CompX(CIX) - 2025 Q4 - Annual Report

Business Segments - The company operates two business segments: Security Products and Marine Components, with a significant North American market share in cabinet lock security products[15]. - The Security Products segment includes specialized products tailored to individual customer specifications, contributing to a substantial portion of sales[17]. Customer Concentration - In 2025, the United States Postal Service accounted for 26% of consolidated net sales, with the top ten customers representing approximately 52% of total sales[29]. Cost Structure - Raw materials accounted for approximately 43% of total cost of sales in 2025, with zinc, brass, aluminum, and stainless steel being primary materials[21]. - The company experienced a general upward trend in the prices of brass and aluminum during 2025, while stainless steel prices began increasing in the latter half of the year[22]. - The company aims to mitigate raw material cost fluctuations through improvements in production efficiencies and other operating cost reductions[22]. - The company does not have long-term supply agreements for raw material requirements due to low risk of unavailability and high price volatility[143]. Workforce and Safety - The company has a well-trained workforce of 549 employees as of December 31, 2025, and emphasizes competitive compensation and benefits[38]. - The company has established safety programs and had two lost time incidents in 2025, with a focus on maintaining a strong safety culture[39]. Intellectual Property - The company holds a number of patents with remaining terms ranging from less than one year to 15 years as of December 31, 2025[23]. Environmental Commitment - The company is committed to environmental sustainability and has received awards for compliance excellence in its operations[33]. Fiscal Year Information - The fiscal year ends on the Sunday closest to December 31, with the years ending December 31, 2023, 2024, and 2025 consisting of 52 weeks[40]. Financial Information - The outstanding principal amount of the note receivable from an affiliate is $8.0 million, bearing interest at prime plus 1.0% (7.8% at December 31, 2025), with interest income of $0.9 million received during 2025[142].