Nov 13, 2025 5:11 PM Eastern Standard Time LSB Industries, Inc. to Participate in NYSE Industrials Virtual Conference Share OKLAHOMA CITY--(BUSINESS WIRE)--LSB Industries, Inc. ("LSB†), (NYSE: LXU), today announced that its Executive Vice President and Chief Financial Officer, Cheryl Maguire will be participating in the NYSE Industrials Virtual Conference on November 18 and 19. Ms. Maguire will be available for one-on- one meetings all day on November 19. To schedule a meeting please contact the NYSE via ...

Financial Performance - Net sales for Q3 2025 reached $155.431 million, a 42.3% increase from $109.217 million in Q3 2024[12] - Gross profit for Q3 2025 was $25.543 million, compared to a gross loss of $7.945 million in Q3 2024[12] - Net income for Q3 2025 was $7.115 million, a significant recovery from a net loss of $25.382 million in Q3 2024[12] - Operating income for Q3 2025 was $15.629 million, a turnaround from an operating loss of $24.423 million in Q3 2024[12] - The company reported a basic net income per share of $0.10 for Q3 2025, compared to a loss of $0.35 per share in Q3 2024[12] - For the nine months ended September 30, 2025, net income was $8.481 million compared to a net loss of $10.204 million in the same period of 2024, representing a significant turnaround[17] - Adjusted gross profit for the first nine months of 2025 was $128.8 million, a 12% increase from $114.9 million in the same period of 2024, with a gross profit percentage of 14.0%[145][149] - Adjusted gross profit for the three months ended September 30, 2025, was $45.978 million, compared to $25.003 million for the same period in 2024, indicating an increase of approximately 83.6%[188] Assets and Liabilities - Total current assets decreased to $270.620 million as of September 30, 2025, down from $309.714 million at December 31, 2024[10] - Total liabilities decreased to $644.918 million as of September 30, 2025, compared to $633.210 million at December 31, 2024[10] - Cash and cash equivalents increased to $27.951 million from $20.230 million at December 31, 2024[10] - Total stockholders' equity increased to $504.609 million as of September 30, 2025, up from $491.640 million at December 31, 2024[10] - Long-term debt as of September 30, 2025, was $447,582,000, down from $476,163,000 as of December 31, 2024[55] - The company’s long-term debt includes Senior Secured Notes due 2028 with an interest rate of 6.25%[55] - The company’s financial covenant under the Revolving Credit Facility was not triggered as of September 30, 2025[57] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $77.575 million, slightly down from $82.600 million in 2024[17] - Net cash used by investing activities was $16.942 million for the nine months ended September 30, 2025, compared to $18.380 million in 2024, indicating a reduction in investment outflows[17] - Cash and cash equivalents at the end of the period were $27.951 million, down from $42.283 million at the end of September 2024[17] - The company repurchased $32.076 million of 6.25% Senior Secured Notes during the nine months ended September 30, 2025, compared to $92.216 million in 2024, indicating a shift in financing strategy[17] - Net cash provided by operating activities for the first nine months of 2025 was $77.6 million, a decrease of $5 million compared to $82.6 million in 2024[157] - Net cash used in financing activities was $52.9 million for the first nine months of 2025, a significant decrease from $123.0 million in the same period of 2024[160] Sales and Production - The company reported net sales of $176.8 million for AN & Nitric Acid in the nine months ended September 30, 2025, compared to $154.9 million in the same period of 2024, reflecting a 14.2% increase[89] - Urea ammonium nitrate (UAN) sales increased to $147.6 million for the nine months ended September 30, 2025, from $109.3 million in 2024, marking a 35% growth[89] - Total product sales volume for the first nine months of 2025 was 1,132,502 tons, a 12% increase from 1,007,081 tons in the same period of 2024[146] - Total ammonia production target for 2025 is approximately 820,000 to 850,000 tons[128] - The company expects to produce approximately 305,000 to 380,000 metric tons of low carbon ammonia annually, which could be sold at higher price levels than conventional ammonia[107] Market Conditions and Pricing - Ammonia prices are currently constrained due to reduced supply from the Middle East and higher production costs in Europe, with expectations of continued supply constraints through the end of 2025[110] - UAN prices have strengthened above year-ago levels, driven by steady exports and strong demand, with tight U.S. supply fundamentals expected to persist into 2026[111] - The USDA estimates approximately 98 million acres of corn will be planted in 2025, a 9% increase from 2024, supporting strong fertilizer demand[112] - The company anticipates changes in ammonia pricing, which could affect overall revenue and market positioning[199] Environmental and Regulatory Matters - The company has identified a wastewater treatment technology for nitrogen-containing wastewater streams at the Pryor Facility, but costs related to the replacement of the disposal well are currently unestimable[69] - The company accrued an estimate for penalties related to a Notice of Violation