Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | LSB Industries, Inc. | |
Entity Central Index Key | 0000060714 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity File Number | 1-7677 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 73-1015226 | |
Entity Address, Address Line One | 3503 NW 63rd Street | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Oklahoma City | |
Entity Address, State or Province | OK | |
Entity Address, Postal Zip Code | 73116 | |
City Area Code | 405 | |
Local Phone Number | 235-4546 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 74,344,336 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | LXU | |
Title of 12(b) Security | Common Stock, Par Value $.10 | |
Security Exchange Name | NYSE | |
Preferred Stock [Member] | ||
Document Information [Line Items] | ||
No Trading Symbol Flag | true | |
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 46,824 | $ 63,769 |
Short-term investments | 270,702 | 330,553 |
Accounts receivable | 47,303 | 75,494 |
Allowance for doubtful accounts | (691) | (699) |
Accounts receivable, net | 46,612 | 74,795 |
Inventories: | ||
Finished goods | 22,554 | 28,893 |
Raw materials | 1,490 | 1,990 |
Total inventories | 24,044 | 30,883 |
Supplies, prepaid items and other: | ||
Prepaid insurance | 1,863 | 17,429 |
Precious metals | 12,544 | 13,323 |
Supplies | 30,251 | 27,501 |
Other | 4,409 | 8,346 |
Total supplies, prepaid items and other | 49,067 | 66,599 |
Total current assets | 437,249 | 566,599 |
Property, plant and equipment, net | 828,828 | 848,661 |
Other assets: | ||
Operating lease assets | 24,621 | 22,682 |
Intangible and other assets, net | 1,508 | 1,877 |
Total other assets | 26,129 | 24,559 |
Total assets | 1,292,206 | 1,439,819 |
Current liabilities: | ||
Accounts payable | 56,796 | 78,182 |
Short-term financing | 16,134 | |
Accrued and other liabilities | 37,395 | 38,470 |
Current portion of long-term debt | 5,493 | 9,522 |
Total current liabilities | 99,684 | 142,308 |
Long-term debt, net | 577,173 | 702,733 |
Noncurrent operating lease liabilities | 15,713 | 14,896 |
Other noncurrent accrued and other liabilities | 522 | 522 |
Deferred income taxes | 66,370 | 63,487 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Common stock, $.10 par value; 150 million shares authorized, 91.2 million shares issued | 9,117 | 9,117 |
Capital in excess of par value | 499,528 | 497,179 |
Retained earnings | 232,362 | 199,092 |
Stockholders equity including treasury stock | 741,007 | 705,388 |
Less treasury stock, at cost: | ||
Common stock, 16.8 million shares (14.9 million shares at December 31, 2022) | 208,263 | 189,515 |
Total stockholders' equity | 532,744 | 515,873 |
Total Liabilities and Stockholders' equity | $ 1,292,206 | $ 1,439,819 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.1 | $ 0.1 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 91,200,000 | 91,200,000 |
Treasury stock, common shares | 16,800,000 | 14,900,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net sales | $ 114,287 | $ 184,273 | $ 461,096 | $ 668,057 |
Cost of sales | 117,673 | 162,144 | 386,845 | 412,274 |
Gross (loss) profit | (3,386) | 22,129 | 74,251 | 255,783 |
Selling, general and administrative expense | 8,512 | 9,138 | 27,815 | 29,711 |
Other (income) expense, net | (2,399) | (75) | (2,096) | 377 |
Operating (loss) income | (9,499) | 13,066 | 48,532 | 225,695 |
Interest expense, net | 7,165 | 12,193 | 31,213 | 34,455 |
(Gain) loss on extinguishment of debt | (8,644) | 113 | ||
Non-operating other income, net | (3,689) | (2,219) | (10,929) | (5,627) |
(Loss) income before provision for income taxes | (12,975) | 3,092 | 36,892 | 196,754 |
(Benefit) provision for income taxes | (5,249) | 780 | 3,622 | 32,277 |
Net (loss) income | $ (7,726) | $ 2,312 | $ 33,270 | $ 164,477 |
Basic: | ||||
Net (loss) income | $ (0.1) | $ 0.03 | $ 0.44 | $ 1.89 |
Diluted: | ||||
Net (loss) income | $ (0.1) | $ 0.03 | $ 0.44 | $ 1.86 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Capital in Excess of Par Value [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Balance at Dec. 31, 2021 | $ 460,490 | $ 9,117 | $ (10,533) | $ 493,161 | $ (31,255) |
Balance, shares at Dec. 31, 2021 | 91,168 | (1,375) | |||
Net income | 58,766 | 58,766 | |||
Stock-based compensation | 803 | 803 | |||
Other | (1,871) | $ (1,871) | |||
Other, Shares | (229) | ||||
Balance at Mar. 31, 2022 | 518,188 | $ 9,117 | $ (12,404) | 493,964 | 27,511 |
Balance, shares at Mar. 31, 2022 | 91,168 | (1,604) | |||
Balance at Dec. 31, 2021 | 460,490 | $ 9,117 | $ (10,533) | 493,161 | (31,255) |
Balance, shares at Dec. 31, 2021 | 91,168 | (1,375) | |||
Net income | 164,477 | ||||
Balance at Sep. 30, 2022 | 526,144 | $ 9,117 | $ (112,446) | 496,251 | 133,222 |
Balance, shares at Sep. 30, 2022 | 91,168 | (9,171) | |||
Balance at Mar. 31, 2022 | 518,188 | $ 9,117 | $ (12,404) | 493,964 | 27,511 |
Balance, shares at Mar. 31, 2022 | 91,168 | (1,604) | |||
Net income | 103,399 | 103,399 | |||
Stock-based compensation | 1,366 | 1,366 | |||
Purchase of common stock | (13,394) | $ (13,394) | |||
Purchase of common stock, Shares | (713) | ||||
Balance at Jun. 30, 2022 | 609,559 | $ 9,117 | $ (25,798) | 495,330 | 130,910 |
Balance, shares at Jun. 30, 2022 | 91,168 | (2,317) | |||
Net income | 2,312 | 2,312 | |||
Stock-based compensation | 921 | 921 | |||
Purchase of common stock | (86,648) | $ (86,648) | |||
Purchase of common stock, Shares | (6,854) | ||||
Balance at Sep. 30, 2022 | 526,144 | $ 9,117 | $ (112,446) | 496,251 | 133,222 |
Balance, shares at Sep. 30, 2022 | 91,168 | (9,171) | |||
Balance at Dec. 31, 2022 | 515,873 | $ 9,117 | $ (189,515) | 497,179 | 199,092 |
Balance, shares at Dec. 31, 2022 | 91,168 | (14,888) | |||
Net income | 15,901 | 15,901 | |||
Stock-based compensation | 719 | 719 | |||
Shares issued restricted stock units | $ 682 | (682) | |||
Shares issued restricted stock units, shares | 53 | ||||
Shares withheld restricted stock and restricted stock units vesting | (2,541) | $ (2,541) | |||
Shares withheld restricted stock and restricted stock units vesting, shares | (204) | ||||
Balance at Mar. 31, 2023 | 529,952 | $ 9,117 | $ (191,374) | 497,216 | 214,993 |
Balance, shares at Mar. 31, 2023 | 91,168 | (15,039) | |||
Balance at Dec. 31, 2022 | 515,873 | $ 9,117 | $ (189,515) | 497,179 | 199,092 |
Balance, shares at Dec. 31, 2022 | 91,168 | (14,888) | |||
Net income | 33,270 | ||||
Balance at Sep. 30, 2023 | 532,744 | $ 9,117 | $ (208,263) | 499,528 | 232,362 |
Balance, shares at Sep. 30, 2023 | 91,168 | (16,824) | |||
Balance at Mar. 31, 2023 | 529,952 | $ 9,117 | $ (191,374) | 497,216 | 214,993 |
Balance, shares at Mar. 31, 2023 | 91,168 | (15,039) | |||
Net income | 25,095 | 25,095 | |||
Stock-based compensation | 1,927 | 1,927 | |||
Purchase of common stock | (17,218) | $ (17,218) | |||
Purchase of common stock, Shares | (1,795) | ||||
Shares issued restricted stock units and ESPP participants | 106 | $ 732 | (626) | ||
Shares issued restricted stock units and ESPP participants, shares | 58 | ||||
Shares withheld restricted stock units vesting | (65) | $ (65) | |||
Shares withheld restricted stock units vesting, shares | (7) | ||||
Balance at Jun. 30, 2023 | 539,797 | $ 9,117 | $ (207,925) | 498,517 | 240,088 |
Balance, shares at Jun. 30, 2023 | 91,168 | (16,783) | |||
Net income | (7,726) | (7,726) | |||
Stock-based compensation | 1,318 | 1,318 | |||
Purchase of common stock | (586) | $ (586) | |||
Purchase of common stock, Shares | (60) | (60) | |||
Shares issued restricted stock units | $ 307 | (307) | |||
Shares issued restricted stock units, shares | 25 | ||||
Shares withheld restricted stock units vesting | (59) | $ (59) | |||
Shares withheld restricted stock units vesting, shares | (6) | ||||
Balance at Sep. 30, 2023 | $ 532,744 | $ 9,117 | $ (208,263) | $ 499,528 | $ 232,362 |
Balance, shares at Sep. 30, 2023 | 91,168 | (16,824) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 33,270 | $ 164,477 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | 2,883 | 31,210 |
(Gain) loss on extinguishment of debt | (8,644) | 113 |
Depreciation and amortization of property, plant and equipment | 49,852 | 50,013 |
Amortization of intangible and other assets | 403 | 889 |
Stock-based compensation | 3,964 | 3,089 |
Other | 1,654 | (2,484) |
Cash provided (used) by changes in assets and liabilities: | ||
Accounts receivable | 28,365 | (22,105) |
Inventories | 6,727 | (13,147) |
Prepaid insurance | 15,566 | 12,486 |
Supplies, prepaid items and other | 1,761 | (3,455) |
Accounts payable | (12,672) | 32,004 |
Accrued interest | 2,237 | 10,010 |
Accrued payroll and benefits | (5,489) | (2,298) |
Other assets and other liabilities | 645 | (1,620) |
Net cash provided by operating activities | 120,522 | 259,182 |
Cash flows from investing activities | ||
Expenditures for property, plant and equipment | (41,123) | (32,531) |
Proceeds from short-term investments | 293,347 | 59,728 |
Purchases of short-term investments | (230,690) | (423,091) |
Other investing activities | (28) | 2,946 |
Net cash provided (used) by investing activities | 21,506 | (392,948) |
Cash flows from financing activities | ||
Net proceeds from 6.25% senior secured notes | 200,000 | |
Repurchases of 6.25% senior secured notes | (114,320) | |
Payments on other long-term debt | (8,155) | (10,950) |
Payments on short-term financing | (16,134) | (11,291) |
Acquisition of treasury stock, net | (20,364) | (101,912) |
Payments of debt-related costs, including extinguishment costs | (4,455) | |
Other financing activities | (135) | |
Net cash (used) provided by financing activities | (158,973) | 71,257 |
Net (decrease) increase in cash and cash equivalents | (16,945) | (62,509) |
Cash and cash equivalents at beginning of period | 63,769 | 82,144 |
Cash and cash equivalents at end of period | $ 46,824 | $ 19,635 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (Unaudited) | Sep. 30, 2023 |
6.25% Senior Secured Notes due 2028 [Member] | |
Debt instrument, interest rate | 6.25% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ (7,726) | $ 25,095 | $ 15,901 | $ 2,312 | $ 103,399 | $ 58,766 | $ 33,270 | $ 164,477 |
Insider Trading Arrangements
Insider Trading Arrangements shares in Thousands | 9 Months Ended |
Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Adoption of 10b5-1 Trading Plans by Our Officers and Directors During our fiscal quarter ended September 30, 2023, one of our directors (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) entered into a contract, instruction or written plan for the purchase or sale of our securities that is intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information. We refer to this contract, instruction, and written plan as a “Rule 10b5-1 trading plan.” We describe the material terms of this Rule 10b5-1 trading plan below. Barry H. Golsen, Member Board of Directors On September 14, 2023 , Barry H. Golsen , a member of our board of directors , entered into a Rule 10b5-1 trading plan that is intended to satisfy the affirmative defense of Rule 10b5-1(c) and provides that Mr. Golsen, acting through a broker, may sell up to an aggregate of 576,047 shares of our common stock, subject to adjustments for stock splits, stock combinations, stock dividends and other similar changes to our common stock in certain trust's which he is trustee over. The total vested common shares held by Mr. Golsen is 677,081 . Sales of shares under the plan may only occur from December 15, 2023 to December 31, 2024. The plan is scheduled to terminate on December 31, 2024 , subject to earlier termination upon the sale of all shares subject to the plan or the expiration of all sale orders under the plan, upon termination by Mr. Golsen or the broker, or as otherwise provided in the plan. |
Barry H Golsen [Member] | |
Trading Arrangements, by Individual | |
Name | Barry H. Golsen |
Title | board of directors |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | September 14, 2023 |
Termination Date | December 31, 2024 |
Aggregate Available | 576,047 |
Underlying Securities | 677,081 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies The accompanying unaudited interim financial statements and notes of LSB have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying unaudited interim financial statements and notes should be read in conjunction with the financial statements and notes included in the Company’s Form 10-K for the year ended December 31, 2022 (our “2022 Form 10-K”), filed with the SEC on February 23, 2023. The accompanying unaudited interim financial statements in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s results of operations and cash flows for the three-month and nine-month periods ended September 30, 2023 and 2022 and the Company’s financial position as of September 30, 2023. Basis of Consolidation – LSB and its subsidiaries are consolidated in the accompanying condensed consolidated financial statements. LSB is a holding company with no significant operations or assets other than cash, cash equivalents, short-term investments and investments in its subsidiaries. All intercompany accounts and transactions have been eliminated. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. Nature of Business – We are engaged in the manufacture and sale of chemical products. The chemical products we primarily manufacture, market and sell are ammonia, fertilizer grade ammonium nitrate (“AN” and “HDAN”) and urea ammonium nitrate ("UAN") for agricultural applications, high purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide and diesel exhaust fluid for industrial applications and industrial grade AN (“LDAN”) and solutions for the mining industry. We manufacture and distribute our products in four facilities; three of which we own and are located in El Dorado, Arkansas (the “El Dorado Facility”); Cherokee, Alabama (the “Cherokee Facility”); and Pryor, Oklahoma (the “Pryor Facility”); and one of which we operate on behalf of Covestro in Baytown, Texas. Sales to customers include farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the United States (“U.S.”); industrial users of acids throughout the U.S. and parts of Canada; and explosive manufacturers in the U.S. and parts of Mexico, Canada and the Caribbean. These interim results are not necessarily indicative of results for a full year due, in part, to the seasonality of our sales of agricultural products and the timing of performing our major plant maintenance activities. Our selling seasons for agricultural products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November. Use of Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Repurchase Program – In May 2023, our Board of Directors (our “Board”) authorized a $ 150 million stock repurchase program. Total repurchase authority remaining under the repurchase program wa s $ 132 million as of September 30, 2023. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing securities, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate us to purchase any particular number or type of securities. During the third quarter of 2023, we repurchased approximately 60 thousand shares of common stock at an average cost of $ 9.78 per share. Short-Term Investments - Investments, which consist of U.S. treasury bills with an original maturity up to and less than 52 weeks, are considered short-term investments and are classified as Level 1. We plan to hold these investments to maturity and have a history of holding investments to maturity. Due to the nature of these investments, as U.S. treasury securities, no impairment is anticipated. Accounts Receivable – Our accounts receivable are presented at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any estimate of expected credit losses. Our estimate is based on historical experience and periodic assessment, particularly on accounts that are past due (based upon the terms of the sale). Our periodic assessment is based on our best estimate of amounts that are not recoverable which includes a present collectability review and forward looking assessment, where applicable. Impairment of Long-Lived Assets –Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An asset’s fair value must be determined when the carrying amount of an asset (asset group) exceeds the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and/or its eventual disposition. If assets to be held and used are considered to be impaired, the impairment to be recognized is the amount by which the carrying amounts of the assets exceed the fair values of the assets as measured by the present value of future net cash flows expected to be generated by the assets or their appraised value. In general, and depending on the event or change in circumstances, our asset groups are reviewed for impairment on a facility-by-facility basis (such as the Cherokee Facility, El Dorado Facility or Pryor Facility) . Short-Term Financing – Our short-term financing represents the short-term note related to financing of our insurance premium, which are renewed annually during November. Contingencies – Certain conditions may exist which may result in a loss, but which will only be resolved when future events occur. We and our legal counsel assess such contingent liabilities and such assessment inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a loss has been incurred, we would accrue for such contingent losses when such losses can be reasonably estimated. If the assessment indicates that a potentially material loss contingency is not probable but reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Estimates of potential legal fees and other directly related costs associated with contingencies are not accrued but rather are expensed as incurred. Loss contingency liabilities are included in current and noncurrent accrued and other liabilities and are based on current estimates that may be revised in the near term. In addition, we recognize contingent gains when such gains are realized or when the contingencies have been resolved (generally at the time a settlement has been reached). Derivatives, Hedges and Financial Instruments – Periodically, we entered into certain forward natural gas contracts. Whenever we have such derivative contracts outstanding, they are recognized in the balance sheet and measured at fair value. Changes in fair value of derivatives are recorded in results of operations unless the normal purchase or sale exceptions apply, or hedge accounting is elected. The fair value amounts recognized for our derivative contracts executed with the same counterparty under a master netting arrangement may be offset. We have the choice to offset or not, but that choice must be applied consistently. A master netting arrangement exists if the reporting entity has multiple contracts with a single counterparty that are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. Offsetting the fair values recognized for the derivative contracts outstanding with a single counterparty results in the net fair value of the transactions reported as an asset or a liability in the balance sheet. When applicable, we present the fair values of our derivative contracts under master netting agreements using a gross fair value presentation. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: Level 1 - Valuations of contracts classified as Level 1 are based on quoted prices in active markets for identical contracts. Level 2 - Valuations of contracts classified as Level 2 are based on quoted prices for similar contracts and valuation inputs other than quoted prices that are observable for these contracts. Level 3 - Valuations of assets and liabilities classified as Level 3 are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Leases – We determine if an arrangement is a lease at inception or modification of a contract and classify each lease as either an operating or finance lease based on the terms of the contract. We reassess lease classification subsequent to commencement upon a change to the expected lease term or a modification to the contract. A contract contains a lease if the contract conveys the right to control the use of the identified property or equipment, explicitly or implicitly, for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and obtain substantially all of the economic benefit from the use of the underlying asset. An operating lease asset represents our right to use the underlying asset as a lessee for the lease term and an operating lease liability represents our obligation to make lease payments arising from the lease. Currently, most of our leases are classified as operating leases and primarily relate to railcars, other equipment and office space. Our leases that are classified as finance leases and other leases under which we are the lessor are not material. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made. Our current leases do not contain residual value guarantees. Most of our leases do not include options to extend or terminate the lease prior to the end of the term. Leases with a term of 12 months or less are not recognized in the balance sheet. Since our leases generally do not provide an implicit rate, we use our incremental borrowing rate based on the lease term and other information available at the commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the applicable lease term. As of September 30, 2023, we have executed operating leases with lease terms greater than one year, with total payments of approximatel y $ 5.8 mill ion which have not yet commenced. Recently Issued Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB") in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. We consider the applicability and impact of all ASUs. ASUs issued and outstanding or that became effective since January 1, 2023 through the date of these financial statements were assessed and determined not to be applicable or are expected to have minimal impact on our condensed consolidated financial position and results of operations. |
