This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

LSB Industries, Inc. Reports Results For The 2012 Third Quarter And Expects An Improved 2012 Fourth Quarter

LSB Industries, Inc. (NYSE: LXU) announced today results for the third quarter ended September 30, 2012.

Third Quarter 2012 Financial Highlights Compared to Third Quarter 2011:

  • Sales were $182.4 million, a 3.2% increase from $176.8 million;
  • Operating income was $11.9 million compared to $12.5 million, a decrease of $0.6 million;
  • Net income and net income applicable to common shareholders were $6.7 million compared to $6.3 million; and
  • Diluted earnings per common share were $0.28 compared to $0.27.

Discussion of Third Quarter of 2012:

The $5.6 million increase in consolidated sales includes a $7.4 million or 7.2% increase in Chemical Business sales and a $3.8 million or 5.3% decrease in Climate Control Business sales.

For the third quarter of 2012, Chemical Business sales volumes and operating income were adversely affected by certain ongoing issues at two of its facilities as summarized below.

During the third quarter of 2012, the Pryor, Oklahoma plant, (the “Pryor Facility”) experienced problems with the ammonia conversion process at its primary ammonia plant. As a result, third quarter total production was only 50% of the targeted production rate. We estimate that the Pryor Facility’s third quarter operating income was at least $14 million lower than it would have been had ammonia production been at or near targeted levels, based upon the selling price of ammonia and urea ammonium nitrate (“UAN”) during the quarter. We believe this condition will continue until the ammonia converter is replaced in early 2013. However, as of the date of this report, the Pryor Facility’s ammonia production has stabilized at approximately 80% of our targeted production rate.

As previously reported, the El Dorado, Arkansas plant (the “El Dorado Facility”) was damaged on May 15, 2012 when a reactor in its 98% concentration nitric acid plant (“DSN” plant) exploded. As a result, the production at the El Dorado Facility for the third quarter of 2012 was lower than otherwise would have been expected resulting in lost absorption and gross profit margins. In addition, in order to satisfy certain customer product requirements, nitric acid and sulfuric acid were purchased on the open market and resold at a negative gross profit margin. We estimate that the combined negative impact to operating profit resulting from lost sales, lost profits and extra expenses for the third quarter was at least $9 million. We expect this situation to continue, but to a lesser degree when the sulfuric acid plant is brought back into production during the fourth quarter. Our insurance policy provides business interruption coverage, which we believe will cover most of these lost profits and extra expenses. We believe that the first installment of business interruption proceeds will be received no earlier than the first quarter of 2013.

1 of 10

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs