Daniel D. Greenwell, Lead Independent Director, Appointed Interim
Chief Executive Officer
Barry H. Golsen Steps Down as President and CEO
Board Initiates Search Process for Permanent President and CEO
Provides Update on Pryor Facility and Estimated Third Quarter 2015
Sales Volumes of UAN
OKLAHOMA CITY--(BUSINESS WIRE)--Sep. 3, 2015--
LSB Industries, Inc. (NYSE:LXU) (“LSB or “the Company”), a manufacturer
of chemical products for the agricultural, mining and industrial markets
and a leading manufacturer of commercial and residential climate control
products, today announced that Barry H. Golsen has stepped down as
President and Chief Executive Officer of LSB, effective immediately. Mr.
Golsen will remain a Director of the Company.
The LSB Board of Directors has appointed Daniel D. Greenwell, Lead
Independent Director, to serve as Interim Chief Executive Officer. Mr.
Greenwell has been a member of the LSB Board of Directors since 2014 and
serves as Chairman of the Audit Committee and a member of the Strategic
Committee of the Board.
“On behalf of the Company, I want to thank Barry for his leadership and
many contributions to LSB as President and CEO,” said Jack E. Golsen,
Executive Chairman of the Board of Directors. “Barry has played an
important role in the growth and success of the Company over the past 38
years. He has also been instrumental in developing the Company’s
strategic plan to lower production costs, improve manufacturing
efficiency and drive sales growth in the Chemicals business, and to
generate profitable growth in the Climate Control business. We look
forward to continuing to benefit from his insight and industry expertise
as a Board member. We are also pleased that Dan Greenwell, an
experienced executive with over 20 years of industrial, financial and
operational experience, will lead the Company as we continue to take
steps to improve the Company’s performance and drive enhanced
shareholder value.”
“Having worked closely with management as a member of the Strategic
Committee of the Board, I am confident that LSB is on the right path to
realize the benefits of the Company’s strategic growth initiatives,”
said Mr. Greenwell. “I believe that the expansion of the El Dorado
facility, the plant reliability enhancements in the Chemical Business
and the implementation of the operational excellence initiatives in the
Climate Control Business will spur significant operating performance
improvement and earnings growth in the years ahead. I look forward to
working with the Operations Oversight Committee as we execute our
business strategy. LSB has a strong foundation in place and we will
continue to focus on increasing shareholder value under new leadership.”
The Company noted that the Board of Directors will initiate a formal
search process to identify a permanent President and CEO. The Board
intends to retain an executive search firm to assist in the search.
As a result of his appointment as Interim Chief Executive Officer, Mr.
Greenwell will no longer serve on the Audit Committee or as Lead
Independent Director of the Board, although he will remain a Director of
the Company. In addition, current Directors William F. Murdy and Richard
W. Roedel have been elected as Lead Independent Director and Audit
Committee Chairman, respectively, to replace Mr. Greenwell in those
positions.
Update on Pryor, Oklahoma Facility
LSB also provided an update on the operational performance of its Pryor
Oklahoma chemical facility (“Pryor Facility” or “Pryor”). As previously
disclosed, the Pryor Facility underwent its annual planned turnaround to
address routine maintenance issues on July 11, 2015 and concluded the
turnaround on August 4, 2015. While in the process of restarting the
ammonia plant, Pryor’s automated monitoring systems detected several
mechanical issues that prompted management to take the plant out of
service. Certain components were removed from the facility, taken
off-site for repair and were reinstalled, and the plant restarted on
August 21, 2015.
Subsequent to the restart of the ammonia plant on August 21, 2015, Pryor
was in production for four days. However, on August 25, 2015 a pipe
connecting two primary components of the ammonia plant developed a
crack, causing operations at Pryor to once again be suspended. There
were no injuries or environmental impact as a result of the crack, and
it appears that the damage is isolated to this one pipe. After
inspection by a third party, it has been determined that the pipe
repairs should be completed by September 18, 2015.
LSB estimates that the periods of downtime at Pryor in August and
September, assuming the ammonia plant is operational by September 18,
2015, will reduce third quarter 2015 sales volumes of UAN and ammonia by
a total of approximately 35,000 to 40,000 tons and 5,000 to 6,000 tons,
respectively, while lowering operating income by a total of
approximately $8.0 million to $8.5 million, which includes lost profit,
unabsorbed overhead expenses and costs of repair. Each additional day of
downtime at Pryor, beyond September 18, 2015, is estimated to result in
a reduction of operating income of approximately $150,000 to $200,000.
