Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations
This discussion is intended to provide a reader of our financial statements with management’s perspective on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Investors should read the following discussion and analysis in conjunction with the consolidated financial statements and related notes included in “ Item 1. Financial Statements .” Notes referenced in this discussion and analysis refer to the notes to consolidated financial statements that are found in “ Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements .” Certain statements contained in this discussion may be deemed to be forward-looking statements. See “ Special Note Regarding Forward-Looking Statements .” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and in our Annual Report on Form 10-K for the year ended December 31, 2024, particularly in the section entitled “ Risk Factors .” Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our” and the “Company” refer to LSB Industries, Inc. and its consolidated subsidiaries.
Overview
General
LSB is headquartered in Oklahoma City, Oklahoma and we manufacture and sell chemical products for the agricultural and industrial markets. We own and operate three multi-plant facilities in Cherokee, Alabama (the “Cherokee Facility”), El Dorado, Arkansas (the “El Dorado Facility”) and Pryor, Oklahoma (the “Pryor Facility”) and operate a facility on behalf of Covestro LLC in Baytown, Texas. Our products are sold through distributors and directly to end customers primarily throughout the United States and other parts of North America.
Key Operating Initiatives for 2025
We expect our future results of operations and financial condition to benefit from the following key initiatives:
• Investing to improve Environmental, Health & Safety and Reliability at our Facilities while Supplying our Customers with Products of the Highest Quality.
▪ We believe that our operational progress over the past several years represents proof that high safety standards not only enable us to protect what matters, which is the well-being of our employees, but also translates into improved plant performance. In 2025, we remain focused on our efforts to further the progress we have made with our safety programs to move closer to attaining zero injuries. We have been investing and plan to continue to invest additional capital at all three of our facilities during 2025 to build upon the success we have had in implementing enhanced safety programs during the last several years.
▪ We have multiple initiatives underway focused on continuing to improve the reliability of our plants as we advance towards our ammonia on-stream operating rate target and increase our production volumes of ammonia and other downstream products. Progress towards these targets would enable us to produce greater volumes of product for sale while lowering our unit cost of production thereby increasing our overall profitability. Additionally, our product quality program continues to focus on providing products to our customers that meet our quality standards.
• Continued Optimization and Increase the Breadth of Distribution of our Product Mix. We have initiatives underway to increase the distribution of our products within our industrial end markets, among other product mix optimization strategies. We believe that these initiatives and strategies, combined with continued expansion of our customer relationships, the robust market analysis capabilities we have developed, and the establishment of in-market tank storage and distribution terminals, will make us more effective in identifying and capitalizing on the most profitable distribution opportunities for our products, while making our financial results more stable and predictable. Additionally, we have completed and are advancing several capital improvement projects with the intention of increasing our sales volumes of higher value downstream products resulting in improvements in our overall profit margins.
• Development of Low Carbon Ammonia and Other Products. The reduction of greenhouse gas emissions, particularly related to carbon dioxide, has been and we expect will increasingly become a global environmental priority. Ammonia has continued to emerge as one of the more viable alternatives to serve as a hydrogen-based energy source for a variety of applications due to its higher energy density and ease of storage relative to hydrogen gas. Low carbon ammonia can be used as a coal and natural gas substitute in power generation, a zero-carbon fuel in the maritime sector, and as a carbon free fertilizer. If low carbon ammonia were to be adopted for these and other energy needs globally, some studies have indicated that future demand could increase from current levels of global annual production of ammonia.
Low carbon ammonia is produced using natural gas and conventional processes but includes an additional stage where the carbon dioxide emissions are captured and permanently stored in deep underground rock formations. We believe that the resulting low carbon emission product can be sold at a premium to conventional ammonia, to customers seeking to reduce their carbon footprint, particularly in the power generation, marine, industrial, mining and agricultural end markets.
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Additionally, we believe that producers of low carbon ammonia will be eligible for government incentives aimed at promoting carbon capture and sequestration (“CCS”).
We believe we are well-positioned to capitalize on this opportunity given our potential to retrofit our existing plants, which we believe can reduce our time to market for low carbon ammonia and also reduce the upfront capital expenditures necessary to enable us to produce this product. We are currently pursuing projects that could enable us to become a producer and marketer of low carbon ammonia and other derivative products. These projects include a low carbon ammonia project at our El Dorado Facility in collaboration with Lapis Carbon Solutions (“Lapis”) that we expect to be operational by the end of 2026. In January 2025, we achieved pre-certification status under the Fertilizer Institute’s Verified Ammonia Carbon Intensity program. This is a voluntary certification of the carbon footprint of ammonia production at a specific facility, from well to production gate. Our El Dorado ammonia plant is one of four North American plants to have received such a status.
