LSB Industries, Inc. Reports Operating Results for the 2024 Fourth Quarter and Full Year and Provides Product Sales Volume Outlook for 2025

Published: 2025-02-26 16:20:04 ET LXU

LSB Industries, Inc. (NYSE: LXU) (“LSB,” “we,” “us,” “our,” or the “Company”) today announced results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Results and Recent Highlights

Full Year 2024 Results and Highlights

(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.

“Our fourth quarter was marked by progress on several fronts," stated Mark Behrman, LSB Industries' Chairman & Chief Executive Officer. "Our adjusted EBITDA for the fourth quarter of 2024 improved versus the fourth quarter of last year due, in part, to improved production and sales volumes of nitric acid and AN despite having a plant turnaround in the fourth quarter of 2024. Stronger ammonia prices and lower natural gas costs also contributed to the year-over-year improvement. Notably, nitrogen fertilizer prices are currently above levels at the same point last year. We believe this more favorable pricing environment reflects balanced channel inventories, strong global urea demand and improving corn futures prices. We’re seeing several positive indicators that point towards a robust Spring.”

“Our Pryor facility achieved a monthly record for urea and UAN production in December. This record is a direct result of the turnaround and urea capacity expansion project that we completed during the third quarter. Additionally, we completed a turnaround of the ammonia plant at our Cherokee facility during the fourth quarter and did so injury-free. In fact our Cherokee and Baytown facilities had zero recordable incidents for full-year 2024. This outstanding achievement is consistent with our ‘Goal Zero’ - zero recordable incidents - for our entire organization.”

“Our balance sheet continues to provide us with the financial flexibility to invest in the growth of our business. Following the investments we made in our Pryor and Cherokee facilities in 2024, we have a planned ammonia turnaround at our El Dorado facility scheduled for the third quarter of 2025. We expect these extensive maintenance and upgrade activities to continue to lead to higher reliability in our manufacturing plants resulting in increased production volumes and incremental growth in EBITDA(1).”

“We continue to make progress with our two energy transition projects. We are targeting startup of low carbon ammonium nitrate solution production at our El Dorado facility in the second half of 2026. Obtaining the EPA’s approval of the Class VI permit application submitted by our partner, Lapis Carbon Solutions, remains our primary gating item. In May 2024, we announced our first off-take customer for low carbon ammonium nitrate solution to be produced at our El Dorado facility. We began shipping product to the customer under this agreement in early 2025 and look forward to transitioning from conventional ANS to a low carbon product next year.”

“With respect to our Houston Ship Channel Project, we are currently involved in conversations with potential customers to get a sense of the pricing levels for low carbon ammonia that could lead to high volume, long-term off-take arrangements. The outcome of these conversations is a key factor in determining the timing of our next step in the project development process, which would be a full FEED(2) study. Our goal is to begin a FEED during the first half of this year and complete the study by mid-2026, paving the way for us to move forward with our final investment decision, and ultimately, plant construction.”

Mr. Behrman concluded, “We begin 2025 better positioned for profitable growth than at any time in our Company’s history. We are well capitalized and the investments we are making to improve the reliability, efficiency and output of our facilities are already bearing fruit. We expect to see incremental improvement from these activities each quarter with the full impact of these investments flowing through our financial results by the end of 2026. We continue to pursue longer term growth opportunities with our low carbon product strategy, with a focus on minimizing risk and maximizing returns. We are highly enthusiastic about our prospects for generating increased value for shareholders in the years to come.”

(1)

(2)

Front End Engineering Design

Market Outlook

Low Carbon Ammonia Projects Summary

Fourth Quarter Results Overview

For the Three Months Ended December 31,

2024

2023

% Change

Product Sales ($ in Thousands)

(In Thousands)

AN & Nitric Acid

57,620

47,959

Urea ammonium nitrate (UAN)

30,132

36,621

(18

Ammonia

40,194

36,731

Other

6,960

11,302

(38

Total net sales

134,906

132,613

Comparison of Fourth Quarter of 2024 to 2023:

The following tables provide key sales metrics for our products:

For the Three Months Ended December 31,

Key Product Volumes (short tons sold)

2024

2023

% Change

AN & Nitric Acid

150,054

124,697

Urea ammonium nitrate (UAN)

114,875

125,966

Ammonia

85,678

95,447

(10

350,607

346,110

Average Selling Prices (price per short ton) (A)

AN & Nitric Acid

308

322

Urea ammonium nitrate (UAN)

221

253

(13

Ammonia

449

368

(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.

