El Dorado Ammonia Plant in Final Stages of Start-Up
Company Website:
http://www.lsb-okc.com
OKLAHOMA CITY -- (Business Wire)
LSB Industries, Inc. (“LSB”) (NYSE:LXU) today announced results for the
first quarter ended March 31, 2016.
First Quarter Highlights
-
Net sales of $165.6 million; $97.0 million Chemical, $66.6 million
Climate Control
-
EBITDA of $(2.0) million; adjusted EBITDA of $14.6 million
-
Operating loss of $12.2 million; adjusted operating income of $1.2
million
-
Net loss applicable to common shareholders of $24.6 million, or $1.08
loss per diluted share; adjusted net loss applicable to common
shareholders of $10.7 million, or $0.47 loss per diluted share
“Today we are pleased to report that we are nearing a transformative
development in LSB Industries’ life as a public company,” stated Dan
Greenwell, LSB’s President and CEO. “The new 375,000 ton per year
ammonia plant at our El Dorado Facility is in the final stages of
start-up and we expect to be producing ammonia in the next several
weeks. At that point we expect to see a material improvement in
profitability at the El Dorado Facility reflecting significantly lower
feedstock costs, along with a greater overall volume of ammonia to
upgrade to other products and to sell as part of our previously
announced ammonia offtake agreement.”
“Turning to our first quarter 2016 financial performance, our Chemical
Business results declined relative to the prior year quarter due largely
to lower selling prices for our agricultural products. Pricing for
nitrogen fertilizers has firmed up during the spring season but remains
relatively low compared to the last several years. However, a reduction
in natural gas costs has partially offset decreases in selling prices.
Recent industry forecasts point to an increase in acres of corn to be
planted by U.S. growers of approximately 6% this year relative to 2015.
This increase, coupled with the poor fall 2015 application season, which
led to stronger spring 2016 fertilizer application, makes us optimistic
that the trend of lowered pricing for our agricultural products has
stabilized.
“Our Chemical Business performance as compared to the first quarter of
2015 also continued to reflect the April 2015 expiration of our contract
with Orica for low density ammonium nitrate, which resulted in reduced
sales, as well as lost fixed cost absorption, exacerbated by the ongoing
cost disadvantage resulting from the use of purchased ammonia at our El
Dorado Facility. When the new ammonia plant is up and running, and we
commence ammonia sales, and with a full year behind us since the end of
the Orica contract, we expect year-over-year sales and profit
comparisons for El Dorado to improve dramatically.
“Outside of the headwinds presented by weak agricultural product
pricing, our facilities performed well during the quarter. Our Pryor
Facility achieved an ammonia on-stream rate of 92% during the first
quarter while our Cherokee Facility’s ammonia on-stream rate was 96%. We
expect continued consistent production for the balance of 2016 as we
focus on the implementation of enhanced reliability programs at all of
our facilities.
“With respect to our Climate Control Business, we had a solid first
quarter 2016. Sales increased compared to the same quarter last year,
driven by stronger demand for our large custom air handlers for the
healthcare and industrial sectors. These markets continue to show signs
of gradual recovery and we expect to see continued improvement through
the balance of the year. Notably, our Climate Control Business generated
120 basis points of gross profit improvement relative to the prior year
reflecting the operating leverage inherent in the business as volumes
rise, coupled with the increasing benefits of our operational excellence
initiatives.”
Mr. Greenwell concluded, “Upon the start-up of our new ammonia plant at
El Dorado, we believe that LSB will soon be better positioned to deliver
profitable growth than at any time in our Company’s history. With our
Pryor and Cherokee Facilities running well, and the other operational
enhancements we have been implementing throughout our organization, we
currently expect to generate improved earnings and free cash flow, while
at the same time, strengthening our balance sheet, which we believe will
translate into greater value for our shareholders.”
Chemical Business First Quarter 2016 Compared to First Quarter 2015:
|
|
|
|
| |
| |
| | | | |
Three Months Ended March 31,
|
| | | | |
|
2016
|
|
|
|
2015
| | |
Change
|
| | | | | (In millions) | | |
Net sales
| | | | |
$
|
97.0
| | |
$
|
131.8
| | |
$
|
(34.8
|
)
|
Operating income (loss)
| | | | |
$
|
(10.2
|
)
| |
$
|
16.7
| | |
$
|
(26.9
|
)
|
Segment EBITDA*
| | | | |
$
|
0.5
| | |
$
|
24.5
| | |
$
|
(24.0
|
)
|
Adjusted Segment EBITDA*
| | | | |
$
|
13.9
| | |
$
|
24.5
| | |
$
|
(10.6
|
)
|
| | | | | | | | | |
|
*Refer to Non-GAAP Reconciliations for Segment EBITDA definitions later
in this release
Comparison of 2016 to 2015 periods:
-
Net sales of agricultural products decreased significantly, driven by
20-35% declines in selling prices of our key products, as indicated in
the table below. Sales volumes were also lower for HDAN and UAN
resulting from a slower start to the quarter from residual inventory
carry-over from the prior period coupled with reluctance of customers
to buy given the declining price environment. We were able to take
advantage of a more favorable ammonia market during the period,
resulting in lower overall sales of UAN. Industrial acids and other
chemical product sales also decreased as a result of lower selling
prices. This decrease was partially offset by increased volume from
our new nitric acid plant at the El Dorado Facility, which started up
in November 2015. The April 2015 expiration of our contract with Orica
coupled with continued headwinds in the mining industry also led to
decreased volumes as compared to the prior period, coupled with lower
sales prices from the pass-through of lower ammonia costs to our
contractual customers.
