Oklahoma City’s LSB Industries endured tough financial 4Q and year

Oklahoma City’s LSB Industries released its fourth quarter and full year 2023 financial results this week showing a drop in sales and a $5 million quarterly loss, prompting leadership to delay a planned expansion of one of its fertilizer and ammonia plants in Arkansas.

It proved to be a challenging year for the company that manufactures ammonia and ammonia-related products at facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma and operates a facility for a global chemical company in Baytown, Texas.

The company recorded the $5 million net loss compared to $66 million in net income in the fourth quarter of 2022. Net sales for the quarter amounted to $133 million, far below the $234 million recorded in the previous year. Its earnings per share in the fourth quarter amounted to (0.07) compared to 83 cents for the fourth quarter of 2022.

Adjusted EBITDA plummed from $105 million in the fourth quarter of 2022 to $25 million this quarter. Cash flow from operations also fell from $26 million to $17 million.

But the drop in revenue was not unexpected.

Our fourth quarter results were consistent with our expectations,” stated Mark Behrman, LSB Industries’ President and CEO.

“While we continued to experience a weaker pricing environment relative to 2022, pricing rebounded off of third quarter lows enabling us to generate a significant sequential top and bottom line improvement.

As a result of the lower revenue, a decision was made regarding an expansion of one of its operations.

“We have elected to delay the expansion of the production capacity of our El Dorado facility,” explained Behrman.

“After reviewing numerous factors, including current commodity market conditions and the other initiatives we have underway, we’ve determined that delaying the El Dorado expansion enables us to more effectively deploy resources to our other projects, while allowing us to maintain the strength of our balance sheet.”

The decline in revenue wasn’t experienced only in the fourth quarter. It was also down for all of 2023. Net sales dropped from $902 million in 2022 to $594 million last year. Its net income was only $28 million compared to net income of $230 million in the previous year. Adjusted EBITDA was $133 million while it totaled $415 miillion in the full year 2022.

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