Lsb Industries, Inc. · NYSE:LXU
Lsb Industries — Q2 2021 Earnings Presentation
19 slides from Lsb Industries's earnings presentation, Jul 29, 2021
Slide 1: Q2 2021 Earnings Presentation
Q2 2021 Earnings Presentation July 29, 2021
Slide 2: Q2 2021 Overview
Q2 2021 Overview Executing on Our Strategy and Improving End-Market Fundamentals Net sales up 34% year over year driven by higher selling prices and continued strong plant operations Record Adjusted EBITDA of $46.0M - an increase of 58% year over year Robust market conditions and solid operati
Slide 3: Agricultural Market Overview
Agricultural Market Overview Corn is currently trading around $5.60/bushel and is expected to 5 Year Corn Prices remain at elevated levels throughout the year $8 ~ $7.00 late April Robust pricing for nitrogen products is expected to continue in $6 2H21 $4 Many factors point to strong 2H21 and
Slide 4: Strong Industrial and Mining Fundamentals
Strong Industrial and Mining Fundamentals Industrial Mining According to the U.S. Department of Housing and Copper prices rising, reaching $4.72 per pound in Urban Development, new privately-owned housing May, its highest price in history, and has continued to unit starts totaled 1.572 million i
Slide 5: LSB Consolidated Financial Highlights
LSB Consolidated Financial Highlights $ in millions, except per share amounts 2Q 2021 2Q 2020 Sales $140.7 $105.0 Sales up 34%: Driven by higher pricing Adjusted Gross Higher selling prices partially offset by lower $52.7 $30.3 sales volumes and higher gas costs Profit 1 Operating profit incre
Slide 6: Second Quarter – 2021 vs. 2020
Second Quarter – 2021 vs. 2020 $ in millions (amounts are approximate) 2020 Q2 Adjusted EBITDA Net Price impacts 1 Vendor Settlement Sales Volumes Other Costs 2021 Q2 Adjusted EBITDA (1) Represents $34.3M higher selling prices, offset by $8.7M in higher gas and sulfur prices. 6
Slide 7: Preferred Stock Exchange Transaction
Preferred Stock Exchange Transaction LSB Industries, Inc. (“LSB” or the “Company”) is seeking to exchange its existing preferred stock held by Eldridge Industries and its affiliates (“collectively Eldridge”) into common stock, with Eldridge, becoming a majority shareholder of LSB with ~ 60% owners
Slide 8: Key Transaction Rationale
Key Transaction Rationale Eliminates the future financial impact of the accrued compounding preferred stock dividend of 14.5% (increasing to 16.0% in April 2023) which has been accruing since the preferred stock was issued in December 2015 The Special Committee, Board of Directors and LSB manage
Slide 9: Pro-Forma Capitalization
Pro-Forma Capitalization Pro Forma Capitalization(1) ($ M) As of 6/30/21 Adjustments Pro Forma Cash , Cash Equivalents & Restricted Cash $18 ($9) $9 9.625% Senior Secured Notes due 2023 $435 - $435 Other Debt $42 - $42 Total Debt $477 - $477 Preferred Stock $300 ($300) - Market Capitalization(2) $18
Slide 10: Reducing Leverage Profile with Target Leverage of 4x or Less
Reducing Leverage Profile with Target Leverage of 4x or Less $ Millions Total Debt + Preferred Stock(1) Net Leverage Multiples(2)(3) 1000.0 15.0x $762 $769 $777 11.4x 11.2x 800.0 $715 10.0x $654 9.0x 10.0x 8.1x 600.0 244 279 289 300 214 $477 5.6x Expected 400.0 further 5.0x decline as 200.0 440 471
Slide 11: Blue Green Ammonia Strategy
Blue Green Ammonia Strategy As an existing ammonia producer, LSB is well positioned to lever its assets and knowledge to capitalize on potential green ammonia opportunities. Blue Ammonia Green Ammonia • CO2 emissions from reforming or gasification • Produced using renewable feedstock, specifically p
Slide 12: Next 12 Months
Next 12 Months Receive approval from shareholders to consummate the exchange of the Eldridge preferred stock into LSB common stock Take advantage of issuer friendly credit market environment to refinance the Company’s existing debt Continue to improve operations within a favorable fertilizer m
Slide 13: Appendix
Appendix
Slide 14: EBITDA Reconciliation
EBITDA Reconciliation Three Months Ended LSB Consolidated ($ In Thousands) June 30, 2021 2020 Net income (loss) $23,670 ($365) Plus: Interest expense 12,290 12,476 Gain on extinguishment of debt (10,000) - Depreciation and amortization 17,277 17,295 Provision (benefit) for income taxes (248) (1,299)
Slide 15: EBITDA Reconciliation TTM
EBITDA Reconciliation TTM TTM TTM Twelve Months Ended LSB Consolidated ($ In Millions) June 30, Mar 31, December 31, December 31, December 31, 2021 2021 2020 2019 2018 Net loss ($31.7) ($55.7) ($61.9) ($63.4) ($72.2) Plus: Interest expense 49.8 50.0 51.1 46.4 43.1 Loss/(gain) on extinguishment of de
Slide 16: Gross Profit Reconciliation
Gross Profit Reconciliation Three Months Ended Twelve Months Ended LSB Consolidated ($ In Thousands) June 30, December 31, 2021 2020 2020 2019 2018 Net sales Agricultural $66,508 $64,997 $180,036 $187,641 $187,164 Industrial and Mining 74,188 40,036 171,280 177,429 190,996 Total net sales $140,696 $
Slide 17: EBITDA Sensitivity Grid at $3.00/mmbtu Gas
EBITDA Sensitivity Grid at $3.00/mmbtu Gas $ in millions Significant Earnings Power at Optimal Operating Rates Average UAN Price/ST For A Year $ 210 $ 190 $ 170 $ 150 $ 130 $ 400 $ 180 $ 170 $ 160 $ 150 $ 140 Average Tampa Ammonia Price/MT For A Year $ 350 $ 160 $ 150 $ 140 $ 130 $ 120 $ 300 $ 140 $
Slide 18: Forward-Looking Statements
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 assumpt
Slide 19: Safe Harbor Statement
Safe Harbor Statement 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 jurisdiction