What changed in this filing

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Item 1. Business

2025-03-06 compared with 2024-03-07 · 120 added, 117 removed, 526 unchanged (31% of the section changed)

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● 2013 – In December we purchased an additional ownership interest in and became the majority owner of Basic Management, Inc.

and The LandWell Company;

(“BMI”) and The LandWell Company (“LandWell”);

● 2015 – The first homes in our Cadence planned community were completed by third-party builders and sold to the public;

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In December BMI sold Basic Power Company;

● 2024 – In July, Kronos acquired the remaining 50% joint venture interest in Louisiana Pigment Company, L.P.

previously held by Venator Investments, Ltd.

Unless otherwise indicated, references in this report to “we”, “us” or “our” refer to Valhi, Inc.

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● Future supply and demand for our products;

● Our ability to realize expected cost savings from strategic and operational initiatives;

● Our ability to integrate acquisitions, including Louisiana Pigment Company, L.P., into Kronos’ operations and realize expected synergies and innovations;

● The extent of the dependence of certain of our businesses on certain market sectors;

● The cyclicality of certain of our businesses (such as Kronos’ TiO 2 operations);

● The cyclicality of certain of our businesses (such as Kronos’ titanium dioxide (“TiO 2 ”) operations);

● Customer and producer inventory levels;

● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO 2 industry);

● Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs);

● Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs) or the implementation of tariffs on imported raw materials;

● Changes in the availability of raw materials (such as ore);

● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO 2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises);

● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO 2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, tariffs, natural disasters, terrorist acts, global conflicts and public health crises);

● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises);

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● Competitive products and substitute products;

● Competition from Chinese suppliers with less stringent regulatory and environmental compliance requirements;

● Customer and competitor strategies;

● Potential difficulties in integrating future acquisitions;

● Potential difficulties in upgrading or implementing accounting and manufacturing software systems;

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● Our ability to protect or defend intellectual property rights;

● The introduction of trade barriers or trade disputes;

● The introduction of new, or changes in existing, tariffs, trade barriers or trade disputes (including tariffs imposed by the U.S.

federal government on imports from Canada, where Kronos has a manufacturing facility);

● The ability of our subsidiaries to pay us dividends;

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● The timing and amounts of insurance recoveries;

● Our ability to renew, amend, refinance or establish credit facilities;

● Increases in interest rates;

● Our ability to renew or refinance credit facilities or other debt instruments in the future ;

● Changes in interest rates;

● Our ability to maintain sufficient liquidity;

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● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations);

● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental, health, safety, sustainability or other regulations (such as those seeking to limit or classify TiO 2 or its use);

● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental, sustainability, health and safety or other regulations (such as those seeking to limit or classify TiO 2 or its use);

● The ultimate resolution of pending litigation (such as NL’s lead pigment and environmental matters);

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● Changes in real estate values and construction costs in Henderson, Nevada;

● Pending or possible future litigation or other actions.

● Pending or possible future litigation (such as litigation related to CompX’s use of certain permitted chemicals in its productions process) or other actions.

Should one or more of these risks materialize (or the consequences of such development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected.

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Our Chemicals Segment is operated through our majority control of Kronos.

Kronos is a leading global producer and marketer of value-added titanium dioxide pigments (TiO 2 ).

Kronos is a leading global producer and marketer of value-added titanium dioxide pigments.

TiO 2 is used to impart whiteness, brightness, opacity and durability to a wide variety of products, including paints, plastics, paper, fibers and ceramics.

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We operate in the component products industry through our majority control of CompX.

CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare and a variety of other industries.

CompX is also a leading manufacturer of wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine industry.

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Our majority-controlled subsidiary, Kronos, is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO 2 , a base industrial product used in a wide range of applications.

Kronos, along with its distributors and agents, sells and provides technical services for its products to approximately 3,000 customers in 100 countries with the majority of sales in Europe, North America and the Asia Pacific region.

Kronos, along with its distributors

and agents, sells and provides technical services for its products to approximately 3,000 customers in 100 countries with the majority of sales in Europe, North America and the Asia Pacific region.

We believe Kronos has developed considerable expertise and efficiency in the manufacture, sale, shipment and service of its products in domestic and international markets.

Effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50% joint venture interest in Louisiana Pigment Company, L.P.

(“LPC”) held by Venator Investments, Ltd.

(“Venator”) for consideration of $185 million less a working capital adjustment.

Prior to the acquisition, Kronos held a 50% joint venture interest in LPC through a wholly-owned subsidiary.

LPC was operated as a manufacturing joint venture between Kronos and Venator.

Following the acquisition, LPC became a wholly-owned subsidiary of Kronos.

See Note 3 to our Consolidated Financial Statements.

TiO 2 is a white inorganic pigment used in a wide range of products for its exceptional durability and its ability to impart whiteness, brightness and opacity.

TiO 2 is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, cosmetics and pharmaceuticals.

TiO 2 is widely considered to be superior to alternative white pigments in large part due to its hiding power (or opacity), which is the ability to cover or

mask other materials effectively and efficiently.

TiO 2 is widely considered to be superior to alternative white pigments in large part due to its hiding power (or opacity), which is the ability to cover or mask other materials effectively and efficiently.

TiO 2 is designed, marketed and sold based on specific end-use applications.

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Per capita consumption of TiO 2 in Western Europe and North America far exceeds that in other areas of the world, and these regions are expected to continue to be the largest consumers of TiO 2 on a per capita basis for the foreseeable future.

We believe Western Europe and North America currently account for approximately 14% and 15% of global TiO 2 consumption, respectively.

We believe Western Europe and North America each account for approximately 15% of global TiO 2 consumption, respectively.

Markets for TiO 2 are generally increasing in China, the Asia Pacific region, South America and Eastern Europe and we believe these are significant markets which will continue to grow as economies in these regions develop and quality-of-life products, including TiO 2 , experience greater demand.

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Kronos ships TiO 2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier.

Sales of Kronos’ core TiO 2 pigments represented approximately 90% of our Chemicals Segment’s net sales in 2023.

Sales of Kronos’ core

TiO 2 pigments represented approximately 90% of our Chemicals Segment’s net sales in 2024.

Kronos and its agents and distributors primarily sell its products in three major end-use markets:

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In pharmaceuticals, Kronos’ TiO 2 is used commonly as a colorant in tablet and capsule coatings as well as in liquid medicines to provide uniformity of color and appearance.

KRONOS ® purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP and BP (United States Pharmacopoeia and British Pharmacopoeia) and the FDA (United States Food and Drug Administration).

KRONOS ® purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP (United States Pharmacopoeia), BP (British Pharmacopoeia) and the FDA (United States Food and Drug Administration).

Kronos’ TiO 2 business is enhanced by the following three complementary businesses, which comprised approximately 10% of our Chemicals Segment’s net sales in 2024:

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Manufacturing, operations and properties

Kronos produces TiO 2 in two crystalline forms:

Manufacturing – Kronos produces TiO 2 in two crystalline forms:

rutile and anatase.

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The sulfate process produces a warmer undertone and is preferred for use in selected paper products, ceramics, rubber tires, man-made fibers, food products, pharmaceuticals and cosmetics, some of which generate higher profit margins.

Kronos produced 545,000, 492,000 and 401,000 metric tons of TiO 2 in 2021, 2022 and 2023, respectively.

Kronos’ production volumes include its share of the output produced by its TiO 2 manufacturing joint venture discussed below.

Kronos’ average production capacity utilization rates were approximately full practical capacity in 2021, 89% in 2022 and 72% in 2023.

Beginning in the fourth quarter of 2022 and continuing throughout 2023, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties.

Kronos operates facilities throughout North America and Europe, including the only sulfate process plant in North America and four TiO 2 plants in Europe (one in each of Leverkusen, Germany;

LPC – Prior to July 16, 2024, Kronos Louisiana, Inc., one of Kronos’ subsidiaries, and Venator each owned a 50% interest in LPC, which was operated as a manufacturing joint venture.

LPC owns and operates a chloride-process TiO 2 plant located near Lake Charles, Louisiana.

On July 16, 2024 Kronos acquired the 50% interest in LPC held by Venator for consideration of $185 million less a working capital adjustment.

Prior to the acquisition, Kronos accounted for its interest in the joint venture by the equity method.

