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): March 12,
2009
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 Avenue,
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))
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Section
2 – Financial Information
Item
2.02. Results of Operations and Financial Condition
On March
12, 2009, LSB Industries, Inc. (the “Company”) issued a press release to report
its financial results for the fourth quarter and year ended December 31,
2008. The press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
On March
12, 2009, 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 financial results of the fourth
quarter and year ended December 31, 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 to this Item 2.02 in such
filing.
Section
8 – Other Events
Item
8.01. Other Events
On March
20, 2009, LSB Industries, Inc. (the “Company”) purchased a total of $1.95
million aggregate principal amount of its 5.5% Convertible Senior Subordinated
Debentures due 2012 (the “Debentures”) for approximately $1.46 million, plus
accrued interest. The purchase price was funded from the Company’s working
capital. This purchase was unsolicited by the Company and was
privately negotiated.
The
Debentures are convertible by the holders, in whole or in part, into shares of
the Company’s common stock prior to their maturity at a conversion rate of 36.4
shares of our common stock per $1,000 principal amount of debentures
(representing a conversion price of $27.47 per share of common stock), subject
to adjustment under certain conditions. The closing price of the Company’s
common stock on March 19, 2009 was $9.23 per share. As of the date of
this report, $34.8 million aggregate principal amount of the Debentures remain
outstanding.
The
information contained in this Item 8.01 is not an offer or a solicitation of an
offer to sell or exchange any security.
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 to such Exhibit 99.1 in such
filing.
(d)
Exhibits.
Exhibit Description
|
99.1
|
Press
Release issued by LSB Industries, Inc. dated March 12,
2009
|
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: March
24, 2009
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
RESULTS
FOR THE 2008 FOURTH QUARTER
AND YEAR
Oklahoma
City, OK - March 12, 2009 - LSB Industries, Inc. (NYSE:LXU), today reported
results for the fourth quarter and year ended December 31, 2008.
Fourth
Quarter 2008 Compared to Fourth Quarter 2007:
|
·
|
Net
sales increased 33.3% to $179.5 million from $134.7
million;
|
|
·
|
Climate
Control sales increased 24.9% to $81.1 million from $64.9
million;
|
|
·
|
Chemical
Business sales rose 42.7% to $94.8 million from $66.4
million;
|
|
·
|
Operating
income declined to $1.8 million from $11.2
million;
|
|
·
|
Operating
income before unusual items, shown in the table below, was $9.0 million
compared to $9.1 million in the fourth quarter of
2007;
|
|
·
|
Net
income was $3.6 million or $0.16 per diluted share compared to net income
of $4.5 million or $0.20 per diluted
share.
|
Tony
Shelby, CFO, commented, “As noted in the table below, the decline in fourth
quarter operating income was partly attributable to certain unusual loss items
primarily related to the steep decline in commodities and the effects of the
general economic slowdown, both occurring in the latter half of
2008.”
|
Fourth
Quarter
of
2008
|
Fourth
Quarter
of
2007
|
Effect
On
Comparability
|
|
(In
Millions)
|
|||||||||||
|
Operating
income before unusual items below
|
$
|
9.0
|
$
|
9.1
|
$
|
(.1
|
)
|
||||
|
Unrealized
non-cash losses on commodities contracts
|
(3.6
|
)
|
(.2
|
)
|
(3.4
|
)
|
|||||
|
Lower
of cost or market inventory provision
|
(3.6
|
)
|
-
|
(3.6
|
)
|
||||||
|
Insurance
recoveries of business interruption claims
|
-
|
2.3
|
(2.3
|
)
|
|||||||
|
Total
unusual items
|
(7.2
|
)
|
2.1
|
(9.3
|
)
|
||||||
|
Operating
income (GAAP)
|
$
|
1.8
|
$
|
11.2
|
$
|
(9.4
|
)
|
||||
(more)
LSB
Industries, Inc. News
Release Page
2
March 12,
2009
Commenting
further, he mentioned, “Non-operating income for the fourth quarter 2008
included a $5.5 million pre-tax gain from the repurchase of a portion of the
company’s subordinated debentures partially offset by a $3.0 million loss on
interest rate hedge positions included in interest expense.”
Mr.
Shelby continued, “Income taxes for the quarter included a benefit of $1.0
million compared to a provision of $3.6 million in the 2007
quarter. The fourth quarter tax benefit of $1.0 million consisted of
a tax provision at statutory rates offset by state tax credits, certain true-ups
of the actual tax for 2007 based upon returns filed and an approximate $1.3
million deferred tax asset for state net operating loss carryforwards not
previously reflected.”
2008
Compared to 2007:
|
·
|
Net
sales increased 27.7% to $749.0 million from $586.4
million;
|
|
·
|
Climate
Control sales increased 8.7% to $311.4 million from $286.4
million;
|
|
·
|
Chemical
Business sales rose 46.8% to $424.1 million from $288.8
million;
|
|
·
|
Operating
income was $59.2 million compared to $59.0
million.
|
|
o
|
In
2008, in addition to the unusual loss items in the fourth quarter, the
2008 operating income was negatively impacted by additional unrealized
losses relating to commodities contracts still held at year-end of $2.3
million, and $5.1 million as a result of unplanned downtime in the third
quarter at the Cherokee Facility, which was offset by operating other
income of $7.6 million from a litigation
judgment.
|
|
o
|
In
2007, operating income benefited by $7.1 million from a $3.3 million
litigation settlement and a $3.8 million insurance
recovery.
|
|
·
|
In
2008, the tax provision was approximately $18.8 million compared to $2.5
million in 2007;
|
|
·
|
Net
income in 2008 was $36.5 million or $1.58 per diluted share compared to
2007’s $46.9 million or $1.84 per diluted
share.
|
Business
Overview
Jack
Golsen, Chairman & CEO of LSB Industries, Inc. commented, “We just completed
a year with the highest sales and pre-tax income in the history of
LSB. Considering the economic turmoil and downturn that occurred in
2008, we believe our results were more than acceptable. Even though
the recession has continued into 2009 and it could have certain adverse effects
on us, we remain optimistic about LSB’s long-term upside
potential. In 2009 we will minimize our controllable costs to adjust
to the economic conditions. In spite of this, we are undertaking
certain strategic initiatives that are important to the long-term growth of
LSB. We will not curtail these programs in an effort to boost
short-term profits to the detriment of medium and long-term growth for
LSB. Fortunately, we are entering 2009 with a strong balance sheet
and adequate liquidity to execute our plan and grow our business.”
Barry
Golsen, LSB’s President & COO, discussing results of operations and recent
events, commented about LSB’s Climate Control Business, “For the fourth quarter,
sales and operating income were both up 25% over 2007’s fourth quarter and for
the full year, sales were up 9%. The 25% improvement in the fourth quarter sales
and segment operating income were driven by an increase in geothermal and water
source heat pump sales. The backlog for all Climate Control products
at year-end 2008 was $68.5 million, providing solid support going into the first
quarter of 2009. Orders for all Climate Control products in the final quarter of
2008 were $59.1 million compared to the $82.3 million average for the first
three quarters of 2008. Some of this reduction was seasonal and some
was due to the current economic downturn.”
(more)
LSB
Industries, Inc. News
Release Page
3
March 12,
2009
He
continued, “We believe that the current recession, will result in lower Climate
Control sales in 2009. However, in this economy, it is difficult to
forecast what will actually happen.
“For the
full year 2008, residential geothermal heat pump sales increased approximately
82% compared to 2007, and new orders for these products were approximately
two-and-one-half times the prior year. This is the most promising and fastest
growing product line in LSB’s Climate Control Business. In spite of the
recession, we see growth opportunities for geothermal heat pumps continuing in
2009, in part because of the tax credits and incentives under the American
Reinvestment and Recovery Act of 2009, plus several billion dollars of planned
direct spending by the federal government also contained in the Act. The
provisions of the stimulus package could positively impact sales of our
geothermal heat pump products, as well as other products we produce and sell
that can be used to modernize federally owned and operated buildings, military
installations, public housing and hospitals. The new legislation
extends and expands federal tax credits for individuals who install geothermal
systems in their residences to 30% of the total installed
costs. Businesses are eligible for a federal tax credit equal to 10%
of the total system cost, 50% first year bonus depreciation, and five year
accelerated depreciation for the balance of the cost. Although
we have more than doubled our manufacturing floor space for our heat pump
products in the past two years, we are currently planning another 78,000 square
foot expansion of our manufacturing facility and a 40,000 square foot expansion
of our air coil production facility.”
Turning
to LSB’s Chemical Business, Barry Golsen stated, “Sales for the fourth quarter
increased by 43% and for the year, sales for the Chemical Business increased
47%. Our operating profit in the Chemical Business was lower than the prior
year, but it was impacted by certain unusual non-cash items totaling $7.2
million as reflected in the table above. Also, in the 2007 fourth quarter we had
a $2.3 million gain from an insurance recovery. Excluding those
unusual items in both years, Chemical’s operating income was approximately the
same as 2007.”
He
continued, “Looking forward, indicators point to our Chemical Business’s 2009
agricultural product sales volume in tons shipped to be about the same as 2008
levels. However, due to the steep price declines in most commodities in the
latter half of 2008, including the anhydrous ammonia and natural gas we use as
feedstocks for our plants, as well as the lower selling prices per ton for our
Chemical products, our sales dollars should be less. With regard to agricultural
chemicals, industry sources are predicting higher demand for the nitrogen
fertilizers we produce after the spring application depletes the fertilizer
currently in storage throughout the distribution system. Weather
permitting, this could result in a rebound in sales and firming of prices in the
fall. We are also pleased to see that, following unprecedented
volatility in commodity markets that occurred in the third and fourth quarters
of 2008, there has been some settling and the market is moving
forward.
“We
expect that many of our mining and industrial customers will take less product
in 2009 than in 2008 due to the downturn in housing, automotive and other
sectors. However, to a certain degree we are insulated by sales agreements with
either minimum volume requirements or fixed profit arrangements.
(more)
LSB
Industries, Inc. News
Release Page
4
March 12,
2009
“Finally,
we have received all necessary permits to activate a portion of our idled
chemical production facility located in Pryor, Oklahoma and have taken certain
actions to move forward subject to securing a sales agreement with a strategic
customer to purchase and distribute the majority of the UAN production. If the
Pryor Facility becomes operational, we plan to produce and sell approximately
325,000 tons of urea ammonium nitrate (“UAN”) fertilizer and approximately
35,000 tons of anhydrous ammonia annually.”
Discussing
the Company’s overall financial condition and balance sheet, Barry Golsen said,
“During these challenging economic times, a strong financial position is a
definite business advantage, and we have placed as much emphasis on our balance
sheet as on our operating results. We closed the fourth quarter with
working capital of $135.9 million including $46.2 million cash on hand and a 0.8
to 1 ratio of long-term debt to stockholders’ equity. We currently have no
borrowings under our $50 million working capital revolver.”
Conference
Call
LSB will
host a conference call covering the fourth quarter and year 2008 results today,
Thursday, March 12, 2009 at 5:15 pm ET/4:15 pm CT. You are invited to
listen to the call by dialing: 1-706-679-3079. Additionally, there
will be a webcast posted on the Company’s website at www.lsb-okc.com. If
you are unable to listen live, the conference call webcast will be archived on
the Company’s website.
LSB Industries,
Inc.
LSB is a
manufacturing, marketing and engineering company. Through its
subsidiaries, 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,
including, but not limited to, LSB’s long-term upside prospects, minimize our
controllable costs to adjustable economic conditions, strategic initiatives
important to the growth of LSB, lower sales by our Climate Control business in
2009 than 2008, growth opportunities for our geothermal heat pumps, stimulus
package could have positive impact on our geothermal heat pump products,
expansion of heat pump production facilities, sale of our agricultural chemical
products in 2009, sales dollars for our Chemical products should be less in 2009
due to lower selling prices, rebound of our fertilizer chemical products, mining
and industrial chemical customers and the startup of our new Pryor Chemical
facility and amount of products expected to be products at the Pryor
facility. 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, continuing effects of the recession,
amount of capital made available for the construction industry and businesses in
general, weather conditions in our fertilizer markets, changes to the stimulus
bill recently signed into law affecting our geothermal products, acceptance of
our new products and the “Risk Factors” contained in, and the other factors
listed under the heading “Special Note Regarding Forward-Looking Statements” in
our 2008 Form 10-K.
See
Accompanying Tables
LSB
Industries, Inc. News
Release Page
5
March 12,
2009
LSB
Industries, Inc.
Unaudited
Financial Highlights
Years
and Three Months Ended December 31, 2008 and 2007
|
Year
Ended
December
31,
|
Three
Months Ended
December
31,
|
|
2008
|
2007
|
2008
|
2007
|
|||||
|
(In
Thousands, Except Share and Per Share
Amounts)
|
|
Net
sales
|
$
|
748,967
|
$
|
586,407
|
$
|
179,541
|
$
|
134,653
|
|||||||
|
Cost
of sales
|
610,087
|
453,814
|
153,328
|
103,941
|
|||||||||||
|
Gross
profit
|
138,880
|
132,593
|
26,213
|
30,712
|
|||||||||||
|
Selling,
general and administrative expense
|
86,646
|
75,033
|
24,013
|
19,212
|
|||||||||||
|
Provisions
for losses on accounts receivable
|
371
|
858
|
212
|
(16
|
)
|
||||||||||
|
Other
expense
|
1,184
|
1,186
|
238
|
333
|
|||||||||||
|
Other
income
|
(8,476
|
)
|
(3,495
|
)
|
(59
|
)
|
(55
|
)
|
|||||||
|
Operating
income
|
59,155
|
59,011
|
1,809
|
11,238
|
|||||||||||
|
Interest
expense
|
11,381
|
12,078
|
5,018
|
4,016
|
|||||||||||
|
Gain
on extinguishment of debt
|
(5,529
|
)
|
-
|
(5,529
|
)
|
-
|
|||||||||
|
Non-operating
other income, net
|
(1,096
|
)
|
(1,264
|
)
|
29
|
(659
|
)
|
||||||||
|
Income
from continuing operations before provisions
for (benefits from) income taxes
and
equity in earnings of affiliate
|
54,399
|
48,197
|
2,291
|
7,881
|
|||||||||||
|
Provisions
for (benefits from) income taxes
|
18,776
|
2,540
|
(1,041
|
)
|
3,557
|
||||||||||
|
Equity
in earnings of affiliate
|
(937
|
)
|
(877
|
)
|
(240
|
)
|
(223
|
)
|
|||||||
|
Income
from continuing operations
|
36,560
|
46,534
|
3,572
|
4,547
|
|||||||||||
|
Net
loss (income) from discontinued operations
|
13
|
(348
|
)
|
-
|
-
|
||||||||||
|
Net
income
|
36,547
|
46,882
|
3,572
|
4,547
|
|||||||||||
|
Dividends,
dividend requirements and stock dividends
on preferred stock
|
306
|
5,608
|
-
|
-
|
|||||||||||
|
Net
income applicable to common stock
|
$
|
36,241
|
$
|
41,274
|
$
|
3,572
|
$
|
4,547
|
|||||||
|
Weighted
average common shares:
|
|||||||||||||||
|
Basic
|
21,170,418
|
19,579,664
|
21,214,189
|
20,868,564
|
|||||||||||
|
Diluted
|
24,132,738
|
23,495,644
|
22,518,578
|
22,827,185
|
|||||||||||
|
Income
per common share:
|
|||||||||||||||
|
Basic:
|
|||||||||||||||
|
Income
from continuing operations
|
$
|
1.71
|
$
|
2.09
|
$
|
.17
|
$
|
.22
|
|||||||
|
Net
income from discontinued operations
|
-
|
.02
|
-
|
-
|
|||||||||||
|
Net
income
|
$
|
1.71
|
$
|
2.11
|
$
|
.17
|
$
|
.22
|
|||||||
|
Diluted:
|
|||||||||||||||
|
Income
from continuing operations
|
$
|
1.58
|
$
|
1.82
|
$
|
.16
|
$
|
.20
|
|||||||
|
Net
income from discontinued operations
|
-
|
.02
|
-
|
-
|
|||||||||||
|
Net
income
|
$
|
1.58
|
$
|
1.84
|
$
|
.16
|
$
|
.20
|
|
(See
accompanying notes)
|
LSB
Industries, Inc. News
Release Page
6
March 12,
2009
|
LSB
Industries, Inc.
|
|
Notes
to Unaudited Financial Highlights
|
|
Years
and Three Months Ended December 31, 2008 and
2007
|
|
Note
1:
|
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 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:
|
|
Years
Ended
December
31,
|
Three-Months
Ended
December
31,
|
|
||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||
|
(In
Thousands)
|
||||||||||
|
Federal
|
$
|
17,388
|
$
|
5,260
|
$
|
3,747
|
$
|
3,710
|
|||||||
|
State
|
1,651
|
1,980
|
(101
|
)
|
1,397
|
||||||||||
|
Total
current
|
$
|
19,039
|
$
|
7,240
|
$
|
3,646
|
$
|
5,107
|
Deferred:
|
Federal
|
$
|
595
|
$
|
(4,095
|
)
|
$
|
(3,332
|
)
|
$
|
(1,268
|
)
|
||||
|
State
|
(858
|
)
|
(605
|
)
|
(1,355
|
)
|
(282
|
)
|
|||||||
|
Total
deferred
|
$
|
(263
|
)
|
$
|
(4,700
|
)
|
$
|
(4,687
|
)
|
$
|
(1,550
|
)
|
|||
|
Provisions
(benefits) for income taxes
|
$
|
18,776
|
$
|
2,540
|
$
|
(1,041
|
)
|
$
|
3,557
|
The 2007
provision for income taxes included the reversal of the valuation allowance on
deferred tax assets, provision for uncertain tax positions and alternative
minimum tax. The 2008 provision includes income taxes at regular
corporate tax rates. Our overall effective tax rate in 2008 is
reduced by permanent differences, the effect of the change in prior year
deferred items and the provision for uncertain tax positions.
|
Note
3:
|
During
2008, we acquired $19.5 million aggregate principal amount of the 2007
Debentures for $13.2 million and recognized a gain on extinguishment of
debt of $5.5 million, after writing off $0.8 million of the unamortized
debt issuance costs associated with the 2007 Debentures
acquired.
|
|
Note
4:
|
Information
about the Company’s operations in different industry segments for the year
and three months ended December 31, 2008 and 2007 is detailed on the
following page.
|
LSB
Industries, Inc. News
Release Page
7
March 12,
2009
|
LSB
Industries, Inc.
|
|
Notes
to Unaudited Financial Highlights
|
|
Years
and Three Months Ended December 31, 2008 and
2007
|
|
Year
Ended
December
31,
|
Three
Months Ended
December
31,
|
|
2008
|
2007
|
2008
|
2007
|
||||||
|
(In
Thousands)
|
|||||||||||
|
Net
sales:
|
|||||||||||||||
|
Climate
Control
|
$
|
311,380
|
$
|
286,365
|
$
|
81,077
|
$
|
64,901
|
|||||||
|
Chemical
|
424,117
|
288,840
|
94,847
|
66,446
|
|||||||||||
|
Other
|
13,470
|
11,202
|
3,617
|
3,306
|
|||||||||||
|
$
|
748,967
|
$
|
586,407
|
$
|
179,541
|
$
|
134,653
|
||||||||
|
Gross
profit:
|
|||||||||||||||
|
Climate
Control
|
$
|
96,633
|
$
|
83,638
|
$
|
24,287
|
$
|
18,577
|
|||||||
|
Chemical
|
37,991
|
44,946
|
810
|
10,966
|
|||||||||||
|
Other
|
4,256
|
4,009
|
1,116
|
1,169
|
|||||||||||
|
$
|
138,880
|
$
|
132,593
|
$
|
26,213
|
$
|
30,712
|
||||||||
|
Operating
income (loss):
|
|||||||||||||||
|
Climate
Control
|
$
|
38,944
|
$
|
34,194
|
$
|
7,927
|
$
|
6,310
|
|||||||
|
Chemical
|
31,340
|
35,011
|
(3,146
|
)
|
7,888
|
||||||||||
|
General
corporate expenses and other business operations, net
|
(11,129
|
)
|
(10,194
|
)
|
(2,972
|
)
|
(2,960
|
)
|
|||||||
|
59,155
|
59,011
|
1,809
|
11,238
|
||||||||||||
|
Interest
expense
|
(11,381
|
)
|
(12,078
|
)
|
(5,018
|
)
|
(4,016
|
)
|
|||||||
|
Gain
on extinguishment of debt
|
5,529
|
-
|
5,529
|
-
|
|||||||||||
|
Non-operating
other income, net:
|
|||||||||||||||
|
Climate
Control
|
1
|
2
|
-
|
-
|
|||||||||||
|
Chemical
|
27
|
109
|
(37
|
)
|
17
|
||||||||||
|
Corporate
and other business operations
|
1,068
|
1,153
|
8
|
642
|
|||||||||||
|
Benefits
from (provisions for) income
taxes
|
(18,776
|
)
|
(2,540
|
)
|
1,041
|
(3,557
|
)
|
||||||||
|
Equity
in earnings of affiliate, Climate Control
|
937
|
877
|
240
|
223
|
|||||||||||
|
Income
from continuing operations
|
$
|
36,560
|
$
|
46,534
|
$
|
3,572
|
$
|
4,547
|
LSB
Industries, Inc. News
Release Page
8
March 12,
2009
|
LSB
Industries, Inc.
|
|
Notes
to Unaudited Financial Highlights
|
|
Years
and Three Months Ended December 31, 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)
|
During
the year and three months ended December 31, 2007, we realized insurance
recoveries of $3.8 million and $2.3 million, respectively, relating to a
business interruption claim associated with the Cherokee, Alabama facility
which contributed to an increase in gross
profit.
|
|
(3)
|
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 less selling, general and administrative expense
(“SG&A”) incurred plus other income and other expense earned/incurred
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.
|
|
(4)
|
During
the year ended December 31, 2008 we recognized operating income of $7.6
million relating to a litigation
judgment.
|
|
(5)
|
During
the year ended December 31, 2007, we recognized income of $3.3 million
relating to a settlement of litigation which we included in other
income.
|
LSB
Industries, Inc. News
Release Page
9
March 12,
2009
|
LSB
Industries, Inc.
|
|
Consolidated
Balance Sheets
|
|
December
31,
|
||||||||||
|
2008
|
2007
|
|
(In
Thousands)
|
||||||
|
Assets
|
||||||
|
Current
assets:
|
||||||
|
Cash
and cash equivalents
|
$
|
46,204
|
$
|
58,224
|
||
|
Restricted
cash
|
893
|
203
|
||||
|
Accounts
receivable, net
|
78,846
|
70,577
|
||||
|
Inventories
|
60,810
|
56,876
|
||||
|
Supplies,
prepaid items and other:
|
||||||
|
Prepaid
insurance
|
3,373
|
3,350
|
||||
|
Precious
metals
|
14,691
|
10,935
|
||||
|
Supplies
|
4,301
|
3,849
|
||||
|
Other
|
1,378
|
1,464
|
||||
|
Total
supplies, prepaid items and other
|
23,743
|
19,598
|
||||
|
Deferred
income taxes
|
11,417
|
10,030
|
||||
|
Total
current assets
|
221,913
|
215,508
|
||||
|
Property,
plant and equipment, net
|
104,292
|
79,692
|
||||
|
Other
assets:
|
||||||
|
Debt
issuance costs, net
|
2,607
|
4,213
|
||||
|
Investment
in affiliate
|
3,628
|
3,426
|
||||
|
Goodwill
|
1,724
|
1,724
|
||||
|
Other,
net
|
1,603
|
2,991
|
||||
|
Total
other assets
|
9,562
|
12,354
|
||||
|
$
|
335,767
|
$
|
307,554
|
(Continued
on following page)
LSB
Industries, Inc. News
Release Page
10
March 12,
2009
|
LSB
Industries, Inc.
|
|
Consolidated
Balance Sheets
|
(unaudited)
|
December
31,
|
|||||||
|
2008
|
2007
|
||||||
|
(In
Thousands)
|
|||||||
|
Liabilities
and Stockholders’ Equity
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
43,014
|
$
|
39,060
|
|||
|
Short-term
financing
|
2,228
|
919
|
|||||
|
Accrued
and other liabilities
|
39,236
|
38,942
|
|||||
|
Current
portion of long-term debt
|
1,560
|
1,043
|
|||||
|
Total
current liabilities
|
86,038
|
79,964
|
|||||
|
Long-term
debt
|
103,600
|
121,064
|
|||||
|
Noncurrent
accrued and other liabilities
|
9,631
|
6,913
|
|||||
|
Deferred
income taxes
|
6,454
|
5,330
|
|||||
|
Commitments
and 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 and outstanding
|
1,000
|
1,000
|
|||||
|
Common
stock, $.10 par value; 75,000,000 shares authorized, 24,958,330
shares issued (24,466,506 at December 31, 2007)
|
2,496
|
2,447
|
|||||
|
Capital
in excess of par value
|
127,337
|
123,336
|
|||||
|
Accumulated
other comprehensive loss
|
(120
|
)
|
(411
|
)
|
|||
|
Accumulated
retained earnings (deficit)
|
19,804
|
(16,437
|
)
|
||||
|
152,517
|
111,935
|
||||||
|
Less
treasury stock at cost:
|
|||||||
|
Common
stock, 3,848,518 shares (3,448,518 at December
31, 2007)
|
22,473
|
17,652
|
|||||
|
Total
stockholders' equity
|
130,044
|
94,283
|
|||||
|
$
|
335,767
|
$
|
307,554
|
||||