EX-99.1 2 ex_991.htm EXHIBIT 99.1 PRESS RELEASE exhibit 99.1 Press Release
 
COMPANY CONTACT:   Investor Relations Contact:
Tony M. Shelby, Chief Financial Officer       Linda Latman (212) 836-9609
(405) 235-4546                    Lena Cati (212) 836-9611
The Equity Group Inc.

FOR IMMEDIATE RELEASE


LSB INDUSTRIES, INC. REPORTS RESULTS
FOR THE 2006 FOURTH QUARTER AND YEAR
Net Sales Increase of 24% Produces 84% Gain in Operating Income
For The Year

Oklahoma City, Oklahoma . . . March 20, 2007 . . . LSB Industries, Inc. (AMEX:LXU), today reported results for the fourth quarter and year ended December 31, 2006.

Fourth Quarter 2006 Compared to Fourth Quarter 2005:
§  
Net sales increased 30% to $123.7 million from $95.5 million;
§  
Operating income rose 144% to $6.6 million from $2.7 million;
§  
Net income was $3.4 million compared to a loss of $45,000;
§  
After deducting preferred stock dividend requirements, net income applicable to common stock was $2.4 million, compared to a net loss in 2005 of $.7 million;
§  
Diluted earnings per share rose to $.14 per share from a loss per share of $.05.

2006 Compared to 2005:
§  
Net sales increased 24% to $492.0 million from $397.1 million;
§  
Operating income was $27.6 million, up 84% compared to $15.0 million;
§  
Net income of $15.9 million was 212% ahead of last year’s $5.1 million;
§  
After preferred stock dividend requirements, net income applicable to common stock was $13.3 million, up 375% from $2.8 million;
§  
Diluted earnings per share were $.78, or 311% ahead of last year’s $.19.


Business Overview
LSB’s CEO, Jack E. Golsen, noted that fourth quarter results continued the trend of the first three quarters, making 2006 a record year for LSB for both revenues and income from operations. “Our Climate Control and Chemical Businesses both achieved significant gains in revenue and operating income. The Climate Control Business had especially robust sales growth led by geothermal and water source heat pumps. Our Chemical Business also turned in improved results, spearheaded by industrial sales, despite the serious drought during the 2006 growing season that affected agricultural product sales.”
 
(more)
 
 
LSB Industries, Inc. News Release                                                    Page 2
March 20, 2007


Conference Call
LSB will host a conference call covering the fourth quarter and year 2006 results on Wednesday, March 21, 2007 at 11:00 am EDT/ 10:00 am CDT. You are invited to listen to the call by dialing: 1-706-679-3079. Additionally, there will be a webcast posted on the Company’s website at www.lsb-okc.com.


LSB Industries, Inc.

We are a diversified holding company and our principal business activities consist of the:

·  
Climate Control Business engaged in the manufacturing and selling of a broad range of air conditioning and heating products consisting of water source heat pumps including geothermal heat pumps, hydronic fan coils, large custom air handlers and other products used in commercial and residential new building construction, renovation of existing buildings and replacement of existing systems.
·   Chemical Business engaged in the manufacturing and selling of chemical products produced from plants in Texas, Arkansas and Alabama for the industrial, mining and agricultural markets.
 
# # #
 
See Accompanying Tables

 

LSB Industries, Inc. News Release                                                    Page 3
March 20, 2007

LSB Industries, Inc.
Financial Highlights
Years and Three Months Ended December 31, 2006 and 2005
(unaudited)
 
 
Year Ended
December 31,
  
Three Months Ended
December 31,
 
2006
  
2005
  
2006
  
2005
 
(In Thousands, Except Share and Per Share Amounts)
Net sales
$
491,952
   
$
397,115
   
$
123,736
   
$
95,454
 
Cost of sales
  
400,675
     
330,237
     
101,264
     
79,277
 
Gross profit
  
91,277
     
66,878
     
22,472
     
16,177
 
                               
Selling, general and administrative expense
  
64,134
     
53,453
     
17,378
     
13,676
 
Provision for losses (recovery of) on accounts receivable
  
426
      
810
      
(173
)
    
82
  
Other expense
  
722
     
332
     
16
      
184
 
Other income
 
(1,559
)
   
(2,682
)
    
(1,328
)
   
(439
)
Operating income
  
27,554
      
14,965
     
6,579
     
2,674
 
                               
Interest expense
 
11,915
     
11,407
     
2,958
     
2,780
 
Non-operating other income, net
 
(624
)
   
(1,561
)
    
(59
)
   
(36
)
Income (loss) from continuing operations before provision for income taxes and equity in earnings (losses) of affiliate
 
 
16,263
     
 
5,119
     
 
3,680
     
 
(70
 
)
Provision for income taxes
  
601
      
118
     
193
     
34
 
Equity in earnings (losses) of affiliate, net of income taxes
  
(521
)
   
(745
)
    
90
 
    
(191
)
Income from continuing operations
  
16,183
     
5,746
     
3,397
     
87
 
                               
Net loss from discontinued operations
 
253
     
644
     
9
     
132
 
Net income (loss)
  
15,930
     
5,102
     
3,388
     
(45
)
                               