from the EPA, which was not material and paid as of September 30, 2025[75] - The company continues to work with the Oklahoma Department of Environmental Quality under a Consent Order for the continued use of the injection well until a wastewater treatment process is operational[68] - The company expects to incur environmental compliance expenses ranging from $0.9 million to $1.2 million for the remainder of 2025, following $3.2 million in expenses for the first nine months of 2025[176] Strategic Initiatives - The company is evaluating opportunities for organic capacity expansion and potential acquisitions to enhance value and provide attractive returns to stockholders[109] - There is an ongoing strategy to broaden product distribution, leveraging nitric acid production capacity at the El Dorado Facility[199] - The company has entered into a five-year agreement to supply up to 150,000 short tons per year of low carbon ammonium nitrate solution to Freeport Minerals Corporation, starting January 1, 2025[105] Risks and Challenges - The company faces risks from increased competitive pressures and changes in federal, state, and local regulations, including those related to climate change[201] - Recent U.S. tariffs on agricultural products may impact selling prices and input costs, potentially disrupting supply chains[208] - Economic cycles and global market conditions are critical factors that could adversely affect financial performance and liquidity[205] - The international market for nitrogen fertilizer significantly influences operating results, affected by currency values and foreign agricultural policies[207]

Financial Data and Key Metrics Changes - The company reported a significant increase in adjusted EBITDA from $17 million in Q3 2024 to $40 million in Q3 2025, driven by higher pricing and increased sales volumes, despite higher natural gas and other costs [8][9] - Free cash flow generation returned, with approximately $20 million generated year-to-date and $36 million in Q3 2025 [9][10] - The balance sheet remains solid with approximately $150 million in cash and net leverage at approximately two times [9] Business Line Data and Key Metrics Changes - The transition from high-density ammonium nitrate (HDAN) to ammonium nitrate solution for explosives has been completed, optimizing the sales mix [5] - UAN pricing averaged $336 per tonne in Q3 2025, up 65% from Q3 2024, supported by steady exports and strong demand [6] - UAN volumes decreased from 150,000 to about 135,000 year-over-year, with expectations to align with targets in Q4 [45][46] Market Data and Key Metrics Changes - The ammonia market remains tight, with Tampa ammonia prices increasing by $60 to $650 per metric tonne for November, up from $590 in October [6][9] - Domestic production of methylenediphenyl diisocyanate (MDI) is increasing due to tariffs on imports, positively impacting nitric acid sales [5] - The company expects a healthy fall ammonia application season, with strong demand in the U.S. and globally [20] Company Strategy and Development Direction - The company is focused on enhancing performance across its business and investing in strategic priorities, including a low-carbon project at the El Dorado facility expected to generate approximately $15 million in annual EBITDA starting in 2027 [11][12] - There is an ongoing evaluation of production capacity expansion, including potential ammonia expansion at El Dorado [31][32] - The company aims to shift sales towards more contractual industrial sales to improve earnings stability and visibility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a robust market outlook and the company's position to improve operational and financial performance [12] - The company anticipates the fourth quarter of 2025 to be higher than the prior year due to increased selling prices and production, despite higher variable costs [10] - Management highlighted the importance of safety and the need to remain focused on safe operations following a tragic incident [3] Other Important Information - The company will participate in the NYSE Industrials virtual conference on November 18th and 19th [12] - The transition to industrial-grade products allows for better visibility into earnings due to the pass-through of natural gas costs [9] Q&A Session Summary Question: Ammonia market outlook and pricing impact - Management noted a tight supply and demand market globally, with ongoing issues in Trinidad affecting supply [18][20] Question: UAN pricing and setup for 2026 - Management expressed optimism for UAN, expecting prices to recover as the market tightens due to reduced Chinese exports [22][24] Question: Volume impacts and cost side for Q4 - The transition from HDAN to ammonium nitrate solution led to higher costs, but volumes are expected to align with Q3 levels in Q4 [26] Question: Industrial demand impact on contracts and margins - Healthy nitrogen prices are expected to aid in negotiating new contracts and maintaining margins [29][30] Question: El Dorado project and offtake agreements - The CCS project has a negotiated rate for CO2 sequestered, and management is exploring additional contracts and monetization opportunities [40][42]

Q3'25 Earnings Presentation October 30, 2025 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, capita ...

