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Business Wire
29-07-2025
- Business
- Business Wire
LSB Industries, Inc. Reports Operating Results for the 2025 Second Quarter
OKLAHOMA CITY--(BUSINESS WIRE)--LSB Industries, Inc. (NYSE: LXU) ('LSB,' 'we,' 'us,' 'our,' or the 'Company') today announced results for the second quarter ended June 30, 2025. Second Quarter 2025 Results and Recent Highlights Net sales of $151.3 million compared to $140.1 million in the second quarter of 2024 Net income of $3.0 million compared to a net income of $9.6 million in the second quarter of 2024 Diluted EPS of $0.04 compared to $0.13 for the second quarter of 2024 Adjusted EBITDA (1) of $38.3 million compared to $41.9 million in the second quarter of 2024 of $38.3 million compared to $41.9 million in the second quarter of 2024 Repurchased $32.4 million in principal amount of Senior Secured Notes during the second quarter of 2025 Total cash, cash equivalents and short-term investments of approximately $124.9 million and total debt of $452.6 million as of June 30, 2025 Zero recordable injuries for second quarter and first half of 2025 'We generated a 6% year-over-year increase in sales volumes during the second quarter,' stated Mark Behrman, LSB Industries' Chairman & Chief Executive Officer. 'Our reliability and operational improvement measures enabled us to increase our ammonia production volume as compared to last year's second quarter. As a result, we achieved healthy year-over-year growth in both production and sales volumes of higher margin upgraded products. We also saw stronger selling prices for UAN. Similar to the first quarter, however, we experienced materially higher natural gas prices relative to the prior year period when natural gas prices were at multi-year low levels. These higher gas input costs offset the higher selling prices and the operating improvements we made. We expect gas costs to be less of a year-over-year headwind in the third quarter.' 'Demand dynamics across our end markets are favorable as tight inventories and global supply disruptions have contributed to robust pricing, particularly for UAN, which is well above year-ago levels. On the industrial side of our business, our sales volumes have benefited from strong end market demand for nitric acid, as well as for ammonium nitrate, which is benefiting from a surge in U.S. copper mining activity.' 'Our low carbon project at our El Dorado facility remains on track to be operational by the end of 2026. The main gating item continues to be the approval of our Class VI permit application by the EPA. In June, our partner Lapis Low Carbon Solutions ('Lapis') completed the drilling of a stratigraphic injection well at El Dorado. Lapis is using the well to gather data to support the EPA in their technical review of our application. Once the project receives EPA approval, we will use this same well for CO 2 injections, enabling us to be efficient in completing the project and beginning the sequestration of CO 2 .' 'We further de-risked our balance sheet and reduced our future interest expense by repurchasing debt during the second quarter. We also continued to make investments in the reliability of our plants as well as in projects that we expect to enhance our financial performance and visibility in the coming quarters. We believe our multi-pronged approach to capital allocation helps us maintain our financial flexibility while positioning us to maximize our profitability and cash flow, ultimately leading to increased shareholder value.' (1) Adjusted EBITDA and EBITDA are non-GAAP financial measures. Please see the discussion below under the heading 'Non-GAAP Reconciliations' and the reconciliations at the end of this release for additional information concerning these and other non-GAAP financial measures. Expand Market Outlook Our industrial business remains consistent, reflecting: Robust demand for nitric acid domestically with limited export exposure Demand for ammonium nitrate (AN) for use in commercial mining explosives is robust across all commodities, particularly copper and gold Demand for AN is also benefiting from quarrying/aggregate production for infrastructure upgrade and expansion Our ammonia market is healthy and pricing remains at attractive levels driven by: Well balanced distribution channel inventories Supply disruptions from the Middle East Higher cost of production in Europe Continued delays in startup of new production capacity in the U.S. UAN pricing has strengthened due to: Steady exports, lower imports and strong demand, resulting in tight U.S. supply fundamentals Updraft from strong urea market resulting from robust global demand Corn market dynamics supportive of strong fertilizer demand: USDA's recent outlook for U.S. corn calls for greater exports and lower ending stocks Expectations for U.S. corn acres planted in Spring 2025 to be above historical average levels Low Carbon Ammonia Project Summary El Dorado Carbon Capture and Sequestration (CCS) Project with Lapis Carbon Solutions Expect to capture and sequester between 400,000 and 500,000 metric tons of CO 2 per year, which would reduce our Scope 1 emissions by 25%, yielding between 305,000 and 380,000 metric tons per year of low carbon ammonia Awaiting EPA approval of Class VI permit application to commence construction Completed stratigraphic well in June to provide data to support EPA in review of Class VI application Expect to begin operations by the end of 2026 Second Quarter Results Overview Three Months Ended June 30, 2025 2024 % Change Product Sales (In Thousands) AN & Nitric Acid $ 61,707 $ 58,442 6 % Urea ammonium nitrate (UAN) 52,262 42,808 22 % Ammonia 26,830 28,448 (6 )% Other 10,497 10,375 1 % Total net sales $ 151,296 $ 140,073 Expand Comparison of Second Quarter of 2025 to 2024: Net sales increased during the second quarter of 2025 due to higher sales volumes of UAN and AN and higher pricing for UAN. Operating income was lower in the second quarter of 2025, compared to operating income for the second quarter of 2024 due largely to higher natural gas costs. Higher natural gas prices also contributed to the year-over-year decrease in adjusted EBITDA. The following tables provide key sales metrics for our products: Three Months Ended June 30, Key Product Volumes (short tons sold) 2025 2024 % Change AN & Nitric Acid 161,509 147,619 9 % Urea ammonium nitrate (UAN) 151,807 137,499 10 % Ammonia 66,069 72,294 (9 )% 379,385 357,412 6 % Expand Average Selling Prices (price per short ton) (A) AN & Nitric Acid $ 328 $ 337 (3 )% Urea ammonium nitrate (UAN) $ 308 $ 271 14 % Ammonia $ 369 $ 368 0 % Expand (A) Average selling prices represent 'net back' prices which are calculated as sales less freight expenses divided by product sales volume in tons. Please see the discussion below under the heading 'Ammonia, AN, Nitric Acid, UAN Sales Price Reconciliation' and the reconciliations at the end of this release for additional information concerning this financial measure. Expand Three Months Ended June 30, Average Benchmark Prices (price per ton) 2025 2024 % Change Tampa Ammonia Benchmark $ 416 $ 440 (5 )% NOLA UAN $ 344 $ 246 40 % Expand Three Months Ended June 30, 2025 2024 % Change Input Costs Average natural gas cost/MMBtu in cost of materials and other $ 3.50 $ 1.70 106 % Average natural gas cost/MMBtu used in production $ 3.37 $ 1.92 76 % Expand Conference Call LSB's management will host a conference call on Wednesday, July 30, 2025 at 10:00 am ET / 9:00 am CT to discuss second quarter 2025 results and recent corporate developments. Participating in the call will be Chairman & 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 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 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 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, include, but are not limited to, statements regarding: our business strategy; anticipated future operating results and operating expenses, cash flows, capital resources and liquidity; trends, opportunities and risks affecting our business, industry and financial results; our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our strategy to become a leader in the energy transition in the chemical industry; the impact of trade policy on our business; the availability of raw materials; production volumes at our production facilities; and the anticipated cost and timing of our capital projects, including turnarounds. Forward-looking statements can generally be identified by words or phrases such as 'anticipate,' 'believe,' 'could,' 'estimate,' 'expect,' 'will,' 'may,' 'plan,' 'potential,' 'should,' 'would,' and similar words or phrases, as well as by discussions of strategy, plans or intentions. 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 relate to, but are not limited to, business and market disruptions; market conditions and price volatility for our products and feedstocks; global and regional economic downturns that adversely affect the demand for our end-use products; disruptions in production at our manufacturing facilities; increased competitive pressures; our ability to fund the working capital and expansion of our businesses; recruiting and retaining skilled and qualified personnel; our ability to obtain necessary raw materials and purchased components; material increases in cost of raw materials; obtaining and maintaining necessary permits; and other financial, economic, competitive, environmental, political, legal and regulatory factors, including tariffs. These and other risk factors are discussed in the Company's filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K. 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. LSB Industries, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In Thousands, Except Per Share Amounts) Net sales $ 151,296 $ 140,073 $ 294,728 $ 278,277 Cost of sales 128,123 112,658 257,171 228,584 Gross profit 23,173 27,415 37,557 49,693 Selling, general and administrative expense 9,844 11,547 19,997 21,841 Other expense, net 2,836 1,465 2,599 2,189 Operating income 10,493 14,403 14,961 25,663 Interest expense, net 7,886 8,385 15,950 18,114 Loss (gain) on extinguishment of debt 59 (1,879 ) 59 (3,013 ) Non-operating other income, net (1,542 ) (2,908 ) (3,215 ) (6,469 ) Income before income taxes 4,090 10,805 2,167 17,031 Provision for income taxes 1,084 1,250 801 1,853 Net income $ 3,006 $ 9,555 $ 1,366 $ 15,178 Net income per common share: Basic: Net income $ 0.04 $ 0.13 $ 0.02 $ 0.21 Diluted: Net income $ 0.04 $ 0.13 $ 0.02 $ 0.21 Expand LSB Industries, Inc. Consolidated Balance Sheets (Information at June 30, 2025 is unaudited) June 30, 2025 December 31, 2024 (In Thousands) Assets Current assets: Cash and cash equivalents $ 5,614 $ 20,230 Short-term investments 119,278 163,971 Accounts receivable 51,653 39,083 Allowance for doubtful accounts (364 ) (323 ) Accounts receivable, net 51,289 38,760 Inventories: Finished goods 22,635 22,382 Raw materials 1,812 2,519 Total inventories 24,447 24,901 Supplies, prepaid items and other: Prepaid insurance 5,925 14,345 Precious metals 13,198 11,596 Supplies 32,834 31,995 Other 2,627 3,916 Total supplies, prepaid items and other 54,584 61,852 Total current assets 255,212 309,714 Property, plant and equipment, net 838,035 847,570 Other assets: Operating lease assets 33,623 28,727 Intangible and other assets, net 1,213 1,177 Total other assets 34,836 29,904 Total assets $ 1,128,083 $ 1,187,188 Expand LSB Industries, Inc. Consolidated Balance Sheets (continued) (Information at June 30, 2025 is unaudited) June 30, 2025 December 31, 2024 (In Thousands) Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 59,577 $ 83,498 Short-term financing 4,127 12,146 Accrued and other liabilities 26,555 30,874 Current portion of long-term debt 6,252 9,116 Total current liabilities 96,511 135,634 Long-term debt, net 446,370 476,163 Noncurrent operating lease