NL Industries, Inc. (NL): Business Model Canvas [Dec-2025 Updated]

You're looking at NL Industries, Inc. (NL) and wondering how this holding company actually makes its money; honestly, it's a fascinating dual-engine model. It's not just one business; it's primarily a major, passive stake-about $\text{31\%}$-in the global titanium dioxide (TiO2) producer, Kronos Worldwide, Inc., layered on top of its active, direct manufacturing of specialized security and marine components through CompX International Inc. This structure is reflected in their $\text{\$120.59 million}$ cumulative revenue for the first three quarters of 2025, which mixes equity earnings with direct sales to over $\text{4,000}$ industrial customers. It's a complex structure, balancing significant environmental remediation costs against a solid $\text{\$132.5 million}$ cash balance and a compelling $\text{5.56\%}$ forward dividend yield. Want to see the full blueprint for how they manage these disparate parts, from key activities to their cost structure? Dive into the complete Business Model Canvas below.

NL Industries, Inc. (NL) - Canvas Business Model: Key Partnerships

The Key Partnerships block for NL Industries, Inc. centers on its significant equity affiliate, its majority-owned operating subsidiary, and its controlling shareholder structure.

The relationship with Kronos Worldwide, Inc. is critical, as NL Industries, Inc. held an approximate 31% ownership interest as of December 31, 2024. Kronos Worldwide, Inc. is a major global producer of titanium dioxide pigments (TiO2). Kronos's core TiO2 pigments accounted for approximately 90% of its net sales in 2024. This investment directly impacts NL Industries' financials; for instance, NL recognized equity in earnings of Kronos of $5.5 million in the first quarter of 2025, a notable increase from $2.5 million in the first quarter of 2024. Furthermore, Kronos's income from operations rose to $38.4 million in Q1 2025, up from $19.5 million in Q1 2024. A key strategic move by Kronos was the acquisition of the 50% joint venture interest in Louisiana Pigment Company, L.P. (LPC) on July 16, 2024, for consideration of $185 million less a working capital adjustment.

Operations in the component products segment are executed through CompX International Inc., which is a majority-owned subsidiary of NL Industries, Inc.. CompX's segment profit for the first quarter of 2025 reached $5.9 million, improving from $3.7 million in the first quarter of 2024, with net sales reported at $40.3 million for Q1 2025.

The controlling shareholder entity is Contran Corporation. As of the record date for the 2025 annual shareholder meeting, a wholly-owned subsidiary of Contran Corporation held approximately 91% of Valhi, Inc.'s outstanding common stock, and Valhi, Inc. held approximately 83% of NL Industries, Inc.'s outstanding common stock.

The structure of these key relationships and associated financial metrics can be summarized below.

For the component products segment operated by CompX International Inc., the reliance on raw materials involves several categories, with expected price stability for 2025, though subject to external factors like tariffs.

• Zinc
• Brass
• Aluminum
• Stainless steel

The TiO2 business through Kronos Worldwide, Inc. relies on a distribution network, though specific financial data for this network is not detailed.

• Global network of TiO2 dealers and agents
• Sales markets include coatings, plastics, and paper

NL Industries, Inc. (NL) - Canvas Business Model: Key Activities

You're looking at the core engine of NL Industries, Inc. (NL) as of late 2025, which is really a story of managing two distinct operating businesses-CompX and Kronos (via equity accounting)-while handling significant legacy liabilities. Here's a breakdown of the actual activities driving the numbers.

Manufacturing engineered security and marine components

This activity centers on the operations of the majority-owned subsidiary, CompX International Inc. You see concrete sales figures quarter-over-quarter, showing this segment is actively producing and shipping components across various markets. For instance, in the first quarter of 2025, CompX reported net sales of $40.3 million, which helped push its segment profit up to $5.9 million. That momentum continued into the second quarter, with net sales holding at $40.3 million and segment profit increasing to $6.3 million. By the third quarter of 2025, net sales were $40.0 million, with a segment profit of $4.8 million. Over the first nine months of 2025, CompX generated total net sales of $120.6 million. The Marine Components unit, specifically, saw sales grow by 36% in the third quarter of 2025 compared to the prior year period, driven by government, industrial, and a one-time towboat OEM stocking event.

