Lsb Industries, Inc 10-Q for FY2026 Q3
Lsb Industries, Inc. (LXU)
About this 10-Q
Lsb Industries, Inc filed this 10-Q on October 29, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
LSB Industries reported third-quarter 2026 net sales of $158.6 million and operating income of $26.8 million, versus $155.4 million and $15.6 million in 2025. Its El Dorado CO₂ project could generate approximately $25 million to $30 million annually when fully operational. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $158.6M
- up 2.0% from $155.43M a year earlier
- Net income
- $16.35M
- up 129.8% from net income of $7.12M a year earlier
- Diluted EPS
- $0.22
- up 120.0% from $0.10 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
For the quarterly period ended
OR
For the transition period from to .
Commission File Number:
(Exact name of registrant as specified in its charter)
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(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐ Yes
The number of shares outstanding of the registrant's common stock was
FORM 10-Q OF LSB INDUSTRIES, INC.
TABLE OF CONTENTS
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PART I – Financial Information |
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Item 1. |
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3 |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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32 |
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Item 4. |
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32 |
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PART II – Other Information |
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Item 1. |
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35 |
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Item 1A. |
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35 |
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Item 2. |
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36 |
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Item 3. |
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36 |
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Item 4. |
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36 |
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Item 5. |
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36 |
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Item 6. |
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37 |
2
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
LSB INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Information at September 30, 2026 is unaudited)
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September 30, 2026 |
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December 31, 2025 |
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(In Thousands) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Short-term investments |
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Accounts receivable |
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Allowance for doubtful accounts |
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Accounts receivable, net |
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Inventories: |
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Finished goods |
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Raw materials |
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Total inventories |
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Supplies, prepaid items and other: |
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Prepaid insurance |
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Precious metals |
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Supplies |
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Other |
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Total supplies, prepaid items and other |
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Assets held for sale |
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Total current assets |
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Property, plant and equipment, net |
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Other assets: |
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Operating lease assets |
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Intangible and other assets, net |
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Total other assets |
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Total assets |
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$ |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
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Short-term financing |
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Accrued and other liabilities |
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Current portion of long-term debt |
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Total current liabilities |
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Long-term debt, net |
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Noncurrent operating lease liabilities |
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Other noncurrent accrued and other liabilities |
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Deferred income taxes, net |
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Stockholders' equity: |
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Common stock, $ |
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Capital in excess of par value |
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Retained earnings |
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Less treasury stock, at cost: |
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Common stock, |
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Total stockholders' equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
3
LSB INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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(In Thousands, Except Per Share Amounts) |
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Net sales |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expense |
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Other expense (income), net |
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Operating income |
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Interest expense, net |
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Loss on extinguishment of debt |
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Non-operating other income, net |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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$ |
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Net income per common share: |
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Basic: |
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Net income |
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$ |
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Diluted: |
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Net income |
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$ |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
4
LSB INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
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Common |
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Treasury |
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Common |
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Capital in |
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Retained Earnings |
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Treasury |
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Total |
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(In Thousands) |
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Balance at December 31, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net income |
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Stock-based compensation |
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Vesting of equity compensation |
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— |
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Shares withheld upon vesting |
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Balance at March 31, 2026 |
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Net (loss) |
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Stock-based compensation |
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Employee stock purchase plan |
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Vesting of equity compensation |
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— |
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Shares withheld upon vesting |
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Balance at June 30, 2026 |
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Net income |
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Stock-based compensation |
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Balance at September 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Balance at December 31, 2024 |
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Net (loss) |
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Stock-based compensation |
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Vesting of equity compensation |
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Shares withheld upon vesting |
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Balance at March 31, 2025 |
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Net income |
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Stock-based compensation |
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Employee stock purchase plan |
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Vesting of equity compensation |
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Shares withheld upon vesting |
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Balance at June 30, 2025 |
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Net income |
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Stock-based compensation |
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Employee stock purchase plan |
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Vesting of equity compensation |
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Shares withheld upon vesting |
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Balance at September 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
5
LSB INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Months Ended September 30, |
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2026 |
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2025 |
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(In Thousands) |
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Cash flows from operating activities |
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Net income |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Deferred income taxes |
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Loss on extinguishment of debt |
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Depreciation and amortization of property, plant and equipment |
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Stock-based compensation |
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Write-downs of property, plant and equipment |
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Other |
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Cash provided (used) by changes in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
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Prepaid insurance |
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Supplies, prepaid items and other |
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Accounts payable |
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Accrued interest |
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Accrued payroll and benefits |
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Other assets and other liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities |
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Expenditures for property, plant and equipment |
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Development of carbon capture and sequestration facility |
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Proceeds from short-term investments |
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Purchases of short-term investments |
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Recovery of property, plant and equipment costs |
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Other investing activities |
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Net cash used by investing activities |
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Cash flows from financing activities |
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|
||
Proceeds from revolving debt facility |
|
|
|
|
|
|
||
Payments on revolving debt facility |
|
|
( |
) |
|
|
( |
) |
Repurchases of |
|
|
|
|
|
( |
) |
|
Payments on other long-term debt |
|
|
( |
) |
|
|
( |
) |
Payments on short-term financing |
|
|
( |
) |
|
|
( |
) |
Proceeds from employee stock purchase program |
|
|
|
|
|
|
||
Taxes paid on equity awards |
|
|
( |
) |
|
|
( |
) |
Net cash used by financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Net increase in cash and cash equivalents |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
All references to “LSB Industries,” “LSB,” the “Company,” “we,” “us,” and “our” refer to LSB Industries, Inc. and its subsidiaries on a consolidated basis, except where the context makes clear that the reference is only to LSB Industries, Inc. itself and not its subsidiaries. The accompanying unaudited condensed consolidated interim financial statements and notes of LSB have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been omitted. The accompanying unaudited condensed consolidated interim financial statements and notes should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (our “2025 Form 10-K”), filed with the SEC on February 26, 2026. The accompanying unaudited interim financial statements in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s results of operations and cash flows for the three and nine months ended September 30, 2026 and 2025 and the Company’s financial position as of September 30, 2026.
Basis of Consolidation – LSB Industries, Inc. and its subsidiaries are consolidated in the accompanying unaudited condensed consolidated interim financial statements. All intercompany accounts and transactions have been eliminated. Certain prior period amounts reported in our unaudited condensed consolidated interim financial statements and notes thereto have been reclassified to conform to current period presentation.
Nature of Business – We are engaged in the manufacture and sale of chemical products. The chemical products we primarily manufacture, market and sell are (i) ammonia and urea ammonia nitrate (“UAN”) for agricultural applications, and (ii) high purity and commercial grade ammonia, high purity ammonium nitrate, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide, and industrial grade ammonium nitrate (“LDAN”) and ammonium nitrate (“AN”) solutions for industrial applications. We manufacture and distribute products in
Our customers include farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the United States; industrial users of acids throughout the United States and parts of Canada; and explosives manufacturers in United States and other parts of North America.
Seasonality – The interim results in this report are not necessarily indicative of results for a full year due, in part, to the seasonality of our sales of agricultural products and the timing of performing our major plant maintenance activities. Our selling seasons for agricultural products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November, respectively.
Equity Awards – Equity award transactions with employees are measured based on the estimated fair value of the equity awards issued. For equity awards with only a service condition, the grant date fair value is based on the market price of our common stock and compensation is recognized so long as the service condition is met. For equity awards with simultaneous service, market and performance conditions, the grant date fair value is based on a Monte Carlo simulation, and compensation is recognized so long as the service condition is met and it is probable the performance condition will be achieved without regard to the outcome of the market condition. For equity awards with a service and market condition, the grant date fair value is based on a Monte Carlo simulation, and compensation cost is recognized so long as the service condition is met, without regard to the outcome of the market condition. For equity awards with service conditions that have a graded vesting period, we recognize compensation cost on a straight-line basis over the requisite service period for the entire award. Forfeitures are accounted for as they occur.
On February 10, 2026, we entered into a side letter agreement (the “Side Letter”) with our Chief Executive Officer, Mark T. Behrman, which modifies all of Mr. Behrman’s outstanding equity awards to incorporate qualifying retirement provisions. Pursuant to the Side Letter, upon a qualifying retirement, all of Mr. Behrman’s outstanding time-based restricted stock units (“RSU”) will accelerate and vest in full. Additionally, all outstanding performance-based RSUs will accelerate and vest at the greater of (i) target or (ii) actual performance through the retirement date, as determined by our Compensation Committee of the Board of Directors. For the purposes of the Side Letter, a “qualifying retirement” is defined as a voluntary retirement occurring (i) on or after age 63 with at least five years of service, (ii) more than one year after the applicable grant date, and (iii) absent of any determination by us of grounds for termination for cause. All future equity awards granted to Mr. Behrman shall also include the same qualifying retirement provisions, unless otherwise agreed in writing by us and Mr. Behrman.
7
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Upon the execution of the Side Letter, Mr. Behrman met the criteria for a qualifying retirement with respect to his equity awards granted in 2024 and 2025. As a result of the shortened amount of time that Mr. Behrman would be required to serve in order to be eligible for vesting, we accelerated recognition of the remaining compensation cost associated with those grants in the amount of $
On April 24, 2026, the Company made a one-time retention grant of
Cash and Cash Equivalents – Investments, which consist of highly liquid investments with original maturities of three months or less, are considered cash equivalents.
Short-Term Investments – Investments, which consist of U.S. treasury securities with remaining maturity at the time of purchase greater than three months but less than 12 months, are considered short-term investments and are classified as Level 1 under the fair value hierarchy. These investments are classified as held to maturity, consistent with our intent to hold these investments to maturity. U.S. treasury bills with remaining maturity at the time of purchase of three months or less are included in cash and cash equivalents. Due to the nature of these investments as U.S. treasury securities, no impairment is anticipated. See “Note 6. Financial Instruments” for more information regarding our short-term investments.
Accounts Receivable – Substantially all of our accounts receivable consists of trade receivables from customers. We have recognized an appropriate allowance for estimated uncollectible accounts to reflect any estimate of expected credit losses. Our estimate is based on historical experience and periodic assessment, particularly on accounts that are past due (based upon the terms of the sale). Our periodic assessment is based on our best estimate of amounts that are not recoverable, which includes a present collectability review and forward-looking assessment, where applicable. We write off accounts receivable when we deem them uncollectible and record recoveries of accounts receivable previously written off when received.