-
Operating income and EBITDA declined primarily as a result of the
aforementioned items in addition to a one-time cost of $12.1 million
relating to consulting services associated with the reduction of
assessed property tax values for the El Dorado projects’ real and
personal property for the nitric acid plant, nitric acid concentrator
plant and the ammonia plant. We expect material savings in future
periods through a reduction in property taxes paid. The El Dorado
Facility produces agricultural grade AN, nitric acid and industrial
grade AN from purchased ammonia, which is currently at a cost
disadvantage compared to products produced from natural gas. This cost
disadvantage, along with the impact from the loss of our contract with
Orica and certain additional expenses related to the El Dorado
Expansion projects, resulted in an EBITDA loss for the El Dorado
Facility during the first quarter of 2016 period of approximately
$16.3 million compared to positive EBITDA of approximately $1.6
million in first quarter 2015. Natural gas and ammonia feedstock costs
both decreased approximately 33% during the first quarter of 2016
relative to the prior year period, the benefits of which were
partially offset by operating losses incurred relating to our working
interests in certain natural gas properties. Please refer to “Non-GAAP
Reconciliation” in the financial tables below for a reconciliation of
Non-GAAP financial measures to the most directly comparable GAAP
financial measures.
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
| | | | |
2016
|
|
|
2015
|
|
| |
| | | | | (Dollars in millions) |
Sales by Market Sector | | | | |
Sales
|
|
Sector Mix
| |
Sales
|
|
Sector Mix
| |
% Change
|
Agricultural
| | | | |
$
|
49.8
| |
51
|
%
| |
$
|
71.1
| |
54
|
%
| |
(30
|
) %
|
Industrial, Mining and Other
| | | | |
$
|
47.2
| |
49
|
%
| |
$
|
60.7
| |
46
|
%
| |
(22
|
) %
|
| | | | |
$
|
97.0
| | | |
$
|
131.8
| | |
(26
|
) %
|
| | | | | | | | | | | |
|
The following tables provide key operating metrics for the Agricultural
products of our Chemical Business:
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
Product (tons sold) | | | | |
2016
|
|
2015
|
|
% Change
|
Urea ammonium nitrate (UAN)
| | | | |
94,306
| |
116,922
| |
(19) %
|
Ammonium nitrate (AN)
| | | | |
54,548
| |
64,000
| |
(15) %
|
Ammonia
| | | | |
36,644
| |
30,766
| |
19 %
|
Other
| | | | |
4,738
| |
3,406
| |
39 %
|
| | | | |
190,236
| |
215,094
| |
(12) %
|
Average Selling Prices (price per ton)(A)
| | | | | | | | | |
UAN
| | | | |
$ 180
| |
$ 256
| |
(30) %
|
AN
| | | | |
$ 247
| |
$ 317
| |
(22) %
|
Ammonia
| | | | |
$ 337
| |
$ 513
| |
(34) %
|
| | | | | | | | |
|
|
|
|
|
(A) Average selling prices represent “net back” prices which are
calculated as sales less freight expenses divided by product sales
volume in tons
|
| | | |
|
With respect to sales of Industrial, Mining and Other Chemical Products,
the following table indicates the volumes sold of our major products:
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
Product (tons sold) | | | | |
2016
|
|
2015
|
|
% Change
|
Nitric acid
| | | | |
140,530
| |
130,737
| |
7 %
|
LDAN/HDAN (B)
| | | | |
19,562
| |
27,153
| |
(28) %
|
AN solution
| | | | |
22,427
| |
23,256
| |
(4) %
|
Ammonia
| | | | |
7,673
| |
8,418
| |
(9) %
|
| | | | |
190,192
| |
189,564
| |
0 %
|
| | | | | | | | |
|
|
|
|
|
(B) A contract with Orica was in place during the first quarter of
2015, sales for the period were 24,965 tons of low density ammonium
nitrate to Orica. This agreement expired in April 2015
|
| | | |
|
|
|
|
|
| |
| |
| |
Input Costs | | | | | | | | | |
Average purchased ammonia cost/ton
| | | | |
$ 328
| |
$ 488
| |
(33)%
|
Average natural gas cost/MMbtu
| | | | |
$ 2.21
| |
$ 3.32
| |
(33)%
|
| | | | | | | | |
|
Climate Control Business First Quarter 2016 Compared to First Quarter
2015:
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
| | | | |
|
2016
|
|
|
2015
|
|
Change
|
| | | | | (In millions) |
Net sales
| | | | |
$
|
66.6
| |
$
|
65.2
| |
$
|
1.4
|
Operating income
| | | | |
$
|
5.5
| |
$
|
4.3
| |
$
|
1.2
|
Segment EBITDA*
| | | | |
$
|
6.7
| |
$
|
5.5
| |
$
|
1.2
|
| | | | | | | | |
|
*Refer to Non-GAAP Reconciliations for Segment EBITDA definitions later
in this release
Comparison of 2016 to 2015 periods:
-
Net sales increased driven primarily by higher sales of custom air
handlers reflecting a higher beginning backlog relative to the backlog
for these products at the beginning of the prior year period. Net
sales of water source and geothermal heat pumps also increased in the
first quarter of 2016 as stronger sales to the healthcare sector
within our commercial and institutional market more than offset
declines in sales of our residential products. Net sales of our
hydronic fan coils were impacted by a decline in volume which was
partially offset by increased unit selling prices related to favorable
product mix.
