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) May 7, 2007
LSB
INDUSTRIES, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-7677
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73-1015226
|
||
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
|
||
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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
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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|
o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
2 - Financial Information
Item
2.02. Results of Operations and Financial Condition
On
May 7,
2007, LSB Industries, Inc. (the “Company”) issued a press release to report its
unaudited financial results for the first quarter ended March 31, 2007. The
press release is attached hereto as Exhibit 99.1 and is incorporated herein
by
reference.
On
May 8,
2007, at 10:00 a.m. EDT/11:00 a.m. CDT, the Company will hold a conference
call
broadcast live over the Internet to discuss the unaudited results of the
first
quarter ended March 31, 2007. The conference call is announced in the press
release, dated May 7, 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 May 7, 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:
May 7,
2007
LSB
INDUSTRIES, INC.
By:
/s/
Tony M. Shelby
Name: Tony
M.
Shelby,
Title: Executive
Vice President 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 2007 FIRST QUARTER
Net
Sales Increase of 32% Produces 134% Gain in Operating
Income
Oklahoma
City, Oklahoma . . . May 7, 2007 . . . LSB Industries, Inc. (AMEX:LXU), today
reported results for the first quarter ended March 31, 2007.
First
Quarter 2007 Compared to First Quarter 2006:
| § |
Net
sales increased 32% to $147.4 million from $111.9 million;
|
| § |
Operating
income rose 134% to $13.5 million from $5.8
million;
|
| § |
Net
income rose 263% to $10.8 million from $3.0
million;
|
| § |
After
deducting preferred stock dividend requirements, including $5.0 million
non-cash stock dividend on preferred stock exchanged in March 2007,
net
income applicable to common stock was $5.6 million, compared to $2.4
million;
|
| § |
Diluted
income per common share rose to $.28 per share from $.14 per
share.
|
Business
Overview
LSB’s
Chairman & CEO, Jack E. Golsen, noted that the first quarter continued the
growth trend and improving results of the past year. “Our Climate Control and
Chemical Businesses both achieved significant gains in revenue and operating
income. The Climate Control Business had robust sales growth led by geothermal
and water source heat pumps. Our Chemical Business also turned in top and bottom
line gains due primarily to the improved market for our agricultural
products.”
As
previously reported, basic and diluted income per common share increased at
a
lower rate than the increase in net income due to the $5.0 million non-cash
stock dividend in excess of accrued dividends that resulted from the March
13,
2007 exchange of Series 2 preferred shares for common shares. In addition,
basic
and diluted income per common share were calculated on 27% and 15% more shares,
respectively, than in the prior year period.
(more)
LSB
Industries, Inc. News Release Page
2
May
7,
2007
Conference
Call
LSB’s
management will host a conference call covering the first quarter results on
Tuesday, May 8, 2007 at 11:00 am EDT/10:00 am CDT to discuss these results
and
recent corporate developments. Participating in the call will be CEO, Jack
E.
Golsen; President and COO, Barry H. Golsen; Executive Vice President and CFO,
Tony M. Shelby; and, President of the Chemical Business, Larry Holley.
Interested parties may participate in the call by dialing 706-679-3079. Please
call in ten minutes before the conference is scheduled to begin and ask for
the
LSB conference call.
To
listen
to a webcast of the call, please go to the Company’s website at www.lsb-okc.com
at least
15 minutes before the conference call to download and install any necessary
audio software. If you are unable to listen live, the conference call webcast
will be archived on the Company’s website for 90 days. We suggest listeners use
Microsoft Explorer as their web browser.
LSB
Industries, Inc.
LSB
is a
manufacturing, marketing and engineering company. LSB’s principal business
activities consist of the manufacture and sale of commercial and residential
climate control products, such as geothermal and water source heat pumps,
hydronic fan coils, large custom air handlers, the manufacture and sale of
chemical products for the mining, agricultural and industrial markets, and
the
provision of specialized engineering services and other activities
#
#
#
See
Accompanying Tables
LSB
Industries, Inc. News Release Page
3
May
7,
2007
LSB
Industries, Inc.