• Evaluate and Pursue Organic Capacity Expansion. We have been evaluating opportunities across all our facilities to increase production capacity through the implementation of several potential debottlenecking projects, particularly at our El Dorado Facility. Initial feasibility studies have pointed to potentially attractive returns for some of these projects. However, given the current high-cost environment and limited resources, coupled with our outlook for moderating selling prices, during 2024 we elected to put the El Dorado expansion projects on hold. We will continue evaluating these projects over the course of 2025 to determine our prospects of moving forward with one or more of them in the future.
• During 2024, we undertook several smaller projects that we expect to enhance our profitability during 2025. These projects include:
▪ Construction of additional AN solution storage and new AN solution rail loading capability at our El Dorado Facility to significantly increase the volume of AN solution sales and increase product optionality at the site. This project was completed during the second quarter of 2025;
▪ Construction of 5,000 tons of additional nitric acid storage at our El Dorado Facility was completed in the latter part of 2024 to help us optimize our product sales mix; and
▪ Expansion of our urea capacity at our Pryor Facility, to enable us to use a portion of the facility’s ammonia output to upgrade to approximately 75,000 additional tons of UAN per year. This project was completed in late 2024 and led to increased UAN sales volumes during the first half of 2025.
• Evaluate Acquisitions of Strategic Assets or Companies. We may evaluate opportunities to acquire strategic assets or companies where we believe those acquisitions will enhance the value of the Company and provide attractive returns. We may consider assets and companies that can provide us with geographic expansion, extend an existing product line, add one or more new product lines, leverage our existing ammonia production capabilities, or complement our existing business lines, among other accretive opportunities.
Recent Business Developments
Advanced Low Carbon Ammonia Initiatives
In May 2024, we announced an agreement to supply, for a five-year period commencing January 1, 2025, up to 150,000 short tons per year of low carbon ammonium nitrate solution (“ANS”) to Freeport Minerals Corporation (“Freeport”). In early 2025 we began supplying conventional ANS to Freeport from our El Dorado Facility, and expect to phase in the low carbon contracted volume in the next year. Freeport intends to use the low carbon ANS purchased from us for its United States copper mining operations.
In April 2022, we entered into an agreement with Lapis to develop a project to capture and sequester CO 2 at our El Dorado Facility. Lapis, backed by Cresta Fund Management, a Dallas-based middle-market infrastructure investment firm, will invest the majority of the capital required for project development. The project is expected to be completed and operational by the end of 2026, subject to the approval of a Class VI permit, at which time CO 2 injections are expected to begin. Once operational, the project at the El Dorado site will initially capture and sequester approximately 400,000 to 500,000 metric tons of CO 2 per year in underground saline aquifers.
The sequestered CO 2 generated from the facility’s ammonia production is expected to qualify for federal tax credits under Internal Revenue Code Section 45Q, which are $85 per metric ton of CO 2 captured and sequestered. Lapis, as the majority owner of the CCS equipment, will earn the 45Q tax credits and will pay us a fee for each ton of CO 2 captured and sequestered by the end of 2026. Once in operation, the sequestered CO 2 is expected to reduce our overall scope 1 GHG emissions by approximately 25% from current levels. In addition, sequestering approximately 400,000 to 500,000 metric tons of CO 2 annually is expected to enable us to produce approximately 305,000 to 380,000 metric tons of low carbon ammonia annually, a product that could potentially be sold at higher price levels than conventional ammonia. In February 2023, a key milestone was achieved in the advancement of our low carbon ammonia project at El Dorado by filing a pre-construction Class VI permit application with the United States Environmental Protection Agency (the “EPA”). The EPA recognized the application as complete in March 2023 and is currently in the review process. In June 2025, Lapis completed the drilling of a stratigraphic injection well at the El Dorado site and has been gathering data
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to support the EPA in its continuing technical review of our Class VI application. Once the project receives EPA approval, we intend to use this well for CO 2 injections.
