Shares of CompX International Inc. (CIX Quick QuoteCIX - Free Report) have risen 1.1% since reporting its earnings for the third quarter of 2025. This compares to the S&P 500 index’s 0.5% rally over the same time frame. Over the past month, the stock has declined 3.2% against the S&P 500’s 1.2% growth, reflecting a modest underperformance despite solid quarterly financial results.

CompX International reported third-quarter 2025 net sales of $40 million, up 19% from $33.6 million a year earlier. Net income grew roughly 20% to $4.2 million, or 34 cents per share, from $3.5 million, or 28 cents per share, in the third quarter of 2024. Operating income advanced to $4.8 million from $3.3 million in the year-ago period, and the gross margin expanded to $11 million from $9.5 million.

For the nine months ended Sept. 30, 2025, revenues climbed 12% year over year to $120.6 million, while net income rose 23% to $14.8 million (or $1.20 per share). These improvements were driven by higher sales across the Security Products and Marine Components segments, particularly in the government and industrial markets.

CompX International Inc. Price, Consensus and EPS Surprise

 

CompX International Inc. price-consensus-eps-surprise-chart | CompX International Inc. Quote

Segmental Performances & Other Key Metrics

The Security Products segment posted third-quarter revenues of $30.3 million, up 14% from $26.6 million a year earlier, fueled mainly by stronger government-security orders and incremental gains in the gas-station market. The Marine Components segment recorded $9.7 million in revenues, a 36% year-over-year rise, supported by higher sales to the industrial, towboat and government markets. Segmental operating income rose 9% for Security Products and an impressive 156% for Marine Components, illustrating robust expansion in the latter’s profitability due to favorable product mix and fixed-cost leverage.

The gross margin as a percentage of net sales slipped slightly for Security Products (to 28.3% from 30.4%) because of higher-cost inventory and increased employee-related expenses. In contrast, Marine Components saw year-over-year margin improvement (25.4% vs. 19.5%), aided by better coverage of fixed costs on higher volume. Overall, the company's gross margin was 27.6% compared with 28.1% a year earlier.

Management Commentary

Management emphasized that the company’s third-quarter gains were underpinned by broad demand across both divisions. Executives highlighted particularly strong government-security orders, which offset weakness in the healthcare and tool-storage markets. For Marine Components, the company benefited from one-time stocking orders from a towboat OEM customer early in the year and sustained strength in government and industrial channels.

CompX International’s leadership also reaffirmed its commitment to disciplined cost control and manufacturing flexibility. Management noted that all operations are U.S.-based, with most raw materials sourced domestically, helping to limit supply-chain disruptions. However, higher input prices, particularly for electronic components imported from Asia, continued to exert pressure on margins.

Factors Influencing Results

Third-quarter operating income expanded 42% year over year, reflecting higher sales volume and improved fixed-cost absorption. The slight contraction in the gross margin percentage was offset by lower operating expenses as a share of sales (15.7% versus 18.2% in the prior year). Interest income fell to $0.8 million from $1.3 million as average cash balances and rates declined.

Cost inflation and tariffs remained headwinds. Raw-material price increases that began in late 2024 persisted through 2025, and new tariff-related surcharges on electronic components were introduced in the second quarter. Management has responded by raising selling prices where feasible but expects full cost recovery to remain challenging through year-end.

From a cash-flow perspective, net cash provided by operating activities fell to $10.8 million for the first nine months of 2025, from $15.6 million in the same period of 2024, due to higher working-capital needs. Cash and equivalents stood at $46.3 million as of Sept. 30, 2025, down from $60.8 million at the end of 2024. The company paid out dividends of $23.4 million in the first nine months, including a $1-per-share special payout declared in August 2025.

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CompX International projected continued demand strength across both operating segments for the remainder of 2025 but cautioned that input-cost pressures would persist. Management expects Security Products sales to remain buoyed by government-security demand but tempered by softness in transportation and tool-storage markets. Segment margins are anticipated to run slightly below prior-year levels because of elevated inventory and tariff expenses.

Conversely, Marine Components is expected to deliver year-over-year growth in both sales and margins, benefiting from fixed-cost leverage and sustained industrial and government demand.

The company’s production and supply chains remain stable, with limited logistical delays. Management continues to monitor customer demand closely to align inventories and output, citing confidence that cash generated from operations and current reserves will be sufficient to fund capital needs and shareholder distributions.

Other Developments

On Nov. 5, 2025, CompX International’s board declared a regular quarterly dividend of 30 cents per share, payable Dec. 9 to shareholders of record as of Nov. 21. No acquisitions or divestitures were disclosed in the quarter, and there were no reported changes to the company’s operating footprint or capital-allocation strategy beyond the ongoing repurchase authorization covering approximately 524,000 shares.