Valhi Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 7 May 2026: press release. The quarter’s numbers.

Key takeaways

Net income fell year on year: Net income attributable to Valhi stockholders was $2.0 million, or $.07 per share, against $16.9 million, or $.59 per share, a year earlier. Source
Chemicals operating income fell sharply: Chemicals operating income was $14.5 million, against $41.2 million a year earlier. Lower prices, lower production volumes and currency were cited, partly offset by sales volumes and production costs. Source
Selling prices began recovering: After starting 2026 below the start-2025 level, average TiO2 selling prices rose 2% in the first quarter as recovery of 2025 pricing continued. Source
Final commercial parcel sold: Real estate net sales were $9.7 million, up from $8.5 million, mainly from a $7.3 million sale recognized immediately because it had no further development obligations. Source
Cost programme lowered production costs: Lower production costs partly reflected fourth-quarter 2025 measures, including workforce reductions, that management said were intended to improve the cost structure. Source
German tax uncertainty recognized: Income tax expense of $2.0 million, or $.04 per share, was recognized at Chemicals for an uncertain tax position tied to a German tax audit. Source

“which were designed to permanently improve our Chemicals Segment’s cost structure and enable more efficient operation of its facilities at lower production rates for extended periods.”
Valhi Inc., press release

What changed from last quarter

New: Chemicals recognized an uncertain tax position tied to a German tax audit in the quarter. The prior quarter had recorded a valuation allowance on a German deferred tax asset. Source

Quarter results overview

Net income fell year on year: Net income attributable to Valhi stockholders was $2.0 million, or $.07 per share, against $16.9 million, or $.59 per share, a year earlier. Source
Chemicals decline partly offset: Management attributed the lower net income mainly to Chemicals, partly offset by higher operating income at Component Products and Real Estate. Source
Chemicals sales rose four percent: Chemicals net sales reached $509.8 million, up $20.0 million, or 4%, from the first quarter of 2025. Source

Chemicals segment results

Currency lifted Chemicals sales: Management estimated that currency changes, mainly the euro, added about $30 million to Chemicals net sales in the quarter. Source
Chemicals operating income fell sharply: Chemicals operating income was $14.5 million, against $41.2 million a year earlier. Lower prices, lower production volumes and currency were cited, partly offset by sales volumes and production costs. Source
Currency reduced operating income: Euro-related currency fluctuations lowered Chemicals operating income by about $6 million compared with the first quarter of 2025. Source

“Our Chemicals Segment started 2026 with average TiO 2 selling prices lower than at the beginning of 2025”
Valhi Inc., press release

Pricing and sales volumes

Selling prices began recovering: After starting 2026 below the start-2025 level, average TiO2 selling prices rose 2% in the first quarter as recovery of 2025 pricing continued. Source
Volumes rose outside Europe: TiO2 sales volumes were higher in North American, Latin American and export markets, which management cited as a driver of sales growth. Source
European volumes declined: Sales volumes in the European market were lower, partly offsetting gains elsewhere along with lower average TiO2 selling prices. Source

Component products segment

Component sales edged higher: Component Products net sales were $40.6 million versus $40.3 million, with higher industrial marine sales partly offset by lower security sales. Source
Security margin drove profit: Security products gross margin rose on a more favorable customer and product mix, with higher sales at the marine components unit adding to profit to a lesser extent. Source
Segment operating income increased: Component Products operating income was $7.1 million, up from $5.9 million a year earlier. Source

Real estate and reimbursements

Final commercial parcel sold: Real estate net sales were $9.7 million, up from $8.5 million, mainly from a $7.3 million sale recognized immediately because it had no further development obligations. Source
Reimbursement added to operating income: A $5.4 million tax increment infrastructure reimbursement was included in operating income, or $2.8 million net, $.10 per share. Source

Cost reductions and production costs

Cost programme lowered production costs: Lower production costs partly reflected fourth-quarter 2025 measures, including workforce reductions, that management said were intended to improve the cost structure. Source

Corporate costs, interest and tax

Corporate expenses slightly lower: Corporate expenses declined slightly, mainly from lower administrative and environmental remediation costs. Source
Interest income lower: Interest income and other fell $.8 million on lower average investment balances and lower average interest rates. Source
Interest expense rose: Interest expense rose $1.5 million, reflecting higher overall debt levels and higher average interest rates. Source
German tax uncertainty recognized: Income tax expense of $2.0 million, or $.04 per share, was recognized at Chemicals for an uncertain tax position tied to a German tax audit. Source

Coming up, as management said on 7 May 2026

Development work nearing completion: Management said development on the residential/planned community is nearing completion, which slows development activity on previously sold parcels. Source