Unaudited
Financial Highlights (Notes)
Three
Months Ended March 31, 2007 and 2006
(unaudited)
|
Three
Months Ended
March
31,
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2007
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2006
|
||
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(In
Thousands,
Except Share and Per Share Amounts) |
|||
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Net
sales
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$
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147,385
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$
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111,857
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|||
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Cost
of sales
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115,333
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91,678
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|||||
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Gross
profit
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32,052
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20,179
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|||||
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Selling,
general and administrative expense
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18,301
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14,152
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|||||
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Provision
for losses on accounts receivable
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258
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200
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|||||
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Other
expense
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24
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106
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|||||
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Other
income
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(54
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)
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(47
|
)
|
|||
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Operating
income
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13,523
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5,768
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|||||
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Interest
expense
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2,588
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2,875
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|||||
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Non-operating
other income, net
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(42
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)
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(30
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)
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|||
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Income
from continuing operations before provision for income taxes and
equity in
earnings of affiliate
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10,977
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2,923
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|||||
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Provisions
for income taxes
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344
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50
|
|||||
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Equity
in earnings of affiliate
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(215
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)
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(205
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)
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|||
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Income
from continuing operations
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10,848
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3,078
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|||||
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Net
loss from discontinued operations
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29
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100
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|||||
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Net
income
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10,819
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2,978
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|||||
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|||||||
| Preferred stock dividends: | |||||||
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Dividend
requirements and stock dividend on preferred stock exchanged in
March
2007
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4,971
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248
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|||
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Other
preferred stock dividend requirements
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217
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304
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|||||
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|||||||
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Total
Preferred stock dividends
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5,188
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552
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|||||
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Net
income applicable to common stock
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$
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5,631
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$
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2,426
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Weighted
average common shares:
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|||||||
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Basic
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17,516
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13,762
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|||||
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Diluted
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20,976
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18,220
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|||||
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Income
(loss) per common share:
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|||||||
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Basic:
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|||||||
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Income
from continuing operations
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$
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.32
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$
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.19
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|||
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Net
loss from discontinued operations
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-
|
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(.01
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)
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|||
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Net
income
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$
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.32
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$
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.18
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|||
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Diluted:
|
|||||||
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Income
from continuing operations
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$
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.28
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$
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.15
|
|||
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Net
loss from discontinued operations
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-
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(.01
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)
|
||||
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Net
income
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$
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.28
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$
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.14
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(See
accompanying notes)
LSB
Industries, Inc. News Release Page
4
May
7,
2007
LSB
Industries, Inc.
Notes
to Unaudited Financial Highlights
Three
Months Ended March 31, 2007 and 2006
|
Note
1:
|
Net
income applicable to common stock is computed by adjusting net income
by
the amount of preferred stock dividend requirements and stock dividends.
Basic income per common share is based upon net income applicable
to
common stock and the weighted average number of common shares outstanding
during each period. Diluted income per share is based on net income
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.
|
|
During
the three months ended March 31, 2007, $3,000,000 of the 7% Convertible
Senior Subordinated Debentures due 2011, was converted into 423,749
shares
of common stock.
|
In
addition, as a result of a tender offer completed on March 13, 2007, we issued
2,262,965 shares of our common stock for 305,807 shares of Series 2 preferred
that were tendered. Also as a result of this tender offer, an aggregate of
approximately $7.3 million in accrued and unpaid dividends were waived. At
March
31, 2007, the amount of unpaid dividends in arrears on our Series 2 preferred
totaled approximately $4.8 million.
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Note
2:
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In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
FASB Staff Position No. AUG AIR-1 (“FSP”), accounting for planned major
maintenance activities (“Turnarounds”). Effective January 1, 2007, we
changed from the accrue-in-advance method which we were using to
the
preferred direct expensing method in accordance with the FSP. As
a result
of the change, net income for the three months ended March 31, 2006
as
presented in the Unaudited Financial Highlights has been increased
$422,000 as a result of the retrospective application of the FSP.
|
|
Note
3
|
Information
about the Company’s operations in different industry segments for the
three months ended March 31, 2007 and 2006 is detailed on the following
page.
|
LSB
Industries, Inc. News Release Page
5
May
7,
2007
LSB
INDUSTRIES, INC.
Notes
to Unaudited Financial Highlights (Continued)
Three
Months Ended March 31, 2007 and 2006
|
Three
Months Ended
March
31,
|
|
2007
|
2006
|
| (In Thousands) | |||||||
|
Net
sales:
|
|||||||
|
Climate
Control
|
$
|
71,305
|
$
|
47,362
|
|||
|
Chemical
|
73,720
|
62,530
|
|||||
|
Other
|
2,360
|
1,965
|
|||||
|
$
|
147,385
|
$
|
111,857
|
||||
|
Gross
profit:
|
|||||||
|
Climate
Control
|
$
|
20,707
|
$
|
14,807
|
|||
|
Chemical
|
10,532
|
4,701
|
|||||
|
Other
|
813
|
671
|
|||||
|
$
|
32,052
|
$
|
20,179
|
||||
|
Operating
income:
|
|||||||
|
Climate
Control
|
$
|
8,508
|
$
|
5,573
|
|||
|
Chemical
|
7,710
|
1,809
|
|||||
|
General
corporate expenses and other business operations, net
|
(2,695
|
)
|
(1,614
|
) | |||
|
13,523
|
5,768
|
||||||
|
Interest
expense
|
(2,588
|
)
|
(2,875
|
||||
|
Non-operating
other income, net
|
42
|
30
|
|||||
|
Provision
for income taxes
|
(344
|
)
|
(50
|
) | |||
|
Equity
in earnings of affiliate -
Climate Control
|
215
|
205
|
|||||
|
Income
from continuing operations
|
$
|
10,848
|
$
|
3,078
|
|||
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.