Here are the segment results for the first three quarters of 2025:

Global production and distribution of TiO2 pigments

NL Industries manages its exposure to the titanium dioxide (TiO2) market through its non-controlling equity investment in Kronos Worldwide, Inc. (KRO). This means the key activity here is monitoring KRO's global production and sales performance, which directly impacts NL's equity earnings or losses. KRO's third quarter 2025 net sales were $456.9 million, a 6% drop from Q3 2024, primarily due to lower TiO2 selling prices and reduced export volumes. This operational pressure resulted in a $19.2 million loss from operations for KRO in Q3 2025. For NL, this translated into an equity in losses of $11.3 million for that quarter. Looking at the first nine months of 2025, KRO's net sales were $1.4 billion, down 2% year-over-year, with income from operations falling to $26.6 million from $94.3 million in the prior year period. Consequently, NL recognized an equity in losses of $8.6 million for the nine-month period, a sharp contrast to the $30.4 million in equity earnings recognized in the first nine months of 2024. KRO's unabsorbed fixed production costs due to decreased production volumes were approximately $27 million in Q3 2025.

Managing marketable equity securities and investments

This activity involves managing the value of NL's investment portfolio, which includes its stake in Kronos and other marketable securities, like those held in Valhi. The financial impact of this management is often seen through non-cash unrealized gains or losses. For the first nine months of 2025, NL reported an unrealized loss of $9.1 million related to the change in value of these securities, compared to an unrealized gain of $21.8 million for the same period in 2024. The third quarter alone saw an unrealized loss of $0.5 million, versus a gain of $18.6 million in Q3 2024. At June 30, 2025, the carrying value of the investment in Kronos was $259,405 (likely in thousands), while the market value of Kronos was $218.4 million. The marketable securities classified as Valhi had a fair value of $19,356 (likely in thousands) at that date, carrying an unrealized loss of $4,991 (likely in thousands).

Key investment metrics as of mid-2025:

• Shares of NL common stock outstanding (as of February 28, 2025): 48,847,734.
• Marketable securities (Valhi) fair value (June 30, 2025): $19,356 (in thousands).
• Unrealized loss on marketable securities (Nine Months 2025): $9.1 million.

Environmental remediation and liability management

This is a critical, cash-intensive activity stemming from former operations. In the first quarter of 2025, NL made a substantial cash outlay, paying approximately $56.1 million plus $0.5 million in interest toward the Raritan Bay Slag (RBS) global settlement. This payment was partially offset by receiving approximately $9.6 million from other settling parties. Following these transactions, environmental remediation accruals declined to $13,301 (current $2,706; noncurrent $10,595) as of June 30, 2025 (amounts likely in thousands). Management estimates that for approximately 29 sites with reasonably estimable costs, the upper-end reasonably possible range remains around ~$38 million. Still, about 5 sites exist where costs cannot yet be estimated. For context, a prior ruling related to a lead smelter contamination suggested cleanup costs around $136 million.

Corporate governance and subsidiary oversight

Oversight involves setting corporate policy, managing the capital structure, and distributing returns to shareholders, all while monitoring the performance of its majority-owned CompX and non-controlling Kronos interest. The company's dividend policy is a direct output of this governance. For example, NL announced a quarterly dividend for the fourth quarter of 2025 at $.09 per share on October 30, 2025. This followed a special dividend of 21 cents per share payable in August 2025, alongside the Q3 2025 quarterly dividend of 9 cents per share. This focus on cash returns is supported by a stated real trailing dividend yield of an impressive 10.4%. The overall financial performance under this oversight shows a net loss attributable to NL stockholders of $7.8 million in Q3 2025, compared to a net income of $36.0 million in Q3 2024. For the first nine months of 2025, NL reported a net loss of $6.8 million, down from a net income of $50.7 million in the same period of 2024. Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - Canvas Business Model: Key Resources

You're looking at the core assets NL Industries, Inc. (NL) relies on to run its business, which is mostly about holding significant stakes in other companies. These aren't just paper assets; they are the engine for much of the reported financial performance, so you need to track them closely.