Figures management reported

Figure	Reported
TiO2 sales volumes (Q1 2026 vs Q1 2025) Source	+4%
TiO2 product pricing (Q1 2026 vs Q1 2025) Source	-6%
Average TiO2 selling price change, first quarter 2026 Source	+2%

Risks management discussed

Demand: Lower European sales volumes and lower average TiO2 selling prices partly offset the gains in other markets. Source
External: Currency fluctuations, mainly the euro, reduced Chemicals operating income by about $6 million in the quarter. Source
Operational: Lower production volumes reduced Chemicals operating income alongside lower prices and currency effects. Source

Earlier plans management reported on

Not stated: Management said the Chemicals Segment works to recover pricing lost during 2025, with prices up 2% in the quarter. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

VALHI REPORTS FIRST QUARTER 2026 RESULTS

DALLAS, TEXAS . . May 7, 2026. Valhi, Inc. (NYSE: VHI) reported net income attributable to Valhi stockholders of $2.0 million, or $.07 per share, in the first quarter of 2026 compared to net income of $16.9 million, or $.59 per share, in the first quarter of 2025. Net income attributable to Valhi stockholders decreased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to lower operating results from the Chemicals Segment, partially offset by higher operating income from the Component Products and the Real Estate Management and Development Segments.

The Chemicals Segment’s net sales of $509.8 million in the first quarter of 2026 were $20.0 million, or 4%, higher than in the first quarter of 2025. The Chemicals Segment’s net sales increased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to the effects of higher sales volumes in its North American, Latin American and export markets and the favorable impact of changes in currency exchange rates (primarily the euro), which we estimate increased net sales by approximately $30 million. These increases were partially offset by lower sales volumes in the European market and lower average TiO2 selling prices. Our Chemicals Segment started 2026 with average TiO2 selling prices lower than at the beginning of 2025; however, its average TiO2 selling prices increased 2% during the first quarter of 2026 as our Chemicals Segment works to recover pricing lost during 2025. The table at the end of this press release shows how each of these items impacted the Chemicals Segment’s net sales.

The Chemicals Segment’s operating income in the first quarter of 2026 was $14.5 million compared to operating income of $41.2 million in the first quarter of 2025. The Chemicals Segment’s operating income decreased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to the effects of lower average TiO2 selling prices, lower production volumes, and the unfavorable impact of changes in currency exchange rates, partially offset by higher sales volumes and lower productions costs. Lower production costs benefited in part from cost reduction initiatives implemented in the fourth quarter of 2025, including workforce reductions and other measures, which were designed to permanently improve our Chemicals Segment’s cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. Fluctuations in currency exchange rates (primarily the euro) decreased our Chemicals Segment’s operating income by approximately $6 million in the first quarter of 2026 compared to the first quarter of 2025.

The Component Products Segment’s net sales were $40.6 million in the first quarter of 2026 compared to $40.3 million in the first quarter of 2025. The Component Products Segment’s first quarter net sales increased over the comparable 2025 period due to higher marine components sales to the industrial market partially offset by lower security products sales. Operating income attributable to the Component Products Segment was $7.1 million in the first quarter of 2026 compared to $5.9 million in the first quarter of 2025. The Component Products Segment’s operating income increased in the first quarter of 2026 compared to the same period in 2025 primarily due to a higher gross margin at the security products reporting unit as a result of a more favorable customer and product mix, and, to a lesser extent, the impact of higher sales at the marine components reporting unit.

The Real Estate Management and Development Segment had net sales of $9.7 million in the first quarter of 2026 compared to $8.5 million in the first quarter of 2025. Land sales revenue is generally recognized over time based on cost inputs, and land sales revenues are dependent on spending for development activities. Net sales increased $1.2 million in the first quarter of 2026 compared to the same period in 2025 primarily due to the sale of the final commercial parcel for $7.3 million, which had no further development obligations and was therefore recognized immediately as revenue. This increase was partially offset by effects of a slower pace of development activity for previously sold parcels within the residential/planned community as the development work nears completion. The pace of development activities is dictated by a number of factors such as city permit and design approval, approvals from the Nevada Department of Environmental Protection, labor and materials availability, and the amount of remaining development obligations. The Real Estate Management and Development Segment also recognized tax increment infrastructure reimbursement of $5.4 million ($2.8 million, or $.10 per share, net of income tax and noncontrolling interest) in the first quarter of 2026 which is included in operating income.

Corporate expenses in the first quarter of 2026 declined slightly compared to the same period in 2025 primarily due to lower administrative and environmental remediation and related costs. Interest income and other decreased $.8 million in the first quarter of 2026 compared to the first quarter of 2025 primarily due to decreased average investment balances and lower average interest rates. Interest expense increased $1.5 million in the first quarter of 2026 compared to the same period in 2025 primarily due to higher overall debt levels and higher average interest rates.

