UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF
1934
Date of
report (Date of earliest event reported) November
6, 2008
LSB INDUSTRIES, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-7677
|
73-1015226
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
||
|
16 South Pennsylvania, Oklahoma
City, Oklahoma
(Address of principal executive offices) |
73107
(Zip
Code) |
|||
Registrant's telephone number,
including area code (405) 235-4546
Not applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Section
2 – Financial Information
Item
2.02. Results of Operations and Financial Condition
On
November 6, 2008, LSB Industries, Inc. (the “Company”) issued a press release to
report its unaudited financial results for the third quarter
ended September 30, 2008. The press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
On November
6, 2008, at 5:15 p.m. EDT / 4:15 p.m. CDT, the Company held a conference
call broadcast live over the Internet to discuss the unaudited results of
the third quarter and nine months ended September 30,
2008.
The
information contained in this Item 2.02 of this Form 8-K and the Exhibit
attached hereto are being furnished and shall not be deemed “filed” for the
purposes of Section 18 of the Securities Act of 1934 (as amended), or otherwise
subject to the liabilities of such section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933 (as amended), except
as shall be expressly set forth by specific reference in such
filing.
Item
9.01. Exhibits
The
information contained in the accompanying Exhibit 99.1 shall not be deemed filed
for purposes of Section 18 of the Exchange Act or incorporated by reference in
any filing under the Exchange Act or the Securities Act, except as shall be
expressly set forth by specific reference in such filing.
(d)
Exhibits.
Exhibit Description
99.1 Press
Release issued by LSB Industries, Inc. dated November 6, 2008
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated: November
7, 2008
LSB
INDUSTRIES, INC.
By: /s/Tony M. Shelby
Name: Tony
M. Shelby
Title:
Executive Vice President of Finance,
Chief
Financial Officer
COMPANY
CONTACT:
Investor Relations Contact:
Tony M.
Shelby, Chief Financial Officer Linda Latman (212)
836-9609
(405)
235-4546 Lena Cati (212)
836-9611
The Equity Group Inc.
FOR IMMEDIATE
RELEASE
LSB INDUSTRIES, INC. REPORTS
2008 THIRD QUARTER RESULTS
Oklahoma
City, Oklahoma - November 6, 2008. LSB Industries, Inc. (NYSE:LXU), today
reported results for the third quarter and nine months ended September 30,
2008.
Third
Quarter 2008 Compared to Third Quarter 2007:
|
·
|
Net
sales increased 42.9% to $210.9 million from $147.6
million;
|
|
·
|
Climate
Control sales increased 10.2% to $83.4 million from $75.6
million;
|
|
·
|
Chemical
Business sale rose 79.8% to $124.5 million from $69.3
million;
|
|
·
|
Operating
income before unusual items, shown in the table below, was $18.7 million
compared to $14.3 million in the third quarter of
2007;
|
|
·
|
Operating
income declined to $8.7 million from $19.1
million;
|
|
·
|
Net
income was $4.2 million or $0.18 per diluted share, which included a $2.4
million tax provision. In the 2007 third quarter, net income
was $18.3 million, which included a $1.5 million income tax
benefit. Diluted earnings per share in the 2007 third quarter
were $0.77.
|
|
Third
Quarter of 2008 |
Third
Quarter of 2007 |
Change
|
|
(In
Millions)
|
|||||||||||
|
Operating
income before unusual items below
|
$
|
18.7
|
$
|
14.3
|
$
|
4.4
|
|||||
|
Unrealized
non-cash losses on natural gas contracts
|
(4.9
|
)
|
-
|
(4.9
|
)
|
||||||
|
Unplanned
downtime at the Cherokee Facility
|
(5.1
|
)
|
-
|
(5.1
|
)
|
||||||
|
Other
income from litigation settlement
|
-
|
3.3
|
(3.3
|
)
|
|||||||
|
Insurance
recoveries of business interruption claims
|
-
|
1.5
|
(1.5
|
)
|
|||||||
|
Total
|
(10.0
|
)
|
4.8
|
(14.8
|
)
|
||||||
|
Operating
income
|
$
|
8.7
|
$
|
19.1
|
$
|
(10.4
|
)
|
Jack
Golsen, LSB’s Chairman & CEO stated, “Certain significant unusual items in
our Chemical Business for the three month periods ended September 30, 2008 and
2007 offset gains achieved by LSB Industries this quarter, including growth in
sales, new orders and backlog by our Climate Control Business. As
detailed above, unusual income items aggregating $4.8 million enhanced our
Chemical Business’ operating income in the third quarter of 2007 while this
year’s third quarter operating income was negatively impacted by unusual loss
items totaling $10.0 million.
