LXU

Image source: The Motley Fool. Thursday, July 30, 2026 at 10:00 a.m. ET Senior Vice President and Treasurer - Kristy D. Carver Chairman and Chief Executive Officer - Mark T. Behrman Executive Vice President and Chief Financial Officer - Cheryl A. Maguire Executive Vice President and Chief Commercial Officer - Damien J. Renwick Operator: Greetings and welcome to LSB Industries Second Quarter 2026 Earnings Conference Call. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Kristy Carver, Senior Vice President and Treasurer. Kristy D. Carver: Thank you. Operator: You may begin. Kristy D. Carver: Good morning, everyone. Joining me today are Mark T. Behrman, our Chairman and Chief Executive Officer Cheryl A. Maguire, our chief financial officer and Damien J. 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 could cause actual results to differ materially. And a variety of factors could cause actual results. For more information about the risks and uncertainties that could cause actual results to differ materially from those projected or implied by forward looking statements please see the risk factors set forth in the company's most recent report Form 10-K. On the call, we will reference non GAAP results. Please see the press release in the investors section of our website, lsbindustries.com, for further information regarding forward looking statements and reconciliations of non GAAP results to GAAP results. At this time, I would like to go ahead and turn the call over to Mark. Mark T. Behrman: Thank you, Kristy, and good morning, everyone. We delivered a strong quarter both financially and operationally. Operationally, we continued to make meaningful progress in improving safety, plant reliability, operating rates, and product optimization. While also advancing several important growth initiatives that we believe support stronger earnings and shareholder value. There are 3 key topics I would like to cover today. First, the turnaround activity completed during the quarter and the expected benefits to our operating performance. Second, the changes to our ownership agreement at El Dorado for the carbon capture and sequestration project. And third, how these actions position LSB for stronger performance going forward. Starting with our turnaround activity, we successfully completed an extensive complex turnaround of our El Dorado ammonia plant and site infrastructure during the quarter. Importantly, this work was completed on time, on budget, and injury free. Which is a strong reflection of the planning, coordination, and execution of our team. We are already seeing the benefits of this work with El Dorado achieving some of the highest daily production rates since we went into production in 2016. We also made a strategic decision to pull forward much of the scheduled turnaround work at our Pryor facility from the third quarter into the second quarter. This shifted a portion of expected turnaround related production and earnings impacts into the second quarter, which will reduce the expected production downtime and related earnings impact for the third quarter. We successfully restarted the plants late last week and are in the process of ramping up full production and expect to see improved reliability from that site as well. Taken together, these investments in our facilities support our goal of improving annual production and earnings while continuing to maintain the safety standards that are essential across our operations. Turning to El Dorado. In May, we announced an agreement to assume full ownership of our carbon capture and sequestration project from Lapis Carbon Solutions. The milestone based structure of the agreement aligns the company's capital deployment with project advancement while limiting upfront capital exposure. We continue to view this project as a meaningful long term value creation opportunity for LSB, and I will provide further details and an update on the project later in the call. We entered the second half of 2026 with strong momentum and a meaningfully improved operating setup. We expect to benefit from higher overall production rates at El Dorado and Pryor, as well as our continued focus on reliability, efficiency, and product mix optimization. We believe our improved operating platform positions us to capitalize on current market conditions and more importantly, we believe the actions we have taken position us to drive stronger financial and operational performance through the remainder of this year and into the future. Now I will turn over the call to Damien to provide more detail on the commercial environment. Damien J. Renwick: Thanks, Mark, and good morning, everyone. it is no secret that the conflict in The Middle East is having a considerable impact on our industry. More specifically, the effect this conflict is having on shipping activity through the Strait of Hormuz, a globally critical transportation artery, has been considerable. And this disruption is ongoing. Recent events make it clear that the situation remains extremely unstable. Creating significant ongoing risk that may continue to impact product pricing going forward. As a reminder, shipping within the strait alone represents about 20% of global ammonia seaborne trade, 30% of global urea trade, and 45% of global sulfur trade. Beyond the backdrop of the Mideast conflict, we are seeing continued strong demand for ammonium nitrate within the industrial markets. Supported by continued mining sector investments. Favorable supply and demand fundamentals, further supported by ongoing producer outages, continue to underpin both spot and contract pricing. During the second quarter, we leveraged the flexibility that we have developed with our production assets to optimize our product mix. This enabled us to maximize our AN sales to support customers whose AN supply has been disrupted. We were also able to take advantage of higher than normal AN spot prices. The longer term outlook of AN demand continues to be promising. In the medium to longer term, there are several potential mining projects on the horizon across North America that will drive increased demand for AN. Quarrying and contract and aggregate production continues to grow on the strength of The US economy. And as well as from broader capital spending tied to AI related infrastructure, data centers, power generation, and electrification. Turning to page 5. The fertilizer market backdrop remains constructive, as global supply conditions continue to evolve. Ongoing supply uncertainty trade disruptions, and broader macro volatility continue to support a higher pricing environment. Importantly, demand for our products remain solid. And the market continues to reflect limited visibility around supply availability over the near to medium term. Ammonia prices remain above historical averages. Despite a recent reduction in the Tampa ammonia price index. Global ammonia demand has softened, especially for phosphate use, as phosphate producers have curtailed production amid elevated sulfur costs. The resulting decline in ammonia demand balances some of the loss of supply that typically transits the Strait Of Hormuz. However, the recent resumption of military activity in The Middle East is disrupting fertilizer supply once again. And it is causing global natural gas prices to increase. European TTF natural gas prices have been above 19 and even $20 per MMBtu in recent days, increasing European ammonia production costs to nearly $700 per metric ton. European natural gas inventories also continued to fall short of 5-year lows as the market struggles to restock ahead of the critical winter season due to limited LNG supply. This will further pressure global natural gas prices and exacerbate the spread between global prices and US domestic prices. This underpins the significant and structural production cost advantage for US ammonia producers. We therefore believe that ammonia prices will continue to see upward pressure through the duration of the closure of the Strait. Driving strong margins for our business at a time where US natural gas prices continue to be significantly cheaper than elsewhere. Urea ammonium nitrate UAN pricing remains favorable. Urea prices have strengthened from their current year lows in June, and UAN has found stability after typical July summer price reset. We continue to expect strong demand for UAN in the second half of 2026, ahead of the 2027 spring planting season. We saw strong uptake on ammonia and UAN US summer fill programs through June and July. We are pleased with both the volumes and prices we achieved for our forward sales. Our order book is also well placed with flexibility to take advantage of improving prices over the coming months. through the fall prepay and winter fill programs. The USDA is projecting more than 95 million planted corn acres for the 2026-2027 marketing season. More importantly, however, in July, the USDA reduced its forecast for 2027 global ending stock for corn, to what will be the lowest level seen in over a decade. Global corn demand continues to run ahead of supply. Extreme heat and dry conditions have crippled European and regional crops. China continues to destock as consumption outpaces domestic production. And finally, stocks are declining across most major exporters, Argentina, Brazil, South Africa, and Ukraine, as well as The US. As a result, we are seeing corn futures pricing increase strongly. We expect this to incentivize US farmers to increase planted acres in the coming season. Which will in turn be very constructive for nitrogen demand into 2027. As we look ahead, the global nitrogen supply backdrop remains uncertain. With limited visibility around the timing and pace of potential production restarts from Russian plants damaged by Ukrainian drone attacks and Middle Eastern producers impacted by the Iranian conflict. While some capacity may return over time, we have not yet seen meaningful volumes reenter the market. And the operating status of several facilities remain unclear. As a result, we believe the market continues to be supported by a relatively tight supply environment. And high non US natural gas and energy prices. We also suspect that the new and elevated risk premiums attached to the supply of nitrogen, sulfur, and energy products coming from The Middle East could become a new reality going forward. Taken together, we expect product pricing to remain favorable. With the strong potential for a further rebound in Q4. With our turnaround activities at El Dorado and Pryor behind us, we will have a lot of momentum going into the fourth quarter on production volumes, and the potential restrengthening of fertilizer prices. Now I will turn the call over to Cheryl to discuss our second quarter financial results and our outlook. Cheryl? Cheryl A. Maguire: Thanks, Damien, and good morning. On page 6, you will see a summary of our second quarter 2026 financial results. As Mark highlighted earlier, we had planned turnaround activity at both our El Dorado and Pryor facilities during the quarter, which temporarily reduced ammonia and UAN production volumes. However, this impact was more than offset by higher product pricing and our ability to maximize product mix. Page 7 provides some color to the quarter over quarter results bridging our second quarter 25 adjusted EBITDA of $38 million to our second quarter 26 adjusted EBITDA of $53 million representing an increase of 40%. As shown on this slide, our second quarter results were impacted by an estimated $35 million to $40 million from planned turnaround activity at both our El Dorado and Pryor facilities. Most of that impact was related to the El Dorado facility turnaround, which was planned for the second quarter. At our Pryor facility, we made the strategic decision to pull forward turnaround work that was originally scheduled for the third quarter. Excluding the estimated impact from both turnarounds, illustrative second quarter adjusted EBITDA is approximately $90 million. Stepping back, even with this significant plan turnaround activity, we generated $200 million of adjusted EBITDA on a trailing-12-month basis as of June 30. We believe that is an important reference point as we evaluate the earnings power of the business across different market environments and cycles. While the turnarounds affected second quarter results, they do not change how we are thinking about full year production in any meaningful way. The prior pull forward shifted some production and earnings impact into Q2, but it also reduced expected downtime and expected EBITDA impact in Q3. As Mark mentioned, the Pryor facility restarted late last week, and is in the process of ramping up to full rates. We believe the work completed positions both facilities for stronger, more reliable performance going forward. Lastly, on page 8, you can see that our balance sheet remains solid with approximately $220 million in cash at the end of the second quarter and net leverage at 1.1x. Operating cash flow for the quarter was $59 million. After subtracting $27 million of sustaining capital, the capital required to maintain our operations, our free cash flow was approximately 32 million. Additionally, we invested approximately $13 million in growth related projects including approximately $11 million related to the acquisition and development, of the carbon capture project at our El Dorado facility. Looking ahead to the remainder of 2026, demand remains strong and prices remain elevated. With major turnaround activity substantially complete, we expect to operate at higher production rates and are positioned to maximize production for the balance of the year. Pricing remains favorable, although moderated somewhat from first half highs. Tampa ammonia settled at $635 per metric ton for August. And NOLA UAN is currently trading around $300 per ton. While natural gas costs have averaged approximately $3.20 per MMBtu thus far in the third quarter. Putting it all together, we expect a positive second half of the year putting us on track to meet or exceed our annual production targets. And now I will turn it back over to Mark. Mark T. Behrman: Thank you, Cheryl. Turning to page 9. As I noted earlier, we recently announced our agreement to assume full ownership of our El Dorado carbon capture and sequestration project. To quickly recap, our investment is being made in stages, tied to key milestones as we focus on project development, permitting, construction. Operator: Welcome to LSB Industries Second Quarter 2026 Earnings Conference Call. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Kristy Carver, Senior Vice President and Treasurer. Kristy D. Carver: Thank you. Operator: You may begin. Kristy D. Carver: Good morning, everyone. Joining me today are Mark T. Behrman, our Chairman and Chief Executive Officer Cheryl A. Maguire, our chief financial officer and Damien J. 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 the risks and uncertainties that could cause actual results to 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 Form 10-K. On the call, we will reference non GAAP results. Please see the press release in the investors section of our website, lsbindustries.com, for further information regarding forward looking statements and reconciliations of non GAAP results to GAAP results. At this time, I would like to go ahead and turn the call over to Mark. Mark T. Behrman: Thank you, Kristy, and good morning, everyone. We delivered a strong quarter both financially and operationally. Operationally, we continued to make meaningful progress in improving safety, plant reliability, operating rates, and product optimization. While also advancing several important growth initiatives that we believe will support stronger earnings and shareholder value. There are 3 key topics I would like to cover today. First, the turnaround activity completed during the quarter and the expected benefits to our operating performance. Second, the changes to our ownership agreement at El Dorado for the carbon capture and sequestration project. And third, how these actions position LSB for stronger performance going forward. Starting with our turnaround activity, we successfully completed an extensive complex turnaround of our El Dorado ammonia plant and site infrastructure during the quarter. Importantly, this work was completed on time, on budget, and injury-free, which is a strong reflection of the planning, coordination, and execution of our team. We are already seeing the benefits of this work with El Dorado achieving some of the highest daily production rates since we went into production in 2016. We also made a strategic decision to pull forward much of the scheduled turnaround work at our Pryor facility from the third quarter into the second quarter. This shifted a portion of expected turnaround related production and earnings impacts into the second quarter, which will reduce the expected production downtime and related earnings impact for the third quarter. We successfully restarted the plants late last week and are in the process of ramping up to full production and expect to see improved reliability from that site as well. Taken together, these investments in our facilities support our goal of improving annual production and earnings while continuing to maintain the safety standards that are essential across our operations. Turning to El Dorado. In May, we announced an agreement to assume full ownership of our carbon capture and sequestration project from Lapis Carbon Solutions. The milestone based structure of the agreement aligns the company's capital deployment with project advancement while limiting upfront capital exposure. We continue to view this project as a meaningful long term value creation opportunity for LSB, and I will provide further details and an update on the project later in the call. We entered the second half of 2026 with strong momentum and a meaningfully improved operating setup. We expect to benefit from higher overall production rates at El Dorado and Pryor, as well as our continued focus on reliability, efficiency, and product mix optimization. We believe our improved operating platform positions us to capitalize on current market conditions and more importantly, we believe the actions we have taken position us to drive stronger financial and operational performance through the remainder of this year and into the future. Now I will turn over the call to Damien to provide more detail on the commercial environment. Damien J. Renwick: Thanks, Mark, and good morning, everyone. it is no secret that the conflict in The Middle East is having a considerable impact on our industry. More specifically, the effect this conflict is having on shipping activity through the Strait of Hormuz, a globally critical transportation artery, has been considerable, and this disruption is ongoing. Recent events make it clear that the situation remains extremely unstable. Creating significant ongoing risk that may continue to impact product pricing going forward. As a reminder, shipping within the strait alone represents about 20% of global ammonia seaborne trade, 30% of global urea trade, and 45% of global sulfur trade. Beyond the backdrop of the Mideast conflict, we are seeing continued strong demand for ammonium nitrate within the industrial markets. Supported by continued mining sector investments. Favorable supply and demand fundamentals, further supported by ongoing producer outages, continue to underpin both spot and contract pricing. During the second quarter, we leveraged the flexibility that we have developed with our production assets to optimize our product mix. This enabled us to maximize our AN sales to support customers whose AN supply has been disrupted. We were also able to take advantage of higher than normal AN spot prices. The longer term outlook of AN demand continues to be promising. In the medium to longer term, there are several potential mining projects on the horizon across North America that will drive increased demand for AN. Quarrying and contract and aggregate production continues to grow on the strength of The US economy. And as well as from broader capital spending tied to AI related infrastructure, data centers, power generation, and electrification. Turning to page 5. The fertilizer market backdrop remains constructive, as global supply conditions continue to evolve. Ongoing supply uncertainty, trade disruptions, and broader macro volatility continue to support a higher pricing environment. Importantly, demand for our products remain solid, and the market continues to reflect limited visibility around supply availability over the near to medium term. Ammonia prices remain above historical averages. Despite a recent reduction in the Tampa ammonia price index. Global ammonia demand has softened, especially for phosphate use, as phosphate producers have curtailed production amid elevated sulfur costs. The resulting decline in ammonia demand balances some of the loss of supply that typically transits the Strait Of Hormuz. However, the recent resumption of military activity in The Middle East is disrupting fertilizer supply once again. And it is causing global natural gas prices to increase. European TTF natural gas prices have been above 19 and even $20 per MMBtu in recent days, increasing European ammonia production costs to nearly $700 per metric ton. European natural gas inventories also continued to fall short of 5-year lows as the market struggles to restock ahead of the critical winter season due to limited LNG supply. This will further pressure global natural gas prices and exacerbate the spread between global prices and US domestic prices. This underpins the significant and structural production cost advantage for US ammonia producers. We therefore believe that ammonia prices will continue to see upward pressure through the duration of the closure of the Strait. Driving strong margins for our business at a time where US natural gas prices continue to be significantly cheaper than elsewhere. Urea ammonium nitrate UAN pricing remains favorable. Urea prices have strengthened from their current year lows in June, and UAN has found stability after typical July summer price reset. We continue to expect strong demand for UAN in the second half of 2026, ahead of the 2027 spring planting season. We saw strong uptake on ammonia and UAN US summer fill programs through June and July. And we are pleased with both the volumes and prices we achieved for our forward sales. Our order book is also well placed with flexibility to take advantage of improving prices over the coming months through the fall prepay and winter fill programs. The USDA is projecting more than 95 million planted corn acres for the 2026-2027 marketing season. More importantly, however, in July, the USDA reduced its forecast for 2027 global ending stock for corn. To what will be the lowest level seen in over a decade. Global corn demand continues to run ahead of supply. Extreme heat and dry conditions have crippled European and regional crops. China continues to destock as consumption outpaces domestic production. And finally, stocks are declining across most major exporters, Argentina, Brazil, South Africa, and Ukraine, as well as The US. As a result, we are seeing corn futures pricing increase strongly. We expect this to incentivize US farmers to increase planted acres in the coming season. Which will in turn be very constructive for nitrogen demand into 2027. As we look ahead, the global nitrogen supply backdrop remains uncertain. With limited visibility around the timing and pace of potential production restarts from Russian plants damaged by Ukrainian drone attacks and Middle Eastern producers impacted by the Iranian conflict. While some capacity may return over time, we have not yet seen meaningful volumes reenter the market. And the operating status of several facilities remain unclear. As a result, we believe the market continues to be supported by a relatively tight supply environment. And high non US natural gas and energy prices. We also suspect that the new and elevated risk premiums attached to the supply of nitrogen, sulfur, and energy products coming from The Middle East could become a new reality going forward. Taken together, we expect product pricing to remain favorable. With the strong potential for a further rebound in Q4. With our turnaround activities at El Dorado and Pryor behind us, we will have a lot of momentum going into the fourth quarter on production volumes, and the potential restrengthening of fertilizer prices. Now I will turn the call over to Cheryl to discuss our second quarter financial results and our outlook. Cheryl? Cheryl A. Maguire: Thanks, Damien, and good morning. On page 6, you will see a summary of our second quarter 2026 financial results. As Mark highlighted earlier, we had planned turnaround activity at both our El Dorado and Pryor facilities during the quarter, which temporarily reduced ammonia and UAN production volumes. However, this impact was more than offset by higher product pricing and our ability to maximize product mix. Page 7 provides some color to the quarter over quarter results bridging our second quarter 25 adjusted EBITDA of $38 million to our second quarter 26 adjusted EBITDA of $53 million representing an increase of 40%. As shown on this slide, our second quarter results were impacted by an estimated $35 million to $40 million from planned turnaround activity at both our El Dorado and Pryor facilities. Most of that impact was related to the El Dorado facility turnaround, which was planned for the second quarter. At our Pryor facility, we made the strategic decision to pull forward turnaround work that was originally scheduled for the third quarter. Excluding the estimated impact from both turnarounds, illustrative second quarter adjusted EBITDA is approximately $90 million. Stepping back, even with this significant plan turnaround activity, we generated $200 million of adjusted EBITDA on a trailing-12-month basis as of June 30. We believe that is an important reference point as we evaluate the earnings power of the business across different market environments and cycles. While the turnarounds affected second quarter results, they do not change how we are thinking about full year production in any meaningful way. The prior pull forward shifted some production and earnings impact into Q2, but it also reduced expected downtime and expected EBITDA impact in Q3. As Mark mentioned, the Pryor facility restarted late last week, and is in the process of ramping up to full rates. We believe the work completed positions both facilities for stronger, more reliable performance going forward. Lastly, on page 8, you can see that our balance sheet remains solid with approximately $220 million in cash at the end of the second quarter and net leverage at 1.1x. Operating cash flow for the quarter was $59 million. After subtracting $27 million of sustaining capital, the capital required to maintain our operations, our free cash flow was approximately 32 million. Additionally, we invested approximately $13 million in growth related projects, including approximately $11 million related to the acquisition and development of the carbon capture project at our El Dorado facility. Looking ahead to the remainder of 2026, demand remains strong and prices remain elevated. With major turnaround activity substantially complete, we expect to operate at higher production rates and are positioned to maximize production for the balance of the year. Pricing remains favorable, although moderated somewhat from first half highs. Tampa ammonia settled at $635 per metric ton for August. And NOLA UAN is currently trading around $300 per ton. While natural gas costs have averaged approximately $3.20 per MMBtu thus far in the third quarter. Putting it all together, we expect a positive second half of the year, putting us on track to meet or exceed our annual production targets. And now I will turn it back over to Mark. Mark T. Behrman: Thank you, Cheryl. Turning to page 9. As I noted earlier, we recently announced our agreement to assume full ownership of our El Dorado carbon capture and sequestration project. To quickly recap, our investment is being made in stages, tied to key milestones as we focus on project development, permitting, construction, Full ownership of the project provides us with enhanced commercial flexibility to optimize the use of our CO2 and evaluate future expansion opportunities without limitations. We continue to work closely with senior officials from the EPA's region 6 office with the expectations of beginning operations in Q1 27. When fully operational, we expect to generate between $25 and $30 million of annual earnings and cash flow net of any operating costs associated with CCS operations. Our commercial team continues to pursue low carbon product supply opportunities where we can generate premiums for those products, as well as evaluate the potential to sell environmental attributes generated. We are excited as we are getting closer to