OKLAHOMA CITY--(BUSINESS WIRE)--Dec. 17, 2015--
LSB Industries, Inc. (NYSE:LXU) (“LSB or the Company”) today announced
that the ammonia plant at its Cherokee, Alabama chemical facility
(“Cherokee Facility” or “Cherokee”) was taken out of service for
unplanned maintenance on December 11, 2015 due to a small leak that was
detected in a vessel containing hydrogen. Repairs are currently underway
and the Cherokee Facility is expected to resume production on or around
December 24, 2015. LSB management estimates that this unplanned outage
will reduce operating income by approximately $2.5 million to $3.0
million. Approximately half of the financial impact is expected to be
reflected in LSB’s fourth quarter 2015 results because of repair costs,
lost sales and reduced absorption of fixed costs, with the balance being
realized in the first quarter of 2016 due to lost sales as the Cherokee
Facility rebuilds its product inventory.
Additionally, LSB announced that the urea plant at its Pryor, Oklahoma
chemical facility (“Pryor Facility” or “Pryor”) was taken out of service
on November 14, 2015 in order to repair a CO2 pre-compressor. As a
result, Pryor has been unable to produce urea ammonium nitrate (UAN)
during this time, but has been able to transport a portion of its
ammonia production to the Company’s El Dorado, Arkansas facility for use
in the production of low and high density ammonium nitrate (LDAN/HDAN).
LSB management anticipates that Pryor will resume urea and UAN
production on or around December 21, 2015. The lost sales volume of UAN
(see below table), coupled with the cost of repairs and reduced
absorption of fixed costs is expected to lower fourth quarter 2015
operating income by approximately $3.0 million to $3.5 million.
Approximately $1.0 million of this lost operating income is expected to
be recovered in the first quarter of 2016 from the sale of surplus
ammonia produced in the fourth quarter of 2015 that could not be used to
produce urea and then upgraded to UAN.
Due to the issues at the Cherokee and Pryor Facilities, LSB has revised
its previously disclosed outlook for fourth quarter 2015 Chemical
Business sales volume as follows:
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Products
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Revised Outlook - Sales (tons)
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Previous Outlook - Sales (tons)
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Agriculture:
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UAN
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80,000 – 90,000
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100,000 – 110,000
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HDAN
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25,000 – 30,000
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25,000 – 30,000
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Ammonia
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25,000 – 30,000
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25,000 – 30,000
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Industrial, Mining and Other:
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Nitric acid
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130,000 – 140,000
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130,000 – 140,000
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LDAN/HDAN
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15,000 – 20,000
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15,000 – 20,000
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Ammonium nitrate solution
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20,000 – 25,000
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20,000 – 25,000
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Ammonia
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5,000 – 10,000
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5,000 – 10,000
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About LSB Industries, Inc.
LSB is a manufacturing 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
chillers, large custom air handlers and make-up air units.
This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally are identified by use of the
words “will”, “believes”, “expects”, “estimates”, “intends”,
“anticipates”, “plans to”, “should”, “estimates”, “projects”, or similar
expressions, including, without limitation, timing of the repairs to the
Pryor and Cherokee Facilities; the anticipated effect of the repairs to
the Pryor and Cherokee Facilities on fourth quarter 2015 and first
quarter 2016 operating income; the impact of the unplanned downtime at
the Pryor and Cherokee Facilities on Chemical Business sales volume in
the fourth quarter of 2015, and the sale of surplus ammonia produced in
the fourth quarter of 2015 in the first quarter of 2016, and the
various factors described in the “Special Note Regarding Forward-Looking
Statements,” and the “Risk Factors” contained in our 10-K for the year
ended December 31, 2014, and Form 10-Q for quarter ended September 30,
2015. 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/20151217005462/en/
Source: LSB Industries, Inc.
Company Contact:
LSB Industries
Mark Behrman,
405-235-4546
Chief Financial Officer
Investor Relations:
The
Equity Group Inc.
Fred Buonocore, 212-836-9607
or
Linda
Latman, 212-836-9609