Property, Plant and Equipment – Property, plant and equipment (“PP&E”) are stated at cost or fair market value in the case of assets acquired through acquisitions, or otherwise at reduced values to the extent there have been asset impairment write-downs, net of accumulated depreciation and amortization. Major renewals and improvements that increase the life, value, or productive capacity of assets are capitalized in PP&E, while maintenance, repairs and minor renewals, including planned maintenance turnarounds, are expensed as incurred. Interest cost related to the construction of qualifying assets is capitalized as part of the construction costs.
For financial reporting purposes, depreciation of the costs of PP&E is computed using the straight-line method over the estimated useful lives of the assets. No provision for depreciation is made on construction in progress or capital spare parts until such time as the relevant assets are put into service. Depreciation expense is recognized in cost of sales or selling, general and administrative expense within the condensed consolidated statements of operations consistent with the utilization of the underlying assets.
When PP&E is retired, sold, or otherwise disposed, the asset’s carrying amount and related accumulated depreciation and amortization is removed from the accounts and any gain or loss is included in other expense (income), net in our condensed consolidated statements of operations.
Impairment of Long-Lived Assets – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An asset’s fair value must be determined when the carrying amount of an asset (asset group) exceeds the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and/or its eventual disposition. If assets to be held and used are considered to be impaired, the impairment to be recognized is the amount by which the carrying amounts of the assets exceed the fair values of the assets as measured by the present value of future net cash flows expected to be generated by the assets or their appraised value. In general, our asset groups are reviewed for impairment on a facility-by-facility basis (such as the Cherokee, El Dorado or Pryor Facility) unless it is determined that the asset being evaluated will generate cash flows that are independent from the rest of the facility.
In addition, if the event or change in circumstance relates to the probable sale of an asset (or group of assets), the specific asset (or group of assets) is reviewed for impairment.
For the three and nine months ended September 30, 2026, we recorded net losses on asset disposals and write-downs in the amount of $
8
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Assets Held For Sale – In general, assets held for sale are reported at the lower of the carrying amounts of the assets or fair values less costs to sell.
During the third quarter of 2025, we entered into purchase and sale agreements for the disposition of real estate and tangible property for two former agricultural retail locations that had ceased operations. We closed on the sale of the first location on October 20, 2025, and closed on the sale of the second location on February 2, 2026. The aggregate purchase price for the real estate and tangible personal property at both locations was approximately $
In December 2025, we received an offer with respect to a parcel of land we own, for which we are currently negotiating a purchase and sale agreement. As the offer price was less than the carrying value of the land at the time, we recorded an impairment of $
Assets classified as held for sale on the condensed consolidated balance sheet as of September 30, 2026, reflect the net book value of the parcel of land for which a sale is pending, while the amount as of December 31, 2025, reflects the net book values of both the land and the former agricultural retail location sold in February 2026.
Short-Term Financing – Our short-term financing represents the short-term note related to financing of our insurance premium, which is renewed annually.
Contingencies – Certain conditions may exist which may result in a loss, but which will only be resolved when future events occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a loss has been incurred, we accrue for such contingent loss when such loss can be reasonably estimated. If the assessment indicates that a potentially material loss contingency is not probable but reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Estimates of potential legal fees and other directly related costs associated with contingencies are not accrued but rather are expensed as incurred. Loss contingency liabilities are included in current and noncurrent accrued and other liabilities and are based on current estimates that may be revised in the near term. In addition, we recognize contingent gains when such gains are realized or when the contingencies have been resolved (generally at the time a settlement has been reached).
Partial Settlement of Global Industrial Matter and Related Claims
As previously disclosed, since 2016, the Company has been involved in litigation with respect to engineering and procurement contracts related to the construction of the ammonia plant at the El Dorado Facility. On April 2, 2026, the Company, certain of the Company’s wholly owned subsidiaries, and Benham Constructors, LLC (f/k/a Leidos Constructors, LLC, f/k/a SAIC Constructors, LLC) (“Benham”) entered into a Settlement and Mutual Release Agreement (the “Settlement Agreement”), effective
Pursuant to the terms of the Settlement Agreement, Benham agreed to pay the Company approximately $
The Settlement Agreement did not release or otherwise discharge any claims, rights or remedies the Company has, may have had or may have in the future against Leidos Inc. (f/k/a Science Applications International Corporation) or Leidos Engineering, LLC (“Leidos Engineering”), including its claims for fraud and breach of contract. The Company plans to continue its vigorous prosecution of its filed claims against Leidos Inc. and Leidos Engineering and continues to seek actual and punitive damages in excess of $
Derivatives, Hedges and Financial Instruments – In order to mitigate a portion of the commodity price risk associated with natural gas, which we utilize in our manufacturing process, we periodically enter into natural gas forward contracts or volume purchase commitments. Such contracts are required to be accounted for as derivatives under applicable accounting guidance unless they are eligible for, and we elect the normal purchase normal sale (“NPNS”) exception. We are eligible for the NPNS exception when these contracts provide for the purchase of natural gas that will be delivered in quantities expected to be used over a reasonable period of
9
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
time in the normal course of business and are documented as such. In the event that we have natural gas derivatives that we do not elect or do not qualify for the NPNS exception, we would account for such contracts as derivatives by recognizing them in the balance sheet at fair value with changes in fair value recognized in the statement of operations. Such derivatives are not designated as hedges for accounting purposes.
Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:
Level 1 - Valuations of assets and liabilities classified as Level 1 are based on quoted prices in active markets for identical contracts.
Level 2 - Valuations of assets and liabilities classified as Level 2 are based on quoted prices for similar contracts and valuation inputs other than quoted prices that are observable for these contracts.
Level 3 - Valuations of assets and liabilities classified as Level 3 are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
Leases – We are the lessee in most of the lease arrangements we enter into. We determine if an arrangement is a lease at inception or modification of a contract and classify each lease as either an operating or finance lease based on the terms of the contract. We reassess lease classification subsequent to commencement upon a change to the expected lease term or a modification to the contract. A contract contains a lease if the contract conveys the right to control the use of the identified property or equipment, explicitly or implicitly, for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and obtain substantially all of the economic benefit from the use of the underlying asset.
An operating lease asset represents our right to use the underlying asset as a lessee for the lease term and an operating lease liability represents our obligation to make lease payments arising from the lease. Currently, most of our leases are classified as operating leases and primarily relate to railcars, other equipment and office space. Our leases that are classified as finance leases primarily relate to railcars. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made. We apply a practical expedient to combine lease and non-lease components in calculating the right of use asset and lease liability to certain classes of underlying assets. Our current leases do not contain residual value guarantees. Most of our leases do not include options to extend or terminate the lease prior to the end of the term. Leases with a term of 12 months or less are not recognized in the balance sheet.
As a lessee, we use our incremental borrowing rate based on the lease term and other information available at the commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the applicable lease term.
From time to time when we have excess freight capacity, we may sublease a portion of our railcars fleet on a short-term basis to other parties. The income from these subleases is recorded as a component of “Other expense (income), net” in our condensed consolidated statements of operations. For the nine months ended September 30, 2026 and 2025, sublease income was not material.
As of September 30, 2026, we had executed operating leases for railcars with lease terms that had not yet commenced. The leases have terms greater than one year, with aggregate lease payments of approximately $
Recently Adopted Accounting Pronouncements
ASU 2025-05 - In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this ASU provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from our sales transactions. The practical expedient permits us to assume current conditions as of the balance sheet date that do not change for the remaining life of the current accounts receivable and current contract assets. Public business entities are not permitted to elect the optional accounting policy to consider subsequent cash collections. We
Recently Issued Accounting Pronouncements
ASU 2024-03 - In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires an entity to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. It also requires an entity to include certain amounts that are already required to be disclosed under current U.S. GAAP in the same disclosure. Additionally, it requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and to disclose
10
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. While we are currently evaluating the effect of adopting this ASU on the disclosures in our financial statements, we do not expect this ASU to impact our financial condition and results of operations.
ASU 2025-11 - In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for us beginning in the fiscal year ending December 31, 2028, including interim periods within those fiscal years. While we are currently evaluating the effect of adopting this ASU on the disclosures in our financial statements, we do not expect this ASU to impact our financial condition and results of operations.
Changes to U.S. GAAP are established by the FASB in the form of ASUs to the FASB’s Accounting Standards Codification. We considered all ASUs issued and outstanding or that became effective since January 1, 2026 through the date of these financial statements and determined them not to be applicable or materially impact our financial statements other than those ASUs specifically addressed above.
2. Net (Loss) Income per Common Share
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
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|
2026 |
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|
2025 |
|
||||
|
|
(In Thousands, Except Per Share Amounts) |
|
|||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Numerator for basic and diluted net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
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|
|
|
|
|
|
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|
||||
Denominator for basic net income per common |
|
|
|
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|
|
|
|
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|
||||
Effect of dilutive securities: |
|
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|
||||
Unvested restricted stock and stock units |
|
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|
||||
Dilutive potential common shares |
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|
||||
Denominator for diluted net income per common |
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|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per common share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted net income per common share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following securities were not included in the computation of diluted net income per common share as their effect would have been antidilutive:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
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|
Restricted stock and stock units |
|
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||||
|
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|
||||
11
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Accrued and Other Liabilities
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In Thousands) |
|
|||||
Accrued interest |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|||
Accrued payroll and benefits |
|
|
|
|
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||
Other (1) |
|
|
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|
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||
|
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|
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|
||
Less noncurrent portion |
|
|
|
|
|
|
||
Current portion of accrued and other liabilities |
|
$ |
|
|
$ |
|
||
_____________________________
4. Long-Term Debt
Our long-term debt consists of the following:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In Thousands) |
|
|||||
Revolving Credit Facility (A) |
|
$ |
— |
|
|
$ |
— |
|
Senior Secured Notes due 2028, with an interest rate of |
|
|
|
|
|
|
||
Finance (C) |
|
|
|
|
|
|
||
Unamortized debt issuance costs (1) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Less current portion of long-term debt |
|
|
|
|
|
|
||
Long-term debt due after one year, net |
|
$ |
|
|
$ |
|
||
_____________________________
The Revolving Credit Facility matures on
LSB Industries, Inc. and all of its subsidiaries (collectively, the “Borrowers”) are co-borrowers under the Revolving Credit Facility. Obligations under the Revolving Credit Facility are secured by a first priority security interest in substantially all of our current assets, including accounts receivable and inventory, subject to certain exceptions.