Exclusive
of these unusual items in both quarters, our third quarter 2008 consolidated
operating income would have been $4.4 million ahead of last year.”
He
continued, “Income tax provisions in the current quarter and tax benefits in the
prior year’s third quarter have also affected the quarterly
comparison. The provision for income taxes for the three months ended
September 30, 2008 was $2.4 million, while in the third quarter of last year net
income was increased by a tax benefit of $1.5 million.”
Nine
Months 2008 Compared to Nine Months 2007:
|
·
|
Net
sales increased 26.0% to $569.4 million from $451.8
million;
|
|
·
|
Climate
Control sales increased 4.0% to $230.3 million from $221.5
million;
|
|
·
|
Chemical
Business sales rose 48.1% to $329.3 million from $222.4
million;
|
|
·
|
Operating
income was $57.3 million, which includes the $10.0 million of unusual
third quarter loss items discussed above, partially offset by income from
a $7.6 million litigation settlement recorded in the second
quarter. For the first nine months of 2007, operating income
was $47.8 million, which benefited from the $4.8 million in unusual income
items discussed above.
|
|
·
|
Net
income was $33.0 million and net income applicable to common stock was
$32.7 million or $1.40 per diluted share, compared to net income of $42.3
million and net income applicable to common stock of $36.8 million or
$1.67 per diluted share.
|
Discussing
the Climate Control Business, Barry Golsen, LSB’s President & COO stated,
“The top-line improvement in the third quarter was driven by a 21% increase in
total heat pump sales, offset by a 5% and 6% decline in fan coil and other
sales, respectively. For the current third quarter, segment operating
income rose modestly as we invested in additional sales and marketing personnel,
as well as incurred higher operating expenses. New orders were an
all-time quarterly record of $101.0 million, up 53% from $66 million one year
earlier, and a 34% increase from $75.6 million in new bookings in the
immediately preceding second quarter. Year-to-date, we booked $246
million in new orders, up 31% versus the first nine months of
2007.”
LSB’s
President continued, “There was also a significant increase in the Climate
Control order backlog which rose to $85.8 million at the close of the current
third quarter, compared to $61.6 million and $63.3 million at September 30, 2007
and June 30, 2008, respectively.
“We are
naturally enthusiastic about the recently enacted Federal tax incentives, in the
form of tax credits, for residential and non-residential purchases of geothermal
heat pumps, which should be a further boost to growth, and one of the reasons
why we are revving up our sales and marketing activities. Of note,
even in the absence of these tax credits, year to date, both our residential
geothermal sales and bookings are running approximately 150% ahead of
2007.”
Discussing
the Chemical Business, Barry Golsen pointed out, “Approximately 65% of third
quarter sales were to industrial and mining customers, under cost plus
agreements. As a result, higher selling prices resulting from the
pass through of higher cost of raw material feedstock, rather than volume, was
responsible for the increase in net sales. Two previously announced
factors detracted from the operating performance of our Chemical
Business. We incurred $5.1 million of expenses associated with the
unplanned downtime of the anhydrous ammonia plant at the Cherokee, Alabama
facility. The lost production meant lost sales, lost fixed overhead
absorption, additional repair costs, plus losses we incurred when we purchased
anhydrous ammonia to meet firm sales commitments. The second
detractor was $4.9 million of unrealized non-cash losses on natural gas hedges
resulting from the steep decline in natural gas prices
between
June 30 and September 30, 2008. These hedges contractually secure a
large portion of the profit margin on certain significant orders which use
natural gas as feedstock that will be shipped at firm sales prices subsequent to
the third quarter. In fact, approximately $2.6 million of these
unrealized losses will be recovered in the fourth quarter 2008, assuming the
related sales are shipped as scheduled.
