Q1 2024 EARNINGS PRESENTATION April 30, 2024 Forward-Looking Statements Statements in this presentation 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, may include projections of our future financial performance including the effects of the COVID-19 pandemic and anticipated performance based on our grow ...

Wall Street expects a year-over-year decline in earnings on lower revenues when LSB (LXU) reports results for the quarter ended March 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other h ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from __________ to __________ Commission File Number: 1-7677 WASHINGTON, D.C. 20549 LSB INDUSTRIES, INC. FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact Name of Registrant as Specified in its Charter) Delaware 73-1015226 (State of o ...

LSB Industries, Inc. (NYSE:LXU) Q4 2023 Earnings Conference Call March 6, 2024 10:00 AM ET Company Participants Fred Buonocore - Vice President of Investor Relations Mark Behrman - Chief Executive Officer Cheryl Maguire - Chief Financial Officer Conference Call Participants Josh Spector - UBS Anthony Mercandetti - Deutsche Bank Adam Samuelson - Goldman Sachs Dan Rizzo - Jefferies Andrew Rong - RBC Capital Markets Rob McGuire - Granite Research Operator Greetings and welcome to the LSB Industries' Fourth Qua ...

Q4 2023 EARNINGS PRESENTATION March 6, 2024 Statements in this presentation 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, may include projections of our future financial performance including the effects of the COVID-19 pandemic and anticipated performance based on our growth and other strategies and ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $9 million for Q3 2023, a significant decline from the record $50 million in Q3 2022, primarily due to lower market prices for nitrogen products and reduced nitric acid production [14][15][8] - Year-to-date cash flow from operations reached approximately $120 million, with capital expenditures of $41 million, resulting in nearly $80 million of free cash flow and a conversion rate of over 70% [16][60] - The company expects capital expenditures for Q4 2023 to be between $15 million and $20 million, with total CapEx for the year around $60 million [16] Business Line Data and Key Metrics Changes - Demand for ammonium nitrate in mining applications remains strong, driven by infrastructure projects and the growth of electric vehicles [13] - Sales volumes of nitric acid and derivative products were somewhat lower, but the company managed to meet most customer commitments by purchasing nitric acid or transporting products from other facilities [34][8] Market Data and Key Metrics Changes - Corn prices have decreased from recent highs of $7 per bushel to around $5, which is still considered healthy and incentivizes farmers to plant more corn [2][12] - Nitrogen prices are firming up, with Tampa ammonia currently at $625 per metric ton, a significant increase from the low of $285 per metric ton in July [36] - The company anticipates that average fertilizer prices, particularly nitrogen fertilizer prices, in 2024 will be higher than in 2023 [108] Company Strategy and Development Direction - The company is focused on expanding its El Dorado facility with an estimated cost of $400 million, with the USDA proposing to fund 25% of the project costs [10][30] - LSB Industries is advancing several core growth projects, including a partnership with INPEX and Air Liquide to develop a low-carbon ammonia production facility [19][29] - The company is prioritizing blue ammonia projects over green ammonia due to current market conditions and regulatory uncertainties [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q3 results but remains optimistic about strong fertilizer demand due to lower farm input costs and the goal of maximizing yields [8][12] - The company expects a good fall ammonia run and anticipates healthy demand for fertilizer across the board in 2024 [107][108] - Management noted that the pricing challenges faced in 2023 have not deterred their long-term growth strategy and they continue to generate positive free cash flow [60] Other Important Information - The company has a stockholder rights plan to protect certain tax attributes [25] - The trailing 12-month total recordable injury rate was 0.34, reflecting the company's commitment to safety [26] - The company is in discussions with potential off-takers for its ammonia production and expects to finalize agreements as they progress through the pre-FEED phase [73][87] Q&A Session Summary Question: Can you provide more granularity on the Houston Ship Channel projects? - Management indicated that the project cost is estimated between $500 million and $750 million, with a potential 50/50 ownership structure with INPEX [62][47] Question: How has the UAW strike impacted nitric acid volumes? - Management stated there has been no impact on nitric acid volumes, as the strikes were short-lived [112] Question: What are the trends for nitric acid into year-end? - Management expects strong demand for nitric acid, with healthy market conditions continuing [87] Question: When do you expect to have off-take agreements for blue ammonia? - Management is currently in discussions and anticipates moving into the feed phase by the second quarter of 2025 [73] Question: What is the outlook for ammonia pricing in Q1 2024? - Management expects a significant increase in ammonia pricing for Q1 2024, as they have not sold anything forward [80]