The most substantial resource is the equity investment in Kronos Worldwide, Inc. (KRO). As of the six months ended June 30, 2025, the carrying value of this investment on NL Industries, Inc.'s books stood at $259,405 thousand. To be fair, the market value of that holding was reported at $218.4M as of that same date, showing a difference you definitely need to watch. NL Industries, Inc. holds an indirect controlling interest in Kronos Worldwide, Inc. of 31.00% (as of March 31, 2025). This investment is critical because Kronos, a major global producer of titanium dioxide (TiO2) pigments, swings NL Industries, Inc.'s earnings significantly, as seen when NL recognized an equity in losses of Kronos of $11.3 million in the third quarter of 2025.

The component products segment operates through its majority-owned subsidiary, CompX International Inc. This part of the business relies on physical assets. CompX International Inc. operates three manufacturing facilities located in the United States. One of these, the Mauldin, South Carolina facility, handles production processes requiring waste-water discharge and has received recognition for its performance. Anyway, CompX's operations are also supported by extensive scrap metal recycling programs to cut down on landfill waste.

Regarding the chemical side, the technology is tied to Kronos Worldwide, Inc.'s operations. Kronos utilizes both the chloride process and the sulfate process for TiO2 production. For the first half of 2025, Kronos operated at 87% capacity utilization. While specific patents held directly by NL Industries, Inc. aren't detailed here, the core technology resource is the operational know-how embedded within the Kronos investment, which has historically increased its chloride process capacity by approximately 5% over the past ten years through moderate capital expenditures.

Liquidity is a key resource, and for H1 2025, NL Industries, Inc. reported its cash and restricted cash balance ended at $132,514 thousand, or $132.5 million. However, you should note that the operating cash flow for the first six months of 2025 swung to a net use of $40,188 thousand, largely due to significant environmental payments, including approximately $56.1M plus $0.5M interest toward a settlement.

The company also holds other marketable equity securities, primarily in Valhi, Inc. (VHI). For the nine months ended September 30, 2025, NL Industries, Inc. recognized an unrealized loss of $9.1 million related to the change in value of these marketable equity securities, contrasting sharply with an unrealized gain of $21.8 million in the same period of 2024. The fair value of the marketable securities (Valhi) at June 30, 2025, was $19,356 thousand, which carried an unrealized loss of $4,991 thousand at that time.

Here's a quick look at the major financial resources as of mid-2025:

The tangible and intangible resources supporting the business model include:

• CompX International Inc. operates three production facilities in the United States.
• Kronos Worldwide, Inc. capacity utilization was 87% in H1 2025.
• Kronos utilizes both chloride and sulfate TiO2 manufacturing processes.
• NL Industries, Inc. common stock outstanding on November 3, 2025, was 48,862,734 shares.

Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose NL Industries, Inc. (NL) over the competition. It boils down to specialized manufacturing strength and a commitment to shareholder returns, even when the chemical side faces macro headwinds.

High-performance, value-added TiO2 pigments for industrial use

NL Industries, through its equity investment in Kronos Worldwide, provides access to titanium dioxide (TiO2) pigments. These are essential for whiteness and opacity in paints, plastics, and paper. However, the value proposition here is currently challenged by market conditions; for instance, Kronos' average TiO2 selling prices were 7% lower in the third quarter of 2025 compared to the third quarter of 2024. Furthermore, Kronos operated at reduced rates, recognizing approximately $20 million in unabsorbed fixed production costs in Q2 2025 due to operating at 81% capacity.

Specialized security products for government and commercial markets

The specialized security products, managed through the CompX subsidiary, represent a clear value driver. This segment showed strength, contributing to CompX's net sales of $40.0 million in the third quarter of 2025. For the first nine months of 2025, CompX net sales reached $120.6 million.

Engineered marine components for recreational transportation

Similarly, engineered marine components are a key value driver, often sold alongside security products within CompX. The segment profit for CompX, which includes both Security Products and Marine Components, was $4.8 million in Q3 2025, up from $3.3 million in Q3 2024. The first nine months of 2025 saw CompX segment profit at $17.0 million.

