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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission file number 1-7677

 

LSB Industries, Inc.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

73-1015226

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma

 

73116

(Address of principal executive offices)

 

(Zip Code)

 

(Registrant's telephone number, including area code) (405) 235-4546

Not applicable

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, Par Value $.10

Preferred Stock Purchase Rights

 

LXU

N/A

 

New York Stock Exchange

New York Stock Exchange

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  Yes      No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

  Yes      No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

☐ 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes      No

The number of shares outstanding of the Registrant's common stock was 89,564,162 shares as of April 29, 2022.

 

 

 


 

FORM 10-Q OF LSB INDUSTRIES, INC.

TABLE OF CONTENTS

 

 

 

PART I – Financial Information

 

Page

 

 

 

 

 

Item 1.

 

Financial Statements

 

3

 

 

 

 

 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

18

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

29

 

 

 

 

 

 

 

PART II – Other Information

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

34

 

 

 

 

 

Item 1A.

 

Risk Factors

 

34

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

34

 

 

 

 

 

Item 4.

 

Mining Safety Disclosures

 

34

 

 

 

 

 

Item 5.

 

Other Information

 

34

 

 

 

 

 

Item 6.

 

Exhibits

 

34

 

 

2


 

PART I

FINANCIAL INFORMATION

 

 

Item 1. Financial Statements

LSB INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Information at March 31, 2022 is unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

254,299

 

 

$

82,144

 

Short-term investments

 

 

89,311

 

 

 

 

Accounts receivable

 

 

97,515

 

 

 

86,902

 

Allowance for doubtful accounts

 

 

(463

)

 

 

(474

)

Accounts receivable, net

 

 

97,052

 

 

 

86,428

 

Inventories:

 

 

 

 

 

 

 

 

Finished goods

 

 

25,810

 

 

 

14,688

 

Raw materials

 

 

1,590

 

 

 

1,895

 

Total inventories

 

 

27,400

 

 

 

16,583

 

Supplies, prepaid items and other:

 

 

 

 

 

 

 

 

Prepaid insurance

 

 

10,557

 

 

 

14,244

 

Precious metals

 

 

13,945

 

 

 

14,945

 

Supplies

 

 

27,066

 

 

 

26,558

 

Other

 

 

9,805

 

 

 

2,234

 

Total supplies, prepaid items and other

 

 

61,373

 

 

 

57,981

 

Total current assets

 

 

529,435

 

 

 

243,136

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

850,372

 

 

 

858,480

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Operating lease assets

 

 

24,829

 

 

 

27,317

 

Intangible and other assets, net

 

 

3,555

 

 

 

3,907

 

 

 

 

28,384

 

 

 

31,224

 

 

 

 

 

 

 

 

 

 

 

 

$

1,408,191

 

 

$

1,132,840

 

 

(Continued on following page)

3


LSB INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

(Information at March 31, 2022 is unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands)

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

60,649

 

 

$

49,458

 

Short-term financing

 

 

9,911

 

 

 

12,716

 

Accrued and other liabilities

 

 

44,913

 

 

 

33,301

 

Current portion of long-term debt

 

 

8,112

 

 

 

9,454

 

Total current liabilities

 

 

123,585

 

 

 

104,929

 

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

708,398

 

 

 

518,190

 

 

 

 

 

 

 

 

 

 

Noncurrent operating lease liabilities

 

 

17,542

 

 

 

19,568

 

 

 

 

 

 

 

 

 

 

Other noncurrent accrued and other liabilities

 

 

3,023

 

 

 

3,030

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

37,455

 

 

 

26,633

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock, $.10 par value; 150 million shares authorized, 91.2 million

   shares issued

 

 

9,117

 

 

 

9,117

 

Capital in excess of par value

 

 

493,964

 

 

 

493,161

 

Retained earnings (accumulated deficit)

 

 

27,511

 

 

 

(31,255

)

 

 

 

530,592

 

 

 

471,023

 

Less treasury stock, at cost:

 

 

 

 

 

 

 

 

Common stock, 1.6 million shares (1.4 million shares at December 31, 2021)

 

 

12,404

 

 

 

10,533

 

Total stockholders' equity

 

 

518,188

 

 

 

460,490

 

 

 

$

1,408,191

 

 

$

1,132,840

 

 

 

See accompanying notes to condensed consolidated financial statements.

4


LSB INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands, Except Per Share Amounts)

 

Net sales

 

$

198,981

 

 

$

98,116

 

Cost of sales

 

 

108,251

 

 

 

90,056

 

Gross profit

 

 

90,730

 

 

 

8,060

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

 

10,935

 

 

 

8,793

 

Other income, net

 

 

(176

)

 

 

(263

)

Operating income (loss)

 

 

79,971

 

 

 

(470

)

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

9,955

 

 

 

12,372

 

Non-operating other expense, net

 

 

135

 

 

 

395

 

Income (loss) before provision for income taxes

 

 

69,881

 

 

 

(13,237

)

Provision for income taxes

 

 

11,115

 

 

 

42

 

Net income (loss)

 

 

58,766

 

 

 

(13,279

)

 

 

 

 

 

 

 

 

 

Dividends on convertible preferred stocks

 

 

 

 

 

75

 

Dividends on Series E redeemable preferred stock

 

 

 

 

 

9,511

 

Accretion of Series E redeemable preferred stock

 

 

 

 

 

511

 

Net income (loss) attributable to common stockholders

 

$

58,766

 

 

$

(23,376

)

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

0.66

 

 

$

(0.63

)

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

0.65

 

 

$

(0.63

)

 

See accompanying notes to condensed consolidated financial statements.

5


LSB INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

Common

Stock

Shares

 

 

Treasury

Stock-

Common

Shares

 

 

Non-

Redeemable

Preferred

Stock

 

 

Common

Stock

Par

Value

 

 

Capital in

Excess of

Par

Value

 

 

Retained Earnings (Accumulated Deficit)

 

 

Treasury

Stock-

Common

 

 

Total

 

 

 

(In Thousands)

 

Balance at December 31, 2021

 

 

91,168

 

 

 

(1,375

)

 

$

 

 

$

9,117

 

 

$

493,161

 

 

$

(31,255

)

 

$

(10,533

)

 

$

460,490

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

58,766

 

 

 

 

 

 

 

58,766

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

803

 

 

 

 

 

 

 

 

 

 

 

803

 

Other

 

 

 

 

 

 

(229

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,871

)

 

 

(1,871

)

Balance at March 31, 2022

 

 

91,168

 

 

 

(1,604

)

 

$

 

 

$

9,117

 

 

$

493,964

 

 

$

27,511

 

 

$

(12,404

)

 

$

518,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

39,926

 

 

 

(2,075

)

 

$

3,000

 

 

$

3,993

 

 

$

197,350

 

 

$

(41,487

)

 

$

(13,213

)

 

$

149,643

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,279

)

 

 

 

 

 

 

(13,279

)

Dividend accrued on redeemable

   preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,511

)

 

 

 

 

 

 

(9,511

)

Accretion of redeemable preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(511

)

 

 

 

 

 

 

(511

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

713

 

 

 

 

 

 

 

 

 

 

 

713

 

Issuance of restricted stock

 

 

250

 

 

 

835

 

 

 

 

 

 

 

25

 

 

 

(5,335

)

 

 

 

 

 

 

5,310

 

 

 

 

Other

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18

)

 

 

(18

)

Balance at March 31, 2021

 

 

40,176

 

 

 

(1,245

)

 

$

3,000

 

 

$

4,018

 

 

$

192,728

 

 

$

(64,788

)

 

$

(7,921

)

 

$

127,037

 

 

 

 

See accompanying notes condensed consolidated financial statements.

6


LSB INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

58,766

 

 

$

(13,279

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

10,823

 

 

 

327

 

Depreciation and amortization of property, plant and equipment

 

 

17,197

 

 

 

16,762

 

Amortization of intangible and other assets

 

 

311

 

 

 

315

 

Other

 

 

1,438

 

 

 

(1,058

)

Cash provided (used) by changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(11,707

)

 

 

(17,321

)

Inventories

 

 

(10,817

)

 

 

625

 

Prepaid insurance

 

 

3,687

 

 

 

2,265

 

Accounts payable

 

 

10,003

 

 

 

8,598

 

Accrued interest

 

 

13,618

 

 

 

10,412

 

Other assets and other liabilities

 

 

(7,827

)

 

 

5,065

 

Net cash provided by operating activities

 

 

85,492

 

 

 

12,711

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Expenditures for property, plant and equipment

 

 

(8,254

)

 

 

(6,133

)

Purchases of short-term investments

 

 

(89,311

)

 

 

-

 

Other investing activities

 

 

51

 

 

 

198

 

Net cash used by investing activities

 

 

(97,514

)

 

 

(5,935

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Net proceeds from 6.25% senior secured notes

 

 

200,000

 

 

 

 

Payments on other long-term debt

 

 

(6,912

)

 

 

(3,353

)

Payments on short-term financing

 

 

(2,805

)

 

 

(5,419

)

Payments of debt-related costs, including

   extinguishment costs

 

 

(4,102

)

 

 

 

Other financing activities

 

 

(2,004

)

 

 

(36

)

Net cash provided (used) by financing activities

 

 

184,177

 

 

 

(8,808

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

172,155

 

 

 

(2,032

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

82,144

 

 

 

16,264

 

Cash and cash equivalents at end of period

 

$

254,299

 

 

$

14,232

 

 

See accompanying notes condensed consolidated financial statements.

 

 

 

7


LSB INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

1. Summary of Significant Accounting Policies

The accompanying unaudited interim financial statements and notes of LSB Industries, Inc. (“LSB”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying unaudited interim financial statements and notes should be read in conjunction with the financial statements and notes included in the Company’s Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022, as amended by the Form 10-K/A filed on March 25, 2022 (“2021 Form 10-K”). The accompanying unaudited interim financial statements in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s results of operations and cash flows for the three-month periods ended March 31, 2022 and 2021 and the Company’s financial position as of March 31, 2022.

Basis of Consolidation LSB and its subsidiaries (the “Company,” “we,” “us,” or “our”) are consolidated in the accompanying condensed consolidated financial statements. LSB is a holding company with no significant operations or assets other than cash, cash equivalents, and investments in its subsidiaries. All material intercompany accounts and transactions have been eliminated. Certain prior period amounts reported in our consolidated financial statements and notes thereto have been reclassified to conform to current period presentation, including all share and per share information relating to the stock split in the form of a stock dividend on October 8, 2021.

Nature of Business – We are engaged in the manufacture and sale of chemical products. The chemical products we primarily manufacture, market and sell are ammonia, fertilizer grade AN (“HDAN”) and UAN for agricultural applications, high purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid for industrial applications, and industrial grade AN (“LDAN”) and solutions for the mining industry. We manufacture and distribute our products in four facilities; three of which we own and are located in El Dorado, Arkansas (the “El Dorado Facility”); Cherokee, Alabama (the “Cherokee Facility”); and Pryor, Oklahoma (the “Pryor Facility”); and one of which we operate on behalf of a global chemical company in Baytown, Texas.  

Sales to customers include farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the United States (“U.S.”); industrial users of acids throughout the U.S. and parts of Canada; and explosive manufacturers in the U.S. and parts of Mexico and Canada.

These interim results are not necessarily indicative of results for a full year due, in part, to the seasonality of our sales of agricultural products and the timing of performing our major plant maintenance activities. Our selling seasons for agricultural products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November.

Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Short-Term Investments - Investments, which consist of U.S. treasury bills with an original maturities ranging from approximately 17 weeks to 51 weeks, were considered short-term investments. These investments are carried at cost which approximated fair value.

Equity Awards Equity award transactions with employees are measured based on the estimated fair value of the equity awards issued. For equity awards with service conditions that have a graded vesting period, we recognize compensation cost on a straight-line basis over the requisite service period for the entire award. Forfeitures are accounted for as they occur. We may issue new shares of common stock or may use treasury shares associated with the equity awards.

8


LSB INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Summary of Significant Accounting Policies (continued)

In January 2022 and March 2022, the compensation committee of our Board of Directors approved the grant of 224,455 shares of time-based restricted stock units and 160,724 shares of performance-based restricted stock units to certain executives and employees under our 2016 Long Term Incentive Plan. A portion of the time-based restricted stock unit shares will vest at the end of each one-year period at the rate of one-third per year for three years and a portion will vest 100% at the end of three years. The performance-based restricted stock units will vest on the third anniversary of the grant date subject to the achievement of certain performance metrics established by the Board of Directors as set out in the grant. Upon the third anniversary the grants may be modified in a range between 0% and 200% based upon achievement of the performance goals. The unvested restricted shares carry dividend and voting rights contingent upon the vesting and lapsing of restriction. Sales of these shares are restricted prior to the date of vesting. Pursuant to the terms of the underlying restricted stock agreements, unvested restricted shares may immediately vest upon the occurrence of a change in control (as defined by agreement), termination without cause or death.

Derivatives, Hedges and Financial Instruments Derivatives are recognized in the balance sheet and measured at fair value. Changes in fair value of derivatives are recorded in results of operations unless the normal purchase or sale exceptions apply, or hedge accounting is elected.

The fair value amounts recognized for our derivative contracts executed with the same counterparty under a master netting arrangement may be offset. We have the choice to offset or not, but that choice must be applied consistently. A master netting arrangement exists if the reporting entity has multiple contracts with a single counterparty that are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. Offsetting the fair values recognized for the derivative contracts outstanding with a single counterparty results in the net fair value of the transactions reported as an asset or a liability in the balance sheet. When applicable, we present the fair values of our derivative contracts under master netting agreements using a gross fair value presentation.

Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level 1 - Valuations of contracts classified as Level 1 are based on quoted prices in active markets for identical contracts.

Level 2 - Valuations of contracts classified as Level 2 are based on quoted prices for similar contracts and valuation inputs other than quoted prices that are observable for these contracts.

Level 3 - Valuations of assets and liabilities classified as Level 3 are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

At March 31, 2022 and December 31, 2021, we did not have any financial instruments with fair values materially different from their carrying amounts (which excludes issuance costs, if applicable). The carrying value of our Senior Secured Notes approximates fair value and is classified as a Level 2 fair value measurement. The fair value of financial instruments is not indicative of the overall fair value of our assets and liabilities since financial instruments do not include all assets, including intangibles, and all liabilities.

Recently Issued Accounting Pronouncements

ASU 2020-06 - In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s own Equity (Subtopic 815-40). This ASU addresses the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity. The ASU includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments which include beneficial conversion features or cash conversion features by removing certain separation models. Additionally, the ASU requires entities to use the “if-converted” method when calculating diluted earnings per share for convertible instruments. This ASU will be effective for us on January 1, 2024; however, early adoption was permitted beginning January 1, 2021. We are currently evaluating the timing and the effect of adoption of this ASU on our consolidated financial statements and related disclosures.

ASU 2020-04 In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR that are expected to be discontinued. This ASU provides exceptions and optional expedients for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR or other reference rates to be discontinued as a result of reference rate reform. They do not apply to modifications made or hedges entered into or evaluated after December 31, 2022, unless the hedging relationships existed as of that date and optional expedients for them were elected and retained through the end of the hedging relationship. This ASU became effective upon issuance. We continue to evaluate the effect of this ASU and plan to utilize this relief for our debt agreements that include LIBOR rates.

9


LSB INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

2. Income (Loss) Per Common Share

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2022

 

 

2021

 

 

 

 

(In Thousands, Except Per Share Amounts)

Numerator:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

58,766

 

 

$

(13,279

)

 

Adjustments for basic income (loss) per common share:

 

 

 

 

 

 

 

 

 

Dividend requirements on Series E Redeemable

   Preferred

 

 

 

 

 

(9,511

)

 

Dividend requirements on Series B Preferred

 

 

 

 

 

(60

)

 

Dividend requirements on Series D Preferred

 

 

 

 

 

(15

)

 

Accretion of Series E Redeemable Preferred

 

 

 

 

 

(511

)

 

Numerator for basic and diluted net income (loss) per common

   share

 

$

58,766

 

 

$

(23,376

)

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic net income (loss) per common

   share - adjusted weighted-average shares (1)

 

 

88,421

 

 

 

36,850

 

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Unvested restricted stock and stock units

 

 

1,345

 

 

 

 

 

Dilutive potential common shares

 

 

1,345

 

 

 

 

 

Denominator for diluted net income (loss) per

   common share - adjusted weighted-average

   shares

 

 

89,766

 

 

 

36,850

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per common share

 

$

0.66

 

 

$

(0.63

)

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per common share

 

$

0.65

 

 

$

(0.63

)

 

 

 

(1)

Excludes the weighted-average shares of unvested restricted stock that are contingently issuable.

 

The following weighted-average shares of securities were not included in the computation of diluted net loss per common share as their effect would have been antidilutive:

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2022

 

 

2021

 

 

Restricted stock and stock units

 

 

 

 

 

2,247,887

 

 

Convertible preferred stocks

 

 

 

 

 

1,191,666

 

 

Series E Redeemable Preferred - embedded derivative

 

 

 

 

 

303,646

 

 

Stock options

 

 

13,000

 

 

 

107,652

 

 

 

 

 

13,000

 

 

 

3,850,851

 

 

 

10


LSB INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

3. Current and Noncurrent Accrued and Other Liabilities

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands)

 

Accrued interest

 

$

22,015

 

 

$

8,397

 

Current portion of operating lease liabilities

 

 

7,293

 

 

 

7,755

 

Accrued payroll and benefits

 

 

6,582

 

 

 

9,794

 

Accrued death and other executive benefits

 

 

2,508

 

 

 

2,514

 

Accrued health and worker compensation insurance claims

 

 

1,103

 

 

 

1,272

 

Other

 

 

8,435

 

 

 

6,599

 

 

 

 

47,936

 

 

 

36,331

 

Less noncurrent portion

 

 

3,023

 

 

 

3,030

 

Current portion of accrued and other liabilities

 

$

44,913

 

 

$

33,301

 

 

4. Long-Term Debt

Our long-term debt consists of the following: 

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In Thousands)

 

Working Capital Revolver Loan, with a current interest

   rate of 4.00% (A)

 

$