The joint venture operated on a break-even basis and therefore Kronos did not have any equity in earnings of the joint venture.

Kronos was required to purchase one-half of the TiO 2 produced by the joint venture.

All costs and capital expenditures

were shared equally with Venator, with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced.

Kronos’ share of net costs was reported as cost of sales as the TiO 2 was sold.

See Notes 3 and 17 to our Consolidated Financial Statements.

As a result of the acquisition, for financial reporting purposes, the assets acquired and liabilities assumed of LPC are included in our Consolidated Balance Sheet as of December 31, 2024, and the results of operations and cash flows of LPC are included in our Consolidated Statement of Operations and Cash Flows beginning as of the Acquisition Date.

See Note 3 to our Consolidated Financial Statements.

Operations – Kronos produced 492,000, 401,000 and 535,000 metric tons of TiO 2 in 2022, 2023 and 2024, respectively.

Kronos’ production volumes for 2022, 2023 and 2024 through the Acquisition Date include its share of the output produced by its TiO 2 manufacturing joint venture.

Subsequent to the Acquisition Date, Kronos’ 2024 production volumes include 100% of the production volumes from the LPC facility.

Kronos’ average production capacity utilization rates were approximately 89% in 2022, 72% in 2023 and 96% in 2024.

Beginning in the fourth quarter of 2022 and continuing throughout the first quarter of 2024, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties.

Kronos increased production levels to align with higher overall customer demand in 2024.

Properties – Kronos operates facilities throughout North America and Europe.

Kronos has four TiO 2 plants in Europe (one in each of Leverkusen, Germany;

Nordenham, Germany;

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and Fredrikstad, Norway).

In North America, Kronos has a TiO 2 plant in Varennes, Quebec, Canada and, through the manufacturing joint venture described below, a 50% interest in a TiO 2 plant near Lake Charles, Louisiana.

In North America, Kronos has a TiO 2 plant in Varennes, Quebec, Canada and a TiO 2 plant near Lake Charles, Louisiana.

Kronos’ chloride process production and remaining sulfate production capacity has increased by approximately 5% over the past ten years due to debottlenecking programs, with only moderate capital expenditures.

Kronos operated its facilities at reduced capacities in the fourth quarter of 2022 and through 2023.

The following table presents the division of Kronos’ expected 2025 manufacturing capacity by plant location and type of manufacturing process:

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Varennes, Canada (3)

TiO 2 production, chloride and sulfate process,

TiO 2 production, chloride process,

slurry facility, titanium chemicals products

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(1) The Leverkusen facility is located within a more extensive manufacturing complex.

Kronos owns its Leverkusen facility, which represents about one-third of its current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050.

Kronos owns its Leverkusen facility, which represents approximately 29% of its current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050.

Lease payments are periodically negotiated for periods of at least two years at a time.

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(2) The Fredrikstad facility is located on public land and is leased until 2063.

(3) Kronos operates the facility near Lake Charles, Louisiana through a joint venture with Venator Investments LLC (Venator Investments), a wholly-owned subsidiary of Venator Group, of which Venator Materials PLC (Venator) owns 100% and the amount indicated in the table above represents the share of TiO 2 produced by the joint venture to which Kronos is entitled.

See Note 7 to our Consolidated Financial Statements and “TiO 2 manufacturing joint venture.” The joint venture owns the land and facility.

(3) In the third quarter of 2024, Kronos closed its sulfate process line at its plant in Varennes, Canada.

See Note 20 to our Consolidated Financial Statements.

(4) Effective July 16, 2024, Kronos acquired the 50% interest in LPC it did not already own.

See Note 3 to our Consolidated Financial Statements.

Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above.

Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.

In addition, Kronos operates a rutile slurry manufacturing plant near Lake Charles, Louisiana, which converts dry pigment primarily manufactured for it at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers.

In addition, Kronos operates a rutile slurry manufacturing plant near its Lake Charles, Louisiana facility, which converts dry pigment primarily manufactured for it at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers.

Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium and France.

TiO 2 manufacturing joint venture

Kronos Louisiana, Inc., one of Kronos’ subsidiaries, and Venator Investments each own a 50% interest in a manufacturing joint venture, Louisiana Pigment Company, L.P.

