SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934-
For the fiscal year ended December 31, 2004
Commission file number 1-13905
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A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
COMPX CONTRIBUTORY RETIREMENT PLAN
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
COMPX INTERNATIONAL INC.
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Administrator has duly caused this Annual Report to be signed by the undersigned
thereunto duly authorized.
COMPX CONTRIBUTORY RETIREMENT PLAN
By: ADMINISTRATIVE COMMITTEE OF THE
COMPX CONTRIBUTORY RETIREMENT PLAN
By: /s/ Raymond S. Staton
------------------------------------
Raymond S. Staton
Committee Member
June 28, 2005
COMPX CONTRIBUTORY RETIREMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
December 31, 2004
with
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
COMPX CONTRIBUTORY RETIREMENT PLAN
Index of Financial Statements and Supplemental Schedule
Page
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Report of Independent Registered Public Accounting Firm 2
Financial Statements
Statements of Net Assets Available for Benefits -
December 31, 2003 and 2004 3
Statement of Changes in Net Assets Available for Benefits -
Year ended December 31, 2004 4
Notes to Financial Statements 5-8
Supplemental Schedule *
Schedule H, line 4i - Schedule of Assets (Held at End of Year) -
December 31, 2004 9
Exhibit A
Consent of Independent Registered Public Accounting Firm
* Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for the Reporting and Disclosure under the
Employer Retirement Income Security Act of 1974 ("ERISA") have been omitted
because they are not applicable.
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Report of Independent Registered Public Accounting Firm
To the Participants and Administrative Committee of
CompX Contributory Retirement Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the CompX Contributory Retirement Plan (the "Plan") at December 31, 2003 and
2004, and the changes in net assets available for benefits for the year ended
December 31, 2004 in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of Year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
Dallas, Texas
June 28, 2005
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COMPX CONTRIBUTORY RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003 and 2004
2003 2004
---- ----
Assets:
Investments at fair value $14,878,555 $16,568,572
Loans to participants 664,719 777,015
----------- -----------
15,543,274 17,345,587
Contributions receivable:
Employer 538,091 587,501
Participants - 4,084
----------- -----------
Net assets available for benefits $16,081,365 $17,937,172
=========== ===========
See accompanying notes to financial statements.
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COMPX CONTRIBUTORY RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2004
Additions:
Investment income:
Net appreciation in fair value of investments $ 1,340,582
Dividends 365,694
Interest 38,928
-----------
1,745,204
Contributions:
Employer 587,501
Participants 1,230,498
-----------
1,817,999
Total additions 3,563,203
-----------
Deductions:
Benefits to participants 1,705,396
Administrative expenses 2,000
-----------
Total deductions 1,707,396
-----------
Net increase in net assets available for benefits 1,855,807
Net assets available for benefits:
Beginning of year 16,081,365
-----------
End of year $17,937,172
===========
See accompanying notes to financial statements.
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COMPX CONTRIBUTORY RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan and significant accounting policies:
General. The following description of the Compx Contributory Retirement
Plan (the "Plan") provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan which covers eligible U.S.
employees of CompX International Inc. and its U.S. subsidiaries (collectively,
the "Employer"). Employees are eligible to participate in the Plan as of the
first entry date, as defined, concurrent with or next following the completion
of 90 days of eligible service and attaining 20 years of age. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
The Employer is 83% owned by CompX Group, a majority-owned subsidiary of NL
Industries, Inc. at December 31, 2004. NL owns 82.4% of CompX Group, and
Titanium Metals Corporation ("TIMET") owns the remaining 17.6% of CompX Group.
At December 31, 2004 (i) TIMET owns an additional 2% of CompX directly, (ii)
Valhi, Inc. holds, directly or through a subsidiary, approximately 83% of NL's
outstanding common stock and approximately 41% of TIMET's outstanding common
stock and (iii) Contran Corporation holds, directly or through subsidiaries,
approximately 91% of Valhi's outstanding common stock. Substantially all of
Contran's outstanding voting stock is held by trusts established for the benefit
of certain children and grandchildren of Harold C. Simmons, of which Mr. Simmons
is sole trustee, or is held by Mr. Simmons or persons or other entities related
to Mr. Simmons. Consequently, Mr. Simmons may be deemed to control each of such
companies and the Employer.
Contributions. The Plan permits participants to defer 1% to 100% of their
annual compensation as pre-tax contributions, not to exceed a deferral of
$13,000 in 2004 (subject to adjustment in future years), through payroll
deductions. Participants who will be at least age 50 by the end of the Plan year
may elect to make "catch-up" contributions, not to exceed an additional deferral
of $3,000 in 2004 (subject to adjustments in future years) through payroll
deductions. Pursuant to the Internal Revenue Code, total participant
contributions (pre-tax and after-tax) and employer contributions are limited to
an aggregate of $41,000 from all employer defined contribution plans in 2004.