liabilities 26,327 21,387 Other noncurrent accrued and other liabilities 456 456 Deferred income taxes 62,619 61,908 Stockholders' equity: Common stock, $.10 par value per share; 150 million shares authorized, 91.2 million shares issued 9,117 9,117 Capital in excess of par value 503,496 504,578 Retained earnings 209,028 207,662 721,641 721,357 Less treasury stock, at cost: Common stock, 19.2 million shares (19.5 million shares at December 31, 2024) 225,841 229,717 Total stockholders' equity 495,800 491,640 Total liabilities and stockholders' equity $ 1,128,083 $ 1,187,188 Expand Non-GAAP Reconciliations To supplement our financial information presented in accordance with generally accepted accounting principles in the United States ('GAAP'), we present certain non-GAAP financial measures in this press release and on the related teleconference call. EBITDA and Adjusted EBITDA Reconciliation Management uses EBITDA and adjusted EBITDA as supplemental measures to review and assess the performance of our core business operations and for planning purposes. 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. 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 similarly titled measures of other companies. The following table provides a reconciliation of net income (loss) to EBITDA and adjusted EBITDA for the periods indicated. Non-GAAP Reconciliations (continued) LSB Consolidated Three Months Ended June 30, 2025 2024 ($ In Thousands) Net (loss) income $ 3,006 $ 9,555 Plus: Interest expense and interest income, net 6,307 5,445 Gain (loss) on extinguishment of debt 59 (1,879 ) Depreciation and amortization 20,682 18,784 Provision for income taxes 1,084 1,250 EBITDA $ 31,138 $ 33,155 Stock-based compensation 2,088 2,099 Legal Fees & Settlements - Specific Matters (207 ) 1,229 Loss on write down of assets 2,528 1,489 Turnaround costs 2,639 3,439 Growth Initiatives 90 485 Adjusted EBITDA $ 38,276 $ 41,896 Expand 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 condensed 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 June 30, 2025 2024 (In Thousands) Ammonia, AN, Nitric Acid, UAN net sales $ 140,799 $ 129,698 Less freight and other 16,841 16,074 Ammonia, AN, Nitric Acid, UAN netback sales $ 123,958 $ 113,624 Expand
Yahoo
14-07-2025
- Business
- Yahoo
LSB Industries, Inc. Schedules 2025 Second Quarter Results Release for Tuesday, July 29th and Conference Call for Wednesday, July 30th
OKLAHOMA CITY, July 14, 2025--(BUSINESS WIRE)--LSB Industries, Inc. ("LSB") (NYSE: LXU), today announced that it will release its financial results for the first quarter ended June 30, 2025 on Tuesday, July 29, 2025 after the close of the stock market. LSB's management will host a conference call on Wednesday, July 30, 2025 at 10:00 am ET / 9:00 am CT to discuss these results. 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 Industries conference call. Following the prepared remarks, there will be a question and answer session. 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 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. About LSB Industries, Inc. LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, is committed to playing a leadership role in 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 industrial and agricultural 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 View source version on Contacts Investor Contacts: Fred Buonocore, CFA, Vice President of Investor Relations(405) 510-3550fbuonocore@ Media Contact:David Kimmel, Director of Communications(405) 815-4645dkimmel@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
14-07-2025
- Business
- Business Wire
LSB Industries, Inc. Schedules 2025 Second Quarter Results Release for Tuesday, July 29
BUSINESS WIRE)--LSB Industries, Inc. ('LSB') (NYSE: LXU), today announced that it will release its financial results for the first quarter ended June 30, 2025 on Tuesday, July 29, 2025 after the close of the stock market. LSB's management will host a conference call on Wednesday, July 30, 2025 at 10:00 am ET / 9:00 am CT to discuss these results. 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 Industries conference call. Following the prepared remarks, there will be a question and answer session. 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 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. About LSB Industries, Inc. LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, is committed to playing a leadership role in 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 industrial and agricultural 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
Yahoo
01-05-2025
- Business
- Yahoo
Q1 2025 LSB Industries Inc Earnings Call
Fred Buonocore; Vice President - Investor Relations; LSB Industries Inc Mark Behrman; President, Chief Executive Officer, Director; LSB Industries Inc Damien Renwick; Executive Vice President, Chief Commercial Officer; LSB Industries Inc Cheryl Maguire; Chief Financial Officer, Executive Vice President; LSB Industries Inc Lucas Beaumont; Analyst; UBS Securities LLC Kevin Estok; Analyst; Jefferies LLC Andrew Wong; Analyst; RBC Capital Markets Robert McGuire; Analyst; Granite Research Charles Neivert; Analyst; Piper Sandler Operator Greetings and welcome to the LSB Industries' first quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It's my pleasure to introduce your host, Fred Buonocore, Vice President in Investor Relations. Fred, please go ahead. Fred Buonocore Good morning, everyone. Joining me today are Mark Behrman, our Chairman and Chief Executive Officer; Cheryl Maguire, our Chief Financial Officer; and Damien Renwick, our Chief Commercial Officer. Please note that today's call includes forward-looking statements. These statements are based on the company's current intent, expectations, and projections. They are not guarantees of future performance, and a variety of factors could cause the actual results to differ materially. For more information about these risks and