COMPX INTERNATIONAL INC
For the period ended Jun 30, 2026. Filed Aug 4, 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.
Jun 30, 2026 · Filed Aug 4, 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 2026-03-31; filed 2026-05-05.
0001104659-26-055645
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001104659-26-090386
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 47 previous paragraphs and 47 current paragraphs.
24 unchanged; 17 reworded; 6 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 28 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
Security Products. Security Products net sales increased 9% in the second quarter of 2026 compared to the same period in 2025 primarily due to $.9 million higher sales to the healthcare market, $.7 million higher sales to the transportation market, $.5 million higher sales to distributors and $.4 million higher sales to the tool storage market. Security Products net sales increased 4% in the first six months of 2026 compared to the same period in 2025 primarily due to $.8 million higher sales to the transportation market, $.7 million higher sales to the tool storage market, $.6 million higher sales to the healthcare market and $.4 million higher sales to distributors. Sales to the government security market in the second quarter and in the first six months of 2026 were comparable to the same periods in 2025.
Current report
Gross margin as a percentage of net sales increased in the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to a more favorable customer and product mix and lower cost of sales driven by lower employer-related medical expenses and the one-time recovery of prior-period import costs recognized during the second quarter of 2026. Operating income margin increased for both periods, primarily due to the improvement in gross margin and increased coverage of operating costs and expenses on higher sales.
Current report
Gross margin as a percentage of net sales increased in the second quarter of 2026 compared to the same period in 2025 primarily due to a more favorable customer and product mix, partially offset by higher cost of sales, including increased maintenance and supply costs. Operating income margin increased in the second quarter of 2026 primarily due to the factors impacting gross margin. Gross margin as a percentage of net sales for the first six months of 2026 was
Current report
comparable to the same period in 2025 as a more favorable customer and product mix and increased coverage of fixed costs on higher sales were largely offset by higher cost of sales, including sales of higher-cost inventory and increased maintenance and supply costs. Operating income margin increased for the first six months of 2026 primarily due to increased coverage of operating costs and expenses on higher sales.
Current report
Outlook. Our results for the first six months of 2026 reflected higher sales and favorable customer and product mix for both the Security Products and Marine Components segments. We expect these trends to continue through the remainder of 2026, and we currently expect net sales for the full year of 2026 to exceed 2025 levels. Within Security Products, we expect demand from several end markets, including healthcare, transportation and tool storage, to remain strong in the second half of 2026. Within Marine Components, we expect increased demand will continue to be driven by industrial market demand, particularly aeroderivative demand, while recreational marine and towboat-related demand is expected to remain relatively consistent with 2025 levels (excluding the impact of the one-time stocking event noted above). Based on our first-half operating performance, we currently expect full-year gross margin and operating income margins to exceed 2025 levels, although margins during the second half of 2026 may be challenged by the factors discussed below. Future operating results will continue to be influenced by product and customer mix, raw material costs and overall demand levels in the markets we serve.
Current report
arising from the fiscal month-end close occurring before calendar month-end, when certain large customers typically remit payments. For comparative purposes, we have provided December 31, 2024 and June 30, 2025 numbers below.
Removed paragraphs (6)
Previous report
See segment discussion below.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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.
Reworded paragraphs (17)
Previous 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.
Current wording
Operating income in the second quarter of 2026 was $8.9 million compared to $6.3 million in the same period of 2025. Operating income for the first six months of 2026 was $16.0 million compared to $12.2 million for the comparable prior year period. Our operating income increased in the second quarter and for the first six months of 2026 due to higher sales and gross margins, predominantly at the Security Products segment and, to a lesser extent, at the Marine Components segment.
Previous 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.
Current wording
Net sales. Net sales increased $3.2 million and $3.5 million in the second quarter and for the first six months of 2026, respectively, compared to the same periods in 2025 due to higher Security Products sales across a variety of markets and higher Marine Components sales to the industrial market. See segment discussion below.
Previous 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.
Current wording
*Cost of sales and gross margin.*Cost of sales as a percentage of net sales improved by 3.7% and 3.1% in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. As a result, gross margin as a percentage of sales increased over the same periods. The improvement in gross margin percentage for the second quarter and first six months of 2026 was primarily due to a higher gross margin percentage at Security Products. In addition, improved gross margin performance at Marine Components contributed favorably to the increase in the second-quarter comparative period. 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 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.
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, administrative costs relating to business unit and corporate management activities, and gains and losses on property and equipment. Operating costs and expenses for the second quarter and first six months of 2026 were comparable to the same periods in 2025. Operating costs and expenses as a percentage of net sales decreased in the second quarter and first six months of 2026 due to higher 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 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.