Financial Performance - Q3 2023 net sales decreased year-over-year due to continued pricing weakness[53] - Q3 2023 Adjusted EBITDA was $9 million, down from $50 million in Q3 2022[23, 53] - Adjusted EBITDA margin decreased to 8% in Q3 2023, compared to 27% in Q3 2022[53, 61] - The company reported a net loss of $7.725 million for the three months ended September 2023[34] Market Overview - Corn supply is expected to decline modestly due to lower production[8] - Nitrogen prices have risen in recent months[8] - Tampa ammonia price settled at $625 per metric ton for November, up from $285 in July[18] - UAN (NOLA) spot price was $260 per short ton on October 27, 2023, compared to $553 per short ton on October 27, 2022[21] - Natural gas (NYMEX Spot Price) was $3.16 per MMBtu on October 27, 2023, compared to $5.19 per MMBtu on October 27, 2022[21] Strategic Initiatives - The company has a Stockholder Rights Plan in place to preserve substantial Net Operating Losses (NOLs)[3, 13] - The Rights Plan is designed to prevent an "ownership change" that could limit the use of NOLs[57] - LSB Industries is collaborating with INPEX, Air Liquide, and Vopak Moda to develop a world-scale blue ammonia production and export facility on the Houston Ship Channel[16, 31] - Expected production of 1.1 million metric tons of blue ammonia per year and sequestration of approximately 1.6 million metric tons of CO2[41]

```markdown PART I – Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for LSB Industries, Inc. as of September 30, 2023, reveal decreased sales and profitability [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$1.44 billion** to **$1.29 billion**, liabilities from **$924 million** to **$759 million**, and equity slightly increased | Balance Sheet Items | Sep 30, 2023 (In Thousands) | Dec 31, 2022 (In Thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $437,249 | $566,599 | | **Total Assets** | $1,292,206 | $1,439,819 | | **Total Current Liabilities** | $99,684 | $142,308 | | **Long-Term Debt, net** | $577,173 | $702,733 | | **Total Liabilities** | $759,462 | $924,046 | | **Total Stockholders' Equity** | $532,744 | $515,873 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2023 reported a **net loss of $7.7 million**, a significant decline from **$2.3 million net income** in Q3 2022, due to lower net sales | Metric (In Thousands, Except Per Share) | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $114,287 | $184,273 | $461,096 | $668,057 | | **Gross (Loss) Profit** | $(3,386) | $22,129 | $74,251 | $255,783 | | **Operating (Loss) Income** | $(9,499) | $13,066 | $48,532 | $225,695 | | **Net (Loss) Income** | $(7,726) | $2,312 | $33,270 | $164,477 | | **Diluted EPS** | $(0.10) | $0.03 | $0.44 | $1.86 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to **$120.5 million** from **$259.2 million**, with investing activities providing **$21.5 million** | Cash Flow Activity (In Thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $120,522 | $259,182 | | **Net cash provided (used) by investing activities** | $21,506 | $(392,948) | | **Net cash (used) provided by financing activities** | $(158,973) | $71,257 | | **Net (decrease) increase in cash** | $(16,945) | $(62,509) | | **Cash and cash equivalents at end of period** | $46,824 | $19,635 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, debt, and legal matters, including a **$150 million** stock repurchase program and **$125 million** debt repurchase - The company manufactures and sells chemical products including ammonia, ammonium nitrate (AN), urea ammonium nitrate (UAN), and various acids for agricultural, industrial, and mining markets across four facilities[24](index=24&type=chunk) - A **$150 million** stock repurchase program was authorized in May 2023, with **$132 million** remaining as of September 30, 2023, and approximately **60,000 shares** repurchased during Q3 2023[28](index=28&type=chunk) - In Q2 2023, the company repurchased **$125 million** in principal of its Senior Secured Notes for approximately **$114.3 million**, recognizing a gain on debt extinguishment of about **$8.6 million**[50](index=50&type=chunk) | Net Sales by Product (In Thousands) | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | AN & Nitric Acid | $46,026 | $66,161 | $173,859 | $234,103 | | Urea ammonium nitrate (UAN) | $30,090 | $50,459 | $117,585 | $184,014 | | Ammonia | $26,823 | $52,075 | $129,850 | $200,861 | | Other | $11,348 | $15,578 | $39,802 | $49,079 | | **Total net sales** | **$114,287** | **$184,273** | **$461,096** | **$668,057** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A details operational and financial performance, attributing Q3 decline to lower product selling prices despite stronger volumes [Overview and Key Initiatives](index=18&type=section&id=Overview) Focuses on improving EHS and reliability, optimizing product mix, and developing low-carbon ammonia projects, including a Houston collaboration - Key 2023 initiatives include: - Improving facility reliability towards a **95% ammonia on-stream operating rate** - Broadening product distribution and optimizing product mix - Developing a strategy for low-carbon (blue and green) ammonia opportunities - Evaluating organic capacity expansion and strategic acquisitions[98](index=98&type=chunk) - The company is collaborating on a large-scale, low-carbon ammonia production and export project on the Houston Ship Channel, targeting over **1.1 million metric tons per year** by the end of 2027[100](index=100&type=chunk) - A project to capture and sequester over **450,000 metric tons of CO2 annually** at the El Dorado facility is underway, with a Class VI permit application filed