The Employer's contribution is based upon a profit-sharing formula and the
Employer's profit, as defined, during the Plan year. The Employer's contribution
is allocated to participants' accounts on a percentage or matching basis
relative to the participants' contributions (excluding catch-up contributions)
for the year. The Employer's contribution is reduced, as provided by the Plan,
by nonvested amounts forfeited by participants who withdraw from the Plan. At
December 31, 2003 and 2004, unallocated forfeited nonvested accounts were
$73,250 and $103,175 respectively. Forfeitures of $17,642 were used to reduce
employer contributions for the year ended December 31, 2004.
Vesting and benefits. Salary deferrals (including earnings thereon) are
immediately vested while Employer contributions (including earnings thereon)
vest at the rate of 20% per year of service, as defined.
Upon termination of employment, retirement or death, a participant (or
beneficiary, if applicable) may elect to receive either (i) a lump sum amount
equal to the vested value of the participant's accounts or (ii) installments
over a period of not more than 30 years. Distribution of a participant's account
balance in a lump sum without the participant's consent may be made if the
vested portion of the participant's account is not greater than $5,000 or
distribution commences after the participant attains 65 years. With the consent
of the Plan administrators, participants can borrow amounts from their vested
account balances, subject to certain limitations under the Plan.
Benefits are recorded when paid.
Participants' accounts. Participants can direct the Plan administrator to
invest, in 1% increments, their account balance in publicly-traded registered
investment companies or commingled trusts administered by Putnam Investments or
in CompX International Inc. common stock (not to exceed 25% of account
balances). Below are the investment fund options available to participants at
December 31, 2004:
Calamos Growth Fund - Seeks long-term capital growth. Invests in securities
of companies that are undervalued and offer above-average potential for
earnings growth. Invests all or a portion of its assets in small to midsize
companies.
Fidelity Diversified International Fund - Seeks capital growth. Invests
primarily in common stocks of non-U.S. issues. The fund allocates its
investments across countries and regions considering the size of the market
in each country and region relative to the size of the international
market.
Managers Special Equity Fund - Seeks capital appreciation through
investment primarily in the equity securities of a diversified group of
companies expected to have superior earnings and growth potential. The
fund's investments will tend to be in the securities of companies having
small to medium market capitalizations.
PIMCO Total Return Fund - Seeks maximum current income and price
appreciation. Invests in fixed-income securities from all major sectors of
the bond market.
Putnam Asset Allocation Fund - Balanced Portfolio - Seeks total return.
Invests in both stocks and bonds.
Putnam Asset Allocation Fund - Conservative Portfolio - Seeks total return
with preservation of capital. Invests in both stocks and bonds.
Putnam Asset Allocation Fund - Growth Portfolio - Seeks capital
appreciation. Invests in both stocks and bonds.
Putnam Equity Income Fund - Seeks to provide current income by investing
primarily in a diversified portfolio of income producing equity securities.
Putnam International Capital Opportunities - Seeks long-term capital
appreciation. Invests primarily in a diversified portfolio of stocks of
small to midsize companies located outside of the United States.
Putnam S&P 500 Index Fund - This commingled trust seeks to mirror the
performance and composition of Standard & Poor's 500 Composite Index.
Putnam Stable Value Fund - This commingled trust seeks stable principal and
relatively high current income. Invests primarily in high-quality
fixed-income investments.
Putnam Voyager Fund - Seeks capital appreciation. Invests primarily in
common stocks.
The George Putnam Fund of Boston - Seeks to provide a balanced investment
which will produce both capital growth and current income. Invests in a
diversified group of stocks and bonds.
UAM ICM Small Company Portfolio Fund - Seeks maximum, long-term total
return. Invests in common stocks of smaller to midsize companies.
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Company Stock Fund - Invests in CompX International Inc. class A common
stock.
The fund descriptions provide only general information. Participants should
refer to the Prospectus of each fund for a more complete description.
Each participant's account is credited with the participant's contribution
and an allocation of the Employer's contribution and Plan earnings, and charged
with an allocation of administrative expenses. Allocations are based on
participant earnings, matching or account balances, as defined in the Plan.
In addition to the investment fund options, a "Loan Fund" is maintained to
account for loans to participants, as permitted by the Plan. A participant is
able to borrow from his/her fund account an amount ranging from a minimum of
$1,000 up to a maximum that is generally equal to the lesser of $50,000 or 50%
of his/her vested account balance. A loan is collateralized by the balance in
the participant's account and bears interest at rates commensurate with local
prevailing rates. For outstanding loans at December 31, 2004, the interest rates
ranged from 5.0% to 10.5% and mature through 2019.
