Greetings and welcome to the LSB Industries Fourth Quarter 2024 Earnings Conference Call. The operator provided instructions. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Fred Buonocore, Vice President of Investor Relations. Thank you. You may begin.

Good morning, everyone. Joining me today are Mark Behrman, our Chairman and Chief Executive Officer; Cheryl Maguire, our Chief Financial Officer; and Damien Renwick, our Chief Commercial Officer. Please note that today’s call includes forward-looking statements. These statements are based on the company’s current intent, expectations and projections. They are not guarantees of future performance, and a variety of factors could cause actual results to differ materially. On the call, we will reference non-GAAP results. Please see the press release in the Investors section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. At this time, I’d like to go ahead and turn the call over to Mark.

Thank you, Fred. Turning to Page 4 of our presentation, our adjusted EBITDA was up significantly year-over-year despite performing a planned turnaround during this year’s fourth quarter versus no turnaround last year. A key driver of the increase was the improved performance of our ammonium nitrate and nitric acid operations, both of which had strong production and sales volume increases as compared to the fourth quarter of 2023. During the fourth quarter, we continued to invest in the reliability and safety of our facilities. We completed a turnaround of the ammonia plant at our Cherokee facility that we expect to lead to increased production volumes during 2025. We are seeing the benefits of that work with daily production rates for urea and UAN at their highest levels on record. We completed that turnaround injury-free. And in fact, our Cherokee site finished 2024 with zero recordable injuries for the year. Additionally, our Baytown nitric acid facility had an injury-free year and is now on its ninth year of no recordable injuries. Big congratulations to the teams at both of these facilities for exemplifying our Protect What Matters corporate value. Lastly, we continue our efforts to advance our two energy transition projects, which I’ll discuss later in the call. Now I’ll turn the call over to Damien, who will review current market dynamics and pricing trends. Damien?

Thanks, Mark, and good morning, everyone. Page 5 summarizes some key dynamics in our industrial end markets. Our industrial business continues to be a core focus of our commercial strategy for 2025 and beyond. The vast majority of our industrial sales are covered under contractual arrangements with ratable offtake. Additionally, our industrial contracts typically utilize cost-plus pricing arrangements that provide us with stable margins and enhance our visibility into our future results. These attributes underpin our motivation to grow the industrial side of our business, which we believe will ultimately accrue to the value of our company. We continue to benefit from healthy demand from our primary industrial end markets and have been successfully increasing our production volumes to meet it. More specifically, we have been ramping up our sales of ammonium nitrate solution to meet new contractual commitments. In terms of the broader mining market, we continue to be encouraged by strong copper production and pricing as copper continues to be supported by the build-out of electrical infrastructure for technology applications. Gold prices are also at record highs, driven by continued global economic uncertainty, which is supporting healthy U.S. gold production. Our other primary industrial product category, nitric acid, has also been performing well. Pricing and demand have been stable, and we see opportunities for growth with existing and new customers with our primary constraint being our production capacity. Auto production and homebuilding, while not particularly robust, have remained stable for several years, which translated into steady demand for our nitric acid business to remain in a sold-out position. Notably, in December 2024 and despite persistent high interest rates, new housing starts picked up to their highest level since early 2024, driven by strong demand for homes and continued solid economic conditions. On Page 6 of our presentation, you’ll find a summary of current nitrogen market dynamics. UAN prices have increased steadily since the summer fill. A key factor in the strength has been the rise in urea prices, driven in part by robust demand from India. Additionally, UAN pricing benefited from a favorable trade balance where U.S. imports remain low compared to recent history. As we enter the spring 2025 planting season, we’re encouraged by what we’re seeing on the UAN landscape, with rising corn prices acting as a potential stimulant for strong fertilizer demand. That, coupled with tightening supply, will likely translate into healthy demand and pricing. The Tampa Ammonia Benchmark price remains above year-ago levels. This is a result of numerous factors, including ongoing delays in the commissioning of new domestic production capacity and a fairly tight supply and demand balance. The Tampa ammonia price strength continues to be impacted by higher natural gas prices in Europe, which is driving higher European marginal production costs for ammonia. The middle chart shows the gas price trend for the European TTF relative to the price for U.S. Henry Hub. European natural gas prices are significantly higher than year-ago levels. The increase is driven by a combination of factors, including geopolitical instability in the Middle East and, more recently, cold winter weather in Europe resulting in depletion of storage. While U.S. natural gas prices are also higher than year-ago levels, U.S. ammonia producers continue to have a material competitive advantage compared to European producers. On Page 7, we show pricing trends and forecasts for corn and other grain prices, which drive our agricultural business. U.S. corn prices rose over the past several months in reaction to revisions of USDA’s outlook for grains, which called for small supplies and reduced ending stocks relative to their earlier estimates. Heading into the spring planting season, corn prices are close to $5 per bushel, which we believe is a level that should incentivize farmers to apply a healthy level of nitrogen fertilizers. Finally, we continue to monitor developments in tariffs related to our end markets. Should broad-based tariffs on Canada and Mexico be implemented, we foresee potential impacts to U.S. nitrogen imports from Canada impacting pricing in both our ag and industrial markets. India retaliatory tariffs are also likely to have impacts on U.S. exports with cost increases likely to be passed on to customers. We are also closely following the recent announcement by the European Commission of a proposal to introduce fixed-rate tariffs on several fertilizer products sourced from Russia and Belarus. This proposal will be considered by the European Parliament before it is adopted. If implemented, we believe this will encourage Russian nitrogen producers to divert volumes to other major import markets, including the U.S. Now I’ll turn the call over to Cheryl to discuss our fourth quarter financial results and our outlook. Cheryl?