completing our project and really realizing our vision of decarbonizing ammonia. I want to take a moment to congratulate our teams at both our El Dorado and Pryor sites on the execution of highly complex turnarounds at each of these facilities. I continue to be impressed by the hard work, professionalism, and dedication of our teams as they work to improve the safety and reliability of our facilities. We have focused intensely on reliability over the past several years, and we are seeing great results in terms of higher production rates and improved product mix. This improved production performance is translating into consistently higher EBITDA and we are not done. As we continue to invest in our business, we expect to see continued improvement in our overall production performance. In addition to the financial benefit of our CCS project, earlier this year, we laid out a path to an additional $35 million of annual EBITDA through specific initiatives, including production targets, process efficiencies, and cost optimization. A good portion of this is expected to be realized by the end of this year. With the expectation of the balance coming by the end of 27. As part of our disciplined capital allocation strategy, we continue to evaluate opportunities to invest in expansion projects that we believe will create attractive long term value for our shareholders. As we have discussed previously, we continue to advance the feasibility for a potential ammonia expansion at our El Dorado facility. Based on our current timeline, we expect to complete our FEED study and make final investment decision during the second quarter of 27. The project targeted for completion alongside our planned 2029 turnaround at our El Dorado site. The total project cost is expected to be between a $135 million to $150 million. However, we have already been awarded a USDA grant that would fund approximately 20% of the project, or the total project cost. So we expect our net project cost will be between a $105 million to $120 million, reducing our required investment and further enhancing the project's economics. Anticipate that this project would be funded with existing cash on our balance sheet. Upon completion, we expect the expansion to add approximately 100 thousand tons of annual ammonia production capacity, which we estimate could generate roughly $20 million of incremental annual EBITDA, of course, depending on ammonia market pricing. I also wanna point out that the capital cost per ton added is significantly below current new-build capital costs. We have several other capacity expansion projects that we are exploring, and we will provide more details as we move along in our evaluation process. Overall, we are well positioned to expand domestic fertilizer production strengthen our competitive position, and create additional value for our shareholders. We look forward to updating you as these projects progress. Respect to the market, the ever evolving nature of geopolitics, including the Middle East conflict, will continue to impact our industry whether it is the disruption of important trade channels like the Strait Of Hormuz or limiting the global availability of products like nitrogen fertilizers. As a business, we must navigate these impacts and support our customers in the best way possible while also ensuring we continue to build shareholder value. Our improved operating performance and ability to optimize our product mix enables us to ensure we can support our customers in both the industrial and agricultural sides of our business as market conditions warrant. We are encouraged by our continued execution across the business and believe it helps us to continue supporting our customers and to deliver sustainable growth and long term value creation for our shareholders. Before we open it up for questions, I would like to mention that Cheryl and Damien will be attending the UBS and Jefferies industrial conferences in New York on September 9 and 10. We look forward to speaking with some of you at these events. That concludes our prepared remarks. We will now be happy to answer any of your questions. Operator: Thank you. We will now be conducting a question and answer session. You may press 2 if you would like to remove your question from the queue. Before pressing the star keys. Our first question is from Andrew Wong with RBC Capital Markets. Please proceed. Andrew Wong: Hey, good morning. Thanks for taking my questions. Just regarding the Eldorado expansion project, I was wondering adding extra ammonia volumes, at a pretty low cost sounds good? Would you also be considering adding some logistics and distribution to sell those extra volumes so you get the best price available. Mark T. Behrman: Morning, Andrew. Yes. Actually, inside the cost that I quoted, is some infrastructure build out to support that expansion. Okay. And then as we think about that project, like ammonia, what is the marketing like for that? Like, where does it go? I think we have 3 years to try and figure that out. We have options today, and I think what we would like to do is figure out how do we get the best margin that we can in those 100 thousand tons. So I do not know that I can give you an answer today. I mean, we sell about 200 thousand tons of merchant ammonia today, and we certainly have the potential to add to that. But there may be some other options for us as well. Okay. that is fair. Andrew Wong: And then just with the 2 big turnarounds this year, how much of that work that was done should help drive costs lower into 2027 and beyond? And can we expect to see the per ton controllable cost to trend lower from here? Mark T. Behrman: Oh, yeah. I think I think we should see a slowing of increasing in cost. I mean, we are going to see, unfortunately, inflation every year. Right? So that is gonna offset some of the savings that we have. But I do think on a cost per ton basis, if we are producing more tons, you should see our cost per ton going down. And that would be the expectation. Okay. Appreciate that. Thank you, Mark. Operator: Our next question is from Lucas Beaumont with UBS. Please proceed. Lucas Beaumont: So maybe we are seeing sort of prices have come off a lot rapidly sort of post the season, I guess, as buyers were looking to they did not really wanna get ahead of future expected pricing declines that were still sort of potentially coming But, I mean, we have sort of seen that start to stabilize now in recent weeks. You know, it is kind of moved up a little on the increased kind of Middle East tensions, and UAN has sort of stabilized up after sort of resetting low with the summer fill pricing. I mean, 1 of the key discussion areas has sort of been like, how much it is sort of what level pricing is actually being realized. Compared to sort of where the benchmarks are. So could you maybe just tell us what you are seeing on the ground and in terms of your order book and what your expectations are there for going into the third quarter? Mark T. Behrman: I am gonna let Damien start with this. Damien J. Renwick: Good morning, Lucas. Look, that is a tricky 1 to answer. I think, you know, where our plants are positioned you get some inland benefits on a premium compared to NOLA. So and we are seeing that although the market is relatively quiet at the moment. Right? We have just come off fill programs for both ammonia and UAN, and we are all gearing up to you know, start moving those tons to our customers. And then, you know, we are well placed basically to with low inventory, carryout inventory to really pick when and how we choose to participate going forward as those price appreciate, which we are pretty confident will happen as we move into fall and then spring into next year. Mark T. Behrman: Mean, would you say that we have seen some price appreciation since fill? Damien J. Renwick: Yeah. I mean, Lucas pointed it out. We have seen particularly with UAN, coming out of fill, it is rebounded quite nicely, and we are pretty happy with where those prices are at into the $300 a ton, and that is that is a nice jump from where it was from a fill perspective. Mark T. Behrman: Okay. Lucas Beaumont: And then just on the cost side. So I guess to start the year, you are expecting kind of SG&A to be $35 million to $40 million. But sort of based on the first half, it is more on track to sort of be 50 to 55. I was just wondering what the sort of driver of the higher cost is there and is that sort of permanent into the cost base now that we should annualize into the second half of next year, or is there anything more onetime in there that is inflated the first half? Thanks. Mark T. Behrman: Yeah. there is some of that-- a little bit of that is inflationary in the first half of the year. I would suspect probably half of that to continue. But what is continuing, Lucas, is more on the noncash side of things. With respect to some long term incentive and things like that as it relates to our stock based compensation, which is noncash. So, while there is a bit of a higher trend, we do not expect the majority of that to continue. Lucas Beaumont: Right. Mark T. Behrman: Thanks. Lucas Beaumont: And then I guess just thinking about the sort of setup as we head later into the year, You know, the spot nitrogen prices at the moment are sort of well below where cost care supports increased to sort of in the low kind of twenties now on the increased Middle East tensions. I mean, it is not sort of that uncommon, I guess, to see pricing below the cost curve in the third quarter of the year, but spreads, like, quite wide. And, I mean, given that global supply is still sort of quite constrained with the challenges going on, I mean, how do you guys kinda see this setup for the fall and spring? Are we headed into another year where we could see, like a U.S. pricing spike, you know, back above the cost curve and widening spreads sort of given the setup? Damien J. Renwick: Yeah. Lucas, we are really optimistic about the setup coming forward. You are right. The global natural gas prices are under pressure. We have seen Dutch TTF around 19 or so now, but it is been above 20. that is gonna put a lot of pressure on the market. And really, I think the watch out is what happens with LNG and if we continue to see the Strait Of Hormuz closed, the globe is gonna be under pressure from an LNG perspective, and that is gonna drive back to European natural gas prices and then European production costs. And I think that will just create a huge amount of pressure in the market from that cost perspective as we move out of Q3 into some stronger demand periods going forward. So we are very optimistic. All right. Thanks very much. Operator: As a reminder, please press star then 1 on your telephone keypad if you would like to ask a question. Our next question is from Laurence Alexander with Jefferies. Please proceed. Laurence Alexander: For the El Dorado carbon sequestration, can you characterize the run rate maintenance CapEx how turnarounds might play out, and is there a point where you would have to do a broader asset revitalization to kind of maintain the stability of the assets? Mark T. Behrman: Good morning, Laurence. No, there is no real big scheduled maintenance events for the carbon capture and sequestration assets themselves. There certainly is ongoing maintenance, but we would not see that as you know, we would not even really consider that a turnaround. It would be just scheduled maintenance on the equipment. You know, from a downtime perspective, you know, I think for the most part, we expect that equipment to run. But it will come down when we have an ammonia plant outage, right? Because we are not producing the CO2. So it is really just tied to the ammonia plant outage itself. Laurence Alexander: Thank you. Mark T. Behrman: Sure. Operator: Our next question is from Robert McGuire with Granite Research. Please proceed. Robert McGuire: Mark, you talked about expecting higher operating rates. Can you discuss what you have seen performance wise out of El Dorado exiting the turnaround? And what type of performance you are looking for out of Pryor when you just mentioned that the plants fired up last week. Mark T. Behrman: Yes. So, by point of reference, the nameplate capacity at El Dorado is about 1.1 thousand or actually 1.15 thousand tons a day. We have run in the 1.25 thousand to, you know, maybe 1.3 thousand tons a day, relatively consistently for the last few years coming out of this turnaround. We are running in the heat of summer. Right? Because you get better rates and cooler weather just airflow, cooling water temperature, things like that. So we are running about 1.38 thousand and it would not be out of the realm of possibility for us to be running 1.4 thousand tons in cooler weather. And that would be something that we are really shooting for. So pretty significant increase from where we were pre turnaround. You know, we could probably see 100 tons or a little over 100 tons a day of increased production. And certainly way above nameplate capacity. At Pryor, I do not know that it is necessarily daily rates that we are gonna see. When Pryor runs, actually, the rates are pretty good. I think it is more reliability and consistency of production. So we expect to see higher overall production out of that facility on an annualized basis. Thank you. Robert McGuire: And then, with regards to acquiring Lapis interest in the CCS project, you are potentially looking 110 thousand tons per year of additional ammonia? ammonia. What would be the full incremental 45 q tax credit be from that debottlenecking project and the upside you are getting from that 110 thousand? would probably say that you know, we get $85 per ton from the government You know, net is probably somewhere in like $60 a ton after you think about expenses. Mark T. Behrman: To operate it. And then there is probably-- yes. I mean, 100 thousand tons, call it 2 tons of CO 2 per ton of ammonia. So that is 200 thousand tons of CO2. But as a reminder, with an SMR, we are only capturing 60%. So it is 120 thousand tons of CO2. So, you know, I do not know, $6 to $7 million. Somewhere in that range, $6.5 to $7.5 million. Thank you. Robert McGuire: And then 1 last question in a different direction. The stockholders' right plan expires in less than a month. Can you discuss the plans for the board to renew that? Mark T. Behrman: it is in discussion as we speak. I think we are just trying to be very thoughtful about it. As to where we are from I do not want to get too technical, but from a potential ownership change that could bust or limit the use of the NOLs. But all things being equal, I think we would like to try and figure out how not to renew it, but we want to be thoughtful and make sure that we do not severely limit it. Thank you. Operator: There are no further questions at this time. I would like to turn the conference back over to Mr. Behrman for closing remarks. Mark T. Behrman: Thank you for participating in our call. We are really excited about our business and the progress that we are making. Hope you guys are too. And we look forward to any other questions. Feel free to reach out to Cheryl or myself. Thanks. Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation. Before you buy stock in LSB Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LSB Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. LSB Industries (LXU) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Lsb Industries Inc.? Here are five stocks we like better. Adjusted EBITDA increased 40% year over year to $53 million in Q2 2026, despite $35 million–$40 million of planned turnaround impacts at the El Dorado and Pryor facilities. Both turnarounds were completed successfully, and El Dorado has since achieved production rates above its nameplate capacity. Strong fertilizer and industrial chemical pricing, along with product-mix optimization and resilient demand, supported results. LSB cited supply disruptions, mining-sector demand, elevated European gas costs and global nitrogen constraints as potential ongoing pricing tailwinds. LSB ended the quarter with $220 million in cash and 1.1x net leverage while advancing growth projects. Its El Dorado CCS project is targeted to begin operations in Q1 2027 and could generate $25 million–$30 million in annual earnings and cash flow; a potential ammonia expansion could add about 100,000 tons of annual capacity and roughly $20 million of EBITDA. Lsb Industries (NYSE:LXU) reported higher second-quarter adjusted EBITDA despite planned turnarounds at its El Dorado and Pryor facilities, as stronger product pricing and product-mix optimization offset lower production volumes. Adjusted EBITDA rose about 40% year over year to $53 million in the second quarter of 2026, compared with $38 million in the prior-year period, Chief Financial Officer Cheryl Maguire said. The company estimated that planned turnaround activity reduced quarterly adjusted EBITDA by $35 million to $40 million, with most of the impact tied to El Dorado. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now “Even with this significant planned turnaround activity, we generated $200 million of adjusted EBITDA on a trailing 12-month basis as of June 30th,” Maguire said. Chairman and Chief Executive Officer Mark Behrman said the company completed an extensive turnaround at its El Dorado ammonia plant and related site infrastructure on time, on budget and without injuries. He said the plant has since recorded some of its highest daily production rates since it began operating in 2016. → Microsoft Just Flipped the AI Spending Narrative Overnight LSB also moved much of its planned third-quarter turnaround work at Pryor into the second quarter. The decision shifted some anticipated production and earnings impacts into the second quarter while reducing expected downtime in the third quarter. Behrman said Pryor restarted late in the week before the call and was ramping toward full production. At El Dorado, Behrman said the ammonia plant’s nameplate capacity is approximately 1,150 tons per day. The facility had generally operated at 1,250 to 1,300 tons per day in recent years, but was producing about 1,375 tons per day following the turnaround despite summer conditions. In cooler weather, he said the company could potentially reach 1,400 tons per day. → Carrier Earnings Could Send the Stock to a New All-Time High At Pryor, management expects the turnaround’s benefits to be reflected more in reliability and production consistency than in higher daily production rates. Behrman said higher output should lower costs on a per-ton basis, although inflation could offset some savings. Chief Commercial Officer Damien Renwick said disruptions to shipping through the Strait of Hormuz and broader Middle East conflict were creating uncertainty in global fertilizer and industrial chemical markets. Shipping through the strait represents about 20% of global seaborne ammonia trade, 30% of global urea trade and 45% of global sulfur trade, he said. Renwick said industrial demand for ammonium nitrate, or AN, remained strong, supported by mining-sector investment and producer outages. During the second quarter, LSB adjusted its production mix to maximize AN sales, including sales to customers whose supply had been disrupted, while taking advantage of elevated spot pricing. The company also cited favorable agricultural demand conditions. Renwick said ammonia prices remained above historical averages despite a recent decline in Tampa pricing, while UAN prices had stabilized after the customary July summer price reset. LSB reported strong uptake in its ammonia and UAN summer-fill programs through June and July and said its order book retained flexibility for fall prepay and winter-fill programs. Maguire said Tampa ammonia settled at $635 per metric ton for August, while New Orleans-area UAN was trading near $300 per ton. Natural gas costs had averaged approximately $3.20 per MMBtu in the third quarter through the date of the call. Management said elevated European natural gas prices and limited global nitrogen supply could support pricing. Renwick pointed to European TTF gas prices that had recently exceeded $19 and $20 per MMBtu, raising European ammonia production costs to nearly $700 per metric ton. LSB ended the second quarter with approximately $220 million in cash and net leverage of 1.1 times, Maguire said. The company generated $59 million of operating cash flow and about $32 million of free cash flow after $27 million of sustaining capital expenditures. It also invested about $13 million in growth projects, including roughly $11 million related to its El Dorado carbon capture and sequestration, or CCS, project. In May, LSB announced an agreement to assume full ownership of the El Dorado CCS project from Lapis Carbon Solutions. Behrman said the investment will be made in stages based on development, permitting and construction milestones, limiting the company’s upfront capital exposure. LSB expects the project to begin operations in the first quarter of 2027. Once fully operational, management expects it to generate $25 million to $30 million of annual earnings and cash flow after CCS operating costs. Behrman said the CCS equipment is expected to require routine scheduled maintenance rather than major turnaround events and would generally be offline only when the associated ammonia plant is not producing carbon dioxide. The company is also advancing a feasibility study for a potential ammonia expansion at El Dorado. LSB expects to complete a front-end engineering and design study and make a final investment decision in the second quarter of 2027. If approved, the project would be targeted for completion alongside El Dorado’s planned 2029 turnaround. Expected total expansion cost: $135 million to $150 million. Expected net cost after a USDA grant: $105 million to $120 million. Expected additional annual ammonia capacity: approximately 100,000 tons. Estimated incremental annual EBITDA: roughly $20 million, depending on ammonia pricing. Behrman said the company expects to fund the project with cash on its balance sheet. He added that the quoted project cost includes infrastructure to support the expansion, while the company evaluates how to market the additional ammonia volumes for the strongest possible margins. For the remainder of 2026, LSB said it expects higher operating rates following the completion of major turnaround work and believes it is on track to meet or exceed its annual production targets. Management also reiterated a previously outlined path to an additional $35 million of annual EBITDA from production targets, process improvements and cost optimization, with a substantial portion expected by the end of 2026 and the balance by the end of 2027. LSB Industries, Inc (NYSE: LXU) is an Oklahoma City–based manufacturer of chemical products serving the agricultural, industrial and defense markets. The company operates primarily through two segments: Fertilizer Solutions and Commodities Solutions. Through its Fertilizer Solutions segment, LSB produces primary nitrogen products—including anhydrous ammonia and technical-grade ammonium nitrate—that are sold to fertilizer distributors and agricultural retailers across North America. Its Commodities Solutions segment manufactures and sells nitric acid, sodium nitrate and other nitrate-based compounds for industrial applications such as mining, water treatment and specialty chemical production, as well as defense-related formulations used in munitions and pyrotechnics. Incorporated in 1969, LSB Industries has grown from a single production site to multiple manufacturing facilities strategically located in the central United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lsb Industries Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Adjusted EBITDA: $53 million for Q2 2026, up approximately 40% from $38 million in Q2 2025. Illustrative Adjusted EBITDA (excluding turnarounds): Approximately $90 million for Q2 2026. Trailing 12-Month Adjusted EBITDA: $200 million as of June 30, 2026. Cash: Approximately $220 million at the end of Q2 2026. Net Leverage: 1.1 times. Operating Cash Flow: $59 million for Q2 2026. Sustaining Capital: $27 million for Q2 2026. Free Cash Flow: Approximately $32 million for Q2 2026. Growth-Related Investments: Approximately $13 million in Q2 2026, including $11 million for the carbon capture project. Planned Turnaround Impact: Estimated $35 million to $40 million impact on Q2 2026 results from El Dorado and Pryor facility turnarounds. Carbon Capture Project (El Dorado): Expected to generate $25 million to $30 million of annual earnings and cash flow, net of operating costs, when fully operational. Ammonia Expansion Project (El Dorado): Expected total project cost of $135 million-$150 million, with a net cost of $105 million-$120 million after a USDA grant; expected to add 100,000 tons of annual ammonia production capacity and generate roughly $20 million of incremental annual EBITDA. Warning! GuruFocus has detected 3 Warning Sign with LXU. Is LXU fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Successfully completed complex turnarounds at El Dorado and Pryor on time, on budget, and injury-free, leading to higher production rates and improved reliability. Generated $200 million of trailing 12-month adjusted EBITDA as of June 30, 2026, demonstrating strong earnings power across market cycles. Secured full ownership of the El Dorado carbon capture and sequestration project, expected to generate $25-$30 million in annual EBITDA starting Q1 2027. Advancing a low-cost ammonia expansion at El Dorado with a net project cost of $105-$120 million, expected to add ~100,000 tons of capacity and ~$20 million in annual EBITDA. Favorable market conditions driven by Middle East conflict disrupting global supply, high European natural gas prices, and strong demand for ammonium nitrate in industrial markets. Planned turnaround activity at El Dorado and Pryor caused an estimated $35-$40 million impact on Q2 2026 adjusted EBITDA. Global supply chain disruptions from the Strait of Hormuz closure create ongoing uncertainty and risk for product pricing and availability. SG&A costs in the first half of 2026 trended higher than initial guidance, partly due to inflationary pressures and non-cash stock-based compensation. Ammonia prices have moderated from first-half highs, with Tampa ammonia settling at $635 per metric ton for August, down from earlier peaks. The company faces potential limitations on net operating loss (NOL) usage if a stockholders' rights plan is not renewed, requiring careful board consideration. Here are the key highlights from the LSB Industries Inc (NYSE:LXU) Q2 2026 earnings call, presented as summarized Q&A pairs. Q: Can you discuss the performance improvements seen at the El Dorado plant following the turnaround, and what type of performance you expect from the Pryor facility?A: Mark Behrman (Chairman and CEO) stated that the El Dorado plant is already running at approximately 1,375 tons per day, up from a pre-turnaround range of 1,250-1,300 tons. In cooler weather, they expect to reach 1,400 tons per day, a significant increase of over 100 tons per day above nameplate capacity. For the Pryor facility, the focus is less on daily rates and more on improving overall reliability and consistency of production on an annualized basis. Q: How do you see the market setup for the fall and spring, given that global supply is constrained and US natural gas prices are low relative to the rest of the world?A: Damien Renwick (Chief Commercial Officer) expressed strong optimism. He noted that high European TTF natural gas prices (above $19/MMBtu) are pressuring global production costs. With the Strait of Hormuz closure impacting LNG supply, he expects this cost pressure to continue, creating a significant advantage for US producers and supporting a favorable pricing environment as demand strengthens in Q4 and into 2027. Q: Regarding the El Dorado ammonia expansion project, what is the marketing plan for the additional 100,000 tons of ammonia, and does the cost include logistics?A: Mark Behrman (Chairman and CEO) confirmed that the $135-$150 million project cost includes some infrastructure build-out to support the expansion. He stated they have three years to determine the best margin opportunity for the additional tons, noting they already sell about 200,000 tons of merchant ammonia and are evaluating other potential options. Q: What is the incremental 45Q tax credit benefit from the debottlenecking project that adds 110,000 tons of ammonia?A: Mark Behrman (Chairman and CEO) explained that with a capture rate of 60% for an SMR, the 100,000 tons of new ammonia would produce roughly 120,000 tons of CO2. At a net benefit of approximately $60 per ton after operating costs, this would generate an estimated $6.5 million to $7.5 million in additional annual earnings from the tax credit. Q: The stockholders' rights plan expires soon. What are the Board's plans for renewal?A: Mark Behrman (Chairman and CEO) stated the topic is under active discussion. The company is being thoughtful about the potential for an ownership change that could limit the use of Net Operating Losses (NOLs). While the preference is to not renew the plan, they want to ensure they do not severely limit their financial flexibility. Q: Can you characterize the run rate maintenance CapEx for the El Dorado carbon sequestration assets and if there are any major turnaround events?A: Mark Behrman (Chairman and CEO) clarified that there are no major scheduled maintenance events or turnarounds for the CCS assets themselves. The equipment is expected to run continuously, with downtime only occurring when the ammonia plant is down, as that is the source of the CO2. Q: What are you seeing on the ground in terms of realized pricing compared to benchmarks, and what are your expectations for the third quarter order book?A: Damien Renwick (Chief Commercial Officer) noted that their inland plant locations provide a premium compared to the NOLA benchmark. While the market is currently quiet after summer fill programs, they are well-positioned with low inventory to choose when to participate as prices appreciate. Mark Behrman added that they have already seen price appreciation for UAN since the fill programs, with prices rebounding nicely into the $300 per ton range. Q: With the two major turnarounds completed, how much should this help drive costs lower into 2027, and can we expect per-ton controllable costs to trend lower?A: Mark Behrman (Chairman and CEO) stated that while inflation will offset some savings, the expectation is for cost per ton to decrease as the company produces more tons from the improved, more reliable facilities. Q: The first half SG&A is tracking higher than the initial $35-$40 million guidance. Is this a permanent increase?A: Cheryl Maguire (CFO) explained that the higher run rate is partly inflationary but is also driven by non-cash items like stock-based compensation. She expects roughly half of the increase to be permanent, while the non-cash portion related to long-term incentives is not expected to continue at the same level. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Successfully completed a complex turnaround at the El Dorado facility on time and budget, resulting in post-turnaround production rates reaching approximately 1.38 thousand tons per day, significantly exceeding nameplate capacity. Strategically pulled forward Pryor facility turnaround work from Q3 into Q2 to minimize future downtime and capitalize on expected market strength in the second half of 2026. Assumed full ownership of the El Dorado carbon capture and sequestration (CCS) project, a move designed to enhance commercial flexibility and capture 100% of the associated environmental and financial benefits. Leveraged production asset flexibility to optimize product mix toward ammonium nitrate (AN), capturing higher spot prices and filling supply gaps caused by competitor outages. Attributed strong financial performance to a structural production cost advantage for US producers, as high European natural gas prices (above $19-$20 per MMBtu) keep global ammonia production costs elevated. Maintained a disciplined capital allocation strategy, focusing on high-return debottlenecking and expansion projects like the El Dorado ammonia expansion, which benefits from a 20% USDA grant subsidy. Expects the El Dorado CCS project to be operational by Q1 2027, generating an estimated $25 million to $30 million in annual net earnings and cash flow. Anticipates continued upward pressure on ammonia prices through the duration of the Strait of Hormuz shipping disruptions, which impact roughly 20% of global seaborne ammonia trade. Projects a final investment decision on the El Dorado ammonia expansion in Q2 2027, targeting 100 thousand tons of incremental annual capacity by 2029 for a net cost of $105 million to $120 million. Assumes strong nitrogen demand into 2027 driven by low global corn ending stocks and high corn futures pricing, which incentivizes increased US planted acreage. Targets an additional $35 million of annual EBITDA by the end of 2027 through specific production targets, process efficiencies, and cost optimization initiatives. Planned turnaround activities at El Dorado and Pryor resulted in a temporary $35 million to $40 million impact on Q2 adjusted EBITDA. Geopolitical instability in the Middle East remains a primary risk factor, creating ongoing volatility in shipping logistics and global energy pricing. Identified inflationary pressures on SG&A costs, though management noted a portion of the increase is non-cash stock-based compensation that is not expected to trend higher indefinitely. The company is currently evaluating the potential renewal of its stockholders' rights plan, balancing shareholder protections against the need to preserve Net Operating Losses (NOLs). One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that the $135 million to $150 million gross cost includes necessary infrastructure build-out to support the 100 thousand ton expansion. The company has three years to finalize the marketing plan but intends to leverage its existing 200 thousand ton merchant ammonia footprint to maximize margins. Management expects the turnarounds to drive lower per-ton controllable costs by increasing total production volume, which will help offset annual inflationary pressures. Reliability improvements at Pryor are expected to manifest as more consistent annualized production rather than just higher peak daily rates. UAN prices have rebounded to approximately $300 per ton following the July summer fill reset, which management views as a positive indicator for fall demand. The company maintains low carryout inventory, providing flexibility to participate in the market as prices are expected to appreciate into the fall and spring seasons. The 100 thousand ton ammonia expansion is expected to generate an additional $6.5 million to $7.5 million in 45Q tax credits annually. This calculation assumes capturing 60% of the CO2 generated from the SMR process, resulting in roughly 120 thousand tons of sequestered CO2 from the new capacity.

OKLAHOMA CITY, July 29, 2026--(BUSINESS WIRE)--LSB Industries, Inc. (NYSE: LXU) ("LSB," "we," "us," "our," or the "Company") today announced results for the second quarter ended June 30, 2026. Second Quarter 2026 Results and Recent Highlights Net sales of $168.1 million compared to $151.3 million in the second quarter of 2025 Net loss of $6.2 million, inclusive of approximately $28.8 million of turnaround expenses, compared to net income of $3.0 million in the second quarter of 2025, inclusive of approximately $2.6 million of turnaround expenses Diluted loss per share of $0.09 compared to diluted EPS of $0.04 for the second quarter of 2025 Adjusted EBITDA(1) of $53.1 million compared to $38.3 million in the second quarter of 2025 Total cash, cash equivalents and short-term investments of approximately $218.0 million and total debt of $441.3 million as of June 30, 2026 "Our second quarter results reflect solid execution through an important period of planned maintenance at two of our three production facilities," stated Mark Behrman, LSB Industries' Chairman & Chief Executive Officer. "During the quarter we successfully completed an extensive and complex turnaround of our El Dorado ammonia plant on time, within budget and injury free. We also made the decision to pull forward scheduled turnaround work at our Pryor facility from the third quarter into the second quarter. While this planned activity impacted second quarter production and earnings, it was an important investment in our facilities and supports our broader reliability and operating performance objectives." "We are already seeing the benefits of the work completed at El Dorado, including higher production rates, and expect improved performance at Pryor as that turnaround is completed in the third quarter. While nitrogen prices have moderated from first half highs, market conditions for both our industrial and fertilizer business remain constructive. Alongside our continued focus on reliability, efficiency and product mix optimization, we believe our improved operating platform positions us to generate stronger results in the second half of 2026, supported by higher expected production rates, continued reliability improvements and constructive market conditions." Market Outlook Industrial business is strong with positive market conditions: The fertilizer markets remain constructive as conditions continue to evolve following the Strait of Hormuz disruption earlier this year: Corn market dynamics support fertilizer demand: Low Carbon Ammonia Project Summary El Dorado Carbon Capture and Sequestration (CCS) Project Second Quarter Results Overview Comparison of Second Quarter of 2026 to 2025: Higher selling prices combined with increased AN and Nitric Acid volumes resulted in higher net sales for the period compared to the previous year. Tight market conditions shifted some production toward AN, resulting in lower UAN sales volumes. In addition, ammonia and UAN sales volumes were impacted as a result of significant planned turnaround activity at our El Dorado and Pryor facilities during the second quarter. The following tables provide key sales metrics for our products: Conference Call LSB’s management will host a conference call on Thursday, July 30, 2026 at 10:00 am ET / 9:00 am CT to discuss second quarter 2026 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 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 and industrial 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; the timing for completion of the CCS project at our El Dorado facility, including receipt of Class VI permit approval by the EPA; the cost and expected benefits of the CCS project; 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 and Quarterly Reports on Form 10-Q. 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. 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, non-routine specific legal costs or settlements, 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 costs incurred on growth initiatives, and significant planned maintenance/turnaround costs. 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. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729197619/en/ Contacts Company Contact: Cheryl Maguire, Executive Vice President & CFO(405) [email protected] David Kimmel, Director of Communications(405) [email protected]

LSB delivered strong Q1 results with adjusted EBITDA up 44% year over year to $52 million, ending the quarter with about $180 million in cash, 1.4x net leverage and roughly $37 million of free cash flow; management expects Q2 EBITDA to be “meaningfully higher” despite an El Dorado turnaround that will cut ammonia output by ~35,000 tons and cost $15–$20 million, while Q2 pricing has averaged about $775/mt (Tampa ammonia) and $480/ton (NOLA UAN). Company-wide supply tightness is being driven by the Middle East conflict and Strait of Hormuz disruptions—which represent roughly 20% of seaborne ammonia and 30% of seaborne urea trade—plus other global outages, leaving LSB’s industrial business “sold out” and supporting elevated fertilizer and industrial pricing with tightness expected to persist into 2026–27. LSB reached a settlement with Benham for about $20.9 million but is continuing to pursue claims against Leidos seeking over $300 million with a trial set for October, while advancing a low‑carbon CO2 capture project and other initiatives management says could generate roughly $50 million of incremental annual EBITDA. Interested in Lsb Industries Inc.? Here are five stocks we like better. LSB Industries (NYSE:LXU) reported first-quarter 2026 results that management said were in line with expectations, reflecting higher production reliability, a favorable product mix, and tighter global nitrogen markets. Chairman and CEO Mark Behrman said the company’s operating discipline and recent investments are “driving improved operating and financial performance,” citing year-over-year growth in net sales, adjusted EBITDA, and earnings per share. Behrman highlighted ongoing efforts to improve safety, reliability, efficiency, and output across LSB’s facilities, noting that the benefits have become “increasingly evident over the past two quarters.” He also provided an update on litigation tied to engineering and procurement contracts related to construction of the ammonia plant at the company’s El Dorado, Arkansas, facility. → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Earlier in the month, LSB entered into a settlement agreement with Benham Constructors, one of two defendants in the case. Behrman said Benham agreed to pay the company approximately $20.9 million. The settlement does not release claims against Leidos, Behrman said, adding that LSB plans to continue pursuing claims against Leidos, including allegations of fraud and breach of contract, and to seek “actual and punitive damages in excess of $300 million.” A trial against Leidos is scheduled to begin in October. Chief Commercial Officer Damien Renwick described the conflict in the Middle East as one of the most significant and prolonged supply disruptions the industry has experienced. He said the Strait of Hormuz represents about 20% of global ammonia seaborne trade and 30% of global urea seaborne trade, and that the disruption is affecting both shipping flows and fertilizer production in the region. → Meta Posted Its Best Sales Growth Since 2021—So Why Did Shares Fall? Renwick said these events are compounding other global supply issues, including reduced ammonia production in Trinidad, gas curtailments in India, outages in Australia, “increasingly frequent drone strikes on Russian nitrogen plants,” and export restrictions affecting urea (and potentially ammonia) from China. While some phosphate demand destruction has occurred globally, Renwick said ammonia and urea demand has remained consistent and fertilizer and industrial demand has been “reasonably strong.” On natural gas, Renwick noted that approximately 20% of global LNG transits through the Strait of Hormuz and said disruptions could contribute to elevated European natural gas prices, while the U.S. remains advantaged by low-cost gas. He said U.S. natural gas has been “incredibly resilient and affordable,” trading well below $3 per MMBtu. Renwick added that LSB expects the market implications to be persistent, with elevated pricing “throughout 2026 and even into early 2027,” even