What changed in this filing

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Item 1A. Risk Factors

2026-03-09 compared with 2025-03-06 · 53 added, 44 removed, 176 unchanged (36% of the section changed)

14 unchanged sentences

The TiO 2 industry is concentrated and highly competitive and Kronos faces price pressures in the markets in which it operates, which may result in reduced earnings or operating losses.

The global market in which Kronos operates its business is concentrated, with the top five TiO 2 producers accounting for approximately 51% of the world’s production capacity and is highly competitive.

The global market in which Kronos operates its business is concentrated, with the top four TiO 2 producers accounting for approximately 42% of the world’s production capacity and is highly competitive.

Competition is based on

a number of factors, such as price, product quality and service.

Kronos faces significant competition from international and regional competitors, including TiO 2 producers in China, who have significant sulfate production process capacity.

Kronos faces significant competition from international and regional competitors, including increasing competition from TiO 2 producers in China, who have significant sulfate production process capacity.

Chinese producers have also continued to develop chloride process technology, and the risk of substitution of Kronos’ products with products made by Chinese producers could increase if Chinese producers increase the use of chloride process technology and improve the quality of their sulfate and chloride products.

Some of Kronos’ competitors may be able to drive down prices for Kronos’ products if their costs are lower than Kronos’ costs, including its competitors with vertically integrated sources of raw materials for the chloride process who may have a competitive advantage during periods of high or rising raw material costs or who operate in regions with less stringent regulatory requirements.

In addition, some of Kronos’ competitors’ financial, technological and other resources may be greater than its resources and such competitors may be better able to withstand changes in market conditions.

For example, Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices.

China has dumped lower cost sulfate process TiO 2 into markets Kronos serves.

In some cases, Western TiO 2 producers have been successful in obtaining anti-dumping duties on Chinese imports such as duties recently enacted in the European Union, Brazil, Saudi Arabia, and other jurisdictions.

In addition, some of Kronos’ competitors’ financial, technological and other resources may be greater than its resources and such competitors may be better able to withstand extended periods of reduced demand or other changes in market conditions.

Kronos’ competitors may be able to respond more quickly than it can to new or emerging technologies and changes in customer requirements.

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● Consolidation of CompX’s competitors or customers in any of the markets in which it competes may result in reduced demand for its products.

● A reduction of CompX’s market share with one or more of its key customers, or a reduction in one or more of its key customers’ market share for their end-use products, may reduce demand for its products.

● New competitors could emerge by modifying their existing production facilities to manufacture products that compete with CompX’s products.

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Since expenditures for these types of activities are not considered research and development expense under accounting principles generally accepted in the United States of America (“GAAP”), the amount of CompX’s research and development expenditures, which is not significant, is not indicative of the overall effort involved in the development of new product features.

The introduction of new product features requires the coordination of the design, manufacturing and marketing of the new product features with current and potential customers.

The introduction of

new product features requires the coordination of the design, manufacturing and marketing of the new product features with current and potential customers.

The ability to coordinate these activities with current and potential customers may be affected by factors beyond CompX’s control.

While CompX will continue to emphasize the introduction of innovative

new product features that target customer-specific opportunities, it does not know if any new product features it introduces will achieve the same degree of success that it has achieved with its existing products.

While CompX will continue to emphasize the introduction of innovative new product features that target customer-specific opportunities, it does not know if any new product features it introduces will achieve the same degree of success that it has achieved with its existing products.

At times CompX works with new and existing customers on specific product innovations.

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Certain components used in CompX’s products are manufactured by foreign suppliers located in China and elsewhere.

Global economic and political conditions, including natural disasters, terrorist acts, transportation disruptions, global conflicts and public health crises such as pandemics, could prevent CompX’s vendors from being able to supply these components.

Should CompX’s vendors not be able to meet their supply obligations or should CompX be otherwise unable to obtain necessary raw materials or components, CompX may incur higher supply costs or may be required to reduce production levels, either of which may decrease our liquidity or negatively impact our financial condition or results of operations as CompX may be unable to offset the higher costs with increases in its selling prices or reductions in other operating costs.

Global economic and political conditions, including natural disasters, terrorist acts, transportation disruptions, global conflicts or trade wars and public health crises such as pandemics, could prevent CompX’s vendors from being able to supply these components.

In addition, the imposition of new tariffs or increases in existing tariffs by the U.S.

government on imports from China, Mexico or other countries from which CompX imports raw materials and other components could increase its supply costs.