The Revolving Credit Facility contains a financial covenant, which requires that, solely if we elect to remove the Availability Block, then
12
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
5. Commitments and Contingencies
Outstanding Natural Gas Purchase Commitments – Certain of our natural gas contracts qualify for the NPNS exception under U.S. GAAP and thus are not financial instruments for which we mark-to-market. At September 30, 2026, these contracts included volume purchase commitments with fixed prices of approximately
Legal Matters - The following is a summary of certain legal matters involving the Company:
A. Environmental Matters
Our facilities and operations are subject to numerous federal, state and local environmental laws and to other laws regarding health and safety matters (collectively, the “Environmental and Health Laws”), many of which provide for certain performance obligations, substantial fines and criminal sanctions for violations. Certain Environmental and Health Laws impose strict liability as well as joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. We may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.
In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety effects of our operations.
There can be no assurance that we will not incur material costs or liabilities in complying with such laws or in paying fines or penalties for violation of such laws. Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. The Environmental and Health Laws and related enforcement policies have in the past resulted and could in the future result, in significant compliance expenses, cleanup costs (for our sites or third-party sites where our wastes were disposed of), penalties or other liabilities relating to the handling, manufacture, use, emission, discharge or disposal of hazardous or toxic materials at or from our facilities or the use or disposal of certain of our chemical products. Further, a number of our facilities are dependent on environmental permits to operate, the loss or modification of which could have a material adverse effect on their operations and our financial condition.
Historically, significant capital expenditures have been incurred by our subsidiaries in order to comply with the Environmental and Health Laws and significant capital expenditures are expected to be incurred in the future. We will also be obligated to manage certain discharge water outlets and monitor groundwater contaminants at our facilities should we discontinue the operations of a facility.
As of September 30, 2026, our for environmental matters totaled approximately $
1. Discharge Water Matters
Each of our manufacturing facilities generates process wastewater, which may include cooling tower and boiler water quality control streams, contact storm water and miscellaneous spills and leaks from process equipment. The process water discharge, storm-water runoff and miscellaneous spills and leaks are governed by various permits generally issued by the respective state environmental
13
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
agencies as authorized and overseen by the United States Environmental Protection Agency (the “EPA”). These permits limit the type and volume of effluents that can be discharged and control the method of such discharge.
In 2017, the Company filed a Permit Renewal Application for its Non-Hazardous Injection Well Permit at the Pryor Facility. Although the Injection Well Permit expired in 2018, we continue to operate the injection well in accordance with an executed November 2023 Consent Order with the Oklahoma Department of Environmental Quality (“ODEQ”) that allows for the continued use of the injection well until a wastewater treatment process is designed, built and operational. The Company continues to work with the ODEQ under the terms of the Consent Order to evaluate options for treatment and/or disposal of the wastewater at the Pryor Facility.
In 2006, the Company entered into a Consent Administrative Order (“CAO”) that recognizes the presence of nitrate contamination in the shallow groundwater at our El Dorado Facility. The CAO required us to perform semi-annual groundwater monitoring, continue operation of a groundwater recovery system, submit a human health and ecological risk assessment and submit a remedial action plan. The risk assessment was submitted in 2007. In 2015, the Arkansas Department of Environmental Quality (“ADEQ”) stated that the El Dorado Facility was meeting the requirements of the CAO and should continue semi-annual monitoring. A CAO was signed in 2018, which required an Evaluation Report of the data and effectiveness of the groundwater remedy for nitrate contamination. During 2019, the Evaluation Report was submitted to the ADEQ and the ADEQ approved the report. We continue to comply with the terms of the CAO, including the submission of periodic monitoring reports.
2. Other Environmental Matters
In 2002, certain of our subsidiaries sold substantially all of their operating assets relating to a Kansas chemical facility (the “Hallowell Facility”) but retained ownership of the real property where the facility is located. Our subsidiary retained the obligation to be responsible for and perform the activities under a previously executed consent order to investigate the surface and subsurface contamination at the real property, develop a corrective action strategy based on the investigation and implement such strategy. In addition, certain of our subsidiaries agreed to indemnify the buyer of such assets for these environmental matters.
As the successor to a prior owner of the Hallowell Facility, Chevron Environmental Management Company (“Chevron”) agreed in writing, within certain limitations, to pay and has been paying of the costs of the investigation and interim measures relating to this matter as approved by the Kansas Department of Health and Environment (the “KDHE”), subject to reallocation.
During this process, our subsidiary and Chevron retained an environmental consultant that prepared and performed a corrective action study work plan as to the appropriate method to remediate the Hallowell Facility. During 2020, the KDHE selected a remedy of annual monitoring and the implementation of an Environmental Use Control (“EUC”). This remedy primarily relates to long-term surface and groundwater monitoring to track the natural decline in contamination and is subject to a periodic review with the KDHE. At this time there is no review scheduled.
The final remedy, including the EUC, the finalization of the cost estimates and any required financial assurances remains under discussion with the KDHE. Pending the results from our discussions regarding the final remedy, we continue to accrue our allocable portion of costs primarily for the additional testing, monitoring and risk assessments that could be reasonably estimated, which amount is included in our accrued liabilities for environmental matters discussed above. The estimated amount is not discounted to its present value. As more information becomes available, our estimated accrual will be refined, as necessary.
B. Other Pending, Threatened or Settled Litigation
We are also involved in various other claims and legal actions (including matters involving gain contingencies) in the ordinary course of our business. While it is possible that the actual claims results could differ from our estimates, after consultation with legal counsel, we believe that any such differences will not have a material effect on our business, financial condition, results of operations or cash flows.
Performance and Payment Bonds
We are contingently liable to sureties in respect of insurance bonds issued by the sureties in connection with certain contracts entered into by subsidiaries in the normal course of business. These insurance bonds primarily represent guarantees of future performance of our subsidiaries. As of September 30, 2026, we have agreed to indemnify the sureties for payments, up to $
6. Financial Instruments
Natural Gas Contracts
Periodically, we enter into certain forward natural gas contracts or volume purchase commitments, which are derivatives. We utilize these natural gas contracts as economic hedges for risk management purposes, but the contracts are not designated as hedging instruments for accounting purposes. At September 30, 2026 and December 31, 2025, we had
14
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
contracts or volume purchase commitments accounted for as derivatives. When present in the past, the valuations of the natural gas contracts were classified as a Level 2 fair value measurement.
Financial Instruments
At September 30, 2026 and December 31, 2025, we did
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
||||
|
|
Amount |
|
|
Fair Value |
|
|
Amount |
|
|
Fair Value |
|
||||
|
|
(In Millions) |
|
|||||||||||||
Senior Secured Notes (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-Term Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
_____________________________
7. Income Taxes
Provision for income taxes is as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
(In Thousands) |
|
|||||||||||||
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Federal |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
State |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Federal |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
State |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total Deferred |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision for income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The tax provision for the nine months ended September 30, 2026, was $
We considered both positive and negative evidence in our determination of the need for valuation allowances for deferred tax assets. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years. Valuation allowances are reflective of our quarterly analysis of the four sources of taxable income, including the calculation of the reversal of existing tax assets and liabilities, the impact of financing activities and our quarterly results. Based on our analysis, we have determined that it is more-likely-than-not that all of our federal deferred tax assets and a portion of our state deferred tax assets will be utilized.
During the first quarter of 2026, our results of operations and expected results for the remainder of 2026 and future years significantly improved compared to our prior year-end forecast, primarily due to a favorable shift in pricing conditions across our product portfolio resulting from global supply constraints. This improvement supported the inclusion of future taxable income in our quarterly analysis of the four sources of taxable income and represented a change in the weight of positive evidence relative to the negative evidence that had existed at year-end. As a result of this change, we recognized a discrete income tax benefit of $
15
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to our deferred tax assets. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of our deferred tax assets that could have a material impact on our condensed consolidated financial statements. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.
LSB Industries, Inc. and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the 2022-2025 years remain open for all purposes of examination by the U.S. Internal Revenue Service and other major tax jurisdictions. Additionally, the 2015-2020 years remain subject to examination for determining the amount of net operating loss and other carryforwards.
8. Net Sales
Disaggregated Net Sales
We primarily derive our revenues from the sales of various chemical products. The Company’s net sales disaggregation is consistent with other financial information utilized or provided outside of our condensed consolidated financial statements. Accordingly, this approach is reflected in disaggregated net sales, mirroring how the Company manages its net sales by product through contracts with customers.
The following table presents our net sales disaggregated by our products, which disaggregation is consistent with other financial information utilized or provided outside of our condensed consolidated financial statements:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
(In Thousands) |
|
|||||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
AN & Nitric Acid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Urea ammonium nitrate (UAN) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ammonia |
|
|
|
|
|
|
|
|
|
|
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|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other Information
Liabilities associated with contracts with customers (contract liabilities) primarily relate to deferred revenue and customer deposits associated with cash payments received in advance from customers for product shipments.
Our contract liabilities as of September 30, 2026 were approximately $
For most of our contracts with customers, the transaction price from the inception of a contract is limited to a short period of time (generally one month), as these contracts contain terms with variable consideration related to both price and quantity. At September 30, 2026, we had remaining performance obligations with certain customer contracts, excluding contracts with original durations of less than one year and for service contracts for which we have elected the practical expedient for consideration recognized in revenue as invoiced. As of September 30, 2026, the remaining performance obligations totaled approximately $
16
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9. Supplemental Cash Flow Information
The following provides additional information relating to cash flow activities:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(In Thousands) |
|
|||||
Cash payments (refunds/reduction) for: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Interest on long-term debt and other |
|
$ |
|
|
$ |
|
||
Capitalized interest |
|
$ |
( |
) |
|
$ |
( |
) |
Income taxes, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Noncash investing and financing activities: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Property, plant and equipment acquired and not yet paid at end of period |
|
$ |
|
|
$ |
|
||
Loss on extinguishment of debt |
|
$ |
|
|
$ |
|
||
10. Segment Information
The Company is managed on a consolidated basis with a reportable segment, chemical manufacturing, which is not an aggregation of individual operating segments. There have been no changes in the basis of segmentation or in the basis of measurement of segment profit or loss since the filing of our 2025 Form 10-K.
