Nli Reports Third Quarter 2026 Results

NLI swings to $12.7 million profit on strong Kronos and CompX results.

What the company is saying

NLI Holdings, Inc. is highlighting a decisive turnaround from a net loss of $7.8 million in Q3 2025 to net income of $12.7 million, or $0.26 per share, in Q3 2026. The company frames this improvement as broad-based, citing higher sales and segment profits at both CompX and Kronos. Management attributes the gains to increased Marine Components and Security Products sales, market share gains in Europe and North America for Kronos, and successful cost reduction initiatives. The release quantifies the impact of currency fluctuations, noting a $5 million hit to Kronos’ Q3 operating income, and details non-cash tax items including a $3.7 million deferred tax benefit and a $0.6 million expense related to a German tax audit. The tone is confident and data-driven, with detailed breakdowns of segment performance and explicit explanations for year-over-year changes.

What the data suggests

The numbers show a marked improvement in profitability and operating performance. NLI’s net income attributable to stockholders rose to $12.7 million in Q3 2026 from a $7.8 million loss a year earlier, with year-to-date net income at $26.0 million versus a $6.8 million loss in 2025. CompX’s net sales increased to $44.0 million in Q3 and $128.2 million year-to-date, with segment profit rising to $6.4 million and $22.4 million, respectively. Kronos delivered $541.1 million in Q3 sales (up 18%) and $1.6 billion year-to-date (up 12%), with operating income swinging from a $19.2 million loss to $57.9 million profit in Q3, and from $26.6 million to $108.1 million year-to-date. Kronos’ average TiO2 selling prices rose 11% during the first nine months, though were still 1% lower year-over-year, but up 5% in Q3. Currency movements reduced Kronos’ operating income by $5 million in Q3 and $23 million year-to-date. The improvement is supported by higher sales volumes, reduced fixed costs, lower raw material costs, and cost savings initiatives, partially offset by higher energy and distribution costs.

Analysis

The announcement is a quarterly and year-to-date financial update with all key claims supported by realised, audited financial results. The release provides detailed, period-over-period comparisons for net income, segment profit, operating income, and sales, with clear explanations for drivers such as cost initiatives, currency impacts, and market conditions. There is no reliance on forward-looking projections or aspirational statements in the main body; all material claims are realised and quantified. No large capital outlay is disclosed, and all improvements are already reflected in the reported results. The tone is positive but proportionate to the scale of the turnaround in profitability and operational performance. There is no evidence of narrative inflation or overstatement relative to the disclosed facts.

Risk flags

• ●Currency volatility remains a material risk, as adverse exchange rate movements reduced Kronos’ operating income by $5 million in Q3 and $23 million year-to-date, and could further impact future results.
• ●Higher energy and distribution costs partially offset operational gains, indicating ongoing exposure to input cost inflation that could pressure margins if not managed.
• ●Tax-related uncertainties persist, as shown by the $0.6 million expense linked to a German tax audit and the reliance on non-cash deferred tax benefits, which may not recur or could reverse under changing regulations.

Bottom line

NLI’s Q3 and year-to-date results mark a clear financial turnaround, driven by stronger performance at both CompX and Kronos. The swing from loss to profit is underpinned by higher sales, improved margins, and realised cost reductions, with detailed disclosures supporting management’s narrative. Currency headwinds and rising input costs remain risks, but the company has demonstrated the ability to offset these through pricing and operational discipline. Investors should focus on the sustainability of these gains, especially in the face of volatile FX and energy markets. The most important takeaway is that NLI’s profitability recovery is real, broad-based, and already reflected in the numbers.