Higher UAN Prices and Higher AN and UAN Sales Volumes Offset by Higher Natural Gas Input Costs
Second quarter 2025 results were impacted by natural gas input costs, which were higher than they were in the second quarter and full year of 2024. Partially offsetting the impact of higher natural gas prices were increased sales volumes of AN and UAN. Additionally, second quarter 2025 results benefited from higher UAN prices relative to the prior year second quarter.
Ammonia prices currently reflect reduced supply from the Middle East, robust demand in the United States, and higher cost of production in Europe. Global ammonia inventories appear balanced, however, and as the year progresses, pricing may be impacted by the start-up of new production capacity in both the United States and internationally, with at least one new world scale plant expected to come online during 2025.
Pricing for ammonia derivative fertilizer products has been strong. Both urea and UAN prices are currently well above year-ago levels, reflecting a variety of factors including tight global supply with limited inventory in the United States distribution channel; the demand pull of a strong Spring 2025 corn planting season with the United States Department of Agriculture (“USDA”) currently expecting 95 million acres of corn to be planted, up 5% from the 2024 planting season; and a reduced pace of import flow into the United States.
Demand for our industrial products is stable despite global economic concerns. Nitric acid demand has been steady, reflecting the resilience of the U.S. economy and consumer spending levels. Demand for AN for use in mining applications has been bolstered by positive exposure to copper, gold and iron ore, as well as continued attractive market fundamentals for aggregate production relating to infrastructure construction. Economic uncertainty continues to be heightened by the potential impacts of tariffs on global trade flows, consumer prices and production input costs. However, we believe that we have a meaningful degree of downside protection in our industrial business given our diverse customer base which is almost entirely located in the United States, the nature of our contracts and our ability to shift our production mix to products where demand and pricing are strongest.
See a more detailed discussion below under “Key Industry Factors.”
Shift in Production Mix
Over the last several months, we commenced the process of transitioning our production of HDAN, an agricultural/fertilizer product, to ANS, a product used in industrial and mining applications. We expect this transition to be complete and production of HDAN to cease later in the third quarter of 2025. This transition is consistent with our strategy to shift a portion of our sales mix from agricultural sales made at spot market pricing, which can be volatile, towards sales covered under multi-year contracts where we pass through the cost of natural gas feedstock. With the discontinuation of HDAN production, we will also close our agricultural retail location in Elkhart, TX, as its primarily purpose was to sell the HDAN we produced. The process to close this retail location commenced at the beginning of the third quarter of 2025 and will be substantially complete by quarter-end.
Key Industry Factors
Supply and Demand
Fertilizer
The price at which our agricultural products are ultimately sold depends on numerous factors, including the supply and demand for nitrogen fertilizers which, in turn, depends upon world grain demand and production levels, the cost and availability of transportation and storage, weather conditions, competitive pricing and the availability of imports. Additionally, expansions or upgrades of competitors’ facilities and international and domestic political and economic developments continue to play an important role in the global nitrogen fertilizer industry economics. These factors can affect, in addition to selling prices, the level of inventories in the market which can cause price volatility and affect product margins.
From a farmer’s perspective, the demand for fertilizer is affected by the aggregate crop planting decisions including farm economics, weather and fertilizer application rate decisions of individual farmers. Individual farmers make planting decisions based largely on prospective profitability of a harvest, while the specific varieties and amounts of fertilizer they apply depend on factors such as their financial resources, soil conditions, weather patterns and the types of crops planted.
Additionally, changes in corn prices, as well as soybean, cotton and wheat prices, can affect the number of acres of corn planted in a given year and the number of acres planted will drive the level of nitrogen fertilizer consumption, likely affecting prices.
According to the World Agricultural Supply and Demand Estimates Report dated July 11, 2025 (the “July Report”), farmers planted approximately 95.2 million acres of corn in the 2025 planting season, up 5.1% compared to the 2024 planting season. According to the July Report, the USDA estimates the United States ending stocks for the 2025 Harvest will be approximately 42.2 million metric tons, a 24.1% increase from the 2024 Harvest. The USDA's expected yield per acre for the 2025 Harvest is 181.0 bushels, up approximately 0.9% from a year ago.
