COMPX INTERNATIONAL INC
For the period ended Mar 31, 2026. Filed May 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
CIX$38.70+5.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001104659-25-107005
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001104659-26-055645
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 49 previous paragraphs and 47 current paragraphs.
22 unchanged; 18 reworded; 6 added; 8 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 29 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
See segment discussion below.
Current report
Security Products. Security Products net sales decreased 1% in the first quarter of 2026 compared to the same period last year primarily due to lower sales across a variety of markets. The decrease was driven by $.3 million lower sales to the healthcare market and $.2 million lower sales to each of the general cabinetry, electric control panel, and gas station security markets. These decreases were partially offset by $.3 million higher sales to the tool storage market and $.2 million higher sales to the institutional furniture market. Gross margin as a percentage of net sales increased in the first quarter primarily due to a more favorable customer and product mix. Operating income margin also increased, primarily due to the improvement in gross margin discussed above.
Current report
Outlook. Net sales for the first quarter of 2026 exceeded the prior year period, primarily driven by improved demand in the industrial market at Marine Components. Security Products sales reflected mixed performance across the original equipment manufacturer (“OEM”) markets, driven by differences in customer demand cycles and project timing, resulting in slightly lower net sales compared to the prior year period. Operating income increased compared to the prior year primarily due to a more favorable customer and product mix at Security Products and, to a lesser extent, the impact of higher sales at Marine Components.
Current report
For the full year 2026, we expect modest net sales growth* *as we continue to align pricing, product features, and service levels with market conditions and customer requirements. Net sales growth at Marine Components is expected to be driven primarily by the industrial market. Recreational marine sales have largely stabilized and sales to the towboat market in 2026 are expected to be generally comparable to 2025 (excluding the impact of the one-time stocking event noted above). At Security Products, we expect net sales to be consistent with the prior year, reflecting anticipated continued variability across multiple OEM markets.
Current report
We expect gross margin and operating income margins across both segments in 2026 to remain generally comparable to 2025. Operating income margin at Security Products benefited from favorable mix in the first quarter of 2026; however, margins are expected to moderate over the remainder of the year. We increased inventory levels across both segments during 2025 to support customer demand. These actions included an insourcing initiative at Security Products and a shift in customer mix at Marine Components. Inventory levels at the end of the first quarter of 2026 were comparable to those at December 31, 2025 and are expected to remain at these levels, consistent with near-term operating requirements.
Current report
We generally report a net use of cash from operating activities in the first three months of each year due to seasonal changes in the level of our working capital. Our net cash used by operating activities for the first three months of 2026 increased by $1.0 million as compared to the first three months of 2025. The increase in net cash used is primarily due to the net effects of a $1.9 million increase in the amount of net cash used by relative changes in our inventories, receivables, prepaids, payables and non-tax related accruals in 2026 and a $1.2 million increase in operating income in 2026.
Removed paragraphs (8)
Previous report
Security Products. Security Products net sales increased 14% and 8% in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. Relative to prior year, the increase in third quarter sales was primarily due to $4.0 million higher sales to the government security market and $.3 million higher sales to the gas station security market, partially offset by $.7 million lower sales to the healthcare market and $.3 million lower sales to the tool storage market. Relative to prior year, the increase in sales for the first nine months was primarily due to $8.9 million higher sales to the government security market and $.5 million higher sales to the gas station security market, partially offset by lower sales to a variety of other markets including $1.3 million lower sales to the transportation market, $.9 million lower sales to the tool storage market and $.4 million lower contract plating sales.
Previous report
Marine Components. Marine Components net sales increased 36% in the third quarter of 2025 compared to the same period in 2024. Relative to prior year, the increase in third quarter sales was primarily due to $1.2 million higher sales to the industrial market, $.9 million higher sales to the towboat market and $.5 million higher sales to the government market. Marine Components net sales increased 29% in the first nine months of 2025 compared to the same period in 2024. Relative to prior year, the increase in sales for the first nine months was primarily due to $3.2 million higher sales to the towboat market, $3.1 million higher sales to the government market and $1.0 million higher sales to the industrial market, partially offset by $.9 million lower sales to the center console market.
