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After the question-and-answer session, I will have some important comments and disclaimers about forward-looking statements and our references to EBITDA. We suggest that you stay on the call long enough to hear them.Now I will turn the conference call over to Mr. Jack Golsen. Jack Golsen Thanks, Carol. Welcome to today’s call and thanks for joining us. Today we released the results of our second quarter. We are happy to report that the second quarter results are somewhat better than the first quarter 2010, an indicative trending upwards. Although we have not achieved what we believe to be the full potentials of our businesses, we are continuing to add the building blocks that will allow us to achieve these potentials when the market improves. When Barry discusses order rates and backlog in our Climate Control business and the upturn in our Chemical business, I think you will agree that we are moving in the right direction. Economic activity in some our businesses during the first half of this year has not yet fully recovered due to the factors that we have discussed with you in past conference calls. Commercial construction in the markets we serve are substantially lower in its peak. Residential construction, although expected to increase this year, will also be significantly lower than prior years. In the face or lower residential and commercial construction markets, we have increased our market share of geothermal products over the past years and new orders of our residential geothermal heat pumps have increased dramatically this year over last year. We are encouraged by this and we believe that if it is a nearly [ph] indicator of the potential for our geothermal businesses in our recovered market of future is bright. Our Chemical operations in Baytown, Texas, El Dorado, Arkansas, and Cherokee, Alabama are performing well at this time. Product demand and pricing have been relatively good.
We are frequently asked about Pryor, Oklahoma plant production. As some of you who follow us will know, in June the operations in our Pryor plant were interrupted by a pipe failure and resulting fire, which substantially destroyed the primary reformer and the ammonia plant. This prevented our ramping up to full production as scheduled. Reformer repairs should be completed late in the third quarter. In the near future, the restart of Pryor should add rather than detract from our overall chemical results.We are also asked about our progress on the potential acquisition that we were considering in China. That situation is as follows At the last conference call, we disclosed that we were proceeding with due diligence of a potential acquisition of a heating and air conditioning business in China. What we found while doing our due diligence was not what we expected to find. Since we have been unable to agree to a revised deal with the owner, we have decided not to proceed with the acquisition at this time. We have some light news, which I would like to give you. Last week we agreed to a three-year labor contract with the Union at our El Dorado, Arkansas plant. Labor negotiations were concluded within our expectations and are now subject to a definitive written agreement. This is a formality that we always go through with the unions. Before closing, I would like to convey to you that we are optimistic about the long term future of our company. We remain cautious about the second half of 2010 since there are mixed opinions about the economic recovery of our markets this year. We believe that our company is undervalued and we are working to make these values more visible and realizable to our shareholders. Finally, as some of you may already know, LSB Industries was added to the S&P SmallCap 600 Index in the spring of 2010.
Now for the details about the second quarter, I will turn this conference call over to Tony Shelby.Tony Shelby Thanks, Jack, and good afternoon. As reported in our earnings announcement this morning, the financial results for the second quarter for 2010 compared to the second quarter of ’09 included sales $168.4 million compared to $138.6 million; operating income $12.8 million compared to $14.5 million; net income $6 million compared to $8.7 million; diluted earnings per share of $0.27 compared to $0.38; and EBITDA – all of these are millions – Chemical $12.7 million versus $9 million; Climate Control $7.9 million versus $13.1 million and consolidated $17.6 million, $19.2 million. For the trailing 12 months at June 30, 2010, consolidated EBITDA was $41.7 million. The following comments are all related to the second quarter. Sales: Climate Control sales were $59.8 million, or 10.7% below 2009. Although Climate Control’s order level for the quarter was higher than in 2009 the sales declined due to a soft commercial construction market and a lower beginning order backlog than at the beginning of the second quarter of 2009. Read the rest of this transcript for free on seekingalpha.com