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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Valhi Inc | NYSE:VHI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.14 | 0.95% | 14.85 | 15.06 | 14.77 | 15.06 | 2,723 | 01:00:00 |
The Chemicals Segment’s net sales were $496.0 million in the fourth quarter of 2021 compared to $414.9 million in the fourth quarter of 2020 and $1.9 billion for the full year of 2021 compared to $1.6 billion for the full year of 2020. The Chemicals Segment’s net sales increased in the fourth quarter of 2021 compared to the same period in 2020 primarily due to higher average TiO2 selling prices. The Chemicals Segment’s net sales increased in the full year of 2021 compared to the full year of 2020 primarily due to higher average TiO2 selling prices and higher sales volumes. The Chemicals Segment’s TiO2 sales volumes were 6% higher in the full year of 2021 as compared to the full year of 2020 due to higher demand in the European, North American and Latin American markets. Increased demand resulted from continuing improvements in global economic activity in 2021 compared to the negative impact from the COVID‑19 pandemic in 2020. The Chemicals Segment’s TiO2 sales volumes in the fourth quarter of 2021 were comparable to the fourth quarter of 2020. The Chemicals Segment’s average TiO2 selling prices were 17% higher in the fourth quarter of 2021 as compared to the fourth quarter of 2020 and 8% higher in the full year of 2021 as compared to the full year of 2020. The Chemicals Segment’s average TiO2 selling prices at the end of 2021 were 6% higher than the end of the third quarter of 2021 and 16% higher than at the beginning of the year. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, decreasing our Chemicals Segment’s net sales by approximately $4 million in the fourth quarter of 2021 and increasing net sales by approximately $43 million in the full year of 2021 as compared to the same periods in 2020. The table at the end of this press release shows how each of these items impacted our Chemical Segment’s net sales.
The Chemicals Segment’s operating income in the fourth quarter of 2021 was $55.4 million as compared to $22.2 million in the fourth quarter of 2020 and $200.8 million for the full year of 2021 compared to $126.5 million for the full year of 2020. The Chemicals Segment’s operating income increased in the fourth quarter of 2021 as compared to the fourth quarter of 2020 primarily due to higher average TiO2 selling prices, partially offset by higher production costs, including raw material and energy costs. The Chemicals Segment’s operating income increased in the full year of 2021 primarily due to higher average TiO2 selling prices and higher sales volumes, partially offset by higher manufacturing and other production costs, including higher costs for raw materials and energy. The Chemicals Segment’s TiO2 production volumes were 8% higher in the fourth quarter of 2021 and 5% higher in the full year of 2021 as compared to the same periods of 2020. The Chemicals Segment decreased production levels in 2020 (primarily in the third quarter) to correspond to the temporary decline in demand resulting from the COVID‑19 pandemic. The Chemicals Segment operated its production facilities at full practical capacity in the full year of 2021 (97%, 100%, 100% and 100% in the first, second, third and fourth quarters of 2021, respectively) compared to 92% in the full year of 2020 (95%, 96%, 86% and 92% in the first, second, third and fourth quarters of 2020, respectively). Fluctuations in currency exchange rates (primarily the euro) increased operating income by approximately $2 million in the fourth quarter of 2021 as compared to the fourth quarter of 2020. Fluctuations in currency exchange rates (primarily the Canadian dollar) also affected the year-to-date operating income comparison, which decreased operating income by approximately $13 million in the full year of 2021 as compared to the full year of 2020.