Company Performance - LSB reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, compared to a loss of $0.11 per share a year ago, representing an earnings surprise of +42.86% [1] - The company posted revenues of $155.43 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 30.26%, and compared to year-ago revenues of $109.22 million [2] - Over the last four quarters, LSB has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - LSB shares have increased approximately 21.2% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] - The current consensus EPS estimate for the coming quarter is $0.09 on $123.65 million in revenues, and $0.22 on $537.7 million in revenues for the current fiscal year [7] Industry Outlook - The Zacks Industry Rank indicates that the Chemical - Diversified sector is currently in the bottom 7% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LSB's stock performance [5]

Group 1 - LSB (LXU) shares experienced a significant increase of 12.4%, closing at $8.99, following a period of 2.4% loss over the past four weeks, indicating a strong trading session with higher-than-average volume [1] - The company's positive outlook is driven by strong selling prices and favorable demand, alongside steady exports and lower imports, resulting in tight supply fundamentals in the ammonia market [2] - LSB is projected to report quarterly earnings of $0.05 per share, reflecting a year-over-year increase of 145.5%, with expected revenues of $119.32 million, up 9.3% from the previous year [3] Group 2 - The consensus EPS estimate for LSB has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4] - LSB holds a Zacks Rank of 3 (Hold), indicating a neutral outlook within the Zacks Chemical - Diversified industry, where DuPont de Nemours (DD) also holds a Zacks Rank of 3 [5] - DuPont de Nemours has seen a slight decrease in its consensus EPS estimate by 0.2% over the past month, now projected at $1.13, which is a 4.2% decline from the previous year [6]

PART I – Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed financial statements for LSB Industries, Inc. as of June 30, 2025, show decreased assets and cash flow, with net sales up but net income significantly down year-over-year [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$1.128 billion** by June 30, 2025, from **$1.187 billion** at year-end 2024, driven by reduced cash and investments, while liabilities also fell and equity slightly rose | Balance Sheet Items | June 30, 2025 (Thousands of USD) | December 31, 2024 (Thousands of USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,614 | $20,230 | | Short-term investments | $119,278 | $163,971 | | Total current assets | $255,212 | $309,714 | | Total assets | $1,128,083 | $1,187,188 | | **Liabilities & Equity** | | | | Total current liabilities | $96,511 | $135,634 | | Long-term debt, net | $446,370 | $476,163 | | Total liabilities | $632,283 | $695,548 | | Total stockholders' equity | $495,800 | $491,640 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net sales increased to **$151.3 million**, but net income sharply declined to **$3.0 million** from **$9.6 million** year-over-year, a trend also seen in the six-month period due to higher cost of sales | Metric (Thousands of USD, Except Per Share) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $151,296 | $140,073 | $294,728 | $278,277 | | Gross profit | $23,173 | $27,415 | $37,557 | $49,693 | | Operating income | $10,493 | $14,403 | $14,961 | $25,663 | | Net income | $3,006 | $9,555 | $1,366 | $15,178 | | Diluted EPS | $0.04 | $0.13 | $0.02 | $0.21 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations for the six months ended June 30, 2025, significantly decreased to **$25.0 million** from **$65.5 million** year-over-year, with investing cash also down and financing cash used for debt repurchases | Cash Flow Activity (Thousands of USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,001 | $65,489 | | Net cash provided by investing activities | $4,826 | $168,786 | | Net cash used by financing activities | $(44,443) | $(118,973) | | Net (decrease) increase in cash | $(14,616) | $115,302 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business nature, long-term debt, debt repurchases, disaggregated net sales by product, and environmental commitments, with the company operating as a single chemical manufacturing segment - The company manufactures and sells chemical products including ammonia, ammonium nitrate (HDAN/LDAN), urea ammonia nitrate (UAN), and various acids from four facilities[21](index=21&type=chunk) Product Net Sales | Product Net Sales (Thousands of USD) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | AN & Nitric Acid | $61,707 | $58,442 | $119,325 | $106,877 | | Urea ammonium nitrate (UAN) | $52,262 | $42,808 | $96,127 | $84,000 | | Ammonia | $26,830 | $28,448 | $60,102 | $67,978 | | Other | $10,497 | $10,375 | $19,174 | $19,422 | | **Total net sales** | **$151,296** | **$140,073** | **$294,728** | **$278,277** | - During Q2 2025, the company repurchased **$32.4 million** in principal of its Senior Secured Notes for **$32.1 million**, resulting in a small loss on extinguishment of