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The following July 2025 estimates are associated with the corn market:
2026 Crop
2025 Crop
2024 Crop
(2025 Harvest)
(2024 Harvest)
Percentage
(2023 Harvest)
Percentage
July Report (1)
July Report (1)
Change (2)
July Report (1)
Change (3)
U.S. Area Planted (Million acres)
95.2
90.6
5.1
%
94.6
0.6
%
U.S. Yield per Acre (Bushels)
181.0
179.3
0.9
%
177.3
2.1
%
U.S. Production (Million bushels)
15,705
14,867
5.6
%
15,341
2.4
%
U.S. Ending Stocks (Million metric tons)
42.2
34.0
24.1
%
44.8
(5.8
%)
World Ending Stocks (Million metric tons)
272.1
284.2
(4.3
%)
315.7
(13.8
%)
1. Information obtained from the July Report for the 2026/2025 (“2026 Crop”), 2024/2025 ("2025 Crop") and 2023/2024 (“2024 Crop”) corn marketing years. The marketing year is the twelve-month period during which a crop normally is marketed. For example, the marketing year for the current corn crop is from September 1 of the current year to August 31 of the next year. The year begins at the harvest and continues until just before harvest of the following year.
2. Represents the percentage change between the 2026 Crop amounts compared to the 2025 Crop amounts.
3. Represents the percentage change between the 2026 Crop amounts compared to the 2024 Crop amounts.
The current USDA corn outlook for the United States calls for smaller supplies, domestic use, and ending stocks. Corn beginning stocks are down reflecting an increase in exports partly offset by lower feed and residual use. With supply falling more than use, ending stocks are down 90 million bushels from the previous month’s report. From a demand perspective, we believe that corn prices will remain at a level that will further support demand for fertilizers during the remainder of 2025.
Industrial Products
Our industrial products sales volumes are dependent upon general economic conditions, primarily in the housing, automotive and paper industries. Demand for our industrial products is stable despite persistent global economic challenges. Nitric acid demand has been steady, reflecting the strength of the U.S. economy and consumer spending levels. Our sales prices generally vary with the market price of ammonia or natural gas, as applicable, in our pricing arrangements with customers.
Our LDAN and AN solution, which are primarily used as AN fuel oil and specialty emulsions for usage in the quarry and the construction industries, are used for metals mining and to a lesser extent, for coal. Demand for AN for use in mining applications has been bolstered by positive exposure to copper, gold and iron ore, as well as continued attractive market fundamentals for aggregate production relating to infrastructure construction. Economic uncertainty has recently been heightened by the potential impacts of tariffs on global trade flows, consumer prices and production input costs. However, we believe that we have a meaningful degree of downside protection in our industrial business given our diverse customer base which is almost entirely located in the United States, the nature of our contracts and our ability to shift our production mix to products where demand and pricing are strongest.
Natural Gas Prices
Natural gas is the primary feedstock used to produce nitrogen fertilizers at our manufacturing facilities. In recent years, U.S. natural gas reserves have increased significantly due to, among other factors, advances in extracting shale gas, which has reduced and stabilized natural gas prices, providing North America with a cost advantage over certain imports. As a result, our competitive position and that of other North American nitrogen fertilizer producers has been positively affected.
We historically have purchased natural gas either on the spot market, through forward purchase contracts, or a combination of both and we have used forward purchase contracts to lock in pricing for a portion of our natural gas requirements. These forward purchase contracts are generally either fixed-price or index-price, short-term in nature and for a fixed supply quantity. We are able to purchase natural gas at competitive prices due to our connections to large distribution systems and their proximity to interstate pipeline systems.
The following table shows the volume of natural gas purchased and the average cost per MMBtu:
Three Months Ended June 30,
2025
2024
Natural gas volumes (MMBtu in millions)
7.8
7.5
Natural gas average cost per MMBtu
$
3.37
$
1.92
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Transportation Costs
Costs for transporting nitrogen-based products can be significant relative to their selling price. We continue to evaluate the rising costs of freight domestically. As a result of increases in demand for available rail, truck and barge options to transport product, primarily during the spring and fall planting seasons, higher transportation costs have and could continue to impact our margins, where we are unable to fully pass through these costs to our customers. Additionally, truck driver shortages could impact our ability to fulfill customer demand. As a result, we continue to evaluate supply chain efficiencies to reduce or counter the impact of higher logistics costs.
Key Operational Factors
Facility Reliability
Consistent, reliable and safe operations at our chemical plants are critical to our financial performance and results of operations. The financial effects of planned downtime at our plants, including a planned major maintenance activity (each such activity, a “Turnaround”) is mitigated through a diligent planning process that considers the availability of resources to perform the needed maintenance and other factors. Unplanned downtime of our plants typically results in lost contribution margin from lost sales of our products, lost fixed cost absorption from lower production of our products and increased costs related to repairs and maintenance. All Turnarounds result in lost contribution margin from lost sales of our products, lost fixed cost absorption from lower production of our products and increased costs related to repairs and maintenance, which repair and maintenance costs are expensed as incurred.
