LSB Industries reports turnaround in sales and income

Oklahoma City-based LSB Industries, Inc.  announced increased net sales and net income for the second quarter ended June 30, 2019. The company leadership reported an unprecedented operating performance for the quarter.

  • Net sales increased 18% to $121.5 million for the second quarter of 2019, compared to net sales of $103.2 million for the second quarter of 2018.
  • Net income of $6.6 million for the second quarter of 2019, compared to net loss of $27.5 million for the second quarter of 2018.
  • Adjusted EBITDA(1) increased 71% to $30.5 million for the second quarter of 2019, compared to $17.8 million for the second quarter of 2018.

“We significantly improved results relative to the second quarter of 2018, despite the continued impact of bad weather in the Midwest on demand from our agricultural markets,” stated Mark Behrman, LSB’s President and CEO. “Net sales and adjusted EBITDA increased as a result of higher production volumes at all of our facilities for both agricultural and industrial products and, to a lesser extent, higher pricing for agricultural products relative to last year.

“We had another strong quarter of plant operations. Our ammonia plants averaged a collective 94% on-stream rate across all three facilities for the period, a level we’ve now achieved for four consecutive quarters, consistent with our stated target for 2019. This operating performance is unprecedented in LSB’s history and reflects the capital investments we’ve made to ensure greater reliability,” added  Behrman. “We are planning a fourteen-day turnaround for our El Dorado facility in August and a thirty-day turnaround at our Pryor facility beginning in mid-September. Once this planned maintenance is completed, we believe we will be in position to run all of our plants at high operating rates for an extended period of time, with no turnarounds scheduled at any of our facilities in 2020.”

The company reported agricultural ammonia increased 13%, largely due to strength in demand for product produced out of the Pryor and Cherokee facilities. Pricing for industrial products was lower for the quarter compared to the second quarter of 2018 primarily due to the continued weakening of the Tampa ammonia benchmark price, the relevant index used to price many industrial products.

A poor fall and spring application season in U.S. agricultural markets, combined with weather impacting the movement of ammonia from the Gulf region, has caused a build-up of ammonia inventory across the distribution channel, resulting in downward pressure on Tampa ammonia benchmark pricing and Gulf ammonia in general.

Mr. Behrman continued, “Looking ahead to the second half of 2019, even with the aforementioned turnarounds at two of our facilities, we expect a year-over-year increase in adjusted EBITDA driven by higher rates of production. Subject to weather, we believe that this year’s fall ammonia application season will be heavier than normal as corn prices have risen to the highest levels since 2014, reflecting lower expected harvested acres and weak yields for this season’s corn crop.”

Three Months Ended June 30,



(Dollars in millions)

Net Sales by Market Sector







$ 72.5

60 %

$ 58.0

56 %

25 %



30 %


32 %

13 %



10 %


12 %

(4) %



18 %

Comparison of 2019 to 2018 periods:

  • Net sales of LSB’s agricultural products increased during the quarter relative to the prior year due largely to stronger operating rates at the El Dorado and Pryor facilities. Higher HDAN volumes also reflect the recognition of sales that were pushed out of the first quarter of 2019 due to weather-related factors, while ammonia volumes were augmented by strong demand out of the Southern Plains market early in the quarter. entering the U.S. market.
  • Net sales of industrial products increased as a result of a greater volume of ammonia sales reflecting stronger operating rates at the El Dorado facility. The benefit of higher sales volume was partially offset by lower selling prices for industrial ammonia and other industrial products, which are principally indexed to Tampa ammonia benchmark pricing. The continuing weather-related weakness in demand for agricultural ammonia resulted in a significant increase in inventory levels across the distribution channel, translating into continued softening in the Tampa ammonia benchmark price.
  • Operating income increased year-over-year primarily due to increased sales volume and operational efficiency coupled with the benefit of lower natural gas prices.