NLI Holdings, Inc.

What they do

NLI is primarily a holding company incorporated in New Jersey in 1891 and listed on the NYSE under NL. Its operating business is CompX, a majority-owned subsidiary (NYSE American: CIX) that makes engineered components. It also holds an approximate 31% non-controlling interest in Kronos Worldwide (NYSE: KRO), a global TiO2 producer, accounted for under the equity method. Valhi, Inc. held about 83% of NL's common stock at December 31, 2025.

Revenue drivers

• CompX Security Products — Manufactures mechanical and electronic cabinet locks and locking mechanisms for postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. This segment drove the second-quarter 2026 sales and gross margin increase.
• CompX Marine Components — Makes wake enhancement systems, stainless steel exhaust systems, custom metal fabricated parts, gauges, throttle controls, trim tabs and related hardware for the recreational marine and other industries. Contributed higher sales to the industrial market in Q2 2026.
• Kronos equity earnings — NLI's approximate 31% interest in Kronos is its largest single earnings swing factor; NLI recorded equity in earnings of Kronos of $4.6 million in Q2 2026 versus equity in losses of $2.8 million in Q2 2025. In 2025, Kronos produced equity in losses of $33.9 million, compared with equity in earnings of $26.4 million in 2024.
• Marketable equity securities and other income — NLI reports unrealized gains and losses on marketable equity securities, which added $.5 million in Q2 2026 and $3.1 million in the first six months of 2026. Interest and dividend income was $7.0 million in 2025 versus $11.0 million in 2024.

Recent performance

For the second quarter of 2026, NLI reported net income attributable to stockholders of $9.0 million, or $.18 per share, versus $.3 million, or $.01 per share, in Q2 2025. First-half 2026 net income was $13.3 million, or $.27 per share, compared with $1.0 million, or $.02 per share, a year earlier. CompX net sales were $43.6 million in Q2 2026 versus $40.3 million a year ago, and segment profit rose to $8.9 million from $6.3 million. NLI recognized $4.6 million of equity in earnings from Kronos in Q2 2026, as Kronos net sales rose 13% to $558.1 million. Full-year 2025 results, by contrast, were a net loss of $37.8 million, or $.77 per share, versus net income of $67.2 million in 2024, driven mainly by $33.9 million of equity in losses from Kronos, a $19.7 million non-cash U.S. pension settlement loss, and a $13.6 million unrealized loss on marketable equity securities.

Strategy

NLI describes itself as primarily a holding company, operating in component products through CompX and holding a non-controlling Kronos interest. Kronos is pursuing cost savings from strategic and operational initiatives and is integrating acquisitions to realize synergies and innovations. Kronos began 2026 with average TiO2 selling prices below the start of 2025, but raised prices 4% during the first six months and announced price increases and surcharges in Q2 2026 in response to higher operating costs. Kronos implemented cost reduction initiatives in the fourth quarter of 2025 intended to permanently improve its cost structure and operational efficiency.

Risks

• TiO2 cyclicality and Kronos concentration — About 90% of Kronos' 2025 sales came from TiO2, and cyclical pricing drove equity losses of $33.9 million in 2025 versus earnings of $26.4 million in 2024.
• Currency exposure — Currency fluctuations, primarily the euro, reduced Kronos' income from operations by about $12 million in Q2 2026 and about $18 million in the first six months of 2026 versus prior-year periods.
• Raw material, energy and tariff costs — Kronos and CompX face changes in costs for energy, ore, zinc, aluminum, steel and brass and the imposition of tariffs on imported raw materials, with no assurance those costs can be passed to customers.
• Customer inventory and demand swings — Customers may accelerate TiO2 purchases ahead of anticipated price increases or defer purchases ahead of decreases, and demand is linked to global GDP and discretionary spending, making volumes volatile.

Outlook

Kronos said it started 2026 with average TiO2 selling prices lower than at the start of 2025 but raised them 4% during the first six months of 2026 and announced price increases and surcharges in Q2 2026 in response to higher operating costs. Kronos' Q2 2026 income from operations rose to $37.6 million from $7.4 million a year earlier, aided by higher sales volumes, lower production and raw material costs, lower unabsorbed fixed costs and cost reductions implemented in Q4 2025. NLI notes its results remain dependent on Kronos' TiO2 market and pricing cycles, and on CompX demand across security and marine markets.