The next ammonia plant Turnaround is currently planned for our El Dorado Facility in the first half of 2026. We completed Turnarounds at both our Pryor Facility and Cherokee Facility in the latter half of 2024. Following those Turnarounds, the next Pryor Facility Turnaround is currently planned for 2027, with the Cherokee Facility Turnaround currently planned for 2028.
Ammonia Production
Ammonia is the basic product used to produce all of our upgraded products. The ammonia production rates of our plants affect the total cost per ton of each product produced and the overall sales of our products. For 2025, we are targeting total ammonia production of approximately 820,000 tons to 850,000 tons.
Forward Sales Contracts
In certain instances, we may use forward sales of our fertilizer products to optimize our asset utilization, planning process and production scheduling. These sales are made by offering customers the opportunity to purchase product on a forward basis at prices and delivery dates that are agreed upon, with delivery dates typically occurring within 12 months. We use this program to varying degrees during the year depending on market conditions and our view of changing price environments. Fixing the selling prices of our products months in advance of their ultimate delivery to customers typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment.
Consolidated Results of the Second Quarter of 2025
Our consolidated net sales for the second quarter of 2025 were $151.3 million compared to $140.1 million for the same period in 2024. Our consolidated operating income for the second quarter of 2025 was $10.5 million compared to $14.4 million for the same period in 2024. The items impacting our operating results are discussed in more detail below and under “Results of Operations.”
Items Affecting Comparability of Results of the Second Quarter
Selling Prices
For the second quarter of 2025, average selling prices for ammonia and UAN increased while the average selling price for AN and nitric acids decreased compared to the second quarter of 2024.
(Loss) Gain on Extinguishment of Senior Secured Notes
During the second quarter of 2025 we repurchased $32.4 million in principal amount of our Senior Secured Notes due 2028 (“Senior Secured Notes”) for approximately $32.1 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 loss on extinguishment of debt of approximately $0.1 million.
During the second quarter of 2024 we repurchased $63.7 million in principal amount of our Senior Secured Notes for approximately $60.9 million. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a gain on extinguishment of debt of approximately $1.9 million.
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Plant, Property and Equipment Impairments
For the three months ended June 30, 2025 and 2024, we recorded asset write-downs primarily related to assets no longer in use in the amount of $2.5 million and $1.5 million, respectively. These write-downs are included in “Other expense, net” on our condensed consolidated statements of operations.
Results of Operations
The following is a discussion and analysis of our condensed consolidated results of operations for the three months ended June 30, 2025 and 2024.
Net sales to unaffiliated customers are reported in the condensed consolidated financial statements and gross profit represents net sales less cost of sales. Net sales are reported on a gross basis with the cost of freight being recorded in cost of sales.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
The following table sets forth certain financial information for the three months ended June 30, 2025 and 2024, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
Three Months Ended June 30,
Percentage
2025
2024
Change
Change
(Dollars In Thousands)
Net sales:
AN & Nitric Acid
$
61,707
$
58,442
$
3,265
6
%
Urea ammonium nitrate (UAN)
52,262
42,808
9,454
22
%
Ammonia
26,830
28,448
(1,618
)
(6
)%
Other
10,497
10,375
122
1
%
Total net sales
$
151,296
$
140,073
$
11,223
8
%
Gross profit:
Adjusted gross profit (1)
$
46,429
$
49,608
$
(3,179
)
(6
)%
Depreciation and amortization (2)
(20,617
)
(18,754
)
(1,863
)
10
%
Turnaround expense
(2,639
)
(3,439
)
800
(23
)%
Total gross profit
23,173
27,415
(4,242
)
(15
)%
Selling, general and administrative expense
9,844
11,547
(1,703
)
(15
%)
Other expense, net
2,836
1,465
1,371
N/M
Operating income
10,493
14,403
(3,910
)
(27
)%
Interest expense, net
7,886
8,385
(499
)
(6
)%
Loss (gain) on extinguishment of debt
59
(1,879
)
1,938
N/M
Non-operating other income, net
(1,542
)
(2,908
)
1,366
(47
)%
Provision for income taxes
1,084
1,250
(166
)
(13
)%
Net income
$
3,006
$
9,555
$
(6,549
)
N/M
Other information:
Gross profit percentage (3)
15.3
%
19.6
%
(4.3
)%
Adjusted gross profit percentage (3)
30.7
%
35.4
%
(4.7
)%
Property, plant and equipment expenditures
$
18,480
$
14,760
$
3,720
_____________________________
N/M-Not meaningful.