Here's a quick look at the recent sales performance for the segments housing these two value propositions:

Reliable supply chain for basic industrial chemicals (TiO2)

NL Industries provides a supply chain connection to basic industrial chemicals, primarily TiO2, via its Kronos investment. While Kronos's operational performance faced pressure, NL Industries' total reported revenue (TTM) was $0.15 Billion USD as of a recent report in 2025. The company also manages significant cash flows related to its operations and environmental obligations, ending H1 2025 with cash and restricted cash of $132,514 thousand.

Consistent dividend payments to shareholders (forward yield 5.56%)

For the shareholder segment, a core value proposition is the return of capital. NL Industries declared a special dividend of $0.21/share and a Q3 2025 quarterly dividend of $0.09/share, funded from excess cash flows. The stated forward dividend yield for planning purposes is 5.56%. You should note that actual reported yields near November 2025 varied in market data, with figures like 6.59% and 10.22% being cited. The annual dividend was reported as $0.57 per share at one point.

The dividend payout ratio based on free cash flow was reported as 100%, and based on reported earnings, it was 288%, indicating significant reliance on cash flow or reserves to maintain the payout.

Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - Canvas Business Model: Customer Relationships

You're looking at how NL Industries, Inc. (NL) manages its connections with its diverse customer base, which spans industrial chemical buyers and government/OEM clients through its CompX subsidiary. It's a mix of deep, long-term industrial partnerships and specific, high-value niche sales.

Contractual, long-term relationships with B2B chemical buyers

For the chemicals segment, primarily through its interest in Kronos Worldwide, Inc., NL Industries serves a global customer base. The strategy involves supplying feedstocks under long-term agreements alongside spot transactions to ensure consistent supply reliability for end markets like coatings and plastics. Kronos's Q3 2025 net sales were $456.9 million, showing the scale of these B2B relationships.

Direct sales and technical service support for TiO2 customers

The relationship for titanium dioxide (TiO2) customers is supported by direct engagement. Kronos, along with its distributors and agents, sells and provides technical services across multiple worldwide regions. This support helps customers select the most appropriate pigments for their specific needs. The majority of these sales occur in Europe, North America, and the Asia Pacific region. Kronos actively participates in national and international technical committees to help shape the development of new products and innovative applications.

Dedicated sales teams for government and towboat markets (CompX)

NL Industries' component products business, CompX International Inc., relies on focused sales efforts for its specialized markets. The Marine Components unit specifically targets the towboat and government markets. The Security Products segment focuses heavily on the government security market. CompX's segment profit increased in Q3 2025, driven by higher sales in these targeted areas. The Marine Components segment saw its sales grow by 36% in Q3 2025, with the towboat, government, and industrial markets leading the way. To be fair, CompX's customer concentration is notable, as its largest ten customers accounted for approximately 47% of its sales in 2024.

Here's a quick look at the recent sales performance driving these customer interactions:

Investor relations for public shareholders and analysts

NL Industries, Inc. maintains active communication with its public shareholders and the analyst community, primarily through required filings and dividend announcements. The company had 48,847,734 shares of common stock outstanding as of February 28, 2025. The board declared a quarterly dividend of $0.09 per share, payable on June 24, 2025. Furthermore, a special dividend of 21 cents per share was announced for August 2025. Analyst engagement is tracked, with 1 Wall Street analyst issuing a rating in the past 12 months, resulting in a consensus rating of 'Hold'. The company employs 570 full-time employees.

The key touchpoints for the investment community include:

• Announcements of quarterly dividends, such as the $0.09 per share for Q4 2025.
• Release of quarterly financial results, like the Q3 2025 report on November 6, 2025.
• Filing of required SEC documents, including Annual Reports (10-K) and Proxy Statements.
• Communication regarding corporate governance changes, such as expanding the board to eight members following the 2025 annual meeting.

Maintaining defintely high product quality standards

For the chemical products, quality assurance is tied directly to the operational certifications of Kronos. The company produces according to a uniform quality management system. This commitment is evidenced by several key certifications held by all Kronos locations:

• Certified according to ISO 9001.
• Certified according to ISO 14001.
• Certified according to ISO 22000.
• Certified according to ISO 50001.

