LSB Industries, Inc. Provides Business Update in Connection With COVID-19 Pandemic
April 06 2020 - 8:30AM
Business Wire
LSB Industries, Inc. (NYSE:LXU) (“LSB” or the “Company”) today
announced that its facilities have been designated as essential
critical infrastructure in the states where the Company operates,
based on guidelines issued by the United States Department of
Homeland Security’s Cybersecurity and Infrastructure Security
Agency.
“Because we produce fertilizers used by the agriculture
industry, as well as chemicals required in a variety of industrial
manufacturing processes, LSB has been determined to be a critical
service, and therefore, our facilities are remaining in operation
despite the evolving global health crisis resulting from the
COVID-19 pandemic,” commented Mark Behrman, LSB’s President and
CEO. “We have taken significant measures to ensure the health and
safety of our employees and thank them for their commitment to our
business continuity during this challenging situation. Specific to
our plant and retail agricultural center personnel, we have worked
hard to develop plans and procedures that allow them to operate in
the safest manner possible in order to protect them and their
families. Those policies and procedures include personnel isolation
protocols, procedures for disinfecting all facilities, plant
personnel health monitoring and working from home where
appropriate.”
Mr. Behrman continued, “Due to the unprecedented level of
uncertainty prevalent in the economy at this time, management and
the Board have taken several decisive actions to control our costs
and maintain liquidity until the business environment stabilizes
and visibility improves. Specifically, we have identified a
combination of plant expenses and SG&A that have been deferred
for the next sixty days or potentially longer depending on the
duration of the COVID-19 crisis. Additionally, we currently have
deferred between $5 million and $6 million of capital expenditures
not related to Environmental, Health and Safety investments until
the fourth quarter of 2020. On the liquidity front, as of March 31,
2020, we had approximately $50 million of combined cash and
borrowing capacity, which, we believe, provides us with ample
liquidity to fund our operations and meet our obligations.”
“With respect to our 2020 first quarter, our ammonia plants
performed in-line with our expectations headed into the period,
with our El Dorado facility delivering its best-ever quarter in
terms of ammonia on-stream rate and production volume. We view this
as an indicator that the extensive maintenance we performed on our
facilities in 2019 has positioned us for strong production volume
improvement in 2020.”
“The USDA recently increased its forecast for total corn acres
to be planted in 2020 from 94 million to 97 million, up from the 89
million acres of corn planted in the U.S. in 2019. This suggests
strong growth in demand for fertilizers during the second quarter
spring planting season, which we expect to benefit our results.
While the current global health crisis remains a major uncertainty
for the U.S. economy, which could affect industrial and mining
orders in the coming months, to date, we have not seen a material
decrease in order volume. In fact, we have continued to expand our
customer base in these end markets with the addition of two new
contracts in the last several weeks, leading us to believe that for
the full year, demand for our products will be strong enough to
utilize our recently expanded production capacity and benefit from
our enhanced plant reliability.”
Mr. Behrman concluded, “We expect that our cost reductions,
capital preservation actions and improved performance, combined
with the resolute efforts of our outstanding group of employees and
the cooperation of our customers, suppliers and financing partners,
will enable us to weather the storm of this pandemic and come out
of it a stronger Company. Our hearts go out to all those that have
been sickened by COVID-19 and most especially to those that have
lost loved ones and friends to the virus.”
About LSB Industries, Inc.
LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma,
manufactures and sells chemical products for the agricultural,
mining, and industrial markets. The Company owns and operates
facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor,
Oklahoma, and operates a facility for a global chemical company in
Baytown, Texas. LSB’s products are sold through distributors and
directly to end customers throughout the United States. Additional
information about the Company can be found on its website at
www.lsbindustries.com.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements generally are
identifiable by use of the words “may,” “believe,” “expect,”
“intend,” “plan to,” “estimate,” “project” or similar expressions,
and include but are not limited to: performance improvement and
attaining targeted operating rates.
Investors are cautioned that such forward-looking statements are
not guarantees of future performance and involve risk and
uncertainties. Though we believe that expectations reflected in
such forward-looking statements are reasonable, we can give no
assurance that such expectation will prove to be correct. Actual
results may differ materially from the forward-looking statements
as a result of various factors. These and other risk factors are
discussed in the Company’s filings with the Securities and Exchange
Commission (SEC), including those set forth under “Risk Factors”
and “Special Note Regarding Forward-Looking Statements” in our Form
10-K for the year ended December 31, 2019 and, if applicable, our
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.
All forward-looking statements included in this press release are
expressly qualified in their entirety by such cautionary
statements. We expressly disclaim any obligation to update, amend
or clarify any forward-looking statement to reflect events, new
information or circumstances occurring after the date of this press
release except as required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200406005175/en/
Company Contact: Mark Behrman, President & CEO Cheryl
Maguire, Senior Vice President & CFO (405) 235-4546
Investor Contact: The Equity Group Inc. Fred
Buonocore, CFA (212) 836-9607 Mike Gaudreau (212) 836-9620
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