VALHI REPORTS SECOND QUARTER 2018 RESULTS

DALLAS, TEXAS . . August 8, 2018.  Valhi, Inc. (NYSE: VHI) reported net income from continuing operations attributable to Valhi stockholders of $11.3 million, or $.03 per diluted share, in the second quarter of 2018 compared to $117.0 million, or $.35 per diluted share, in the second quarter of 2017.   Valhi reported net income from continuing operations attributable to Valhi stockholders of $63.0 million, or $.18 per diluted share, in the first six months of 2018 compared to $131.4 million, or $.38 per diluted share in the first six months of 2017.  Net income from continuing operations attributable to Valhi stockholders declined from the 2017 periods primarily due to the net effects of a second quarter 2017 recognition of
 a non-cash deferred income tax benefit related to the Chemicals Segment's German and Belgian operations, a second quarter 2018 litigation settlement charge related to NL and improved operating results from our Chemicals and Component Products Segments in 2018.

The Chemicals Segment's net sales of $471.8 million in the second quarter of 2018 were $30.4 million, or 7%, higher than in the second quarter of 2017.  The Chemicals Segment's net sales of $902.2 million in the first six months of 2018 were $91.0 million, or 11%, higher than in the first six months of 2017.  The Chemicals Segment's net sales increased in 2018 due to higher average TiO2 selling prices partially offset by lower sales volumes.  The Chemicals Segment's average TiO2 selling prices were 20% higher in the second quarter of 2018 as compared to the second quarter of 2017 and were 23% higher in the first six months of 2018 as compared to the same prior year period.  The Chemicals Segment's average TiO2 selling prices at the end of the second quarter of 2018 were 4% higher than at the end of 2017, with most of such increase occurring in the first quarter.  Higher prices in the European, North American and export markets were partially offset by lower prices in Latin America (attributable to changes in customer mix).  The Chemicals Segment's TiO2 sales volumes in the second quarter of 2018 were 12% lower as compared to the record second quarter sales volumes of 2017 reflecting the effects of product availability issues during the quarter as well as reduced shipments as customer inventory levels returned to more normal levels especially in European and export markets, partially offset by higher sales in the North American market.  The Chemicals Segment's sales volumes in the first six months of 2018 were 13% lower than the same period in 2017 primarily due to lower sales in all major markets resulting from a controlled ramp-up in January 2018 as Kronos brought the second phase of its new global enterprise resource planning system online, and inventory management to assure adequate supply to our customers during the spring and summer necessitated by the lower production volumes in the first three months of the year (as discussed below), as well as the impact of product availability and customer inventory level changes in the second quarter discussed above.  Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, increasing net sales by approximately $22 million in the second quarter of 2018 and approximately $53 million in the first six months of 2018 as compared to the same periods in 2017.  The table at the end of this press release shows how each of these items impacted the overall increase in net sales.

The Chemicals Segment's operating income in the second quarter of 2018 was $123.6 million as compared to $77.2 million in the second quarter of 2017.  For the year-to-date period, the Chemicals Segment's operating income was $234.2 million as compared to $136.3 million in the first six months of 2017.  The Chemicals Segment's operating income increased in the 2018 periods primarily due to higher average TiO2 selling prices partially offset by lower sales and production volumes and higher costs for certain raw materials and other production costs.  The Chemicals Segment's TiO2 production volumes were 4% lower in the second quarter and 6% lower in the first six months of 2018 as compared to the same periods in 2017.  Kronos' production facilities operated at 96% of practical capacity in 2018 (95% and 97% in the first and second quarters of 2018, respectively) compared to full practical capacity utilization rates in 2017.  The decrease in TiO2 production volumes in the 2018 periods compared to the production volumes in the 2017 periods was primarily due to the timing of scheduled maintenance at certain facilities in 2018 as well as the implementation of a productivity-enhancing improvement project at Kronos' Belgian facility in the first quarter of 2018.  Fluctuations in currency exchange rates also affected segment profit comparisons, which increased operating income by approximately $18 million in the second quarter of 2018 and by approximately $19 million in the year-to-date 2018 period as compared to the same periods in 2017.
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The following information was filed by Valhi Inc (VHI) on Wednesday, August 8, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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