Introduction
CompX International Inc. (NYSEAMEX:CIX) is a subsidiary of NL Industries, Inc. (NYSE:NL), and was founded in 1993, and is headquartered in Dallas, Texas. The company manufactures ergonomic computer support systems, precision ball bearing slides, and locking systems. The Company’s products are for use in office furniture, computer-related applications, and a variety of other products. CompX sells its products primarily to original equipment manufacturers.
Stock Snapshot
As of Monday, October 1st, 2012, the stock for CompX International Inc. (NYSEAMEX:CIX) traded at USD 15.60 representing a market capitalization of approximately USD 188.11 million. The stock has a trailing P/E ratio of 19.91, a P/S ratio of 1.34 and a P/B ratio of 3.52.
Competitor Analysis
Trifast plc (LON:TRI), together with its subsidiaries, engages in the design, manufacture, and distribution of mechanical fasteners and associated components to various industrial customers. The Trifast plc stock has been trading at a P/B ratio of 90.8 and a P/S ratio of 43.22, with debt to equity ratio of 39.3%
Financial Highlights
Topline
For 6MFY12, the company registered net sales of USD 73.1 million as compared to USD 70.0 million representing YoY increase of 4%. The top line increased mainly due to USD 2.3 million in new ergonomic healthcare product line related to the furniture components business acquired in FY 2011. Also, the customer demand for the security products and marine components segments also improved as a result of improving economic conditions in North America.
Gross Profits
Gross profit for 6MFY12 was recorded at USD 19.5 million, as compared to 18.5 million for the corresponding period last year. The gross profit was positively impacted by lower fixed manufacturing costs, a net positive impact relating to relative changes in currency exchange rates. However, higher raw material costs and higher medical self-insurance costs negatively impacted the gross margin comparison.
Bottom Line
For 6MFY12, the company reported net income per share of USD .29 as compared to USD.45 for the corresponding period last year. The operating income margin for 6MFY12 was reported at 9%, as compared to 17% for the corresponding period last year; the decrease was mainly due to litigation settlement related costs, incurred in 1QFY12.
Cash & Capital
The company had a total cash supply of USD 5.18 million as of 30th June’ 2012; which represented a cash value of USD 0.42 per share. The company also had a total debt of USD 22.93 million, as of the 30th June’ 2012, which equated to a debt to equity of 26.85. The book value per share was recorded at 6.89 as of 30th June 2012.
Outlook
* Outlook for sales looks weak, due to the unstable economic environment of North America
* The weakening of the US Dollar may have further negative implications for the stock
* However a P/E ratio of approximately 19 appears a fair reflection on a relative basis; however value investors should watch out for this stock if the P/E ratio moves any lower!