Current wording
Operating income. As a percentage of net sales, operating income for the second quarter and the first six months 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 $.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.
Current wording
*Interest income.*Interest income decreased $.2 million and $.4 million in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025 primarily due to lower average interest rates and decreased cash balances.
Previous 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.
Current wording
Marine Components. Marine Components net sales increased 6% in both the second quarter and first six months of 2026 compared to the same periods in 2025. The increase in second quarter sales was primarily due to $1.6 million higher sales to the industrial market, partially offset by $1.0 million lower sales to the government market. The increase in sales for the first six months of 2026 was primarily due to $3.5 million higher sales to the industrial market, partially offset by $1.5 million lower sales to the towboat market and $1.0 million lower sales to the government market. Towboat market sales in the first quarter of 2025 benefited from a one-time customer stocking event that did not repeat in 2026.
Previous 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.
Current 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 suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the second quarter of 2026, we experienced cost increases for certain imported raw materials, primarily electronic components, including increases in tariffs and shipping costs. In addition, inflationary pressures have increased costs for certain domestically-sourced raw 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. Accordingly, we continue to closely monitor raw material costs, including zinc, brass, aluminum, steel and energy, as well as current and anticipated customer demand levels, to ensure our production capacity and inventory levels remain aligned with market conditions.
Previous wording
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.
Current wording
Our net cash provided by operating activities for the first six months of 2026 increased by $1.5 million as compared to the first six months of 2025. The increase in net cash provided is primarily due to the net effects of:
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, 2025 to March 31, 2026, with changes
Current wording
Changes in working capital can have a significant effect on cash flows from operating activities. As shown below, our average days sales outstanding increased from December 31, 2025 to June 30, 2026, with changes varying by segment, primarily as a result of differences in the timing of sales and collections relative to the quarter-end, including differences
Previous 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.
Current wording
As shown below, our average number of days in inventory decreased from December 31, 2025 to June 30, 2026 due to a reduction in days in inventory at Security Products, driven by higher sales volumes in the second quarter of 2026 compared to the fourth quarter of 2025. This improvement was partially offset by an increase in days in inventory at Marine Components, primarily due to higher work-in-process inventory balances resulting from delays in certain raw material shipments, as well as the timing of customer order fulfillment. For comparative purposes, we have provided December 31, 2024 and June 30, 2025 numbers below.
Previous 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.
Current wording
*Investing activities.*Our capital expenditures were $1.5 million and $2.2 million in the first six months of 2026 and 2025, respectively. During the first six months of 2026, Valhi repaid a net $1.2 million under the promissory note ($7.6 million of gross borrowings and $8.8 million of gross repayments). During the first six months of 2025, Valhi repaid a net $.4 million under the promissory note ($6.0 million of gross borrowings and $6.4 million of gross repayments). See Note 10 to our Condensed Consolidated Financial Statements.
Previous 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.
Current wording
*Financing activities.*Financing activities consisted only of cash dividends. During each of the first six months of 2026 and 2025, we paid aggregate quarterly dividends to CompX stockholders of $.60 per share. 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
We believe that cash generated from operations together with cash on hand, as well as our ability to obtain external financing, will be sufficient to meet our liquidity needs for working capital, capital expenditures, debt service, dividends (if declared) and any amounts we might loan from time to time under the terms of our revolving loan to Valhi discussed in Note 10 to our Condensed Consolidated Financial Statements (which loans would be solely at our discretion) for both the next 12 months and five years. To the extent that our actual operating results or other developments differ from our expectations, our liquidity could be adversely affected.
Current wording
We believe that cash generated from operations together with cash on hand, as well as our ability to obtain external financing, will be sufficient to meet our liquidity needs for working capital, capital expenditures, debt service, dividends (if declared) and any amounts we might lend from time to time under the terms of our revolving loan to Valhi discussed in Note 10 to our Condensed Consolidated Financial Statements (which loans would be solely at our discretion) for both the next 12 months and five years. To the extent that our actual operating results or other developments differ from our expectations, our liquidity could be adversely affected.
Previous wording
All of our $49.4 million aggregate cash and cash equivalents at March 31, 2026 were held in the U.S.
Current wording
All of our $52.4 million aggregate cash and cash equivalents at June 30, 2026 were held in the U.S.
Previous 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.
Current wording
Capital expenditures. Firm purchase commitments for capital projects in process at June 30, 2026 totaled $1.1 million. We expect our capital expenditures for 2026 will be approximately $5.5 million primarily to increase capacity through investments in manufacturing equipment, including new technologies and increased automation and for improvements to our manufacturing facilities.
Previous 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.
Current wording
There have been no changes in the first six 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.