$0.01	$0.01

Segment and drivers

Metric	Q4 2024	Q1 2025	Q2 2025
CompX Net Sales ($USD Millions)	$38.4	$40.3	$40.3
CompX Segment Profit ($USD Millions)	$4.9	$5.9	$6.3
Kronos Equity in Earnings (Losses), NL’s share ($USD Millions)	($4.0)	$5.5	($2.8)
Corporate Expense/Income ($USD Millions)	$28.7 income (environmental settlement)	($2.7) expense	($3.5) expense
Interest & Dividend Income ($USD Millions)	$3.1	$2.0	$1.5
Marketable Equity Securities (Unrealized Gain/Loss, $USD Millions)	($12.0)	($8.5)	($0.1)

KPI context (Kronos Worldwide)

KPI	Q2 2024	Q1 2025	Q2 2025
Net Sales ($USD Millions)	$500.5 (calculated as $494.4 + $6.1 delta)	$489.8	$494.4
Income from Operations ($USD Millions)	$35.9	$38.4	$7.4
Avg Operating Rate (% of practical capacity)	99%	93%	81%
Unabsorbed Fixed Production Costs ($USD Millions)	—	—	~$20
Avg TiO2 Price YoY Change	—	+2% vs Q1 2024	-1% vs Q2 2024
FX impact on Net Sales ($USD Millions)	—	-$11	+$8

Metric	Period	Previous Guidance	Current Guidance	Change
Special Dividend per Share	Q3 2025 payment (Aug 28)	N/A	$0.21	Announced
Quarterly Dividend per Share	Q3 2025	N/A	$0.09	Announced

No financial guidance ranges (revenue, margins, OpEx, OI&E, tax rate) were provided in Q2 2025 materials .

Note: No Q2 2025 earnings call transcript was available in our document set.

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
TiO2 pricing and demand	Q4 2024: higher volumes and prices YoY; 2024 prices -5% YoY; demand improved; operating rates ~97% in Q4	Q2 2025: avg prices -1% YoY; weaker export volumes; mix headwinds	Softening vs late-2024
Operating rates / fixed cost absorption	Q4 2024: 2024 operating rates 96%; unabsorbed fixed costs only $12M (Q1)	Q2 2025: operating at 81%; ~$20M unabsorbed fixed costs in Q2	Deteriorating utilization
FX impacts	Q1 2025: FX -$11M net sales; -$5M to operating income	Q2 2025: FX +$8M net sales; +$14M to operating income	FX tailwind in Q2
CompX end-markets	Q1 2025: strength in Marine (towboat/government) and Security Products (government security)	Q2 2025: continued strength in those end-markets drives sales/margins	Sustained demand
Environmental/legal	Q4 2024: environmental remediation settlement boosted corporate income; EPS impact noted	Q2 2025: lower litigation and remediation costs reduced corporate expense YoY	Normalizing after settlement

“CompX’s segment profit increased in the second quarter… due to higher sales and gross margin at each of the Security Products and Marine Components segments.”
“Kronos’ net sales decreased… primarily due to… lower average TiO2 selling prices, changes in product mix and lower sales volumes in its export markets…”
“Kronos’ unabsorbed fixed production costs related to decreased production volumes in the second quarter of 2025 were approximately $20 million.”

A Q2 2025 earnings call transcript was not available; no Q&A content to report this quarter.

Metric	Q4 2024 Estimate	Q4 2024 Actual	Surprise	Q1 2025 Estimate	Q1 2025 Actual	Surprise	Q2 2025 Estimate	Q2 2025 Actual
EPS ($)	0.212*	0.34	+0.128 (beat)	0.205*	0.01	-0.195 (miss)	N/A*	0.01
Revenue ($USD Millions)	N/A*	38.4	—	N/A*	40.3	—	N/A*	40.3

Values retrieved from S&P Global.*

Implications:

Given the Q2 EPS at $0.01 and continued Kronos weakness, forward EPS estimates may need to drift lower until TiO2 pricing/volumes normalize and operating rates improve .
CompX demand resilience is a partial offset; consensus likely to reflect a wider dispersion if Kronos volatility persists .

CompX is executing well: sustained demand in government security and marine end-markets is expanding sales and segment profit; watch for continued mix and pricing support .
Kronos is the swing factor: reduced operating rates and ~$20M unabsorbed fixed costs drove a sharp drop in operating income; recovery hinges on pricing, volume normalization, and utilization improvement .
EPS compression reflects external TiO2 headwinds and smaller marketable securities gains; near-term earnings leverage is limited without Kronos stabilization .
Capital returns are active: special $0.21 and quarterly $0.09 dividends are tangible catalysts for income investors and signal balance sheet capacity .
Compare to prior quarters: Q1 2025 showed stronger Kronos profitability and high operating rates; Q2 deterioration underscores volatility in TiO2 end-markets and export demand .
Watch FX and regional mix: Q2 FX tailwinds (+$8M net sales, +$14M operating income) partially offset unit economics pressure; sustained FX support could mitigate volatility .
Near-term trading setup: dividend support vs earnings headwinds—stock likely sensitive to any signs of Kronos pricing/volume firming or utilization uptick; monitor industry datapoints and Kronos disclosures .