Previous report
Gross margin as a percentage of net sales increased in the third quarter and for the first nine months of 2025
Previous report
compared to the same periods last year primarily due to increased coverage of fixed costs as a result of higher sales and to a lesser extent a more favorable customer and product mix. Operating income margin increased primarily due to the increases in gross margin discussed above and increased coverage of operating costs and expenses on higher sales.
Previous report
Outlook. Sales for the first nine months of 2025 reflect sustained demand across both of our segments, with year-to-date results exceeding those for the same period in 2024. Marine Components sales and operating income for the first nine months of 2025 exceeded prior year levels, driven by improved demand in the government and industrial markets as well as increased sales to the towboat market primarily in the first quarter of 2025 related to a one-time stocking event for a towboat OEM customer. Security Products sales improved from prior year primarily due to increased sales to the government security market. Raw material price increases that began in the third quarter of 2024 have persisted through the first nine months of 2025. Additionally, we began incurring tariff-related surcharges on certain components, primarily electronic components from Asia, beginning late in the second quarter of 2025. We expect these cost pressures to continue through the remainder of the year.
Previous report
We expect Security Products net sales in 2025 to improve over 2024 primarily due to continued higher sales to the government security market. However, we expect softness in various other markets to partially offset these gains, primarily the transportation and tool storage markets. Security Products gross margin and operating income percentages are expected to be slightly below prior year levels due to the impact of higher-cost inventory and tariff-related surcharges. We expect Marine Components net sales to increase in 2025 predominantly due to higher expected sales to the government and industrial markets as well as the one-time stocking event for a towboat OEM customer in the first quarter 2025. Overall, we expect Marine Components to have improved gross margin and operating income percentages in 2025 compared to 2024 due to increased coverage of fixed costs on higher expected sales volumes.
Previous report
Our net cash provided by operating activities for the first nine months of 2025 decreased by $4.8 million as compared to the first nine months of 2024. The decrease in net cash provided is primarily due to the net effects of:
Previous report
During the first nine months of 2024, we received gross proceeds totaling $36.0 million related to U.S. treasury bill maturities.
Reworded paragraphs (18)
Previous wording
We are a leading manufacturer of engineered components utilized in a variety of applications and industries. Through our Security Products segment we manufacture mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. We also manufacture wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries through our Marine Components segment.
Current wording
We are a leading manufacturer of engineered components utilized in a variety of applications and industries. Through our Security Products segment we manufacture mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. We also manufacture wake enhancement systems, stainless steel exhaust systems, custom metal fabricated parts, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries through our Marine Components segment.
Previous wording
Operating income in the third quarter of 2025 was $4.8 million compared to $3.3 million in the same period of 2024. Operating income for the first nine months of 2025 was $17.0 million compared to $12.1 million for the comparable prior year period. Our operating income increased in the third quarter and for the first nine months of 2025 due to higher sales and gross margin at each of the Security Products and Marine Components segments.
Current wording
Operating income in the first quarter of 2026 was $7.1 million compared to $5.9 million in the same period of 2025. The increase in operating income in the first quarter of 2026 compared to 2025 is primarily due to higher gross margin at Security Products and, to a lesser extent, the impact of higher sales at Marine Components.
Previous wording
Net sales. Net sales increased $6.3 million and $13.1 million in the third quarter and for the first nine months of 2025, respectively, compared to the same periods in 2024 primarily due to higher Security Products sales to the government security market and higher Marine Component sales to various markets including the towboat, government and industrial markets. See segment discussion below.
Current wording
Net sales. Net sales increased $.3 million in the first quarter of 2026 compared to the same period in 2025 primarily due to higher Marine Components sales to the industrial market partially offset by lower Security Products sales.
Previous wording
*Cost of sales and gross margin.*Cost of sales as a percentage of sales increased .5% in the third quarter of 2025 compared to the same period in 2024. As a result, gross margin as a percentage of sales decreased over the same period. Gross margin percentage decreased in the third quarter of 2025 compared to the same period in 2024 primarily due to lower Security Products gross margin percentage partially offset by higher Marine Components gross margin percentage. Cost of sales as a percentage of sales improved 1.7% for the first nine months of 2025 compared to the same period in 2024. As a result, gross margin as a percentage of sales increased over the same period. The increase in gross margin percentage for the nine-month comparative period is primarily due to higher gross margin percentage at Marine Components, partially offset by lower Security Products gross margin percentage. See segment discussion below.
Current wording
*Cost of sales and gross margin.*Cost of sales as a percentage of net sales decreased 2.5% in the first quarter of 2026 compared to the same period in 2025. As a result, gross margin as a percentage of net sales increased over the same period. Gross margin percentage increased in the first quarter of 2026 compared to the same period in 2025 primarily due to higher gross margin percentage at Security Products. See segment discussion below.
Previous wording
Operating costs and expenses. Operating costs and expenses consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to business unit and corporate management activities, as well as any gains and losses on property and equipment. Operating costs and expenses for the third quarter of 2025 were comparable to the same period in 2024. Operating costs and expenses for the first nine months of 2025 increased $1.0 million compared to the same period in 2024 primarily due to higher employee-related costs including salaries, benefits and medical expenses at both segments. Operating costs and expenses as a percentage of net sales decreased for the third quarter and for the first nine months of 2025 due to higher coverage of operating costs and expenses as a result of higher sales.
Current wording
Operating costs and expenses. Operating costs and expenses consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to business unit and corporate management activities, as well as any gains and losses on property and equipment. Operating costs and expenses for the first quarter of 2026 were comparable to same period in 2025. Operating costs and expenses as a percentage of net sales for the first quarter of 2026 decreased slightly due to increased coverage of operating costs and expenses as a result of higher sales.
Previous wording
Operating income. As a percentage of net sales, operating income for the third quarter and the first nine months of 2025 increased compared to the same periods of 2024 and was primarily impacted by the factors affecting sales, cost of sales, gross margin and operating costs and expenses. See segment discussion below.
Current wording
Operating income. As a percentage of net sales, operating income for the first quarter of 2026 increased compared to the same period of 2025 and was primarily impacted by the factors impacting sales, cost of sales, gross margin and operating costs and expenses. See segment discussion below.
Previous wording
*Interest income.*Interest income decreased $.4 million and $1.2 million in the third quarter and for the first nine months of 2025, respectively, compared to the same periods in 2024 primarily due to lower average interest rates and decreased cash balances.
Current wording
*Interest income.*Interest income decreased $.2 million in the first quarter of 2026 compared to the same period in 2025 primarily due to lower average interest rates and decreased average investment balances.
Previous wording
Gross margin as a percentage of net sales for the third quarter of 2025 decreased compared to the same period in 2024 primarily due to higher cost inventory produced during the second quarter of 2025 and sold in the third quarter of 2025 and higher employee-related costs including salaries, benefits and medical expense partially offset by increased coverage of fixed costs as a result of higher sales. Gross margin as a percentage of net sales for the first nine months of 2025 decreased compared to the same period in 2024 primarily due to higher employee-related costs including salaries, benefits and medical expense partially offset by increased coverage of fixed costs as result of higher sales. Operating income margin for the third quarter and for the first nine months of 2025 decreased primarily due to the decreases in gross margin discussed above partially offset by increased coverage of operating costs and expenses on higher sales.
Current wording
Marine Components. Marine Components net sales increased 6% in the first quarter of 2026 compared to the same period last year primarily due to $1.9 million higher sales to the industrial market partially offset by $1.4 million lower sales to the towboat market. Towboat market sales in the first quarter of 2025 benefitted from a one-time customer stocking event that did not repeat in 2026. Gross margin as a percentage of net sales decreased in the first quarter of 2026 compared to the same period last year primarily due to higher cost inventory produced during the fourth quarter of 2025 and sold in the first quarter of 2026, partially offset by increased coverage of fixed costs on higher sales. Operating income margin decreased primarily due to the factors impacting gross margin discussed above, partially offset by increased coverage of operating costs and expenses on higher sales.