(1) Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.
(2) Represents amount classified as cost of sales.
(3) As a percentage of the total net sales.
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The following tables provide key operating metrics for the fertilizer and major industrial products, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
Three Months Ended June 30,
Percentage
Product (tons sold)
2025
2024
Change
Change
AN & Nitric Acid
161,509
147,619
13,890
9
%
Urea ammonium nitrate (UAN)
151,807
137,499
14,308
10
%
Ammonia
66,069
72,294
(6,225
)
(9
)%
Total
379,385
357,412
21,973
6
%
Three Months Ended June 30,
Percentage
Gross Average Selling Prices (price per ton)
2025
2024
Change
Change
AN & Nitric Acid
$
382
$
396
$
(14
)
(4
)%
Urea ammonium nitrate (UAN)
$
344
$
311
$
33
11
%
Ammonia
$
406
$
394
$
12
3
%
Three Months Ended June 30,
Percentage
Average Benchmark Prices (price per ton)
2025
2024
Change
Change
Tampa Ammonia Benchmark
$
416
$
440
$
(24
)
(5
)%
NOLA UAN
$
344
$
246
$
98
40
%
Net Sales
Net sales increased during the second quarter of 2025 compared to the prior year period driven by the impact of improved pricing for UAN and ammonia, as well as higher sales volumes for UAN and for our AN & Nitric Acid product group. Partially offsetting this increase were lower ammonia sales volumes and a lower average price within our AN & Nitric Acid product group.
Gross Profit
As noted in the table above, we recognized a gross profit of $23.2 million for the second quarter of 2025 compared to $27.4 million for the same period in 2024, or a $4.2 million decrease. Overall, our gross profit percentage was 15.3% compared to 19.6% for the same period in 2024. Our adjusted gross profit percentage decreased to 30.7% for the second quarter of 2025 from 35.4% for the second quarter of 2024. Our gross profit for the second quarter of 2025 was lower compared to the same period of 2024 primarily due to higher natural gas costs and higher depreciation due to recent investments in our facilities. These cost increases were partially offset by higher net sales and lower Turnaround expenses.
Selling, General and Administrative
Our SG&A expenses were $9.8 million for the second quarter of 2025, a decrease of $1.7 million compared to the same period in 2024. The net decrease was primarily driven by decreases in professional fees, insurance and other miscellaneous expenses items, partially offset by an increase in payroll related expenses.
Other expense, net
Other expense, net for the second quarter of 2025 consisted primarily of asset write-downs, which were lower in 2024 compared to 2025.
Interest Expense
Interest expense for the second quarter of 2025 was $7.9 million compared to $8.4 million for the same period in 2024. The decrease was primarily due to a lower outstanding balance on our Senior Secured Notes as a result of repurchases.
(Loss) Gain on Extinguishment of Debt
During the second quarter of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 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 loss on extinguishment of debt of approximately $0.1 million. During the second quarter of 2024, we repurchased $63.7 million in principal amount of our Senior Secured Notes for approximately $60.9 million. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a gain on extinguishment of debt of approximately $1.9 million.
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Non-operating Other Income, net
Non-operating other income, net for the second quarter of 2025 was $1.5 million compared to $2.9 million for the same period of 2024, primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was lower during the second quarter of 2025 compared to the second quarter of 2024.