uncertainties that could cause actual results that differ materially from those projected or implied by forward-looking statements, please see the risk factors set forth in the company's most recent annual report on Form 10-K. On the call, we will reference non-gap results. Please see the press release posted yesterday in the investors section of our website, For further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. At this time, I'd like to go ahead and turn the call over to Mark. Mark Behrman Thank you, Fred, and good morning, everyone. The global economy has a lot of moving parts right now, not the least of which is the impact that US tariffs could have on our business. While we don't anticipate a big impact to our business, it has created a lot of uncertainty for both planned spending and potential capital projects. We'll provide more color on this later in our comments. Turning our attention to the first quarter. On page 4 of our presentation, we highlight some achievements during the quarter. Overall sales volumes improved 4% quarter over quarter, driven by solid improvement in sales volumes for ammonium nitrate and UAM. These gains are the result of higher ammonia production and better performance by our upgrading plants. We're pleased that the work to improve the reliability and efficiency of our facilities is yielding results, and we expect to see continued improvement as 2025 progresses. Not only did we increase our production and sales volumes during the first quarter, but we did so with zero recordable injuries across the organization. Congratulations to the entire team for embracing our Protect What Matters core value and demonstrating that our goal zero is achievable. Lastly, we continue to make progress with our decarbonization project at our El Dorado facility, which I'll discuss later in the call. Now I'll turn the call over to Damien who will review current market dynamics and pricing trends. Damien? Damien Renwick Thanks, Mark. And good morning, everyone. I'll begin my remarks today by addressing the tariff situation. You'll find a summary of key points on this matter on page 5. Much remains to be seen as to how the US tariffs on imports will affect our business. So far, we've seen a significant uplift in domestic pricing for prompt delivery of urea due to tariffs and other factors. We expect this to persist through the current spring planting season. We believe our market exposure to retaliatory tariffs from other countries is limited. We export less than 10% of our sales, with all our exports to Mexico and Canada. We also believe the impact to ag markets we serve will not be significant. Only 2% of US corn exports were to China in 2024. Lastly, some of the parts, components, and equipment we use to maintain our plants are imported, mainly from Europe. We are evaluating any potential tariff implications for these imports, but we have already seen some pricing pressure from suppliers. We are also looking to source domestically wherever possible. Moving to page 6. Demand for our industrial products remains robust. We continue to ramp up our ammonium nitrates pollution volumes as we expand our industrial business. Copper mining activity and pricing remains strong. Global demand for copper has surged over the past year. Additionally, gold prices have continued to move higher. This price increase is driven by global economic uncertainty. As a result, US gold mining activity continues to be strong. Nitric acid continues to see healthy demand and pricing. We remain sold out. We also continue to see opportunities for growth with existing and new customers. Our primary constraint at this point is production capacity. And we are continually evaluating opportunities to increase our production capacity in both nitric acid and ammonium nitrate. On page 7, we continue to see strong prices for our products. UAN prices continue to increase significantly. The current NOLA UAN price of $350 per tonne is 73% higher than the low price of full 2024. We are seeing strong demand, along with insufficient import volumes which has resulted in tight US inventories. Urea prices have also strengthened considerably, with NOLA prices now above $500 per tonne. This increase is due to seasonal demand, lack of imports, tariff pressures, robust demand from India, and the continued ban on urea exports from China. The Tampa ammonia price has declined since the start of the year. This decline has followed falling natural gas prices in Europe. Europe continues to be the marginal cost producer for ammonia. This dynamic is underpinning ammonia prices globally. But despite this decline, ammonia prices remain attractive due to a globally tight supply and demand balance. US ammonia producers continue to enjoy a significant cost advantage to those in Europe. We expect that spread to persist through the entirety of this year. The spring 2025 planting season is shaping up strongly, with a significant increase in planted corn acres expected. The USDA reported in its prospective plantings report that producers intend to plant 95.3 million acres of corn this year compared to 90.6 million planted acres last year. This significant increase is driving very strong fertilizer demand and is driving pricing for our products up significantly. On page 8, the USDA has lowered its forecast for corn ending stocks. This forecast has provided support for corn prices. US corn prices sit solidly above $4 per bushel supporting favorable farmer economics. Now, I'll turn the call over to Cheryl to discuss our first quarter financial results and our outlook. Cheryl? Cheryl Maguire Thanks, Damien, and good morning. On page 9, you'll see a summary of our first quarter 2025 financial results. You can see the early benefits of the investments we've made in plant reliability and efficiency in our increase in net sales driven in part by stronger volumes. Page 10 bridges our first quarter 2024 adjusted EBITDA of $33 million to our