What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-09 compared with 2025-03-06 · 157 added, 215 removed, 963 unchanged (28% of the section changed)

107 unchanged sentences

Back-to-Back Pledge and Security Agreement made by and between the registrant in favor of Valhi, Inc., dated as of November 14, 2016 – incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K of the Registrant dated November 14, 2016 and filed on November 15, 2016.

Indenture, dated as of September 13, 2017, among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Kronos Worldwide, Inc.

dated September 13, 2017 and filed on September 13, 2017.

Supplemental Indenture No.

1, dated as of February 12, 2024, among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 4.1 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

Supplemental Indenture No.

2, dated as of August 8, 2024, among Louisiana Pigment Company, L.P.

and Kronos LPC, LLC (as new guarantors under the Indenture dated as of September 13, 2017, as amended), Kronos International, Inc., and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Indenture, dated as of February 12, 2024, among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 4.2 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

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and Kronos LPC, LLC (as new guarantors under the Indenture dated as of February 12, 2024, as amended), Kronos International, Inc., and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Third Supplement Indenture dated as of September 15, 2025, by and among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.1 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on September 15, 2025.

Pledge Agreement, dated as of September 13, 2017, among Kronos International, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as collateral agent – incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kronos Worldwide, Inc.

dated September 13, 2017 and filed on September 13, 2017.

Exhibit Index

Additional Notes Priority Joinder Agreement dated February 12, 2024, executed by Deutsche Bank Trust Company Americas, as trustee and collateral agent for the holders of Kronos International, Inc.’s 9.50% Senior Secured Notes due 2029 and as existing agent under the Pledge Agreement dated September 13, 2017 entered into in connection with Kronos International Inc.’s 3.75% Senior Secured Notes due 2025 – incorporated by reference to Exhibit 4.4 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

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– incorporated by reference to Exhibit 10.2 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed July 30, 2024 .

1 dated as of August 8, 2024, to the Pledge Agreement dated as of September 13, 2017, joining Louisiana Pigment Company, L.P.

and Kronos LPC, LLC to the Pledge Agreement – incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Exhibit Index

Pledge Amendment dated as of August 8, 2024, to the Pledge Agreement dated as of September 13, 2017, executed by Kronos Louisiana, Inc.

and Kronos LPC, LLC regarding additional pledged securities – incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Additional Notes Priority Joinder Agreement dated September 15, 2025, executed by Deutsche Bank Trust Company Americas, as trustee and collateral agent – incorporated by reference to Exhibit 10.2 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed on September 15, 2025 .

Credit Agreement dated as of April 20, 2021 by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH and Wells Fargo Bank, National Association as administrative agent and lender – incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

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Third Amendment to Credit Agreement dated December 19, 2024 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association, as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.1 to Kronos Worldwide’s Current Report on Form 8-K filed on December 19, 2024.

Fourth Amendment to Credit Agreement dated July 17, 2025 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association, as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.1 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on July 17, 2025.

Fifth Amendment to Credit Agreement dated December 2, 2025 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association, as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.11.5 to Kronos Worldwide Inc.’s Annual Report on Form 10K for the year ended December 31, 2025 filed on March 9, 2026.

Guaranty and Security Agreement dated as of April 20, 2021, by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos International, Inc.

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and Louisiana Pigment Company, L.P, amending Purchase Agreement dated as of July 16, 2024 – incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Consent Decree effective February 10, 2025, among NL Industries, Inc., the United States of America (on behalf of several agencies) and certain other plaintiff parties and defendant parties, relating to the Raritan Bay Slag Superfund Site.

Consent Decree effective February 10, 2025, among NL Industries, Inc., the United States of America (on behalf of several agencies – incorporated by reference to Exhibit 10.26 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 6, 2025) and certain other plaintiff parties and defendant parties, relating to the Raritan Bay Slag Superfund Site.

NL Industries, Inc.

Insider Trading Policy.

Insider Trading Policy – incorporated by reference to Exhibit 19.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 6, 2025.

Subsidiaries of the Registrant

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Policy for the Recovery of Erroneously Awarded Compensation – incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023.

Exhibit Index

Consolidated Financial Statements of Kronos Worldwide, Inc.

– incorporated by reference to Kronos’ Annual Report on Form 10-K for the year ended December 31, 2025.

Exhibit Index

Inline XBRL Instance – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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Principal Accounting Officer)

Gerald Turner

Gerald Turner, March 9, 2026

NL INDUSTRIES, INC.

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Consolidated Statements of Operations – Years ended December 31, 2023, 2024 and 2025

Consolidated Statements of Comprehensive Income – Years ended December 31, 2022, 2023 and 2024

Consolidated Statements of Comprehensive Income (Loss) – Years ended December 31, 2023, 2024 and 2025

Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2023, 2024 and 2025

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We have audited the accompanying consolidated balance sheets of NL Industries, Inc.

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Environmental Remediation and Related Matters

As described in Note 17 to the consolidated financial statements, management evaluates the potential range of the Company’s liability for environmental remediation and related costs at sites where the Company has been named as a potentially responsible party (PRP) or defendant.

As of December 31, 2024, management accrued approximately $69 million related to approximately 30 sites associated with remediation and related matters.

Liabilities related to environmental remediation and related matters (including costs associated with damages for property damage and/or damages for injury to natural resources) are recorded when management determines that estimated future expenditures are probable and reasonably estimable.

As disclosed by management, environmental remediation and related costs accruals (and the potential range of the Company’s liabilities) are adjusted as further information becomes available or as circumstances change which involves management’s judgment regarding current facts and circumstances for each site and is subject to various assumptions and estimates.

The principal considerations for our determination that performing procedures relating to environmental remediation and related matters is a critical audit matter are the significant judgment by management when assessing the accruals and the potential range of the Company’s liabilities and when determining whether estimated future expenditures are probable and reasonably estimable, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating evidence related to management’s assessment of the accruals and the potential range of the liabilities.

Revenue Recognition

As described in Note 1 to the consolidated financial statements, the Company’s net sales were $158.3 million for the year ended December 31, 2025.

The Company’s sales involve single performance obligations to ship products pursuant to customer purchase orders.

The Company records revenue when performance

obligations are satisfied by transferring control of products to its customers, which generally occurs at point of shipment or upon delivery.

Revenue is recorded in an amount that reflects the net consideration the Company expects to receive in exchange for its products.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s evaluation of environmental remediation and related matters, including controls over determining whether estimated future expenditures are probable and reasonably estimable, as well as the related financial statement disclosures.

These procedures also included, among others, (i) obtaining the rollforward of environmental accrual activity for each matter and, for a sample of sites, reviewing and discussing site activity with management, (ii) obtaining and evaluating responses to letters of audit inquiry from internal and external legal counsel, and (iii) evaluating the sufficiency of the Company’s environmental remediation and related matters disclosures.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others, testing revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment, and cash receipts.