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|
(In Thousands) |
||||||
Net sales |
|
$ |
|
$ |
|
$ |
|
$ |
Less: |
|
|
|
|
|
|
|
|
Cost of sales excluding depreciation, amortization |
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
||||
Turnaround expense |
|
|
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|
||||
Total cost of sales |
|
|
|
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
Wages and benefits |
|
|
|
|
||||
Other selling general and administrative |
|
|
|
|
||||
Total selling general and administrative |
|
|
|
|
||||
Interest expense |
|
|
|
|
||||
Loss on extinguishment of debt |
|
|
|
|
||||
Loss from PP&E write-downs and disposals |
|
|
|
|
||||
Income tax provision |
|
|
|
|
||||
Other segment income, net (a) |
|
( |
|
( |
|
( |
|
( |
Segment net income |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
Reconciliation of profit or loss |
|
|
|
|
|
|
|
|
Adjustments and reconciling items |
|
|
|
|
||||
Consolidated net income |
|
$ |
|
$ |
|
$ |
|
$ |
_____________________________
(a) For the periods presented, amount consisted primarily of interest income.
The measure of our chemical manufacturing segment assets is reported on the condensed consolidated balance sheet as total assets. Expenditures for long-lived chemical manufacturing segment assets are reported on our condensed consolidated statement of cash flows.
17
LSB INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
11. Asset Acquisition
On May 18, 2026, we acquired full ownership of the carbon capture and sequestration project currently underway at our El Dorado, Arkansas facility (the “Project”) from Lapis Carbon Solutions. The total purchase price and remaining completion capital associated with the Project are estimated at approximately $
Under the purchase and sale agreement for the acquisition, the contingent purchase consideration becomes payable in
We continue to incur development and construction costs associated with the Project, which are capitalized as incurred in accordance with the Company’s accounting policies. For the three and nine months ended September 30, 2026, our cash expenditures on the Project were $
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This discussion is intended to provide a reader of our financial statements with management’s perspective on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Investors should read the following discussion and analysis in conjunction with the condensed consolidated financial statements and related notes included in “Item 1. Financial Statements.” Notes referenced in this discussion and analysis refer to the notes to condensed consolidated financial statements that are found in “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements.” Certain statements contained in this discussion may be deemed to be forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and in our Annual Report on Form 10-K for the year ended December 31, 2025, particularly in the section entitled “Risk Factors.” Unless we state otherwise or the context otherwise requires, the terms “LSB,” “we,” “us,” “our” and the “Company” refer to LSB Industries, Inc. and its consolidated subsidiaries.
Overview
General
LSB is headquartered in Oklahoma City, Oklahoma and we manufacture and sell chemical products for the agricultural and industrial markets. We own and operate three multi-plant facilities in Cherokee, Alabama (the “Cherokee Facility”), El Dorado, Arkansas (the “El Dorado Facility”) and Pryor, Oklahoma (the “Pryor Facility”) and operate a facility on behalf of Covestro LLC in Baytown, Texas. Our products are sold through distributors and directly to end customers primarily throughout the United States and other parts of North America.
Key Operating Initiatives for 2026
We expect our future results of operations and financial condition to benefit from the following key initiatives:
19
Summary of Low Carbon Ammonia Initiatives
In May 2026, we reached an agreement to assume full ownership of our project to capture and sequester CO2 at our El Dorado Facility (the “Project”) from Lapis Carbon Solutions (“Lapis”). The milestone-based structure of the agreement aligns our capital deployment with Project advancement, while limiting upfront capital exposure. Completion of the Project and commencement of CO₂ injections are conditioned on the U.S. Environmental Protection Agency’s (“EPA”) issuance of our Class VI permit. The EPA’s technical review of our resubmitted application is ongoing. Although the EPA’s published Class VI Permit Tracker currently reflects a potential operational date in the second half of 2027, based on our continued engagement with the EPA’s Region 6 office, we believe an earlier operational date is possible, depending on the timing of the EPA’s completion of its review.
Once operational, the Project will initially capture and sequester approximately 400,000 to 500,000 metric tons of CO2 per year in underground saline aquifers. The sequestered CO2 is expected to reduce our overall scope 1 GHG emissions by approximately 25% from current levels. In addition, the Project is expected to enable us to produce between 305,000 and 380,000 metric tons per year of low carbon ammonia, a product that could potentially be sold at higher price levels than conventional ammonia.
Key Project milestones include:
Market Outlook
Demand for our industrial products remains strong, including demand for Ammonium Nitrate (AN), supported by continued mining-sector investment across North America and globally, as well as broader capital spending tied to AI-related infrastructure, data centers, power generation and electrification. Favorable supply / demand fundamentals, further supported by producer outages, continue to underpin both spot and contract pricing, while new mining and aggregate projects are expected to support medium to longer-term demand for explosives used in copper, iron ore, quarrying and infrastructure-related production.
20
We believe our industrial business provides a meaningful degree of downside protection from risks associated with economic uncertainty, including those related to tariffs, fluctuating oil and commodity prices, concerns about inflation and the ongoing instability in the Middle East, including the conflict involving the U.S. and Iran. A significant portion of our volumes are already contracted, our customer base is diverse and located almost entirely in the United States, and we have the ability to optimize our product mix. In addition, we expect European marginal cost of production to remain elevated throughout the remainder of 2026, driven primarily by elevated natural gas costs and a tight global market for nitrogen products, particularly as demand for fertilizers in India remains strong and nitrogen exports from China and certain other sources remain constrained.
The fertilizer markets remain constructive, with ongoing geopolitical conflicts, including those in the Middle East and between Ukraine and Russia, continuing to affect international supply, pricing and logistics. Ammonia prices remain elevated relative to historical averages, although they have moderated from first-half highs, due in part to reduced ammonia demand from phosphate producers affected by constrained sulfur supply. As we look forward, we expect higher natural gas prices in Europe will be constructive to pricing. Constrained Urea supplies strengthened Urea pricing during the third quarter, which also improved Urea Ammonium Nitrate (UAN) pricing. We expect fall fertilizer applications to support demand in the fourth quarter. Other notable developments that could impact product pricing include continued attacks affecting Russian nitrogen plants, ports, and ships, and any further escalation of conflicts in the Middle East, including between Saudi Arabia and the Houthis.
The outlook for U.S. corn calls for approximately 96.8 million planted acres of corn for the 2026/2027 marketing season with global ending stocks projected to be at the lowest levels in over a decade supporting improved corn prices. We believe this will support strong fertilizer application rates and we anticipate robust nitrogen demand through the fall 2026 and spring 2027 fertilizer application season.
Key Industry Factors
Supply and Demand
Industrial Products
Our industrial products sales volumes are dependent upon general economic conditions, primarily in the housing, automotive, mining and paper industries. Demand for our industrial products is robust across all commodities, particularly with copper and gold miners as they maximize production to take advantage of strong supply and demand fundamentals.
Our LDAN and AN solutions are primarily used to produce AN fuel oil and specialty emulsions for use in explosives in the quarry and the construction industries, for metals mining and to a lesser extent, for coal.
Fertilizer
The price at which our agricultural products are ultimately sold depends on numerous factors, including the supply and demand for nitrogen fertilizers which, in turn, depends upon world grain demand and production levels, the cost and availability of transportation and storage, weather conditions, competitive pricing and the availability of imports. Additionally, expansions or upgrades of competitors’ facilities and international and domestic political and economic developments continue to play an important role in the global nitrogen fertilizer industry economics. These factors can affect, in addition to selling prices, the level of inventories in the market which can cause price volatility and affect product margins.
From a farmer’s perspective, the demand for fertilizer is affected by the aggregate crop planting decisions including farm economics, weather and fertilizer application rate decisions of individual farmers. Individual farmers make planting decisions based largely on prospective profitability of a harvest, while the specific varieties and amounts of fertilizer they apply depend on factors such as their financial resources, soil conditions, weather patterns and the types of crops planted.
Additionally, changes in corn prices, as well as soybean, cotton and wheat prices, can affect the number of acres of corn planted in a given year and the number of acres planted will drive the level of nitrogen fertilizer consumption, likely affecting fertilizer prices.
According to the World Agricultural Supply and Demand Estimates Report dated October 9, 2026 (the “October Report”), farmers planted approximately 96.8 million acres of corn in the 2026 planting season, down 1.9% compared to the 2025 planting season. According to the October Report, the U.S. Department of Agriculture (“USDA”) estimates the U.S. ending stocks for the 2026 Harvest will be approximately 47.0 million metric tons, an 11.7% decrease from the 2025 Harvest. The USDA's expected yield per acre for the 2026 Harvest is 181.2 bushels, down approximately 2.8% from a year ago.
21
The following October 2026 estimates are associated with the corn market:
|
|
2027 Crop |
|
|
2026 Crop |
|
|
|
|
2025 Crop |
|
|
|
|
|||||
|
|
(2026 Harvest) |
|
|
(2025 Harvest) |
|
|
Percentage |
|
(2024 Harvest) |
|
|
Percentage |
|
|||||
|
|
October Report (1) |
|
|
October Report (1) |
|
|
Change (2) |
|
October Report (1) |
|
|
Change (3) |
|
|||||
U.S. Area Planted (Million acres) |
|
|
96.8 |
|
|
|
98.7 |
|
|
|
(1.9 |
%) |
|
90.9 |
|
|
|
6.5 |
% |
U.S. Yield per Acre (Bushels) |
|
|
181.2 |
|
|
|
186.5 |
|
|
|
(2.8 |
%) |
|
179.3 |
|
|
|
1.1 |
% |
U.S. Production (Million bushels) |
|
|
16,034 |
|
|
|
16,964 |
|
|
|
(5.5 |
%) |
|
14,892 |
|
|
|
7.7 |
% |
U.S. Ending Stocks (Million metric tons) |
|
|
47.0 |
|
|
|
53.2 |
|
|
|
(11.7 |
%) |
|
39.4 |
|
|
|
19.3 |
% |
World Ending Stocks (Million metric tons) |
|
|
280.4 |
|
|
|
307.2 |
|
|
|
(8.7 |
%) |
|
295.6 |
|
|
|
(5.1 |
%) |
The current USDA corn outlook compared to the prior report for the U.S. is for larger supplies, exports, domestic use and ending stocks. Corn beginning stocks were raised based on the September 30, 2026 Grain Stocks report. Corn production moved higher on a 2.7-bushel increase in yield to 181.2 bushels per acre compared to the prior month report. Harvested area for grain is unchanged at 88.5 million acres. Each component of use was increased. Exports increased due to increased supplies.