first quarter 2025 adjusted EBITDA of $29 million. Improved sales volumes along with higher pricing for ammonia and AN were offset by materially higher natural gas costs. As we've discussed on previous calls, we like the contractual nature of our industrial business and the benefits this provides to our overall performance. On page 11, we illustrate that many of our industrial contracts are cost plus arrangements where we pass through the cost of the natural gas used to make products like nitric acid or AN and earn a fixed margin. This type of arrangement allows us to contract out the volatility of natural gas prices, is non-seasonal, and provides stability to our business. In 2021, less than 20% of our sales volumes were cost plus contracts. As we've grown our industrial business, we've grown this cost pass through business to approximately 30% as of the end of Q1 2025, and we expect this to grow to 35% by the end of the year as we continue to optimize our product mix. Page 12 provides a summary of our key balance sheet and cash flow metrics. Our cash balance remains strong, and our leverage ratio remains in line with our target level for a mid-cycle pricing environment. We will continue to make investments in the reliability of our facilities while also investing in storage and logistics capability to support our growing industrial business. Turning to the second quarter outlook, the Tampa ammonia price currently sits at $435 a tonne. NOLA UAN pricing rose through April and is currently at its highest level in more than two years. While much of our UN volume for April was sold ahead of this increase, we expect to capitalize on the pricing strength for sales in May and June. Our natural gas costs settled just under $4 per MMBTU for April. However, US gas costs have trended downward closer to $3 per MMBTU as we move toward May settlement, and we look forward to benefiting from that. From a volume perspective, we expect meaningful increases in both UAN and AN volumes compared to prior year. This will come with lower sales volumes of ammonia as we forgo ammonia sales in favor of upgrading into higher margin products. One change to the full-year outlook that we discussed on our Q4 2024 call relates to the turnaround that was scheduled for our El Dorado site for the second half of this year. We have elected to push this turnaround into the first half of 2026 as we have experienced delays in the delivery of key equipment we were planning to replace during the turnaround. As a result, we are increasing our ammonia production outlook for 2025 by approximately 30,000 tonnes. We are also lowering our estimated turnaround expense for the full year by approximately $15 million. And now I'll turn it back over to Mark. Mark Behrman Thank you, Cheryl. Page 13 summarizes a key development with our El Dorado ammonia project. We are excited that in January, we achieved pre-certification status under the Fertilizer Institute's Verified Ammonia Carbon Intensity Program. This is a voluntary certification of the carbon footprint of ammonia production at a specific facility from well to production gate. The program utilizes a standard methodology to calculate the carbon intensity of a facility's ammonia production. The program has been developed by industry experts, and the results are audited by a third party. Once the auditor provides a written report confirming that the carbon intensity was calculated by the facility according to the methodology, verified ammonia carbon intensity certifies the facility. Our ammonia plant at El Dorado is one of four North American plants that have received such a status. We expect this certification to be integral in our ability to secure sales agreements for our low carbon ammonia and upgraded product output. Page 14 is an overview of the project at El Dorado. Our partner, Lapis Carbon Solutions, is completing the drilling of a stratigraphic injection well. Lapis is now gathering data to support the EPA in their continuing technical review of our Class 6 permit application. Once our project receives EPA approval, we will use the same well for CO2 injections allowing us to be very efficient. Based on our ongoing dialogue with the EPA, we continue to expect to begin CO2 injections by the end of 2026. Given the impact of US tariff-related price increases and other global economic uncertainties on project costs, coupled with a slower than anticipated ramp up of low carbon ammonia demand, we have decided to put a pause on our Houston Ship Channel project. While disappointing, we are excited that we will have approximately 250,000 tonnes of low carbon ammonia available for sale out of our El Dorado site by the end of next year. We're off to a good start in 2025. While we're making meaningful production and sales volume improvements, we are continuing to grow and optimize our industrial business in order to increase the stability and predictability of our earning stream. And as I mentioned, we're on track to begin producing low carbon ammonia at our El Dorado facility late next year. We plan to continue to invest in our core business to achieve our plant reliability goals. Additionally, we have a number of opportunities within our existing portfolio of assets to grow our profits while maintaining a strong balance sheet. We will look to make investments in projects that increase our profits and cash flow, while managing our leverage at a level appropriate for the uncertain economic environment. Collectively, we believe that these initiatives will translate into significant incremental EBITDA and shareholder value. Before we open it up for questions, I'd like to mention that we will be participating in the following events in the coming months; The UBS Energy Transition and Decarbonization Conference in New York on May 14, and the Deutsche Bank Industrials Materials and Building Products Conference in New York on June 5. We look forward to speaking with some of you at those