LPC owns and operates a chloride-process TiO 2 plant located near Lake Charles, Louisiana.

Kronos and Venator share production from the plant equally pursuant to separate offtake agreements, unless Kronos and Venator otherwise agree.

A supervisory committee directs the business and affairs of the joint venture, including production and output decisions.

This committee is composed of four members, two of whom Kronos appoints and two of whom Venator appoints.

Two general managers manage the operations of the joint venture acting under the direction of the supervisory committee.

Kronos appoints one general manager and Venator appoints the other.

We do not consolidate LPC because we do not control it.

We account for Kronos’ interest in the joint venture by the equity method.

The joint venture operates on a break-even basis and therefore we do not have any equity in earnings of the joint venture.

Kronos is required to purchase one half of the TiO 2 produced by the joint venture.

All costs and capital expenditures are shared equally with Venator with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced.

Kronos’ share of net costs is reported as cost of sales as the TiO 2 is sold.

See Notes 7 and 17 to our Consolidated Financial Statements.

Raw materials

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Auto-renews annually

Chloride process grade slag

Renewal terms upon negotiation

Sierra Rutile Limited

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Renewal terms upon negotiation

Saraf Agencies Private Limited

Chloride process grade slag

Renewal terms upon negotiation

In the past Kronos has been, and it expects that it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts.

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As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates a rock ilmenite mine in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2024.

Kronos expects ilmenite production from its mine to meet its European sulfate process feedstock requirements for the foreseeable future.

For its Canadian sulfate process plant, Kronos purchases sulfate grade slag primarily from Rio Tinto Fer et Titane Inc.

under a supply contract that renews annually, subject to termination upon twelve months written notice.

Kronos expects ilmenite production from its mine to meet its sulfate process feedstock requirements for the foreseeable future.

Kronos expects the raw materials purchased under this contract, and contracts that it may enter into, to meet its sulfate process feedstock requirements over the next several years.

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Ilmenite ore mined and used internally

Purchased slag

Purchased ilmenite ore (1)

(1) Relates to Kronos’ Canadian sulfate production line, which was closed in the third quarter of 2024.

Sales and marketing

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During 2024, Kronos had an estimated 7% share of worldwide TiO 2 sales volume, and based on sales volume, we believe Kronos is the leading seller of TiO 2 in several countries, including Germany.

Kronos’ principal competitors are The Chemours Company, Tronox Incorporated, LB Group Co.

and Venator Materials PLC.

Kronos’ principal competitors are LB Group Co.

Ltd., The Chemours Company, Tronox Holdings PLC and Venator Materials PLC.

The top five TiO 2 producers (i.e.

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Chemours has approximately one-half of total North American TiO 2 production capacity and is Kronos’ principal North American competitor.

previously announced it plans to add an additional 200,000 tons of chloride process capacity which we expect will be added incrementally over the next several years.

In addition, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulphate process capacity.

LB Group previously announced it plans to add an additional 200,000 tons of chloride process capacity which we expect will be added incrementally over the next several years.

However, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulfate process capacity.

In addition, in 2024 Kronos closed its sulfate production line in Varennes, Canada.

The TiO 2 industry is characterized by high barriers to entry consisting of high capital costs, proprietary technology and significant lead times required to construct new facilities or to expand existing capacity.

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however, this increase only partly compensated for the shut-down of various TiO 2 plants throughout the world.

Although overall industry demand is expected to increase in 2024, other than through debottlenecking projects and the LB Group Co.

expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by it or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.

If actual developments differ from Kronos’ expectations, the TiO 2 industry’s and Kronos’ performance could be unfavorably affected.

Other than through debottlenecking projects and the LB Group expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by it or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.

If actual developments differ from Kronos’ expectations, the TiO 2 industry and Kronos’ performance could be unfavorably affected.

Research and development

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Kronos continually seeks to improve the quality of its grades and has been successful at developing new grades for existing and new applications to meet the needs of its customers and increase product life cycles.

Since the beginning of 2019, Kronos has added seven new grades for pigments and other applications.

Since the beginning of 2020, Kronos has added six new grades for pigments and other applications.

