Lsb Industries, Inc. · NYSE:LXU
Lsb Industries — Q4 2021 Earnings Presentation
20 slides from Lsb Industries's earnings presentation, Feb 24, 2022
Slide 1: Q4 2021 Earnings Presentation
Q4 2021 Earnings Presentation February 24, 2022
Slide 2: 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 assum
Slide 3: Employee Safety Is Our Top Priority – Goal Zero
Employee Safety Is Our Top Priority – Goal Zero Our Safety focus continued in 2021 • Our Job Safety Analysis process Recordable & Lost Time Rate Trends and Cross Site Event learning 3 initiatives were enhanced in 2021 2.5 • 2021 full year total recordable 2 injury rate was 1.15 per 200,000- man ho
Slide 4: Q4'21 Overview – Record Performance, Significant Momentum Into 2022
Q4’21 Overview – Record Performance, Significant Momentum Into 2022 Q4’21 Q4’20 Net sales up 114% year over year driven by higher selling prices and continued strong plant Net operations $190.2 M $88.9 M Sales Record Q4 Adjusted EBITDA of $90.1M - an increase of 766% year over year Adjusted Ad
Slide 5: Agricultural Market Overview
Agricultural Market Overview (1) Corn is currently trading above $6.50/bushel and is expected to remain in this range well into 2022 5 Year Corn Prices $8 – Rebound in the production of ethanol (~40% of total annual U.S. corn use) as miles driven have $6 returned to near pre-pandemic levels $4 – S
Slide 6: Strong Industrial and Mining Fundamentals
Strong Industrial and Mining Fundamentals Industrial Mining U.S. Federal Reserve data indicates that new housing starts sit Production of construction aggregates has increased over the near 15-year highs and on a rolling twelve-month basis are at past decade driven by infrastructure repair, upgr
Slide 7: LSB Consolidated Financial Highlights
LSB Consolidated Financial Highlights $ in millions YTD YTD 4Q 2021 4Q 2020 12/31/21 12/31/20 Sales $190.2 $88.9 $556.2 $351.3 Sales increase driven by higher pricing Higher selling prices partially Adjusted Gross $96.9 $14.2 $217.6 $81.0 offset by higher gas and other Profit (1) raw material costs
Slide 8: Fourth Quarter – 2021 vs. 2020
Fourth Quarter – 2021 vs. 2020 $ in millions Higher Industrial/Mining Sales $1M Lower Ag Sales ($1.1M) 1 Other Costs and Expenses 2020 Q4 Adjusted EBITDA Selling Prices Sales Volumes Variable Costs 2021 Q4 Adjusted EBITDA (1) Primarily impact of higher natural gas and Sulfur raw material costs. 8
Slide 9: Two-Year Rolling Average Annual Ammonia Production
Two-Year Rolling Average Annual Ammonia Production (1) 800,000 790,000 780,000 770,000 Tons 760,000 2019 averages impacted by turnarounds at each location including an extensive 67-day 750,000 turnaround at our Pryor facility 740,000 730,000 720,000 2018 2019 2020 2021 Two-Year Period Ended 12/31 (1
Slide 10: Strong Bottom Line Improvement
Strong Bottom Line Improvement Adjusted EBITDA(1) $220 $200 $180 $160 $140 Expect continued $ millions growth$245 in adjusted $120 $191 EBITDA in 2022 $100 driven by strong product demand and $80 pricing, continued operational $60 improvements and $111 margin enhancement $40 $84 projects $69 $65 $67
Slide 11: 2022 Outlook
2022 Outlook Operating: 2022 2021 Ammonia Production (tons): 770,000 - 790,000 765,000 Turnarounds: El Dorado 24 Days - Cherokee - 40 Days Pryor 30 Days - Capex: Reliability/EH&S/Maintenance $50.0 million $29.0 million Margin Enhancement $15.0 million $6.1 million Sales Volume: Full Year 2022 Sales
Slide 12: 2022 Outlook
2022 Outlook Financial (Full Year): Variable Plant Expenses: Natural gas feedstock costs 30 – 33 MMBtu/ton of ammonia Electricity 3.0% – 5.0% of sales Catalyst expense (burnoff) 1.0% – 3.0% of sales Freight 5.0% – 7.0% of sales Other purchased products (primarily Ag Centers) 1.0% – 3.0% of sales Oth
Slide 13: Increasing Global Energy Price Spreads
$0 $10 $20 $30 $40 $50 $60 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Henry Hub Nov-20 Dec-20 Jan-21 TTF Feb-21 Mar-21 Increasing Global Energy Price Spreads Apr-21 May-21 NBP Jun-21 Jul-21 International Natural Gas Benchmarks - Front Month ($/MMBtu) Aug-21 Sep-21 Oct-21 N
Slide 14: 2022 Growth Initiatives
2022 Growth Initiatives • Advancing safety programs • Full year sold-out position already underway and in nitric acid implementing new ones • Investing $10-$15 million • Investing capital to Becoming Optimizing for margin enhancement promote safe, reliable projects to optimize operations and expand
Slide 15: Low Carbon Ammonia Represents Sizeable Opportunity
Low Carbon Ammonia Represents Sizeable Opportunity As an existing ammonia producer, LSB is well positioned to lever its assets and knowledge to capitalize on potential blue and green ammonia opportunities. Blue Ammonia Green Ammonia CO2 emissions from reforming or gasification Produced using car
Slide 16: Appendix
Appendix
Slide 17: EBITDA Reconciliation
EBITDA Reconciliation Three Months Ended Twelve Months Ended LSB Consolidated ($ In Thousands) December 31, December 31, 2021 2020 2021 2020 Net income (loss) $42,082 ($21,692) $43,545 ($61,911) Plus: Interest expense 11,760 12,606 49,378 51,115 Loss on extinguishment of debt 20,259 - 10,259 - Depre
Slide 18: EBITDA Reconciliation - TTM
EBITDA Reconciliation - TTM TTM TTM TTM Twelve Months Ended LSB Consolidated ($ In Millions) Sep 30, June 30, Mar 31, Dec 31, Dec 31, Dec 31, 2021 2021 2021 2021 2020 2019 Net income (loss) $ (20.2) $ (31.7) $ (55.7) $ 39.2 $ (61.9) $ (63.4) Plus: Interest expense 50.2 49.8 50.0 49.4 51.1 46.4 Loss/
Slide 19: EPS Reconciliation
EPS Reconciliation Three Months Ended Twelve Months Ended December 31, December 31, LSB Consolidated ($ In Thousands) except per share amounts 2021 2020 2021 2020 Net income (loss attributable to common stockholders $ 42,009 $ (31,573) $ (220,002) $ (99,419) Adjustments for Exchange Transaction: Div
Slide 20: Gross Profit Reconciliation
Gross Profit Reconciliation Three Months Ended Twelve Months Ended LSB Consolidated ($ In Thousands) December 31, December 31, 2021 2020 2021 2020 2019 Net sales Agricultural $101,979 $41,595 $264,502 $180,036 $187,641 Industrial and Mining 88,249 47,308 291,737 171,280 177,429 Total net sales $190,