-
Operating income and EBITDA increased as a result of the stronger
sales coupled with material and productivity savings generated by the
continued implementation of our operational efficiency initiatives.
-
New orders for our Climate Control products were $64.6 million in the
first quarter of 2016, down slightly from the first quarter of 2015.
New orders from the commercial and institutional end-markets were
in-line with the first quarter 2015, while residential product new
orders declined 16% over the same period. Backlog of $68.0 million as
of March 31, 2016 was consistent with March 31, 2015 and December 31,
2015 levels.
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
| | | | |
2016
|
|
|
2015
|
|
| |
| | | | | (Dollars in millions) | |
Sales by Market Sector | | | | |
Sales
|
|
Sector Mix
| |
Sales
|
|
Sector Mix
| |
%
Change
|
|
Commercial/Institutional
| | | | |
$
|
58.1
| |
87
|
%
| |
$
|
56.0
| |
86
|
%
| |
4
|
%
|
Residential
| | | | |
$
|
8.5
| |
13
|
%
| |
$
|
9.2
| |
14
|
%
| |
(8
|
) %
|
| | | | |
$
|
66.6
| | | |
$
|
65.2
| | |
2
|
%
|
| | | | | | | | | | | |
|
|
|
|
|
| |
| | | | |
Three Months Ended March 31,
|
| | | | |
2016
|
|
|
2015
|
|
| |
| | | | | (Dollars in millions) | |
Sales by Product Category | | | | |
Sales
|
|
Product
Mix
| |
Sales
|
|
Product
Mix
| |
%
Change
|
|
Heat pumps
| | | | |
$
|
38.3
| |
58
|
%
| |
$
|
37.5
| |
58
|
%
| |
2
|
%
|
Fan coils
| | | | |
$
|
15.5
| |
23
|
%
| |
$
|
16.5
| |
25
|
%
| |
(6
|
) %
|
Other HVAC
| | | | |
$
|
12.8
| |
19
|
%
| |
$
|
11.2
| |
17
|
%
| |
14
|
%
|
| | | | |
$
|
66.6
| | | |
$
|
65.2
| | | |
2
|
%
|
| | | | | | | | | | | | |
|
Financial Position and Capital Additions
As of March 31, 2016, our total cash and investments were $39.5 million,
including short-term investments.
Capital additions were approximately $96.1 million in the first quarter
of 2016, including $90.8 relating to the expansion projects at our El
Dorado Facility. Planned capital additions for the remainder of 2016, in
the aggregate, are estimated to be in the range of $72 million to $114
million, including $29 million to $59 million remaining for the
full-year on the El Dorado expansion projects. Some of the 2016 planned
capital additions, not related to the El Dorado expansion projects, may
be deferred should we need to do so.
Total long-term debt, including the current portion was $528.5 million
at March 31, 2016 compared to $520.4 million at December 31, 2015 and
our Working Capital Revolver Loan at March 31, 2016 was undrawn
(borrowing availability, which is tied in to eligible accounts
receivable and inventories, was $69.3 million at March 31, 2016).
Interest expense, net of capitalized interest, for the first quarter of
2016 was $1.4 million compared to $3.4 million for the same period in
2015. Additionally, in December 2015 the Company issued $210 million of
preferred stock with an aggregate liquidation preference of $219.6
million, inclusive of accrued dividends at March 31, 2016.
In February 2016, we received financing of $10 million related to the
cogeneration facility equipment in connection with the El Dorado
expansion projects. We are currently in discussions with several parties
for further financing as it relates to the cogeneration facilities.