Pryor Facility – “As
previously reported, we are considering activating a portion of our idle
chemical production facility located in Pryor, Oklahoma subject to securing a
sales agreement with a strategic customer to purchase and distribute the
majority of the UAN production. Based on our discussions with several large
strategic industry customers, we believe that we will be able to reach an
agreement to sell or distribute the UAN production at the Pryor
Facility.
“Based on
the current status of those discussions and our expectation that we will receive
the necessary permits, we have hired key personnel to operate the facility and
have positioned the additional necessary personnel to be hired at appropriate
intervals during the start-up phases.
“We were
originally advised by the permitting authorities that we would receive our
permits in October 2008. However, due to delays relating to administrative
procedures, the final permits could be delayed 90 to 120
days. Currently, we do not believe that there are any impediments to
the issuance of permits to operate the facility. Therefore, we are
proceeding with the preparations to start the facility. Barring
unforeseen delays and subject to securing a sales or distribution agreement as
discussed above and obtaining the required permits, we expect the anhydrous
ammonia plant and nitric acid plant to start up during the second quarter of
2009 and the urea plant and the production of UAN to start during the third
quarter of 2009. When all of these plants become operational, we
believe they will add approximately $120 million in annual sales at current
prices. The preliminary estimated total cost to activate the Pryor
Facility is approximately $15 to $20 million, with a portion of these costs to
be expensed as incurred. This project will likely be funded from our
available cash on hand and working capital. However, the actual
timeframe on beginning production, the related amount of sales and the total
cost to activate the facility could be significantly different than our current
estimates.”
Tony
Shelby, LSB’s Executive Vice President & CFO noted, “Our financial position
continues to strengthen. We closed the third quarter with working
capital of $156.4 million including $47.5 million of cash on hand and a 0.96 to
1 ratio of long-term debt to stockholders’ equity. We also have $49.5
million of borrowing availability under our $50 million working capital
revolver. In summary, we are well capitalized.”
Conference
Call
LSB’s
management will host a conference call covering third quarter 2008 results on
Thursday, November 6, 2008 at 5:15 pm ET/4:15 pm CT to discuss these results and
recent corporate developments. Participating in the call will be CEO,
Jack E. Golsen; President and COO, Barry H. Golsen; and Executive Vice President
and CFO, Tony M. Shelby. Interested parties may participate in the
call by dialing (706)-679-3079. Please call in ten minutes before the
conference is scheduled to begin and ask for the LSB conference
call.
To listen
to a webcast of the call, please go to the Company’s website at www.lsb-okc.com at
least 15 minutes before the conference call to download and install any
necessary audio software. If you are unable to listen live, the
conference call webcast will be archived on the Company’s website for 90
days. We will also archive this press release on the Company’s
website. We suggest listeners use Microsoft Explorer as their web
browser.
LSB Industries,
Inc.
LSB is a
manufacturing, marketing and engineering company. LSB’s principal
business activities consist of the manufacture and sale of commercial and
residential climate control products, such as geothermal and water source heat
pumps, hydronic fan coils, large custom air handlers, the manufacture and sale
of chemical products for the mining, agricultural and industrial markets, and
the provision of specialized engineering services and other
activities. LSB Industries is included in the Russell 2000 Index and
the Russell 3000 Index.
This
press release contains certain statements which may constitute forward-looking
statements within the meaning of the Private Securities Reform Act of
1996. Investors are cautioned that such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from the forward-looking
statements as a result of various factors, including, but not limited to,
general economic conditions and the “Risk Factors” contained in, and the other
factors listed under the heading “Special Note Regarding Forward-Looking
Statements” in our 2007 Form 10-K as amended by our 10-K/A Amendment No.
1.
# #
#
See
Accompanying Notes
LSB
INDUSTRIES, INC.