Thanks, Damien, and good morning. On Page 8, you’ll see a summary of our fourth quarter 2024 financial results. We generated adjusted EBITDA of $38 million. This is a material improvement over the prior year fourth quarter despite an estimated $7 million impact from the planned turnaround we completed at our Cherokee facility’s ammonia plant in December. Page 9 provides some color to the quarter-over-quarter results by bridging our fourth quarter 2023 adjusted EBITDA of $25 million to our fourth quarter 2024 adjusted EBITDA of $38 million. Stronger sales volumes from improvements in plant reliability, higher ammonia prices and lower natural gas costs benefited us during the period. Notably, excluding the sales volume impact of our Cherokee turnaround, we estimate that our fourth quarter adjusted EBITDA would have been approximately $45 million. These financial results reflect the positive impact of the work that we completed during 2024 to improve our manufacturing operations. We expect to make further progress on this front in 2025, as I will discuss shortly. Page 10 provides a summary of our key balance sheet and cash flow metrics. Our cash flow balance remains strong, and our 2024 year-end leverage ratio was below our target level for a mid-cycle pricing environment. At the same time, we’ve made significant investments in the reliability of our facilities as well as in capacity expansion, storage and logistics capabilities. Much of this investment is reflected in our $92 million of CapEx for the full year 2024, of which approximately $25 million was targeted towards growth, with the balance to sustain reliable operations. In addition to investing in our manufacturing assets over the two years ended December 31, 2024, we derisked our balance sheet by repurchasing approximately $222 million in principal amount of our senior secured notes. We also returned capital to stockholders through the repurchase of approximately 4.6 million shares of our stock in the same period. Slide 11 summarizes the key considerations with respect to our expectations for full year 2025. The table in the upper left shows our estimated ammonia production and sales volumes for the year. We expect that our ammonia production will increase as compared to 2024 with the improvements made in the turnarounds we completed at our Pryor and Cherokee facilities last year. This production should more than offset the impact of the 30-day turnaround planned at our El Dorado site during the second half of this year. Also, we expect the work completed in 2024 to yield meaningful increases in production and sales volumes of our downstream products, AN, nitric acid and UAN. At the same time, you can see that we expect our ammonia sales volumes to decline in 2025, reflecting the upgrade of a greater portion of our ammonia production into higher-margin downstream products. The slide also covers our estimates of variable and fixed plant expenses as well as SG&A and other expenses for 2025. Our expectations for fixed costs reflect investments we are making to achieve our production volume goals. We expect to see fixed costs trend down beginning in 2026. We expect our effective tax rate for the year to be approximately 25%. However, we do not expect to be a material cash taxpayer in 2025 as we continue to utilize our NOLs. In the table at the bottom right side of the slide, you’ll see that we expect to invest approximately $80 million to $90 million of CapEx in our facilities during 2025. That includes $60 million to $65 million for annual EH&S and reliability CapEx and $20 million to $25 million earmarked for growth investments, including enhanced logistics and storage capabilities for our growing AN business. As Damien pointed out, urea prices are rising in the U.S., resulting in a corresponding rise in UAN pricing, a trend we believe will continue through the forthcoming spring application season. We expect our first quarter volumes to be relatively flat compared to the first quarter of 2024. This is largely the result of lower inventory levels heading into 2025 following our turnarounds in the final months of the year. With that said, as indicated on this slide, we do expect a volume uplift for the full year 2025. Through the first two months of the year, our cost of gas has averaged approximately $3.85 per MMBtu. This is consistent with our expectations for 2025 natural gas prices to be higher relative to 2024. We previously discussed our focus on upgrading an increasing amount of ammonia to capture additional margins. Page 12 illustrates the favorable sales volume trends we’re driving in our major product groups adjusted for the impact of turnarounds. The first chart shows the increase in AN and nitric acid sales volumes recognized in 2024 as a result of our reliability improvements to our downstream operations and the full year volume impact we expect in 2025. The middle chart shows UAN sales volumes, which, despite the impact of turnarounds at both our Pryor and Cherokee facilities, were flat in 2024 compared to 2023. This strong performance results in part from the urea expansion we completed at our Pryor facility in the third quarter. Excluding the impact of turnarounds shown in the white and blue striped section of the middle bar, we estimate that UAN sales volumes would have been up significantly. Our projection for a further increase in UAN volume in 2025 reflects the full year benefit of the new capacity as well as improved plant reliability. The chart on the far right shows a downward trend in ammonia sales volumes. In this case, a down-into-the-right trend is a good thing. Turning to Page 13, you’ll find a summary of the multiple initiatives we have underway to drive earnings growth. First, over the course of 2024, we talked about our two margin enhancement projects, the expansion of our urea capacity at our Pryor facility that we expect to allow us to produce an incremental 75,000 tons of UAN annually and the construction of an additional 5,000 tons of nitric acid storage at our El Dorado facility. Both projects were completed in the second half of 2024. We expect to see the full year incremental EBITDA benefit in 2025. Second, our stated goal of increasing our ammonia production volumes represents an important earnings lever. And while we recognize some of those benefits post the work performed during the 2024 turnaround, we have additional opportunity ahead of us. We expect the turnaround of our El Dorado ammonia plant in the second half of this year to move us further towards our ammonia production goals. Third, during 2024, we put a great deal of focus on improving the reliability of our downstream production. We are pleased with our progress in 2024 and have ongoing initiatives to capture additional production that we expect to see in 2025. Lastly, we believe we can generate meaningful incremental earnings by driving efficiencies and focusing on profit optimization. There are numerous opportunities to realize efficiencies in our business and capturing them will be a focus for 2025. Additionally, our spending levels have been elevated over the past several years as we’ve made investments aimed at increasing production and maximizing sales volumes. We expect these costs to reach an inflection point in 2025 and begin trending downward in 2026. One additional point to keep in mind is that on top of these value creation activities, we also have the expectation of $15 million to $20 million of incremental annual EBITDA once we have our CCS project at our El Dorado facility complete. And now I’ll turn it back over to Mark.