Additionally, on April 1, 2016 we successfully refinanced our $12
million promissory note related to our Marcellus Shale assets.
Furthermore, we expect to receive the remaining $5 million in financing
related to the ammonia storage tank in the second quarter of 2016.
We believe that the combination of our cash, the availability on our
Working Capital Revolver Loan, the additional borrowings discussed above
and our cash from operations will be sufficient to fund our anticipated
liquidity needs for the remainder of 2016. Once we recognize improved
operating results, we anticipate that our next significant initiative
will be to refinance our Senior Secured Notes and our Series E
Redeemable Preferred to obtain a lower cost of capital. We hope this
will be accomplished towards the end of 2016 or in 2017.
Full Year 2016 Update
With the continued headwinds in the mining industry we are revising our
sales outlook for AN in the Industrial, Mining and Other sector from
110,000 – 135,000 tons to 70,000 – 95,000 tons for the full year of
2016. We do expect increased ammonia sales volumes of approximately
10,000 tons as compared to previously announced guidance.
For 2016, we anticipate consolidated interest expense to be in the range
of $31 million - $32 million, net of capitalized interest of
approximately $14 million. Additionally, we expect consolidated
depreciation and amortization to be $72 million - $75 million in 2016
and $82 million - $85 million, assuming a full year of El Dorado project
depreciation.
Conference Call
LSB’s management will host a conference call covering the first quarter
results on Thursday, May 5, 2016 at 10:00 am ET/9:00 am CT to discuss
these results and recent corporate developments. Participating in the
call will be President and CEO, Dan Greenwell and Executive Vice
President and CFO, Mark Behrman. Interested parties may participate in
the call by dialing (708) 290-0754. Please call in 10 minutes before the
conference is scheduled to begin and mention conference ID 94985763. To
coincide with the conference call, LSB will post a slide presentation at www.lsbindustries.com
on the webcast section of the Investor tab of our website.
To listen to a webcast of the call, please go to the Company’s website
at www.lsbindustries.com
at least 15 minutes prior to the conference call to download and install
any necessary audio software. If you are unable to listen live, the
conference call webcast will be archived on the Company’s website. We
suggest listeners use Microsoft Explorer as their web browser.
LSB Industries, Inc.
LSB is a manufacturing and marketing company. LSB’s principal business
activities consist of the manufacture and sale of chemical products for
the agricultural, mining and industrial markets; and, the manufacture
and sale of commercial and residential climate control products, such as
water source and geothermal heat pumps, hydronic fan coils, modular
geothermal and other chillers and large custom air handlers.
Forward-Looking Statements
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally are identifiable by use of
the words “believe,” “expect,” “intend,” “plan to,” “estimate,”
“project” or similar expressions, and include but are not limited to:
our belief that we have accurately revised the cost projections and
timing of completion for the El Dorado project; our expectation of
increased reliability and production consistency at our Facilities,
including our Cherokee and Pryor Facilities; our projections of trends
in the fertilizer market; our outlook for commercial and residential
construction; our expectation of continued success of our operational
excellence initiatives; our belief in stronger profitability and
expectation of cash flow generation; opportunities to improve our
overall capitalization and liquidity; and our planned capital additions
for 2016.
Investors are cautioned that such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties.
Though we believe that expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such
expectation will prove to be correct. Actual results may differ
materially from the forward-looking statements as a result of various
factors, including, but not limited to: general economic conditions;
weather conditions; increased costs to complete the El Dorado project;
ability to install necessary equipment and renovations at our Facilities
in a timely manner; changes to federal legislation or adverse
regulations; increased competitive pressures, domestic and foreign;
ability to complete transactions to address our leveraged balance sheet
and cash flow requirements; loss of significant customers; increased
costs of raw materials; and other factors set forth under “Risk Factors”
and “Special Note Regarding Forward-Looking Statements” in our Form 10-K
for the year ended December 31, 2015 and, if applicable, our Quarterly
Reports on Form 10-Q and our Current Reports on Form 8-K, which contain
a discussion of a variety of factors which could cause future outcomes
to differ materially from the forward-looking statements contained in
this release. All forward-looking statements included in this press
release are expressly qualified in their entirety by such cautionary
statements. We expressly disclaim any obligation to update, amend or
clarify and forward-looking statement to reflect events, new information
or circumstances occurring after the date of this press release except
as required by applicable law.