events. That concludes our prepared remarks, and we will now be happy to take your questions. Thanks. Operator (Operator Instructions) Lucas Beaumont, UBS. Lucas Beaumont Good morning. So I guess as we head into May, we're seeing very strong derivative pricing sort of including UAN. That looks sort of set to peak here in the second quarter. On the other hand, ammonia has sort of been weakening, and there's expectations that the temp contracts probably going to shift a fair bit lower, for May as well. So I guess with these diverging trends, and just considering some of the timings in the order book that you mentioned earlier, Cheryl, I was just wondering if you could give us a bit more how we should think about the set up for L2 you've realized pricing here in the second quarter? Damien Renwick Hi, Lucas, I'll take that one. So look, we're seeing, as you said, good price increases for our UAN products. We're well positioned to take advantage of that. We're not fully sold out deliberately so through the end of second quarter, so we can capitalize on that pricing and that'll that'll reflect in our results. Lucas Beaumont Right. And then, I guess just given that you've decided to sort of pause the Houston Ship Channel project, I was just wondering if you could kind of give us your thoughts now on your updated capital allocation priorities. Is there anything else on the CapEx side that you guys will look to do now to maybe drive an earnings improvement there or is it more back to repurchases and that sort of thing? Mark Behrman Yeah, good morning, Lucas. Yeah, I think there's nothing, not a project on the horizon as we sit here today that we've committed capital to. We continually look at projects on our existing assets that we can do, that will improve the operating results. But as we sit here today, we haven't FID any of those projects. From a capital allocation standpoint, as always, we're going to focus on improving the reliability and the EH&S of our existing facilities, so we'll continue to do that which I think as we stated before is somewhere in the neighborhood of, $60 million to $65 million of capital a year. And then after that, I think we will take a step back and look at investments in other projects, stock buyback, and of course, debt reduction. Lucas Beaumont Right, thank you. Operator Kevin Estock, Jefferies. Kevin Estok Hey, good morning this is Kevin Estock on for Lawrence Alexander. Thank you for taking my questions. So yeah, my first one is just so there's been obviously quite a bit of talk around deregulation by the administration. And I guess I was wondering whether or not you guys have sketched out or maybe thought about how big of a tailwind or how it could help you guys, I guess, let's say, like related to permitting, etc. I guess many companies that we're covering are actually saying that the impact is going to be quite minimal. And I guess I was wondering if you guys were thinking about it in the same way. Mark Behrman Yeah, good morning. I would say it is going to be quite minimal with the exception of the EPA, where we're having numerous conversations. We did see, I'd say, a slow process before the change in the administration and the change in the head of the EPA and the regional offices. And we certainly saw a pause for a couple of months while they put new people in place to lead all those efforts. But since that -- since the time that Lee Zeldin took over the EPA and our new head of the Region 6 office in Dallas of the EPA took over, we've seen a lot more activity and a lot more conversations, which is encouraging for us on our low carbon ammonia project at El Dorado. Other than that though, I don't think we're going to see much change. Kevin Estok Got it. Okay, thank you. And just, I guess is the second question, but you guys mentioned in the release that there's potential pent up demand, I guess related to UAN at the retailer and producer level. And I guess I was wondering if you could give a little bit more color there, certain like specific dynamics there and it's related to, I guess, higher corn acreage just planting season just any color that would help be helpful. Thank you. Damien Renwick Yeah, Kevin, absolutely. It's down to the higher corn acres forecast. So we talked about it In the prepared remarks around the USDA in the prospective plantings report forecasting over 95 million acres, and that's a significant increase compared to last year. But the other compounding factor that we're seeing in both urea and UAN is the fact that there haven't been enough imports into the country to satisfy that demand, and so that's putting strain on the logistics on river movements, demand on rail as well. And we're all just working as hard as we can to satisfy that demand and that's also having an impact on pricing as well. Operator (Operator Instructions) Andrew Wong, RBC Capital Markets. Andrew Wong Hey, good morning. So as you're considering some of these potential upgrade capacity projects, can you just, nothing's been committed, but can you just talk about what those projects might look like from a tax spaces, like how large that they might be and what kind of margin benefits do you anticipate generally from a project that might increase your nitric acid or AN capacity? Mark Behrman Morning, Andrew. Look I think that while we're doing some work to explore some of the expansion capabilities or potentials that we have, I think it's probably too early for us to talk about, the actual cost. We want to finish engineering studies before we sort of give you a good number. I think that would be the most prudent and. With that, once we get a final or at least a more finalized capital number, then we can sit down and and figure out what kind of EBITDA generation and returns there are and that the project even makes sense. So we have the capability, and I think we've mentioned this in the past, to expand our urea production up at prior, which would be great