Income Per Common Share
Income Per Common Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Income Per Common Share | 2. Income Per Common Share Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands, Except Per Share Amounts) Numerator: Net (loss) income $ ( 7,726 ) $ 2,312 $ 33,270 $ 164,477 Numerator for basic and diluted net (loss) $ ( 7,726 ) $ 2,312 $ 33,270 $ 164,477 Denominator: Denominator for basic net income (loss) per 73,992 84,187 74,946 86,929 Effect of dilutive securities: Unvested restricted stock and stock units — 1,328 533 1,352 Dilutive potential common shares — 1,328 533 1,352 Denominator for diluted net income (loss) per 73,992 85,515 75,479 88,281 Basic net (loss) income per common share $ ( 0.10 ) $ 0.03 $ 0.44 $ 1.89 Diluted net (loss) income per common share $ ( 0.10 ) $ 0.03 $ 0.44 $ 1.86 (1) Excludes the weighted-average shares of unvested restricted stock that are contingently issuable. The following weighted-average shares of securities were not included in the computation of diluted net income per common share as their effect would have been antidilutive: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Restricted stock and stock units 1,422,181 146,537 429,339 76,204 Stock options 13,000 13,000 13,000 13,000 1,435,181 159,537 442,339 89,204 |
Current and Noncurrent Accrued
Current and Noncurrent Accrued and Other Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Current and Noncurrent Accrued and Other Liabilities | 3. Current and Noncurrent Accrued and Other Liabilities September 30, December 31, 2023 2022 (In Thousands) Accrued interest $ 13,477 11,196 Current portion of operating lease liabilities 8,917 7,259 Accrued payroll and benefits 6,950 12,440 Other 8,573 8,097 37,917 38,992 Less noncurrent portion 522 522 Current portion of accrued and other liabilities $ 37,395 $ 38,470 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt Our long-term debt consists of the following: September 30, December 31, 2023 2022 (In Thousands) Working Capital Revolver Loan, with a current interest 9.00 % (A) $ — $ — Senior Secured Notes due 2028, with an interest 6.25 % (B) 575,000 700,000 Secured Financing due 2025, with an interest 8.75 % (C) 15,459 19,277 Secured Financing due 2023, with an interest 8.32 % (D) — 4,161 Other 1,008 1,138 Unamortized debt issuance costs ( 8,801 ) ( 12,321 ) 582,666 712,255 Less current portion of long-term debt 5,493 9,522 Long-term debt due after one year, net $ 577,173 $ 702,733 (A) Our revolving credit facility, as amended (the “Working Capital Revolver Loan”), provides for advances up to $ 65 million (the “Maximum Revolver Amount”), based on specific percentages of eligible accounts receivable and inventories and up to $ 10 million of letters of credit. We had outstanding letters of credit as of September 30, 2023 of $ 2.0 million, which reduces the amount available for borrowing under the Working Capital Revolver Loan. At September 30, 2023, our available borrowings under our Working Capital Revolver Loan were approximately $ 42.4 million. The maturity date of the Working Capital Revolver Loan is on the earlier of (i) the date that is 90 days prior to the earliest stated maturity date of the Senior Secured Notes (unless refinanced or repaid) and (ii) February 26, 2024 . Subject to certain conditions and subject to lender approval, the Maximum Revolver Amount may increase up to an additional $ 10 million. The Working Capital Revolver Loan also provides for a springing financial covenant (the “Financial Covenant”), which requires that, if the borrowing availability is less than 10.0 % of the total revolver commitments , then the borrowers must maintain a minimum fixed charge coverage ratio of not less than 1.00 to 1.00. The Financial Covenant, if triggered, is tested monthly. Interest accrues on outstanding borrowings under the Working Capital Revolver Loan at a rate equal to, at our election, either (a) SOFR for an interest period selected by us plus a SOFR adjustment e qual to 0.10 % per an num plus an applicable margin equal to 1.50 % per annum or 1.75 % per annum, depending on borrowing availability under the Working Capital Revolver Loan, or (b) Wells Fargo Capital Finance’s prime rate plus an applicable margin equal to 0.50 % per annum or 0.75 % per annum, depending on borrowing availability under the Working Capital Revolver Loan. Interest is paid quarterly, if applicable. During the second quarter of 2023 the LIBOR rate component included in our Working Capital Revolver Loan was converted to SOFR as use of LIBOR was discontinued. (B) On October 14, 2021, LSB completed the issuance and sale of $ 500 million aggregate principal amount of the Notes of its 6.25 % Senior Secured Notes due 2028 (the “Notes”), pursuant to an indenture (the “Indenture”), dated as of October 14, 2021. The Notes were issued at a price equal to 100 % of their face value. On March 8, 2022, LSB completed the issuance and sale of an additional $ 200 million aggregate principal amount of the Notes (the “New Notes”), which were issued pursuant to the Indenture (the Notes together with the New Notes, the “Senior Secured Notes”). The New Notes were issued at a price equal to 100 % of their face value, plus accrued interest from October 14, 2021 to March 7, 2022. The Senior Secured Notes mature on October 15, 2028 . Interest is to be paid in arrears on May 15 and October 15. During the second quarter of 2023 we repurchased $ 125 million in principal amount of our Senior Secured Notes for approximately $ 114.3 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a gain on extinguishment of approximately $ 8.6 million. (C) In August 2020, El Dorado Ammonia L.L.C. (“EDA”), one of our subsidiaries, entered into a $ 30 million secured financing arrangement with an affiliate of Eldridge Industries, L.L.C. (“Eldridge”). Beginning in September 2020, principal and interest is payable in 60 equal monthly installments with a final balloon payment of approximately $ 5 million due in August 2025 . This financing arrangement is secured by an ammonia storage tank and is guaranteed by LSB. (D) During the second quarter 2023, El Dorado Chemical Company (“EDC”), one of our subsidiaries, made the final balloon payment of approximately $ 3 million on a secured financing arrangement with an affiliate of Eldridge. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Outstanding Natural Gas Purchase Commitments – Certain of our natural gas contracts qualify as normal purchases under GAAP and thus are not financial instruments for which we mark-to-market. At September 30, 2023, these contracts included volume purchase commitments with fixed prices of appr oximately 7.2 million MMBtus of natural gas that cover a period from October 2023 through December 2023. The weighted-average price of the natural gas covered by these contracts was $ 3.93 per MMBtu, for a total of $ 28.5 million. Based on strip prices, the weighted-average market price of the fixed contracts was $ 2.77 per MMBtu for a total of $ 20.0 million. Legal Matters - Following is a summary of certain legal matters involving the Company: A. Environmental Matters Our facilities and operations are subject to numerous federal, state and local environmental laws and to other laws regarding health and safety matters (collectively, the “Environmental and Health Laws”), many of which provide for certain performance obligations, substantial fines and criminal sanctions for violations. Certain Environmental and Health Laws impose strict liability as well as joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. We may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety effects of our operations. There can be no assurance that we will not incur material costs or liabilities in complying with such laws or in paying fines or penalties for violation of such laws. Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. The Environmental and Health Laws and related enforcement policies have in the past resulted and could in the future result, in significant compliance expenses, cleanup costs (for our sites or third-party sites where our wastes were disposed of), penalties or other liabilities relating to the handling, manufacture, use, emission, discharge or disposal of hazardous or toxic materials at or from our facilities or the use or disposal of certain of its chemical products. Further, a number of our facilities are dependent on environmental permits to operate, the loss or modification of which could have a material adverse effect on their operations and our financial condition. Historically, significant capital expenditures have been incurred by our subsidiaries in order to comply with the Environmental and Health Laws and significant capital expenditures are expected to be incurred in the future. We will also be obligated to manage certain discharge water outlets and monitor groundwater contaminants at our facilities should we discontinue the operations of a facility. As of September 30, 2023, our accrued liabilities for environmental matters totaled approximately $ 0.5 million relating primarily to the matters discussed below. Estimates of the most likely costs for our environmental matters are generally based on preliminary or completed assessment studies, preliminary results of studies, or our experience with other similar matters. It is reasonably possible that a change in the estimate of our liability could occur in the near term. 1. Discharge Water Matters Each of our manufacturing facilities generates process wastewater, which may include cooling tower and boiler water quality control streams, contact storm water and miscellaneous spills and leaks from process equipment. The process water discharge, storm-water runoff and miscellaneous spills and leaks are governed by various permits generally issued by the respective state environmental agencies as authorized and overseen by the U.S. Environmental Protection Agency. These permits limit the type and volume of effluents that can be discharged and control the method of such discharge. In 2017, the Pryor Chemical Company (“PCC”) filed a Permit Renewal Application for its Non-Hazardous Injection Well Permit at the Pryor Facility. Although the Injection Well Permit expired in 2018, PCC continues to operate the injection well pending the Oklahoma Department of Environmental Quality (“ODEQ”) action on the Permit Renewal Application. Since that time, PCC and ODEQ engaged in ongoing discussions related to the renewal of the injection well to address the wastewater stream. In 2022, ODEQ responded to the application in the form of an information request. PCC has submitted a formal response to the information request and is currently evaluating wastewater treatment alternatives. In 2006, the El Dorado Facility entered into a Consent Administrative Order (“CAO”) that recognizes the presence of nitrate contamination in the shallow groundwater. The CAO required EDC to perform semi-annual groundwater monitoring, continue operation of a groundwater recovery system, submit a human health and ecological risk assessment and submit a remedial action plan. The risk assessment was submitted in 2007. In 2015, the Arkansas Department of Environmental Quality (“ADEQ”) stated that El Dorado Chemical was meeting the requirements of the CAO and should continue semi-annual monitoring. A CAO was signed in 2018, which required an Evaluation Report of the data and effectiveness of the groundwater remedy for nitrate contamination. During 2019, the Evaluation Report was submitted to the ADEQ and the ADEQ approved the report. No liability has been established as of September 30, 2023, in connection with this ADEQ matter. 