debt of **$0.1 million**, compared to a **$1.9 million** gain on debt extinguishment in Q2 2024[54](index=54&type=chunk)[55](index=55&type=chunk) - As of June 30, 2025, the company had remaining performance obligations of approximately **$126.6 million**, with **56%** expected to be recognized as revenue from 2025 through 2027[89](index=89&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2025 initiatives, including safety, product optimization, and low carbon ammonia, noting Q2 results were impacted by higher natural gas costs despite increased sales, with sufficient liquidity and projected capital expenditures [Overview and Key Initiatives](index=23&type=section&id=Overview%20and%20Key%20Initiatives) LSB focuses on chemical manufacturing for agricultural and industrial markets, with 2025 initiatives centered on EHS, product optimization, and developing low carbon ammonia, including a CO2 capture project at El Dorado - Key 2025 initiatives include: - Investing in EHS and reliability to improve plant performance - Optimizing product mix and distribution to enhance profitability and stability - Developing low carbon ammonia to capitalize on growing demand for hydrogen-based energy sources[101](index=101&type=chunk) - The company is pursuing a low carbon ammonia project at its El Dorado Facility with Lapis Carbon Solutions, aiming to be operational by the end of 2026, expected to capture **400,000 to 500,000 metric tons of CO2 annually** and qualify for Section 45Q tax credits[103](index=103&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q2 2025 net sales increased **8%** to **$151.3 million** due to higher UAN pricing and volumes, but gross profit fell **15%** to **$23.2 million** and operating income decreased **27%** to **$10.5 million** due to higher natural gas costs Key Financial Metrics | Metric (Millions of USD) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $151.3M | $140.1M | +8% | | Gross Profit | $23.2M | $27.4M | -15% | | Operating Income | $10.5M | $14.4M | -27% | | Net Income | $3.0M | $9.6M | -68% | Product Sales Volumes | Product Sales Volumes (Tons) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | AN & Nitric Acid | 161,509 | 147,619 | +9% | | Urea ammonium nitrate (UAN) | 151,807 | 137,499 | +10% | | Ammonia | 66,069 | 72,294 | -9% | Average Selling Prices | Average Selling Prices (USD per Ton) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | AN & Nitric Acid | $382 | $396 | -4% | | Urea ammonium nitrate (UAN) | $344 | $311 | +11% | | Ammonia | $406 | $394 | +3% | - The average cost of natural gas, a primary feedstock, increased significantly to **$3.37 per MMBtu** in Q2 2025 from **$1.92 per MMBtu** in Q2 2024, negatively impacting gross profit[123](index=123&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, liquidity included **$124.9 million** in cash and investments, with net cash from operations at **$25.0 million** for six months, and projected 2025 capital expenditures of **$80-$90 million**, deemed sufficient for future needs Capitalization | Capitalization (Millions of USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents & short-term investments | $124.9 | $184.2 | | Total long-term debt, net | $452.6 | $485.2 | | Total stockholders' equity | $495.8 | $491.6 | - Projected capital expenditures for the full year 2025 are estimated to be between **$80 million and $90 million**, with **$60 million to $65 million** allocated to sustaining production[168](index=168&type=chunk) - During the first six months of 2025, the company repurchased **$32.4 million** in principal of its Senior Secured Notes for approximately **$32.1 million** to deleverage the balance sheet[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from commodity price fluctuations, especially natural gas, and interest rate changes on its Revolving Credit Facility, which had no outstanding borrowings as of June 30, 2025 - The company's primary market risks are related to commodity price fluctuations for its products and raw materials, especially natural gas[193](index=193&type=chunk) - Interest rate risk is associated with the variable-rate Revolving Credit Facility, which had no outstanding borrowings as of June 30, 2025[194](index=194&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[195](index=195&type=chunk) PART II – Other Information [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings and claims in the ordinary course of business, with further details in Note 5 of the financial statements - The company is involved in various legal actions in the ordinary course of business, with further details provided in Note 5 of the financial statements[204](index=204&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company's business is sensitive to adverse economic cycles, inflation, and global market conditions, with trade policies and tariffs potentially impacting product prices, input costs, and customer demand - The company's business is sensitive to adverse economic cycles, and a prolonged deterioration of global market conditions could have a material adverse effect on its financial results[206](index=206&type=chunk) - Trade policies and tariffs from