after the Strait is fully reopened due to the time required to restore normal logistics and production. → Verizon’s Signal Strength: The Turnaround Call Is Loud and Clear Renwick said LSB’s industrial business is currently in a “sold-out position,” even with improved production volumes. During the first quarter, the company optimized its production mix to maximize ammonium nitrate spot sales at above typical market prices, which Renwick said helped support customers impacted by supply disruptions. He said the U.S. ammonium nitrate market is under pressure due to lower domestic production availability while demand remains strong, with supply interruptions expected to continue through most of 2026. Renwick also pointed to strength in mining demand, describing a “renaissance in mining” driven by copper demand outpacing supply and record gold prices incentivizing new supply, particularly in the Western U.S. He added that quarrying and aggregate production has been growing, and that lower residential construction demand is being offset by higher private and public construction demand. He said coal demand remains resilient, supported by policy changes and demand for electricity. In chemicals, Renwick said finalized antidumping duties on imported methylene diphenyl diisocyanate (MDI) for five years have been positive for U.S. producers. In response to a question, he said the MDI duties are a “very positive story” for domestic producers, noting LSB’s customer base is running “flat out” and that some customers are contemplating expansions, prompting early discussions on supply needs. On agricultural markets, Renwick said the company had a “good spring ammonia campaign” and exited with minimal inventory, with inland ammonia prices tracking international levels. Favorable weather in the first quarter supported higher-than-expected shipments out of the Pryor facility and low inventory levels at quarter end, he said, and he observed that ammonia supply appeared constrained in late March. Renwick said ammonia demand is being supported by nitrogen pricing spreads, with ammonia at a significant discount to urea and UAN, incentivizing growers to minimize input costs amid “challenging grain economics.” For UAN, Renwick said grower economics remain difficult and supply chain inventory levels appear low. He added that the North American market is at risk of being short nitrogen due to uncertainty around forward urea imports, with urea pricing strengthening since late February due to the Iranian conflict and Strait of Hormuz issues. He said LSB is estimating very low UAN carryout inventories on June 30 at around 2025 levels, with the potential for even tighter conditions if urea shortages, unplanned downtime, or reduced imports occur. Renwick also noted the USDA’s projection of 95 million planted corn acres for the 2026 crop season, which the company expects will support robust nitrogen demand. Chief Financial Officer Cheryl Maguire said first-quarter adjusted EBITDA rose 44% year over year, increasing to $52 million from $29 million in the prior-year quarter. She attributed the increase to higher pricing and stronger volumes and product mix, partially offset by higher natural gas and other operating costs. Maguire said LSB ended the quarter with approximately $180 million in cash and net leverage of 1.4 times. Operating cash flow was $52 million, and after $15 million of sustaining capital expenditures, free cash flow was approximately $37 million. Looking to the second quarter, Maguire said the company expects to remain sold out with elevated pricing. She cited average pricing so far in Q2 of approximately $775 per metric ton for Tampa ammonia and $480 per ton for NOLA UAN, while natural gas costs have averaged below $3 per MMBtu. She also said a planned turnaround at the El Dorado facility is underway and is expected to reduce ammonia production by approximately 35,000 tons and result in $15 million to $20 million of turnaround-related expenses. Maguire said the company built ammonia inventory ahead of the outage and expects to operate downstream production during most of the ammonia outage. Despite the turnaround, Maguire said LSB expects second-quarter adjusted EBITDA to be “meaningfully higher” than both the first quarter of 2026 and the second quarter of last year, driven by strong market fundamentals and continued improvement in downstream production. Behrman said the company’s El Dorado low-carbon project is progressing, with LSB working with senior officials from the EPA’s Region 6 and targeting CO2 sequestration by the end of this year or early next year. He said that, in addition to a previously drilled injection well, the company completed drilling of an underground horizontal pipeline to transport CO2 from the capture area to the injection well. Next steps include completing civil work in the capture area and preparing for delivery of capture equipment this summer, with assembly and connection expected to finish in late fall. Behrman said the company is pursuing low-carbon product supply opportunities that could generate premiums and is evaluating potential sales of environmental attributes generated by the project. He also reiterated LSB’s longer-term improvement plan, referencing prior commentary about a path to an additional $50 million of annual EBITDA through initiatives including production targets, process efficiencies, and the El Dorado carbon capture project. Behrman said a “good portion” is expected to be realized by the end of this year, with the balance by the end of next year, on a run-rate basis. On capital deployment, Behrman said LSB is reviewing opportunities to invest in projects that could expand fertilizer and industrial production capacity, including debottlenecking and potential acquisitions or partnerships to increase production and scale. In response to questions, he pointed to the ability to expand ammonia plant production at El Dorado, noting the company has a USDA grant and is completing the final stage of engineering before a final investment decision. He said the company is also evaluating debottlenecking and potential capacity increases at its Pryor facility, including possible nitric acid expansion. Behrman said he has recently met with the administration in Washington, D.C. as part of an industry trade group and stated that the administration is focused on increasing domestic fertilizer production, viewing it as a food security issue, and that capital support could be available “for the right projects.” On operations, Behrman said LSB chose not to delay the El Dorado turnaround—previously pushed from last year—citing contractor scheduling and execution considerations. He said a Pryor turnaround is scheduled for July, and the company aims to complete it quickly, adding that skipping the work could risk extended downtime. Behrman also said he does not expect pricing to “fall off a cliff” later in the fall, given the expected duration of global supply disruptions. LSB Industries, Inc (NYSE: LXU) is an Oklahoma City–based manufacturer of chemical products serving the agricultural, industrial and defense markets. The company operates primarily through two segments: Fertilizer Solutions and Commodities Solutions. Through its Fertilizer Solutions segment, LSB produces primary nitrogen products—including anhydrous ammonia and technical-grade ammonium nitrate—that are sold to fertilizer distributors and agricultural retailers across North America. Its Commodities Solutions segment manufactures and sells nitric acid, sodium nitrate and other nitrate-based compounds for industrial applications such as mining, water treatment and specialty chemical production, as well as defense-related formulations used in munitions and pyrotechnics. Incorporated in 1969, LSB Industries has grown from a single production site to multiple manufacturing facilities strategically located in the central United States. The article "Lsb Industries Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Thursday, April 30, 2026 at 10 a.m. ET President & CEO — Mark T. Behrman Chief Commercial Officer — Damien J. Renwick EVP & CFO — Cheryl A. Maguire Mark T. Behrman: Thank you, Kristy, and good morning, everyone. I am pleased with our first quarter 2026 results. They were in line with our overall expectations and reflect the growing contribution from the impact of the operational discipline we have been building and executing over the past several years. Our progress has become increasingly evident over the past two quarters, driving improved operating and financial performance. The investments we have made to increase the safety, reliability, efficiency, and output at our facilities continue to bear fruit in the form of improving overall O&S performance, and significant year-over-year growth in net sales, adjusted EBITDA, and EPS. Our results reflect the progress we have made so far, and we expect to see additional improvement going forward. Our emphasis on production performance improvement, optimizing our product mix, and disciplined commercial execution reinforce our ability to maximize profitability. This will become even more important as current market dynamics begin to be reflected in pricing over the coming quarters. Regarding the progress of our CCS project at our El Dorado site, we feel good about meeting our projected timeline. I will provide an update later on in this call. Lastly, as we previously discussed, we have been involved in litigation with respect to engineering and procurement contracts related to the construction of the ammonia plant at our El Dorado, Arkansas facility. Earlier this month, we entered into a settlement agreement with Benham Constructors, one of the two defendants in the case. Pursuant to the terms of the settlement agreement, Benham agreed to pay us approximately $20.9 million. The settlement agreement does not release or otherwise discharge any claims, rights, or remedies we have against Leidos, including our claims for fraud and breach of contract. We plan to continue the vigorous prosecution of our filed claims against Leidos and continue to seek actual and punitive damages in excess of $300 million. The trial against Leidos is scheduled to begin in October. I will now turn the call over to Damien to provide more detail on the commercial environment. Damien J. Renwick: Thank you, Mark, and good morning, everyone. Let me start by discussing the ongoing conflict in the Middle East and the impact that it is having on our industry. This is one of the more significant and prolonged supply disruptions that we have experienced. The Strait of Hormuz alone represents 20% of global ammonia seaborne trade and 30% of global urea seaborne trade. While the situation remains fluid, these dynamics are creating meaningful supply constraints across both markets. We are seeing this manifest in two primary ways. The first is the disruption to shipping through the Strait and the ability to move product globally. Second, potentially more significant, is the impact to existing fertilizer production facilities in the Middle East, the full extent of which is not yet fully known. These dynamics are additive to the existing supply challenges across global markets, including reduced ammonia production in Trinidad, gas curtailments in India, outages in Australia, increasingly frequent drone strikes on Russian nitrogen plants, the potential export restriction of ammonia from China, as well as the ongoing export restriction of urea from China. While supply disruptions have been significant to date, global demand for ammonia and urea has remained consistent. Despite some demand destruction in phosphates globally, fertilizer and industrial demand have been reasonably strong, supported by Indian domestic consumption and fertilizer and industrial upgrades globally. Moving to natural gas, approximately 20% of the world's LNG transits through the Strait. This has been severely disrupted, and there is very little alternative supply of LNG that can offset this. We expect European natural gas prices to be increasingly elevated as they work to fill up their storage ahead of next winter. During this time, we expect to be advantaged on U.S. natural gas prices, which have been incredibly resilient and affordable. Today, it trades well below $3 per MMBtu. We also believe that the implications for the market will not be short-lived. Even when the Strait is fully opened, it will take some time before normality is restored. We expect elevated pricing throughout 2026 and even into early 2027. Our industrial business is in a sold-out position, even with our improved production volumes. During the first quarter, we optimized our production mix to maximize ammonium nitrate spot sales at above typical market prices. This allowed us to support customers whose AN supply has been disrupted. The U.S. AN market continues to be under pressure, with significantly lower domestic production available while demand is strong. We expect these constructive market dynamics to continue to impact market prices, with supply interruptions expected to continue through most of 2026. As we think about the mining market segment, we are encouraged to see a renaissance in mining. What we are seeing is not temporal, but structural. Copper demand is strongly outpacing supply, and record gold prices are incentivizing new supply. Much of this activity is taking place in the Western U.S. Quarrying and aggregate production has also been growing. Lower demand in residential construction is being offset by higher demand in private and public construction. Even coal remains resilient, supported by policy changes and insatiable demand for electricity. The chemical segment has also been positive. The antidumping duties on imported methylene diphenyl diisocyanate (MDI) have been positively finalized for five years. Generally, the chemical producers in the U.S. are feedstock-advantaged with U.S. natural gas liquids, while international peers are paying much higher naphtha inputs, which have been disrupted from the Strait of Hormuz. Moving to the domestic ammonia market, we had a good spring ammonia campaign and exited with minimal inventories. Inland prices continue to track with international prices, so we expect this to carry through to summer fill. New domestic supply in the U.S. Gulf continues to ramp up, albeit with some delays. However, this new supply is nowhere near the extent of the supply that is disrupted globally, and would only approximately offset the loss of production in Trinidad. Favorable