Lsb Industries Inc. (LXU)

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LSB Industries, Inc. (LXU)

Q1 2008 Earnings Call Transcript

May 6, 2008 5:15 pm ET

Executives

Carol Oden – IR

Jack Golsen – Chairman and CEO

Tony Shelby – EVP of Finance and CFO

Barry Golsen – Vice Chairman, President and President of Climate Control Business

Analysts

Dan Mannes – Avondale Partners

Michael Coleman – Sterne, Agee

Robert Clayson – Wachovia Securities

Ali Motamed – Boston Partners

Richard Nelson – Jesup & Lamont

Cliff Borden [ph] – CIBC

Charles Hansel – Jayjoe Securities [ph]

Presentation

Operator

Good day, everyone, and welcome to the LSB Industries first quarter 2008 conference call. At this time, I would like to inform you that this conference is being recorded and that all participants are currently in a listen-only mode. I will now turn the conference over to Ms. Carol Oden. Ms. Oden, you may begin your conference.

Carol Oden

Thank you. Welcome to the LSB Industries conference call. Today, LSB's management participants are Jack Golsen, Chairman and Chief Executive Officer; Barry Golsen, President; and Tony Shelby, Chief Financial Officer.

This conference call is being broadcast live over the Internet and is also being recorded. An archive of the webcast will be available shortly after the call on our web site at www.lsb-okc.com and will be accessible for one month. After comments by management, a question-and-answer session will be held. Instructions for asking questions will be provided at that time. Information reported on this call speaks only as of today, May 6, 2008, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay.

Comments today may contain certain forward-looking statements. All statements other than statements of historical fact are forward-looking statements. Statements that include the words expect, intend, plan, believe, project, anticipate, estimate and similar statements of a future or forward-looking nature identify forward-looking statements, including, but not limited to, the effect of the economic downturn on our Climate Control business; long-range growth potential for our Climate Control products; the effects of pending legislation on certain of our Climate Control products; market demand for our agricultural products; start-up costs and production estimates and timing of the Pryor, Oklahoma chemical plant; strategy as to emphasizing cost reductions; develop product mixes to operate our plants at full rate at reduced cost; utilization of our NOL; higher selling prices; increased output of our Chemical business; margins within our Chemical business.

The term EBITDA as used in this presentation is net income plus interest expense, depreciation, amortization, income taxes, and certain non-cash charges unless otherwise described. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to the GAAP measurement. You should to rely on forward-looking statements because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors.

These factors include, but are not limited to, decline in general economic conditions; interest rate changes; competitive pressures; costs to activate the Pryor plant; changes in working capital; price of our common stock; and the risk and uncertainties discussed under the heading Special Note Regarding Forward-Looking Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, the Form 10-Q for the quarter ended March 31, 2008, and the reports we file from time to time with the Securities and Exchange Commission. We do not intend to and undertake no duty to update the information contained in this press release. We'll post on our web site a reconciliation to GAAP of any EBITDA numbers discussed during this conference call.

Now, I will turn the conference call over to Mr. Jack Golsen, the company's Board Chairman.

Jack Golsen

Thank you. Good afternoon. Thanks for joining our conference call today. Today, we are going to change our previous format to streamline our first quarter 2008 conference call presentation, and eliminate duplication of some of the information that we have been presenting to you in the previous calls.

First, Tony Shelby, our Executive Vice President and Chief Financial Officer, will go over our overall results and the pertinent numbers of our Climate Control and Chemical businesses. Then Barry Golsen, our President and Chief Operating Officer, will discuss both the Climate Control and Chemical company's operations. When they have completed their statements, Tony, Barry, and I will be available to answer any questions that you have.

For my part, I would like to congratulate the entire LSB team for their efforts, which resulted in record first quarter diluted earnings per share of $0.46, up approximately 64% over the first quarter of last year. Both our Chemical and Climate Control businesses contributed to this result, but the standout performer in the first quarter was Chemical, increasing its operating profit by 57% over the first quarter last year.

Barry and Tony will discuss these results, along with other developments in detail. We would like to hear from you about whether or not you prefer this new presentation approach compared to our previous conferences or whether you have any additional suggestions. You can contact us by e-mail at a special e-mail, info@lsb-okc.com. One other item of interest to you, we have been solicited by the New York Stock Exchange and the NASDAQ to move our listing from the AMEX. If we do nothing, we will end up on the New York Exchange when the acquisition of the AMEX is completed. You may want to communicate your preferences about this to us.

Read the rest of this transcript for free on seekingalpha.com