UNAUDITED
FINANCIAL HIGHLIGHTS
Nine
and Three Months Ended September 30, 2008 and 2007
|
Nine
Months
|
Three
Months
|
||||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||||||
|
(In
Thousands, Except Per Share
Amounts)
|
||||||||||||||||||||||||
|
Net
sales
|
$
|
569,427
|
$
|
451,754
|
$
|
210,920
|
$
|
147,613
|
|||||||||||||||||
|
Cost
of sales
|
456,760
|
349,873
|
179,751
|
112,441
|
|||||||||||||||||||||
|
Gross
profit
|
112,667
|
101,881
|
31,169
|
35,172
|
|||||||||||||||||||||
|
Selling,
general and administrative expense
|
62,633
|
55,821
|
22,411
|
18,827
|
|||||||||||||||||||||
|
Provisions
for (recovery of) losses on accounts receivable
|
159
|
874
|
(133
|
)
|
253
|
||||||||||||||||||||
|
Other
expense
|
946
|
853
|
289
|
335
|
|||||||||||||||||||||
|
Other
income
|
(8,417
|
)
|
(3,440
|
)
|
(88
|
)
|
(3,340
|
)
|
|||||||||||||||||
|
Operating
income
|
57,346
|
47,773
|
8,690
|
19,097
|
|||||||||||||||||||||
|
Interest
expense
|
6,363
|
8,062
|
2,643
|
3,482
|
|||||||||||||||||||||
|
Non-operating
other income, net
|
(1,125
|
)
|
(605
|
)
|
(263
|
)
|
(532
|
)
|
|||||||||||||||||
|
Income
from continuing operations before provisions
(benefits) for income taxes and equity
in earnings of affiliate
|
52,108
|
40,316
|
6,310
|
16,147
|
|||||||||||||||||||||
|
Provisions
(benefits) for income taxes
|
19,817
|
(1,017
|
)
|
2,388
|
(1,549
|
)
|
|||||||||||||||||||
|
Equity
in earnings of affiliate
|
(697
|
)
|
(654
|
)
|
(235
|
)
|
(223
|
)
|
|||||||||||||||||
|
Income
from continuing operations
|
32,988
|
41,987
|
4,157
|
17,919
|
|||||||||||||||||||||
|
Net
loss (income) from discontinued operations
|
13
|
(348
|
)
|
(4
|
)
|
(377
|
)
|
||||||||||||||||||
|
Net
income
|
32,975
|
42,335
|
4,161
|
18,296
|
|||||||||||||||||||||
|
Dividends,
dividend requirements and stock
dividend
on preferred stocks
|
306
|
5,608
|
-
|
203
|
|||||||||||||||||||||
|
Net
income applicable to common stock
|
$
|
32,669
|
$
|
36,727
|
$
|
4,161
|
$
|
18,093
|
|||||||||||||||||
|
Weighted-average
common shares:
|
|||||||||||||||||||||||||
|
Basic
|
21,156
|
19,150
|
21,237
|
20,220
|
|||||||||||||||||||||
|
Diluted
|
24,884
|
22,990
|
22,654
|
25,072
|
|||||||||||||||||||||
|
Income
per common share:
|
|||||||||||||||||||||||||
|
Basic:
|
|||||||||||||||||||||||||
|
Income
from continuing operations
|
$
|
1.54
|
$
|
1.90
|
$
|
.20
|
$
|
.87
|
|||||||||||||||||
|
Net
income (loss) from discontinued operations
|
-
|
.02
|
-
|
.02
|
|||||||||||||||||||||
|
Net
income
|
$
|
1.54
|
$
|
1.92
|
$
|
.20
|
$
|
.89
|
|||||||||||||||||
|
Diluted:
|
|||||||||||||||||||||||||
|
Income
from continuing operations
|
$
|
1.40
|
$
|
1.65
|
$
|
.18
|
$
|
.75
|
|||||||||||||||||
|
Net
income (loss) from discontinued operations
|
-
|
.02
|
-
|
.02
|
|||||||||||||||||||||
|
Net
income
|
$
|
1.40
|
$
|
1.67
|
$
|
.18
|
$
|
.77
|
|||||||||||||||||
(See
accompanying notes)
LSB
INDUSTRIES, INC.
NOTES
TO UNAUDITED FINANCIAL HIGHLIGHTS
Nine
and Three Months Ended September 30, 2008 and 2007
|
Note 1:
|
Net
income applicable to common stock is computed by adjusting net income by
the amount of preferred stock dividends, dividend requirements and the
stock dividend. Basic income per common share is based upon net income
applicable to common stock and the weighted-average number of common
shares outstanding during each period. Diluted income per share
is based on net income applicable to common stock plus preferred stock
dividends and dividend requirements on preferred stock assumed to be
converted, if dilutive, and interest expense including amortization of
debt issuance cost, net of income taxes, on convertible debt assumed to be
converted, if dilutive, and the weighted-average number of common shares
and dilutive common equivalent shares outstanding, and the assumed
conversion of dilutive convertible securities
outstanding.
|
|
Note 2:
|
Provisions
(benefits) for income taxes are as
follows:
|
|
Nine-Months
Ended
September
30,
|
Three-Months
Ended
September
30,
|
|||||||||
|
2008
|
2007
|
2008
|
2007
|
|
(In
Thousands)
|
Current:
|
Federal
|
$
|
13,641
|
$
|
1,550
|
$
|
2,121
|
$
|
1,104
|
||||||
|
State
|
1,752
|
583
|
28
|
497
|
||||||||||
|
Total
Current
|
$
|
15,393
|
$
|
2,133
|
$
|
2,149
|
$
|
1,601
|
Deferred:
|
Federal
|
$
|
3,927
|
$
|
(2,827
|
)
|
$
|
388
|
$
|
(2,827
|
)
|
||||
|
State
|
497
|
(323
|
)
|
(149
|
)
|
(323
|
)
|
|||||||
|
Total
Deferred
|
4,424
|
(3,150
|
)
|
239
|
(3,150
|
)
|
||||||||
|
Provisions
(benefits) for income taxes
|
$
|
19,817
|
$
|
(1,017
|
)
|
$
|
2,388
|
$
|
(1,549
|
)
|
For the
nine and three months ended September 30, 2008, the current provision for
federal income taxes includes regular federal income tax after the consideration
of permanent and temporary differences between income for GAAP and tax
purposes. For the nine and three months ended September 30, 2007, the
current provision for federal income taxes includes alternative minimum income
tax (“AMT”). The current provision for state income taxes in 2008
includes provisions for jurisdictions not previously recognized and also
anticipates the utilization of remaining net operating loss (“NOL”)
carryforwards in certain states. At December 31, 2007, we had minimal federal
and state NOL carryforwards and we anticipate utilizing substantially all of
these NOL carryforwards during 2008 and have accrued income taxes at regular
corporate tax rates. Our overall effective tax rate in 2008 is reduced by
permanent tax differences.
For the
nine and three months ended September 30, 2007, the benefit for deferred taxes
results from the reversal of valuation allowance on deferred tax assets, the
benefit of AMT credits, and other temporary differences.
|
Note
3:
|
Information
about the Company’s operations in different industry segments for the nine
and three months ended September 30, 2008 and 2007 is detailed on the
following page.
|
|
|
LSB
INDUSTRIES, INC.