The Component Products Segment’s net sales were $34.1 million in the fourth quarter of 2021 compared to $30.0 million in the fourth quarter of 2020 and $140.8 million for the full year of 2021 compared to $114.5 million for the full year of 2020. The Component Products Segment’s fourth quarter 2021 net sales increased over the 2020 comparable period primarily due to higher security products sales, largely increased sales to the government security and transportation markets and, to a lesser extent, higher marine component sales, predominantly to the towboat market. The Component Products Segment’s net sales increased for the full year of 2021 compared to the full year of 2020 primarily due to higher sales volumes at both its reporting units, particularly in the second quarter of 2021, as many of its customers were temporarily closed or reduced production during the second quarter of 2020 due to government ordered closures or reduced demand resulting from the COVID‑19 pandemic. Operating income attributable to the Component Products Segment was $3.8 million in the fourth quarter of 2021 compared to $2.3 million in the fourth quarter of 2020 and $20.5 million for the full year of 2021 compared to $11.8 million for the full year of 2020. The Component Products Segment’s operating income increased for the fourth quarter of 2021 compared to the fourth quarter of 2020 as higher costs, specifically increased raw material, shipping and labor costs, were more than offset by higher sales. The Component Products Segment’s operating income was negatively impacted by the COVID‑19 pandemic in the second and third quarters of 2020, which significantly impacts the operating income comparison for the full year. Beginning in the third quarter of 2020 and continuing through 2021, the Component Products Segment’s sales generally improved at both its reporting units and its operating income increased for the full year of 2021 as compared to 2020 primarily due to the favorable effect of higher sales and production volumes, partially offset by higher production costs including increased raw materials, shipping and labor costs.
The Real Estate Management and Development Segment had sales of $153.1 million in the fourth quarter of 2021, including $150.8 million in revenue on sales of land held for development, compared to sales of $71.9 million in the fourth quarter of 2020, including $70.2 million in revenue on sales of land held for development. For the full year of 2021 the Real Estate Management and Development Segment had sales of $216.2 million, including $207.8 million in revenue on sales of land held for development, compared to sales of $96.4 million, including $87.0 million in sales of land held for development in the full year of 2020. Land sales revenue is generally recognized over time based on cost inputs, and land sales revenues are dependent on spending for development activities as we balance development requirements with home builder output during the year. Land sales revenues are also impacted by the relative timing of when new land parcel sales are closed. Land sales revenues increased in the fourth quarter and full year of 2021 as compared to the same periods in 2020 primarily due to an increase in both the amount of acreage sold and sales price per acre in 2021 as compared to 2020 and increased development activity in 2021 compared to the same periods of 2020. In addition, during the fourth quarter of 2021, our Real Estate Management and Development Segment closed on two parcels for proceeds of approximately $70 million, and during the fourth quarter of 2020, our Real Estate Management and Development Segment closed on a single parcel for proceeds of approximately $55 million. The contracts for these parcels contained no post-closing obligations therefore we recognized the full $70 million and $55 million in revenue in the fourth quarters of 2021 and 2020, respectively. As noted above, land sales are generally recognized over time using cost based inputs and in the second quarter of 2020, in an effort to conserve resources in response to the pandemic, we reduced infrastructure development spending to only those expenditures necessary to fulfill our contractual obligations. Beginning in the second half of 2020 and through 2021 we increased development spending in response to improved demand. Recognition of tax increment reimbursement note receivables of $15.3 million ($8.0 million, or $.28 per share, net of income taxes and noncontrolling interest) in 2021 and $19.1 million ($9.9 million, or $.35 per share, net of income taxes and noncontrolling interest) in 2020 is also included in the determination of operating income. Excluding the recognition of the tax increment note receivables, increased land sales revenues resulted in higher operating income in both the fourth quarter and full year of 2021 compared to the same periods of 2020.
Corporate expenses in the fourth quarter and full year of 2021 were comparable to the same periods of 2020. In 2021 we sold excess property not used in our operations for net proceeds of approximately $23.4 million and recognized a pre-tax gain of $16.0 million ($12.3 million, or $.43 per share, net of income taxes and noncontrolling interest). In the first quarter of 2020, Kronos recognized a $1.5 million insurance settlement gain ($.8 million, or $.03 per share, net of income taxes and noncontrolling interest) related to a property damage claim.
Discontinued operations represent a pre-tax gain of approximately $4.9 million ($4.3 million or $.15 per diluted share) in the fourth quarter of 2020 related to proceeds received in final settlement of an earn-out provision in the sale agreement for our former Waste Management Segment.
The statements in this press release relating to matters that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Although we believe the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those predicted. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause our actual future results to differ materially include, but are not limited to, the following:
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. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.
Valhi, Inc. is engaged in the chemicals (TiO2), component products (security products and recreational marine components) and real estate management and development industries.