Previous wording
We manufacture substantially all of our products in the U.S. and source a substantial majority of our raw materials from U.S. suppliers. We also source certain components, primarily electronic components from Asia, including China. Early in the first quarter of 2025, in anticipation of the U.S. federal government tariffs announcements, we increased purchases of certain electronic components and other components to mitigate the potential near-term impact of tariffs. As noted above, late in the second quarter we began incurring tariff-related surcharges on certain raw materials, primarily electronic components. In addition to tariffs on imported raw materials and components, some of our U.S. based suppliers have recently begun to implement tariff-related surcharges on certain U.S. based purchases. Where possible, we are increasing selling prices to our customers to recoup these increased raw material costs, although the extent to which we can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, the length of time tariffs are in effect, and the ability of our customers to substitute alternative products. We will continue to monitor current and anticipated near-term customer demand levels to ensure our production capabilities and inventories are aligned accordingly.
Current wording
We manufacture substantially all our products in the U.S. and source a substantial majority of our raw materials from U.S. suppliers. We also source certain components, primarily electronic components, from suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the first quarter of 2026, we incurred tariff-related surcharges to certain raw materials, primarily electronic components. In addition, some of our U.S.-based suppliers are applying tariff-related surcharges on certain domestically sourced materials. Where possible, we increase selling prices to recover these higher raw material costs, although the extent to which we can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, duration of tariffs, and our customers’ ability to substitute alternative products. We will continue to monitor current and anticipated near-term customer demand levels to ensure our production capabilities and inventories are aligned accordingly.
Previous wording
Our expectations for our operations and the markets we serve are based on a number of factors outside our control. Currently, our supply chains are stable and transportation and logistical delays are minimal. We have experienced global and domestic supply chain challenges in the past, and any future impacts on our operations will depend on, among other things, any future disruption in our operations or our suppliers’ operations, the effect of tariffs, and the impact of economic conditions, consumer confidence, and geopolitical events on demand for our products or our customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Current wording
Our expectations for our operations and the markets we serve are based on a number of factors outside our control. Currently, our supply chains are stable and transportation and logistical delays are minimal. We have experienced global and domestic supply chain challenges in the past. Any future impacts on our operations will depend on, among other things, disruption to our operations or our suppliers’ operations, the effect of tariffs, and the impact of broader economic conditions, consumer confidence, and geopolitical events affecting demand for our products or our customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous wording
Changes in working capital can have a significant effect on cash flows from operating activities. As shown below, the change in our average days sales outstanding increased from December 31, 2024 to September 30, 2025 primarily as a result of a seasonal increase in sales during the third quarter as compared to the fourth quarter and the timing of sales and collections relative to the end of the quarter. For comparative purposes, we have provided December 31, 2023 and September 30, 2024 numbers below.
Current wording
Changes in working capital can have a significant effect on cash flows from operating activities. As shown below, the change in our average days sales outstanding increased from December 31, 2025 to March 31, 2026, with changes
Previous wording
As shown below, our average number of days in inventory increased from December 31, 2024 to September 30, 2025 primarily due to increased inventory at Security Products as a result of higher raw material and production costs and to meet expected customer demand, partially offset by lower days in inventory at Marine Components primarily due to higher sales volumes for the third quarter of 2025 as compared to the fourth quarter of 2024. For comparative purposes, we have provided December 31, 2023 and September 30, 2024 numbers below.
Current wording
As shown below, our average number of days in inventory decreased from December 31, 2025 to March 31, 2026 primarily due to lower days in inventory at Marine Components driven by higher sales volumes in the first quarter of 2026 as compared to the fourth quarter of 2025. For comparative purposes, we have provided December 31, 2024 and March 31, 2025 numbers below.
Previous wording
*Investing activities.*Our capital expenditures were $3.1 million and $1.2 million in the first nine months of 2025 and 2024, respectively. During the first nine months of 2025, Valhi repaid a net $1.2 million under the promissory note ($10.7 million of gross borrowings and $11.9 million of gross repayments). During the first nine months of 2024, Valhi repaid a net $2.7 million under the promissory note ($17.7 million of gross borrowings and $20.4 million of gross repayments). See Note 9 to our Condensed Consolidated Financial Statements.
