UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported) March 20, 2007
LSB
INDUSTRIES, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-7677
|
73-1015226
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
||
|
16
South Pennsylvania, Oklahoma City, Oklahoma
(Address of principal executive offices) |
73107
(Zip
Code) |
|||
Registrant's
telephone number, including area code
(405) 235-4546
Not
applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Section
2 - Financial Information
Item
2.02. Results of Operations and Financial Condition
On
March
20, 2007, LSB Industries, Inc. (the "Company") issued a press release to report
its financial results for the fourth quarter and year ended December 31, 2006.
The press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
On
March
21, 2007, at 10:00 a.m. central time, the Company held a conference call
broadcast live over the Internet to discuss the results of the fourth quarter
and year ended December 31, 2006. The conference call was announced in the
press
release, dated March 20, 2007, attached hereto as Exhibit 99.1.
The
information contained in this Item 2.02 of this Form 8-K and the Exhibit
attached hereto are being furnished and shall not be deemed "filed" for the
purposes of Section 18 of the Securities Act of 1934 (as amended), or otherwise
subject to the liabilities of such section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933 (as amended), except
as shall be expressly set forth by specific reference in such
filing.
Item
9.01. Financial Statements and Exhibits
The
information contained in the accompanying Exhibit 99.1 shall not be deemed
filed
for purposes of Section 18 of the Exchange Act or incorporated by reference
in
any filing under the Exchange Act or the Securities Act, except as shall be
expressly set forth by specific reference in such filing.
(d)
Exhibits.
Exhibit Description
99.1 Press
Release issued by LSB Industries, Inc. dated March 20, 2007.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has
duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated:
March
26, 2007
LSB
INDUSTRIES, INC.
By:/s/
Tony M. Shelby
Tony
M.
Shelby,
Executive Vice
President of Finance
and Chief
Financial Officer
COMPANY
CONTACT: Investor
Relations Contact:
Tony
M.
Shelby, Chief Financial Officer Linda
Latman (212) 836-9609
(405)
235-4546
Lena
Cati
(212) 836-9611
The
Equity Group Inc.
FOR
IMMEDIATE RELEASE
LSB
INDUSTRIES, INC. REPORTS RESULTS
FOR
THE 2006 FOURTH QUARTER AND YEAR
Net
Sales Increase of 24% Produces 84% Gain in Operating
Income
For
The Year
Oklahoma
City, Oklahoma . . . March 20, 2007 . . . LSB Industries, Inc. (AMEX:LXU),
today
reported results for the fourth quarter and year ended December 31,
2006.
Fourth
Quarter 2006 Compared to Fourth Quarter 2005:
| § |
Net
sales increased 30% to $123.7 million from $95.5 million;
|
| § |
Operating
income rose 144% to $6.6 million from $2.7
million;
|
| § |
Net
income was $3.4 million compared to a loss of
$45,000;
|
| § |
After
deducting preferred stock dividend requirements, net income applicable
to
common stock was $2.4 million, compared to a net loss in 2005 of
$.7
million;
|
| § |
Diluted
earnings per share rose to $.14 per share from a loss per share of
$.05.
|
2006
Compared to 2005:
| § |
Net
sales increased 24% to $492.0 million from $397.1 million;
|
| § |
Operating
income was $27.6 million, up 84% compared to $15.0
million;
|
| § |
Net
income of $15.9 million was 212% ahead of last year’s $5.1
million;
|
| § |
After
preferred stock dividend requirements, net income applicable to common
stock was $13.3 million, up 375% from $2.8
million;
|
| § |
Diluted
earnings per share were $.78, or 311% ahead of last year’s
$.19.
|
Business
Overview
LSB’s
CEO, Jack E. Golsen, noted that fourth quarter results continued the trend
of
the first three quarters, making 2006 a record year for LSB for both revenues
and income from operations. “Our Climate Control and Chemical Businesses both
achieved significant gains in revenue and operating income. The Climate Control
Business had especially robust sales growth led by geothermal and water source
heat pumps. Our Chemical Business also turned in improved results, spearheaded
by industrial sales, despite the serious drought during the 2006 growing season
that affected agricultural product sales.”
(more)
LSB
Industries, Inc. News Release Page
2
March
20,
2007
Conference
Call
LSB
will
host a conference call covering the fourth quarter and year 2006 results on
Wednesday, March 21, 2007 at 11:00 am EDT/ 10:00 am CDT. You are invited to
listen to the call by dialing: 1-706-679-3079. Additionally, there will be
a
webcast posted on the Company’s website at www.lsb-okc.com.
LSB
Industries, Inc.