because we'll upgrade more free ammonia, which we're always interested in doing, capture more margin. We have the ability to expand our ammonia plant down at El Dorado to give us more ammonia, which hopefully then you know allows us to look at possibly expanding nitric acid or AN solution, because we think there's demand, particularly in AN solution, but I think it's a bit too early for us to be talking about the capital cost to do that. Andrew Wong Okay, that's fair. And then on the Houston Channel project, the decision to delay there, makes sense everything you've laid out. Is there the potential for revisiting that project in the future and what might need to change for that? Mark Behrman Yeah, look, I think overall we still believe that over time, there'll be new demand generation for low carbon ammonia. So I think for us, it's really about uncertainty and capital costs right now, as things are moving around and you know, one day we have tariffs and the next day we don't. And you know this whole situation, I think it's -- I think everyone's going through that and you see lots of projects being put on hold. In addition to that, I think there still is an unwillingness from some -- from many actually buyers to actually transact at a cost that I think supports the returns on a facility, and I believe that changes over time. But today, I think you know we're not comfortable with that. So I guess the answer would be we'd like to participate either in the current project that we're in and revisit that, if the economics could make sense and we could certainly put a deal together that would make sense. We'd actually participate in another project that's maybe being developed, and we can make an investment and maybe even operate or have some offtake or something like that so. I think we're open to that, but I think we've just got to be very prudent about what project we get involved in and what's the right timing is. So today, I think it doesn't make sense for us. Andrew Wong It's great. Thanks, Mark. Operator Rob McGuire, Granite Research. Robert McGuire Good morning. Just a couple of big picture topics. So Bloomberg reported a couple of weeks ago that China halted US LNG purchases due to the trade war, and it's boosting supply and lowering gas prices over in Europe. Do do you have a view, and if so, could you just kind of share it with regards to, is it better for Europe to import ammonia or LNG from the US and maybe the reasons why behind that? Damien Renwick Hi, Rob. That's a tricky question, I guess. From an ammonia perspective, European ammonia producers will really just be evaluating, okay, what's the forward outlook on the natural gas purchases and pricing. And then they'll weigh that up against their own landed price for an import, right? So it's really a make versus buy decision, and we've been in that realm now for a number of years, particularly as Russian natural gas has disappeared from Europe. And I don't see that sort of changing at all anytime in the future unless there's some resolution between Russia and Ukraine, and then back to Russian natural gas supply into Europe. In terms of LNG, I think it's much the same really. You've got the Europeans trying to import sufficient natural gas to keep the lights on and make sure they've got enough gas in the system for power for residential and industrial use. So I'm sure they'll look to transact upon that at the best possible price. Robert McGuire Thanks, Damien. And then any further color on potential legislation over in Europe supporting the use of ammonia or CBAM updates, anything you guys are seeing on the ground? Damien Renwick No, we've seen some positive developments with the IMO recently, where they outlined their sort of carbon incentive/ tax program as it relates to marine fuels. And so we think that that one is -- everyone's -- it's rather complex. So once everyone's had the time to digest what that means, I think, we'll see a continued shift there targeting low carbon fuels. In terms of CBAM, look, I think we're still on track for the start-up of the transition into CBAM next year. And there's -- we hear rumors about potential delays or changes, but nothing firm that we're aware of. Mark Behrman While there's conversation in Europe, certainly the EU with what would the carbon intensity scores of the low carbon ammonia versus a zero carbon ammonia look like, there's not been anything finalized. Robert McGuire Well that's great. I really appreciate it. Just one other last quick one are you seeing a a bigger disparity in what you're selling your ammonia inland relative to Tampa? Mark Behrman I think we're seeing pricing that's consistent with what you'd expect to see in the middle of season or just after application for ammonia, Rob. So nothing really too far out of the ordinary there. Robert McGuire Thanks, guys. Operator (Operator Instructions) Charles Neivert, Piper Sandler. Charles Neivert Morning, guys. You mentioned already that you're delaying some scheduled turnarounds because of equipment and things like that delays there. Is there any chance that some of these delays also leak out into the carbon project at El Dorado? I mean, you're talking about the second half of 2026 with all the -- and there's a lot still going on, but is there any risk to the equipment and needs that are there that might get -- that might push it out any further? Damien Renwick Morning, Charlie. No, I don't think so. We're talking about I mean some of the main things we're talking about on the compression facility of compressors, so we've -- actually our partner Lapis has already had discussions about the timing of delivery of equipment, and they're on the precipice basically of of making orders for long lead time items. So I think based on delivery times and if they get ordered over the next couple of weeks, I think we're really comfortable that we have no problem meeting the timeline that we talked about which is the end of next year. Charles