See Accompanying Tables
|
|
|
| | |
|
|
| | |
LSB Industries, Inc. Financial Highlights Three Months Ended March 31, |
| | | | | | | | | |
|
| | | | | | | | | |
Three Months
|
| | | | | | | | | |
2016
| |
2015
|
| | | | | | | | | |
(In Thousands, Except Per Share Amounts)
|
| | | | | | | | | | | |
|
Net sales
| | | |
$
|
165,599
|
$
|
198,798
|
Cost of sales
| | | | |
150,590
| |
158,037
|
Gross profit
| | | | |
15,009
| |
40,761
|
| | | | | | | | | | | |
|
Selling, general and administrative expense
| | | | |
26,862
| |
26,615
|
Other expense (income)
| | | | |
390
| |
(77)
|
Operating income (loss)
| | | | |
(12,243)
| |
14,223
|
| | | | | | | | | | | |
|
Interest expense, net
| | | | |
1,350
| |
3,398
|
Non-operating other expense (income), net
| | | | |
1,956
| |
(35)
|
Income (loss) from continuing operations before provision (benefit)
for income taxes
| | | | |
(15,549)
| |
10,860
|
Provision (benefit) for income taxes
| | | | |
(610)
| |
4,181
|
Income (loss) from continuing operations
| | | | |
(14,939)
| |
6,679
|
| | | | | | | | | | | |
|
Net loss from discontinued operations
| | | | |
2
| |
30
|
Net income (loss)
| | | | |
(14,941)
| |
6,649
|
Dividends on convertible preferred stocks
| | | | |
75
| |
300
|
Dividends on Series E redeemable preferred stock
| | | | |
7,350
| |
-
|
Accretion of Series E redeemable preferred stock
| | | | |
2,243
| |
-
|
Net (loss) income applicable to common stock
| | | |
$
|
(24,609)
|
$
|
6,349
|
| | | | | | | | | | | |
|
Weighted-average common shares:
| | | | | | | |
|
Basic and diluted
| | | | | |
22,868
| |
23,047
|
| | | | | | | | | | | |
|
Income (loss) per common share:
| | | | | | | |
|
Basic and diluted
| | | | |
$
|
(1.08)
|
$
|
0.28
|
| | | | | | | | |
|
|
|
|
| | |
|
|
|
| | |
LSB Industries, Inc. Financial Highlights Three Months Ended March 31, |
| | | | | | | | | | |
|
| | | | | | | | | | |
Three Months
|
| | | | | | | | | | |
2016
|
|
| |
2015
|
| | | | | | | | | | |
(In Thousands)
|
Net sales:
| | | | | | | | | | |
|
Chemical (1)
| | | | |
$
|
97,005
| | |
$
|
131,754
|
|
Climate Control
| | | | | |
66,627
| | | |
65,198
|
|
Other
| | | | | | |
1,967
| | | |
1,846
|
| | | | | | | | | |
$
|
165,599
| | |
$
|
198,798
|
Gross profit (loss): (1)
| | | | | | | | | | |
|
Chemical (2)
| | | | |
$
|
(6,961)
| | |
$
|
20,232
|
|
Climate Control
| | | | | |
21,173
| | | |
19,962
|
|
Other
| | | | | | |
797
| | | |
567
|
| | | | | | | | | |
$
|
15,009
| | |
$
|
40,761
|
Operating income (loss): (1)
| | | | | | | | | | |
|
Chemical (2)
| | | | |
$
|
(10,172)
| | |
$
|
16,660
|
|
Climate Control
| | | | | |
5,464
| | | |
4,312
|
|
Other
| | | | | | |
243
| | | |
(2)
|
|
General corporate expenses (3)
| | | | | |
(7,778)
| | | |
(6,747)
|
| | | | | | | | | | |
(12,243)
| | | |
14,223
|
Interest expense, net (4)
| | | | | |
1,350
| | | |
3,398
|
Non-operating income, net:
| | | | | | | | | | |
|
Chemical
| | | | | |
(6)
| | | |
(33)
|
|
Corporate & other business operations(5)
| | | | | |
1,962
| | | |
(2)
|
Provision (benefit) for income taxes
| | | | | |
(610)
| | | |
4,181
|
Income (loss) from continuing operations
| | | | |
$
|
(14,939)
| | |
$
|
6,679
|
| | | | | | | | | |
|
(1) Gross profit (loss) by business segment represents net sales less
cost of sales. Gross profit classified as “Other” relates to the sales
of industrial machinery and related components. Operating income (loss)
by business segment represents gross profit (loss) by business segment
less selling, general and administrative expense (“SG&A”) incurred by
each business segment plus other income and other expense
earned/incurred by each business segment before general corporate
expenses.
(2) During the first quarter of 2016, our Chemical Business incurred a
consulting fee of $12.1 million associated with the reduction of
assessed property tax values for the El Dorado projects’ real and
personal property for the nitric acid plant, nitric acid concentrator
plant and the ammonia plant. As a result, we expect material savings
with respect to property taxes paid in future periods.