Increases in CompX’s supply costs may decrease our liquidity or negatively impact our financial condition or results of operations as CompX may be unable to offset the higher costs with increases in its selling prices or reductions in other operating costs.

Dependence on CompX’s significant customers could adversely affect our business and results of operations.

For the year ended December 31, 2025, CompX’s ten largest customers accounted for approximately 52% of our consolidated net sales, with a single customer accounting for 26% of our consolidated net sales.

Because CompX’s customers’ purchases are made through purchase orders rather than long-term contracts or minimum purchase commitments, order levels can fluctuate significantly period to period based on customer needs.

In addition, significant customers may negotiate more favorable pricing or terms which may pressure our operating margins.

If any significant CompX customer reduces its purchases, loses market share for its end-use products, experiences financial difficulty, changes suppliers, or otherwise alters its relationship with CompX, demand for its products could decline.

Any such reduction in CompX’s sales could potentially have a material adverse effect on our revenues and results of operations.

Higher costs or limited availability of Kronos’ raw materials may reduce its earnings and decrease its liquidity.

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If Kronos or Kronos’ worldwide vendors are unable to meet their planned or contractual obligations and Kronos was unable to obtain necessary raw materials, Kronos could incur higher costs for raw materials or may be required to reduce production levels.

Kronos experienced increases in feedstock costs in 2023 and 2024, for example, which affected its margins.

For example, Kronos experienced increases in feedstock costs in 2023 and 2024, which negatively affected its margins.

Kronos has also experienced higher operating costs such as energy costs.

Future variations in the cost of energy, which primarily reflect market prices for oil and natural gas, and for raw materials may significantly affect its operating results and decrease liquidity as Kronos may not always be able to increase its selling prices to offset the impact of any higher costs or reduced production levels.

Future variations in the cost of energy, which primarily reflect market prices for oil and natural gas, and for raw materials may

significantly affect its operating results and decrease liquidity as Kronos may not always be able to increase its selling prices to offset the impact of any higher costs or reduced production levels.

Kronos has supply contracts that provide for its TiO 2 feedstock requirements.

While Kronos believes it will be able to renew these contracts, as necessary, Kronos does not know if it will be successful in renewing them or in obtaining long-term extensions to them prior to expiration.

Kronos’ current agreements require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $542 million beginning in 2025 and extending through 2026.

In addition, Kronos has other long-term supply and service contracts that provide for various raw materials and services.

These agreements require Kronos to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $67 million at December 31, 2024.

Kronos’ commitments under these contracts could adversely affect our financial results if Kronos significantly reduces its production and was unable to modify the contractual commitments.

Kronos’ recent acquisition of the remaining 50% interest in LPC may not generate benefits it anticipates and may otherwise affect its business and prospects.

Kronos recently completed the LPC acquisition in which it purchased the 50% ownership interest in LPC it did

not previously own.

If Kronos experiences unforeseen technological, operation or other difficulties in managing the integration of LPC as its wholly-owned subsidiary, it may not be able to implement the process innovations at the facility that it expects.

In addition, Kronos may not be able to achieve the synergies or improve efficiency and product quality that it expects.

With or without such difficulties, the integration of the LPC facility into Kronos’ operations may divert significant management time and attention from its other operations.

If Kronos fails to successfully integrate LPC into its operations, or if the LPC acquisition does not provide expected synergies or sales increases, or if LPC has unexpected legal or financials liabilities, its business, financial condition, result of operations and prospects could be adversely affected.

Kronos’ current agreements have minimum purchase requirements, targeted purchases or require it to purchase certain minimum percentage-based quantities of feedstock based upon its annual purchasing requirements.

Kronos estimates purchases under these feedstock agreements will be between approximately $375 million and $450 million in 2026.

In addition, Kronos has other long-term supply and service contracts that provide for various raw materials and services which may require Kronos to purchase certain minimum quantities.

Kronos’ obligations under these contracts could adversely affect our financial results if Kronos significantly reduces its production and was unable to modify the contractual commitments.

Kronos’ acquisition of the remaining 50% interest in LPC may not generate benefits it anticipates and may otherwise affect its business and prospects.

In July 2024, Kronos completed the LPC acquisition in which it purchased the 50% ownership interest in LPC it did not previously own and Kronos subsequently merged LPC into Kronos’ wholly-owned subsidiary, Kronos Louisiana.

If Kronos experiences unforeseen technological, operational or other difficulties in integrating the Kronos Louisiana facility into its operations as Kronos’ wholly-owned subsidiary, it may not be able to implement the process innovations at the facility that it expects.