Patents, trademarks, trade secrets and other intellectual property rights

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It is possible that future developments, such as stricter requirements in environmental laws and enforcement policies, could adversely affect Kronos’ operations, including production, handling, use, storage, transportation, sale or disposal of hazardous or toxic substances or require Kronos to make capital and other expenditures to comply, and could adversely affect our consolidated financial position and results of operations or liquidity.

During 2021, Kronos was notified by government authorities in Norway that the classification of a dam at its mine facilities was changed to the highest level for Norwegian classification of dam structures.

As a result, Kronos’ mine operations are subject to a higher degree of oversight and regulation than existed prior to this change in classification.

In 2023, Kronos completed capital projects for improvements to the dam and related areas necessary to meet the new classification standards.

Kronos has a history of identifying new ways to reduce consumption and waste by converting byproducts to co-products through its KRONOS ecochem® products.

Annually Kronos updates and publishes its Safety, Environment, Energy and Quality Policy which is translated into local languages and distributed to all its employees and shared publicly

via its website.

Kronos has a published Safety, Environment, Energy and Quality Policy which is translated into local languages and distributed to all its employees and shared publicly via its website.

Kronos has implemented rigorous procedures for incident reporting and investigation, including root cause analysis of environmental and safety incidents and near misses.

Because TiO 2 production requires significant energy input, Kronos is focused on energy efficiency at all production locations.

Four of its five production facilities maintain certifications to the ISO 50001:2018 Energy Management standard and all locations have local energy teams in place.

Four of its six production facilities maintain certifications to the ISO 50001:2018 Energy Management standard and all locations have local energy teams in place.

These teams are responsible for maintaining ISO 50001:2018 certifications (where applicable), performing regular reviews of local energy consumption, making recommendations regarding capital projects that reduce energy consumption and associated Greenhouse Gas (“GHG”) emissions or enhance efficiency.

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Norway is not a member but generally patterns its environmental regulatory actions after those of the EU.

From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under U.S.

Typically, Kronos establishes compliance programs to resolve these matters.

From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under local or national laws.

Typically, Kronos updates its compliance programs to resolve these matters.

Occasionally, Kronos may pay penalties.

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Kronos believes all of its facilities are in substantial compliance with applicable environmental laws.

From time to time, new environmental, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 .

From time to time, new environmental, sustainability, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 .

Kronos believes it is in substantial compliance with laws applicable to the regulation of TiO 2 .

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Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels.

On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety.

That decision is currently under appeal.

On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety, which decision is currently under appeal.

Kronos’ capital expenditures related to ongoing environmental compliance, protection and improvement programs, including capital expenditures which are primarily focused on increasing operating efficiency but also result in improved environmental protection such as lower emissions from its manufacturing facilities, were $17 million in 2024 and are currently expected to be approximately $24 million in 2025.

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Business overview

Through our majority-controlled subsidiary, CompX, we are a leading manufacturer of security products including mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications.

CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries.

CompX continuously seeks to diversify into new markets and identify new applications and features for its products, which it believes provides a greater potential for higher rates of earnings growth as well as diversification of risk.

Through our majority-controlled subsidiary, CompX, we are a leading manufacturer of engineered components utilized in a variety of applications and industries.

CompX manufactures security products including mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare applications and a variety of other industries.

CompX continuously seeks to diversify into new

markets and identify new applications and features for its products, which it believes provides a greater potential for higher rates of earnings growth as well as diversification of risk.

Manufacturing, operations and products

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● disc tumbler locks which provide moderate security and generally represent the lowest cost lock CompX produces;

● pin tumbler locks which are more costly to produce and are used in applications requiring higher levels of security, including KeSet ® and System 64 ® (which each allow the user to change the keying on a single lock 64 times without removing the lock from its enclosure), TuBar ® and Turbine™ ;

● CompX’s innovative CompX eLock ® and StealthLock ® electronic locks which provide stand-alone or networked security and audit trail capability for drug storage and other valuables through the use of a proximity card, magnetic stripe, radio frequency or other keypad credential.

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Marine Components .

CompX’s marine components reporting unit manufactures and distributes wake enhancement systems, stainless steel exhaust components, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats (tow boats) and performance boats.

CompX’s marine components reporting unit has a facility in Neenah, Wisconsin and a facility in Grayslake, Illinois which is shared with its security products reporting unit.