*****
VALHI, INC. AND SUBSIDIARIESCONDENSED SUMMARY OF INCOME(In millions, except earnings per share)
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2020 | 2021 | 2020 | 2021 | |||||||||
(unaudited) | ||||||||||||
Net sales | ||||||||||||
Chemicals | $ | 414.9 | $ | 496.0 | $ | 1,638.8 | $ | 1,939.4 | ||||
Component products | 30.0 | 34.1 | 114.5 | 140.8 | ||||||||
Real estate management and development | 71.9 | 153.1 | 96.4 | 216.2 | ||||||||
Total net sales | $ | 516.8 | $ | 683.2 | $ | 1,849.7 | $ | 2,296.4 | ||||
Operating income | ||||||||||||
Chemicals | $ | 22.2 | $ | 55.4 | $ | 126.5 | $ | 200.8 | ||||
Component products | 2.3 | 3.8 | 11.8 | 20.5 | ||||||||
Real estate management and development | 22.4 | 71.3 | 47.8 | 97.3 | ||||||||
Total operating income | 46.9 | 130.5 | 186.1 | 318.6 | ||||||||
General corporate items: | ||||||||||||
Securities earnings | 1.2 | 1.1 | 4.7 | 4.0 | ||||||||
Insurance recoveries | — | .1 | 1.6 | .1 | ||||||||
Gain on land sales | — | — | .5 | 16.0 | ||||||||
Changes in market value of Valhi common stock held by subsidiaries | .5 | 1.3 | (1.7) | 3.3 | ||||||||
Other components of net periodic pension and OPEB expense | (5.2) | (3.8) | (20.1) | (17.0) | ||||||||
General expenses, net | (8.3) | (8.6) | (34.3) | (34.7) | ||||||||
Interest expense | (8.8) | (7.3) | (36.2) | (32.5) | ||||||||
Income from continuing operations before income taxes | 26.3 | 113.3 | 100.6 | 257.8 | ||||||||
Income tax expense (benefit) | (5.3) | 24.9 | 15.9 | 60.1 | ||||||||
Net income from continuing operations | 31.6 | 88.4 | 84.7 | 197.7 | ||||||||
Income from discontinued operations | 4.3 | — | 4.3 | — | ||||||||
Net income | 35.9 | 88.4 | 89.0 | 197.7 | ||||||||
Noncontrolling interest in net income of subsidiaries | 11.4 | 36.4 | 33.8 | 70.5 | ||||||||
Net income attributable to Valhi stockholders | $ | 24.5 | $ | 52.0 | $ | 55.2 | $ | 127.2 |
VALHI, INC. AND SUBSIDIARIESCONDENSED SUMMARY OF INCOME (Continued)(In millions, except earnings per share)
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2020 | 2021 | 2020 | 2021 | |||||||||
(unaudited) | ||||||||||||
Amounts attributable to Valhi stockholders: | ||||||||||||
Income from continuing operations | $ | 20.2 | $ | 52.0 | $ | 50.9 | $ | 127.2 | ||||
Income from discontinued operations | 4.3 | - | 4.3 | - | ||||||||
Net income attributable to Valhi stockholders | $ | 24.5 | $ | 52.0 | $ | 55.2 | $ | 127.2 | ||||
Basic and diluted net income per share | ||||||||||||
Income from continuing operations | $ | .71 | $ | 1.83 | $ | 1.79 | $ | 4.46 | ||||
Income from discontinued operations | .15 | - | .15 | - | ||||||||
Net income attributable to Valhi stockholders | $ | .86 | $ | 1.83 | $ | 1.94 | $ | 4.46 | ||||
Basic and diluted weighted average shares outstanding | 28.5 | 28.5 | 28.5 | 28.5 |
VALHI, INC. AND SUBSIDIARIES IMPACT OF PERCENTAGE CHANGE IN CHEMICAL SEGMENT'S NET SALES (unaudited)
Three months ended | Year ended | ||||
December 31, | December 31, | ||||
2021 vs. 2020 | 2021 vs. 2020 | ||||
Percentage change in TiO2 net sales : | |||||
TiO2 product pricing | 17 | % | 8 | % | |
TiO2 sales volumes | — | 6 | |||
TiO2 product mix/other | 4 | 1 | |||
Changes in currency exchange rates | (1) | 3 | |||
Total | 20 | % | 18 | % |
SOURCE: Valhi, Inc. CONTACT: Janet G. Keckeisen, Vice President - Investor Relations, 972.233.1700
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