Kronos also ensures compliance with specific industry standards, confirming that its TiO2 complies with the EuPIA Exclusion Policy for Printing Inks (5th Edition, June 2023). Furthermore, the company confirms its TiO2 is registered under REACH and does not contain any substances of very high concern (SVHC) as of November 2025. The properties of the pigments, like gloss, opacity, and weather resistance, are adjusted during manufacturing to meet the requirements of the respective user.

Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - Canvas Business Model: Channels

Direct sales force for large industrial TiO2 customers is supported by the structure of its equity investment in Kronos Worldwide, Inc., which provides technical services for its products to approximately 3,000 customers.

Global network of TiO2 dealers and agents in ~100 countries is evidenced by Kronos serving customers in 100 countries. Kronos' net sales for the first nine months of 2025 were $1.4 billion.

Direct sales to government security contractors are a key component of the CompX subsidiary's performance, with Security Products sales primarily directed to the government security market. CompX's net sales for the first nine months of 2025 totaled $120.6 million.

Distribution network for marine component OEMs and aftermarket is driven by Marine Components sales to various markets, including the towboat, government and industrial markets. The third quarter of 2025 saw CompX net sales of $40.0 million, with a portion attributed to these marine components.

Channel performance metrics for the CompX subsidiary in 2025:

TiO2 pricing channel impact for Kronos in 2025:

• Kronos' average TiO2 selling prices were 7% lower in the third quarter of 2025 compared to Q3 2024.
• Kronos' average TiO2 selling prices were 2% lower in the first nine months of 2025 compared to the same prior year period.

The sales channels for CompX products are segmented as follows:

• Security Products sales primarily to the government security market.
• Marine Components sales to the towboat, government and industrial markets.

NL Industries, Inc. (NL) - Canvas Business Model: Customer Segments

You're looking at the customer base for NL Industries, Inc. (NL) as of late 2025. It's a mix of industrial chemical buyers and specialized component purchasers, all feeding into the operations of its subsidiaries, primarily CompX International, Inc. and its interest in Kronos Worldwide, Inc.

The customer segments are quite distinct, reflecting the two main business areas: chemicals (TiO2) and engineered components.

For the chemical side, Kronos Worldwide, Inc., a leading global producer of titanium dioxide pigments (TiO2), serves a wide international audience. This product is a base industrial good used for whiteness and opacity in coatings, plastics, and paper. The component side, through CompX, focuses on more specific, often North American, original equipment manufacturers (OEMs) and government entities.

Here's a breakdown of the key customer groups and associated figures from the 2025 reporting period.

• Global industrial manufacturers requiring TiO2 pigments.
• Government and commercial security product buyers.
• Recreational marine component original equipment manufacturers (OEMs).
• Institutional investors and individual public shareholders.
• Healthcare and general engineered component sectors.

The financial scale of these segments, particularly through the subsidiaries, gives you a clear picture of where the revenue is coming from. For instance, CompX showed resilience with net sales of $40.3 million in Q2 2025, with segment profit rising to $6.3 million in that quarter. Meanwhile, the chemical side saw Kronos's net sales for the first half of 2025 reach $984.2 million, though NL Industries recognized equity in losses of $2.8 million from Kronos in Q2 2025.

The overall company structure is reflected in the shareholder base, which supports a market capitalization of $288M as of November 3, 2025, based on 48,847,734 shares outstanding as of February 28, 2025. The trailing twelve-month revenue for NL Industries as of September 30, 2025, was $159M.

You can see the customer reach and financial context in this table:

The component products segment, CompX, sells its engineered components primarily in North America to OEMs. CompX's products include mechanical and electrical cabinet locks and stainless steel exhaust systems for the marine industry. The healthcare applications include locking mechanisms for cabinetry and tool storage.

For the TiO2 segment, Kronos's sales are spread across Europe, North America, and the Asia Pacific region. Their largest ten customers accounted for approximately 39% of net sales in 2024, with only one customer representing 10% or more of net sales in 2024 (Behr Process Corporation - 10%). This suggests a relatively diversified chemical customer base, though the component side has higher customer concentration.

