On July 31, 2024, LSB Industries Inc (LXU, Financial) released its 8-K filing for the second quarter ended June 30, 2024. LSB Industries Inc is engaged in the manufacturing and sale of chemical products in the United States, catering to the agricultural, industrial, and mining markets.
Performance Overview
LSB Industries Inc (LXU, Financial) reported net sales of $140 million for Q2 2024, a decline from $166 million in the same quarter of 2023. The company posted a net income of $10 million, down from $25 million in Q2 2023. Diluted earnings per share (EPS) stood at $0.13, compared to $0.33 in the previous year. Despite the decline in revenue, the EPS exceeded the analyst estimate of $0.11.
Key Financial Metrics
Adjusted EBITDA for the quarter was $41 million, down from $47 million in Q2 2023. Cash flow from operations was robust at $41 million, with capital expenditures amounting to $15 million. The company repurchased approximately 0.8 million shares of common stock during the quarter and 1.5 million shares year-to-date. Additionally, LSB Industries repurchased $64 million in principal amount of Senior Secured Notes during the quarter, bringing the total debt to approximately $486 million as of June 30, 2024. The company held total cash of approximately $216 million at the end of the quarter.
Income Statement Highlights
| Three Months Ended | June 30, 2024 | June 30, 2023 | % Change |
|---|---|---|---|
| Net Sales | $140,073 | $165,845 | -15.5% |
| Net Income | $10,000 | $25,000 | -60% |
| Diluted EPS | $0.13 | $0.33 | -60.6% |
Balance Sheet and Cash Flow
LSB Industries Inc (LXU, Financial) reported a total debt of approximately $486 million and total cash of $216 million as of June 30, 2024. The company generated $41 million in cash flow from operations and invested $15 million in capital expenditures during the quarter.
Market Outlook and Strategic Initiatives
LSB Industries Inc (LXU, Financial) highlighted several strategic initiatives and market outlooks in its earnings report. The company signed a five-year agreement to supply low carbon ammonium nitrate solution (ANS) to Freeport Minerals Corporation. This agreement is seen as a significant step towards achieving decarbonization initiatives.
"Our second quarter was highlighted by our landmark agreement to supply Freeport Minerals with low carbon ANS for use in their copper mining operations," stated Mark Behrman, LSB Industries' President and CEO.
The company also noted that its profitability improved sequentially due to better pricing compared to the first quarter of 2024. However, year-over-year pricing for key products like UAN and AN was lower, impacting overall sales.
Product Sales and Pricing
| Product Sales ($ in Thousands) | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| AN & Nitric Acid | $58,442 | $69,561 | -16% |
| Urea Ammonium Nitrate (UAN) | $42,808 | $40,905 | 5% |
| Ammonia | $28,448 | $39,612 | -28% |
| Other | $10,375 | $15,767 | -34% |
Conclusion
While LSB Industries Inc (LXU, Financial) faced challenges with lower sales and net income compared to the previous year, the company demonstrated resilience through strategic agreements and effective cash flow management. The focus on low carbon products and ongoing investments in facility reliability and safety are expected to drive future growth and stability.
For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from LSB Industries Inc for further details.