Natural Gas Prices
Natural gas is the primary resource for conversion and manufacturing production of our nitrogen products. In recent years, U.S. natural gas reserves have increased significantly due to, among other factors, advances in extracting shale gas, which has reduced and stabilized natural gas prices, providing North America with a cost advantage over certain imports. As a result, our competitive position and that of other North American nitrogen fertilizer producers has been positively affected.
Historically, we have purchased natural gas either on the spot market, through forward purchase contracts, or a combination of both and have used forward purchase contracts to lock in pricing for a portion of our natural gas requirements. These forward purchase contracts are generally either fixed-price or index-price, short-term in nature and for a fixed supply quantity. We are able to purchase natural gas at competitive prices due to our connections to large distribution systems and their proximity to interstate pipeline systems.
The following table shows the volume of natural gas utilized to produce the goods we sold and the associated average cost per MMBtu:
|
|
Three Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Natural gas volumes (MMBtu in millions) |
|
|
7.0 |
|
|
|
8.0 |
|
Natural gas average cost per MMBtu |
|
$ |
2.93 |
|
|
$ |
3.10 |
|
Transportation Costs
Costs for transporting nitrogen-based products can be significant relative to their selling price. We continue to evaluate the rising costs of freight domestically. As a result of increases in demand for available rail, truck and barge options to transport product, primarily during the spring and fall planting seasons, higher transportation costs have and could continue to impact our margins, where we are unable to fully pass through these costs to our customers. Additionally, truck driver shortages could impact our ability to fulfill customer demand. As a result, we continue to evaluate supply chain efficiencies to reduce or counter the impact of higher logistics costs.
Key Operational Factors
Facility Reliability
Consistent, reliable and safe operations at our chemical plants are critical to our financial performance and results of operations. Planned downtime, including a planned major maintenance activity (each such activity, a “Turnaround”), and unplanned downtime can adversely affect results of operations through reduced sales volumes, lower fixed cost absorption, and increased repair and maintenance costs, which are expensed as incurred.
We completed the scheduled ammonia plant Turnaround at our El Dorado Facility during the second quarter of 2026 and the scheduled Turnaround at our Pryor Facility early in the third quarter of 2026. The timing of the Turnaround at our Pryor Facility was
22
accelerated to commence during the second quarter of 2026 instead of the third quarter, as originally planned. We did not perform any major planned ammonia Turnaround events during 2025.
Ammonia Production
Ammonia is the basic product used to produce all of our upgraded products. The ammonia production rates of our plants affect the total cost per ton of each product produced and the overall sales of our products.
For 2026, we are targeting total ammonia production of approximately 780,000 tons to 810,000 tons, which reflects planned Turnaround work at our El Dorado and Pryor Facilities during 2026.
Forward Sales Contracts
In certain instances, we may use forward sales of our fertilizer products to optimize our asset utilization, planning process and production scheduling. These sales are made by offering customers the opportunity to purchase product on a forward basis at prices and delivery dates that are agreed upon, with dates typically occurring within 12 months. We use this program to varying degrees during the year depending on market conditions and our view of changing price environments. Fixing the selling prices of our products months in advance of their ultimate delivery to customers typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment.
Consolidated Results of the Third Quarter of 2026
Our consolidated net sales for the third quarter of 2026 were $158.6 million compared to $155.4 million for the same period in 2025. Our consolidated operating income for the third quarter of 2026 was $26.8 million compared to operating income of $15.6 million for the same period in 2025. The items impacting our operating results are discussed in more detail below and under “Results of Operations.”
Items Affecting Comparability of Results of the Third Quarter
Selling Prices
For the third quarter of 2026, average selling prices for AN & Nitric Acid and Ammonia increased, while UAN decreased slightly compared to the third quarter of 2025.
Turnaround Activities
As discussed above, during the second quarter of 2026, we performed major Turnaround activities at our El Dorado Facility and started a full plant Turnaround at our Pryor Facility. The Pryor Facility Turnaround was completed during the third quarter of 2026. When such activities are performed, overall results are negatively impacted. This impact includes lost contribution margin from lost sales, lost fixed cost absorption from lower production, and increased costs associated with repairs and maintenance. In addition, Turnaround-related costs may be incurred in periods earlier than the actual outage of the plant for activities such as planning and procurement of materials. Turnaround costs for the three months ended September 30, 2026 and 2025, were $6.3 million and $1.1 million, respectively, while Turnaround costs for the nine months ended September 30, 2026 and 2025, were $39.0 million and $5.7 million, respectively.
Chief Executive Officer One-Time Retention Award (2026 only)
During the second quarter of 2026, we granted a one-time retention award of 706,880 restricted stock units (“RSUs”) to Mark T. Behrman, our Chief Executive Officer, which award is subject to cliff vesting and will vest on March 31, 2029. This award will increase stock-based compensation expense on a quarterly basis by approximately $0.9 million. See our discussion in “Equity Awards” in Note 1.
Plant, Property and Equipment Write-downs
For the third quarter of 2026 and 2025, we recorded asset write-downs primarily related to assets no longer in use in the amount of $2.9 million and $0.4 million, respectively. These write-downs are primarily included in “Other expense (income), net” on our condensed consolidated statements of operations.
Shift in Production Mix
In 2025, we transitioned our production from fertilizer grade ammonium nitrate (“HDAN”), an agricultural product, to ANS, a product used in industrial and mining applications. The transition was completed during the third quarter of 2025, at which time we ceased production of HDAN. This shift in production mix is consistent with our strategy to transition a portion of our sales from agricultural sales made at spot market pricing, which can be volatile, to sales under multi-year contracts that provide the pass-through of natural gas feedstock costs. In 2026 we shifted our production mix to AN & Nitric Acid at the expense of UAN volumes in response to market conditions.
23
Results of Operations
The following is a discussion and analysis of our condensed consolidated results of operations for the three and nine months ended September 30, 2026 and 2025.
Net sales to unaffiliated customers are reported in the condensed consolidated financial statements. Gross profit represents net sales less cost of sales. Net sales are reported on a gross basis with the cost of freight being recorded in cost of sales.
24
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The following table sets forth certain financial information for the three months ended September 30, 2026 and 2025, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
|
|
Three Months Ended September 30, |
|
|
|
|
|
Percentage |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
|
|
(Dollars In Thousands) |
|
|
|
|
||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
AN & Nitric Acid |
|
$ |
80,946 |
|
|
$ |
57,522 |
|
|
$ |
23,424 |
|
|
|
41 |
% |
Urea ammonium nitrate (UAN) |
|
|
20,206 |
|
|
|
51,423 |
|
|
|
(31,217 |
) |
|
|
(61 |
)% |
Ammonia |
|
|
45,179 |
|
|
|
37,072 |
|
|
|
8,107 |
|
|
|
22 |
% |
Other |
|
|
12,271 |
|
|
|
9,414 |
|
|
|
2,857 |
|
|
|
30 |
% |
Total net sales |
|
$ |
158,602 |
|
|
$ |
155,431 |
|
|
$ |
3,171 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
$ |
43,102 |
|
|
$ |
25,543 |
|
|
$ |
17,559 |
|
|
|
69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expense |
|
|
14,764 |
|
|
|
10,333 |
|
|
|
4,431 |
|
|
|
43 |
% |
Other expense (income), net |
|
|
1,531 |
|
|
|
(419 |
) |
|
|
1,950 |
|
|
N/M |
|
|
Operating income |
|
|
26,807 |
|
|
|
15,629 |
|
|
|
11,178 |
|
|
|
72 |
% |
Interest expense, net |
|
|
6,755 |
|
|
|
7,363 |
|
|
|
(608 |
) |
|
|
(8 |
)% |
Non-operating other income, net |
|
|
(1,838 |
) |
|
|
(1,385 |
) |
|
|
(453 |
) |
|
|
33 |
% |
Provision for income taxes |
|
|
5,543 |
|
|
|
2,536 |
|
|
|
3,007 |
|
|
|
119 |
% |
Net income |
|
$ |
16,347 |
|
|
$ |
7,115 |
|
|
$ |
9,232 |
|
|
|
130 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit percentage (1) |
|
|
27.2 |
% |
|
|
16.4 |
% |
|
|
10.8 |
% |
|
|
|
|
Property, plant and equipment expenditures (2) |
|
$ |
18,109 |
|
|
$ |
16,978 |
|
|
$ |
1,131 |
|
|
|
|
|
Development of carbon capture and sequestration facility |
|
$ |
13,289 |
|
|
$ |
— |
|
|
$ |
13,289 |
|
|
|
|
|
_____________________________
N/M-Not meaningful.
