Lsb Industries, Inc. · NYSE:LXU
Lsb Industries — Investor Presentation (September 2016)
21 slides from Lsb Industries's investor presentation, September 2016
Slide 1: Investor Presentation
Investor Presentation September 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identifiable by use of the words “believe,” “expect,” “intend,” “plan to,” “estimate,” “proje
Slide 3: Why LSB? Executing on Strategic Plan to Drive Growth and Enhance Shareholder Value
Why LSB? Executing on Strategic Plan to Drive Growth and Enhance Shareholder Value Operates well-diversified Chemical businesses with differentiated 1 market positions 2 Well-positioned for growth with major expansion completed Implemented operating improvement plans that are enhancing plant reliabi
Slide 4: Business Overview
Business Overview • 4 production facilities o El Dorado, Arkansas o Cherokee, Alabama Sales mix o Pryor, Oklahoma A key strategy o Baytown, Texas Mining is to optimize 11% • Provides nitrogen based agricultural, mining and Industrial sales mix: industrial chemicals to North American market acids & i
Slide 5: Diverse Products with Broad Application
Diverse Products with Broad Application Products Uses Competitors • CF Industries Holdings Inc., PCS Agricultural • Urea ammonium nitrate Nitrogen Inc., Koch Industries • Fertilizer for corn and other crops Chemicals solutions (UAN) Inc., Rentech Inc., CVR Partners LP, imports 48% • Ammonium nitrate
Slide 6: LSB’s Agricultural Distribution
LSB’s Agricultural Distribution Koch, CVR, Southern Pryor, UAN Distributors & Plains & Corn OK Ammonia Belt Dealers Transammonia, Cherokee, Eastern UAN The Andersons, Corn Belt AL CHS, Koch, et.al. AN Ag Centers Southern Plains, El Dorado, South Central, Ammonia Distributors & AR Midwest & West Deal
Slide 7: Production Facilities
Production Facilities El Dorado Cherokee Pryor Baytown Facility Location El Dorado, AR Cherokee, AL Pryor, OK Baytown, TX Year Acquired/Built 1983 1999 2000 2000 Ammonia Design Kellogg Kellogg Pritchard - Plant Area (acres) 150 160 47 2 Site Area (acres) 1,400 1,300 104 Covestro’s site Feedstock nat
Slide 8: Annual Production Capacity of Products Available for Sale
Annual Production Capacity of Products Available for Sale (Tons in thousands) Facility: El Dorado Cherokee Pryor Baytown Total Feedstock Natural gas Natural gas Natural gas Ammonia Ammonia Production 375 175 215 – 765 Capacity Products Available for Sale UAN – 215 270 – 485 Agricultural Products Hig
Slide 9: Market Outlook
Market Outlook Agricultural Industrial and Mining Planted corn acreage ~93.6 million in 2016 (vs. 88 million in Industrial market – Trending slightly up in 2016, due to a strong US 2015) dollar and global softness in commodities pricing. The auto and US growers expected to increase both corn and whe
Slide 10: Agricultural Chemicals – Attractive Medium to Long-Term Industry Fundamentals
Agricultural Chemicals – Attractive Medium to Long-Term Industry Fundamentals World situation North American situation • Growing populations • World grain usage continues to increase annually • Despite lower grain prices, the USDA is projecting a 6% • Developing economies increase in corn acres plan
Slide 11: Chemical Commodities
Chemical Commodities Feedstock & End Products 5-year Price Trends $750 $6.00 $5.50 $650 $5.00 $550 $4.50 $4.00 $450 $3.50 $350 $3.00 $2.50 $250 $2.00 $150 $1.50 Aug 11 Aug 12 Jul 13 Jun 14 May 15 Apr 16 UAN - Southern Plains (Green Markets $/ton) Ammonium Nitrate - NOLA (Green Markets $/ton) Tampa A
Slide 12: LSB’s Operational Improvement Plan
LSB’s Operational Improvement Plan LSB is implementing an operating and capital improvement plan that is expected to drive shareholder returns 12
Slide 13: Executing on Operational Improvement Plan to Drive Growth and Enhance Shareholder Value
Executing on Operational Improvement Plan to Drive Growth and Enhance Shareholder Value • Continue improvement of plant on-stream rates Comprehensive upgrade of • Reduce risks of unplanned downtime Chemical facilities • Improve safety and plant reliability • Additional engineering support Pryor faci
Slide 14: Financial Overview
Lou Financial Overview 14 Isbindustries.com
Slide 15: Summary Statement of Income for Continuing Operations
Summary Statement of Income for Continuing Operations ($ in millions) Twelve months ended 12-31 Six months ended 6-30 LSB Industries, Inc. Consolidated 2013 2014 2015 2015 2016 Sales $416.2 $495.9 $437.7 $259.1 $209.0 Gross Profit 46.8 65.5 20.0 33.4 (4.0)(1) Gross Profit % 11.2% 13.2% 4.6% 12.9% (1
Slide 16: Capital Structure / Actual and Pro-forma for Climate Control Business Sale
Capital Structure/ Actual and Pro-forma for Climate Control Business Sale ($ in millions) Pro-forma Pro-forma Overview of Outstanding Debt June 30, 2016 Adjustments June 30, 2016 Senior Secured Notes Cash and Cash Equivalents $22.8 $128.0 $150.8 • $375 million at 8.5% Senior Secured Notes 475.0 (100
Slide 17: Proceeds from Sale of Climate Control Business
Proceeds from Sale of Climate Control Business- Closed July 1, 2016 ($ in millions) Gross Sale proceeds $364 Escrow, fees and other estimated closing costs (13) Net cash proceeds, upon closing $351 Repayment of outstanding balance of ABL (31) Net cash proceeds after repayment of ABL $320 August Inte
Slide 18: EBITDA Sensitivity
EBITDA Sensitivity FY EBITDA Change Impact Tampa Ammonia (MT)** +/-$ 10 +/-$ 1.6mm UAN (ST) +/-$ 10 +/-$ 4.5mm HDAN (ST) +/-$ 10 +/-$ 1.5mm Natural Gas ($/mmbtu) +/-$ 0.10 +/-$ 1.6mm ** Represents portion of Ammonia sales sold out of EDC Sensitivity calculated on 2H16 sales volumes annualized to rep
Slide 19: Appendix
Lou INDUSTRIES Appendix Isbindustries.com
Slide 20: EBITDA Reconciliation for Continuing Operations
EBITDA Reconciliation for Continuing Operations ($ in millions) Twelve months ended 12-31 Six months ended 6-30 LSB Industries, Inc. Consolidated 2013 2014 2015 2015 2016 Net income (loss) plus: $55.0 $ 19.6 $(34.8) $7.1 $0.2 Provision for Impairment – – 43.2 – – Interest expense 13.3 21.6 7.4 5.6 7
Slide 21: Typical Facility Process Flow (Pryor)
Typical Facility Process Flow (Pryor) NH3 (storage, trucks, rail) Nitric AN Acid Solution Ammonia UAN Plant UAN (storage, trucks, rail) Natural CO2 Gas (pipeline) Urea CO2 CO2 Liquification (storage, trucks) • Products are marketable at every intermediate and final stage of production. • Pryor facil
LSB Industries — Investor Presentation (September 2016) on 6ix