Lsb Industries, Inc. · NYSE:LXU
Lsb Industries — Merger or Acquisition (July 2021)
13 slides from Lsb Industries's merger presentation, Jul 20, 2021
Slide 1: LSB Industries Transaction Summary and Rationale
Exhibit 99.2 LSB Industries Transaction Summary and Rationale (NYSE: LXU) July 2021Exhibit 99.2 LSB Industries Transaction Summary and Rationale (NYSE: LXU) July 2021
Slide 2: Transaction Summary
Transaction Summary § LSB Industries, Inc. (“LSB” or the “Company”) is seeking to exchange its existing preferred stock held by Eldridge into common stock, with Eldridge, becoming a majority shareholder of LSB with ~ 60% ownership § Eldridge will be exchanging at a 30-day volume weighted average pri
Slide 3: Key Transaction Rationale
Key Transaction Rationale § Eliminates the current financial impact and repayment of the accrued compounding preferred stock and future accruing dividends at 14.5% (increasing to 16.0% in April 2023) unburdening the Company and unlocking stockholder value § The Special Committee, Board of Directors
Slide 4: Pro-Forma Capitalization
Pro-Forma Capitalization (1) Pro Forma Capitalization ($ M) As of 3/31/21 Adjustments Pro Forma Cash , Cash Equivalents & Restricted Cash $14 ($9) $5 9.625% Senior Secured Notes due 2023 $435 - $435 Other Debt $44 - $44 Total Debt $479 - $479 Preferred Stock $289 ($289) - (2) (3)(4) (3)(4) Market Ca
Slide 5: Reducing Leverage Profile with Target Leverage of 4x or Less
Reducing Leverage Profile with Target Leverage of 4x or Less $ Millions (1) (2)(3) Total Debt + Preferred Stock Net Leverage Multiples 1000.0 15.0x 900.0 $769 $762 11.4x 11.2x 800.0 $715 $654 10.0x 700.0 10.0x 279 289 8.1x 600.0 244 $479 214 7.1x 500.0 (4) 400.0 Expected 4.5x further 5.0x 300.0 decl
Slide 6: Exchange Provides Financial Flexibility to Handle Commodity Price Volatility
Exchange Provides Financial Flexibility to Handle Commodity Price Volatility ($Millions) Illustrative Adjusted EBITDA Sensitivity Grid at natural gas cost of $3.00/mmbtu Trough Price Peak Price Key Factors: Average UAN Price/ST For A Year § Assumes no turnarounds at $130 $150 $170 $190 $210 any faci
Slide 7: Preferred Stock Balance Only Partially Redeemed at Peak Pricing Cycle
Preferred Stock Balance Only Partially Redeemed at Peak Pricing Cycle Scenario 1: Trough Pricing Cycles Scenario 2: Mid Pricing Cycles Scenario 3: Peak Pricing Cycles LTM 3/21 Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Adjusted EBITDA $ 60 $ 70 $ 80 $ 110 $ 120 $ 130 $ 160 $ 170
Slide 8: Next Steps
Next Steps § Receive approval from shareholders to consummate the exchange of the Eldridge preferred stock into LSB common stock § Take advantage of issuer friendly credit market environment to refinance the Company’s existing debt § Continue to improve operations within a favorable fertilizer marke
Slide 9: Appendix
APPENDIXAPPENDIX
Slide 10: EBITDA Reconciliation
EBITDA Reconciliation LTM Adjustments 2018 2019 2020 3/31/21 1. Stock-based compensation: Non-cash adjustment for options and restricted stock Net Loss (72) (63) (62) (56) unit expense recognized in each period Interest expense 43 46 51 50 2. Noncash loss (gain) on natural gas contracts: Represents
Slide 11: Preferred Stock Reconciliation
Preferred Stock Reconciliation Quarterly Current 12/31/20 3/31/21 6/30/21 7/19/21 Beginning Preferred Balance $ 268.7 $ 278.0 $ 287.5 $ 297.7 (+) Preferred Stock Periodic Dividend Accrual 9.3 9.5 10.2 2.2 Ending Preferred Stock Balance $ 278.0 $ 287.5 $ 297.7 $ 299.9 (1) 1.9 1.9 1.9 1.9 Participatio
Slide 12: Safe Harbor Statement
Safe Harbor Statement 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, uncert
Slide 13: Safe Harbor Statement (continued)
Safe Harbor Statement (continued) No Offer or Solicitation This presentation is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any