LSB Industries, Inc.

What they do

LSB manufactures ammonia and downstream products at owned facilities in El Dorado, Arkansas; Cherokee, Alabama; and Pryor, Oklahoma, and operates a facility on behalf of Covestro LLC in Baytown, Texas. Products are made primarily from natural gas and are sold through distributors and directly to end customers, including farmers, ranchers, fertilizer dealers and explosives manufacturers, across the U.S. and parts of Canada and North America. The business is managed around two principal markets: Industrial and Agricultural.

Revenue drivers

• AN & Nitric Acid — Largest product line at 39% of 2025 consolidated net sales, serving industrial end markets including explosives manufacturers; demand is tied to mining and infrastructure activity.
• Urea Ammonium Nitrate (UAN) — 31% of 2025 consolidated net sales, sold as fertilizer into agricultural markets largely at spot prices or short-duration pre-sales.
• Ammonia — 24% of 2025 consolidated net sales; LSB produced approximately 826,000 tons in 2025 across its three owned facilities, an increase over 2024 when two Turnarounds were completed.
• Other — 6% of 2025 consolidated net sales, representing the remainder of the product mix.

Recent performance

For the second quarter of 2026, net sales were $168.1 million versus $151.3 million in the second quarter of 2025, but the company reported a net loss of $6.2 million (diluted loss per share of $0.09) compared with net income of $3.0 million ($0.04 per diluted share) a year earlier. The loss included approximately $28.8 million of Turnaround expenses, versus $2.6 million of such expenses in the prior-year quarter. Adjusted EBITDA was $53.1 million, up from $38.3 million a year earlier. As of June 30, 2026, total cash, cash equivalents and short-term investments were approximately $218.0 million and total debt was $441.3 million.

Strategy

Management aims to be a leader in low and no carbon products while balancing fertilizer sales into agricultural markets against industrial customers under contractual or pass-through pricing arrangements. Key 2026 initiatives include investing in environmental, health and safety programs; improving facility reliability and production volumes; and executing planned Turnarounds on time and on budget. The company completed a Turnaround of its El Dorado ammonia plant in the second quarter of 2026 and pulled forward a Pryor Turnaround from the third quarter into the second quarter, completed in the third quarter. LSB is also pursuing productivity and cost-reduction initiatives, product-mix optimization, in-market storage and distribution terminals, and the El Dorado carbon capture and sequestration project, for which it agreed in May 2026 to assume full ownership.

Risks

• Commodity price volatility — Agricultural product prices may not correlate with natural gas costs and can fall below the full cost to produce, as the company itself notes about its fertilizer business.
• Turnaround and outage execution — Planned maintenance at El Dorado and Pryor cut second-quarter 2026 production and drove $28.8 million of Turnaround expenses and a net loss.
• Customer concentration — Five customers accounted for approximately 32% of consolidated net sales in 2025.
• Intense competition — LSB competes with larger, better-resourced companies including CF Industries, Nutrien, Koch Industries and Yara International, some of which are also customers.

Outlook

Management says it is already seeing higher production rates at El Dorado after the completed Turnaround and expects improved performance at Pryor once its Turnaround is finished in the third quarter. The company describes industrial demand for ammonium nitrate as strong and fertilizer markets as constructive, while noting ammonia prices have moderated from first-half highs. It points to USDA projections of 95+ million planted corn acres and lowest-in-over-a-decade global ending stocks as supportive of fertilizer demand into the second half of 2026.