the U.S. and other countries could negatively impact the selling prices of products, increase costs, and reduce demand for agricultural and consumer goods[209](index=209&type=chunk)[210](index=210&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On May 15, 2025, **83,800 restricted stock units** were issued to non-employee directors as compensation under the 2025 Long-Term Incentive Plan, exempt from registration - On May 15, 2025, an aggregate of **83,800 restricted stock units** were issued to non-employee directors as compensation for their board service[211](index=211&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) On June 11, 2025, Executive Vice President and General Counsel Michael J. Foster adopted a Rule 10b5-1 trading plan to sell up to **30,000 shares** of common stock between September 2025 and September 2026 - An executive officer, Michael J. Foster, adopted a Rule 10b5-1 trading plan on June 11, 2025, to sell up to **30,000 shares** of common stock[213](index=213&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, incentive plan agreements, and CEO/CFO certifications

Financial Data and Key Metrics Changes - Sales volumes increased by 6% year over year, driven by improvements in sales volumes of AN and UAN due to higher ammonia production and better performance by upgrading plants [4] - Adjusted EBITDA for Q2 2025 was $38 million, down from $42 million in Q2 2024, impacted by higher natural gas costs despite higher pricing for UAN and increased sales volumes [10][11] - The cash balance remains strong, with $32 million of senior secured notes repurchased during the quarter [11] Business Line Data and Key Metrics Changes - The company ramped up ammonium nitrate solution volumes as part of its industrial business expansion, with strong demand from copper and gold mining activities [6] - UAN prices increased significantly, with current NOLA UAN price at $350 per tonne, over 70% higher than the previous year [9] - The company expects to see meaningful increases in both UAN and AN sales volumes compared to the prior year, while forgoing ammonia sales in favor of higher-margin products [13] Market Data and Key Metrics Changes - The spring 2025 planting season resulted in strong demand and pricing for nitrogen fertilizers, with USDA estimating an increase in planted corn acres to 95.2 million from 90.6 million [8] - The Tampa ammonia price for August is $487 per ton, reflecting reduced supply from the Middle East, North Africa, and Russia [12] - Demand for nitric acid remains strong, supported by the resilience of the U.S. economy [7] Company Strategy and Development Direction - The company is focusing on improving the reliability and efficiency of its facilities while investing in storage and logistics capabilities to support its growing industrial business [11][15] - A strategic shift is underway to increase the percentage of contractual industrial sales, which allows the company to pass through natural gas costs and provides a more stable earnings base [15] - The company is also progressing on a low carbon project at El Dorado, with expectations to begin CO2 injections by the end of next year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for the remainder of the year, highlighting the successful shift in sales mix and continued focus on capital allocation [15] - The company anticipates that third-quarter gas prices will be less of a headwind compared to the previous year, with expectations for a healthy year-over-year increase in adjusted EBITDA [12][13] - Management noted that while there are still operational improvements to be made, they expect costs to reach an inflection point in 2025 and start trending down thereafter [29] Other Important Information - The company will participate in the Jefferies Industrial Conference and the UBS Global Materials Conference in September [16] - The company has a lawsuit with Leidos scheduled to go to trial in late October [50] Q&A Session Summary Question: Outlook for UAN volumes in the second half - Management expects higher UAN production and sales in the second half due to operational improvements at the Pryor facility, despite seasonal sales dynamics [20][21] Question: Cost trends as operational rates stabilize - Management indicated that costs are expected to reach an inflection point in 2025, with ongoing initiatives aimed at reducing costs and improving efficiencies [29][30] Question: Impact of tariffs on U.S. nitrogen prices - Management noted that while it is difficult to discern the impact of tariffs due to current market dynamics, they are closely monitoring the situation, especially regarding Russia [34][35] Question: Signs of demand destruction from farmers due to fertilizer prices - Management reported no significant demand destruction observed during the spring season, but noted some hesitancy from retailers as prices remain elevated [38] Question: Changes in permitting and regulatory environment - Management observed more user-friendly dialogue with federal and state agencies, which has positively impacted environmental conversations and project discussions [41]