Preferred stock dividend requirements
  
2,630
 
    
2,283
 
    
975
 
    
612
 
Net income (loss) applicable to common stock
$
13,300
   
$
2,819
   
$
2,413
   
$
(657
)
                               
Weighted average common shares:
                              
Basic
 
14,331,963
     
13,617,418
     
15,810,883
     
13,756,647
 
                               
Diluted
  
20,871,659
     
14,906,711
     
17,813,675
     
14,936,692  
  
                               
Income (loss) per common share:
                              
Basic:
                              
Income (loss) from continuing operations
$
.95
   
$
.26
   
$
.15
   
$
(.04
)
Net loss from discontinued operations
  
(.02
)
    
(.05
)
    
-
 
    
(.01
)
Net income (loss)
$
.93
   
$
.21
   
$
.15
   
$
(.05
)
                               
Diluted:
                              
Income (loss) from continuing operations
$
.79
   
$
.23
   
$
.14
   
$
(.04
)
Net loss from discontinued operations
  
(.01
)
    
(.04
)
    
-
 
    
(.01
)
Net income (loss)
$
.78
   
$
.19
   
$
.14
   
$
(.05
)

(See accompanying notes)


LSB Industries, Inc. News Release                                                   Page 4
March 20, 2007


LSB Industries, Inc.
Notes to Unaudited Financial Highlights
Years and Three Months Ended December 31, 2006 and 2005
(unaudited)

 
Note 1:
  
Net income applicable to common stock is computed by adjusting net income by the amount of preferred stock dividend requirements.

 
Note 2:
  
During each of the four quarters of 2006, our Board of Directors declared and we paid nominal dividends on certain outstanding series of our preferred stock as follows: $.10 per share on our outstanding Series 2 Preferred, $.37 per share on our outstanding Series B Preferred, and $.31 per share on our outstanding Non-Cumulative Redeemable Preferred. These dividends were not for the full amount of the required quarterly dividends pursuant to the terms of all of our outstanding series of preferred stock.

 
Note 3:
  
Basic net income (loss) per common share is based upon net income (loss) applicable to common stock and the weighted average number of common shares outstanding during each period. Diluted income (loss) per share, if applicable, is based on net income (loss) applicable to common stock plus preferred stock dividend requirements on preferred stock assumed to be converted, if dilutive, and interest expense including amortization of debt issuance costs, net of income taxes, on convertible debt assumed to be converted, if dilutive, and the weighted average number of common shares and dilutive common equivalent shares outstanding, and the assumed conversion of dilutive convertible securities outstanding.

 
Note 4:
  
Information about the Company’s operations in different industry segments for the year and three months ended December 31, 2006 and 2005 is detailed on the following page.
 

 
 
 
 
LSB Industries, Inc. News Release                                                    Page 5
March 20, 2007


LSB INDUSTRIES, INC.
Notes to Unaudited Financial Highlights
Years and Three Months Ended December 31, 2006 and 2005
(unaudited)
 
 
 
Year Ended
December 31,
  
Three Months Ended
December 31,
 
2006
  
2005
  
2006
  
2005
 
(In Thousands)
Net sales:
                              
Climate Control
$
221,161
   
$
156,859
   
$
60,916
   
$
39,566
 
Chemical
 
260,651
     
233,447
     
59,190
     
53,744
 
Other
 
10,140
     
6,809
     
3,630
     
2,144
 
 
$
491,952
   
$
397,115
   
$
123,736
   
$
95,454
 
                               
Gross profit:
                             
Climate Control
$
65,496
    
$
48,122
    
$
17,134
    
$
12,232
  
Chemical
 
22,438
      
16,426
      
4,240
      
3,209
  
Other
  
3,343
      
2,330
      
1,098
      
736
  
 
$
91,277
    
$
66,878
    
$
22,472
    
$
16,177
  
                               
Operating income:
                             
Climate Control
$
25,428
    
$
14,097
    
$
6,948
    
$
3,815
  
Chemical
 
10,200
      
7,703
      
1,413
      
778
  
General corporate expenses and other business operations, net
 
(8,074
)
    
(6,835
)
    
(1,782
)
    
(1,919
)
   
27,554
      
14,965
      
6,579
      
2,674
  
                               
Interest expense
  
(11,915
)
    
(11,407
)
    
(2,958
)
    
(2,780
)
Non-operating other income, net:
                              
Climate Control
  
1
      
-
      
-
      
-
  
Chemical
 
311
      
362
      
50
      
28
  
Corporate and other business operations
 
 
312
      
 
1,199
      
 
9
      
 
8
  
Provision for income taxes
  
(601
)
    
(118
)
    
(193
)
    
(34
)
Equity in earnings (losses) of affiliate, net of income taxes-Climate Control
  
521
      
745
      
(90
)
    
191
  
Income from continuing operations
$
16,183
    
$
5,746
    
$
3,397
    
$
87
  
 
 
Notes:
  
Gross profit by industry segment represents net sales less cost of sales. Amounts classified as “Other” relates to the sales of industrial machinery and components.

Operating income by industry segment represents gross profit by industry segment less selling, general and administrative expense (“SG&A”) incurred by each industry segment plus other income and other expense earned/incurred by each industry segment before general corporate expenses and other business operations, net. General corporate expenses and other business operations, net consist of unallocated portions of gross profit, SG&A, other income and other expense.