/s/ PricewaterhouseCoopers LLP

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Restricted cash and cash equivalents

Marketable securities

Accounts and other receivables, net

Receivables from affiliates

Inventories, net

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Accrued environmental remediation and related costs

Long-term litigation settlement

Deferred income taxes

Accrued pension costs

Total noncurrent liabilities

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Marketable equity securities

Loss on pension plan termination

Settlement loss on pension plan termination and buy-out

Other components of net periodic pension and OPEB cost

2 unchanged sentences

Income tax expense (benefit)

Net income (loss)

Noncontrolling interest in net income of subsidiary

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

Years ended December 31,

Net income (loss)

Other comprehensive income (loss), net of tax:

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Total other comprehensive income (loss), net

Comprehensive income

Comprehensive income (loss)

Comprehensive income attributable to noncontrolling interest

Comprehensive income attributable to NL stockholders

Comprehensive income (loss) attributable to NL stockholders

See accompanying Notes to Consolidated Financial Statements.

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Balance at December 31, 2022

Net income (loss)

Other comprehensive income,

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Balance at December 31, 2023

Net income (loss)

Other comprehensive income,

Other comprehensive loss,

Issuance of NL common stock

2 unchanged sentences

Balance at December 31, 2024

Other comprehensive loss,

Net income (loss)

Other comprehensive income,

Issuance of NL common stock

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Cash flows from operating activities:

Net income (loss)

Depreciation and amortization

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Marketable equity securities (gain) loss

Loss on pension plan termination

Settlement loss on pension plan termination and buy-out

Benefit plan expense greater than cash funding

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Other noncurrent assets and liabilities, net

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

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Dividends paid

Subsidiary treasury stock acquired

Dividends paid to noncontrolling interests in subsidiary

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Accordingly, Kronos translates the assets and liabilities at year-end rates of exchange, while it translates its revenues and expenses at average exchange rates prevailing during the year.

We accumulate the resulting translation adjustments in stockholders’ equity as part of accumulated other comprehensive income (loss), net of related deferred income taxes.

We accumulate the resulting translation adjustments in stockholders’ equity as part of accumulated other comprehensive loss, net of related deferred income taxes.

Kronos recognizes currency transaction gains and losses in income which is reflected as part of our equity in earnings (losses) of Kronos.

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Restricted cash equivalents classified as a current asset or a noncurrent asset are presented separately on our Consolidated Balance Sheets.

Marketable securities and securities transactions – We carry marketable debt and equity securities at fair value.

Marketable securities and securities transactions – We carry marketable securities at fair value.

Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , establishes a consistent framework for measuring fair value and (with certain exceptions) this framework is generally applied to all financial statement items required to be measured at fair value.

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We classify all of our marketable securities as available-for-sale.

We accumulate unrealized gains and losses on marketable debt securities as part of accumulated other comprehensive income (loss), net of related deferred income taxes.

We recognize unrealized gains or losses on the marketable equity securities in Marketable equity securities on our Consolidated Statements of Operations.

We base realized gains and losses upon the specific identification of the securities sold.

See Notes 5 and 11.

Accounts receivable – We provide an allowance for doubtful accounts for known and estimated potential losses arising from sales to customers based on a periodic review of these accounts.

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We record a provision for obsolete and slow-moving inventories.

We generally base inventory costs for all inventory categories on an average cost that approximates the first-in, first-out method.

We generally base inventory costs for all inventory categories on average cost that approximates the first-in, first-out method.

Inventories include the costs for raw materials, the cost to manufacture the raw materials into finished goods and overhead.

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We lease various facilities and equipment.

From time to time, we may also enter into an arrangement in which the right to use and control an identified underlying asset is

embedded in another type of contract.

We determine if an arrangement is a lease (including leases embedded in another type of contract) at inception.

From time to time, we may also enter into an arrangement in which the right to use and control an identified underlying asset is embedded in another type of contract.

We determine if an arrangement is a lease (including leases embedded in another

type of contract) at inception.

All of our leases are classified as operating leases under ASC Topic 842 Leases .

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Internal Revenue Service or the applicable state tax authority had we not been a member of the Contran Tax Group.

We made net payments to Valhi for income taxes of $ 1.1 in 2022, received net refunds from Valhi of $ .3 million in 2023 and made net payments to Valhi of $ .1 million in 2024.

We received net refunds from Valhi of $ .3 million in 2023 and made net payments to Valhi of $ .1 million in each of 2024 and 2025.

We recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the income tax and financial reporting carrying amounts of assets and liabilities, including investments in our subsidiaries and affiliates who are not members of the Contran Tax Group and undistributed earnings of non-U.S.

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other comprehensive income (loss).

Changes in applicable income tax rates over time as a result of changes in tax law, or times in which a deferred income tax asset valuation allowance is initially recognized in one year and subsequently reversed in a later year, can give rise to “stranded” tax effects in accumulated other comprehensive income in which the net accumulated income tax expense (benefit) remaining in accumulated other comprehensive income does not correspond to the then-applicable

income tax rate applied to the pre-tax amount which resides in accumulated other comprehensive income (loss).

As permitted by GAAP, our accounting policy is to remove any such stranded tax effect remaining in accumulated other comprehensive income, by recognizing an offset to our provision for income taxes related to continuing operations, only at the time when there is no remaining pre-tax amount in accumulated other comprehensive income.

permitted by GAAP, our accounting policy is to remove any such stranded tax effect remaining in accumulated other comprehensive income, by recognizing an offset to our provision for income taxes related to continuing operations, only at the time when there is no remaining pre-tax amount in accumulated other comprehensive income.

For accumulated other comprehensive income related to currency translation, this would occur only upon the sale or complete liquidation of one of our non-U.S.

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For defined pension benefit plans and OPEB plans, this would occur whenever one of our subsidiaries which previously sponsored a defined benefit pension or OPEB plan had terminated such a plan and had no future obligation or plan asset associated with such a plan (such as in 2023 when we terminated our U.K.

pension plan and in 2025 when we terminated our U.S.

pension plan).

We record a reserve for uncertain tax positions for tax positions where we believe it is more-likely-than-not our position will not prevail with the applicable tax authorities.

The amount of the benefit associated with our uncertain tax positions that we recognize is limited to the largest amount for which we believe the likelihood of realization is greater than 50 %.

We record a reserve for uncertain tax positions (“UTPs”) for tax positions where we believe it is more-likely-than-not our position will not prevail with the applicable tax authorities.

The amount of the benefit associated with our UTPs that we recognize is limited to the largest amount for which we believe the likelihood of realization is greater than 50 %.