Thank you, Cheryl. Page 14 pertains to our low-carbon ammonia projects. The EPA’s approval of our Class VI permit application remains the key gating item for our El Dorado CCS project. We continue to have meaningful dialogue with the EPA regarding their technical review of our permit application. To provide the most site-specific data possible to the EPA, we plan to drill the deep injection well as the stratigraphic well. We expect that this approach will decrease the overall timeline, and we estimate our first CO2 injections would begin in the latter half of 2026. In May of 2024, we announced our first offtake customer for low-carbon ammonium nitrate solution that we’ll produce at our El Dorado facility. We’ve begun shipping conventional AN to that customer and will transition to low-carbon product upon start-up of these operations. With respect to our Houston Ship Channel project, following the completion of pre-FEED in late 2024, our focus has been on having price discovery discussions with potential offtake customers. Those discussions have centered around both demand and pricing levels for low-carbon ammonia that are transactable. Based on these discussions, we believe that higher volume multiyear demand for low-carbon ammonia exists, providing that the price per ton is less than $600. We are working with our partners on gaining knowledge to assess all aspects of the project, including the evaluation of alternative configurations to ensure our project obtains the required customer demand and generates our targeted return on investment. If this assessment continues to support our assumptions about the economics of the project, our next step will be a full FEED study. We continue to believe that the global momentum to reduce CO2 emissions will drive new demand for low-carbon ammonia. What we don’t know is the timing of that new demand. Therefore, we are trying to be disciplined in our approach to the market and how we invest capital. We expect to provide a more definitive update on this project on our first quarter conference call. As we move into 2025, we are excited about the prospects for further transforming our company and increasing value for our stockholders. We accomplished a great deal during 2024 towards improving the reliability and production capacity of our facilities, and we expect to make more progress on this front this year. We continue to shift our sales mix towards higher-margin downstream products and to drive efficiencies across the business to enhance our profitability. Collectively, we believe that these initiatives will translate into significant incremental EBITDA. At the same time, we continue to navigate our low-carbon ammonia projects through the necessary phases of development. While certain aspects of them are largely out of our control, particularly the EPA Class VI permit process, as I mentioned earlier, we are firm believers in low-carbon ammonia’s place in the global energy transition landscape and are confident in our ability to be a meaningful player in this evolving market in the coming years. Before we open it up to questions, I’d like to mention that we will be participating in the following virtual events in the coming months: the New York Stock Exchange Basic Materials Day on March 11 and a Granite Research Management Conference series on April 3 and April 4. We look forward to speaking with some of you at those events. That concludes our prepared remarks, and we will now be happy to take your questions. Thank you.

The first question is from David Begleiter from Deutsche Bank. Please go ahead.

Thank you. Good morning.

Good morning.

Mark, you mentioned a $600 price for low carbon as may be the key price for customers. Why is that the right price for them? What’s the implication underpinning that price?

Well, I don’t know if it’s the right price for them. They have to deal with their own customers and what they think they can pay. But just from our information in the marketplace from all the conversations we have had, there has been a lot of talk about price benefit in the marketplace, and we are pretty confident now saying that we have got to be under $600 a ton FOB to really transact.

Understood. And it looks like we will get some tariffs on Canada shortly. Could you frame that opportunity for yourself and other U.S.-based producers if that comes to pass?

I am sorry, I didn’t understand the first part of the question.

In terms of the Canadian tariffs, could you frame the potential opportunity for U.S.-based producers if those tariffs come into place?

Yes, I will take that. Good morning, David. I think there is probably some opportunity there on the different molecules. Canada is a net exporter of ammonia to the U.S. I think it’s going to be difficult for them to find a home for that product outside of the U.S. So, that would likely increase prices here as they either seek to pass it on. But then I think over time, it will probably net out somewhat as they get pressure from other import sources. And then UAN as well, they are a net exporter into the U.S. But I think there is a lot more optionality on UAN. So while we might see some short-term price benefits, that will probably level out over time as different trade routes are found.