Q2'25 Performance Highlights - Increased total sales volumes by 6% compared with Q2'24, driven by UAN and AN sales[10] - Net sales increased to $151 million in Q2'25 from $140 million in Q2'24[17] - Adjusted EBITDA was $38 million in Q2'25, compared to $42 million in Q2'24[17] - Adjusted EBITDA margin decreased to 25% in Q2'25 from 30% in Q2'24[17] - Diluted EPS was $004 in Q2'25, compared to $013 in Q2'24[17] Balance Sheet and Capital Allocation - Reduced debt by $32 million[10] - Cash and short-term investments were $125 million as of June 30, 2025, compared to $216 million as of June 30, 2024[23] - Total debt was $453 million as of June 30, 2025, compared to $486 million as of June 30, 2024[23] - Net debt to TTM Adjusted EBITDA was 27x[23] El Dorado CCS Project - The El Dorado low carbon ammonia project is progressing towards a 2H'26 startup[10]

[Second Quarter 2025 Results and Recent Highlights](index=1&type=section&id=Second%20Quarter%202025%20Results%20and%20Recent%20Highlights) LSB Industries reported its second quarter 2025 financial performance and highlighted recent operational and strategic developments [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mark Behrman reported a **6% sales volume increase** from enhanced ammonia production and high-margin products, with rising natural gas costs offsetting UAN price gains - Sales volume increased by **6% year-over-year**, primarily due to higher ammonia production and increased sales of high-margin upgraded products[3](index=3&type=chunk) - Stronger UAN sales prices were offset by a significant year-over-year increase in natural gas prices, negating gains from operational improvements and higher sales prices[3](index=3&type=chunk) - Robust end-market demand for industrial businesses, especially nitric acid and ammonium nitrate, benefited from a surge in US copper mining activity[3](index=3&type=chunk) - The El Dorado low-carbon project remains on track for operation by **late 2026**, with EPA approval for the Class VI permit application being the primary hurdle[3](index=3&type=chunk) - The company further reduced balance sheet risk and future interest expenses by repurchasing debt, while continuing investments in plant reliability projects[3](index=3&type=chunk) [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) Q2 2025 saw net sales rise to **$151.3 million**, but net income and diluted EPS declined, with adjusted EBITDA also slightly decreasing, alongside debt repurchases and zero recordable injuries Q2 2025 Key Financial Data | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change (%) | | :------------------- | :-------------------- | :-------------------- | :------------- | | Net Sales | 151.3 | 140.1 | 8.0% | | Net Income | 3.0 | 9.6 | -68.8% | | Diluted EPS | 0.04 | 0.13 | -69.2% | | Adjusted EBITDA | 38.3 | 41.9 | -8.6% | - Repurchased **$32.4 million** in principal amount of senior secured notes during Q2 2025[4](index=4&type=chunk) Financial Position as of June 30, 2025 | Metric | Amount (million USD) | | :--------------------- | :------------------- | | Cash, Cash Equivalents, and Short-Term Investments | 124.9 | | Total Debt | 452.6 | - Achieved **zero recordable injuries** for both Q2 2025 and the first half of the year[4](index=4&type=chunk) [Market Outlook and Strategic Initiatives](index=3&type=section&id=Market%20Outlook%20%26%20Strategic%20Initiatives) This section provides an overview of market conditions for industrial, ammonia, UAN, and corn, alongside updates on the El Dorado low-carbon ammonia project [Market Outlook](index=3&type=section&id=Market%20Outlook) The company maintains a positive outlook for industrial, ammonia, UAN, and corn markets, driven by stable demand, attractive pricing, and supportive agricultural dynamics - Industrial business remains stable with strong nitric acid demand and ammonium nitrate benefiting from commercial mining (especially copper and gold) and infrastructure upgrades[8](index=8&type=chunk) - The ammonia market is healthy with attractive pricing, driven by balanced distribution channel inventories, Middle East supply disruptions, rising European production costs, and delayed US new capacity startups[8](index=8&type=chunk) - UAN pricing is strengthening due to stable exports, reduced imports, strong demand leading to tight US supply, and a robust global urea market[8](index=8&type=chunk) - Corn market dynamics support strong fertilizer demand, with USDA projecting increased US corn exports, lower ending stocks, and above-average corn acreage for spring 2025[8](index=8&type=chunk) [Low Carbon Ammonia Project Summary](index=3&type=section&id=Low%20Carbon%20Ammonia%20Project%20Summary) The El Dorado CCS project aims to capture **400,000-500,000 metric tons of CO2 annually**, reducing Scope 1 emissions by **25%** and producing **305,000-380,000 metric tons of low-carbon ammonia** by late 2026, pending EPA approval - The El Dorado Carbon Capture and Sequestration (CCS) project is projected to capture and sequester **400,000 to 500,000 metric tons of CO2 annually**, reducing Scope 1 emissions by **25%**[8](index=8&type=chunk) - The project is expected to produce **305,000 to 380,000 metric tons of low-carbon