Our net income attributable to Valhi stockholders in the first quarter of 2026 includes an income tax expense of $2.0 million ($1.3 million, or $.04 per share, net of noncontrolling interest) related to the recognition at our Chemicals Segment of an uncertain tax position related to a German tax audit.

The statements in this press release relating to matters that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Although we believe the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those predicted. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause our actual future results to differ materially include, but are not limited to, the following:

Future supply and demand for our products;
Our ability to realize expected cost savings from strategic and operational initiatives;
Our ability to integrate acquisitions into Kronos’ operations and realize expected synergies and innovations;
The extent of the dependence of certain of our businesses on certain market sectors;
The cyclicality of certain of our businesses (such as Kronos’ TiO2 operations);
Customer and producer inventory levels;
Unexpected or earlier-than-expected industry capacity expansion (such as the TiO2 industry);
Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs) or the implementation of tariffs on imported raw materials;
Changes in the availability of raw materials (such as ore);
General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, tariffs, natural disasters, terrorist acts, global conflicts and public health crises);
Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises);
Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades or improvements; technology processing failures; or other events) related to our technology infrastructure (including manufacturing and accounting systems) that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders;
Competitive products and substitute products;
Competition from Chinese suppliers with less stringent regulatory and environmental compliance requirements;
Customer and competitor strategies;
Potential consolidation of our competitors;
Potential consolidation of our customers;
Our ability to retain key customers;
The impact of pricing and production decisions;
Competitive technology positions;
Our ability to protect or defend intellectual property rights;
The introduction of new, or changes in existing, tariffs, trade barriers or trade disputes;
The ability of our subsidiaries to pay us dividends;
Uncertainties associated with new product development and the development of new product features;
Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone) or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies;
Decisions to sell operating assets other than in the ordinary course of business;
The timing and amounts of insurance recoveries;
Our ability to renew or refinance credit facilities or other debt instruments in the future;
Changes in interest rates;
Our ability to maintain sufficient liquidity;
The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform;
Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria;
Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations);
Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental, sustainability, health and safety or other regulations (such as those seeking to limit or classify TiO2 or its use);
The ultimate resolution of pending litigation (such as NL’s lead pigment and environmental matters);
Our ability to comply with covenants contained in our revolving bank credit facilities;
Our ability to complete and comply with the conditions of our licenses and permits;
Changes in construction costs in Henderson, Nevada; and
Pending or possible future litigation (such as litigation related to CompX’s use of certain permitted chemicals in its productions process) or other actions.

Should one or more of these risks materialize (or the consequences of such development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.

Valhi, Inc. is engaged in the chemicals (TiO2), component products (security products and recreational marine components) and real estate management and development industries.

VALHI, INC. AND SUBSIDIARIES

CONDENSED SUMMARY OF INCOME

(In millions, except earnings per share)

	Three months ended
	March 31,
	2025		2026
	(unaudited)
Net sales
Chemicals		$489.8		$509.8
Component products		40.3		40.6
Real estate management and development		8.5		9.7
Total net sales		$538.6		$560.1
Operating income
Chemicals		$41.2		$14.5
Component products		5.9		7.1
Real estate management and development		3.0		11.3
Total operating income		50.1		32.9
General corporate items:
Interest income and other		4.3		3.5
Other components of net periodic pension and OPEB expense		(.8)		(.8)
Changes in market value of Valhi common stock held by subsidiaries		(1.7)		.5
General expenses, net		(7.9)		(7.3)
Interest expense		(13.2)		(14.7)
Income before income taxes		30.8		14.1
Income tax expense		8.0		6.3
Net income		22.8		7.8
Noncontrolling interest in net income of subsidiaries		5.9		5.8
Net income attributable to Valhi stockholders		$16.9		$2.0
Amounts attributable to Valhi stockholders:
Basic and diluted net income per share	$	.59	$	.07
Basic and diluted weighted average shares outstanding		28.5		28.5

VALHI, INC. AND SUBSIDIARIES

IMPACT OF PERCENTAGE CHANGE IN CHEMICAL SEGMENT'S NET SALES

(unaudited)

	Three months ended
	March 31,
	2026 vs. 2025
Percentage change in TiO2 net sales:
TiO2 sales volumes	4%
TiO2 product pricing	(6)
TiO2 product mix/other	-
Changes in currency exchange rates	6
Total	4%

Contacts
Bryan A. Hanley
Senior Vice President and Treasurer
Tel. 972-233-1700