weather windows during the first quarter allowed growers to apply ammonia, resulting in higher-than-expected shipments out of our Pryor facility and low inventory levels at the end of the quarter. Ammonia supply appeared to be constrained during March, with many customers seemingly dealing with allocations and the inability to secure enough supply to meet growers' application demand. Agricultural demand for ammonia is being supported by nitrogen pricing spreads, with ammonia trading at a significant discount to urea and UAN. Growers are especially incentivized this year to minimize input costs given the current challenging grain economics. While side-dress ammonia demand is a relatively modest percentage of total nitrogen demand, we would expect this pricing relationship to persist and growers to be incentivized to maximize ammonia purchases and application during the second quarter. Turning to UAN, grower economics, as previously mentioned, are challenging for the upcoming crop year. We believe the difficult margin environment for growers is resulting in limited risk-taking and positioning of product throughout the supply chain. We currently believe that the North American market is at risk of being short nitrogen due to uncertainty around forward urea imports. Urea pricing has strengthened since February due to the Iranian conflict and the Strait of Hormuz issues, and the U.S. has consistently priced at a discount relative to the rest of the world, putting import volumes for late April and May at risk. UAN demand has been steady throughout 2026, and we expect that to continue through the second quarter and into July. We believe that current supply chain inventory levels are low, and that demand may attempt to switch away from urea if pricing spreads or availability of urea become an issue during Q2. We are currently estimating a very low carry of UAN inventories on June 30, at around 2025 levels. Urea shortages, unplanned downtime across the U.S. production system, or reduced imports could reduce carryout even further than currently expected. Lastly, the USDA recently projected 95 million planted corn acres for the 2026 crop season, and we anticipate robust nitrogen demand through the full fertilizer application season. I will now turn the call over to Cheryl to discuss our first quarter financial results and our outlook. Cheryl A. Maguire: Thanks, Damien, and good morning. On page six, you will see a summary of our first quarter 2026 financial results. As Mark mentioned earlier, we focus consistently on improving the reliability and efficiency of our assets, and we believe these results, as with last quarter's results, reflect those efforts and the progress we continue to make, which is contributing to our ability to capitalize on tight market conditions. As shown on page seven, Q1 adjusted EBITDA grew 44% year over year from $29 million in Q1 last year to $52 million this year. This increase reflects higher pricing, coupled with stronger volumes and product mix, which were partly offset by higher natural gas and other operating costs. On page eight, you can see that our balance sheet remains solid, with approximately $180 million in cash at the end of the first quarter and net leverage at 1.4 times. Operating cash flow for the quarter was $52 million. After subtracting $15 million of sustaining capital, which is the capital required to maintain our operations, our free cash flow was approximately $37 million. This reflects strong free cash flow generation in the quarter, and we are encouraged by these results. Looking ahead, we remain focused on sustaining a high level of free cash flow generation, and our strong balance sheet gives us meaningful flexibility to invest in growth opportunities and drive long-term value creation. Looking ahead to the second quarter, we expect demand for our products to remain strong as we operate in a sold-out position. We also expect pricing to remain elevated. Tampa ammonia and NOLA UAN have averaged approximately $775 per metric ton and $480 per ton, respectively, while natural gas costs have averaged below $3 per MMBtu thus far in the second quarter. Our planned turnaround at our El Dorado facility is underway and is a key step to continued operational improvement. The outage is expected to impact ammonia production by approximately 35 thousand tons. Additionally, we expect to incur approximately $15 million to $20 million of turnaround-related expenses during the period. As discussed on our last call, we built ammonia inventory heading into the turnaround and therefore expect to operate our downstream production during the majority of the ammonia outage. Putting it all together, despite the turnaround, we expect Q2 adjusted EBITDA to be meaningfully higher as compared to 2026 Q1 and the second quarter of last year, driven by strong market fundamentals and continued improvement in downstream production. And now I will turn it back over to Mark. Thank you. Mark T. Behrman: Turning to page nine, our El Dorado low-carbon project is progressing, and we continue to work closely with senior officials from the EPA's Region 6 with a goal of sequestering CO2 by the end of this year or early next year. In addition to the previously drilled injection well, this quarter we completed the drilling of the underground horizontal pipeline that will transport CO2 from the capture equipment area to the injection well that will sequester the CO2. The next step is to complete the capture area civil work and prepare the area for delivery of the capture equipment this summer. The assembly and connection of the different pieces of capture equipment is expected to be completed in late fall this year. On the commercial front, our team continues to pursue low-carbon product supply opportunities where we can generate premiums for those products, as well as evaluate the potential to sell environmental attributes generated. We are excited as we are getting closer to completing our project and realizing our vision of decarbonizing ammonia. As I mentioned earlier, we have been highly focused over the last several years on increasing the reliability of our facilities, which has translated into higher production rates, improved product mix, and lower costs. During this time, we have often been asked about when we would begin to see the results of these investments. I think I can safely say that after two consecutive quarters of $50 million-plus in EBITDA, led by significantly improved production performance, we are beginning to see the fruits of all the hard work our teams have accomplished over the last three years. And we are not done. As we continue to invest in our business, including the El Dorado turnaround Cheryl mentioned, along with the scheduled turnaround at our Pryor, Oklahoma facility in the third quarter, we expect continued improvement in our overall production performance. In previous calls, we have laid out a path to a $50 million of annual EBITDA through specific initiatives including production targets, process efficiencies, and our El Dorado carbon capture project. A good portion of this is expected to be realized by the end of this year with the balance coming by the end of next year. We ended the quarter with a strong cash position, having generated significant free cash flow for the quarter. We also believe we will generate meaningful free cash flow for the remainder of this year. This, plus the approximately $21 million settlement payment I mentioned earlier, will provide us with financial flexibility and numerous options as we consider the best way to create value for our shareholders. We are currently reviewing several opportunities to invest capital into projects that would enable us to expand both our fertilizer and industrial production capacity. These include debottlenecking activities, as well as evaluating potential acquisition or partnership opportunities that offer the ability to increase our production while gaining meaningful scale. There is no question that the evolving geopolitical landscape, including the conflict in the Middle East and associated disruption of production facilities there, as well as the ongoing impact of important trade channels, is having a significant impact on the global availability of nitrogen fertilizers. We expect this will continue throughout the remainder of 2026 and into 2027. Our improved operating performance is enabling us to maximize fertilizer production and support U.S. farmers with additional supply in this difficult time. We are encouraged by our continued execution across the business and believe it positions us to continue supporting our customers and deliver sustainable growth and long-term value creation. Before we open it up for questions, I would like to mention that Cheryl will be participating in the Barclays Leveraged Finance Conference in Austin on May 18 and the Wolfe Research Materials Future Conference in June in New York City. Additionally, Damien and I will be participating in the Granite Research Virtual Conference Series on June 30 and July 1. We look forward to speaking with some of you at these events. That concludes our prepared remarks. We will now open the call for questions. Operator: Ladies and gentlemen, if you would like to ask a question, please press star 1 and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Lucas Charles Beaumont with UBS. Please proceed. Lucas Charles Beaumont: Good morning. Thank you. I want to get your view on where the nitrogen market is going. It seems like there has been a bit of a disconnect between what is happening in the physical market and the degree of the disruption that we are seeing. Prices have moved up a lot in certain areas, urea or UAN, but the cost curve not as much so far. We have not seen any resumption yet in trade flows, and I think even if things were to be credibly reopened tomorrow, we would probably still have four-plus weeks before production would restart over there, and then two to three months before we could start seeing deliveries again into import markets. From where we stand today, how do you see market dynamics evolving over the next couple of months and what does that mean for pricing and, ultimately, demand and demand destruction? Thanks. Mark T. Behrman: Morning, Lucas. I think you are right. There is the perception that if there was a permanent ceasefire, things would go back to normal relatively quickly, and I think that is a misnomer. First off, there is so much supply that has been taken out of the marketplace that it will take a relatively long time to make that up. Part of the reason is there has been damage to facilities in the Middle East, and I think most of us do not really understand what type of damage the production facilities have incurred, and so we do not know how long it will be before some of those plants that were damaged come back online. I also think people may be miscalculating the backup of vessels that are waiting to get out of the Strait, how long that will take, the coordination, and which vessels get priority. Big picture, we think that it is going to take certainly through the end of this year and into next year until we see things back to normal again. As far as our view on pricing and supply-demand, I will pass it over to Damien for a more current view on the ground. Damien J. Renwick: Good morning, Lucas. It has been interesting to observe how the market has responded. The U.S., particularly with urea, is priced at a fairly significant discount to market prices. India bid very heavily on the basis of their government support for tonnes, so they are in a reasonably good position now following their latest tender. You have also got Brazil trading upwards of where NOLA urea is at the moment. I think there is some concern on product availability here in the U.S. that may materialize over the next four to eight weeks as we work through the full season, and that is where it will all bear out. Also, Tampa ammonia has not settled yet; it should go upwards from where it is today. As Mark said, we have months before you see anything calm down after the Strait has reopened, and then the world gets a sense of what plants have been damaged or what the restart profile looks like, notwithstanding all of the other issues you have throughout the world with damage to Russian plants, Trinidad production being out probably for the long term, and the typical interruptions you are seeing, like with Burrup in Australia being out for many weeks. We are pretty positive, optimistic on pricing. Lucas Charles Beaumont: Thanks. That is helpful. On the industrial side, I know a large portion of your book is contracted. How is industrial demand responding more broadly and pricing there? What are you doing to capitalize most on the current market? And second, on the industrial versus fertilizer mix, where do you think the demand destruction in the industry comes from to equilibrate demand with the lower supply available this year? Damien J. Renwick: Our portfolio is weighted nicely to mining, and as I said earlier, mining activity globally, particularly in the U.S., is very strong, with a strong pipeline for new projects. That is underpinning very strong demand for ammonium nitrates for explosives, and we are leaning into that as best we can, optimizing our production mix to take advantage of the current situation, particularly in the U.S. with some supply being out of the market. We are maximizing our spot sales into that market. In terms of other industrial demand, it has been steady. We talked about nitric demand through polyurethane and MDI, and that is still strong in the U.S. The fundamentals around that industry continue to hold true, and U.S. producers are well shielded from some of the issues in the Middle East that other global producers are experiencing. We are seeing them maximize production, which is maintaining very strong levels of demand for our products. In terms of demand destruction, you will see buyers opt out when their economics get too strained, and you have already seen that in phosphates with those producers experiencing a double whammy with both ammonia and sulfur. Sulfur prices are at extremely high levels, and sulfuric acid prices have followed. You will also see, through the nitrogen molecule, some regions of the world decide not to apply nitrogen, particularly parts of Africa or Asia, and even countries that cannot get product; they will not have a choice. You will see that start to happen, and the market will act rationally and efficiently as it