In addition, Kronos may not be able to achieve the anticipated synergies or improvements in efficiency and product quality that it expects.

With or without such difficulties, the integration of the Kronos Louisiana facility into Kronos’ operations may divert significant management time and attention from its other operations.

If Kronos fails to successfully integrate the Kronos Louisiana facility into its operations, if the acquisition does not provide expected synergies or sales increases, or if Kronos Louisiana has unexpected legal or financial liabilities, its business, financial condition, results of operations and prospects could be adversely affected.

Our assets consist primarily of investments in our operating subsidiaries and affiliate, and we are dependent upon distributions from our subsidiaries and affiliate.

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Kronos’ leverage may impair our financial condition.

Kronos has a significant amount of debt, primarily related to its 9.50% Senior Secured Notes due 2029 and its 3.75% Senior Secured Notes due 2025, its term loan from Contran, and borrowings on its global revolving credit facility (“Global Revolver”).

As of December 31, 2024, Kronos’ total consolidated debt was approximately $507.4 million.

Kronos has a significant amount of debt, primarily related to its 9.50% Senior Secured Notes due 2029, its term loan from Contran, and borrowings on its global revolving credit facility (“Global Revolver”).

As of December 31, 2025,

Kronos’ total consolidated debt was approximately $557.4 million.

Kronos’ level of debt could have important consequences to our stockholders and creditors, including:

2 unchanged sentences

● requiring that a portion of its cash flows from operations be used for the payment of interest on its debt, which reduces its ability to use its cash flow to fund working capital, capital expenditures, dividends on its common stock, acquisitions or general corporate requirements;

● limiting the ability of Kronos’ subsidiaries to pay dividends to it;

● limiting the ability of Kronos’ subsidiaries to pay dividends to it or limiting its ability to pay dividends to its shareholders;

● limiting Kronos’ ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or general corporate requirements;

3 unchanged sentences

To the extent market interest rates rise, the cost of Kronos’ debt could increase, even if the amount borrowed remains the same, adversely affecting its financial condition, results of operations and cash flows.

In addition to Kronos’ indebtedness, Kronos is party to various lease and other agreements (including feedstock purchase contracts and other long-term supply and service contracts, as discussed above) pursuant to which, along with its indebtedness, Kronos is committed to pay approximately $701 million in 2025.

In addition to Kronos’ indebtedness, Kronos is party to various lease and other agreements (including feedstock purchase contracts with minimum commitments and other long-term supply and service contracts, as discussed above) pursuant to which, along with its indebtedness, Kronos is committed to pay approximately $193 million in 2026.

Kronos’ ability to make payments on and refinance its debt and to fund planned capital expenditures depends on its ability to generate cash flow in the future.

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Kronos operates its businesses in several different countries and sells its products worldwide.

For example, during both 2023 and 2024, approximately 44% of Kronos’ sales volumes were sold into European markets.

For example, during both 2024 and 2025, approximately 44% and 45% of Kronos’ sales volumes, respectively, were sold into European markets.

The majority (but not all) of Kronos’ sales from its operations outside the United States are denominated in currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.

Therefore, Kronos is exposed to risks related to the need to convert currencies we receive from the sale of its products into the currencies required to pay for certain of its operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of Kronos’ results of operations between periods.

Therefore, Kronos is exposed to risks related to the need to convert currencies it receives from the sale of its products into the currencies required to pay for certain of its operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of Kronos’ results of operations between periods.

Legal, Compliance and Regulatory Risk Factors

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See also Item 3 – “Legal Proceedings – Environmental matters and litigation.”

If some or all of Kronos’ or CompX’s intellectual property were to be declared invalid, held to be unenforceable or copied by competitors, or some or all of Kronos’ or CompX’s confidential information become known to competitors, or if Kronos’ or CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.

If some or all of Kronos’ or CompX’s intellectual property were to be declared invalid, held to be unenforceable or copied by competitors, or some or all of Kronos’ or CompX’s confidential information becomes known to competitors, or if Kronos’ or CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.

Protection of intellectual property rights, including patents, copyrights, trade secrets, confidential information, trademarks and tradenames, is important to Kronos’ and CompX’s businesses and their competitive positions.

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Despite these measures, any of CompX’s intellectual property rights could be challenged, invalidated, circumvented or misappropriated.

Third parties may independently discover CompX’s trade secrets and proprietary information, and in such cases CompX could not assert any trade secret rights against such parties.

Third parties may independently discover CompX’s trade secrets and proprietary information, and in such cases CompX could not assert

any trade secret rights against such parties.

Further, CompX does not know if any of its pending trademark or patent applications will be approved.

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Many of Kronos’ and CompX’s facilities require large amounts of energy, including electricity and natural gas, in order to conduct operations.

government and various non-U.S.

governmental agencies of countries in which Kronos and CompX operate have determined the consumption of energy derived from fossil fuels is a major contributor to climate change and have adopted or are contemplating regulatory changes in response to the potential impact of climate change, including laws and regulations requiring enhanced reporting (such as the Corporate Social Responsibility Directive adopted by the European Union on November 28, 2022) as well as legislation regarding carbon emission costs, GHG emissions and renewable energy targets.

Governmental agencies of countries in which Kronos and CompX operate have determined, or may determine in the future the consumption of energy derived from fossil fuels is a major contributor to climate change and have adopted or are contemplating regulatory changes in response to the potential impact of climate change, including laws and regulations requiring enhanced reporting (such as the Corporate Social Responsibility Directive adopted by the European Union on November 28, 2022) as well as legislation regulating carbon and other GHG emissions and the use of renewable energy.

International treaties or agreements may also result in increasing regulation of GHG emissions, including emissions permits and/or energy taxes or the introduction of carbon emissions trading mechanisms.

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Kronos has significant international operations which, along with its customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including:

● global or regional economic downturns;

● global or regional economic downturn;

● changes in tariffs, trade barriers, and regulatory requirements, such as the enactment of tariffs on goods imported into the U.S.

including, but not limited to, the recently enacted tariff on goods imported from Canada where Kronos manufactures a significant portion of the TiO 2 it sells in North America.

including, but not limited to, tariffs enacted on goods imported from Canada where Kronos manufactures a significant portion of the TiO 2 it sells in North America.

Tariffs could make Kronos’ products more expensive which would reduce demand or require it to absorb the increased costs reducing its operating margins;

1 unchanged sentence

relations with the governments of the other countries in which Kronos operates;

● t errorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas);

● t errorism, armed conflict (such as the current conflicts between Russia and Ukraine);

● natural disasters, pandemics or other health crises, climate change, and other events beyond Kronos’ control;

3 unchanged sentences

These risks, individually or in the aggregate, could have an adverse effect on Kronos’ results of operations and financial condition.

Kronos is experiencing increasing competition from China.

Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices.

China has dumped lower cost sulfate process TiO 2 into the markets Kronos serves.

In some cases, the TiO 2 industry has been successful in getting anti-competitive duties enacted on Chinese imports such as the European duties enacted in 2024.

federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.

For example, on March 4, 2025, the U.S.

government implemented a 25% tariff on all imports from Mexico and Canada into the U.S.

As Kronos currently manufactures a significant portion of its North American TiO 2 in Canada, if sustained for an extended period of time, the 25% tariff on Kronos’ imports into the U.S.

from Canada, without exclusion, will make its products manufactured in Canada and sold into the U.S.

As Kronos currently manufactures a significant portion of its North American TiO 2 in Canada, if sustained for an extended period of time, a tariff on Kronos’ imports into the U.S.

from Canada, would make its products manufactured in Canada and sold into the U.S.

more expensive.

As a result, demand for these products could be reduced, or Kronos could be required to absorb the increased costs or increase prices of such products.

Tariff mitigation strategies, such as those Kronos undertook in the first quarter of 2025 which included building and positioning inventory from its Canadian facility into the U.S., may result in increased shipping and warehousing costs.

Future mitigation strategies may offer only temporary relief from the effect of these tariffs.

Such tariffs and, if enacted, any further legislation or actions taken by the U.S.

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Kronos and CompX rely on integrated information technology systems to manage, process and analyze data, including to facilitate the manufacture and distribution of their products to and from their facilities, receive, process and ship orders, manage the billing of and collections from their customers and manage payments to vendors.

Although Kronos and CompX have systems and procedures in place to protect information technology systems, there can be no assurance that such systems and procedures would be sufficiently effective.

Although Kronos and CompX have systems and procedures in place to protect information technology systems, there can be no assurance

that such systems and procedures would be sufficiently effective.

Therefore, any of Kronos’ and CompX’s information technology systems may be susceptible to outages, disruptions or destruction from power outages, telecommunications failures, employee error, cybersecurity breaches or attacks and other similar events.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors