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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): October 29, 2024

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.)
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 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):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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		LXU		New York Stock Exchange
Preferred Stock Purchase Rights		N/A		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

 

 

 

 

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Item 2.02.	Results of Operations and Financial Condition.

On October 29, 2024, LSB Industries, Inc. (the “Company”) issued a press release to report its financial results for the third quarter ended September 30, 2024. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

On October 30, 2024, at 10:00 a.m. (Eastern time) / 9:00 a.m. (Central time), the Company will hold a conference call broadcast live over the Internet to discuss the financial results of the third quarter ended September 30, 2024.

The information contained in this Item 2.02 of this Form 8-K and the Exhibit 99.1 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.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release issued by LSB Industries, Inc. dated October 29, 2024, titled “LSB Industries, Inc. Reports Operating Results for the 2024 Third Quarter”.
104		Cover Page Interactive Data File (embedded within the XBRL document)

 

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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: October 29, 2024

LSB INDUSTRIES, INC.
By:		/s/ Cheryl A. Maguire
Name:		Cheryl A. Maguire
Title:		Executive Vice President and Chief Financial Officer

 

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LSB INDUSTRIES, INC. REPORTS OPERATING RESULTS FOR THE 2024 THIRD QUARTER

 

OKLAHOMA CITY, Oklahoma…October 29, 2024…LSB Industries, Inc. (NYSE: LXU) (“LSB” or the “Company”) today announced results for the third quarter ended September 30, 2024.

Third Quarter 2024 Results and Recent Highlights

 

“I want to first thank my entire team for another injury free quarter. Our commitment to safety continues to ensure that everyone goes home safe. We delivered a strong increase in adjusted EBITDA relative to the third quarter of last year," stated Mark Behrman, LSB Industries' Chairman, President and CEO. "The year-over-year improvement was driven by higher ammonia prices coupled with lower natural gas prices compared to a year ago and an increase in industrial product production and sales. These favorable dynamics more than offset the impact of the planned maintenance activities we conducted during the quarter.”

“Our balance sheet remains strong, providing us with ample financial flexibility to invest in the growth of our business. During the third quarter, we completed an injury free and successful turnaround of our Pryor facility. The investments we made at Pryor were focused not only on improving its reliability and daily ammonia production volume, but also included the debottlenecking of the facility's urea plant. We expect this to lead to an incremental 75,000 tons per year of UAN production which we are ramping up over the fourth quarter. We also completed the construction of an additional 5,000 tons of nitric acid storage at our El Dorado facility providing us with the ability to capitalize on incremental sales opportunities not previously available to us. This should also enable us to further optimize our sales mix to maximize margins. We continue to deploy capital to improve the reliability and safety of our facilities with a

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turnaround at our Cherokee facility this November and a turnaround of our El Dorado facility scheduled for the third quarter of 2025. These planned maintenance and upgrade activities should lead to increased production volumes and incremental EBITDA and cash flow.”

“We continue to make progress with our two energy transition projects. We expect to begin producing low carbon products at our El Dorado facility beginning in 2026 pending the approval by the EPA of the Class VI permit submitted by our partner, Lapis Energy. We are working with Lapis and the EPA towards the issuance of our permit to construct, that will allow us to begin drilling two injection wells on our site in El Dorado. The permit is the critical path item for us. Supporting the economics of this project, earlier this year, we were pleased to announce our first off-take customer for low carbon ammonium nitrate solution to be produced at El Dorado.”

“With respect to our Houston Ship Channel project, we have completed our Pre-FEED study and are working through the results, engaging with potential customers and preparing to select an engineering contractor for the FEED study. We expect to start a full FEED study during the first half of 2025 that should be completed by mid-2026, after which we anticipate moving on to FID.”

“We view our low carbon product strategy as a potential multi-year earnings growth engine that complements our near-term opportunities to increase our production and sales volumes from our core manufacturing assets.”

 

 

Market Outlook

 

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Low Carbon Ammonia Projects Summary

 

 

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Third Quarter Results Overview

 

		Three Months Ended September 30,
		2024				2023				% Change
Product Sales ($ in Thousands)		(In Thousands)
AN & Nitric Acid		$	47,981			$	46,026				4	%
Urea ammonium nitrate (UAN)			25,303				30,090				(16	)%
Ammonia			28,490				26,823				6	%
Other			7,443				11,348				(34	)%
Total net sales		$	109,217			$	114,287

 

Comparison of 2024 to 2023 quarterly periods:

The following tables provide key sales metrics for our products:

 

		Three Months Ended September 30,
Key Product Volumes (short tons sold)		2024				2023				% Change
AN & Nitric Acid			127,139				119,468				6	%
Urea ammonium nitrate (UAN)			95,468				118,135				(19	)%
Ammonia			68,497				88,986				(23	)%
			291,104				326,589				(11	)%

 

Average Selling Prices (price per short ton) (A)
AN & Nitric Acid		$	308			$	327				(6	)%
Urea ammonium nitrate (UAN)		$	222			$	217				2	%
Ammonia		$	387			$	269				44	%

 

(A) Average selling prices represent “net back” prices which are calculated as sales less freight expenses divided by product sales volume in tons.

 

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		Three Months Ended September 30,
		2024				2023				% Change
Average Benchmark Prices (price per ton)
Tampa Ammonia (MT) Benchmark		$	485			$	343				41	%
NOLA UAN		$	204			$	228				(11	)%
Input Costs
Average natural gas cost/MMBtu in cost of materials and other		$	2.40			$	3.57				(33	)%
Average natural gas cost/MMBtu used in production		$	2.17			$	3.61				(40	)%

 

 

Conference Call

LSB’s management will host a conference call covering the third quarter results on Wednesday, October 30, 2024 at 10:00 am ET / 9:00 am CT to discuss these results and recent corporate developments. Participating in the call will be Chairman, President & Chief Executive Officer, Mark Behrman, Executive Vice President & Chief Financial Officer, Cheryl Maguire and Executive Vice President & Chief Commercial Officer, Damien Renwick. Interested parties may participate in the call by dialing (877) 407-6176 / (201) 689-8451. Please call in 10 minutes before the conference is scheduled to begin and ask for the LSB conference call.

A webcast of the call, along with a slide presentation that coincides with management’s prepared remarks, will be available in the Investors section of LSB’s website, at www.lsbindustries.com. The webcast can be found under Events & Presentations. If you are unable to listen to the live call, the conference call webcast will be archived on LSB’s website.

LSB Industries, Inc.

LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, is committed to playing a leadership role in the energy transition through the production of low and no carbon products that build, feed and power the world. The LSB team is dedicated to building a culture of excellence in customer experiences as we currently deliver essential products across the agricultural, industrial, and mining end markets and, in the future, the energy markets. The company manufactures ammonia and ammonia-related products at facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma and operates a facility for a global chemical company in Baytown, Texas. Additional information about LSB can be found on our website at www.lsbindustries.com.

Forward-Looking Statements

Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance and anticipated performance based on our growth and other strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or actual achievements to differ materially from the results, level of activity, performance or anticipated achievements expressed or implied by the forward-looking statements. Significant risks and uncertainties may relate to, but are not limited to, business and market disruptions, market conditions and price volatility for our products and feedstocks, as well as global and regional economic downturns that adversely affect the demand for our end-use products; disruptions in

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production at our manufacturing facilities and other financial, economic, competitive, environmental, political, legal and regulatory factors. These and other risk factors are discussed in the Company’s filings with the Securities and Exchange Commission.

Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.

See Accompanying Tables

 

Company Contact: Cheryl Maguire, Executive Vice President & CFO (405) 510-3524   Fred Buonocore, CFA, Vice President of Investor Relations (405) 510-3550 fbuonocore@lsbindustries.com

 

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LSB Industries, Inc.

Consolidated Statements of Operations

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
		(In Thousands, Except Per Share Amounts)
Net sales		$	109,217			$	114,287			$	387,494			$	461,096
Cost of sales			117,162				117,673				345,746				386,845
Gross (loss) profit			(7,945	)			(3,386	)			41,748				74,251
Selling, general and administrative expense			10,042				8,512				31,883				27,815
Other expense (income), net			6,436				(2,399	)			8,625				(2,096	)
Operating (loss) income			(24,423	)			(9,499	)			1,240				48,532
Interest expense, net			8,115				7,165				26,229				31,213
Gain on extinguishment of debt			—				—				(3,013	)			(8,644	)
Non-operating other income, net			(2,674	)			(3,689	)			(9,143	)			(10,929	)
(Loss) income before provision for income taxes			(29,864	)			(12,975	)			(12,833	)			36,892
(Benefit) provision for income taxes			(4,482	)			(5,249	)			(2,629	)			3,622
Net (loss) income		$	(25,382	)		$	(7,726	)		$	(10,204	)		$	33,270
(Loss) income per common share:
Basic:
Net (loss) income		$	(0.35	)		$	(0.10	)		$	(0.14	)		$	0.44
Diluted:
Net (loss) income		$	(0.35	)		$	(0.10	)		$	(0.14	)		$	0.44

 

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LSB Industries, Inc.

Consolidated Balance Sheets

 

		September 30, 2024				December 31, 2023
		(In Thousands)
Assets
Current assets:
Cash and cash equivalents		$	42,283			$	98,500
Restricted cash			—				2,532
Short-term investments			157,060				207,434
Accounts receivable			44,601				40,749
Allowance for doubtful accounts			(326	)			(364	)
Accounts receivable, net			44,275				40,385
Inventories:
Finished goods			19,259				26,329
Raw materials			2,127				1,799
Total inventories			21,386				28,128
Supplies, prepaid items and other:
Prepaid insurance			2,014				14,846
Precious metals			11,675				12,094
Supplies			31,421				30,486
Other			4,123				2,337
Total supplies, prepaid items and other			49,233				59,763
Total current assets			314,237				436,742
Property, plant and equipment, net			842,863				835,298
Other assets:
Operating lease assets			24,377				24,852
Intangible and other assets, net			1,456				1,292
			25,833				26,144
		$	1,182,933			$	1,298,184

 

 

 

 

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LSB Industries, Inc.

Consolidated Balance Sheets (continued)

 

		September 30, 2024				December 31, 2023
		(In Thousands)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	75,734			$	68,323
Short-term financing			1,528				13,398
Accrued and other liabilities			36,107				30,961
Current portion of long-term debt			10,979				5,847
Total current liabilities			124,348				118,529
Long-term debt, net			475,991				575,874
Noncurrent operating lease liabilities			17,137				16,074
Other noncurrent accrued and other liabilities			523				523
Deferred income taxes			65,973				68,853
Commitments and contingencies
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			502,972				501,026
Retained earnings			216,811				227,015
			728,900				737,158
Less treasury stock, at cost:
Common stock, 19.5 million shares (18.1 million shares at December 31, 2023)			229,939				218,827
Total stockholders' equity			498,961				518,331
		$	1,182,933			$	1,298,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Non-GAAP Reconciliations

 

This news release includes certain “non-GAAP financial measures” under the rules of the Securities and Exchange Commission, including Regulation G. These non-GAAP measures are calculated using GAAP amounts in our consolidated financial statements.

EBITDA and Adjusted EBITDA Reconciliation

EBITDA is defined as net income (loss) plus interest expense and interest income, net, less gain on extinguishment of debt, plus depreciation and amortization (D&A) (which includes D&A of property, plant and equipment and amortization of intangible and other assets), plus provision (benefit) for income taxes. Adjusted EBITDA is reported to show the impact of non-cash stock-based compensation, one time/non-cash or non-operating items-such as, one-time income or fees, loss (gain) on sale of a business and/or other property and equipment, certain fair market value (FMV) adjustments, and consulting costs associated with reliability and purchasing initiatives (Initiatives). We historically have performed turnaround activities on an annual basis; however, we have moved towards extending turnarounds to a two or three-year cycle. Rather than being capitalized and amortized over the period of benefit, our accounting policy is to recognize the costs as incurred. Given these turnarounds are essentially investments that provide benefits over multiple years, they are not reflective of our operating performance in a given year.

We believe that certain investors consider EBITDA a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. In addition, we believe that certain investors consider adjusted EBITDA as more meaningful to further assess our performance. We believe that the inclusion of supplementary adjustments to EBITDA is appropriate to provide additional information to investors about certain items.

EBITDA and adjusted EBITDA have limitations and should not be considered in isolation or as a substitute for net income, operating income, cash flow from operations or other consolidated income or cash flow data prepared in accordance with GAAP. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to a similarly titled measure of other companies. The following table provides a reconciliation of net income (loss) to EBITDA and adjusted EBITDA for the periods indicated.

 

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Non-GAAP Reconciliations (continued)

 

LSB Consolidated ($ In Thousands)		Three Months Ended September 30,
		2024				2023
Net loss		$	(25,382	)		$	(7,726	)
Plus:
Interest expense and interest income, net			5,401				3,467
Depreciation and amortization			16,693				15,548
Benefit for income taxes			(4,482	)			(5,249	)
EBITDA		$	(7,770	)		$	6,040
Stock-based compensation			1,550				1,318
Legal Fees & Settlements - Specific Matters			1,385				111
Loss (gain) on disposal and impairment of assets			5,639				(11	)
Turnaround costs			16,284				1,741
Growth Initiatives			376			-
Adjusted EBITDA		$	17,464			$	9,199

 

 

Ammonia, AN, Nitric Acid, UAN Sales Price Reconciliation

The following table provides a reconciliation of total identified net sales as reported under GAAP in our consolidated financial statements reconciled to netback sales which is calculated as net sales less freight and other non-netback costs. We believe this provides a relevant industry comparison among our peer group.

 

		Three Months Ended September 30,
		2024				2023
		(In Thousands)
Ammonia, AN, Nitric Acid, UAN net sales		$	101,774			$	102,938
Less freight and other			14,943				14,236
Ammonia, AN, Nitric Acid, UAN netback sales		$	86,831			$	88,702

 

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