The following tables provide key operating metrics for the fertilizer and major industrial products, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended September 30, |
|
|
|
|
|
Percentage |
|
|||||||
Product (tons sold) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
AN & Nitric Acid |
|
|
196,477 |
|
|
|
159,662 |
|
|
|
36,815 |
|
|
|
23 |
% |
Urea ammonium nitrate (UAN) |
|
|
55,510 |
|
|
|
134,634 |
|
|
|
(79,124 |
) |
|
|
(59 |
)% |
Ammonia |
|
|
79,940 |
|
|
|
86,322 |
|
|
|
(6,382 |
) |
|
|
(7 |
)% |
Total |
|
|
331,927 |
|
|
|
380,618 |
|
|
|
(48,691 |
) |
|
|
(13 |
)% |
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended September 30, |
|
|
|
|
|
Percentage |
|
|||||||
Gross Average Selling Prices (price per ton) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
AN & Nitric Acid |
|
$ |
412 |
|
|
$ |
360 |
|
|
$ |
52 |
|
|
|
14 |
% |
Urea ammonium nitrate (UAN) |
|
$ |
364 |
|
|
$ |
382 |
|
|
$ |
(18 |
) |
|
|
(5 |
)% |
Ammonia |
|
$ |
565 |
|
|
$ |
429 |
|
|
$ |
136 |
|
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended September 30, |
|
|
|
|
|
Percentage |
|
|||||||
Average Benchmark Prices (price per ton) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
Tampa Ammonia Benchmark |
|
$ |
622 |
|
|
$ |
491 |
|
|
$ |
131 |
|
|
|
27 |
% |
NOLA UAN |
|
$ |
330 |
|
|
$ |
336 |
|
|
$ |
(6 |
) |
|
|
(2 |
)% |
25
Net Sales
We recorded net sales of $158.6 million during the third quarter of 2026 compared to $155.4 million for the third quarter of 2025, representing an increase of $3.2 million. The increase was primarily due to higher sales prices for AN & Nitric Acid and Ammonia products and was partially offset by volume decreases primarily caused by the Turnaround at our Pryor Facility, which commenced during the second quarter and was completed during the third quarter. In addition to the impact of the Turnaround, UAN volumes were lower as production shifted to AN & Nitric Acid as part of our product mix strategy in response to tight market conditions.
Gross Profit
We recognized a gross profit of $43.1 million for the third quarter of 2026 compared to $25.5 million for the same period in 2025, or a $17.6 million increase. Our gross profit percentage for the third quarter of 2026 was 27.2% compared to 16.4% for the same period in 2025. Our gross profit for the third quarter of 2026 was higher compared to the same period of 2025 primarily due to the impact of favorable pricing, a recovery of precious metals and lower plant fixed costs, partially offset by decreased UAN and Ammonia sales volumes and Turnaround expenses.
Selling, General and Administrative
Our SG&A expenses were higher for the third quarter of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short term incentive compensation, stock-based compensation from a one-time retention award (see discussion of the retention grant within “Equity Awards” in Note 1) and professional fees.
Other Expense, net
Other expense, net, during the third quarter of 2026 consisted primarily of losses from asset write-downs partially offset by sales and use tax recoveries resulting from our ongoing review.
Interest Expense
Interest expense for the third quarter of 2026 was $6.8 million compared to $7.4 million for the same period in 2025. The decrease was primarily due to an increase in the amount of interest that we capitalized and a lower balance on our Senior Secured Notes as a result of repurchases in 2025.
Non-operating Other Income, net
Non-operating other income, net for the third quarter of 2026 was $1.8 million compared to $1.4 million for the same period of 2025, primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the third quarter of 2026 but interest rates were lower during this period compared to the third quarter of 2025.
Provision for Income Taxes
The provision for income taxes for the third quarter of 2026 was $5.5 million compared to $2.5 million for the same period of 2025. The resulting effective tax rate for the third quarter of 2026 was a provision on pre-tax income of 25.3% compared to a provision for income taxes of 26.3% for the same period of 2025. For the third quarter of 2026, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. For the third quarter of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
26
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The following table contains certain financial information for the nine months ended September 30, 2026 and 2025, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
|
|
Nine Months Ended September 30, |
|
|
|
|
|
Percentage |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
|
|
(Dollars In Thousands) |
|
|
|
|
||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
AN & Nitric Acid |
|
$ |
225,832 |
|
|
$ |
176,847 |
|
|
$ |
48,985 |
|
|
|
28 |
% |
Urea ammonium nitrate (UAN) |
|
|
131,865 |
|
|
|
147,550 |
|
|
|
(15,685 |
) |
|
|
(11 |
)% |
Ammonia |
|
|
107,504 |
|
|
|
97,174 |
|
|
|
10,330 |
|
|
|
11 |
% |
Other |
|
|
30,980 |
|
|
|
28,588 |
|
|
|
2,392 |
|
|
|
8 |
% |
Total net sales |
|
$ |
496,181 |
|
|
$ |
450,159 |
|
|
$ |
46,022 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
$ |
90,357 |
|
|
$ |
63,100 |
|
|
$ |
27,257 |
|
|
|
43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expense |
|
|
41,520 |
|
|
|
30,330 |
|
|
|
11,190 |
|
|
|
37 |
% |
Other expense, net |
|
|
1,616 |
|
|
|
2,180 |
|
|
|
(564 |
) |
|
|
(26 |
)% |
Operating income |
|
|
47,221 |
|
|
|
30,590 |
|
|
|
16,631 |
|
|
|
54 |
% |
Interest expense, net |
|
|
20,942 |
|
|
|
23,313 |
|
|
|
(2,371 |
) |
|
|
(10 |
)% |
Loss on extinguishment of debt |
|
|
— |
|
|
|
59 |
|
|
|
(59 |
) |
|
N/M |
|
|
Non-operating other income, net |
|
|
(5,060 |
) |
|
|
(4,600 |
) |
|
|
(460 |
) |
|
|
10 |
% |
Provision for income taxes |
|
|
1,496 |
|
|
|
3,337 |
|
|
|
(1,841 |
) |
|
|
(55 |
)% |
Net income |
|
$ |
29,843 |
|
|
$ |
8,481 |
|
|
$ |
21,362 |
|
|
|
252 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit percentage (1) |
|
|
18.2 |
% |
|
|
14.0 |
% |
|
|
4.2 |
% |
|
|
|
|
Property, plant and equipment expenditures (2) |
|
$ |
64,350 |
|
|
$ |
56,325 |
|
|
$ |
8,025 |
|
|
|
|
|
Development of carbon capture and sequestration facility |
|
$ |
24,108 |
|
|
$ |
— |
|
|
$ |
24,108 |
|
|
|
|
|
_____________________________
N/M-Not meaningful.
The following tables provide key operating metrics for the fertilizer and major industrial products, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
|
|
Nine Months Ended September 30, |
|
|
|
Percentage |
||
Product (tons sold) |
|
2026 |
|
2025 |
|
Change |
|
Change |
AN & Nitric Acid |
|
553,678 |
|
471,702 |
|
81,976 |
|
17 % |
Urea ammonium nitrate (UAN) |
|
314,951 |
|
435,006 |
|
(120,055) |
|
(28)% |
Ammonia |
|
181,647 |
|
225,794 |
|
(44,147) |
|
(20)% |
Total |
|
1,050,276 |
|
1,132,502 |
|
(82,226) |
|
(7)% |
|
|
Nine Months Ended September 30, |
|
|
|
Percentage |
||
Gross Average Selling Prices (price per ton) |
|
2026 |
|
2025 |
|
Change |
|
Change |
AN & Nitric Acid |
|
$408 |
|
$375 |
|
$33 |
|
9 % |
Urea ammonium nitrate (UAN) |
|
$419 |
|
$339 |
|
$80 |
|
24 % |
Ammonia |
|
$592 |
|
$430 |
|
$162 |
|
38 % |
|
|
Nine Months Ended September 30, |
|
|
|
Percentage |
||
Average Benchmark Prices (price per ton) |
|
2026 |
|
2025 |
|
Change |
|
Change |
Tampa Ammonia Benchmark |
|
$677 |
|
$466 |
|
$211 |
|
45 % |
NOLA UAN |
|
$390 |
|
$319 |
|
$71 |
|
22 % |
27
Net Sales
Net sales increased during the first nine months of 2026 compared to the prior year period primarily due to higher sales prices on all our products partially offset by lower volumes of UAN and Ammonia sold. Total volumes were lower due to the impact of the Turnarounds at our El Dorado and Pryor Facilities. Furthermore, UAN volumes were lower as production shifted to AN & Nitric Acid as part of our product mix strategy in response to current market conditions.
Gross Profit
As noted in the table above, we recognized a gross profit of $90.4 million for the first nine months of 2026 compared to $63.1 million for the same period in 2025, a $27.3 million increase. Our gross profit percentage was 18.2% compared to a gross profit percentage of 14.0% for the same period in 2025. Our gross profit for the first nine months of 2026 was higher compared to the same period of 2025 primarily due to increased sales from favorable product pricing and a recovery of precious metals partially offset by decreased sales volumes, Turnaround expenses and higher depreciation due to recent investments in our facilities.
Selling, General and Administrative
Our SG&A expenses were higher for the first nine months of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short-term incentive compensation and stock-based compensation from a one-time retention award (see discussion of the Side Letter and retention grant within “Equity Awards” in Note 1) and professional fees.
Interest Expense
Interest expense for the first nine months of 2026 was $20.9 million compared to $23.3 million for the same period in 2025. The decrease primarily related to a lower balance of Senior Secured Notes as a result of repurchases made during the second and fourth quarters of 2025 and an increase in the amount of interest that we capitalized.
Loss on Extinguishment of Debt
During the first nine months of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million. There have been no repurchases so far during 2026.
Other Expense, net
Other expense, net during the first nine months of 2026 was lower than the prior year period primarily due to sales and use tax recoveries resulting from our ongoing review, which reduced expense.
Non-operating Other Income, net
Non-operating other income, net for the first nine months of 2026 and 2025 primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the first nine months of 2026 but interest rates were lower during this period compared to the first nine months of 2025.
Provision for Income Taxes
The provision for income taxes for the first nine months of 2026 was $1.5 million compared to a provision for income taxes of $3.3 million for the same period of 2025. The resulting effective tax rate for the first nine months of 2026 was a provision for income taxes of 4.8% compared to a provision for income taxes of 28.2% for the same period of 2025. For the first nine months of 2026, the effective tax rate was lower than the statutory rate primarily due to the release of state valuation allowances, partially offset by nondeductible compensation expense. For the first nine months of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
28
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes our cash flow activities for the nine months ended September 30:
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
|
|
(In Thousands) |
|
|||||||||
Net cash flows from operating activities |
|
$ |
131,656 |
|
|
$ |
77,575 |
|
|
$ |
54,081 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net cash flows from investing activities |
|
$ |
(100,271 |
) |
|
$ |
(16,942 |
) |
|
$ |
(83,329 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Net cash flows from financing activities |
|
$ |
(13,200 |
) |
|
$ |
(52,912 |
) |
|
$ |
39,712 |
|
Net Cash Flow from Operating Activities
Net cash provided by operating activities was $131.7 million for the first nine months of 2026 compared to $77.6 million for the same period of 2025, a change of $54.1 million. The increase was primarily a result of improved operating income and changes in working capital.