2. Other Environmental Matters In 2002, certain of our subsidiaries sold substantially all of their operating assets relating to a Kansas chemical facility (the “Hallowell Facility”) but retained ownership of the real property where the facility is located. Our subsidiary retained the obligation to be responsible for and perform the activities under, a previously executed consent order to investigate the surface and subsurface contamination at the real property, develop a corrective action strategy based on the investigation and implement such strategy. In addition, certain of our subsidiaries agreed to indemnify the buyer of such assets for these environmental matters. As the successor to a prior owner of the Hallowell Facility, Chevron Environmental Management Company (“Chevron”) has agreed in writing, within certain limitations, to pay and has been paying one-half of the costs of the investigation and interim measures relating to this matter as approved by the Kansas Department of Health and Environment (the “KDHE”), subject to reallocation. During this process, our subsidiary and Chevron retained an environmental consultant that prepared and performed a corrective action study work plan as to the appropriate method to remediate the Hallowell Facility. During 2020, the KDHE selected a remedy of annual monitoring and the implementation of an Environmental Use Control (“EUC”). This remedy primarily relates to long-term surface and groundwater monitoring to track the natural decline in contamination and is subject to a 5-year re-evaluation with the KDHE. The final remedy, including the EUC, the finalization of the cost estimates and any required financial assurances remains under discussion with the KDHE. Pending the results from our discussions regarding the final remedy, we continue to accrue our allocable portion of costs primarily for the additional testing, monitoring and risk assessments that could be reasonably estimated, which amount is included in our accrued liabilities for environmental matters discussed above. The estimated amount is not discounted to its present value. As more information becomes available, our estimated accrual will be refined, as necessary. Cherokee Nitrogen Company received a Notice of Potential Violation for ten (10) findings identified from an inspection conducted by the U.S. Environmental Protection Agency (“EPA”) Region IV in late 2022. We provided written responses to each finding in the inspection report issued in connection with such inspection and to the Notice of Potential Violations and held direct communications with the EPA related to the matter. EPA is drafting a final Notice of Violation and we expect to engage in additional remedial actions to address any remaining violations. We also anticipate the potential imposition of financial penalties, although we are unable to quantify or estimate those penalties or remedial actions and no liability has been established as of September 30, 2023, in connection with this matter. B. Other Pending, Threatened or Settled Litigation In 2013, an explosion and fire occurred at the West Fertilizer Company. (“West Fertilizer”) located in West, Texas, causing death, bodily injury and substantial property damage. West Fertilizer is not owned or controlled by us, but West Fertilizer was a customer of EDC and purchased AN from EDC from time to time. LSB and EDC received letters from counsel purporting to represent subrogated insurance carriers, personal injury claimants and persons who suffered property damages informing LSB and EDC that their clients are conducting investigations into the cause of the explosion and fire to determine, among other things, whether AN manufactured by EDC and supplied to West Fertilizer was stored at West Fertilizer at the time of the explosion and, if so, whether such AN may have been one of the contributing factors of the explosion. Initial lawsuits filed named West Fertilizer and another supplier of AN as defendants. In 2014, EDC and LSB were named as defendants, together with other AN manufacturers and brokers that arranged the transport and delivery of AN to West Fertilizer, in the case styled City of West, Texas vs. CF Industries, Inc., et al. , in the District Court of McLennan County, Texas. The plaintiffs allege, among other things, that LSB and EDC were negligent in the production and marketing of fertilizer products sold to West Fertilizer, resulting in death, personal injury and property damage. EDC retained a firm specializing in cause and origin investigations with particular experience with fertilizer facilities, to assist EDC in its own investigation. LSB and EDC placed its liability insurance carrier on notice and the carrier is handling the defense for LSB and EDC concerning this matter. Our product liability insurance policies have aggregate limits of general liability totaling $ 100 million, with a self-insured retention of $ 0.3 million, which retention limit has been met relating to the West Fertilizer matter. In August 2015, the trial court dismissed plaintiff’s negligence claims against us and EDC based on a duty to inspect but allowed the plaintiffs to proceed on claims for design defect and failure to warn. Subsequently, we and EDC have entered into confidential settlement agreements (with approval of our insurance carriers) with several plaintiffs that had claimed wrongful death and bodily injury and insurance companies asserting subrogation claims for damages from the explosion. While these settlements resolve the claims of a number of the claimants in this matter, we continue to be party to litigation related to the explosion. We continue to defend these lawsuits vigorously and we are unable to estimate a possible range of loss at this time if there is an adverse outcome in this matter. As of September 30, 2023, no liability reserve has been established in connection with this matter. In 2015, we and EDA received formal written notice from Global Industrial, Inc. (“Global”) of Global’s intention to assert mechanic liens for labor, service, or materials furnished under certain subcontract agreements for the improvement of the new ammonia plant (“Ammonia Plant”) at our El Dorado Facility. Global was a subcontractor of Leidos Constructors, LLC (“Leidos”), the general contractor for EDA for the construction for the Ammonia Plant. Leidos terminated the services of Global with respect to their work performed at our El Dorado Facility. LSB and EDA are pursuing the recovery of any damage or loss caused by Global’s work performed through their contract with Leidos at our El Dorado Facility. In March 2016, EDC and LSB were served a summons in a case styled Global Industrial, Inc. d/b/a Global Turnaround vs. Leidos Constructors, LLC et al., in the Circuit court of Union County, Arkansas (the “Union County Trial Court”), wherein Global sought damages under breach of contract and other claims. At the time of the summons, our accounts payable included invoices totaling approximately $ 3.5 million related to the claims asserted by Global, but such invoices were not approved by Leidos for payment. We have requested indemnification from Leidos under the terms of our contracts, which they have denied. As a result, we are seeking reimbursement of legal expenses from Leidos under our contracts. We also seek damages from Leidos for their wrongdoing during the expansion, including breach of contract, fraud, professional negligence and gross negligence. During 2018, the Union County Trial Court bifurcated the case into: (1) Global’s claims against Leidos and LSB and (2) the cross-claims between Leidos and LSB. Part (1) of the case was tried in the Union County Trial Court. In March 2020, the Union County Trial Court rendered a judgment and then an amended final judgment in April 2020. In summary, the amended judgment awarded Global (i) approximately $ 7.4 million (including the $ 3.5 million discussed above) for labor, service and materials furnished relating to the Ammonia Plant on what the Union County Circuit Court called a claim for “nonpayment of invoices,” (ii) approximately $ 1.3 million for prejudgment interest on the same claim, and (iii) a lien on certain property and the foreclosure of the lien to satisfy the monetary obligations of the judgement. In addition, post-judgment interest accrued at the annual rate of 4.25 % until paid. LSB appealed this judgment and on October 18, 2023, the Arkansas Court of Appeals reversed and remanded. The Arkansas Court of Appeal ruled that the lien was defective and therefore invalid, and that the claim for “nonpayment of invoices” was not a cause of action and reversed and remanded the judgment on that claim. As a result, we derecognized approximately $ 9.8 million of payables and accrued liabilities, which related to approximately $ 2.4 million in pre and post-judgement accrued interest and $ 7.4 million of gross plant, property and equipment, which was also derecognized. These adjustments also impacted our results of operations for the three and nine months ending September 30, 2023, through the reversals of approximately $ 2.4 million of interest expense and of approximately $ 1.8 million in previously recognized depreciation expense (a component of cost of sales) on the related plant, property and equipment. LSB retains all of its claims against Leidos and intends to vigorously prosecute those claims and vigorously contest the cross-claims in Part (2) of the matter. We are awaiting a trial date for the claims in Part (2). No liability was established at September 30, 2023 or December 31, 2022, in connection with the cross-claims in Part (2) of the matter, except for certain invoices held in accounts payable. We are also involved in various other claims and legal actions (including matters involving gain contingencies). It is possible that the actual future development of claims could be different from our estimates but, after consultation with legal counsel, we believe that changes in our estimates will not have a material effect on our business, financial condition, results of operations or cash flows. |
Derivatives, Hedges and Financi
Derivatives, Hedges and Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives, Hedges and Financial Instruments | 6. Derivatives, Hedges and Financial Instruments Natural Gas Contracts Periodically, we entered into certain forward natural gas contracts, which are accounted for on a mark-to-market basis. We are utilizing these natural gas contracts as economic hedges for risk management purposes but are not designated as hedging instruments. At September 30, 2023 and December 31, 2022 , we had no outstanding natural gas contracts ac counted for on a mark-to-market basis. When present, the valuations of the natural gas contracts are classified as Level 2. Financial Instruments At September 30, 2023 and December 31, 2022, we did no t have any financial instruments with fair values materially different from their carrying amounts (which excludes issuance costs, if applicable) except for our Senior Secured Notes included in the table below. The Senior Secured Notes are classified as a Level 2 fair value measurement. The fair value of financial instruments is not indicative of the overall fair value of our assets and liabilities since financial instruments do not include all assets, including intangibles and all liabilities. September 30, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value (In Millions) Senior Secured Notes (1) $ 575 $ 520 $ 700 $ 637 1. Based on a quoted price of 90.50 at September 30, 2023 and 91.00 at December 31, 2022. Also see discussion in Note 4 (B). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes (Benefit) provision for income taxes is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands) Current: Federal $ — $ — $ — $ — State ( 396 ) 170 739 1,067 Total Current $ ( 396 ) $ 170 $ 739 $ 1,067 Deferred: Federal $ ( 2,955 ) $ 1,557 $ 8,139 $ 32,236 State ( 1,898 ) ( 947 ) ( 5,256 ) ( 1,026 ) Total Deferred $ ( 4,853 ) $ 610 $ 2,883 $ 31,210 (Benefit) provision for income taxes $ ( 5,249 ) $ 780 $ 3,622 $ 32,277 The tax provision for the nine months ended September 30, 2023, w as $ 3.6 million ( 9.8 % provision on pre-tax income). The tax provision for the nine months ended September 30, 2022, was $ 32.3 million ( 16.4 % provision on pre-tax income). For 2023, the effective tax rate is lower than the statutory tax rate primarily due to deferred benefits from state tax law changes, partially offset by state taxes. For 2022, the effective tax rate was less than the statutory tax rate primarily due to the impact of the valuation allowances. We considered both positive and negative evidence in our determination of the need for valuation allowances for deferred tax assets. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years. Valuation allowances are reflective of our quarterly analysis of the four sources of taxable income, including the calculation of the reversal of existing tax assets and liabilities, the impact of financing activities and our quarterly results. Based on our analysis, we have determined that it is more-likely-than-not that all of our federal deferred tax assets and a portion of our state deferred tax assets will be utilized. We estimate an approximately $ 1.3 million increase in the related valuation allowance associated with these state deferred tax assets will be recorded during the year as part of the estimated annual effective tax rate applied to ordinary income. We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to our deferred tax assets. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of our deferred tax assets that could have a material impact on our consolidated financial statements. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time. LSB and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the 2019-2022 years remain open for all purposes of examination by the U.S. Internal Revenue Service (“IRS”) and other major tax jurisdictions. Additionally, the 2013-2018 years remain s ubject to examination for determining the amount of net operating loss and other carryforwards. |
Net Sales
Net Sales | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales | 8. Net Sales Disaggregated Net Sales We primarily derive our revenues from the sales of various chemical products. The Company’s net sales disaggregation is consistent with other financial information utilized or provided outside of our condensed consolidated financial statements. With our continued focus on optimizing our commercial strategy and product mix going forward we will report revenue by product as opposed to the end market. Accordingly, this approach is reflected in disaggregated net sales, mirroring how the Company manages its net sales by product through contracts with customers. The following table presents our net sales disaggregated by our principal product types: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands) Net sales: AN & Nitric Acid $ 46,026 $ 66,161 $ 173,859 $ 234,103 Urea ammonium nitrate (UAN) 30,090 50,459 117,585 184,014 Ammonia 26,823 52,075 129,850 200,861 Other 11,348 15,578 39,802 49,079 Total net sales $ 114,287 $ 184,273 $ 461,096 $ 668,057 Other Information Although most of our contracts have an original expected duration of one year or less, for our contracts with a duration greater than one year at contract inception, the average remaining expected duration wa s approximately 26 months at September 30, 2023. Liabilities associated with contracts with customers (contract liabilities) primarily relate to deferred revenue and customer deposits associated with cash payments received in advance from customers for volume shortfall charges and product shipments. We had approximate ly $ 0.6 million and $ 2.0 m illion of contract liabilities as of September 30, 2023 and December 31, 2022, respectively. For the three and nine months ended September 30, 2023, revenues of $ 0.3 million and $ 1.6 million, respectively, were recognized and included in the balances as of June 30, 2023 and December 31, 2022. For the three and nine months ended September 30, 2022, revenues of $ 0.2 million and $ 1.5 million, respectively, were reco gnized and included in the balance as of June 30, 2022 and December 31, 2021, respectively. For most of our contracts with customers, the transaction price from the inception of a contract is constrained to a short period of time (generally one month) as these contracts contain terms with variable consideration related to both price and quantity. At September 30, 2023, we have remaining performance obligations with certain customer contracts, excluding contract s with original durations of less than one year and for service contracts for which we have elected the practical expedient for consideration recognized in revenue as invoiced. The remaining performance obligations totals approximately $ 76.6 million, of which approximately 52 % of this amount relates to 2023 through 2025 , approximately 31 % relates to 2026 through 2027 , with the remainder thereafter. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions As of September 30, 2023, we had one outstanding financing arrangement with an affiliate of Eldridge as discussed in footnote (C) of Note 4. An affiliate of Eldridge holds $ 30 million of the Senior Secured Notes. During the third quarter of 2022, under a previously authorized repurchase program we repurchased approximately 5.5 million shares of our common stock at an average cost of approximately $ 12 per share in connection with a public offering by LSB Funding and SBT Investors, each of which is an affiliate of Eldridge . We were party to a death benefit agreement (“2005 Agreement”) with Jack E. Golsen (“J. Golsen”), who retired as Executive Chairman of the Board, effective December 31, 2017 . The 2005 Agreement provided that, upon J. Golsen’s death, we would pay to the designated beneficiary a lump-sum payment of $ 2.5 million. J. Golsen passed away in April 2022. Further, we maintained and owned a life insurance policy with a face value of $ 3.0 million for which we were the beneficiary. The policy did not have any cash surrender value, premium payments were current, and the policy was in force at the time of Golsen’s death. We received the settlement payment of $ 3.0 million and paid the death benefit of $ 2.5 million in July 2022. We recorded $ 3.0 million in a settlement of life insurance presented within non-operating other expense (income), net within our condensed consolidated statements of operations for the nine months ended September 30, 2022. The settlement of life insurance is included in our condensed consolidated statement of cash flows in “Other” investing activities. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 10. Supplemental Cash Flow Information The following provides additional information relating to cash flow activities: Nine Months Ended September 30, 2023 2022 (In Thousands) Cash payments (refunds) for: Income taxes, net $ 1,658 $ 1,320 Noncash investing and financing activities: Property, plant and equipment acquired and not yet paid at end of period $ 18,102 $ 29,752 (Gain) loss on extinguishment of debt $ ( 8,644 ) $ 113 Accounts payable associated with debt-related costs $ — $ 385 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation – LSB and its subsidiaries are consolidated in the accompanying condensed consolidated financial statements. LSB is a holding company with no significant operations or assets other than cash, cash equivalents, short-term investments and investments in its subsidiaries. All intercompany accounts and transactions have been eliminated. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. |