Thank you.

The next question is from Lucas Beaumont from UBS. Please go ahead.

Great. Thank you. Yes, I just wanted to ask about the Houston Ship Channel project. When we look at the pre-FEED cost curve, that was kind of 40% or more below where the current outlook is. Given the uncertainty in Europe about this potentially shifting somewhat lower, I don’t think anyone is assuming it will go back to those levels, but it’s probably going to come down somewhat. How are you thinking about that in the context of the economics of the project and how you would factor that in when you assess whether to go forward or not?

Hey Lucas. How are you? I think we have been pretty public that we are not going to build a plant and hope customers come. A lot of the activities over the last number of months have been conversations with potential offtakers to understand at what price point we could transact for stated volumes and long-term contracts, for example seven, ten, twelve years, so that we can underpin a project. Without that, we are not going to take the risk to build a plant and hope they come. When we think about capital cost today, as I mentioned in my prepared comments, we are looking at different configurations and ways to bring capital cost down in hopes of getting below the $600 a ton that would allow us to offer a long-term contract to customers. If we can’t get there, we will sit on the sidelines for now and wait until the market unfolds. In the meantime, we will continue to have conversations with partners and offtakers, and when we think it makes sense to move forward on a project, we will have done the necessary work and gained knowledge on what it would take to get the project done.

Alright. Thanks. And just on your outlook for gross ammonia production, you are projecting that you are going to get back to about 87% on operating rates this year, which is good year-on-year progress. How do you see the pathway from here to drive more volumes out of the system over the next couple of years?

That 87% is low mainly because we have a large turnaround at our El Dorado facility this year. We have been running between 90% and 92% excluding planned activities and turnarounds. The real focus this year — and we brought in outside resources to help — is to move those rates forward. By the end of 2026, we would hope to be much closer to 95% on a consistent basis.

Great. Thanks. And then on your expense outlook for the year, I noticed you increased your assumption on gas consumption per ton of ammonia to 34 this year from 32 previously. Is that driven by increased upstream upgrade product usage, or is something else driving the change?

Good morning. The main change there is just updating it to include both the processed gas and the fuel gas. That’s the primary reason for the update.

Great. Thanks so much.

The next question is from Laurence Alexander from Jefferies. Please go ahead.

Excuse me. Hi. It’s Dan Rizzo on for Laurence. After the El Dorado turnaround in the second half of this year, how should we think about turnarounds in 2026 and 2027? Are you done for a while, or will there be more as you try to expand capacity further outside of the low-carbon project?

Sure. Generally speaking, we want to be on a three-year to four-year full turnaround schedule. You may have some smaller outages in between for other projects. We will go through the El Dorado turnaround this year and would expect El Dorado not to have another turnaround for about three years. Our Cherokee ammonia plant had a turnaround in 2024 and is not scheduled for another ammonia turnaround until 2027. Pryor went through a full turnaround including ammonia this year, and they will be on another two-year cycle until 2026 and then move to a three-year turnaround cadence.

Okay. Thanks. And you mentioned delays in new ammonia supply. Are you seeing people move downstream and add UAN or UAN capacity coming online in North America or elsewhere?

No, not really. Most of the focus has been on low-carbon ammonia. In the U.S., we haven’t seen much new UAN builds. There may be marginal expansions. We did an expansion at Pryor this past year and there is another opportunity to consider further expansion at Pryor, but we are still analyzing whether the economics make sense for us.

Thank you very much.

The next question is from Andrew Wong from RBC Capital Markets. Please go ahead.

Hey. Good morning. Can I understand a little more on the $600 per ton number? Is that where your current cost estimates look like you will get a good return for the Houston Ship Channel project? And is that also where it's helpful for customers — is that the pivot point?

