What changed in this filing

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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-06 · 56 added, 14 removed, 164 unchanged (30% of the section changed)

15 unchanged sentences

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.

Competition is based on a number of factors, such as price, product quality and service.

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.

21 unchanged sentences

CompX spends a significant amount of time and effort to refine, improve and adapt its existing products for new customers and applications.

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.

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 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.

26 unchanged sentences

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.

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

6 unchanged sentences

If we were required to liquidate our subsidiaries’ and affiliate’s securities in order to generate funds to satisfy our liabilities, we may be required to sell such securities at a time or times for less than what we believe to be the long-term value of such assets.

Financial Risk Factors

Kronos’ leverage may impair our financial condition.

Kronos has a significant amount of debt, primarily related to its Senior Secured Notes issued in September 2017 and February 2024.

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

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

● making it more difficult for Kronos to satisfy its obligations with respect to its liabilities;

5 unchanged sentences

● placing Kronos at a competitive disadvantage relative to other less leveraged competitors.

Indebtedness outstanding under Kronos’ global revolving credit facility (Global Revolver) accrues interest at variable rates.

Indebtedness outstanding under Kronos’ Global Revolver accrues interest at variable rates.

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.

4 unchanged sentences

Kronos’ business may not generate cash flows from operating activities sufficient to enable it to pay its debts when they become due and to fund its other liquidity needs.

As a result, Kronos may need to refinance all or a portion of its debt before maturity, as we have done in the past.

As a result, Kronos may need to refinance all or a portion of its debt before maturity, as it has done in the past.

Kronos may not be able to refinance any of its debt in a timely manner on favorable terms, if at all, in the current credit markets.

Any inability to generate sufficient cash flows or to refinance its debt on favorable terms could have a material adverse effect on its financial condition and impact its ability to pay a dividend to us.

Changes in currency exchange rates and interest rates can adversely affect Kronos’ net sales, profits and cash flows.

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.

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.

Legal, Compliance and Regulatory Risk Factors

24 unchanged sentences

Kronos also may not be able to readily detect breaches of such agreements.

The failure of Kronos’ confidentiality agreements to protect its proprietary technology,

know-how or trade secrets could result in a material loss of its competitive position, which could lead to significantly lower revenues, reduced profit margins or loss of market share.

The failure of Kronos’ confidentiality agreements to protect its proprietary technology, know-how or trade secrets could result in a material loss of its competitive position, which could lead to significantly lower revenues, reduced profit margins or loss of market share.

CompX relies on patent, trademark and trade secret laws in the United States and similar laws in other countries to establish and maintain intellectual property rights in its technology and designs.

21 unchanged sentences

To date, the existing GHG laws and regulations in effect in the various countries in which Kronos or CompX operates have not had a material adverse effect on financial results.

Until the timing, scope and extent

of any new or future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.

Until the timing, scope and extent of any new or future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.

However, if further GHG laws and regulations were to be enacted in one or more countries, it could negatively impact Kronos or CompX future results of operations through increased costs of production, particularly as it relates to their energy requirements or their need to obtain emissions permits.

3 unchanged sentences

Kronos’ operating as a global business presents risks associated with global and regional economic, political, and regulatory environments.

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 trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, terrorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas), natural disasters, pandemics or other health crises and political conditions.

Kronos may encounter difficulties enforcing agreements or other legal rights and the effective tax rate may fluctuate based on the variability of geographic earnings and statutory tax rates.

Kronos manufactures and distributes its products globally.

Revenue from non-U.S.

markets accounted for approximately 68%, 66%, and 66% of Kronos’ revenue for the years ended December 31, 2022, 2023 and 2024, respectively.

● global or regional economic downturns;

● 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.

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

● protectionist laws, policies, and business practices and nationalistic campaigns such as economic sanctions and exchange controls;

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);

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

● difficulties enforcing agreements or other legal rights;

● Kronos’ effective tax rate may fluctuate based on the variability of geographic earnings and statutory rates.

TiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions.

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.

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.

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

government that restrict trade, such as additional tariffs, trade barriers and other protectionist or retaliatory measures taken in response, could adversely impact Kronos’ ability to sell its products in the U.S.

or reduce its revenues and gross margins.

These measures may also increase Kronos’ costs of Canadian feedstock imported into the U.S.

and could adversely impact its gross margins or require Kronos to raise prices thereby making its products less competitive.

Additional tariffs imposed by the U.S or any retaliatory or reciprocal tariffs imposed by other countries could also increase the cost of feedstock and other raw materials that go into making TiO 2 , the extent of which is unknown.

The ultimate impact of any tariffs will depend on various factors, including the length of time tariffs are ultimately implemented and the amount, scope and nature of the tariffs.

Technology failures or cybersecurity breaches could have a material adverse effect on our operations.

13 unchanged sentences

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