Nature of Business | Nature of Business – We are engaged in the manufacture and sale of chemical products. The chemical products we primarily manufacture, market and sell are ammonia, fertilizer grade ammonium nitrate (“AN” and “HDAN”) and urea ammonium nitrate ("UAN") for agricultural applications, high purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide and diesel exhaust fluid for industrial applications and industrial grade AN (“LDAN”) and solutions for the mining industry. We manufacture and distribute our products in four facilities; three of which we own and are located in El Dorado, Arkansas (the “El Dorado Facility”); Cherokee, Alabama (the “Cherokee Facility”); and Pryor, Oklahoma (the “Pryor Facility”); and one of which we operate on behalf of Covestro in Baytown, Texas. Sales to customers include farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the United States (“U.S.”); industrial users of acids throughout the U.S. and parts of Canada; and explosive manufacturers in the U.S. and parts of Mexico, Canada and the Caribbean. These interim results are not necessarily indicative of results for a full year due, in part, to the seasonality of our sales of agricultural products and the timing of performing our major plant maintenance activities. Our selling seasons for agricultural products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November. |
Use of Estimates | Use of Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Repurchase Program | Repurchase Program – In May 2023, our Board of Directors (our “Board”) authorized a $ 150 million stock repurchase program. Total repurchase authority remaining under the repurchase program wa s $ 132 million as of September 30, 2023. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing securities, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate us to purchase any particular number or type of securities. During the third quarter of 2023, we repurchased approximately 60 thousand shares of common stock at an average cost of $ 9.78 per share. |
Short-Term Investments | Short-Term Investments - Investments, which consist of U.S. treasury bills with an original maturity up to and less than 52 weeks, are considered short-term investments and are classified as Level 1. We plan to hold these investments to maturity and have a history of holding investments to maturity. Due to the nature of these investments, as U.S. treasury securities, no impairment is anticipated. |
Accounts Receivable | Accounts Receivable – Our accounts receivable are presented at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any estimate of expected credit losses. Our estimate is based on historical experience and periodic assessment, particularly on accounts that are past due (based upon the terms of the sale). Our periodic assessment is based on our best estimate of amounts that are not recoverable which includes a present collectability review and forward looking assessment, where applicable. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets –Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An asset’s fair value must be determined when the carrying amount of an asset (asset group) exceeds the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and/or its eventual disposition. If assets to be held and used are considered to be impaired, the impairment to be recognized is the amount by which the carrying amounts of the assets exceed the fair values of the assets as measured by the present value of future net cash flows expected to be generated by the assets or their appraised value. In general, and depending on the event or change in circumstances, our asset groups are reviewed for impairment on a facility-by-facility basis (such as the Cherokee Facility, El Dorado Facility or Pryor Facility) |
Short Term Financing | Short-Term Financing – Our short-term financing represents the short-term note related to financing of our insurance premium, which are renewed annually during November. |
Contingencies | Contingencies – Certain conditions may exist which may result in a loss, but which will only be resolved when future events occur. We and our legal counsel assess such contingent liabilities and such assessment inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a loss has been incurred, we would accrue for such contingent losses when such losses can be reasonably estimated. If the assessment indicates that a potentially material loss contingency is not probable but reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Estimates of potential legal fees and other directly related costs associated with contingencies are not accrued but rather are expensed as incurred. Loss contingency liabilities are included in current and noncurrent accrued and other liabilities and are based on current estimates that may be revised in the near term. In addition, we recognize contingent gains when such gains are realized or when the contingencies have been resolved (generally at the time a settlement has been reached). |
Derivatives, Hedges and Financial Instruments | Derivatives, Hedges and Financial Instruments – Periodically, we entered into certain forward natural gas contracts. Whenever we have such derivative contracts outstanding, they are recognized in the balance sheet and measured at fair value. Changes in fair value of derivatives are recorded in results of operations unless the normal purchase or sale exceptions apply, or hedge accounting is elected. The fair value amounts recognized for our derivative contracts executed with the same counterparty under a master netting arrangement may be offset. We have the choice to offset or not, but that choice must be applied consistently. A master netting arrangement exists if the reporting entity has multiple contracts with a single counterparty that are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. Offsetting the fair values recognized for the derivative contracts outstanding with a single counterparty results in the net fair value of the transactions reported as an asset or a liability in the balance sheet. When applicable, we present the fair values of our derivative contracts under master netting agreements using a gross fair value presentation. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: Level 1 - Valuations of contracts classified as Level 1 are based on quoted prices in active markets for identical contracts. Level 2 - Valuations of contracts classified as Level 2 are based on quoted prices for similar contracts and valuation inputs other than quoted prices that are observable for these contracts. Level 3 - Valuations of assets and liabilities classified as Level 3 are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. |
Leases | Leases – We determine if an arrangement is a lease at inception or modification of a contract and classify each lease as either an operating or finance lease based on the terms of the contract. We reassess lease classification subsequent to commencement upon a change to the expected lease term or a modification to the contract. A contract contains a lease if the contract conveys the right to control the use of the identified property or equipment, explicitly or implicitly, for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and obtain substantially all of the economic benefit from the use of the underlying asset. An operating lease asset represents our right to use the underlying asset as a lessee for the lease term and an operating lease liability represents our obligation to make lease payments arising from the lease. Currently, most of our leases are classified as operating leases and primarily relate to railcars, other equipment and office space. Our leases that are classified as finance leases and other leases under which we are the lessor are not material. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made. Our current leases do not contain residual value guarantees. Most of our leases do not include options to extend or terminate the lease prior to the end of the term. Leases with a term of 12 months or less are not recognized in the balance sheet. Since our leases generally do not provide an implicit rate, we use our incremental borrowing rate based on the lease term and other information available at the commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the applicable lease term. As of September 30, 2023, we have executed operating leases with lease terms greater than one year, with total payments of approximatel y $ 5.8 mill ion which have not yet commenced. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB") in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. We consider the applicability and impact of all ASUs. ASUs issued and outstanding or that became effective since January 1, 2023 through the date of these financial statements were assessed and determined not to be applicable or are expected to have minimal impact on our condensed consolidated financial position and results of operations. |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Common Share | Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands, Except Per Share Amounts) Numerator: Net (loss) income $ ( 7,726 ) $ 2,312 $ 33,270 $ 164,477 Numerator for basic and diluted net (loss) $ ( 7,726 ) $ 2,312 $ 33,270 $ 164,477 Denominator: Denominator for basic net income (loss) per 73,992 84,187 74,946 86,929 Effect of dilutive securities: Unvested restricted stock and stock units — 1,328 533 1,352 Dilutive potential common shares — 1,328 533 1,352 Denominator for diluted net income (loss) per 73,992 85,515 75,479 88,281 Basic net (loss) income per common share $ ( 0.10 ) $ 0.03 $ 0.44 $ 1.89 Diluted net (loss) income per common share $ ( 0.10 ) $ 0.03 $ 0.44 $ 1.86 (1) Excludes the weighted-average shares of unvested restricted stock that are contingently issuable. |
Antidilutive Securities Excluded from Computation of Diluted Net Income Per Common Share | The following weighted-average shares of securities were not included in the computation of diluted net income per common share as their effect would have been antidilutive: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Restricted stock and stock units 1,422,181 146,537 429,339 76,204 Stock options 13,000 13,000 13,000 13,000 1,435,181 159,537 442,339 89,204 |
Current and Noncurrent Accrue_2