(3) General corporate expenses consist of the following:
|
|
|
|
| |
|
|
|
| | |
| | | | | | | | | | |
Three Months Ended
|
| | | | | | | | | | |
March 31,
|
| | | | | | | | | | |
2016
|
|
| |
2015
|
| | | | | | | | | | |
(In Thousands)
|
Selling, general and administrative:
| | | | | | | | | | |
|
Personnel costs (A)
| | | | |
$
|
(3,349)
| | |
$
|
(2,602)
|
|
Shareholder related fees and expenses (B)
| | | | | |
(63)
| | | |
(1,679)
|
|
Professional fees (C)
| | | | | |
(3,177)
| | | |
(1,544)
|
|
All other
| | | | | |
(940)
| | | |
(897)
|
Total selling, general and administrative
| | | | | |
(7,529)
| | | |
(6,722)
|
Other income
| | | | | |
-
| | | |
24
|
Other expense
| | | | | |
(249)
| | | |
(49)
|
Total general corporate expenses
| | | | |
$
|
(7,778)
| | |
$
|
(6,747)
|
| | | | | | | | | |
|
|
|
| |
| |
| | |
(A)
| |
Increases for the first quarter of 2016 are related to the
issuance of restricted stock awards in connection with certain
retention agreements and approximately $0.3 million in one-time
fees associated with a reduction in the number of Directors in our
Board structure.
|
| | | | |
|
| | |
(B)
| |
For the first quarter of 2015, these fees and expenses include
costs associated with evaluating and analyzing proposals received
from certain activist shareholders and dealing, negotiating and
settling with those shareholders in order to avoid proxy contests.
|
| | | | |
|
| | |
(C)
| |
Increases in professional fees during the first quarter of 2016
are primarily related to our continued review of strategic
initiatives and updates to our corporate governance policies and
practices.
|
| | | | |
|
(4) During the three months ended March 31, 2016 and 2015, interest
expense is net of capitalized interest of $10.0 million and $5.6
million, respectively.
(5) During the three months ended March 31, 2016, we recognized an
unrealized loss of $2.5 million based on the change in fair value
associated with the participation rights embedded in our Series E
preferred stock agreements.
|
|
|
| | |
|
|
| | | |
|
| | |
LSB Industries, Inc. Consolidated Balance Sheets | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | |
March 31,
| | | |
December 31,
|
| | | | | | | | | |
2016
| | | |
2015
|
| | | | | | | | | | |
(In Thousands)
|
Assets | | | | | | | | | | | |
Current assets:
| | | | | | | | | | |
|
Cash and cash equivalents
| | | | |
$
|
39,529
| | |
$
|
127,314
|
|
Accounts receivable, net
| | | | | |
87,496
| | | |
92,602
|
|
Inventories:
| | | | | | | | | | |
| |
Finished goods
| | | | | |
26,433
| | | |
24,383
|
| |
Work in progress
| | | | | |
1,893
| | | |
2,042
|
| |
Raw materials
| | | | | |
20,313
| | | |
26,812
|
| | |
Total inventories
| | | | | |
48,639
| | | |
53,237
|
|
Supplies, prepaid items and other:
| | | | | | | | | | |
| |
Prepaid insurance
| | | | | |
7,959
| | | |
10,563
|
| |
Precious metals
| | | | | |
12,669
| | | |
12,918
|
| |
Supplies
| | | | | |
20,003
| | | |
18,681
|
| |
Prepaid and refundable income taxes
| | | | | |
5,954
| | | |
6,811
|
| |
Other
| | | | | |
4,445
| | | |
5,797
|
| | |
Total supplies, prepaid items and other
| | | | | |
51,030
| | | |
54,770
|
|
Deferred income taxes
| | | | | |
4,588
| | | |
4,774
|
Total current assets
| | | | | |
231,282
| | | |
332,697
|
| | | | | | | | | | | | | | |
|
Property, plant and equipment, net
| | | | | |
1,087,954
| | | |
1,005,488
|
| | | | | | | | | | | | | | |
|
Other assets:
| | | | | | | | | | |
|
Intangible and other, net
| | | | | |
24,060
| | | |
23,642
|
| | | | | | |
| | |
$
|
1,343,296
| | |
$
|
1,361,827
|
| | | | | | | | | | | | | | |
|
Liabilities and Stockholders' Equity | | | | | | |
Current liabilities:
| | | | | | |
|
Accounts payable
|
$
|
106,853
| | |
$
|
108,002
|
|
Short-term financing
| |
6,399
| | | |
9,119
|
|
Accrued and other liabilities
| |
42,049
| | | |
52,331
|
|
Current portion of long-term debt
| |
16,836
| | | |
22,468
|
Total current liabilities
| |
172,137
| | | |
191,920
|
| | | |
| | | | | | | |
Long-term debt
| |
511,678
| | | |
497,954
|
| | | | | | | | | | |
|
Noncurrent accrued and other liabilities
| |
23,754
| | | |
20,922
|
| | | | | | | | | | |
|
Deferred income taxes
| |
50,715
| | | |
52,179
|
| | | | | | | | | | |
|
Commitments and contingencies
| | | | | | |
| | | | | | | | | | |
|
Redeemable preferred stocks:
| | | | | | |
Series E 14% cumulative, redeemable preferred stocks, no par
value, 210,000 shares issued and outstanding; aggregate
liquidation preference of $219,637,000 ($212,287,000 as of
December 31, 2015)
Series F redeemable Class C preferred stock, no par value, 1 share
issued and outstanding; aggregate liquidation preference of $100
| |
186,865
| | | |
177,272
|
|
-
| | | |
-
|
| | | | | |
|
Stockholders' equity:
| | | | | | |
Series B 12% cumulative, convertible preferred stock, $100 par
value; 20,000 shares issued and outstanding
| |
2,000
| | | |
2,000
|
Series D 6% cumulative, convertible Class C preferred stock,
no par value; 1,000,000 shares issued and outstanding
| |
1,000
| | | |
1,000
|
Common stock, $.10 par value; 75,000,000 shares authorized,
27,137,599 shares issued (27,131,724 at December 31, 2015)
| |
2,714
| | | |
2,713
|
Capital in excess of par value
| |
190,378
| | | |
192,249
|
Retained earnings
| |
223,616
| | | |
248,150
|
| |
419,708
| | | |
446,112
|
Less treasury stock, at cost:
| | | | | | |
Common stock, 3,283,081 shares
(3,735,503 shares at December 31, 2015)
| |
21,561
| | | |
24,532
|
Total stockholders' equity
| |
398,147
| | | |
421,580
|
Total Liabilities and Equity $
| |
1,343,296
| | |
$
|
1,361,827
|
| | | | | |
|
LSB Industries, Inc.
Non-GAAP Reconciliation
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 Segment EBITDA Reconciliations
EBITDA is defined as net income plus interest expense, depreciation,
depletion and amortization of property plant and equipment (which
includes amortization of other assets and excludes interest included in
amortization), plus provision for income taxes. 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. EBITDA has 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 may not be comparable to a
similarly titled measure of other companies. The following table
provides a reconciliation of net income to EBITDA for the periods
indicated.
|
| |
| | |
|
|
|
| |
| | | | | | | | | |
Three Months Ended March 31,
|
| | | | | | | | | |
2016
|
|
|
2015
|
| | | | | | | | | |
($ in millions)
|
LSB Consolidated | | | | | | | | |
Net income (loss) | | | | | $ (14.9) | | | $ 6.6 |
Plus:
| | | | | | | | | | | |
| |
Interest expense
| | | | |
1.3
| | |
3.4
|
| |
Depreciation, depletion and amortization
| | | | |
12.2
| | |
9.4
|
| |
Provision (benefit) for income taxes
| | | | |
(0.6)
| | |
4.2
|
EBITDA | | | | | | $ (2.0) | | | $ 23.6 |
Climate Control Business | | | | | | | | |
Operating income | | | | | $ 5.5 | | | $ 4.3 |
Plus:
| | | | | | | | | | | |
| |
Depreciation, depletion and amortization
| | | | |
1.2
| | |
1.2
|
Segment EBITDA | | | | | $ 6.7 | | | $ 5.5 |
Chemical Business | | | | | | | | |
Operating income (loss) | | | | | $ (10.2) | | | $ 16.7 |
Plus:
| | | | | | | | | | | |
| |
Depreciation, depletion and amortization
| | | | |
10.7
| | |
7.8
|
Segment EBITDA | | | | | $ 0.5 | | | $ 24.5 |
| | | | | | | |
|
LSB Industries, Inc.
Non-GAAP Reconciliation (continued)
Adjusted Operating Income, EBITDA, Adjusted Net
Income (Loss) Applicable to Common Stock and Adjusted Income (Loss) per
Diluted Share
Adjusted operating income, adjusted EBITDA, adjusted net income (loss)
applicable to common stock and adjusted income (loss) per diluted share
are reported to show the impact of a one-time consulting fee,
start-up/commissioning costs, certain fair market value adjustment,
stock based compensation, Delaware unclaimed property liability, and
insurance recovery. We believe that the inclusion of supplementary
adjustments to operating income, EBITDA, net income (loss) applicable to
common stock and diluted income per common share, are appropriate to
provide additional information to investors about certain unusual items.
The following tables provide reconciliations of operating income (loss),
EBITDA, net income (loss) applicable to common stock and diluted income
(loss) per common share excluding the impact of the supplementary
adjustments.