We accrue penalties and interest on the difference between tax positions taken on our tax returns and the amount of benefit recognized for financial reporting purposes.

We classify our reserves for uncertain tax positions in a separate current or noncurrent liability, depending on the nature of the tax position.

We classify our reserves for UTPs in a separate current or noncurrent liability, depending on the nature of the tax position.

Environmental remediation costs – We record liabilities related to environmental remediation obligations when estimated future expenditures are probable and reasonably estimable.

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We expense advertising costs and research and development costs as incurred.

Advertising costs were approximately $ .4 million in 2022 and $ .5 million in each of 2023 and 2024.

Advertising costs were approximately $ .5 million in each of 2023, 2024 and 2025.

Research and development costs were no t significant in any year presented.

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CompX manufactures and sells security products including locking mechanisms and other security products for sale to the postal, transportation, office and institutional furniture, cabinetry, tool storage, healthcare and other industries.

CompX also manufactures and distributes wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats and performance boats.

CompX also manufactures and distributes wake enhancement systems, stainless steel exhaust systems, custom metal fabricated parts, gauges, throttle controls, trim tabs and related hardware and accessories primarily for recreational marine and other industries.

Our chief operating decision maker (“CODM”) is our Vice Chairman of the Board.

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Asset information is not regularly provided to the CODM and therefore is not considered to be used by the CODM in making key operating decisions, allocating resources or assessing segment performance.

Depreciation and amortization amounts included in the calculation of segment profit all relate to CompX and were $ 4.0 million in each of 2022 and 2023 and $ 3.7 million in 2024.

Depreciation and amortization amounts included in the calculation of segment profit all relate to CompX and were $ 4.0 million in 2023 and $ 3.7 million in each of 2024 and 2025.

Years ended December 31,

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Marketable equity securities gain (loss)

Loss on pension plan termination

Settlement loss on pension plan termination and buy-out

Other components of net periodic pension and OPEB cost

1 unchanged sentence

Income tax (expense) benefit

Net income (loss)

See the Consolidated Financial Statements for other financial information regarding the Company’s operating segment.

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Note 5 – Marketable securities:

The current marketable securities we held at December 31, 2023 consisted of investments in debt securities.

The fair value of these current marketable securities was generally determined using Level 2 inputs because although these securities are generally traded, in many cases the market is not active and the year-end valuation is generally based on the last trade of the year, which may be several days prior to December 31.

Our noncurrent marketable securities consist of investments in the publicly-traded shares of our immediate parent company Valhi, Inc.

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December 31, 2024

Current assets - fixed income securities

Noncurrent assets

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Balance at the beginning of the period

Equity in earnings (loss) of Kronos

Equity in earnings (losses) of Kronos

Dividends received from Kronos

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Property and equipment, net

Investment in TiO 2 joint venture

Other noncurrent assets

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Prior to the acquisition, Kronos held a 50 % joint venture interest in LPC and LPC was operated as a manufacturing joint venture between Kronos and Venator.

Kronos acquired the 50 % joint venture interest in LPC for consideration of $ 185 million less a working

capital adjustment.

An additional earn-out payment of up to $ 15 million may be required if Kronos’ aggregate consolidated net income before interest expense, income taxes and depreciation and amortization expense, or EBITDA, during a two-year period comprising calendar years 2025 and 2026 exceed certain thresholds as described below.

Kronos accounted for the acquisition of the interest in LPC as a business combination and, as a result of obtaining full control, LPC became a wholly-owned subsidiary of Kronos.

Obtaining control of LPC and its estimated additional 78,000 metric tons annually of TiO 2 production volume allows Kronos to better serve the North American TiO 2 marketplace.

The acquisition was financed through a borrowing of $ 132.1 million under Kronos’ Global Revolver and the remainder paid with Kronos’ cash on hand.

The potential earn-out payment of up to $ 15 million is based on Kronos’ aggregate consolidated EBITDA tiers for 2025 and 2026 of $ 650 million and $ 730 million, with $ 5 million of the earn-out payable if Kronos achieves $ 650 million in aggregate consolidated EBITDA, and a maximum of $ 15 million payable if aggregate EBITDA is $ 730 million or greater for the period.

If Kronos achieves aggregated consolidated EBITDA between $ 650 million and $ 730 million, the payment of the additional $ 10 million is prorated between the two targets.

The earn-out is payable at the earliest in April 2027.

The estimated fair value of the earn-out at the Acquisition Date was $ 4.2 million and was determined using a weighted probability of potential outcomes based on estimated future EBITDA and volatility factors, among other variables and estimates.

Kronos recognized a pre-tax gain of approximately $ 64.5 million in the third quarter of 2024, representing the difference between the $ 178.2 million estimated fair value of its existing ownership interest in LPC at the Acquisition Date and its aggregate $ 113.7 million carrying value at the Acquisition Date.

Kronos acquired the 50 % joint venture interest in LPC for consideration of $ 185 million less a working capital adjustment and an additional earn-out payment of up to $ 15 million.

The earn-out liability associated with the

acquisition is remeasured at fair value at each reporting date.

The estimated fair value of the earn-out as of December 31, 2024 was $ 4.3 million.

During the third quarter of 2025, Kronos determined that it was no longer probable that the thresholds required to trigger payment of the earn-out would be achieved.

As a result, the fair value of the earn-out liability was reduced to zero , resulting in Kronos recognizing a non-cash gain of $ 4.6 million.

Kronos also recognized a pre-tax gain of approximately $ 64.5 million in the third quarter of 2024, representing the difference between the $ 178.2 million estimated fair value of its existing ownership interest in LPC at the Acquisition Date and its aggregate $ 113.7 million carrying value at the Acquisition Date.

Note 7 – Goodwill:

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No impairment was indicated as part of such annual review of goodwill.

As permitted by GAAP, during 2022, 2023 and 2024 we used the qualitative assessment of ASC 350-20-35 for our annual impairment test and determined it was not necessary to perform the quantitative goodwill impairment test.

As permitted by GAAP, during 2023, 2024 and 2025 we used the qualitative assessment of ASC 350-20-35 for our annual impairment test.

Prior to 2023, all of the goodwill related to CompX’s marine components operations (which aggregated $ 10.1 million) was impaired, and all of the goodwill related to our wholly-owned subsidiary EWI Re, Inc., (“EWI”) which was formerly an insurance brokerage and risk management services company (which aggregated $ 6.4 million), was impaired.

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Any outstanding borrowings and interest on such borrowings under the Back-to-Back Credit Facility are eliminated in the preparation of the Consolidated Financial Statements.

In November 2022, NLKW and Valhi entered into a first amendment to the Valhi Credit Facility to extend the latest maturity date (and consequently the latest borrowing date) under the Valhi Credit Facility from December 31, 2023 to December 31, 2030;

and NLKW and NL entered into a first amendment to the Back-to-Back Credit Facility to extend the latest

maturity date (and consequently the latest borrowing date) under the Back-to-Back Credit Facility from December 31, 2023 to December 31, 2030.

Prior to 2023, NLKW and Valhi entered into a first amendment to the Valhi Credit Facility to extend the latest maturity date (and consequently the latest borrowing date) under the Valhi Credit Facility from December 31, 2023 to December 31, 2030;

and NLKW and NL entered into a first amendment to the Back-to-Back Credit Facility to extend the latest maturity date (and consequently the latest borrowing date) under the Back-to-Back Credit Facility from December 31, 2023 to December 31, 2030.

The related collateral arrangements remained unchanged by these amendments.

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Company contributions are based on matching or other formulas.

Defined contribution plan expense approximated $ 3.9 million in each of 2022 and 2023 and $ 3.5 million in 2024.

Defined contribution plan expense approximated $ 3.9 million in 2023, $ 3.5 million in 2024 and $ 4.0 million in 2025.

Defined benefit pension plans – We maintain a defined benefit pension plan in the U.S.

As a result of the spin-off of Kronos in 2003, Kronos participates in our pension plan.

Using participant data, we account for our portion of the combined pension plan as if it were a separate pension plan from the portion in which Kronos participates.

As a result of the spin-off of Kronos in 2003, Kronos participated in our pension plan.

Using participant data, we accounted for our portion of

the combined pension plan as if it were a separate pension plan from the portion in which Kronos participated.

The benefits under our defined benefit pension plan were based upon years of service and employee compensation.

The plan was closed to new participants, and no additional benefits accrued to existing plan participants.

As a result of the LPC acquisition in July 2024 (see Note 6), Kronos acquired the LPC defined benefit pension plan, which was overfunded on the Acquisition Date.

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Because we account for our portion of the combined pension plan separately, the plan merger did not impact our Consolidated Financial Statements.

The benefits under our defined benefit pension plan are based upon years of service and employee compensation.

The plan is closed to new participants, and no additional benefits accrue to existing plan participants.

Our funding policy is to contribute annually the minimum amount required under ERISA regulations plus additional amounts as we deem appropriate.

The benefits under our defined benefit pension plan were based upon years of service and employee compensation.

The plan was closed to new participants, and no additional benefits accrue to existing plan participants.

In accordance with applicable U.S.

pension regulations, effective June 30, 2025, we began the process of terminating the pension plan, which includes the purchase of annuity contracts from third-party insurance companies for the purpose of paying benefits to plan participants.

The annuity contracts were purchased on December 16, 2025, from “A” rated third-party insurance companies in settlement of all remaining obligations to the pension plan participants.

The annuity purchase was funded with existing plan assets.

In connection with the settlement, we recognized a non-cash settlement loss on pension plan termination and buy-out of approximately $ 19.7 million in the fourth quarter of 2025.

This charge represents the previously unrecognized actuarial losses and prior service costs that were accumulated in other comprehensive loss.

We previously maintained a defined benefit pension plan in the U.K.

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pension plan were removed from our Consolidated Financial Statements and a non-cash pension plan termination loss of $ 4.9 million was recognized in the second quarter of 2023.

We do not expect to make any contributions to our defined benefit pension plan during 2025.

Benefit payments to all plan participants out of plan assets are expected to be the equivalent of:

Years ending December 31,

(In thousands)

The funded status of our defined benefit pension plans is presented in the table below.

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Actuarial (gains) losses

Change in currency exchange rates

Benefits paid

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Plan settlement

Change in currency exchange rates

Benefits paid

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Accumulated benefit obligations ("ABO")

The amounts shown in the table above for actuarial (gains) losses at December 31, 2023 and 2024 have not been recognized as components of our periodic defined benefit pension cost as of those dates.

These amounts will be recognized as components of our periodic defined benefit cost in future years.

These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive loss at December 31, 2023 and 2024.

Our defined benefit pension plans increased from a total net underfunded status of $ 1.6 million at December 31, 2023 to a total net overfunded status of $ .2 million at December 31, 2024 due to the change in our PBO exceeding the change in our plan assets during 2024.

The decrease in our PBO in 2024 was primarily attributable to higher actuarial gains due primarily to the increase in the discount rate.

The amounts shown in the table above for actuarial (gains) losses at December 31, 2024 have not been recognized as components of our periodic defined benefit pension cost as of that date.

Actuarial gains (losses) are recognized as components of our periodic defined benefit cost in future years.

Because we terminated our remaining U.S.

pension plan, all remaining actuarial losses were recognized in the fourth quarter of 2025.

We were not required, and therefore did not make, any contributions to our U.S.

plan in 2025 but as a result of the allocated asset shortfall we will be required to fund an additional approximate $ 2 million into the U.S.

pension plan asset trust during 2026 to fulfill our final funding obligation.

The table below details the changes in other comprehensive income (loss) during 2023, 2024 and 2025.

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Net actuarial gain (loss) arising during the year

Plan settlement

Pension plan settlement loss

Amortization of unrecognized net actuarial gain

The components of our net periodic defined benefit pension cost are presented in the table below.

The amounts shown below for recognized actuarial losses in 2022, 2023 and 2024, net of deferred income taxes, were recognized as a component of our accumulated other comprehensive loss at December 31, 2021, 2022 and 2023, respectively.

The amounts shown below for recognized actuarial losses in 2023, 2024 and 2025, net of deferred income taxes, were recognized as a component of our accumulated other comprehensive loss at December 31, 2022, 2023 and 2024, respectively, and through the pension plan settlement loss in 2025.

Years ended December 31,

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Expected return on plan assets

Plan settlement

Settlement loss on pension plan termination and buy-out

Recognized actuarial losses

Certain information concerning our defined benefit pension plans (including information concerning certain plans for which ABO exceeds the fair value of plan assets as of the indicated date) is presented in the table below.

As discussed above, our U.K.

plan was terminated in the second quarter of 2023.

(In thousands)

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Fair value of plan assets

The weighted-average discount rate assumptions used in determining the actuarial present value of our benefit obligations as of December 31, 2023 and 2024 are 5.0 % and 5.5 %, respectively.

Such weighted-average rates were determined using the projected benefit obligations at each date.

Since our plans are closed to new participants and no new additional benefits accrue to existing plan participants, assumptions regarding future compensation levels are not applicable.

Consequently, the accumulated benefit obligations for all of our defined benefit pension plans were equal to the projected benefit obligations at December 31, 2023 and 2024.

The weighted-average discount rate assumptions used in determining the actuarial present value of our benefit obligations as of December 31, 2024 was 5.5 %.