Provision for Income Taxes
The provision for income taxes for the second quarter of 2025 was $1.1 million compared to $1.3 million for the same period of 2024. The resulting effective tax rate for the second quarter of 2025 was a provision on pre-tax income of 26.5% compared to 11.6% for the same period of 2024. For the second quarter of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. For the second quarter of 2024, the effective tax rate is lower than the statutory rate primarily due to nondeductible compensation and deferred benefits from state tax law changes. See discussion in Note 7.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table contains certain financial information for the six months ended June 30, 2025 and 2024, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
Six Months Ended June 30,
Percentage
2025
2024
Change
Change
(Dollars In Thousands)
Net sales:
AN & Nitric Acid
$119,325
$106,877
$12,448
12 %
Urea ammonium nitrate (UAN)
96,127
84,000
12,127
14 %
Ammonia
60,102
67,978
(7,876)
(12)%
Other
19,174
19,422
(248)
(1)%
Total net sales
$294,728
$278,277
$16,451
6 %
Gross profit:
Adjusted gross profit (1)
$82,871
$89,895
$(7,024)
(8)%
Depreciation and amortization (2)
(40,680)
(35,848)
(4,832)
13 %
Turnaround expense
(4,634)
(4,354)
(280)
6 %
Total gross profit
37,557
49,693
(12,136)
(24)%
Selling, general and administrative expense
19,997
21,841
(1,844)
(8)%
Other expense, net
2,599
2,189
410
19 %
Operating income
14,961
25,663
(10,702)
(42)%
Interest expense, net
15,950
18,114
(2,164)
(12)%
Loss (gain) on extinguishment of debt
59
(3,013)
3,072
N/M
Non-operating other income, net
(3,215)
(6,469)
3,254
(50)%
Provision for income taxes
801
1,853
(1,052)
(57)%
Net income
$1,366
$15,178
$(13,812)
(91)%
Other information:
Gross profit percentage (3)
12.7 %
17.9 %
(5.2)%
Adjusted gross profit percentage (3)
28.1 %
32.3 %
(4.2)%
Property, plant and equipment expenditures
$39,347
$33,047
$6,300
_____________________________
N/M-Not meaningful.
(1) Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.
(2) Represents amount classified as cost of sales.
(3) As a percentage of the total net sales.
The following tables provide key operating metrics for the fertilizer and major industrial products, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
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Six Months Ended June 30,
Percentage
Product (tons sold)
2025
2024
Change
Change
AN & Nitric Acid
312,040
276,420
35,620
13 %
Urea ammonium nitrate (UAN)
300,372
272,432
27,940
10 %
Ammonia
139,472
167,125
(27,653)
(17)%
Total
751,884
715,977
35,907
5 %
Six Months Ended June 30,
Percentage
Gross Average Selling Prices (price per ton)
2025
2024
Change
Change
AN & Nitric Acid
$382
$387
$(5)
(1)%
Urea ammonium nitrate (UAN)
$320
$308
$12
4 %
Ammonia
$431
$407
$24
6 %
Six Months Ended June 30,
Percentage
Average Benchmark Prices (price per ton)
2025
2024
Change
Change
Tampa Ammonia Benchmark
$455
$453
$2
0 %
NOLA UAN
$310
$249
$61
24 %
Net Sales
Net sales of our primary products increased during the first half of 2025 compared to the prior year period driven by the impact of higher volumes for UAN and our AN & Nitric Acid product group and improved pricing for UAN and ammonia. Partially offsetting this increase was lower pricing for our AN & Nitric Acid product group and lower ammonia sales volumes. Additionally, we benefited from a healthy increase in downstream upgraded product production volumes.
Gross Profit
As noted in the table above, we recognized a gross profit of $37.6 million for the first half of 2025 compared to $49.7 million for the same period in 2024, a $12.1 million reduction. Overall, our gross profit percentage was 12.7% compared to a gross profit percentage of 17.9% for the same period in 2024. Our adjusted gross profit percentage was 28.1% for the first half of 2025 compared to 32.3% for the same period in 2024. Our gross profit for the first half of 2025 was lower compared to the same period of 2024 primarily due to higher natural gas costs and higher depreciation due to recent investments in our facilities. These cost increases were partially offset by higher net sales.
Selling, General and Administrative
Our SG&A expenses were $20.0 million for the first half of 2025, a decrease of $1.8 million compared to the same period in 2024. The net decrease was primarily driven by decreases in professional fees, insurance and other miscellaneous expenses items, partially offset by an increase in payroll related expenses.
Interest Expense
Interest expense for the first half of 2025 was $16.0 million compared to $18.1 million for the same period in 2024. The decrease primarily related to reduced interest expense as a result of repurchases of Senior Secured Notes made during 2024 and the second quarter of 2025.
(Loss) gain on Extinguishment of Debt
During the first half of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 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 loss on extinguishment of debt of approximately $0.1 million. During the first half of 2024, we repurchased $96.6 million of our Senior Secured Notes through open market transactions for approximately $92.2 million. As a result, we recognized a gain on extinguishment of debt, net of issuance costs, of approximately $3.0 million.