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Grayslake, IL

(1) ISO-9001 registered facilities

SP – Security Products

MC – Marine Components

(1) ISO-9001 registered facilities

Raw materials

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At other times CompX may make spot market buys of larger quantities of raw materials to take advantage of favorable pricing or volume-based discounts.

After increasing in 2021 and the first half of 2022, prices for the primary commodity-related raw materials used in the manufacture of locking mechanisms, primarily zinc and brass, generally began to stabilize in the latter half of 2022 and into 2023 and generally began to soften in the latter half of 2023.

Prices for aluminum and stainless steel, the primary raw material used for the manufacture of marine components including marine exhaust headers and pipes, wake enhancement systems, throttles and trim tabs experienced significant volatility during 2021 and 2022 but were more stable in 2023.

Although raw commodity costs declined during 2023 from elevated levels experienced in 2021 and 2022, in most cases materials CompX purchases also include processing and conversion costs such as alloying, extrusion and rolling, which continue to be elevated due to costs of labor, transportation and energy.

Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2024 to be relatively stable.

CompX’s raw material prices were generally stable through the first half of 2024, although beginning in the latter half of the third quarter CompX began to experience moderate increases in certain raw material costs, particularly brass.

The zinc market was volatile in 2024, but CompX was successful in making strategic spot buys to keep its costs consistent with 2023.

Prices for aluminum and stainless steel, which are the primary raw materials used for the manufacture of marine components (including marine exhaust headers and pipes, wake enhancement systems, throttles and trim tabs), were relatively stable in 2024 because CompX took advantage of volume purchase opportunities during the year.

In most cases, commodity raw materials CompX purchases include processing and conversion costs, such as alloying, extrusion and rolling, which remain elevated due to costs of labor, transportation, and energy.

Processing and conversion costs are not expected to decrease and may negate the benefit of softening commodity prices on CompX’s purchases.

Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2025 to be relatively stable, although governmental actions such as tariffs may impact markets.

When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.

When possible, CompX seeks to mitigate the impact of fluctuations in these raw material costs on its margins through improvements in production efficiencies or other operating cost reductions.

In the event CompX is unable to offset raw material cost increases with other cost reductions, it may be difficult to recover those cost increases through increased product selling prices or raw material surcharges due to the competitive nature of the markets in which it competes.

Consequently, overall operating margins can be negatively affected by commodity-related raw material cost pressures.

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CompX holds a number of patents relating to its component products, certain of which it believes to be important to it and its continuing business activity.

Patents generally have a term of 20 years, and CompX’s patents have remaining

terms ranging from less than 1 year to 17 years at December 31, 2023.

Patents generally have a term of 20 years, and CompX’s patents have remaining terms ranging from one year to 16 years at December 31, 2024.

CompX’s major trademarks and brand names in addition to CompX ® include:

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These products are packaged and merchandised for easy availability and handling by distributors and end users.

Our Component Products Segment sells to a diverse customer base with only one customer representing 10% or more of our Component Products Segment’s sales in 2023 (United States Postal Service representing 24% of which 11% related to a pilot project).

Our Component Products Segment sells to a diverse customer base with only one customer representing 10% or more of our Component Products Segment’s sales in 2024 (United States Postal Service – 21%).

Our Component Products Segment’s largest ten customers accounted for approximately 47% of its sales in 2024.

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CompX has a history of incorporating environmental management and compliance in its operations and decision making.

CompX operates three low-emission manufacturing facilities and CompX’s production processes requiring waste-water discharge are consolidated at its Mauldin, South Carolina facility.

This facility has received a ReWa Compliance Excellence Award multiple years for its exemplary performance from Renewable Water Resources, an organization which sets regulatory and water policies for the Mauldin facility’s geographic region.

CompX operates three manufacturing facilities and CompX’s production processes requiring waste-water discharge are consolidated at its Mauldin, South Carolina facility.

This facility has received a ReWa Compliance Excellence Award multiple years for its exemplary performance from Renewable Water Resources, an organization which

sets regulatory and water policies for the Mauldin facility’s geographic region.

In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste.

CompX’s operations are subject to federal, state and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal, remediation of and exposure to hazardous and non-hazardous substances, materials and wastes.