We
are a
diversified holding company and our principal business activities consist of
the:
| · |
Climate
Control Business engaged in the manufacturing and selling of a broad
range
of air conditioning and heating products consisting of water source
heat
pumps including geothermal heat pumps, hydronic fan coils, large
custom
air handlers and other products used in commercial and residential
new
building construction, renovation of existing buildings and replacement
of
existing systems.
|
| · | Chemical Business engaged in the manufacturing and selling of chemical products produced from plants in Texas, Arkansas and Alabama for the industrial, mining and agricultural markets. |
#
#
#
See
Accompanying Tables
LSB
Industries, Inc. News Release Page
3
March
20,
2007
LSB
Industries, Inc.
Financial
Highlights
Years
and Three Months Ended December 31, 2006 and 2005
(unaudited)
|
Year
Ended
December
31,
|
Three
Months Ended
December
31,
|
|
2006
|
2005
|
2006
|
2005
|
|
(In
Thousands, Except Share and Per Share
Amounts)
|
|
Net
sales
|
$
|
491,952
|
$
|
397,115
|
$
|
123,736
|
$
|
95,454
|
|||||||
|
Cost
of sales
|
400,675
|
330,237
|
101,264
|
79,277
|
|||||||||||
|
Gross
profit
|
91,277
|
66,878
|
22,472
|
16,177
|
|||||||||||
|
Selling,
general and administrative expense
|
64,134
|
53,453
|
17,378
|
13,676
|
|||||||||||
|
Provision
for losses (recovery of) on accounts receivable
|
426
|
810
|
(173
|
)
|
82
|
||||||||||
|
Other
expense
|
722
|
332
|
16
|
184
|
|
||||||||||
|
Other
income
|
(1,559
|
)
|
(2,682
|
)
|
(1,328
|
)
|
(439
|
)
|
|||||||
|
Operating
income
|
27,554
|
14,965
|
6,579
|
2,674
|
|||||||||||
|
Interest
expense
|
11,915
|
11,407
|
2,958
|
2,780
|
|||||||||||
|
Non-operating
other income, net
|
(624
|
)
|
(1,561
|
)
|
(59
|
)
|
(36
|
)
|
|||||||
|
Income
(loss) from continuing operations before provision for income taxes
and
equity in earnings (losses) of affiliate
|
16,263
|
5,119
|
3,680
|
(70
|
)
|
||||||||||
|
Provision
for income taxes
|
601
|
118
|
193
|
34
|
|||||||||||
|
Equity
in earnings (losses) of affiliate, net of income taxes
|
(521
|
)
|
(745
|
)
|
90
|
|
(191
|
)
|
|||||||
|
Income
from continuing operations
|
16,183
|
5,746
|
3,397
|
87
|
|||||||||||
|
Net
loss from discontinued operations
|
253
|
644
|
9
|
132
|
|||||||||||
|
Net
income (loss)
|
15,930
|
5,102
|
3,388
|
(45
|
)
|
||||||||||
|
Preferred
stock dividend requirements
|
2,630
|
|
2,283
|
|
975
|
|
612
|
|
|||||||
|
Net
income (loss) applicable to common stock
|
$
|
13,300
|
$
|
2,819
|
$
|
2,413
|
$
|
(657
|
)
|
||||||
|
Weighted
average common shares:
|
|||||||||||||||
|
Basic
|
14,331,963
|
13,617,418
|
15,810,883
|
13,756,647
|
|||||||||||
|
Diluted
|
20,871,659
|
14,906,711
|
17,813,675
|
14,936,692
|
|||||||||||
|
Income
(loss) per common share:
|
|||||||||||||||
|
Basic:
|
|||||||||||||||
|
Income
(loss) from continuing operations
|
$
|
.95
|
$
|
.26
|
$
|
.15
|
$
|
(.04
|
)
|
||||||
|
Net
loss from discontinued operations
|
(.02
|
)
|
(.05
|
)
|
-
|
|
(.01
|
)
|
|||||||
|
Net
income (loss)
|
$
|
.93
|
$
|
.21
|
$
|
.15
|
$
|
(.05
|
)
|
||||||
|
Diluted:
|
|||||||||||||||
|
Income
(loss) from continuing operations
|
$
|
.79
|
$
|
.23
|
$
|
.14
|
$
|
(.04
|
)
|
||||||
|
Net
loss from discontinued operations
|
(.01
|
)
|
(.04
|
)
|
-
|
|
(.01
|
)
|
|||||||
|
Net
income (loss)
|
$
|
.78
|
$
|
.19
|
$
|
.14
|
$
|
(.05
|
)
|
(See
accompanying notes)
LSB
Industries, Inc. News Release Page
4
March
20,
2007
LSB
Industries, Inc.