Neivert Yeah, and also I mean I know that they're obviously they're footing the bill for all of the equipment and the build out. Is there any risk to the deal that you guys have struck between the two of you in terms of what the payout would look like going forward or is it really it's strictly based on the payments from the government for the carbon, and you're just getting that whatever piece that you're going to be getting and that won't change? Obviously, their profit does if their costs get higher. Mark Behrman Yeah, we have a CO2 sales agreement in place with them, that's been heavily negotiated. So we're really comfortable with us being able to receive the $1 per tonne of CO2 that we've agreed to. Charles Neivert Okay. Thanks very much. Mark Behrman Sure. Operator Lucas Beaumont, UBS. Lucas Beaumont Okay, thank you. So just with the shift that you've outlined going more towards cost plus kind of pricing on the contracts. So I just wanted to -- you're targeting 35% by the end of this year. I guess two things. I just wanted to understand, where would you like to kind of get that to, I guess, over the medium term. And then secondly, sort of what is your assessment been on how that's going to kind of impact your margins over the cycle? So I mean, I'm sure it's going to reduce the volatility in your earnings year to year. But yeah, I guess you're having to give anything up over the cycle, do you think from a margin perspective to get that or would it be similar? Mark Behrman Yeah. I think our commercial team does a really good job of trying to optimize our production, so you will see swings year to year and contracts, even on the industrial side where we have contracts. I mean they roll off and and we've got to make a decision on whether we want to up a contract for a longer term or do we think that the spot market in the ag markets, based on our views, are better play at least for the next 12 months, 18 months, whatever it might be. If I had to think about what would be an optimal mix, certainly 50/50 is something that -- so that 35% moving up to 50% is probably something that would make sense for us. I think in any given year or over a given couple of years, you could see that move up to 60% or you could see it move down to 40%, so probably somewhere between 40% and 60% industrial, with the balance obviously being added. From a margin perspective, absolutely you're right, it's going to give us much more stability and comfortability on what our earnings profile looks like. And from a margin perspective, it really just depends. If you look over a 10-year period on some of the products, the same conversations that at some point that customers who are used to maybe pricing off of a Tampa index or something like that, and we'd like them to now price off of a gas plus contract. And the commercial team again does a really good job and let's go back over the last 10 years and look at how pricing has -- the actual pricing was over the last 10 years versus if you went gas back or cost plus and what that might look like so. I think, well, margins overall over a period of time should actually be relatively similar. We will lose where there's a huge spike in fertilizer pricing since we like we saw in 2022, but we are trading that off for a lot of downside protection in our earnings. Lucas Beaumont Right, thanks. And then I just wanted to follow up with one more on the cost increases on the equipment side of the maintenance that you sort of called out. I guess just maybe -- I don't know if you're able to size that for us relative to your cost base in 2024. I mean, if the tariffs that were in, I'm assuming there's a tariff driven if they were in place today, I guess how much of a cost impact would you expect kind of on that basis? Cheryl Maguire Yeah, hey Lucas, we took a look at that. On the expense side, when water treatment chemicals, things like that, probably looking at maybe $1 million dollars over the year on the expense side. On the capital side, we've got the majority of our equipment kind of ordered and so thinking, maybe could see $2 million there, that's best guess today. It's a moving target. Lucas Beaumont Great, thank you. Operator Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to Mark for any further closing comments. Mark Behrman Right. Appreciate everyone joining the call today and appreciate everyone's support. So if there are any other questions, feel free to give us a shout and we'll have a conversation, and hopefully, answer your questions. Thanks and have a great day. Operator Thank you. That does conclude today's teleconference and webcast. Let me just connect your line at this time and have a wonderful day. We thank you for your participation today. Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
LSB Industries, Inc. Schedules 2025 First Quarter Results Release for Tuesday, April 29th and Conference Call for Wednesday, April 30th
OKLAHOMA CITY, April 15, 2025--(BUSINESS WIRE)--LSB Industries, Inc. ("LSB") (NYSE: LXU), today announced that it will release its financial results for the first quarter ended March 31, 2025 on Tuesday, April 29, 2025 after the close of the stock market. LSB's management will host a conference call on Wednesday, April 30, 2025 at 10:00 am ET / 9:00 am CT to discuss these results. 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 Industries conference call. Following the prepared remarks, there will be a question and answer session. 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 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. About 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 industrial and agricultural 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 View source version on Contacts Investor Contacts: Fred Buonocore, CFA, Vice President of Investor Relations(405) 510-3550fbuonocore@ Media Contact: David Kimmel, Director of Communications(405) 815-4645dkimmel@ Sign in to access your portfolio
