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 9, 2010
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))
|
Section
2 – Financial Information
Item
2.02. Results of Operations and Financial Condition
On March
8, 2010, LSB Industries, Inc. (the “Company”) issued a press release to report
its financial results for the fourth quarter and year ended December 31,
2009. The press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
On March
8, 2010, at 5:15 p.m. EST / 4:15 p.m. CST, 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, 2009.
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.
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 8,
2010
|
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 9, 2010
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
2009 FOURTH QUARTER AND
YEAR
OKLAHOMA
CITY, Oklahoma…March 8, 2010… LSB Industries, Inc. (NYSE: LXU) announced today
results for the fourth quarter ended December 31, 2009. These results
include $5.0 million of expenses related to the start-up of the chemical plant
in Pryor, Oklahoma (“Pryor Facility”).
Fourth Quarter 2009
Financial Highlights Compared to Fourth Quarter 2008:
|
·
|
Net
sales were $115.3 million, a 35.8% decline from $179.5
million;
|
|
·
|
Operating
income was $2.5 million compared to $1.8
million;
|
|
·
|
Net
income was $38,000 compared to $3.6
million;
|
|
·
|
Net
income applicable to common shareholders was $38,000 compared to $3.6
million;
|
|
·
|
Diluted
earnings per common share were less than $0.01 compared
$0.16.
|
Year 2009 Financial
Highlights Compared to Year 2008:
|
·
|
Net
sales were $531.8 million, a 29.0% decline from $749.0
million;
|
|
·
|
Operating
income was $40.7 million compared to $59.2
million;
|
|
·
|
Net
income was $21.6 million compared to $36.5
million;
|
|
·
|
Net
income applicable to common shareholders decreased to $21.3 million from
$36.2 million;
|
|
·
|
Diluted
earnings per common share were $0.96 compared to
$1.58.
|
Discussion of Fourth Quarter
of 2009:
The $64.2
million decline in fourth quarter net sales includes a decrease of $21.4 million
in our Climate Control Business and a decrease of approximately $41.1 million in
our Chemical Business.
Consolidated
operating income was $2.5 million compared to $1.8 million in 2008.
Operating
income for the Climate Control Business was $5.6 million, a 30% decline from
2008 primarily primarily as a result of a 26.3% decline in net
sales.
The
Chemical Business reported an operating loss of $0.4 million in the fourth
quarter of 2009, which included $5.0 million of start-up expenses for the Pryor
Facility; in the fourth quarter of 2008, the Chemical Business incurred an
operating loss of $3.1 million, which included Pryor Facility start-up expenses
of $1.0 million. Excluding the Pryor Facility start-up expenses from
both quarters, the Chemical Business’ operating income was $6.7 million higher
compared to 2008 due to a number of factors including:
1
|
·
|
The
timing of planned major maintenance ($3.7
million),
|
|
·
|
Reduced
losses on natural gas and anhydrous ammonia hedge contracts ($3.2
million),
|
|
·
|
2008
firm sales commitments settled in the fourth quarter of 2009, resulting in
higher gross profit compared to then current market prices ($1.4
million),
|
|
·
|
Other
plant variances and efficiencies ($1.6
million),
|
|
·
|
Partially
offset by lower gross profit on agricultural product sales ($3.2
million).
|
Although
our consolidated operating income for the fourth quarter 2009 increased, net
income decreased to $38,000 from $3.6 million for the same period of
2008. This decrease was primarily due to non-operating items in the
2008 fourth quarter, including a $5.5 million pre-tax gain from the repurchase
of a portion of the Company’s subordinated debentures partially offset by a $3.1
million loss included in interest expense relating to interest rate contracts
used as economic hedges. Additionally, income taxes for the 2008
fourth quarter included a benefit of $1.0 million compared to a $0.9 million
provision for the 2009 fourth quarter.
Discussion of the Year
2009:
The sales
decrease of approximately $217.2 million includes a decrease of $45.2 million in
our Climate Control Business and a decrease of $166.3 million in our Chemical
Business. Operating income for 2009 included approximately $17.2 million of
start-up expenses associated with the Pryor Facility. Expenses
associated with maintaining the Pryor Facility were $2.4 million in
2008.
Interest
expense was $6.7 million for 2009 compared to $11.4 million for 2008, a decrease
of approximately $4.7 million primarily due to $2.0 million of reduced losses
associated with our interest rate contracts, a decrease of $1.6 million from the
repurchase of the 2007 Debentures and a decrease of $1.1 million due declines in
the LIBOR interest rates on our $50.0 million secured term loan.
Pre-tax
income in 2009 includes a gain of $1.8 million from the extinguishment of debt
as a result of acquiring $11.1 million of our 2007 Debentures at discounts to
face value. The prior year includes a $5.5 million gain from
acquiring $19.5 million of these debentures at discounts to face
value.
Climate Control
Business:
Net sales
for the Climate Control Business for the fourth quarter 2009 totaled $59.7
million, a 26.3% decrease from the fourth quarter of 2008 due primarily to
reduced construction activity. The segment’s operating income was
$5.6 million for 2009 as compared to $7.9 million for 2008, with the decline
primarily attributable to lower sales.
Despite a
26.3% decrease in sales, Climate Control’s gross profit was down only 16.7% or
$4.1 million, as the gross margin improved to 33.9% for the fourth quarter of
2009 compared to 30.0% in the fourth quarter of 2008, despite lower factory
overhead absorption stemming from a decline in unit sales
volumes. The improvement in gross margin was primarily related to
product mix, a $0.4 million gain on copper futures contracts as compared to a
$0.6 million loss in 2008, as well as to efficiency improvements in our fan coil
manufacturing operation and our engineering and construction services
businesses.
Bookings
of new product orders during the fourth quarter were $48.5 million compared to
$59.1 million in the fourth quarter of 2008 and $49.1 million for the third
quarter of 2009. Lower bookings were primarily due to lower levels of
commercial construction activity caused by the recession. At December
31, 2009, the backlog of confirmed customer product orders was $32.2 million
compared to $39.4 million at September 30, 2009 and $68.5 million at December
31, 2008.
2
Chemical
Business:
Net sales
for the Chemical Business for the fourth quarter 2009 were $53.7 million, or
43.3% below 2008. The decrease is primarily attributable to steep
declines in commodity prices including the selling prices for our products
accompanied by significantly lower raw material feedstock costs and lower tons
sold in our mining markets.
The Pryor
Facility project to begin production of anhydrous ammonia and UAN is still
underway despite numerous delays. In January 2010, we began production of
anhydrous ammonia, which is the initial feedstock for the production of UAN, but
at production rates lower than our targeted rates. We are continuing to produce
and store anhydrous ammonia while we are activating the Urea plant. The start-up
of the Urea plant has encountered delays, due to extended lead times to
refurbish certain major equipment items, resulting in significant increases in
our previous estimates of the start-up costs. When we reach sustained
targeted production rates of UAN, we will issue an announcement. For
2009, we incurred approximately $17.2 million of expenses primarily consisting
of start-up costs. Currently, the Pryor Facility monthly operating start-up
costs, prior to production of UAN at sustained targeted rates, are approximately
$1.6 million in addition to variable costs such as natural gas and
electricity.
CEO’s
Remarks:
Jack
Golsen, LSB’s Board Chairman and CEO stated: “Excluding the start-up costs of
the Pryor Facility incurred during the fourth quarter, both our Chemical and
Climate Control businesses operated profitably in a very challenging
economy.”
Mr.
Golsen went on to say, “Due to current economic conditions, especially in the
commercial construction sector, product orders and sales in our Climate Control
Business have declined. Once the economy turns, we look forward to a
resumption of growth in this business. We have seen some initial
positive effects from the tax benefit provisions for geothermal heat pumps,
which are part of the federal economic stimulus package, but these gains have
been more than offset by the effects of the recession. We are
continuously developing and introducing new green products, and we are investing
in programs that we expect will stimulate the growth of our Climate Control
Business.”
He
continued, “With respect to our Chemical Business, signs point to improvement in
2010 in all of its markets. We are especially pleased to see UAN
pricing firming following a period of low prices. Looking ahead, the
outlook is good for grain and crop production and fertilizer required to support
them, including UAN. Despite the delays, we remain confident that the
Pryor Facility will be a valuable asset for LSB once it is fully
operational. We estimate that our all-in costs to refurbish the Pryor
Facility are a fraction of the cost to construct a new plant with comparable
capacities.”
Discussing
LSB’s financial condition, Mr. Golsen noted, “During the fourth quarter, we
continued to strengthen our balance sheet, by reducing long-term debt, and
increasing cash. During the fourth quarter, we purchased $1.0 million
face value of our Debentures that are due in 2012 in a negotiated transaction at
a discount from face value bringing our total purchases of our Debentures during
2009 to $11.1 million face value. As a result of these and prior
acquisitions of these Debentures, only $29.4 million remained outstanding at
December 31, 2009.
“While we
look forward to an economic recovery, we have and will continue to invest in the
areas that we believe have long-term strategic growth potential for
LSB.”
3
Conference
Call
LSB’s
management will host a conference call covering the fourth quarter results on
Monday, March 8, 2010 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. 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.
This
press release contains 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 “believe,” “expects,”
“intends,” “anticipates,” “plans to,” “estimates,” “projects” or similar
expressions, and such forward-looking statements include, but are not limited to
we believe that the Climate Control Business growth will resume once the economy
turns; the new green products we continually develop and introduce and the
programs we invest in will stimulate the growth of our Climate Control Business;
with respect to our Chemical Business, signs point to improved activity in 2010
in all of its markets; the outlook for grain and crop production and fertilizer
required to support them, including UAN, is good; that the Pryor Facility will
be a valuable asset for LSB and our all-in cost to refurbish the Pryor Facility
are a fraction of the cost to construct a new plant with comparable capacities.
Investors are cautioned that such forward-looking statements are not guarantees
of future performance and involve risk 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,
effect of the recession on the commercial and residential construction industry,
acceptance by the market of our geothermal heat pump products, acceptance of our
technology, changes to federal legislation or adverse regulations, available
working capital, ability to install necessary equipment and renovations at the
Pryor facility in a timely manner, ability to finance our investments, and other
factors set forth under “A Special Note Regarding Forward-Looking Statements”
contained in the Form 10-K for year ended December 31, 2009, for a
discussion of a variety of factors which could cause the future outcome to
differ materially from the forward-looking statements contained in this
letter.
# #
#
See
Accompanying Tables
4
LSB
Industries, Inc.
Unaudited
Financial Highlights
Years
and Three Months Ended December 31, 2009 and 2008
|
Year
Ended
December
31,
|
Three
Months Ended
December
31,
|
|||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||
|
(In
Thousands, Except Share and Per Share Amounts)
|
||||||||||||||
|
Net
sales
|
$
|
531,838
|
$
|
748,967
|
$
|
115,300
|
$
|
179,541
|
||||||
|
Cost
of sales
|
394,424
|
610,087
|
87,094
|
153,328
|
||||||||||
|
Gross
profit
|
137,414
|
138,880
|
28,206
|
26,213
|
||||||||||
|
Selling,
general and administrative expense
|
96,374
|
86,646
|
25,826
|
24,013
|
||||||||||
|
Provisions
for (recovery of) losses on accounts receivable
|
90
|
371
|
(99
|
)
|
212
|
|||||||||
|
Other
expense
|
527
|
1,184
|
66
|
238
|
||||||||||
|
Other
income
|
(287
|
)
|
(8,476
|
)
|
(
65
|
)
|
(59
|
)
|
||||||
|
Operating
income
|
40,710
|
59,155
|
2,478
|
1,809
|
||||||||||
|
Interest
expense
|
6,746
|
11,381
|
1,607
|
5,018
|
||||||||||
|
Loss
(gains) on extinguishment of debt
|
(1,783
|
)
|
(5,529
|
)
|
13
|
(5,529
|
)
|
|||||||
|
Non-operating
other expense (income), net
|
(130
|
)
|
(1,096
|
)
|
(
58
|
)
|
29
|
|||||||
|
Income
from continuing operations before provisions
for (benefits from) income taxes and
equity in earnings of affiliate
|
35,877
|
54,399
|
916
|
2,291
|
||||||||||
|
Provisions
for (benefit from) income taxes
|
15,024
|
18,776
|
914
|
(1,041
|
)
|
|||||||||
|
Equity
in earnings of affiliate
|
(996
|
)
|
(937
|
)
|
(256
|
)
|
(240
|
)
|
||||||
|
Income
from continuing operations
|
21,849
|
36,560
|
258
|
3,572
|
||||||||||
|
Net
loss from discontinued operations
|
265
|
13
|
220
|
-
|
||||||||||
|
Net
income
|
21,584
|
36,547
|
38
|
3,572
|
||||||||||
|
Dividends
on preferred stocks
|
306
|
306
|
-
|
-
|
||||||||||
|
Net
income applicable to common stock
|
$
|
21,278
|
$
|
36,241
|
$
|
38
|
$
|
3,572
|
||||||
|
Weighted
average common shares:
|
||||||||||||||
|
Basic
|
21,294,780
|
21,170,418
|
21,342,956
|
21,214,189
|
||||||||||
|
Diluted
|
22,492,446
|
24,132,738
|
22,417,153
|
22,518,578
|
||||||||||
|
Income
(loss) per common share:
|
||||||||||||||
|
Basic:
|
||||||||||||||
|
Income
from continuing operations
|
$
|
1.01
|
$
|
1.71
|
$
|
.01
|
$
|
.17
|
||||||
|
Net
loss from discontinued operations
|
(
.01
|
)
|
-
|
(.01
|
)
|
-
|
||||||||
|
Net
income
|
$
|
1.00
|
$
|
1.71
|
$
|
-
|
$
|
.17
|
||||||
|
Diluted:
|
||||||||||||||
|
Income
from continuing operations
|
$
|
.97
|
$
|
1.58
|
$
|
.01
|
$
|
.16
|
||||||
|
Net
loss from discontinued operations
|
(
.01
|
)
|
-
|
(.01
|
)
|
-
|
||||||||
|
Net
income
|
$
|
.96
|
$
|
1.58
|
$
|
-
|
$
|
.16
|
||||||
(See
accompanying notes)
5
LSB
Industries, Inc.
Notes
to Unaudited Financial Highlights
Years
and Three Months Ended December 31, 2009 and 2008
|
Note 1:
|
Net
income applicable to common stock is computed by adjusting net income by
the amount of preferred stock dividends and dividend
requirements. 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 costs, 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,
|
||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||
|
(In
Thousands)
|
||||||||||
Current:
|
Federal
|
$
|
2,456
|
$
|
17,388
|
$
|
(1,789
|
)
|
$
|
3,747
|
|||||
|
State
|
1,337
|
1,651
|
845
|
(101
|
)
|
|||||||||
|
Total
current
|
$
|
3,793
|
$
|
19,039
|
$
|
(944
|
)
|
$
|
3,646
|
Deferred:
|
Federal
|
$
|
9,611
|
$
|
595
|
$
|
931
|
$
|
(3,332
|
)
|
|||||
|
State
|
1,620
|
(858
|
)
|
927
|
(1,355
|
)
|
||||||||
|
Total
deferred
|
$
|
11,231
|
$
|
(263
|
)
|
$
|
1,858
|
$
|
(4,687
|
)
|
||||
|
Provisions
(benefits) for income taxes
|
$
|
15,024
|
$
|
18,776
|
$
|
914
|
$
|
(1,041
|
)
|
For 2009,
the current provision for federal income taxes of approximately $2.5 million
includes regular federal income tax after the consideration of permanent and
temporary differences between income for GAAP and tax purposes. The
current provision for state income taxes of approximately $1.3 million in 2009
includes regular state income tax.
The 2009
deferred tax provision of $11.2 million results from the recognition of changes
in our prior year deferred tax assets and liabilities, and the utilization of
state NOL carryforwards and other temporary differences.
Our
overall effective tax rate of 40.7% in 2009 included adjustments to reconcile
the 2008 financial income tax provision to the filed income tax return,
permanent tax differences and tax credits.
|
|
Note
3: During 2009 and 2008, we acquired $11.1 million and
$19.5 million, respectively aggregate principal amount of the 2007
Debentures for $8.9 million and $13.2 million,
respectively. Accordingly, we recognized gains on
extinguishment of debt of $1.8 million and $5.5 million, for 2009 and 2008
respectively, after writing 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, 2009 and 2008 is detailed on the following
page.
|
6
|
|
LSB
Industries, Inc.
|
|
|
Notes
to Unaudited Financial Highlights
|
|
|
Years
and Three Months Ended December 31, 2009 and
2008
|
|
Years
Ended
December
31,
|
|
Three
Months Ended
December
31,
|
||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||
|
(In
Thousands)
|
|||||||||||||||||||||||
|
Net
sales:
|
|||||||||||||||
|
Climate
Control
|
$
|
266,169
|
$
|
311,380
|
$
|
59,726
|
$
|
81,077
|
|||||||
|
Chemical
|
257,832
|
424,117
|
53,743
|
94,847
|
|||||||||||
|
Other
|
7,837
|
13,470
|
1,831
|
3,617
|
|||||||||||
|
$
|
531,838
|
$
|
748,967
|
$
|
115,300
|
$
|
179,541
|
||||||||
|
Gross
profit: (1)
|
|||||||||||||||
|
Climate
Control
|
$
|
92,409
|
$
|
96,633
|
$
|
20,237
|
$
|
24,287
|
|||||||
|
Chemical
|
42,422
|
37,991
|
7,331
|
810
|
|||||||||||
|
Other
|
2,583
|
4,256
|
638
|
1,116
|
|||||||||||
|
$
|
137,414
|
$
|
138,880
|
$
|
28,206
|
$
|
26,213
|
||||||||
|
Operating
income (loss): (2)
|
|||||||||||||||
|
Climate
Control
|
$
|
37,706
|
$
|
38,944
|
$
|
5,560
|
$
|
7,927
|
|||||||
|
Chemical (3)
|
15,122
|
31,340
|
(369
|
)
|
(3,146
|
)
|
|||||||||
|
General
corporate expenses and other business operations, net
|
(12,118
|
)
|
(11,129
|
)
|
(2,713
|
)
|
(2,972
|
)
|
|||||||
|
40,710
|
59,155
|
2,478
|
1,809
|
||||||||||||
|
Interest
expense
|
(6,746
|
)
|
(11,381
|
)
|
(1,607
|
)
|
(5,018
|
)
|
|||||||
|
Gain
(loss) on extinguishment of debt
|
1,783
|
5,529
|
(13
|
)
|
5,529
|
||||||||||
|
Non-operating
other income (expense), net:
|
|||||||||||||||
|
Climate
Control
|
8
|
1
|
8
|
-
|
|||||||||||
|
Chemical
|
31
|
27
|
5
|
(37
|
)
|
||||||||||
|
Corporate
and other business operations
|
91
|
1,068
|
45
|
8
|
|||||||||||
|
Benefits
from (provisions for) income taxes
|
(15,024
|
)
|
(18,776
|
)
|
(914
|
)
|
1,041
|
||||||||
|
Equity
in earnings of affiliate, Climate Control
|
996
|
937
|
256
|
240
|
|||||||||||
|
Income
from continuing operations
|
$
|
21,849
|
$
|
36,560
|
$
|
258
|
$
|
3,572
|
7
|
|
LSB
Industries, Inc.
|
|
|
Notes
to Unaudited Financial Highlights
|
|
|
Years
and Three Months Ended December 31, 2009 and
2008
|
|
|
(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
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.
|
|
|
(3)
|
During
the year ended December 31, 2008, we recognized operating income of $7.6
million relating to a litigation
judgment.
|
8
|
|
LSB
Industries,
Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
(Unaudited)
|
|
December
31,
|
|
2009
|
2008
|
|
(In
Thousands)
|
|
Assets
|
||||||
|
Current
assets:
|
||||||
|
Cash
and cash equivalents
|
$
|
61,739
|
$
|
46,204
|
||
|
Restricted
cash
|
30
|
893
|
||||
|
Short-term
investments
|
10,051
|
-
|
||||
|
Accounts
receivable, net
|
57,762
|
78,846
|
||||
|
Inventories
|
51,013
|
60,810
|
||||
|
Supplies,
prepaid items and other:
|
||||||
|
Prepaid
insurance
|
4,136
|
3,373
|
||||
|
Prepaid
income taxes
|
1,642
|
-
|
||||
|
Precious
metals
|
13,083
|
14,691
|
||||
|
Supplies
|
4,886
|
4,301
|
||||
|
Other
|
1,626
|
1,378
|
||||
|
Total
supplies, prepaid items and other
|
25,373
|
23,743
|
||||
|
Deferred
income taxes
|
5,527
|
11,417
|
||||
|
Total
current assets
|
211,495
|
221,913
|
||||
|
Property,
plant and equipment, net
|
117,962
|
104,292
|
||||
|
Other
assets:
|
||||||
|
Debt
issuance costs, net
|
1,652
|
2,607
|
||||
|
Investment
in affiliate
|
3,838
|
3,628
|
||||
|
Goodwill
|
1,724
|
1,724
|
||||
|
Other,
net
|
1,962
|
1,603
|
||||
|
Total
other assets
|
9,176
|
9,562
|
||||
|
$
|
338,633
|
$
|
335,767
|
(Continued
on following page)
9
|
|
LSB
Industries, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
(Unaudited)
|
|
December
31,
|
||||||
|
2009
|
2008
|
|||||
|
(In
Thousands)
|
||||||
|
Liabilities
and Stockholders’ Equity
|
||||||
|
Current
liabilities:
|
||||||
|
Accounts
payable
|
$
|
37,553
|
$
|
43,014
|
||
|
Short-term
financing
|
3,017
|
2,228
|
||||
|
Accrued
and other liabilities
|
23,054
|
39,236
|
||||
|
Current
portion of long-term debt
|
3,205
|
1,560
|
||||
|
Total
current liabilities
|
66,829
|
86,038
|
||||
|
Long-term
debt
|
98,596
|
103,600
|
||||
|
Noncurrent
accrued and other liabilities
|
10,626
|
9,631
|
||||
|
Deferred
income taxes
|
11,975
|
6,454
|
||||
|
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, 25,369,095
shares issued (24,958,330 at December 31, 2008)
|
2,537
|
2,496
|
||||
|
Capital
in excess of par value
|
129,941
|
127,337
|
||||
|
Accumulated
other comprehensive loss
|
-
|
(120
|
)
|
|||
|
Retained
earnings
|
41,082
|
19,804
|
||||
|
176,560
|
152,517
|
|||||
|
Less
treasury stock at cost:
|
||||||
|
Common
stock, 4,143,362 shares (3,848,518 at December
31, 2008)
|
25,953
|
22,473
|
||||
|
Total
stockholders' equity
|
150,607
|
130,044
|
||||
|
$
|
338,633
|
$
|
335,767
|
|||
10