Notes
to Unaudited Financial Highlights
Years
and Three Months Ended December 31, 2006 and 2005
(unaudited)
|
Note
1:
|
Net
income applicable to common stock is computed by adjusting net income
by
the amount of preferred stock dividend requirements.
|
|
Note
2:
|
During
each of the four quarters of 2006, our Board of Directors declared
and we
paid nominal dividends on certain outstanding series of our preferred
stock as follows: $.10 per share on our outstanding Series 2 Preferred,
$.37 per share on our outstanding Series B Preferred, and $.31 per
share
on our outstanding Non-Cumulative Redeemable Preferred. These dividends
were not for the full amount of the required quarterly dividends
pursuant
to the terms of all of our outstanding series of preferred
stock.
|
|
Note
3:
|
Basic
net income (loss) per common share is based upon net income (loss)
applicable to common stock and the weighted average number of common
shares outstanding during each period. Diluted income (loss) per
share, if
applicable, is based on net income (loss) applicable to common stock
plus
preferred stock dividend requirements on preferred stock assumed
to be
converted, if dilutive, and interest expense including amortization
of
debt issuance costs, net of income taxes, on convertible debt assumed
to
be converted, if dilutive, and the weighted average number of common
shares and dilutive common equivalent shares outstanding, and the
assumed
conversion of dilutive convertible securities outstanding.
|
|
Note
4:
|
Information
about the Company’s operations in different industry segments for the year
and three months ended December 31, 2006 and 2005 is detailed on
the
following page.
|
LSB
Industries, Inc. News Release Page
5
March
20,
2007
LSB
INDUSTRIES, INC.
Notes
to Unaudited Financial Highlights
Years
and Three Months Ended December 31, 2006 and 2005
(unaudited)
|
Year
Ended
December
31,
|
Three
Months Ended
December
31,
|
|
2006
|
2005
|
2006
|
2005
|
|
(In
Thousands)
|
|
Net
sales:
|
|||||||||||||||
|
Climate
Control
|
$
|
221,161
|
$
|
156,859
|
$
|
60,916
|
$
|
39,566
|
|||||||
|
Chemical
|
260,651
|
233,447
|
59,190
|
53,744
|
|||||||||||
|
Other
|
10,140
|
6,809
|
3,630
|
2,144
|
|||||||||||
|
$
|
491,952
|
$
|
397,115
|
$
|
123,736
|
$
|
95,454
|
||||||||
|
Gross
profit:
|
|||||||||||||||
|
Climate
Control
|
$
|
65,496
|
$
|
48,122
|
$
|
17,134
|
$
|
12,232
|
|||||||
|
Chemical
|
22,438
|
16,426
|
4,240
|
3,209
|
|||||||||||
|
Other
|
3,343
|
2,330
|
1,098
|
736
|
|||||||||||
|
$
|
91,277
|
$
|
66,878
|
$
|
22,472
|
$
|
16,177
|
||||||||
|
Operating
income:
|
|||||||||||||||
|
Climate
Control
|
$
|
25,428
|
$
|
14,097
|
$
|
6,948
|
$
|
3,815
|
|||||||
|
Chemical
|
10,200
|
7,703
|
1,413
|
778
|
|||||||||||
|
General
corporate expenses and other business operations, net
|
(8,074
|
)
|
(6,835
|
)
|
(1,782
|
)
|
(1,919
|
)
|
|||||||
|
27,554
|
14,965
|
6,579
|
2,674
|
||||||||||||
|
Interest
expense
|
(11,915
|
)
|
(11,407
|
)
|
(2,958
|
)
|
(2,780
|
)
|
|||||||
|
Non-operating
other income, net:
|
|||||||||||||||
|
Climate
Control
|
1
|
-
|
-
|
-
|
|||||||||||
|
Chemical
|
311
|
362
|
50
|
28
|
|||||||||||
|
Corporate
and other business operations
|
312
|
1,199
|
9
|
8
|
|||||||||||
|
Provision
for income taxes
|
(601
|
)
|
(118
|
)
|
(193
|
)
|
(34
|
)
|
|||||||
|
Equity
in earnings (losses) of affiliate, net of income taxes-Climate
Control
|
521
|
745
|
(90
|
)
|
191
|
||||||||||
|
Income
from continuing operations
|
$
|
16,183
|
$
|
5,746
|
$
|
3,397
|
$
|
87
|
|
Notes:
|
Gross
profit by industry segment represents net sales less cost of sales. Amounts
classified as “Other” relates to the sales of industrial machinery and
components.
Operating
income by industry segment represents gross profit by industry segment less
selling, general and administrative expense (“SG&A”) incurred by each
industry segment plus other income and other expense earned/incurred by each
industry segment before general corporate expenses and other business
operations, net. General corporate expenses and other business operations,
net
consist of unallocated portions of gross profit, SG&A, other income and
other expense.