tends to do. Mark T. Behrman: One thought to add: security of supply is now front and center. Going back to the beginning of the Russia-Ukraine conflict and now this conflict, people are really focused on security of supply. In our industrial business, customers need product because it is either a feedstock for another product, as Damien talked about with nitric acid, or you need AN to mine copper or gold. This focus on security of supply is creating interesting opportunities for us because we have customers that desire long-term product and want to know they have it. We may have opportunities to expand at our sites—some brownfield expansion or debottlenecking—supported by customer contracts and demand. Damien J. Renwick: To build on that, with our three facilities we have the ability to support our industrial customer base through each of the three facilities with the core industrial products. That is a huge strength of our business, and our customers value that security of supply. We expect that to continue to be reflected in what we do going forward, with customers attracted to that value proposition. Lucas Charles Beaumont: Lastly, on free cash flow, it looks like you could easily do an extra $100 million this year, maybe $200 million more in free cash flow than last year, plus the $20 million from the legal settlement. You mentioned looking at new projects to deploy that. Any more detail? Should we refer back to the last Investor Day projects, or is there anything else under consideration? Mark T. Behrman: We have talked on previous calls about the ability to expand the ammonia plant production at El Dorado. We do have a USDA grant to provide some capital for that. While we have not FID’d that project, we will do our last stage of engineering before FID, and I think there is a high probability that we would move forward with that project. With the current administration focused on increasing domestic fertilizer production, we are thinking about how we can expand other parts of El Dorado and maybe even some new products at El Dorado with the support of the administration, plus the capital we have available. That would be the plan at El Dorado—figure out how to expand given the current environment and the capital we have and will generate. At our other two facilities, there are things at our Pryor facility we are looking at—whether debottlenecking, increasing nitric acid production, or other things. We have the ability with our current assets to invest that capital to get attractive returns, and we are focused on doing the work to make sure our assumptions are correct before moving forward. The administration is looking to onshore or increase domestic fertilizer production, and we want to support that. Operator: The next question comes from the line of Andrew D. Wong with RBC Capital Markets. Please proceed. Andrew D. Wong: Good morning. I wanted to follow up on the comment around the administration's support for fertilizers. There was funding from the USDA earlier. Is there anything else that has come up more recently? Is there anything larger the administration may look at that LSB Industries, Inc. could participate in? Mark T. Behrman: Morning, Andrew. I do not know that there is another USDA funding program like the original one that came out during the Biden administration. What I can tell you is I was in D.C. a couple of weeks ago as part of an industry trade group talking with the administration, and there is a fair amount of capital that the administration has and would like to commit to increasing domestic fertilizer production. I think they want to support that. They have done a number of press releases, and they are talking about the abundance and low cost of natural gas in the United States, and nitrogen fertilizers being a derivative of natural gas. They would prefer not to depend on other countries for fertilizer. They look at it as food security, which is extremely important—even to the point of, if we ever got there, being an exporter versus an importer. I do think there is capital available, and for the right projects, they would support new projects with capital. Andrew D. Wong: For this year, I understand there is a heavier turnaround schedule. How flexible is that? Are you able to hold off on some of the work and maybe have the plants come on faster given the current price environment, or is that too disruptive to the plans you already have in place? Mark T. Behrman: We are currently in our turnaround at El Dorado. We discussed whether to delay it prior to going in, but we pushed off that turnaround from last year already. When you do major project work like a turnaround, lining up the contractors and getting the right people is critical, and if you start pushing things around, you run the risk of not having the desired contractor or people. We elected not to push off that turnaround. I think we will come out of it in great shape. I am excited about that because I think not only will we increase reliability, but we have done a lot of work on the site that sets us up for the expansion I talked about—whether electrical work or other infrastructure that will allow us to leverage that to do some expansion. For Pryor, we have a turnaround in July. There is specifically one item we need to address, and we will try to get through that turnaround as quickly as we can, but we would run the risk of having extended downtime if we do not go through it. We are focused on that. I do not think we are going to see pricing fall off a cliff later in the fall, so we expect an opportunity to take advantage of the pricing market, which we think will last longer. Operator: The next question comes from the line of Robert Miles McGuire with Granite Research. Please proceed. Robert Miles McGuire: Good morning and congratulations on the quarter. MDI tariffs and countervailing duties—how are they affecting nitric acid demand and LSB Industries, Inc.'s debottlenecking plans? How do you think the tariffs and duties will shape the market from here? Damien J. Renwick: Hi, Rob. It is a very positive story for U.S. domestic producers of MDI. Our customer base is running flat out. They are contemplating their own expansions, and we are in early discussions with them about what that might look like from a supply perspective. There is a very positive tailwind in the U.S. because of that, and we are also seeing it more broadly with some other producers bringing on additional capacity. Robert Miles McGuire: Thank you, Damien. With regards to the projects, what should we be looking for exiting the turnarounds this year that relate to progress with your value creation projects? Mark T. Behrman: As I mentioned in the prepared comments, we expect to see a good portion of that $50 million in value creation as we come out of this year on a run-rate basis, with the balance occurring by the end of next year. So about half by the end of this year and the balance by the end of next year, on a run-rate basis. Robert Miles McGuire: On AN, should we be looking for a similar mix of AN and UAN in the second quarter that we saw in the first quarter? Is there room for further AN production? Damien J. Renwick: You will see the same mix. We are probably at our limit of what we can lean into, so that will continue through at least the end of the year. Robert Miles McGuire: Lastly, sulfuric acid—do you still produce and sell on a commercial basis? Can you benefit from the recent price increase, or is that not really a product at this point? Damien J. Renwick: We are still in that market, although it is immaterial to the overall profile. Yes, sulfur prices are going up, but so too are sulfur costs, so margins are pretty stable. Operator: Thank you. This concludes the question-and-answer session. I will hand the call back over to Mark T. Behrman for closing remarks. Mark T. Behrman: I appreciate everyone's interest in LSB Industries, Inc. I hope you can see that we are making progress. We are excited about the progress we have going forward, and I hope to talk to some of you at the upcoming conferences. Thanks, and have a great day. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. Before you buy stock in LSB Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LSB Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,797!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,282,815!* Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. LSB Industries (LXU) Q1 2026 Earnings Transcript was originally published by The Motley Fool

OKLAHOMA CITY, April 29, 2026--(BUSINESS WIRE)--LSB Industries, Inc. (NYSE: LXU) ("LSB," "we," "us," "our," or the "Company") today announced results for the first quarter ended March 31, 2026. First Quarter 2026 Results and Recent Highlights Net sales of $169.5 million compared to $143.4 million in the first quarter of 2025 Net income of $19.7 million compared to a net loss of $1.6 million in the first quarter of 2025 Diluted EPS of $0.27 compared to $(0.02) for the first quarter of 2025 Adjusted EBITDA(1) of $52.1 million compared to $29.1 million in the first quarter of 2025 Total cash, cash equivalents and short-term investments of approximately $181.7 million and total debt of $441.2 million as of March 31, 2026 "I am pleased with our first quarter results, as they are in-line with our overall expectations. Our results reflect the impact of the operational discipline we have been building and executing over the past several years. Our progress is increasingly evident over the past two quarters, driving improved operating and financial performance," stated Mark Behrman, LSB Industries' Chairman & Chief Executive Officer. "The evolving geopolitical landscape, including the conflict in the Middle East and associated disruption of production facilities and important trade channels, is significantly impacting the global availability of nitrogen fertilizers. Importantly, our improved operating performance is enabling us to maximize fertilizer production and support US farmers with additional supply in this difficult time. We are encouraged by our continued execution across the business and believe it positions us to continue supporting our customers and deliver sustainable growth and long-term value creation." Market Outlook Industrial business is strong with positive market conditions: Supply of Ammonium Nitrate (AN) for explosives in mining and quarrying/aggregate production is constrained in North America due in part to producer outages. Demand for AN across all commodities remains strong, particularly with copper and gold miners maximizing production to take advantage of strong supply and demand fundamentals in their markets, leading to tight market conditions and higher AN selling prices. Demand for nitric acid is robust domestically, where it is supported by tariffs and countervailing duties on imports of methylene diphenyl diisocyanate (MDI). The duties were finalized on April 8, 2026, for a period of five years. Fertilizer markets are tight due to the conflicts in the Middle East and pricing remains strong: Ammonia prices currently reflect: Significantly reduced ammonia supplies due to ammonia vessels unable to transit through the Strait of Hormuz Higher costs of production in Europe Ongoing curtailment of ammonia production in Trinidad and new production outages in Australia Increased import demand in India to offset reduced supply of LNG Potential export controls in China Gas supply disruptions in North Africa reducing ammonia production, and Slow ramp up in new US production capacity, which is constraining global supply availability Urea Ammonium Nitrate (UAN) prices recently improved, reflecting: Increased demand ahead of the Spring fertilizer application season Continued lower-than-expected working inventory through the supply chain Like ammonia, significantly reduced urea supplies due to vessels unable to transit through the Strait of Hormuz leading to a strengthening in urea prices and higher UAN demand as customers switch from urea to UAN Strong import demand for Urea in India and increased government subsidies to support purchases Other notable developments include: Increasing and frequent drone attacks on Russian nitrogen plants and ports Russian export ban on AN for one month, with potential extension Limited Urea exports from China as they appear to continue to prioritize domestic supply Corn market dynamics support fertilizer demand: Demand is keeping stocks-to-use near historical levels (ending projections for 2025/26 crop year in USDA’s April WASDE is 12.9% versus long-term average of ~13%) USDA projecting 95+ million planted acres for corn for the 2026/27 crop season and we anticipate robust nitrogen demand through the full fertilizer application season 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 CO2 per year, which would reduce our Scope 1 emissions by approximately 25%, yielding between 305,000 and 380,000 metric tons per year of low carbon ammonia Completed stratigraphic well in June 2025 to provide data to support EPA in review of Class VI application Lapis Carbon Solutions resubmitted the pre-construction Class VI permit application to the EPA in December 2025. Once the project receives EPA approval, we intend to use the completed stratigraphic well for CO2 injections Expect to begin operations in Q4 ‘26/Q1 ‘27 First Quarter Results Overview Comparison of First Quarter of 2026 to 2025: Higher selling prices combined with increased AN and Nitric Acid volumes resulted in higher net sales for the period compared to the previous year. Tight market conditions shifted some production toward AN, resulting in lower UAN sales volumes. In addition, ammonia sales were impacted slightly as we built inventory in preparation for the scheduled turnaround at our El Dorado facility in the second quarter. The following tables provide key sales metrics for our products: Conference Call LSB’s management will host a conference call on Thursday, April 30, 2026 at 10:00 am ET / 9:00 am CT to discuss first quarter 2026 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 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 and industrial 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; 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. 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. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260429450667/en/ Contacts Company Contact: Cheryl Maguire, Executive Vice President & CFO (405) 510-3524 [email protected] David Kimmel, Director of Communications (405) 815-4645 [email protected]