“We are extremely disappointed by the unplanned downtime occurring at
the Pryor Facility during the third quarter,” stated Jack Golsen. “We
have been making progress towards generating more consistent performance
at Pryor. However, there is always the risk that facility will
experience some unplanned downtime from time to time during the next 18
months as we continue to move forward with our plant reliability and
safety initiatives, which include the installation of sensors that will
allow for earlier identification of mechanical issues and enhance
preventative maintenance, and the implementation of advanced automation
systems that will enable faster and more refined control over plant
process conditions.”
About Daniel D. Greenwell
Mr. Greenwell has served as a Partner and Chief Financial Officer of a
private equity investment and advisory firm since September 2014. Mr.
Greenwell previously served as the Chief Financial Officer and Executive
Vice President of Sabre Industries Inc., a private equity-held
manufacturer of utility and cell towers, from April 2013 until May 2014.
Mr. Greenwell focused on operational change and value creation
opportunities and was responsible for all financial aspects of a
fast-growing manufacturing and service business. From January 2012 until
March 2013, Mr. Greenwell served as Senior Vice President and Chief
Financial Officer of Tronox Limited, a leading global producer and
marketer of titanium dioxide pigment. Mr. Greenwell led Tronox to a
public listing on the NYSE in 2012. Prior to that, Mr. Greenwell served
as Senior Vice President and Chief Financial Officer of Terra
Industries, Inc., from 2005 until its acquisition by CF Industries
Holdings, Inc. in April 2010. He also served on the Board of Directors
of Terra Nitrogen Company, L.P., a Master Limited Partnership, from
March 2008 until April 2010. Mr. Greenwell has over 20 years of
industrial, financial and operational experience and has held various
executive leadership positions at a number of public companies,
including Belden Inc., Zoltek Companies Inc., and Sigma Chemical
Company. He also served as Senior Manager of KPMG from 1985 to 1992. Mr.
Greenwell is a Certified Public Accountant. He received a Bachelor of
Science degree in Accounting from Truman State University.
LSB Industries, Inc.
LSB is a manufacturing and marketing company. LSB’s principal business
activities consist of the manufacture and sale of chemical products for
the agricultural, mining and industrial markets; and, the manufacture
and sale of commercial and residential climate control products, such as
water source and geothermal heat pumps, hydronic fan coils, modular
geothermal and other chillers and large custom air handlers.
This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Act of 1995. These
forward-looking statements generally are identifiable by use of the
words “will,” “believe,” “expects,” “intends,” “anticipates,” “plans
to,” “should,” “estimates,” “projects” or similar expressions,
including, without limitation, benefits of the strategic and operational
initiatives we are implementing; programs initiated are expected to
improve business and operational performance; timing of the repairs to
the Pryor, Oklahoma facility; and the anticipated effect on third
quarter 2015 operating income and UAN and ammonia sales volumes. Actual
results may differ materially from the forward-looking statements for
many reasons, including, without limitation, general economic
conditions; increased competitive pressures; labor conditions; loss of
significant customers or customers’ failure to abide by conditional
terms; legislative or regulatory changes which could negatively affect
the implementation of corporate governance enhancements; and the various
factors described in the “Special Note Regarding Forward-Looking
Statements” and “Risk Factors” contained in our 10-K for the year ended
December 31, 2014, and Form 10-Q for quarter ended June 30, 2015. In
addition, no assurance can be given that the Company will be successful
in identifying a permanent President and CEO or that any candidate will
be employed on financial terms comparable to those of our prior
President and CEO. These forward looking statements speak only as
of the date of this press release, and LSB expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
LSB’s expectations with regard thereto or any change in events
conditions or circumstances on which any such statement is based.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150903005456/en/
Source: LSB Industries, Inc.
LSB Industries, Inc.
Mark Behrman, 405-235-4546
Chief
Financial Officer
Or
Investor Relations:
The
Equity Group Inc.
Fred Buonocore, 212-836-9607
or
Linda
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