Current wording
*Investing activities.*Our capital expenditures were $.4 million and $.8 million in the first three months of 2026 and 2025, respectively. During the first three months of 2026, Valhi repaid a net $.6 million under the promissory note ($3.1 million of gross borrowings and $3.7 million of gross repayments). During the first three months of 2025, the promissory note balance with Valhi had net activity of nil ($.5 million of gross borrowings and $.5 million of gross repayments). See Note 10 to our Condensed Consolidated Financial Statements.
Previous wording
*Financing activities.Financing activities consisted only of cash dividends. *During the first nine months of 2025 and 2024, we paid aggregate quarterly dividends to CompX stockholders of $.90 per share. Additionally, in August 2024 and August 2025, our board of directors declared a special dividend on our Class A common stock of $2.00 per share ($24.6 million) and $1.00 per share ($12.3 million), respectively. The declaration and payment of future dividends and the amount thereof, if any, is discretionary and is dependent upon our results of operations, financial condition, cash requirements for our businesses, contractual requirements and restrictions and other factors deemed relevant by our board of directors. The amount and timing of past dividends is not necessarily indicative of the amount or timing of any future dividends which we might pay.
Current wording
*Financing activities.*Financing activities consisted only of cash dividends. Our board of directors declared a regular quarterly dividend of $.30 per share in each of the first quarters of 2025 and 2026. The declaration and payment of future dividends and the amount thereof, if any, is discretionary and is dependent upon our results of operations, financial condition, cash requirements for our businesses, contractual requirements and restrictions and other factors deemed relevant by our board of directors. The amount and timing of past dividends is not necessarily indicative of the amount or timing of any future dividends which we might pay.
Previous wording
Periodically, we evaluate liquidity requirements, alternative uses of capital, capital needs and available resources in view of, among other things, our capital expenditure requirements, dividend policy and estimated future operating cash flows. As a result of this process, we have in the past and may in the future seek to raise additional capital, refinance or restructure indebtedness, issue additional securities, modify our dividend policy or take a combination of such steps to manage our liquidity and capital resources. In the normal course of business, we may review opportunities for acquisitions, joint ventures or other business combinations in the component products industry. In the event of any such transaction, we
Current wording
Periodically, we evaluate liquidity requirements, alternative uses of capital, capital needs and available resources in view of, among other things, our capital expenditure requirements, dividend policy and estimated future operating cash flows. As a result of this process, we have in the past and may in the future seek to raise additional capital, refinance or restructure indebtedness, issue additional securities, modify our dividend policy or take a combination of such steps to manage our liquidity and capital resources. In the normal course of business, we may review opportunities for acquisitions, joint ventures or other business combinations in the component products industry. In the event of any such transaction, we may consider using available cash, issuing additional equity securities or increasing our indebtedness or that of our subsidiaries.
Previous wording
All of our $46.3 million aggregate cash and cash equivalents at September 30, 2025 were held in the U.S.
Current wording
All of our $49.4 million aggregate cash and cash equivalents at March 31, 2026 were held in the U.S.
Previous wording
Capital expenditures. Firm purchase commitments for capital projects in process at September 30, 2025 totaled $1.2 million. We expect our capital expenditures for 2025 will be approximately $4 million primarily to meet our existing customer demand and those required to properly maintain our facilities and technology infrastructure.
Current wording
Capital expenditures. Firm purchase commitments for capital projects in process at March 31, 2026 totaled $.4 million. We expect our capital expenditures for 2026 will be approximately $4.3 million primarily to improve our manufacturing facilities and invest in manufacturing equipment, including new technologies and increased automation.
Previous wording
There have been no changes in the first nine months of 2025 with respect to our critical accounting policies presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report.
Current wording
There have been no changes in the first three months of 2026 with respect to our critical accounting policies presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
varying by segment primarily as a result of relative changes in the timing of sales and collections relative to the end of the quarter. For comparative purposes, we have provided December 31, 2024 and March 31, 2025 numbers below.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
may consider using available cash, issuing additional equity securities or increasing our indebtedness or that of our subsidiaries.