Current and Noncurrent Accrued and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Current and Noncurrent Accrued and Other Liabilities | September 30, December 31, 2023 2022 (In Thousands) Accrued interest $ 13,477 11,196 Current portion of operating lease liabilities 8,917 7,259 Accrued payroll and benefits 6,950 12,440 Other 8,573 8,097 37,917 38,992 Less noncurrent portion 522 522 Current portion of accrued and other liabilities $ 37,395 $ 38,470 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Credit Facility and Long-Term Debt | Our long-term debt consists of the following: September 30, December 31, 2023 2022 (In Thousands) Working Capital Revolver Loan, with a current interest 9.00 % (A) $ — $ — Senior Secured Notes due 2028, with an interest 6.25 % (B) 575,000 700,000 Secured Financing due 2025, with an interest 8.75 % (C) 15,459 19,277 Secured Financing due 2023, with an interest 8.32 % (D) — 4,161 Other 1,008 1,138 Unamortized debt issuance costs ( 8,801 ) ( 12,321 ) 582,666 712,255 Less current portion of long-term debt 5,493 9,522 Long-term debt due after one year, net $ 577,173 $ 702,733 (A) Our revolving credit facility, as amended (the “Working Capital Revolver Loan”), provides for advances up to $ 65 million (the “Maximum Revolver Amount”), based on specific percentages of eligible accounts receivable and inventories and up to $ 10 million of letters of credit. We had outstanding letters of credit as of September 30, 2023 of $ 2.0 million, which reduces the amount available for borrowing under the Working Capital Revolver Loan. At September 30, 2023, our available borrowings under our Working Capital Revolver Loan were approximately $ 42.4 million. The maturity date of the Working Capital Revolver Loan is on the earlier of (i) the date that is 90 days prior to the earliest stated maturity date of the Senior Secured Notes (unless refinanced or repaid) and (ii) February 26, 2024 . Subject to certain conditions and subject to lender approval, the Maximum Revolver Amount may increase up to an additional $ 10 million. The Working Capital Revolver Loan also provides for a springing financial covenant (the “Financial Covenant”), which requires that, if the borrowing availability is less than 10.0 % of the total revolver commitments , then the borrowers must maintain a minimum fixed charge coverage ratio of not less than 1.00 to 1.00. The Financial Covenant, if triggered, is tested monthly. Interest accrues on outstanding borrowings under the Working Capital Revolver Loan at a rate equal to, at our election, either (a) SOFR for an interest period selected by us plus a SOFR adjustment e qual to 0.10 % per an num plus an applicable margin equal to 1.50 % per annum or 1.75 % per annum, depending on borrowing availability under the Working Capital Revolver Loan, or (b) Wells Fargo Capital Finance’s prime rate plus an applicable margin equal to 0.50 % per annum or 0.75 % per annum, depending on borrowing availability under the Working Capital Revolver Loan. Interest is paid quarterly, if applicable. During the second quarter of 2023 the LIBOR rate component included in our Working Capital Revolver Loan was converted to SOFR as use of LIBOR was discontinued. (B) On October 14, 2021, LSB completed the issuance and sale of $ 500 million aggregate principal amount of the Notes of its 6.25 % Senior Secured Notes due 2028 (the “Notes”), pursuant to an indenture (the “Indenture”), dated as of October 14, 2021. The Notes were issued at a price equal to 100 % of their face value. On March 8, 2022, LSB completed the issuance and sale of an additional $ 200 million aggregate principal amount of the Notes (the “New Notes”), which were issued pursuant to the Indenture (the Notes together with the New Notes, the “Senior Secured Notes”). The New Notes were issued at a price equal to 100 % of their face value, plus accrued interest from October 14, 2021 to March 7, 2022. The Senior Secured Notes mature on October 15, 2028 . Interest is to be paid in arrears on May 15 and October 15. During the second quarter of 2023 we repurchased $ 125 million in principal amount of our Senior Secured Notes for approximately $ 114.3 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a gain on extinguishment of approximately $ 8.6 million. (C) In August 2020, El Dorado Ammonia L.L.C. (“EDA”), one of our subsidiaries, entered into a $ 30 million secured financing arrangement with an affiliate of Eldridge Industries, L.L.C. (“Eldridge”). Beginning in September 2020, principal and interest is payable in 60 equal monthly installments with a final balloon payment of approximately $ 5 million due in August 2025 . This financing arrangement is secured by an ammonia storage tank and is guaranteed by LSB. (D) During the second quarter 2023, El Dorado Chemical Company (“EDC”), one of our subsidiaries, made the final balloon payment of approximately $ 3 million on a secured financing arrangement with an affiliate of Eldridge. |
Derivatives, Hedges and Finan_2
Derivatives, Hedges and Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Financial Instruments | At September 30, 2023 and December 31, 2022, we did no t have any financial instruments with fair values materially different from their carrying amounts (which excludes issuance costs, if applicable) except for our Senior Secured Notes included in the table below. The Senior Secured Notes are classified as a Level 2 fair value measurement. The fair value of financial instruments is not indicative of the overall fair value of our assets and liabilities since financial instruments do not include all assets, including intangibles and all liabilities. September 30, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value (In Millions) Senior Secured Notes (1) $ 575 $ 520 $ 700 $ 637 1. Based on a quoted price of 90.50 at September 30, 2023 and 91.00 at December 31, 2022. Also see discussion in Note 4 (B). |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
(Benefit) Provision for Income Taxes | (Benefit) provision for income taxes is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands) Current: Federal $ — $ — $ — $ — State ( 396 ) 170 739 1,067 Total Current $ ( 396 ) $ 170 $ 739 $ 1,067 Deferred: Federal $ ( 2,955 ) $ 1,557 $ 8,139 $ 32,236 State ( 1,898 ) ( 947 ) ( 5,256 ) ( 1,026 ) Total Deferred $ ( 4,853 ) $ 610 $ 2,883 $ 31,210 (Benefit) provision for income taxes $ ( 5,249 ) $ 780 $ 3,622 $ 32,277 |
Net Sales (Tables)
Net Sales (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Sales Disaggregated by Principal Markets | The following table presents our net sales disaggregated by our principal product types: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In Thousands) Net sales: AN & Nitric Acid $ 46,026 $ 66,161 $ 173,859 $ 234,103 Urea ammonium nitrate (UAN) 30,090 50,459 117,585 184,014 Ammonia 26,823 52,075 129,850 200,861 Other 11,348 15,578 39,802 49,079 Total net sales $ 114,287 $ 184,273 $ 461,096 $ 668,057 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Additional Information Relating to Cash Flow Activities | The following provides additional information relating to cash flow activities: Nine Months Ended September 30, 2023 2022 (In Thousands) Cash payments (refunds) for: Income taxes, net $ 1,658 $ 1,320 Noncash investing and financing activities: Property, plant and equipment acquired and not yet paid at end of period $ 18,102 $ 29,752 (Gain) loss on extinguishment of debt $ ( 8,644 ) $ 113 Accounts payable associated with debt-related costs $ — $ 385 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) Facility | May 31, 2023 USD ($) | |
Equity, Class of Treasury Stock [Line Items] | |||
Number of facilities for manufacture and distribution of products | Facility | 4 | ||
Stock repurchase program, authorized amount | $ 150 | ||
Stock repurchase program, remaining authorized amount | $ 132 | $ 132 | |
Lease obligations not yet commenced | $ 5.8 | $ 5.8 | |
Common Stock [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, number of shares repurchased | shares | 60 | ||
Stock repurchase program, average cost of repurchased shares | $ / shares | $ 9.78 |
Income Per Common Share - Compu
Income Per Common Share - Computation of Basic and Diluted Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||||||
Net Income (Loss) | $ (7,726) | $ 25,095 | $ 15,901 | $ 2,312 | $ 103,399 | $ 58,766 | $ 33,270 | $ 164,477 |
Numerator for basic net (loss) income per common share | (7,726) | 2,312 | 33,270 | 164,477 | ||||
Numerator for diluted net (loss) income per common share | $ (7,726) | $ 2,312 | $ 33,270 | $ 164,477 | ||||
Denominator: | ||||||||
Denominator for basic net income (loss) per common share - adjusted weighted-average shares | 73,992 | 84,187 | 74,946 | 86,929 | ||||
Effect of dilutive securities: | ||||||||
Unvested restricted stock and stock units | 1,328 | 533 | 1,352 | |||||
Dilutive potential common shares | 1,328 | 533 | 1,352 | |||||
Denominator for diluted net income (loss) per common share - adjusted weighted-average shares | 73,992 | 85,515 | 75,479 | 88,281 | ||||
Basic net (loss) income per common share | $ (0.1) | $ 0.03 | $ 0.44 | $ 1.89 | ||||
Diluted net (loss) income per common share | $ (0.1) | $ 0.03 | $ 0.44 | $ 1.86 |
Income Per Common Share - Antid
Income Per Common Share - Antidilutive Securities Excluded from Computation of Diluted Net Income Per Common Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,435,181 | 159,537 | 442,339 | 89,204 |
Restricted Stock and Stock Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,422,181 | 146,537 | 429,339 | 76,204 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,000 | 13,000 | 13,000 | 13,000 |
Current and Noncurrent Accrue_3
Current and Noncurrent Accrued and Other Liabilities - Summary of Current and Noncurrent Accrued and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 13,477 | $ 11,196 |
Current portion of operating lease liabilities | $ 8,917 | $ 7,259 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of accrued and other liabilities | Current portion of accrued and other liabilities |
Accrued payroll and benefits | $ 6,950 | $ 12,440 |
Other | 8,573 | 8,097 |
Total current and noncurrent accrued liabilities | 37,917 | 38,992 |
Less noncurrent portion | 522 | 522 |
Current portion of accrued and other liabilities | $ 37,395 | $ 38,470 |
Long-Term Debt - Schedule of Re
Long-Term Debt - Schedule of Revolving Credit Facility and Long-Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (8,801) | $ (12,321) |
Long-term debt | 582,666 | 712,255 |
Less current portion of long-term debt | 5,493 | 9,522 |
Long-term debt due after one year, net | 577,173 | 702,733 |
6.25% Senior Secured Notes Due 2028 [Member] | ||
Debt Instrument [Line Items] | ||
Debt carrying amount | 575,000 | 700,000 |
8.75% Secured Financing Due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Debt carrying amount | 15,459 | 19,277 |
8.32% Secured Financing Due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Debt carrying amount | 4,161 | |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Debt carrying amount | $ 1,008 | $ 1,138 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Revolving Credit Facility and Long-Term Debt (Parenthetical) (Detail) | Sep. 30, 2023 | Dec. 31, 2022 |
9.00% Working Capital Revolver Loan [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate | 9% | 9% |
6.25% Senior Secured Notes Due 2028 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, effective Interest Rate | 6.25% | 6.25% |
8.75% Secured Financing Due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, effective Interest Rate | 8.75% | 8.75% |
8.32% Secured Financing Due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, effective Interest Rate | 8.32% | 8.32% |