Finance: review the Q3 2025 $7.8 million net loss against the H1 2025 net income of $1,022 thousand (or $1.022 million) to assess shareholder impact by next week.

NL Industries, Inc. (NL) - Canvas Business Model: Cost Structure

You're looking at the cost side of the NL Industries, Inc. (NL) equation, which is heavily influenced by its two main operating segments: CompX International, Inc. and its investment in Kronos Worldwide, Inc. The cost structure is a mix of direct manufacturing costs, significant environmental liabilities, and corporate overhead.

Here's a breakdown of the key cost drivers as of late 2025, focusing on the most recent reported figures:

• Cost of sales for manufactured goods and chemicals (Q3 2025): $28.92 million
• Significant environmental remediation accruals and payments: The H1 2025 payment toward the Raritan Bay Slag global settlement was approximately ~$56.1 million plus $0.5 million in interest. Accrued environmental remediation and related costs on the balance sheet at September 30, 2025, totaled $13.135 million (current liability of $2.666 million and noncurrent liability of $10.469 million).

The costs associated with Kronos, particularly fixed overhead absorption, are a major variable in NL Industries' overall expense profile. When Kronos's production rates dip, those fixed costs don't disappear; they get absorbed into fewer units, hitting the bottom line hard.

Raw material costs are a direct input for CompX's manufacturing, which uses zinc and brass for security products and stainless steel for marine components. Honestly, these commodity prices always need watching.

• Raw material costs (zinc, brass, stainless steel, etc., including purchased components) represented approximately 46% of CompX's total cost of sales in 2024.
• The specific commodity raw materials like zinc, brass, aluminum, and stainless steel accounted for approximately 13% of CompX's total cost of sales in 2024.

Finally, you have the corporate layer. General and administrative expenses, plus other corporate charges, sit above the segment operating results. For Q3 2025, NL Industries reported Selling, general and administrative expense of $19.132 million (in thousands) and a Corporate expense line item of ($9.150 million) (in thousands).

Corporate expenses in Q1 2025 were up $.3 million compared to Q1 2024, driven by higher environmental remediation and general and administrative expenses, even with lower litigation fees offsetting some of that increase. Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - Canvas Business Model: Revenue Streams

You're looking at how NL Industries, Inc. brings in cash, which is a mix of its direct component sales and its investment in the titanium dioxide (TiO2) world through Kronos Worldwide, Inc. It's not a simple one-stream business; it's layered.

The direct revenue comes from the CompX subsidiary, which makes security products and marine components. This segment showed strength in government and towboat markets.

The investment income stream is heavily influenced by the performance of Kronos Worldwide, Inc., which is a major producer of TiO2. This contribution can swing from a positive earnings equity to a loss, as seen recently.

Here's a breakdown of the key revenue components based on the latest available figures for the first nine months of 2025:

The total cumulative revenue for the first three quarters of 2025, which is the nine-month period ending September 30, 2025, reached $120.59 million. This figure aggregates the net sales from CompX and other minor revenue sources before accounting for the equity in earnings/losses from Kronos Worldwide, Inc. and investment income.

The revenue streams can be categorized by their source:

• Net sales from component products (CompX) for the second quarter of 2025 were $40.3 million.
• Equity in losses from the Kronos Worldwide, Inc. investment for the second quarter of 2025 was $2.8 million.
• Interest and dividend income from investments for the first nine months of 2025 totaled $5.6 million.
• The sales of titanium dioxide pigments, which flow through Kronos Worldwide, Inc., represented a significant top-line figure for the subsidiary, with Q2 2025 net sales at $494.4 million.

For the nine months ended September 30, 2025, the total sales figure was $120.59 million. The equity in losses from Kronos Worldwide, Inc. for this nine-month period was $8.6 million, which directly impacts NL Industries, Inc.'s reported income but is separate from the direct net sales figure. If onboarding takes 14+ days, churn risk rises, and similarly, if TiO2 pricing remains soft, the equity contribution will continue to pressure NL Industries, Inc.'s bottom line.

Finance: draft 13-week cash view by Friday.