CompX’s operations are also subject to federal, state, and local laws and regulations relating to worker health and safety.

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To date, the costs of maintaining compliance with such laws and regulations have not significantly impacted CompX’s results;

CompX currently does not anticipate any significant costs or expenses relating to such matters;

however, it is possible future laws and regulations may require it to incur significant additional expenditures.

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In addition, LandWell has been actively marketing and selling land zoned for commercial and light industrial use and at December 31, 2024 approximately 15 saleable acres remain.

Contracts for land sales are negotiated on an individual basis, and sales terms and prices will vary based on such factors as location (including location within a planned community), expected development work and individual buyer needs.

Contracts for land sales are negotiated on an individual basis, and sales terms and prices will vary based on such factors

as location (including location within a planned community), expected development work and individual buyer needs.

Although land may be under contract or land sales may be completed, we do not recognize revenue until we have satisfied the criteria for revenue recognition.

In some instances, LandWell will receive cash proceeds at the time the contract closes

and record deferred revenue for some or all of the cash amount received, with deferred revenue being recognized in subsequent periods.

In most instances buyers can cancel an escrow agreement with no financial penalties until shortly before the closing date.

In some instances, LandWell will receive cash proceeds at the time the contract closes and record deferred revenue for some or all of the cash amount received, with such deferred revenue being recognized in subsequent periods.

Substantially all the land in the residential/planned community has been sold;

however, we expect the development work to take three to four years to complete.

however, we expect the development work to take two to three years to complete.

Our Real Estate Management and Development Segment’s sales consist principally of land sales and to a lesser extent water (through September 2022) and electric delivery fees (prior to December 2023).

During 2023 we had sales to five customers that exceeded 10% of our Real Estate Management and Development Segment’s net sales (CCR 270 – 17%, Taylor Morrison – 13%, Beazer Homes – 11%, Richmond American Homes – 11% and Sand Hill Venture – 11%) related to land sales.

During 2024 we had sales to three customers that exceeded 10% of our Real Estate Management and Development Segment’s net sales (Lennar Homes – 23%, Richmond American Homes – 16% and American Homes for Rent – 14%) related to land sales.

There are multiple new construction residential communities in the greater Las Vegas, Nevada area.

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governmental agencies of countries in which Kronos operates have adopted or are contemplating regulatory changes relating to certain ESG topics, such as the Corporate Social Responsibility Directive adopted by the European Union on November 28, 2022 (EU CSRD).

European jurisdictions in which Kronos operates have not yet adopted local legislation to implement the EU CSRD.

Kronos is evaluating and will continue to evaluate the applicability of the EU CSRD as regulatory guidance is issued and as the European countries in which it operates adopt implementing legislation and Kronos will establish a compliance program to address any applicable requirements.

Kronos is evaluating and will continue to evaluate the applicability of the EU CSRD as regulatory guidance is issued and as the European countries in which it

operates adopt implementing legislation and Kronos will establish a compliance program to address any applicable requirements.

In an effort to align our non-employee directors’ financial interests with those of our stockholders, our board of directors established share ownership guidelines for our non-management directors.

In addition, we have adopted an insider trading policy that applies to both employees and non-employee directors.

Kronos has taken steps to integrate ESG considerations into operating decisions with other critical business factors.

Kronos biennially publishes an ESG Report, which is available on its public website.

Kronos periodically publishes an ESG Report, which is available on its public website.

The primary purpose of its ESG Report is to describe Kronos’ policies and programs in the area of ESG, including certain internal metrics and benchmarks related to various aspects of ESG.

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In addition to salaries, these programs, which vary by segment and by country/region, can include annual bonuses, a defined benefit pension plan, a defined contribution plan with employer matching, a profit sharing plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, employee assistance programs and tuition assistance.

We recognize that everyone deserves respect and equal treatment.

As a global company, we embrace diversity and collaboration in our workforce and our business initiatives.

We are an equal opportunity employer, and we base employment decisions on merit, competence and qualifications, without regard to race, color, national origin, gender, age, religion, disability, sex, sexual orientation or other characteristics protected by applicable law in the jurisdictions in which we operate.

We promote a respectful, diverse and inclusive workplace in which all individuals are treated with respect and dignity.