Plan termination. The Employer has the right under the Plan to discontinue
its contributions at any time and to terminate the Plan, in compliance with the
provisions of ERISA. In the event the Plan is terminated, the accounts of all
participants will become fully vested.
Basis of accounting. The financial statements of the Plan are prepared in
accordance with accounting principles generally accepted in the United States of
America. Valuation of investments is more fully described in Note 2.
Management estimates. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results may, in some instances, differ
from previously estimated amounts.
Risks and uncertainties. The Plan provides for various investment options
in a variety of stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various risks, such
as interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect participants' account balances and the
amounts reported in the Plan's statement of net assets available for benefits.
Expenses of administering the Plan. The Plan provides that the Employer
will generally reimburse the Plan for administrative expenses paid by the Plan.
The Employer paid a significant portion of the 2004 administrative expenses.
Tax status. The Plan has been notified by the Internal Revenue Service in a
letter dated December 13, 2004 that it is a qualified plan under Section 401(a)
and Section 401(k) of the Internal Revenue Code (the "Code"), and is therefore
exempt from federal income taxes under provisions of Section 501(a) of the Code.
The Plan has been amended since it was notified of its exempt status by the
Internal Revenue Service. Management believes that the Plan currently is
designed and operates in accordance with the applicable requirements of the Code
and therefore remains exempt from federal income taxes under provisions of
Section 501(a) of the Code.
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Note 2 - Investments:
General. The assets of the Plan are held and the related investment
transactions are executed by Putnam Fiduciary Trust Company as trustee (the
"Trustee") of the CompX Master 401(k) Plan Trust (the "Trust"). The Trust
invests in publicly-traded registered investment companies, commingled trusts
administered by Putnam Investments and CompX International Inc. class A common
stock (see Note 1). The Plan assets invested in Putnam mutual funds and
commingled trusts qualify as party-in-interest transactions. The Plan's
investments are stated at fair value based on quoted market prices and net
appreciation for the year is reflected in the Plan's statement of changes in net
assets available for plan benefits. The net appreciation consists of realized
gains or losses and unrealized appreciation or depreciation on investments.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
The following presents investments that represent 5 percent or more of the
Plan's net assets at year end:
December 31,
2003 2004
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Putnam Stable Value Fund (commingled trust) $3,724,941 $4,201,986
Putnam Voyager Fund (class Y shares) 2,611,650 2,287,495
Calamos Growth Fund (class A shares) - 2,017,371
PIMCO Total Return Fund (class A shares) 1,321,890 1,282,783
Putnam S&P 500 Index Fund (commingled trust) 1,183,846 1,241,106
UAM ICM Small Company Portfolio Fund
(Institutional shares) 843,808 1,154,597
Managers Special Equity Fund 881,869 1,046,159
Putnam Vista Fund (class Y shares) 1,776,808 -
During 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $1,340,582 as follows:
Mutual funds $ 997,439
Commingled trusts 121,347
Common stock 221,796
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$1,340,582
==========
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COMPX CONTRIBUTORY RETIREMENT PLAN
SCHEDULE H, line 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
Fair
value
-----
*Putnam Stable Value Fund - Commingled Trust $ 4,201,986
*Putnam Voyager Fund - Class Y 2,287,495
Calamos Growth Fund - Class A 2,017,371
PIMCO Total Return Fund - Class A 1,282,783
*Putnam S&P 500 Index Fund - Commingled Trust 1,241,106
UAM ICM Small Company Portfolio Fund -
Class Institutional 1,154,597
Managers Special Equity Fund 1,046,159
Fidelity Diversified International Fund 886,196
*The George Putnam Fund of Boston - Class Y 722,665
*Putnam Equity Income Fund - Class Y 605,045
*Putnam International Capital Opportunities - Class Y 321,608
*CompX International Inc. Class A common stock 292,828
*Putnam Asset Allocation Fund -
Growth Portfolio - Class Y 244,257
*Putnam Asset Allocation Fund -
Conservative Portfolio - Class Y 184,565
*Putnam Asset Allocation Fund -
Balanced Portfolio - Class Y 79,911
*Loans to participants (with interest rates from
5.0% to 10.5%), mature through 2019 777,015
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$17,345,587
===========
* Investment in a "Party-in-interest" entity, as defined by ERISA.
EXHIBIT A
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-56163) of CompX International Inc. of our
report dated June 28, 2005 relating to the financial statements of CompX
Contributory Retirement Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Dallas, Texas
June 28, 2005