Since our plans were closed to new participants and no new additional benefits accrued to existing plan participants, assumptions regarding future compensation levels were not applicable.

Consequently, the accumulated benefit obligations for our defined benefit pension plans was equal to the projected benefit obligations at December 31, 2024.

The weighted-average rate assumptions used in determining the net periodic pension cost for 2023, 2024 and 2025 are presented in the table below.

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In addition, we receive third-party advice about appropriate long-term rates of return.

we currently have a plan asset target allocation of 17 % to equity securities, 80 % to fixed income securities, and the remainder is allocated to other strategies.

The expected long-term rate of return for such investments is approximately 7 % and 5 %, respectively (before plan administrative expenses).

Approximately 99 % of our U.S.

plan assets are invested in funds that are valued at net asset value (“NAV”) and, in accordance with ASC 820-10, not subject to classification in the fair value hierarchy.

We regularly review our actual asset allocation for each plan and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate.

The composition of our pension plan assets by fair value level at December 31, 2023 and 2024 is shown in the tables below.

Fair Value Measurements

Quoted prices

Significant other

Assets measured

markets (Level 1)

inputs (Level 2)

inputs (Level 3)

(In thousands)

December 31, 2023:

Cash and other

As a result of the annuity purchase in December 2025, we did not have any plan assets at December 31, 2025.

The composition of our pension plan assets by fair value level at December 31, 2024 is shown in the table below.

Fair Value Measurements

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federal statutory income tax rate are presented below.

All of our pre-tax income relates to operations in the United States.

Years ended December 31,

(In thousands)

Expected tax expense (benefit), at U.S.

federal statutory

income tax rate of 21 %

federal statutory tax rate

Nontaxable dividends received from Kronos

state income taxes and other, net

Other adjustments:

Reclass for pension termination

Income tax expense (benefit)

Years ended December 31,

(In thousands)

Components of income tax expense (benefit):

Currently payable

Deferred income tax expense (benefit)

Current income tax expense

Deferred income taxes (benefit)

Income tax expense (benefit)

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Currency translation

Pension plans

Defined benefit pension plans

Comprehensive income tax expense (benefit)

In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings (losses) of Kronos.

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Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos.

We received aggregate dividends from Kronos of $ 26.8 million in each of 2022 and 2023, and $ 16.9 million 2024.

We received aggregate dividends from Kronos of $ 26.8 million in 2023, $ 16.9 million in 2024 and $ 7.0 million in 2025.

The components of the net deferred tax liability at December 31, 2024 and 2025 are summarized in the following table.

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Investment in Kronos Worldwide, Inc.

Tax loss carryforwards

Adjusted gross deferred tax assets (liabilities)

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At December 31, 2025, we have a deferred tax asset relating to our NOL carryforwards for federal income tax purposes of $ .8 million all of which have an indefinite carryforward period subject to an 80% annual usage limitation.

Our deferred tax asset for such NOL carryforward is shown net of a portion of our uncertain tax positions as discussed below.

At December 31, 2022, 2023, and 2024, the gross amount of our uncertain tax positions (exclusive of the effect of interest and penalties) was $ 7.3 million, and this amount has not changed during the past three years.

Our deferred tax asset for such NOL carryforward is shown net of a portion of our UTPs as discussed below.

At December 31, 2023, 2024 and 2025, the gross amount of our UTPs (exclusive of the effect of interest and penalties) was $ 7.3 million, and this amount has not changed during the past three years.

Previously, we made certain pro-rata distributions to our stockholders in the form of Kronos common stock and we recognized a taxable gain related to such distributions.

Our uncertain tax positions are attributable to such prior period distribution of Kronos common stock.

Our UTPs are attributable to such prior period distribution of Kronos common stock.

As discussed in Note 1, we are part of the Contran Tax Group and we have not paid this liability because Contran has not paid the liability to the applicable tax authority.

This liability would be payable by Contran to the applicable tax authority only if the previously distributed shares of Kronos common stock were to be sold or otherwise disposed outside of the Contran Tax Group.

At December 31, 2024, $ 2.5 million of our uncertain tax position is classified as a component of our noncurrent deferred tax liability.

If our uncertain tax position at December 31, 2024 was recognized, a benefit of $ 7.3 million would affect our effective income tax rate.

We currently estimate that our unrecognized tax benefits will not change materially during the next twelve months.

This liability would be payable to the applicable tax authority only if the previously distributed shares of Kronos common stock were to be sold or otherwise disposed outside of the Contran Tax Group.

At December 31, 2025, our UTP is classified as a component of our noncurrent deferred tax liability.

If our UTP at December 31, 2025 was recognized, a benefit of $ 7.3 million would affect our effective income tax rate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States.

The OBBBA, among other provisions, provides for bonus depreciation of qualified property, permanently modifies the interest expense deduction to use an adjusted taxable income based on a calculation similar to EBITDA, and makes changes to international tax provisions including Foreign-Derived Intangible Income (“FDII”) (renamed Foreign-derived Deduction Eligible Income (FDDEI)).

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA did not have a material impact on our 2025 consolidated financial statements, and we are in the process of evaluating the impact to future years as additional provisions take effect.

We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations.

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income tax returns prior to 2022 are generally considered closed to examination by applicable tax authorities.

Income tax matters related to Kronos

Kronos periodically reviews its deferred tax assets (“DTA”) to determine if a valuation allowance is required.

At December 31, 2024, Kronos has German corporate and trade net operating loss (“NOL”) carryforwards of $ 447.3 million (DTA of $ 70.8 million) and $ 40.1 million (DTA of $ 4.4 million), respectively;

Belgian corporate NOL carryforwards of $ 72.0 million (DTA of $ 18.0 million) and Canadian corporate and provincial NOL carryforwards of $ 28.9 million (DTA of $ 4.3 million) and $ 31.1 million (DTA of $ 3.6 million), respectively.

Prior to December 31, 2024, and using all available evidence, Kronos had concluded that no deferred income tax asset valuation allowance is required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have lengthy carryforward periods (the German and Belgian carryforwards may be carried forward indefinitely and the Canadian carryforwards may be carried forward 20 years ), (ii) Kronos has utilized a portion of such carryforwards during the most recent three-year period and (iii) Kronos currently expects to utilize the remainder of such carryforwards over the long term.

With regards to Kronos’ Belgian DTA, given its operating results during the fourth quarter of 2024 and its current expectations for 2025 in that jurisdiction, Kronos does not have sufficient positive evidence to overcome the significant negative evidence of having twelve quarters of cumulative losses.

Accordingly, at December 31, 2024, Kronos concluded that it was required to recognize a non-cash deferred income tax asset valuation allowance of $ 8.2 million under the more-likely-than-not recognition criteria with respect to its Belgian DTA.