Net Cash Flow from Investing Activities
Net cash used by investing activities was $100.3 million for the first nine months of 2026 compared to net cash used by investing activities of $16.9 million for the same period of 2025, a change of $83.3 million.
For the first nine months of 2026, the net cash used by investing activities primarily related to purchases of short-term investments of $257.2 million, expenditures for property, plant and equipment of $64.4 million and development of our CO2 capture and sequestration project of $24.1 million partially offset by proceeds from short-term investments of $221.4 million, a recovery of PP&E costs of $20.9 million and proceeds from sales of property, plant and equipment totaling $3.2 million.
For the first nine months of 2025, the net cash used by investing activities primarily related to purchases of short-term investments of $171.8 million and expenditures for property, plant and equipment of $56.3 million, partially offset by proceeds from short-term investments of $211.4 million.
Net Cash Flow from Financing Activities
Net cash used by financing activities was $13.2 million for the first nine months of 2026 compared to $52.9 million for the same period of 2025, a change of $39.7 million.
For the first nine months of 2026, the net cash used by financing activities primarily consisted of payments on short-term financing and finance leases of $11.3 million, $2.1 million for tax withholding obligations related to the vesting of equity awards and $1.4 million in payments on our revolving debt facility partially offset by proceeds of $1.4 million from our revolving debt facility.
For the first nine months of 2025, the net cash used by financing activities primarily consisted of repurchases of our Senior Secured Notes of $32.1 million, payments on a secured financing due 2025 and short-term financing of $19.8 million and $1.2 million for tax withholding obligations related to the vesting of equity awards.
29
Capitalization
The following table summarizes our total cash and cash equivalents, short-term investments, long-term debt and stockholders’ equity as of September 30, 2026 and December 31, 2025:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In Millions) |
|
|||||
Cash and cash equivalents |
|
$ |
37.7 |
|
|
$ |
19.5 |
|
Short-term investments |
|
|
165.8 |
|
|
|
129.0 |
|
Total cash, cash equivalents and short-term investments |
|
$ |
203.5 |
|
|
$ |
148.5 |
|
Long-term debt: |
|
|
|
|
|
|
||
Revolving Credit Facility |
|
$ |
— |
|
|
$ |
— |
|
Senior Secured Notes due 2028 (1) |
|
|
438.6 |
|
|
|
438.6 |
|
Finance Leases |
|
|
6.3 |
|
|
|
6.2 |
|
Unamortized debt issuance costs (2) |
|
|
(2.8 |
) |
|
|
(3.7 |
) |
Total long-term debt, including current portion, net |
|
$ |
442.1 |
|
|
$ |
441.1 |
|
Total stockholders' equity |
|
$ |
558.1 |
|
|
$ |
520.0 |
|
_____________________________
We currently have a revolving credit facility pursuant to a credit agreement, dated December 21, 2023, between us and the lenders identified on the signature pages thereof and JPMorgan Chase Bank, N.A, as administrative agent (the “Revolving Credit Facility”), with a borrowing base up to an initial maximum of $75 million, with an option to increase the maximum by an additional $25 million (which amount is uncommitted). Availability under the Revolving Credit Facility is subject to a borrowing base and an availability block of $7.5 million which is applied against the $75 million initially reducing the maximum (which can be removed by us at our sole discretion, subject to the satisfaction of certain conditions). The Revolving Credit Facility provides for a sub-facility for the issuance of letters of credit in an aggregate amount not to exceed $10 million, with the outstanding amount of any such letters of credit reducing availability for borrowings. As of September 30, 2026, our Revolving Credit Facility was undrawn and had approximately $62 million of availability. See Note 4 for further discussion of the Revolving Credit Facility.
For the full year of 2026, we expect capital expenditures for our core nitrogen-based business to be in the range of $80 million to $85 million, of which approximately $65 million to $70 million is expected to be spent on sustaining production and the remainder spent on growth initiatives. Additionally, in 2026 we expect to expend approximately $40 million of the total $95 million in estimated costs to develop our CO2 capture and sequestration project. The estimate of costs to be incurred in 2026 does not include the contingent acquisition price that is payable only upon achievement of three defined Project milestones (See Note 11), which timing remains uncertain.
As of September 30, 2026, we had approximately $203.5 million of cash and short-term investments. From time to time, we may seek to deploy capital through common stock repurchases or the repurchase of outstanding debt. Such repurchases may be made in open market purchases, privately negotiated transactions or otherwise and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
We believe that the combination of our cash and cash equivalents, short-term investments, the availability under our Revolving Credit Facility and our cash flow from operations will be sufficient to fund our anticipated liquidity needs for the next twelve months. Additionally, we expect our long-term liquidity position will be sufficient to meet our long-term liquidity needs with cash flows from operations and financing arrangements. However, in the event of changes in business conditions or other developments, including a sustained market deterioration, unanticipated regulatory developments, significant acquisitions, competitive pressures, or to the extent our liquidity needs prove to be greater than expected or cash generated from operations is less than anticipated, we may need additional liquidity. To the extent we elect to finance our long-term liquidity needs, we believe that the potential financing capital available to us in the future will be sufficient.
Compliance with Long-Term Debt Covenants
As discussed in Note 4, the Revolving Credit Facility does not include financial covenant requirements unless a defined covenant trigger event has occurred and is continuing. As of September 30, 2026, no trigger event had occurred.
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Loan Agreements
Senior Secured Notes due 2028 – We had $438.6 million aggregate principal amount of Senior Secured Notes outstanding as of September 30, 2026. Interest is to be paid semiannually in arrears on May 15th and October 15th. The Senior Secured Notes mature on October 15, 2028.
Revolving Credit Facility – At September 30, 2026, our Revolving Credit Facility was undrawn and had approximately $62 million of availability, based on our eligible collateral, less outstanding letters of credit as of that date. Also see discussion above under “Compliance with Long-Term Debt Covenants.”
Finance Leases – Our finance leases consist primarily of leases on railcars. Most of our railcar leases are classified as operating leases.
Capital Expenditures – First Nine Months of 2026
For the first nine months of 2026, capital expenditures relating to property, plant and equipment were $64.4 million. Of the expenditures for the first nine months of 2026, approximately $57.5 million was spent on projects to sustain our production capacity while approximately $6.9 million was spent on growth initiatives. In addition, we expended $24.1 million for the development of our CO2 capture and sequestration project. The capital expenditures were funded primarily from cash and working capital.
See discussion above under “Capitalization” for our total expected capital expenditures for the remainder of 2026.
Expenses Associated with Environmental Regulatory Compliance
We are subject to specific federal and state environmental compliance laws, regulations and guidelines. As a result, our expenses were $4.4 million for the first nine months ended September 30, 2026 in connection with environmental projects. For the remainder of 2026, we expect to incur expenses of approximately $1.5 million in connection with additional environmental projects. However, it is possible that the actual costs could be significantly different than our estimates.
Seasonality
We believe sales of fertilizer products to the agricultural industry are seasonal, while sales into the industrial sectors generally are less susceptible to seasonal fluctuations. The selling seasons for fertilizer products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November in the geographical markets where we distribute the majority of our fertilizer products. As a result, we typically increase our inventory of fertilizer products prior to the beginning of each planting season in order to meet the demand for our products. In addition, the amount and timing of sales to the agricultural markets depend upon weather conditions and other circumstances beyond our control.
Performance and Payment Bonds
We are contingently liable to sureties in respect of insurance bonds issued by the sureties in connection with certain contracts entered into by subsidiaries in the normal course of business. These insurance bonds primarily represent guarantees of future performance of our subsidiaries. As of September 30, 2026, we have agreed to indemnify the sureties for payments, up to $10.2 million, made by them in respect of such bonds.
New Accounting Pronouncements
Refer to Note 1 for recently issued accounting standards.
Critical Accounting Policies and Estimates
See “Critical Accounting Policies and Estimates,” Item 7 of our Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026 (the “2025 Form 10-K”). In addition, the preparation of financial statements requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosures of contingencies and fair values, including, but not limited to, various environmental and legal matters, including matters discussed under footnote A of Note 5.
Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. We establish valuation allowances if we believe it is more-likely-than-not that some or all of deferred tax assets will not be realized. Significant judgment is applied in evaluating the need for and the magnitude of appropriate valuation allowances against deferred tax assets.
It is also reasonably possible that the estimates and assumptions utilized as of September 30, 2026, could change in the near term. Actual results could differ materially from these estimates and judgments, as additional information becomes known.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, as contemplated by Item 303 of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 3. Quantitative and Qualitative Disclosures about Market Risk
General
Our results of operations and operating cash flows are impacted by changes in market prices of ammonia and natural gas and changes in market interest rates.
Forward Sales Commitments Risk
Periodically, we enter into forward firm sales commitments for products to be delivered in future periods. As a result, we could be exposed to embedded losses should our product costs exceed the firm sales prices at the end of a reporting period. At September 30, 2026, we had no embedded losses associated with sales commitments with firm sales prices.
Commodity Price Risk
A substantial portion of our products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. Since we are exposed to commodity price risk, we periodically enter into contracts to purchase natural gas for anticipated production needs to manage risk related to changes in prices of natural gas commodities. Generally, these contracts are considered normal purchases because they provide for the purchase of natural gas that will be delivered in quantities expected to be used over a reasonable period of time in the normal course of business, and as such, are exempt from derivative accounting requirements. At September 30, 2026, we had no outstanding natural gas contracts which are subject to derivative accounting requirements.
Interest Rate Risk
We may be exposed to variable interest rate risk with respect to our Revolving Credit Facility when there are outstanding borrowings. As of September 30, 2026, we had no outstanding borrowings on this credit facility and no other variable rate borrowings and, as a result, we currently do not hedge our interest rate risk associated with any variable interest rate loan.
