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February
12, 2008
Ms.
Nudrat Salik
Division
of Corporation Finance
U.
S.
Securities and Exchange Commission
Washington,
D.C. 20549-7010
Re: LSB
Industries, Inc.
Form
10-K/A for the fiscal year ended
December 31, 2006, filed July 18, 2007
Form
10-K for the fiscal year ended
December 31, 2006, filed March 27, 2007
Form
10-Q for the period ended
September 30, 2007, filed November 5, 2007
File
No.
1-7677
Dear
Ms.
Salik:
This
letter responds to the comment letter dated January 30, 2008 from the U.S.
Securities and Exchange Commission (the “Commission”), as referenced
above.
In
response to your comment regarding Item 9A Controls and Procedures, any
revisions or changes noted by our response to your comment will be made in
future filings.
9A
Controls and Procedures:
Company
Response
As
noted
in our previous filings, the Company did not meet the criteria as an
“accelerated filer” under the Sarbanes-Oxley Act of 2002 until June 30, 2007 for
the year ending December 31, 2007. As a result, we will disclose management’s
evaluation, with the participation of our Principal Executive Officer and
Principal Financial Officer, of the effectiveness of the Company’s disclosure
controls and procedures and we will report on internal control over financial
reporting. In addition, we will include an attestation report in our Form
10-K from the Company’s independent registered
public accounting firm as to our internal controls over financial
reporting.
We
have
continued to mitigate the various significant deficiencies mentioned in Item
4
of our September 30, 2007 Form 10-Q. At this time, we have not
completed our assessment of our internal control
over financial reporting as of December 31, 2007 and as a result we have not
made a final determination of which of these significant deficiencies identified
at September 30, 2007 continue to be assessed as significant at December 31,
2007. If any of these deficiencies are still assessed as significant at December
31, 2007, we will include a disclosure in accordance with the Commission’s
request. Following is an example of how we would disclose any such
deficiencies:
1
Proforma
example of an assumed significant deficiency in spreadsheet
controls:
Item 9A. Controls and
Procedures
As
previously reported, we had noted various significant deficiencies in our
disclosure controls and procedures. At December 31, 2007, however, we identified
one significant deficiency relating to general controls (i.e. access and change
controls) over electronic spreadsheets. To mitigate this lack of general
controls over spreadsheets, we implemented additional review and approval
procedures over these spreadsheets. In evaluating the effectiveness
of our disclosure controls and procedures at
December 31, 2007 as discussed below, management considered these mitigating
controls and controls involving financial review procedures.
As
of the
end of the period covered by this report, we carried out an
evaluation, with the participation of our Principal Executive Officer
and Principal Financial Officer, of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15 under the Securities Exchange Act of 1934). Based upon that
evaluation, we have concluded, with the participation of our Principal Executive
Officer and our Principal Financial Officer, that the Company’s disclosure
controls and procedures were effective. There were no significant changes in
the
Company’s internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation.
Management’s
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control system was
designed to provide reasonable assurance to our management and Board of
Directors regarding the preparation and fair presentation of published financial
statements. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.
Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2007. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control – Integrated Framework. Based on our assessment,
we believe that, as of December 31, 2007, the Company’s internal control over
financial reporting is effective based on those criteria.
Our
independent registered public accounting firm has issued an attestation report
on the Company’s internal control over financial reporting. This report appears
on page __.
2
We
appreciate the courtesies you have shown us as we developed our responses.
Please contact the undersigned at (405) 235-4546 if you have any further
comments or questions concerning this matter.
Sincerely,
/s/
Tony M. Shelby
Tony
M.
Shelby
LSB
Industries, Inc.
Executive
Vice President of Finance
and
Chief
Financial Officer