LSB Industries,Announces Inc. (NYSE: LXU), a leading producer of industrial and agricultural chemicals, today announced its financial and operational results for the first quarter ended March 31, 2025. Despite macroeconomic challenges and volatility in input costs, the company demonstrated operational resilience, strategic advancements in its low-carbon initiatives, and continued focus on enhancing shareholder value.
Financial Performance Overview
For the first quarter of 2025, LSB Industries reported net sales of $143.4 million, a 3.8% increase compared to $138.2 million during the same period in 2024. This improvement was largely driven by higher product volumes and improved pricing for select nitrogen-based products. However, the company recorded a net loss of $1.6 million for the quarter, down from a net income of $5.6 million in Q1 2024. The resulting diluted earnings per share were negative at $(0.02), compared to positive earnings of $0.08 per share in the prior-year quarter.
Adjusted EBITDA for the quarter came in at $29.1 million, compared to $32.6 million for Q1 2024, reflecting the impact of elevated natural gas prices, which partially offset the gains from increased production and stronger market prices. As of March 31, 2025, the company held total cash, cash equivalents, and short-term investments of approximately $163.5 million, against a total debt of $485.9 million.
Operational and Safety Achievements
Chairman and CEO Mark Behrman highlighted the company’s exceptional safety performance during the quarter, stating that LSB recorded zero recordable injuries across its operations—a notable achievement that underscores the company’s commitment to safety and operational excellence.
“Safety continues to be a top priority at LSB,” said Behrman. “We are extremely proud of our teams for delivering another quarter without a single recordable injury. This reflects the cultural commitment we’ve instilled across our facilities and aligns with our broader strategy of continuous improvement.”
Production and Market Trends
Behrman also noted that the company saw a 4% year-over-year increase in overall sales volumes during the quarter, fueled by higher production of urea ammonium nitrate (UAN) and ammonium nitrate (AN). The company has been implementing reliability and operational enhancements across its facilities, which are now yielding measurable improvements.
“We produced more ammonia this quarter than in Q1 2024, and we successfully converted a larger portion of that ammonia into higher-margin products such as UAN and AN,” Behrman explained. “Additionally, the ammonia we did sell commanded stronger prices than we saw in the same period last year. Unfortunately, a sharp increase in natural gas prices—our primary input cost—eroded some of these gains.”
Despite this, Behrman expressed cautious optimism regarding input costs. “Natural gas markets remain volatile due to global economic uncertainty, but we’ve seen a recent moderation in prices. If this trend holds, we anticipate cost benefits starting to show in our second-quarter results.”
Favorable Agricultural and Industrial Demand
LSB continues to benefit from robust demand in both agricultural and industrial end markets. According to Behrman, U.S. corn plantings for Spring 2025 are expected to reach historically high levels, providing a strong backdrop for nitrogen fertilizer demand.
“Corn prices remain favorable, supporting continued strength in fertilizer applications,” he noted. “This spring, we experienced a healthy ammonia application season, and UAN prices are currently well above year-ago levels.”
The industrial segment also performed well, with continued strong demand for nitric acid and ammonium nitrate in commercial and specialty markets.
Tariff-Related Uncertainties and Cost Management
Addressing broader economic uncertainties, Behrman noted that while tariffs and global trade tensions are introducing complexity, the direct impact on LSB’s markets has been limited so far.
“Our exposure to tariffs on the revenue side is modest—less than 10% of our sales are international,” he said. “The more significant challenge lies in the potential cost increases for equipment, parts, and components sourced from abroad, especially from Europe. We’re actively working to localize our supply chains and reduce our exposure to international cost volatility where possible.”
Capital Allocation and Strategic Investments
LSB remains committed to prudent capital management. The company intends to continue investing in its core facilities to drive improvements in reliability and efficiency. Once these foundational goals are met, LSB will explore strategic growth initiatives designed to expand earnings while maintaining a disciplined leverage profile.
“Our balance sheet is strong, and we plan to use it wisely,” Behrman said. “We will continue prioritizing internal investments that boost margins and production reliability, but we will also keep a close eye on leverage, especially as economic uncertainty persists.”
Low-Carbon Initiatives and Decarbonization Strategy
A significant milestone during the quarter was achieved at the company’s El Dorado, Arkansas facility. The site was granted pre-certification status for low-carbon ammonia under The Fertilizer Institute’s Verified Ammonia Carbon Intensity program. Only four facilities across North America have received this designation, placing LSB at the forefront of sustainable chemical manufacturing.
“With this certification, we are better positioned to secure offtake agreements for low-carbon ammonia and its upgraded derivatives,” said Behrman. “This is an important validation of our progress toward reducing the carbon intensity of our operations.”
The El Dorado plant is expected to begin producing low-carbon ammonium nitrate solution by the end of 2026, marking a major step in LSB’s sustainability journey.
Houston Ship Channel Project Paused
Amid cost inflation driven by tariffs and global supply chain uncertainties, along with slower-than-expected growth in demand for low-carbon ammonia, LSB has decided to pause development on its planned Houston Ship Channel project.
“We believe it is prudent to delay this project until we have greater clarity around costs and market adoption,” said Behrman. “While we remain committed to expanding our low-carbon product line, we will do so in a financially disciplined manner.”