As of December 31, 2024, our Chemicals Segment employed the following number of people:

United States

(1) Excludes employees of our LPC joint venture.

Certain employees at each of Kronos’ production facilities are organized by labor unions.

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We are committed to maintaining a strong safety culture where all workers meet or exceed required industry performance standards, and we continuously seek to improve occupational and process safety performance.

We conduct our businesses in ways intended to provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve these results.

We expect our manufacturing facilities to produce our products safely and in compliance with local regulations, policies, standards and practices intended to protect the environment and our people and have established global policies designed to promote compliance.

We are conducting our businesses in ways that provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve such results.

We expect our manufacturing facilities to produce our products safely and in compliance with local regulations, policies, standards and practices intended to protect the environment and people and have established global policies designed to promote such compliance.

We require our employees to comply with such requirements.

We provide our workers with the tools and

training necessary to make the appropriate decisions to prevent accidents and injuries.

We provide our workers with the tools and training necessary to make the appropriate decisions to prevent accidents and injuries.

Each of our operating facilities develops, maintains and implements safety programs encompassing key aspects of their operations.

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Each Kronos operating location is subject to local laws and regulations that dictate what injuries are required to be recorded and reported, which may differ from location to location and result in different methods of injury rate calculation.

For internal global tracking, benchmarking and identification of opportunities for improvement, Kronos collects the location specific information and applies a U.S.-based injury rate calculation to arrive at a global total frequency rate, which is expressed as the number of incidents at its operating locations per 200,000 hours.

For internal global tracking, benchmarking and identification of opportunities for improvement, Kronos collects the location specific information and applies a U.S.-based injury rate calculation method to arrive at a global total frequency rate, which is expressed as the number of incidents at its operating locations per 200,000 hours.

This internal safety metric may not be directly comparable to a recordable incident rate calculated under U.S.

Kronos’ global total frequency rate aggregating information about employees and contractors was 1.08 in 2021 (0.90 was the frequency rate for employees only), 1.01 in 2022 (0.86 was the frequency rate for employees only) and 0.95 in 2023 (0.74 was the frequency rate for employees only).

Kronos’ global total frequency rate aggregating information about employees and contractors was 1.01 in 2022 (0.86 of the aggregate represents employees only), 0.95 in 2023 (0.74 of the aggregate represents employees only) and 0.70 in 2024 (0.80 of the aggregate represents employees only).

CompX uses lost time incidents as a key measure of worker safety.

CompX defines lost time incidents as work-related accidents where a worker sustains an injury that results in time away from work.

CompX had one lost time incident in 2021, three in 2022 and one in 2023.

Diversity and inclusion

We recognize that everyone deserves respect and equal treatment.

As a global company, we embrace diversity and collaboration in our workforce and our business initiatives.

We are an equal opportunity employer and we base employment decisions on merit, competence and qualifications, without regard to race, color, national origin, gender, age, religion, disability, sex, sexual orientation or other characteristics protected by applicable law in the jurisdictions in which we operate.

We promote a respectful, diverse and inclusive workplace in which all individuals are treated with respect and dignity.

CompX had three lost time incidents in 2022, one in each of 2023 and 2024.

NL Industries, Inc.

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Tremont also owns 100% of Tall Pines Insurance Company, an insurance company that also holds certain marketable securities and other investments.

Tremont also owns certain real property in Henderson, Nevada.

See Note 17 to our Consolidated Financial Statements.

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Simmons and the Family Trust routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies, that provide strategic opportunities and synergies or that we perceive to be undervalued in the marketplace.

These companies may or may not be engaged in businesses related to our current businesses.

In some instances we actively manage the

businesses we acquire with a focus on maximizing return-on-investment through cost reductions, capital expenditures, improved operating efficiencies, selective marketing to address market niches, disposition of marginal operations, use of leverage and redeployment of capital to more productive assets.

These companies

may or may not be engaged in businesses related to our current businesses.

In some instances we actively manage the businesses we acquire with a focus on maximizing return-on-investment through cost reductions, capital expenditures, improved operating efficiencies, selective marketing to address market niches, disposition of marginal operations, use of leverage and redeployment of capital to more productive assets.

In other instances, we have disposed of our interest in a company prior to gaining control.

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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 1. Business