Item 4. Controls and Procedures
The Company maintains disclosure controls and procedures as defined in Rule 13a-15 under the Exchange Act designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of September 30, 2026. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of September 30, 2026, at the reasonable assurance level. There were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained within this report may be deemed “Forward-Looking Statements” within the meaning of U.S. federal securities laws. All statements in this report other than statements of historical fact are Forward-Looking Statements that are subject to known and unknown risks, uncertainties and other factors, many of which are difficult to predict or outside of the Company’s control, which could cause actual results and performance of the Company to differ materially from those expressed in, or implied or projected by, such statements. Any such Forward-Looking Statements are not guarantees of future performance. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “may,” “could,” and similar expressions identify Forward-Looking Statements. All Forward-Looking Statements speak only as of the date on which they are made. Forward-Looking Statements contained herein, and the associated risks, uncertainties, assumptions and other important factors include, but are not limited to, the following:
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While we believe the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance such expectations will prove to have been correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this report, including, but not limited to, the following:
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Given these uncertainties, all parties are cautioned not to place undue reliance on such Forward-Looking Statements. Except to the extent required by law, we disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the Forward-Looking Statements contained herein to reflect future events or developments.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
We are from time to time subject to various legal proceedings and claims arising in the ordinary course of business. For further discussion of our legal matters, see “Note 5. Commitments and Contingencies—Legal Matters” in the notes to the condensed consolidated financial statements in this report.
Item 1A. Risk Factors
Reference is made to Item 1A of our 2025 Form 10-K filed with the SEC on February 26, 2026. Except as set forth below, there were no material changes from the risk factors disclosed in our 2025 Form 10-K.
Geopolitical conditions, including political turmoil and volatility, regional conflicts, terrorism and war have negatively affected and could negatively affect United States and foreign companies, the financial markets, the industries where we operate, our operations and our profitability and could increase the volatility of our stock price.
Geopolitical events, including political turmoil, regional conflicts, instability and terrorist attacks in the United States and elsewhere have in the past, and can in the future negatively affect our operations and could increase the volatility of our stock price. For example, Russia’s invasion of Ukraine and the ongoing conflict in the Middle East, including the military conflict between Iran and the United States, have impacted our financial results. These conflicts have had an effect on commodity prices and fertilizer supply, and there is no guarantee that such conflicts will not draw military intervention from other countries or further retaliation, which, in turn, could lead to a much larger conflict. Furthermore, such military conflicts and the resulting geopolitical instability have caused, and may continue to cause, (i) disruptions to international shipping routes (including through the Strait of Hormuz and other critical transit corridors), (ii) disruptions in global energy markets and significant fluctuations in the prices of oil, natural gas and fertilizer and (iii) substantial disruption to global financial markets, leading to heightened investor uncertainty, reduced risk tolerance and increased market volatility.
It is possible that production volumes, supply chain and trade routes for our products that are traded globally, and the markets we currently serve, could be further adversely affected, which, in turn, could materially, adversely affect our business operations and financial performance. In addition, the market prices of our common stock have recently experienced, and may continue to experience, volatility.
Further, like other companies with major industrial facilities, we may be targets of terrorist activities. Many of our plants and facilities store significant quantities of ammonia and other materials that can be dangerous if mishandled. Any damage to infrastructure facilities, such as electric generation, transmission and distribution facilities, or injury to employees, who could be direct targets or indirect casualties of an act of terrorism, may affect our operations. Any disruption of our ability to produce or distribute our products could result in a significant decrease in revenues and significant additional costs to replace, repair or insure our assets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we are unable to obtain required regulatory approvals and satisfy other requirements for our carbon capture and sequestration project at our El Dorado Facility, we may not realize the anticipated benefits of the project, and our business, financial condition, results of operations and cash flows could be adversely affected.
In May 2026, we acquired full ownership of the carbon capture and sequestration project at our El Dorado Facility (the “Project”) from Lapis Carbon Solutions. The Project is designed to capture and sequester CO2 generated from our El Dorado Facility ammonia production in underground saline aquifers, and its completion and the commencement of CO2 injections are conditioned upon our receipt of a Class VI permit from the United States Environmental Protection Agency (the “EPA”). A pre-construction Class VI permit application was filed with the EPA in February 2023, which the EPA recognized as complete in March 2023. The application was resubmitted in December 2025 following the EPA’s continuing technical review. Obtaining a Class VI permit is a rigorous, multi-year regulatory process that requires extensive EPA review of the suitability of the proposed storage reservoir.
The EPA may not grant a Class VI permit for the Project, or may not do so on the timeline we currently anticipate. Unless necessary EPA approvals are obtained, we will be unable to complete construction of the Project or commence CO2 injections as planned, and
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we may be unable to recover some or all of the capital we have invested or expect to invest in the Project. The total purchase price and remaining completion capital associated with the Project is currently estimated at approximately $95 million.
Even if the EPA ultimately approves the Class VI permit application, the approval process may take significantly longer than we currently anticipate. Although we drilled a stratigraphic injection well at the El Dorado site in June 2025 to gather data supporting the EPA’s technical review, our application remains subject to further review. The current published EPA Underground Injection Control Class VI Permit Tracker reflects a potential operational date in the second half of 2027, subject to EPA approval of our Class VI permit, at which time CO2 injections are expected to begin. We intend to work with the EPA to potentially accelerate this timeline, but the timing of EPA approval is largely outside of our control and could be affected by, among other things, the EPA’s internal review procedures and resource constraints, requests for additional information, legal or administrative challenges to the permit or changes in applicable regulatory policy.
A failure to obtain necessary EPA approvals would prevent us from realizing the anticipated benefits of the Project, including our ability to produce low carbon ammonia and upgraded products, such as the sale of low carbon ammonium nitrate under our existing supply agreement with Freeport Minerals Corporation, and our eligibility for tax credits under Section 45Q of the Internal Revenue Code. In addition, a significant delay in receiving the Class VI permit approval could increase the costs of completing the Project, require us to incur additional capital expenditures and postpone the commencement of CO2 injections and our production of low carbon ammonium nitrate. Any such failure or delay could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Even if the required EPA approvals are obtained, the Project remains subject to construction, commissioning, operational and third-party performance risks. Successful completion of the Project depends on the performance of the construction manager, construction contractors, equipment suppliers and other third parties involved in engineering, design, procurement, construction, installation, drilling, completion, testing and commissioning. Construction delays, cost overruns, contractor disputes, safety incidents, force majeure events, equipment failures, inability to satisfy completion tests, or failure to achieve commercial operation at expected volumes could delay or prevent the Project from becoming operational, increase our capital expenditures or reduce the Project’s expected benefits.
Furthermore, our ability to claim, monetize or retain Section 45Q tax credits depends on our ability to comply with applicable sequestration standards, monitoring and reporting requirements, prevailing wage and apprenticeship requirements, recordkeeping obligations and other guidance or regulations issued by the U.S. Department of the Treasury or the Internal Revenue Service. If we fail to satisfy applicable Section 45Q requirements, or if applicable law or guidance changes, we may be unable to claim tax credits at the anticipated amount or timing, or such credits could be reduced, delayed, disallowed or subject to recapture. If any of these regulatory, construction, operational or tax contingencies are not satisfied, or are satisfied later or on less favorable terms than we expect, we may be unable to complete, place in service or operate the Project as planned. In that event, we may experience delays in the commencement of CO2 injections, fail to realize some or all of the anticipated benefits of the Project, and be unable to recover some or all of the purchase price, completion capital and other costs associated with the Project. Any such developments could adversely affect our business, financial condition, results of operations and cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
During the third quarter ended September 30, 2026, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company
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Item 6. Exhibits
See “Index to Exhibits” on page 37.
Index to Exhibits Item 6.
Exhibit Number |
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Exhibit Title |
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Incorporated by Reference to the Following |
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3(i).1 |
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Exhibit 3(i).1 to the Company’s Form 10-K filed on February 28, 2013 |
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3(i).2 |
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Exhibit 3(i).2 to the Company’s Registration Statement on Form S-3 filed on November 16, 2021 |
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3(ii).1 |
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Exhibit 3(ii).1(a) to the Company’s Form 10-Q filed on April 30, 2026 |
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31.1(a) |
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31.2(a) |
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32.1(a)(b) |
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32.2(a)(b) |
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101.INS(a) |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH(a) |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL(a) |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF(a) |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB(a) |
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Inline XBRL Taxonomy Extension Labels Linkbase Document |
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101.PRE(a) |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104(a) |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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LSB INDUSTRIES, INC. |
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Date: October 29, 2026 |
/s/ Cheryl A. Maguire |
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Cheryl A. Maguire |
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Executive Vice President and Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
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Exhibit 31.1
CERTIFICATION
I, Mark T. Behrman, certify that:
Date: October 29, 2026
/s/ Mark T. Behrman |
Mark T. Behrman |
President, Chief Executive Officer |
and Chairman of the Board of Directors |
Exhibit 31.2
CERTIFICATION
I, Cheryl A. Maguire, certify that:
Date: October 29, 2026
/s/ Cheryl A. Maguire |
Cheryl A. Maguire |
Executive Vice President |
and Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LSB Industries, Inc. (“LSB”) on Form 10-Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark T. Behrman, President and Chief Executive Officer of LSB, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
/s/ Mark T. Behrman |
Mark T. Behrman |
President, Chief Executive Officer |
(Principal Executive Officer) and |
Chairman of the Board of Directors |
October 29, 2026
This certification is furnished to the Securities and Exchange Commission solely for purpose of 18 U.S.C. §1350 subject to the knowledge standard contained therein, and not for any other purpose.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LSB Industries, Inc. (“LSB”) on Form 10-Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Cheryl A. Maguire, Executive Vice President and Chief Financial Officer of LSB, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
/s/ Cheryl A. Maguire |
Cheryl A. Maguire |
Executive Vice President |
and Chief Financial Officer |
(Principal Financial and Accounting Officer) |
October 29, 2026
This certification is furnished to the Securities and Exchange Commission solely for purpose of 18 U.S.C. §1350 subject to the knowledge standard contained therein and not for any other purpose.