For the Three Months Ended December 31,

Average Benchmark Prices (price per ton)

2024

2023

% Change

Tampa Ammonia Benchmark

564

599

NOLA UAN

230

256

(10

Three Months Ended December 31,

2024

2023

% Change

Input Costs

Average natural gas cost/MMBtu in cost of materials and other

2.45

3.75

(35

Average natural gas cost/MMBtu used in production

2.79

3.99

(30

Volume Outlook*

Estimated ammonia production and product sales volumes for the full year 2025 are as follows:

Products

2025E

2024A

Ammonia Production (tons):

790,000 - 820,000

757,000

Sales Volume (tons):

AN & Nitric Acid

590,000 - 620,000

554,000

Urea Ammonium Nitrate (UAN)

620,000 - 650,000

483,000

Ammonia

250,000 - 280,000

321,000

*2025 ammonia production and product sales volumes forecast reflects a turnaround at our El Dorado facility versus turnarounds at both our Pryor and Cherokee facilities in 2024

Conference Call

LSB’s management will host a conference call on Thursday, February 27, 2025 at 10:00 am ET / 9:00 am CT to discuss fourth quarter and full year 2024 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 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, 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 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. 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

Three Months Ended

Twelve Months Ended

December 31,

2024

2023

2024

2023

(In Thousands, Except Per Share Amounts)

Net sales

134,906

132,613

522,400

593,709

Cost of sales

128,857

120,604

474,603

507,449

Gross profit

6,049

12,009

47,797

86,260

Selling, general and administrative expense

9,884

8,765

41,767

36,580

Other expense (income), net

2,910

)

11,535

(2,097

)

Operating (loss) income

(6,745

)

3,245

(5,505

)

51,777

Interest expense, net

8,223

9,923

34,452

41,136

Gain on extinguishments of debt

—

(3,013

)

(8,644

)

Non-operating income, net

(1,764

)

(3,682

)

(10,907

)

(14,611

)

(Loss) income before (benefit) provision for income taxes

(13,204

)

(2,996

)

(26,037

)

33,896

(Benefit) provision for income taxes

(4,055

)

2,351

(6,684

)

5,973

Net (loss) income

(9,149

)

(5,347

)

(19,353

)

27,923

(Loss) income per common share

Basic:

Net (loss) income

(0.13

)

(0.07

)

(0.27

)

0.37

Diluted:

Net (loss) income

(0.13

)

(0.07

)

(0.27

)

0.37

LSB Industries, Inc.

Consolidated Balance Sheets

December 31,

2024

2023

(In Thousands)

Assets

Current assets:

Cash and cash equivalents

20,230

98,500

Restricted cash

—

2,532

Short-term investments

163,971

207,434

Accounts receivable

39,083

40,749

Allowance for doubtful accounts

(323

)

(364

)

Accounts receivable, net

38,760

40,385

Inventories:

Finished goods

22,382

26,329

Raw materials

2,519

1,799

Total inventories

24,901

28,128

Supplies, prepaid items and other:

Prepaid insurance

14,345

14,846

Precious metals

11,596

12,094

Supplies

31,995

30,486

Other

3,916

2,337

Total supplies, prepaid items and other

61,852

59,763

Total current assets

309,714

436,742

Property, plant and equipment, net

847,570

835,298

Other assets:

Operating lease assets

28,727

24,852

Intangible and other assets, net

1,177

1,292

Total other assets

29,904

26,144

Total assets

1,187,188

1,298,184

LSB Industries, Inc.

Consolidated Balance Sheets (continued)

December 31,

2024

2023

(In Thousands)

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

83,498

68,323

Short-term financing

12,146

13,398

Accrued and other liabilities

30,874

30,961

Current portion of long-term debt

9,116

5,847

Total current liabilities

135,634

118,529

Long-term debt, net

476,163

575,874

Noncurrent operating lease liabilities

21,387

16,074

Other noncurrent accrued liabilities

456

523

Deferred income taxes

61,908

68,853

Commitments and contingencies

Stockholders' equity:

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

9,117

Capital in excess of par value

504,578

501,026

Retained earnings

207,662

227,015

Total stockholders’ equity

721,357

737,158

Less treasury stock, at cost:

Common stock, 19.5 million shares (18.1 million shares at December 31, 2023)

229,717

218,827

Total stockholders' equity

491,640

518,331

Total liabilities and stockholders’ equity

1,187,188

1,298,184

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 (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.

Non-GAAP Reconciliations (continued)

LSB Consolidated ($ In Thousands)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Net (loss) income

(9,149

)

(5,347

)

(19,353

)

27,923

Plus:

Interest expense and interest income, net

6,106

6,237

23,087

26,500

Gain on extinguishment of debt

—

(3,013

)

(8,644

)

Depreciation and amortization

21,853

18,667

74,478

68,922

(Benefit) provision for income taxes

(4,055

)

2,351

(6,684

)

5,973

EBITDA

14,755

21,908

68,515

120,674

Stock-based compensation

1,565

1,389

6,607

5,353

Legal Fees & Settlements - Specific Matters

545

119

3,536

594

Loss on write down of assets

3,122

977

11,703

3,613

Turnaround costs

17,143

734

37,781

2,430

Growth Initiatives

436

1,378

Adjusted EBITDA

37,566

25,127

129,520

132,664

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 December 31,

Twelve Months Ended December 31,

2024

2023

2024

2023

(In Thousands)

Ammonia, AN, Nitric Acid, UAN net sales

127,946

121,311

488,575

542,605

Less freight and other

17,839

14,137

63,047

55,009

Ammonia, AN, Nitric Acid, UAN netback sales

110,107

107,174

425,528

487,596

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