Good morning, Andrew. We think that a price below $600 a ton is a level where we could secure appropriate offtake to make us comfortable moving forward on a project. However, capital costs for projects have risen significantly in the industry. At the current capital cost we have for our project, we don’t think there’s anything transactable. We are working with partners to see if we can reconfigure the project to bring down capital cost and operating costs to get below $600 a ton. There is a possibility, otherwise we wouldn’t be spending the time on this. We expect to be in a position to discuss this more meaningfully on our first quarter conference call at the end of April.

Okay. That makes a lot of sense. On the EPA, with the changeover in the administration, you had previously said resources were constrained. Has there been any change in their capacity to process permits? How does that impact the timeline on El Dorado?

We haven’t seen major negative changes. We are having ongoing conversations with the EPA. We are favorably disposed to some of the leadership changes. The new head of the EPA, Lee Zeldin, we feel could be a good steward and may focus on streamlining regulation, which could be positive for us. The new head of the Region 6 office in Dallas is someone known to our team and is the former Deputy Secretary of Energy of Oklahoma, which we view as positive. We hope that after some initial slowdown, once things settle down, we will see real progress. We feel pretty good about some of the changes at the EPA and where it’s going.

Okay. Great. If I can just ask more on ammonium nitrate, it looks like U.S. Midwest and Southern Plains benchmark prices haven’t quite kept up with NOLA or urea in general. Why is that? And what do you expect for HDAN prices this year?

Hi Andrew. What you're seeing is some changes in the supply and demand balance in the U.S. Over the last couple of years, some major off-takers of AN on the ag side have switched away due to security concerns or high insurance costs and have chosen alternative products. The supply balance in the U.S. hasn’t changed much, so you are seeing some natural price play as we compete against cheaper imports. That is driving the pricing dynamics.

Okay. Appreciate it. Thank you.

The next question is from Rob McGuire from Granite Research. Please go ahead.

Good morning guys. Nice quarter.

Thanks Rob.

Could you discuss, Mark, if you are seeing any updates on European legislation coming down the pipe that might shift the focus from zero-carbon to low-carbon ammonia?

There is a lot of talk. Many potential offtakers are European, so we have good on-the-ground information. Europe is revisiting policies given political and economic pressures: pushback on inflation, cost, tax bases and funding for projects. Low-carbon or blue ammonia is becoming more prominent on the list compared to zero-carbon. One item we are watching closely is CBAM, which is supposed to start January 1, 2026. There is conversation about pushing it back a year or two. If delayed, that reduces near-term pressure on European users to switch to low-carbon ammonia and could delay some demand.

With the U.S. announcing intent to withdraw from the Paris Agreement, are you seeing customers become less interested in participating in 2030 carbon reduction goals? Are they just as interested?

I’m not sure that that’s a major catalyst. The real driver is the financial impact on customers. While some do it for environmental reasons, most corporate decisions are financially based. If switching to low-carbon products reduces profitability without offsetting benefits, it’s hard for companies to justify. We believe in the energy transition and expect demand to materialize over time, but timing is the wildcard.

That’s helpful. One last question: on the stronger fourth quarter AN sales volumes, was that due to increased reliability and capacity or are you shifting production downstream due to strong demand?

It’s a bit of both. We are seeing good uptake on the industrial side for AN solution, and improved plant reliability has allowed us to increase production. We try to upgrade every molecule we can, and the improved reliability is enabling that. We are also leveraging strong customer relationships to take additional volumes.

I want to give kudos to our manufacturing and commercial teams. We focused not just on reliability but on optimizing production and making the most money from the products we produce. The commercial team is doing a good job focusing on that, and the presentation slide highlights the progress and results.

Appreciate that. Thanks guys.

There are no further questions at this time. I would like to turn the floor back over to Mark Behrman for closing comments.

Well, as always, thank you so much for participating in the conference call. We appreciate everyone’s interest. If there are further questions, feel free to give either Fred Buonocore, Cheryl Maguire or myself a call. We look forward to seeing you at some of the events that we have going forward. Thanks and have a great day.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.