with the EPA, enabling production of over **375,000 metric tons of blue ammonia**[103](index=103&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q3 2023 net sales fell **38%** to **$114.3 million**, resulting in an operating loss due to significantly lower average selling prices | Financial Metric (In Thousands) | Q3 2023 | Q3 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Net Sales** | $114,287 | $184,273 | $(69,986) | (38)% | | **Gross (Loss) Profit** | $(3,386) | $22,129 | $(25,515) | (115)% | | **Operating (Loss) Income** | $(9,499) | $13,066 | $(22,565) | N/A | | **Net (Loss) Income** | $(7,726) | $2,312 | $(10,038) | N/A | | Q3 Sales Volume & Pricing | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Ammonia Tons Sold** | 88,986 | 55,825 | 59% | | **Ammonia Avg. Price/Ton** | $301 | $933 | (68)% | | **UAN Tons Sold** | 118,135 | 115,352 | 2% | | **UAN Avg. Price/Ton** | $255 | $437 | (42)% | | Financial Metric (In Thousands) | Nine Months 2023 | Nine Months 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Net Sales** | $461,096 | $668,057 | $(206,961) | (31)% | | **Gross Profit** | $74,251 | $255,783 | $(181,532) | (71)% | | **Operating Income** | $48,532 | $225,695 | $(177,163) | N/A | | **Net Income** | $33,270 | $164,477 | $(131,207) | N/A | [Liquidity and Capital Resources](index=29&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of September 30, 2023, the company had **$317.5 million** in cash and investments, with **$120.5 million** from operations | Capitalization (In Millions) | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $46.8 | $63.8 | | Short-term investments | $270.7 | $330.6 | | **Total cash & investments** | **$317.5** | **$394.4** | | Total long-term debt, net | $582.7 | $712.3 | | Total stockholders' equity | $532.7 | $515.9 | - Expected capital expenditures for the full year 2023 are approximately **$60 million to $65 million**, primarily for reliability and maintenance projects[168](index=168&type=chunk) - During the first nine months of 2023, the company repurchased **$125.0 million** in principal of its Senior Secured Notes and approximately **1.8 million shares** of common stock for **$17.8 million**[170](index=170&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Exposed to market risks from commodity price fluctuations (ammonia, natural gas) and interest rate changes, with no current variable-rate debt - The company is exposed to commodity price risk for its products and raw materials, particularly ammonia and natural gas, whose prices fluctuate with market supply and demand[187](index=187&type=chunk) - Interest rate risk is primarily related to the variable-rate revolving credit facility, which had no outstanding borrowings as of September 30, 2023[188](index=188&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, at a reasonable assurance level[189](index=189&type=chunk) PART II – Other Information [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 5 of the financial statements for detailed information on environmental matters and other litigation - The company refers to Note 5 of the financial statements for a detailed discussion of its legal matters, including commitments and contingencies[200](index=200&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes from the risk factors previously disclosed in the company's Form 10-K for the year ended December 31, 2022 - There are no material changes from the risk factors disclosed in the company's 2022 Form 10-K[201](index=201&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, **59,911 shares** were repurchased at **$9.78 per share**, with **$132.2 million** remaining in the program | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining in Program | | :--- | :--- | :--- | :--- | | July 1 – July 31, 2023 | 59,911 | $9.78 | $132,195,998 | | **Total Q3 2023** | **59,911** | **$9.78** | **$132,195,998** | [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) Board member Barry H. Golsen entered a Rule 10b5-1 trading plan to potentially sell up to **576,047 shares** between December 2023 and December 2024 - On September 14, 2023, board member Barry H. Golsen entered into a Rule 10b5-1 trading plan to potentially sell up to **576,047 shares** of common stock, with sales under the plan occurring from December 15, 2023, to December 31, 2024[204](index=204&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act - This section lists the exhibits filed with the Form 10-Q, including the CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002[206](index=206&type=chunk) ```

July 27, 2023 Q2'23 Overview – Healthy Volume Increase Offset by Lower Prices Return of capital to shareholders through the repurchase of $125 million of debt and 1.8 million shares of common stock | --- | --- | |--------------------------------------------|------------------------------------------------------------------------------------| | | | | have recently begun to increase | Nitrogen price trends have hit an inflection point and | | Tampa ammonia price settled at $295/MT for | August, up $10/MT; fir ...

LSB Industries, Inc. (NYSE:LXU) Q2 2023 Earnings Conference Call July 27, 2023 10:00 AM ET Company Participants Fred Buonocore - Vice President of Investor Relations Mark Behrman - Chief Executive Officer Cheryl Maguire - Chief Financial Officer Conference Call Participants Josh Spector - UBS David Begleiter - Deutsche Bank Andrew Wong - RBC Capital Markets Adam Samuelson - Goldman Sachs Dan Rizzo - Jefferies Rob McGuire - Granite Research Operator Greetings, and welcome to the LSB Industries Second Quarter ...