|
|
|
NOTES
TO UNAUDITED FINANCIAL HIGHLIGHTS
(Continued)
|
|
|
Nine
and Three Months Ended September 30, 2008 and
2007
|
|
Nine-Months
Ended
September
30,
|
Three-Months
Ended
September
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(In
Thousands)
|
|
Net
sales:
|
|||||||||||||||
|
Climate
Control
|
$
|
230,303
|
$
|
221,464
|
$
|
83,354
|
$
|
75,641
|
|||||||
|
Chemical
|
329,271
|
222,394
|
124,483
|
69,252
|
|||||||||||
|
Other
|
9,853
|
7,896
|
3,083
|
2,720
|
|||||||||||
|
$
|
569,427
|
$
|
451,754
|
$
|
210,920
|
$
|
147,613
|
||||||||
|
Gross
profit: (1)
|
|||||||||||||||
|
Climate
Control
|
$
|
72,346
|
$
|
65,061
|
$
|
24,892
|
$
|
22,433
|
|||||||
|
Chemical
(2) (3)
|
37,181
|
33,980
|
5,329
|
11,738
|
|||||||||||
|
Other
|
3,140
|
2,840
|
948
|
1,001
|
|||||||||||
|
$
|
112,667
|
$
|
101,881
|
$
|
31,169
|
$
|
35,172
|
||||||||
|
Operating
income (loss): (4)
|
|||||||||||||||
|
Climate
Control
|
$
|
31,017
|
$
|
27,875
|
$
|
9,835
|
$
|
9,750
|
|||||||
|
Chemical
(2) (3) (5)
|
34,487
|
27,123
|
1,860
|
11,477
|
|||||||||||
|
General
corporate expenses and other business operations, net (6)
|
(8,158
|
)
|
(7,225
|
)
|
(3,005
|
)
|
(2,130
|
)
|
|||||||
|
57,346
|
47,773
|
8,690
|
19,097
|
||||||||||||
|
Interest
expense
|
(6,363
|
)
|
(8,062
|
)
|
(2,643
|
)
|
(3,482
|
)
|
|||||||
|
Non-operating
other income (expense), net:
|
|||||||||||||||
|
Climate
Control
|
1
|
2
|
-
|
-
|
|||||||||||
|
Chemical
|
64
|
92
|
-
|
10
|
|||||||||||
|
Corporate
and other business operations
|
1,060
|
511
|
263
|
522
|
|||||||||||
|
Benefits
(provisions) for income taxes
|
(19,817
|
)
|
1,017
|
(2,388
|
)
|
1,549
|
|||||||||
|
Equity
in earnings of affiliate-Climate Control
|
697
|
654
|
235
|
223
|
|||||||||||
|
Income
from continuing operations
|
$
|
32,988
|
$
|
41,987
|
$
|
4,157
|
$
|
17,919
|
|||||||
|
|
LSB
INDUSTRIES, INC.
|
|
|
NOTES
TO UNAUDITED FINANCIAL HIGHLIGHTS
|
|
|
Nine
and Three Months Ended September 30, 2008 and
2007
|
|
(1)
|
Gross
profit by industry segment represents net sales less cost of sales. Gross
profit classified as “Other” relates to the sales of industrial machinery
and related components.
|
|
(2)
|
Our
Chemical Business recognized unrealized losses on our natural gas forward
contracts outstanding at September 30, 2008. In addition, the Cherokee
Facility incurred costs of approximately $5.1 million as the result of
unplanned downtime during the third quarter of 2008. These costs include
estimates of lost fixed overhead absorption, repair cost, and losses
incurred to purchase anhydrous ammonia to replace lost production in order
to meet firm sales commitments. These unrealized losses and costs
contributed to a decrease in gross profit and operating income in
2008.
|
|
(3)
|
During
the nine and three months ended September 30, 2007, we realized insurance
recoveries of $1.5 million relating to a business interruption claim
associated with the Cherokee Facility. These recoveries contributed to an
increase in gross profit and operating income in
2007.
|
|
(4)
|
Our
chief operating decision makers use operating income by industry segment
for purposes of making decisions, which include resource allocations and
performance evaluations. Operating income by industry segment represents
gross profit by industry segment less selling, general and administration
expense (“SG&A”) incurred by each industry segment plus other income
and other expense earned/incurred by each industry segment before general
corporate expenses and other business operations, net. General corporate
expenses and other business operations, net, consist of unallocated
portions of gross profit, SG&A, other income and other
expense.
|
|
(5)
|
For
the nine-month period ended September 30, 2008, we recognized income of
$7.6 million, net of attorneys’ fees, relating to a litigation judgment,
which contributed to an increase in operating income in 2008. For each of
the nine and three-month periods ended September 30, 2007, we recognized
income of $3.3 million relating to a litigation settlement, which
contributed to an increase in operating income in
2007.
|
|
(6)
|
The
amounts included are not allocated to our Climate Control and Chemical
Businesses since they are not included in the operating results reviewed
by our chief operating decision makers for purposes of making decisions as
discussed above.
