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Sep 30, 2021
LSB Industries Q3 2021 Earnings Report
Reported record third-quarter adjusted EBITDA and positioned for profitable growth after transformative exchange transaction and debt refinancing.
Key Takeaways
LSB Industries reported a strong third quarter with a 72% increase in net sales and a nearly 270% increase in adjusted EBITDA compared to the same period last year. The company completed a preferred stock exchange transaction and debt refinancing, significantly reducing its cost of capital and improving liquidity.
Net sales reached $127.2 million, a significant increase from $74.0 million in Q3 2020.
Adjusted EBITDA was $37.7 million, substantially higher than the $10.2 million reported in Q3 2020.
Adjusted EBITDA margin improved to 29.6% compared to 13.8% in the same quarter of the previous year.
Total liquidity stood at approximately $81.1 million as of September 30, 2021.
LSB Industries
LSB Industries
Forward Guidance
The company anticipates continued strong sales and adjusted EBITDA levels for the remainder of 2021 and into 2022, driven by favorable conditions in agricultural markets, solid demand in industrial markets, and the benefits of a lower cost capital structure.
Positive Outlook
- Stronger farm incomes in 2020.
- Increased demand for corn from China and other countries.
- Dry conditions in South America and the Western U.S. constricting global corn supplies.
- Continued expansion in key end markets including homebuilding and power generation.
- Strength in the Tampa ammonia price benefitting the industrial business.
Challenges Ahead
- Auto sales have backed off after rebounding from early 2020 pandemic lows and reaching peak levels in April of 2021 due to a shortage of microprocessors
- Surge in natural gas prices
- Turnaround at Cherokee facility
- Lost fixed cost absorption resulting from the aforementioned Turnaround at the Cherokee facility and higher natural gas feedstock prices
- Global ammonia supply constraining and causing further increase in ammonia selling prices.