At December 31, 2024, Kronos continues to conclude no valuation allowance is required to be recognized for its German and Canadian DTAs although prior to the complete utilization of such carryforwards, if Kronos were to generate additional losses in its German or Canadian operations for an extended period of time, or if applicable laws were to change such that the carryforward periods were more limited, it is possible that it might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point Kronos would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.

The 2017 Tax Act limited Kronos’ business interest expense to the sum of its business interest income and 30% of its adjusted taxable income as defined in the Tax Act.

Any business interest expense disallowed as a deduction as a result of the limitation may be carried forward indefinitely.

At December 31, 2023 and December 31, 2024, Kronos has

recorded deferred tax assets of $ 3.5 million and $ 13.3 million, respectively, for the carryforwards associated with the nondeductible portion of its interest expense and has concluded it is required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2024, Kronos recognized a non-cash deferred income tax expense of $ 5.7 million with respect to the valuation allowance recorded on a portion of its additional interest expense carryforwards not benefitted by future reversals of existing deferred tax liabilities .

Prior to the enactment of the 2017 Tax Act, the undistributed earnings of Kronos’ European subsidiaries were deemed to be permanently reinvested (Kronos had not made a similar determination with respect to the undistributed earnings of its Canadian subsidiary).

Pursuant to the one-time repatriation tax (Transition Tax) provisions of the 2017 Tax Act which imposed a one-time repatriation tax on post-1986 undistributed earnings, Kronos recognized current income tax expense of $ 74.5 million and elected to pay such tax in annual installments over an eight-year period beginning in 2018.

At December 31, 2024 the balance of its unpaid Transition Tax is $ 18.6 million, with the remaining payment due in 2025.

On December 10, 2024, the Department of the Treasury and the Internal Revenue Service released final currency regulations under §987 and related rules (the “2024 Final Regulations”).

The 2024 Final Regulations generally apply to tax years beginning after December 31, 2024, and include transition rules that require Kronos to compute a pretransition gain or loss for currency translation related to the operations, assets and liabilities of its non-U.S.

qualified business units.

Pursuant to the 2024 Final Regulations, Kronos has calculated a pretransition gain of $ 77.1 million and, accordingly, its income tax expense in 2024 includes a non-cash deferred income tax expense of $ 16.5 million recognized in the fourth quarter.

Tax authorities are examining certain of Kronos’ U.S.

tax returns and may propose tax deficiencies, including penalties and interest.

Because of the inherent uncertainties involved in settlement initiatives and court and tax proceedings, Kronos cannot guarantee that these tax matters, if any, will be resolved in Kronos’ favor, and therefore its potential exposure, if any, is also uncertain.

Kronos believes it has adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations.

Kronos believes the ultimate disposition of tax examinations should not have a material adverse effect on its consolidated financial position, results of operations or liquidity.

Note 15- Stockholders’ equity:

Long-term incentive compensation plan – Prior to 2023, our board of directors adopted a plan that provided for the award of stock to our board of directors, and up to a maximum of 200,000 shares could be awarded.

We awarded 15,000 shares in 2022 and 17,750 shares in 2023 under this plan.

We awarded 17,750 shares in 2023 under this plan.

In February 2023, our board of directors voted to replace the existing director stock plan with a new plan that would provide for the award of stock to non-employee members of our board of directors, and up to a maximum of 200,000 shares could be awarded.

The new plan was approved at our May 2023 shareholder meeting, and the prior director stock plan terminated effective June 30, 2023.

We awarded 14,250 shares in 2024 under the new plan.

We awarded 14,250 shares in 2024 and 15,000 shares in 2025 under the new plan.

At December 31, 2025, 170,750 shares were available for future award under this new plan.

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At December 31, 2025, Kronos had 71,000 shares available for award and CompX had 115,150 shares available for award.

Dividends – Our board of directors approved and we paid quarterly dividends per share to stockholders of $ .07 in each of 2022 and 2023 aggregating $ 13.7 million in each year and $ .08 in 2024 aggregating $ 15.6 million.

In addition, our board of directors declared special dividends on our common stock which totaled $ 17.1 million ($ .35 per share) that was paid on August 31, 2022 and $ 21.0 million ($ .43 per share) that was paid on August 29, 2024.

Dividends – Our board of directors approved and we paid quarterly dividends per share to stockholders of $ .07 in 2023 aggregating $ 13.7 million, $ .08 in 2024 aggregating $ 15.6 million and $ .09 in 2025 aggregating $ 17.6 million.

In addition, our board of directors declared special dividends on our common stock which totaled $ 21.0 million ($ .43 per share) paid in 2024 and $ 10.3 million ($ .21 per share) paid in 2025.

The declaration and payment of future dividends, and the amount thereof, is discretionary and is dependent upon our financial condition, cash requirements, contractual obligations and restrictions and other factors deemed relevant by our board of directors.

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Balance at beginning of period

Other comprehensive income (loss) - unrealized gain (loss)

Other comprehensive income - unrealized gain

arising during the period

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Balance at end of period

See Note 5 for further discussion on our marketable securities and Note 11 for amounts related to our defined benefit pension plans.

Other – During 2022, we purchased 2,000 shares of our common stock from Kronos for a nominal amount in a private transaction that was approved in advance by our independent directors.

We cancelled these treasury shares and allocated their cost to common stock at par value and additional paid-in capital.

During 2022, CompX acquired 78,900 shares of its Class A common stock for an aggregate amount of approximately $ 1.7 million under prior repurchase authorizations.

Of these shares, 70,000 shares were purchased in a market transaction, and 8,900 shares were purchased from two of its affiliates in two separate private transactions that

were also approved in advance by CompX’s independent directors.

At December 31, 2024, 523,647 shares were available for purchase under CompX’s prior repurchase authorizations.

See Note 11 for amounts related to our defined benefit pension plans.

Note 16 – Related party transactions:

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Simmons and the Family Trust.

Corporations that may be deemed to be controlled by or affiliated with such individuals sometimes engage in (a) intercorporate transactions such as guarantees, management and expense sharing arrangements, shared fee arrangements, joint ventures, partnerships, loans, options, advances of funds on open account, and sales, leases and exchanges of assets, including securities issued by both related and unrelated parties and (b) common investment and acquisition strategies, business combinations, reorganizations, recapitalizations, securities repurchases, and purchases and sales (and other acquisitions and dispositions) of subsidiaries, divisions or other business units, which transactions have involved both related and unrelated parties and have included transactions which resulted in the acquisition by one related party of a publicly-held noncontrolling interest in another related party.

of subsidiaries, divisions or other business units, which transactions have involved both related and unrelated parties and have included transactions which resulted in the acquisition by one related party of a publicly-held noncontrolling interest in another related party.