|
|
| | |
| | | |
Three Months Ended
March 31,
|
| | | | |
|
|
| |
2016
|
|
| |
2015
|
LSB Consolidated ($ in millions
except per share data) | | | | | |
| | | | | | | | | | | | |
|
Operating income (loss) | | | | | | | | $ | (12.2) | | | $ | 14.2 |
Plus:
| | | | | | | | | | | | | |
|
Consulting Fee- Negotiated Property tax savings at El Dorado
| | | | | | | | |
12.1
| | | | – |
|
Start-up/ Commissioning costs at El Dorado
| | | | | | | | |
1.3
| | | | – |
Adjusted operating income | | | | | | | | $ | 1.2 | | | $ | 14.2 |
| | | | | | | | | | | | | |
|
EBITDA | | | | | | | | $ | (2.0) | | | $ | 23.6 |
Plus:
| | | | | | | | | | | | | |
|
Consulting Fee- Negotiated Property tax savings at El Dorado
| | | | | | | | |
12.1
| | | |
-
|
|
Start-up/ Commissioning costs at El Dorado
| | | | | | | | |
1.3
| | | |
-
|
|
Fair market value adjustment on participation rights
| | | | | | | | |
2.5
| | | |
-
|
|
Stock based compensation
| | | | | | | | |
1.1
| | | |
0.6
|
|
Delaware unclaimed property liability
| | | | | | | | |
0.3
| | | |
-
|
|
Life insurance recovery
| | | | | | | | |
(0.7)
| | | |
-
|
Adjusted EBITDA | | | | | | | | $ | 14.6 | | | $ | 24.2 |
| | | | | | | | | | | | | |
|
Net income (loss) applicable to common stock | | | | | | | | $ | (24.6) | | | $ | 6.3 |
Plus:
| | | | | | | | | | | | | |
|
Consulting Fee- Negotiated Property tax savings at El Dorado (net of
tax)
|
7.4
| | | |
-
|
|
Start-up/ Commissioning costs at El Dorado (net of tax)
| | | | | | | | |
0.8
| | | |
-
|
|
Fair market value adjustment on participation rights (non-tax
deductible)
| | | | |
2.5
| | | |
-
|
|
Delaware unclaimed property (net of tax)
| | | | | | | | |
0.2
| | | |
-
|
|
Valuation allowance on state net operating losses
| | | | | | | | |
3.7
| | | |
-
|
|
Life insurance recovery (non-tax deductible)
| | | | | | | | |
(0.7)
| | | |
-
|
Adjusted net income (loss) applicable to common stock | | | | | | | | $ | (10.7) | | | $ | 6.3 |
Weighted-average common shares (in thousands)
| | | | | | | | |
22,868
| | | |
23,047
|
Adjusted income (loss) per diluted share | | | | | | | | $ | (0.47) | | | $ | 0.28 |
Chemical Business | | | | | | | | | | |
| | | | | | | | | |
|
Operating income (loss) | | | | | $ | (10.2) | | | $ | 16.7 |
Plus:
| | | | | | | | | | |
|
Consulting Fee- Negotiated Property tax savings at EDC
| | | | | |
12.1
| | | |
-
|
|
Start-up/ Commissioning costs at EDC
|
| | | | |
1.3
| | | |
|
Adjusted operating income | | | | | $ | 3.2 | | | $ | 16.7 |
| | | | | | | | | | |
|
| | | | | | | | | |
|
| | | | | | | | | | |
|
EBITDA | | | | | $ | 0.5 | | | $ | 24.5 |
Plus:
| | | | | | | | | | |
|
Consulting Fee- Negotiated Property tax savings at EDC
| | | | | |
12.1
| | | |
-
|
|
Start-up/ Commissioning costs at EDC
| | | | | |
1.3
| | | |
|
Adjusted EBITDA | | | | | $ | 13.9 | | | $ | 24.5 |
| | | | | | | | | |
|
Agricultural Sales Price Reconciliation
The following table provides a reconciliation of unit selling prices for
our key products calculated using GAAP amounts in our consolidated
financial statement reconciled to “net back” prices which are calculated
as sales less freight expenses divided by product sales volume in tons.
We believe this provides a relevant industry comparison among our peer
group.
|
|
|
|
| |
| | | | |
Three Months Ended
March 31,
|
| | | | |
2016
|
|
|
2015
|
Agricultural Sales recorded ($ per
ton)
| | | | | | | | |
UAN
| | | | |
$192
| | |
$269
|
HDAN
| | | | |
281
| | |
360
|
Ammonia
| | | | |
342
| | |
526
|
| | | | | | | |
|
Less Freight: | | | | | | | | |
UAN
| | | | |
(12)
| | |
(13)
|
HDAN
| | | | |
(34)
| | |
(43)
|
Ammonia
| | | | |
(5)
| | |
(13)
|
| | | | | | | |
|
Agricultural Sales netted with freight | | | | | | | | |
Net Back UAN
| | | | |
180
| | |
256
|
Net Back HDAN
| | | | |
247
| | |
317
|
Net Back Ammonia
| | | | |
337
| | |
513
|
| | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160504006916/en/
Contacts:
LSB Industries, Inc.
Mark Behrman, 405-235-4546
Chief
Financial Officer
or
Investor Relations:
The
Equity Group Inc.
Fred Buonocore, 212-836-9607
Linda
Latman, 212-836-9609
Source: LSB Industries, Inc.
© 2024 Canjex Publishing Ltd. All rights reserved.