Announcement summary

(NYSE:NL) NLI Holdings, Inc. reported net income attributable to NLI stockholders of $12.7 million, or $.26 per share, in the third quarter of 2026, compared to a net loss of $7.8 million, or $.16 per share, in the third quarter of 2025. For the first nine months of 2026, NLI reported net income attributable to NLI stockholders of $26.0 million, or $.53 per share, compared to a net loss of $6.8 million, or $.14 per share, for the first nine months of 2025. NLI’s results include an unrealized gain of $.9 million in the third quarter of 2026 related to the change in value of marketable equity securities, compared to an unrealized loss of $.5 million in the third quarter of 2025. For the first nine months of 2026, NLI’s results include an unrealized gain of $4.0 million related to marketable equity securities, compared to an unrealized loss of $9.1 million in the first nine months of 2025. CompX’s net sales were $44.0 million for the third quarter of 2026 compared to $40.0 million in the third quarter of 2025, and $128.2 million for the first nine months of 2026 compared to $120.6 million for the same prior year period. CompX’s segment profit was $6.4 million for the third quarter of 2026 compared to $4.8 million for the third quarter of 2025, and $22.4 million for the first nine months of 2026 compared to $17.0 million for the same prior year period. NLI recognized equity in earnings of Kronos of $10.6 million in the third quarter of 2026 compared to equity in losses of $11.3 million in the third quarter of 2025, and equity in earnings of $13.8 million in the first nine months of 2026 compared to equity in losses of $8.6 million in the same period of 2025. Kronos’ net sales were $541.1 million in the third quarter of 2026, $84.2 million or 18% higher than in the third quarter of 2025, and $1.6 billion in the first nine months of 2026, $167.9 million or 12% higher than the first nine months of 2025. Kronos’ income from operations in the third quarter of 2026 was $57.9 million compared to a loss of $19.2 million in the third quarter of 2025, and $108.1 million for the first nine months of 2026 compared to $26.6 million in the first nine months of 2025. Kronos’ average TiO2 selling prices increased 11% during the first nine months of 2026, with average TiO2 selling prices for the first nine months of 2026 being 1% lower than the corresponding period of 2025, and 5% higher in the third quarter of 2026 compared to the third quarter of 2025. Fluctuations in currency exchange rates decreased Kronos’ income from operations by approximately $5 million in the third quarter of 2026 and approximately $23 million in the first nine months of 2026 compared to the same prior year periods. Corporate expenses increased $.2 million in the third quarter of 2026 compared to the third quarter of 2025, and decreased $.2 million in the first nine months of 2026 compared to the same period of 2025. Net income attributable to NLI stockholders for the third quarter and the first nine months of 2026 includes income of $3.7 million ($2.9 million, or $.06 per share, net of tax) due to Kronos’ non-cash deferred income tax benefit related to proposed currency regulations under §987 released in August 2026. Net income attributable to NLI stockholders for the first nine months of 2026 includes expense of $.6 million ($.5 million, or $.01 per share, net of tax) related to Kronos’ recognition of an uncertain tax position related to a German tax audit. Net loss attributable to NLI stockholders for the third quarter and the first nine months of 2025 includes expense of $5.9 million ($4.7 million, or $.10 per share, net of tax) related to Kronos’ non-cash deferred income tax expense reflecting the impact of the rate reduction on its net German deferred tax asset, and income of $1.1 million ($.9 million, or $.02 per share, net of tax) due to Kronos’ recognition of a non-cash gain resulting from the remeasurement of its earn-out liability related to its 2024 acquisition of the remaining ownership interest in Louisiana Pigment Company, L.P. CompX’s net sales increases were primarily due to higher Marine Components sales to the towboat and industrial markets, and higher Security Products sales to the healthcare and tool storage markets. Kronos’ net sales increases were primarily due to market share gains in its European and North American markets, the effect of anti-dumping duties, changing supply conditions, higher average TiO2 selling prices, and changes in currency exchange rates, which increased net sales by approximately $39 million in the first nine months of 2026. Kronos’ income from operations increased due to higher sales volumes, higher production rates, reduced unabsorbed fixed production costs, lower raw material costs, and cost reduction initiatives implemented in the fourth quarter of 2025, partially offset by higher energy and distribution costs and unfavorable currency exchange rate impacts.

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