|
LSB
INDUSTRIES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Information
at September 30, 2008 is unaudited)
|
September
30,
2008
|
December
31,
2007
|
|
(In
Thousands)
|
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 47,478 | $ | 58,224 | ||||
|
Restricted
cash
|
276 | 203 | ||||||
|
Accounts
receivable, net
|
106,348 | 70,577 | ||||||
|
Inventories:
|
||||||||
|
Finished
goods
|
38,888 | 28,177 | ||||||
|
Work
in process
|
3,526 | 3,569 | ||||||
|
Raw
materials
|
32,031 | 25,130 | ||||||
|
Total
inventories
|
74,445 | 56,876 | ||||||
|
Supplies,
prepaid items and other:
|
||||||||
|
Prepaid
insurance
|
927 | 3,350 | ||||||
|
Prepaid
income taxes
|
1,535 | - | ||||||
|
Precious
metals
|
14,400 | 10,935 | ||||||
|
Supplies
|
4,371 | 3,849 | ||||||
|
Other
|
1,619 | 1,464 | ||||||
|
Total
supplies, prepaid items and other
|
22,852 | 19,598 | ||||||
|
Deferred
income taxes
|
5,877 | 10,030 | ||||||
|
Total
current assets
|
257,276 | 215,508 | ||||||
|
Property,
plant and equipment, net
|
95,952 | 79,692 | ||||||
|
Other
assets:
|
||||||||
|
Debt
issuance and other debt-related costs, net
|
4,233 | 4,639 | ||||||
|
Investment
in affiliate
|
3,568 | 3,426 | ||||||
|
Goodwill
|
1,724 | 1,724 | ||||||
|
Other,
net
|
2,613 | 2,565 | ||||||
|
Total
other assets
|
12,138 | 12,354 | ||||||
| $ | 365,366 | $ | 307,554 | |||||
(continued
on following page)
LSB
INDUSTRIES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS (Continued)
(Information
at September 30, 2008 is unaudited)
|
September
30,
2008
|
December
31,
2007
|
||||||||||
|
(In
Thousands)
|
|||||||||||
|
Liabilities
and Stockholders’ Equity
|
|||||||||||
|
Current
liabilities:
|
|||||||||||
|
Accounts
payable
|
$
|
55,190
|
$
|
39,060
|
|||||||
|
Short-term
financing and drafts payable
|
-
|
919
|
|||||||||
|
Accrued
and other liabilities
|
44,193
|
38,942
|
|||||||||
|
Current
portion of long-term debt
|
1,495
|
1,043
|
|||||||||
|
Total
current liabilities
|
100,878
|
79,964
|
|||||||||
|
Long-term
debt
|
122,032
|
121,064
|
|||||||||
|
Noncurrent
accrued and other liabilities:
|
|||||||||||
|
Deferred
income taxes
|
5,601
|
5,330
|
|||||||||
|
Other
|
8,343
|
6,913
|
|||||||||
|
13,944
|
12,243
|
||||||||||
|
Contingencies
|
|||||||||||
|
Stockholders'
equity:
|
|||||||||||
|
Series
B 12% cumulative, convertible preferred stock, $100 par value;
20,000 shares issued and outstanding
|
2,000
|
2,000
|
|||||||||
|
Series
D 6% cumulative, convertible Class C preferred stock, no par
value; 1,000,000 shares issued
|
1,000
|
1,000
|
|||||||||
|
Common
stock, $.10 par value; 75,000,000 shares authorized, 24,898,170
shares issued (24,466,506 at December 31, 2007)
|
2,490
|
2,447
|
|||||||||
|
Capital
in excess of par value
|
128,056
|
123,336
|
|||||||||
|
Accumulated
other comprehensive loss
|
(193
|
)
|
(411
|
)
|
|||||||
|
Retained
earnings (accumulated deficit)
|
16,232
|
(16,437
|
)
|
||||||||
|
149,585
|
111,935
|
||||||||||
|
Less
treasury stock at cost:
|
|||||||||||
|
Common
stock, 3,648,518 shares (3,448,518 at December 31, 2007)
|
21,073
|
17,652
|
|||||||||
|
Total
stockholders' equity
|
128,512
|
94,283
|
|||||||||
|
$
|
365,366
|
$
|
307,554
|
||||||||