While no transactions of the type described above are planned or proposed with respect to us other than as set forth in these financial statements, we continuously consider, review and evaluate, and understand that Contran and related entities consider, review and evaluate such transactions.

Depending upon the business, tax and other objectives then relevant, it is possible that we might be a party to one or more such transactions in the future.

Current receivables and payables to affiliates are summarized in the table below:

While we do not consolidate our equity method investment in Kronos in our Consolidated Financial Statements, because we share a common parent company we do consolidate Kronos’ related party transactions with both CompX and our transactions for purposes of this footnote.

Current payables to affiliates are summarized in the table below:

(In thousands)

Current receivables from affiliates:

Other receivables from affiliates

Income taxes receivable from Valhi

Current payables to affiliates:

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In February 2024, Kronos entered into a $ 53.7 million subordinated, unsecured term loan with Contran.

Under the terms of various intercorporate services agreements (ISAs) we enter into with Contran, employees of Contran will provide certain management, tax planning, financial and administrative services to the Company on a fee

Such fees are based on the compensation of individual Contran employees providing services for us and/or estimates of time devoted to our affairs by such persons.

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Tall Pines Insurance Company, a subsidiary of Valhi, underwrites certain insurance policies for Contran and certain of its subsidiaries and affiliates, including us.

Tall Pines purchases reinsurance from highly rated (as determined by A.M.

Tall Pines purchases reinsurance from highly rated

(as determined by A.M.

Best or other internationally recognized ratings agency) third-party insurance carriers for substantially all of the risks it underwrites.

Consistent with insurance industry practices, Tall Pines receives commissions from the reinsurance underwriters and/or assesses fees for certain of the policies that it underwrites.

During 2022, 2023 and 2024 we paid $ 24.3 million, $ 28.4 million and $ 29.1 million, respectively, under the group insurance program (including amounts attributable to Kronos and LPC for all periods) which amounts principally represent insurance premiums, including $ 18.2 million, $ 20.7 million and $ 21.4 million in 2022, 2023 and 2024, respectively, for policies written by Tall Pines.

During 2023, 2024 and 2025 we paid $ 28.4 million, $ 29.1 million and $ 23.6 million, respectively, under the group insurance program (including amounts attributable to Kronos and its subsidiary LPC for all periods) which amounts principally represent insurance premiums, including $ 20.7 million, $ 21.4 million and $ 14.5 million in 2023, 2024 and 2025, respectively, for policies written by Tall Pines.

Amounts paid under the group insurance program also include payments to insurers or reinsurers for the reimbursement of claims within our applicable deductible or retention ranges that such insurers and reinsurers paid to third parties on our behalf, as well as amounts for claims and risk management services and various other third-party fees and expenses incurred by the program.

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The program apportions its costs among the participating companies.

The aggregate amount Kronos paid to Contran for such services was $ .3 million in 2022 and $ .4 million in each of 2023 and 2024.

The aggregate amount Kronos paid to Contran for such services was $ .4 million in each of 2023 and 2024 and $ .3 million in 2025.

Under the terms of a sublease agreement between Contran and Kronos, Kronos leases certain office space from Contran.

Kronos paid Contran $ .5 million in 2022, $ .6 million in 2023 and $ .7 million in 2024 for such rent and related ancillary services.

Kronos paid Contran $ .6 million in 2023 and $ .7 million in each of 2024 and 2025 for such rent and related ancillary services.

We expect that these relationships with Contran will continue in 2026.

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Under the terms of the merger, each of us and Kronos are contractually obligated to bear our respective share of the merged plan costs, including any funding obligations, and we and Kronos each continue to account for our respective portions of the merged plan as if it were a separate employee benefit plan.

If the merged plan were to be terminated in the future, Kronos would be entitled to all funding surplus attributable to its participants in the plan.

Upon the termination of the merged plan, Kronos is entitled to all funding surplus attributable to its participants in the plan.

In February 2025, our board of directors approved the termination of the merged plan, with an effective date of June 30, 2025.

As a result of the U.S.

plan termination, a plan deficit of approximately $ 2 million was attributable to us which is expected to be reimbursed to Kronos in the first half of 2026.

We anticipate that the completion of the merged plan termination will occur in the second half of 2026, following the receipt of all necessary regulatory approvals.

Termination of the merged plan would permanently remove all plan assets, liabilities and accumulated other comprehensive income (loss) from our financial statements.

Note 17 – Commitments and contingencies:

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Our former operations included the manufacture of lead pigments for use in paint and lead-based paint.

We, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (LIA), which discontinued business operations in 2002, have previously been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.

and governmental expenditures allegedly caused by the use of lead-based paints.

Certain of these actions were filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others were asserted as class actions.

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1-00-CV-788657) on July 24, 2019, an order approving a global settlement agreement entered into among all of the plaintiffs and the three defendants remaining in the case (the Sherwin Williams Company, ConAgra Grocery Products and us) was entered by the court and the case was dismissed with prejudice.

The global settlement agreement provides that an aggregate $ 305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between us and our co-defendants in respect to the case .

In the agreement, we expressly deny any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against us.

The global settlement agreement provided that an aggregate $ 305 million would be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between us and our co-defendants in respect to the case .

In the agreement, we expressly denied any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against us.

The settlement agreement fully concludes this matter.

Under the terms of the global settlement agreement, each defendant must pay an aggregate $ 101.7 million to the plaintiffs as follows:

Under the terms of the global settlement agreement, each defendant paid an aggregate $ 101.7 million to the plaintiffs as follows:

$ 25.0 million within sixty days of the court’s approval of the settlement and dismissal of the case, and the remaining $ 76.7 million in six annual installments beginning on the first anniversary of the initial payment ($ 12.0 million for the first five installments and $ 16.7 million for the sixth installment).

Our sixth installment due in September 2025 will be made with funds already on deposit at the court, which is included in current restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by us (and any amounts on deposit in excess of the final payment would be returned to us).

Pursuant to the settlement agreement, we had placed an additional $ 9.0 million into an escrow account which was previously included in noncurrent restricted cash on our Consolidated Balance Sheets.

Following our fifth $ 12.0 million installment made in September 2024, these funds became available for use and were reclassified as cash equivalents on our Consolidated Balance Sheet.

For financial reporting purposes, using a discount rate of 1.9 % per annum, we discounted the aggregate $ 101.7 million settlement to the estimated net present value of $ 96.3 million.

We made the initial $ 25.0 million payment in September 2019 and five annual installment payments of $ 12.0 million beginning in September 2020 and each September thereafter through 2024.

Our sixth installment, which was paid in October 2025, was funded with amounts that were already on deposit at the court and previously included in current restricted cash on our Consolidated Balance Sheets, as those amounts, together with all accrued interest at the date of payment, had been committed to the settlement.