Long-Term Debt - Working Capita
Long-Term Debt - Working Capital Revolver Loan and Senior Secured Notes - Additional Information (Detail) - USD ($) | 6 Months Ended | 9 Months Ended | ||||
Mar. 08, 2022 | Oct. 14, 2021 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 28, 2019 | |
Debt Instrument [Line Items] | ||||||
(Gain) loss on extinguishment of debt | $ (8,644,000) | $ 113,000 | ||||
Working Capital Revolver Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount of revolving credit facility | $ 65,000,000 | |||||
Revolving credit facility, increase (decrease), net | 10,000,000 | |||||
Amount available for borrowing | $ 42,400,000 | |||||
Maturity date | Feb. 26, 2024 | |||||
Working Capital Revolver Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 0.10% | |||||
Working Capital Revolver Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument basis spread on variable rate | 1.75% | |||||
Working Capital Revolver Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument basis spread on variable rate | 1.50% | |||||
Working Capital Revolver Loan [Member] | Prime Rate [Member] | Maximum [Member] | Wells Fargo Capital Finance, Inc. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument basis spread on variable rate | 0.75% | |||||
Working Capital Revolver Loan [Member] | Prime Rate [Member] | Minimum [Member] | Wells Fargo Capital Finance, Inc. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument basis spread on variable rate | 0.50% | |||||
Springing Financials Covenant [Member] | Working Capital Revolver Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital revolver loan requirements | borrowers must maintain a minimum fixed charge coverage ratio of not less than 1.00 to 1.00. | |||||
Maximum revolver commitment available, percentage | 10% | |||||
Loan requirements description | less than 10.0% of the total revolver commitments | |||||
Fixed charge coverage ratio | 100% | |||||
6.25% Senior Secured Notes Due 2028 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Oct. 15, 2028 | |||||
Debt issued - principal amount | $ 200,000,000 | $ 500,000,000 | ||||
Debt instrument, interest rate | 6.25% | |||||
Debt instrument, maturity term | 2028 | |||||
Debt instrument issued price percentage | 100% | 100% | ||||
Repurchase of debt instrument | $ 125,000,000 | |||||
Extinguishment of debt | 114,300,000 | |||||
(Gain) loss on extinguishment of debt | $ 8,600,000 | |||||
8.75% Secured Financing Due 2025 [Member] | El Dorado Ammonia L.L.C. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Aug. 31, 2025 | |||||
Debt issued - principal amount | $ 30,000,000 | |||||
Debt instrument, frequency of interest payment | principal and interest is payable in 60 equal monthly installments with a final balloon payment of approximately $5 million due in August 2025 | |||||
Final balloon payment | $ 5,000,000 | |||||
8.32% Secured Financing Due 2023 [Member] | El Dorado Chemical Company [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Final balloon payment | 3,000,000 | |||||
Letter of Credit [Member] | Working Capital Revolver Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount of revolving credit facility | $ 10,000,000 | |||||
Letters of credit outstanding | $ 2,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) MMBTU in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) Settlement $ / MMBTU | Sep. 30, 2022 USD ($) | Mar. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) MMBTU Settlement $ / MMBTU | Sep. 30, 2022 USD ($) | Oct. 18, 2023 USD ($) | Mar. 31, 2016 USD ($) | |
Commitments And Contingencies [Line Items] | |||||||
Accrued liabilities for environmental matters | $ 500,000 | $ 500,000 | |||||
Percentage of payment of investigation costs agreed by Hallowell Facility | 50% | ||||||
Insurance coverage of general liability and auto liability risks | $ 100,000,000 | $ 100,000,000 | |||||
Product liability deductible per claim | $ 300,000 | ||||||
Confidential settlement agreement with family groups | Settlement | 3 | 3 | |||||
Liability reserve | $ 0 | $ 0 | |||||
Interest Expense, Total | 7,165,000 | $ 12,193,000 | 31,213,000 | $ 34,455,000 | |||
Depreciation, Depletion and Amortization, Total | 49,852,000 | $ 50,013,000 | |||||
Global Industrial Inc [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Amount awarded for labor, service, materials and other | $ 7,400,000 | ||||||
Prejudgment interest | 1,300,000 | ||||||
Leidos Constructors, LLC [Member] | Global Industrial Inc [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Property, Plant and Equipment, Gross, Total | $ 7,400,000 | ||||||
Accounts Payable and Accrued Liabilities, Current, Total | 9,800,000 | ||||||
Pre and Post Judgement Accrued Interest | $ 2,400,000 | ||||||
Interest Expense, Total | 2,400,000 | 2,400,000 | |||||
Depreciation, Depletion and Amortization, Total | $ 1,800,000 | $ 1,800,000 | |||||
Percentage of accrued post judgement interests | 4.25% | ||||||
Leidos Constructors, LLC [Member] | Global Industrial Inc [Member] | Accounts Payable [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Claim amount not approved for payment | $ 3,500,000 | $ 3,500,000 | |||||
Natural Gas Purchase Commitments [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Natural gas purchase commitments volume | MMBTU | 7.2 | ||||||
Weighted average price of natural gas per unit | $ / MMBTU | 3.93 | 3.93 | |||||
Weighted average purchase price of natural gas | $ 28,500,000 | ||||||
Weighted average natural gas market price per unit | $ / MMBTU | 2.77 | 2.77 | |||||
Weighted average natural gas market price | $ 20,000,000 |
Derivatives, Hedges and Finan_3
Derivatives, Hedges and Financial Instruments - Additional Information (Detail) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) MMBTU | Dec. 31, 2022 USD ($) MMBTU | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Financial instruments with fair values | $ | $ 0 | $ 0 |
Natural Gas Purchase Commitments [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Natural gas purchase commitments volume | 7,200,000 | |
Natural Gas Purchase Commitments [Member] | Level 2 [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Natural gas purchase commitments volume | 0 | 0 |
Derivatives, Hedges and Finan_4
Derivatives, Hedges and Financial Instruments - Summary of Financial Instruments (Detail) - Senior Notes - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Carrying Amount | $ 575 | $ 700 |
Estimated Fair Value | $ 520 | $ 637 |
Derivatives, Hedges and Finan_5
Derivatives, Hedges and Financial Instruments - Summary of Financial Instruments (Parenthetical) (Detail) | Sep. 30, 2023 | Dec. 31, 2022 |
Offsetting [Abstract] | ||
Quoted price | 90.50 | 91 |
Income Taxes - (Benefit) Provis
Income Taxes - (Benefit) Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Current: | ||||
State | $ (396) | $ 170 | $ 739 | $ 1,067 |
Total Current | (396) | 170 | 739 | 1,067 |
Deferred: | ||||
Federal | (2,955) | 1,557 | 8,139 | 32,236 |
State | (1,898) | (947) | (5,256) | (1,026) |
Total Deferred | (4,853) | 610 | 2,883 | 31,210 |
(Benefit) provision for income taxes | $ (5,249) | $ 780 | $ 3,622 | $ 32,277 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||||
Provision for income taxes | $ (5,249) | $ 780 | $ 3,622 | $ 32,277 |
Percentage of provision on pre-tax income | 9.80% | 16.40% | ||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance reduction, Change | $ 1,300 | $ 1,300 |
Net Sales - Summary of Net Sale
Net Sales - Summary of Net Sales Disaggregated by Principal Markets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net sales: | ||||
Net sales | $ 114,287 | $ 184,273 | $ 461,096 | $ 668,057 |
Chemical | ||||
Net sales: | ||||
Net sales | 114,287 | 184,273 | 461,096 | 668,057 |
Chemical | AN and Nitric Acid | ||||
Net sales: | ||||
Net sales | 46,026 | 66,161 | 173,859 | 234,103 |
Chemical | Urea ammonium nitrate (UAN) | ||||
Net sales: | ||||
Net sales | 30,090 | 50,459 | 117,585 | 184,014 |
Chemical | Ammonia | ||||
Net sales: | ||||
Net sales | 26,823 | 52,075 | 129,850 | 200,861 |
Chemical | Other | ||||
Net sales: | ||||
Net sales | $ 11,348 | $ 15,578 | $ 39,802 | $ 49,079 |
Net Sales - Additional Informat
Net Sales - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||||
Revenue, remaining performance obligation, expected timing of satisfaction, description | contracts have an original expected duration of one year or less, for our contracts with a duration greater than one year at contract inception, the average remaining expected duration was approximately 26 months | ||||
Contract liabilities | $ 600 | $ 600 | $ 2,000 | ||
Contract with customer, liability partially offset revenue recognized | 300 | $ 200 | 1,600 | $ 1,500 | |
Amount of remaining performance obligation | 76,600 | 76,600 | |||
Accounts receivable | $ 47,303 | $ 47,303 | $ 75,494 |
Net Sales - Additional Inform_2
Net Sales - Additional Information (Detail 1) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-07-01 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, percent | 52% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 30 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, percent | 31% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 28, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | May 31, 2023 | |
Related Party Transaction [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 150,000,000 | |||||
Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Stock repurchase program, average cost of repurchased shares | $ 9.78 | |||||
Eldridge [Member] | Senior Secured Notes [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt issued - principal amount | $ 30,000,000 | $ 30,000,000 | ||||
Jack E. Golsen [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment of death benefits | $ 2,500,000 | |||||
Retirement date | Dec. 31, 2017 | |||||
Minimum amount of life insurance policy to be kept by the company for 2005 Agreement | $ 2,500,000 | |||||
Face value of life insurance policies | $ 3,000,000 | $ 3,000,000 | ||||
Gain on insurance settlement | $ 3,000,000 | |||||
Settlement payment received | $ 3,000,000 | |||||
LSB Funding [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Stock repurchase authorized | 5.5 | 5.5 | ||||
Stock repurchase acquired, average cost per share | $ 12 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Additional Information Relating to Cash Flow Activities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash payments (refunds) for: | ||
Income taxes, net | $ 1,658 | $ 1,320 |
Noncash investing and financing activities: | ||
Property, plant and equipment acquired and not yet paid at end of period | 18,102 | 29,752 |
(Gain) loss on extinguishment of debt | $ (8,644) | 113 |
Accounts payable associated with debt-related costs | $ 385 |