ammonia** annually[8](index=8&type=chunk) - The project awaits EPA approval for its Class VI permit application and is anticipated to begin operations by **late 2026**[8](index=8&type=chunk)[11](index=11&type=chunk) - Partner Lapis Low Carbon Solutions completed drilling of the stratigraphic injection well in June to provide data supporting EPA's technical review[3](index=3&type=chunk)[11](index=11&type=chunk) [Detailed Second Quarter Financial Performance](index=4&type=section&id=Detailed%20Second%20Quarter%20Financial%20Performance) This section provides a detailed breakdown of LSB Industries' financial results for Q2 2025, focusing on product sales, volumes, pricing, and input costs [Product Sales Overview](index=4&type=section&id=Product%20Sales%20Overview) Q2 2025 net sales grew **8% to $151.3 million**, driven by increased UAN and AN volumes and UAN price hikes, though operating income and adjusted EBITDA declined due to higher natural gas costs Q2 2025 Product Net Sales | Product Category | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | YoY Change (%) | | :--------------- | :--------------------- | :--------------------- | :------------- | | AN & Nitric Acid | 61,707 | 58,442 | 6% | | UAN | 52,262 | 42,808 | 22% | | Ammonia | 26,830 | 28,448 | (6)% | | Other | 10,497 | 10,375 | 1% | | **Total Net Sales** | **151,296** | **140,073** | **8%** | - Net sales growth was primarily attributed to increased UAN and AN sales volumes and higher UAN pricing[9](index=9&type=chunk) - Operating income and adjusted EBITDA declined, mainly due to rising natural gas costs[9](index=9&type=chunk) [Key Product Volumes and Pricing](index=4&type=section&id=Key%20Product%20Volumes%20and%20Pricing) Q2 2025 saw AN & Nitric Acid and UAN volumes grow **9% and 10%**, respectively, while ammonia volume decreased **9%**, with UAN average selling price up **14%** to **$308/short ton** Q2 2025 Key Product Volumes (short tons) | Product Category | Q2 2025 | Q2 2024 | YoY Change (%) | | :--------------- | :------ | :------ | :------------- | | AN & Nitric Acid | 161,509 | 147,619 | 9% | | UAN | 151,807 | 137,499 | 10% | | Ammonia | 66,069 | 72,294 | (9)% | | **Total** | **379,385** | **357,412** | **6%** | Q2 2025 Average Selling Prices (USD/short ton) | Product Category | Q2 2025 | Q2 2024 | YoY Change (%) | | :--------------- | :------ | :------ | :------------- | | AN & Nitric Acid | 328 | 337 | (3)% | | UAN | 308 | 271 | 14% | | Ammonia | 369 | 368 | 0% | Q2 2025 Average Benchmark Prices (USD/ton) | Benchmark Price | Q2 2025 | Q2 2024 | YoY Change (%) | | :-------------- | :------ | :------ | :------------- | | Tampa Ammonia | 416 | 440 | (5)% | | NOLA UAN | 344 | 246 | 40% | [Input Costs](index=5&type=section&id=Input%20Costs) Q2 2025 saw significant year-over-year increases in natural gas costs, with average costs for materials and production rising **106%** and **76%**, respectively Q2 2025 Average Natural Gas Costs/MMBtu | Input Cost Category | Q2 2025 (USD) | Q2 2024 (USD) | YoY Change (%) | | :------------------ | :------------ | :------------ | :------------- | | Average Natural Gas Cost/MMBtu in Materials and Other Costs | 3.50 | 1.70 | 106% | | Average Natural Gas Cost/MMBtu Used in Production | 3.37 | 1.92 | 76% | [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) This section presents LSB Industries' consolidated statements of operations and balance sheets for the second quarter of 2025 and year-to-date [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 net sales increased to **$151.3 million**, but gross profit and operating income declined due to rising costs, leading to a decrease in net income and diluted EPS Q2 2025 Consolidated Statements of Operations Summary (thousand USD, except per share amounts) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------- | :------ | :------ | :------ | :------ | | Net Sales | 151,296 | 140,073 | 294,728 | 278,277 | | Cost of Sales | 128,123 | 112,658 | 257,171 | 228,584 | | Gross Profit | 23,173 | 27,415 | 37,557 | 49,693 | | Operating Income | 10,493 | 14,403 | 14,961 | 25,663 | | Net Income | 3,006 | 9,555 | 1,366 | 15,178 | | Diluted Net Income Per Share | 0.04 | 0.13 | 0.02 | 0.21 | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$1.128 billion**, a decrease from year-end 2024, with reduced cash and short-term investments, increased net receivables, and a decrease in net long-term debt to **$446 million** Consolidated Balance Sheets Summary (thousand USD) | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :------------------- | :--------------------------- | :------------------------------- | | Cash and Cash Equivalents | 5,614 | 20,230 | | Short-Term Investments | 119,278 | 163,971 | | Accounts Receivable, Net | 51,289 | 38,760 | | Total Current Assets | 255,212 | 309,714 | | Property, Plant and Equipment, Net | 838,035 | 847,570 | | **Total Assets** | **1,128,083** | **1,187,188** | | Total Current Liabilities | 96,511 | 135,634 | | Long-Term Debt, Net | 446,370 | 476,163 | | **Total Liabilities and Stockholders' Equity** | **1,128,083** | **1,187,188** | | Total Stockholders' Equity | 495,800 | 491,640 | [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for non-GAAP financial measures, including EBITDA, Adjusted EBITDA, and netback sales prices for key products [EBITDA and Adjusted EBITDA Reconciliation](index=12&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) LSB Industries uses EBITDA and Adjusted EBITDA to assess core operations, with Q2 2025 Adjusted EBITDA at **$38.276 million**, a decrease from **$41.896 million** in the prior year - EBITDA is defined as net income (loss) plus net interest expense and interest income, less gain on extinguishment of debt, plus depreciation and amortization, plus provision (benefit) for income taxes[28](index=28&type=chunk) - Adjusted EBITDA further adjusts for non-cash equity compensation, one-time/non-cash or non-operating items such as legal fees, asset impairment losses, turnaround costs, and growth initiatives[28](index=28&type=chunk) Q2 2025 EBITDA and Adjusted EBITDA Reconciliation (thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :----------------------- | :--------------------- | :--------------------- | | Net (Loss) Income | 3,006 | 9,555 | | Add: Net Interest Expense and Interest Income | 6,307 | 5,445 | | Gain (Loss) on Extinguishment of Debt | 59 | (1,879) | | Depreciation and Amortization | 20,682 | 18,784 | | Provision for Income Taxes | 1,084 | 1,250 | | **EBITDA** | **31,138** | **33,155** | | Equity Compensation | 2,088 | 2,099 | | Legal Fees and Specific Matter Settlements | (207) | 1,229 | | Asset Impairment Losses | 2,528 | 1,489 | | Turnaround Costs | 2,639 | 3,439 | | Growth Initiatives | 90 | 485 | | **Adjusted EBITDA** | **38,276** | **41,896** | [Ammonia, AN, Nitric Acid, UAN Sales Price Reconciliation](index=13&type=section&id=Ammonia%2C%20AN%2C%20Nitric%20Acid%2C%20UAN%20Sales%20Price%20Reconciliation) The company provides a reconciliation of net sales to netback sales for ammonia, AN, nitric acid, and UAN, with Q2 2025 netback sales at **$123.958 million**, up from **$113.624 million** year-over-year Q2 2025 Ammonia, AN, Nitric Acid, UAN Sales Price Reconciliation (thousand USD) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :------------------------- | :--------------------- | :--------------------- | | Ammonia, AN, Nitric Acid, UAN Net Sales | 140,799 | 129,698 | | Less: Freight and Other | 16,841 | 16,074 | | **Ammonia, AN, Nitric Acid, UAN Netback Sales** | **123,958** | **113,624** | [Company Information and Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) This section provides details on LSB Industries' upcoming conference call, company overview, and important forward-looking statements [Conference Call and Investor Relations](index=5&type=section&id=Conference%20Call%20%26%20Investor%20Relations) LSB management will host a conference call on **July 30, 2025**, to discuss Q2 2025 results and recent developments, with details available on the company's investor relations website - LSB management will host a conference call on **July 30, 2025**, at 10:00 AM ET / 9:00 AM CT to discuss Q2 2025 results[13](index=13&type=chunk) - Participants include Chairman and CEO Mark Behrman, Executive Vice President and CFO Cheryl Maguire, and Executive Vice President and CCO Damien Renwick[13](index=13&type=chunk) - A webcast and presentation for the conference call are available in the Investor section of LSB's website (www.lsbindustries.com)[14](index=14&type=chunk) [About LSB Industries, Inc.](index=6&type=section&id=About%20LSB%20Industries%2C%20Inc.) Headquartered in Oklahoma City, LSB Industries, Inc. aims to lead in low-carbon and zero-carbon product manufacturing for agricultural, industrial, mining, and future energy markets - LSB Industries, Inc., headquartered in Oklahoma City, is committed to leadership in producing low-carbon and zero-carbon products[15](index=15&type=chunk) - The company currently provides essential products for agricultural, industrial, and mining end markets, with future expansion into energy markets[15](index=15&type=chunk) - The company operates ammonia and related product manufacturing facilities in Cherokee, Alabama; El Dorado, Arkansas; and Pryor, Oklahoma[15](index=15&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions, with no obligation for the company to update or revise them - Forward-looking statements involve business strategies, anticipated future operating results, cash flows, capital resources and liquidity, industry trends, low-carbon product production capabilities, and capital project costs and timing[16](index=16&type=chunk) - Significant risks and uncertainties include business and market disruptions, product and raw material price volatility, global and regional economic downturns, production facility interruptions, increased competitive pressures, financing capabilities, personnel recruitment and retention, raw material access, permit acquisition, and other financial, economic, competitive, environmental, political, legal, and regulatory factors[16](index=16&type=chunk) - The company does not guarantee future results, activity levels, performance, or achievements and undertakes no obligation to update or revise any forward-looking statements[17](index=17&type=chunk)