Per the terms of the settlement, any amounts on deposit in excess of the final payment were to be returned to us, and in October 2025 we received accrued interest of approximately $ 1.6 million from such restricted cash.

For financial reporting purposes, we used a discount rate of 1.9 % per annum to discount the aggregate $ 101.7 million settlement to the estimated net present value of $ 96.3 million.

We recognized an aggregate accretion expense of $ .7 million, $ .5 million and $ .2 million in 2023, 2024 and 2025, respectively.

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We do not know if we will incur liability in the future in respect of any of the pending or possible litigation in view of the inherent uncertainties involved in court and jury rulings.

In the future, if new information regarding such matters becomes available to us (such as a final, non-appealable adverse verdict against us or otherwise ultimately being found liable with respect to such matters), at that time we would consider such information in evaluating any remaining cases then-pending against us as to whether it might then have become probable we have incurred liability with respect to these matters, and whether such liability, if any, could have become reasonably

The resolution of any of these cases could result in the recognition of a loss contingency accrual that could have a material adverse impact on our net income for the interim or annual period during which such liability is recognized and a material adverse impact on our consolidated financial condition and liquidity.

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We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs.

The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process;

The timing of payments depends upon a number of factors, including but not limited to

the timing of the actual remediation process;

which in turn depends on factors outside of our control.

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At December 31, 2025, we had accrued approximately $ 13 million related to approximately 27 sites associated with remediation and related matters we believe are at the present time and/or in their current phase reasonably estimable.

Excluding the $ 56.1 million environmental remediation settlement payment made in the first quarter of 2025 (as discussed below), the upper end of the range of reasonably possible costs to us for remediation and related matters for which we believe it is possible to estimate costs is approximately $ 38 million, including amounts currently accrued.

The upper end of the range of reasonably possible costs to us for remediation and related matters for which we believe it is possible to estimate costs is approximately $ 26 million, including amounts currently accrued.

These accruals have not been discounted to present value.

On February 10, 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the Raritan Bay Slag Superfund Site (“RBS Site”) in Middlesex County, New Jersey.

The consent decree requires the United States Army Corps of Engineers (and other federal agencies), the State of New Jersey, the Township of Old Bridge, NL, and twenty-two other private companies to pay a total of $ 151.1 million, plus interest, to resolve all federal and state law claims for past and future response costs under CERCLA and the New Jersey Spill Act, including natural resource damages, contribution, and indemnification, relating to the RBS Site.

In February 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the Raritan Bay Slag Superfund Site (“RBS Site”) in Middlesex County, New Jersey.

The consent decree required the United States Army Corps of Engineers (and other federal agencies), the State of New Jersey, the Township of Old Bridge, NL, and twenty-two other private companies to pay a total of $ 151.1 million, plus interest, to resolve all federal and state law claims for past and future response costs under CERCLA and the New Jersey Spill Act, including natural resource damages, contribution, and indemnification, relating to the RBS Site.

The consent decree is a global settlement of all such claims relating to the RBS Site and resolves a lawsuit captioned United States of America, et al.

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3:24-cv-08946) as well as all claims asserted by NL and the other settling parties in NL’s previously filed contribution lawsuit, NL Industries, Inc.

Old Bridge Township, et al., discussed above.

Old Bridge Township, et al .

Under the terms of the consent decree, in the first quarter of 2025 we paid $ 56.1 million, plus $ .5 million interest, toward the global settlement and received approximately $ 9.6 million from the other private companies participating in the settlement.

We recognized aggregate income of approximately $ 31.4 million in 2024 related to the adjustment of our environmental accrual related to this matter and the recording of a $ 9.6 million receivable for the funds received in the first quarter of 2025 from the other private companies participating in the settlement.

We recognized aggregate income of approximately $ 31.4 million in 2024 related to the adjustment of our environmental accrual related to this matter and recorded a $ 9.6 million receivable for the funds which we received in the first quarter of 2025 from the other private companies participating in the settlement.

The satisfaction of our obligations under the consent decree fully concludes this matter.

We believe it is not reasonably possible to estimate the range of costs for certain sites.

At December 31, 2025, there were approximately five sites for which we are not currently able to reasonably estimate a range of costs.

For these sites, generally the investigation is in the early stages, and we are unable to determine whether or not we actually had any association with the site, the nature of our responsibility, if any, for the contamination at the site, if any, and the extent of contamination at and cost to remediate the site.

sites, generally the investigation is in the early stages, and we are unable to determine whether or not we actually had any association with the site, the nature of our responsibility, if any, for the contamination at the site, if any, and the extent of contamination at and cost to remediate the site.

The timing and availability of information on these sites is dependent on events outside of our control, such as when the party alleging liability provides information to us.

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Accordingly, we recognize insurance recoveries in income only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the recovery.

In this regard we received $ .5 million and $ 1.4 million in insurance recoveries in 2023 and 2024, respectively.

Recoveries in 2022 were nominal.

In this regard we received $ .5 million, $ 1.4 million and nil in insurance recoveries in 2023, 2024 and 2025, respectively.

Other litigation

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Component products are sold primarily in North America to original equipment manufacturers.

The ten largest customers related to our Component Products operations accounted for approximately 52 % of total sales in each of 2022 and 2023 and 47 % in 2024.

One customer of CompX’s Security Products business accounted for 14 % of total sales in 2022, 24 % in 2023 (of which 11 % related to a pilot project) and 21 % in 2024.

One customer of CompX’s Marine Components business accounted for 12 % of consolidated sales in 2022.

The ten largest customers related to our Component Products operations accounted for approximately 52 % of total sales in 2023, 47 % in 2024 and 52 % in 2025.

One customer of CompX’s Security Products business accounted for 24 % in 2023 (of which 11 % related to a non-recurring pilot project), 21 % in 2024 and 26 % in 2025.

Note 18 – Financial instruments:

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Note 19 – Recent accounting pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis.

The ASU also mandates public companies to provide all segment disclosures currently required annually in interim periods.

Public companies are also required to disclose the title and position of the chief operating decision maker (“CODM”) and explain how the CODM uses the reported measure of segment profit or loss in assessing segment performance and allocation resources.

Pending Adoption

In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (“Topic 740”):

Improvements to Income Tax Disclosures .

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In addition, the standard increases the disclosure requirements for items included in the rate reconciliation that meet a quantitative threshold.

effective for us beginning with our 2025 Annual Report.

The ASU may be applied prospectively;

however, entities have the option to apply it retrospectively.

We are in the process of evaluating the additional disclosure requirements.

We adopted the ASU during the year ended December 31, 2025 on a retrospective basis.

Pending Adoption

In November 2024, the FASB issued ASU No.

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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 9A. Controls and Procedures