Other Expense, net
Other expense, net during the first half of 2025 and 2024 consisted primarily of asset write-downs related to assets no longer being used in operations. The asset write downs were lower in the first half of 2025 compared to the first half of 2024 while the write-downs in the first half of 2024 were partially offset by higher short-term rental income from railcar subleases.
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Non-operating Other Income, net
Non-operating other income, net for the first half of 2025 was $3.2 million compared to $6.5 million for the same period of 2024, primarily related to interest income earned during both periods from our short-term investments.
Provision for Income Taxes
The provision for income taxes for the first half of 2025 was $0.8 million compared to $1.9 million for the same period of 2024. The resulting effective tax rate for the first half 2025 was 37.0% compared to 10.9% for the same period of 2024. For the first half of 2025, the effective tax rate is higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. For the first half of 2024, the effective tax rate is lower than the statutory rate primarily due to nondeductible compensation and deferred benefits from state tax law changes. See discussion in Note 7.
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes our cash flow activities for the six months ended June 30:
2025
2024
Change
(In Thousands)
Net cash flows from operating activities
$
25,001
$
65,489
$
(40,488
)
Net cash flows from investing activities
$
4,826
$
168,786
$
(163,960
)
Net cash flows from financing activities
$
(44,443
)
$
(118,973
)
$
74,530
Net Cash Flow from Operating Activities
Net cash provided by operating activities was $25.0 million for the first six months of 2025 compared to $65.5 million for the same period of 2024, a change of $40.5 million. The decrease was primarily a result of higher cost of sales, changes in working capital and lower interest income on our short-term investments.
Net Cash Flow from Investing Activities
Net cash provided by investing activities was $4.8 million for the first six months of 2025 compared to $168.8 million for the same period of 2024, a change of $164.0 million.
For the first six months of 2025, the net cash provided by investing activities primarily related to proceeds from short-term investments of $154.6 million, partially offset by purchases of short-term investments of $110.3 million and expenditures for property, plant and equipment of $39.3 million.
For the first six months ended 2024, the net cash provided by investing activities primarily related to proceeds from short-term investments of $236.5 million, partially offset by purchases of short-term investments of $34.7 million and expenditures for property, plant and equipment of $33.0 million.
Net Cash Flow from Financing Activities
Net cash used by financing activities was $44.4 million for the first six months of 2025 compared to $119.0 million for the same period of 2024, a change of $74.5 million.
For the first six months of 2025, the net cash used by financing activities primarily consisted of repurchases of our Senior Secured Notes of $32.1 million, payments on our Secured Financing due 2025 and short-term financing of $11.3 million and $1.2 million for tax withholding obligations related to the vesting of equity awards.
For the first six months of 2024, the net cash used by financing activities primarily consisted of repurchases of our Senior Secured Notes of $92.2 million, payments on our Secured Financing due 2025 and short-term financing of $11.8 million, repurchases of $12.0 million of common stock and $2.2 million for tax withholding obligations related to the vesting of equity awards.
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Capitalization
The following table summarizes our total cash and cash equivalents, short-term investments, long-term debt and stockholders’ equity as of June 30, 2025 and December 31, 2024:
June 30, 2025
December 31, 2024
(In Millions)
Cash and cash equivalents
$
5.6
$
20.2
Short-term investments
119.3
164.0
Total cash, cash equivalents and short-term investments
$
124.9
$
184.2
Long-term debt:
Revolving Credit Facility
$
—
$
—
Senior Secured Notes due 2028 (1)
446.1
478.4
Secured Financing due 2025
5.5
8.5
Finance Leases
5.5
3.9
Unamortized debt issuance costs (2)
(4.5
)
(5.6
)
Total long-term debt, including current portion, net
452.6
$
485.2
Total stockholders' equity
495.8
$
491.6
_____________________________
(1) See discussion contained in Note 4.
(2) Debt issuance costs as of June 30, 2025 and December 31, 2024 of approximately $0.6 million and $0.6 million, respectively, relating to our Revolving Credit Facility are not included in Unamortized debt issuance costs. These costs are included in our condensed consolidated balance sheets in Intangible and other assets, net.
We currently have a revolving credit facility pursuant to a credit agreement, dated December 21, 2023, between us and the lenders identified on the signature pages thereof and JPMorgan Chase Bank, N.A, as administrative agent (the “Revolving Credit Facility”), with a borrowing base up to an initial maximum of $75 million, with an option to increase the maximum by an additional $25 million (which amount is uncommitted). Availability under the Revolving Credit Facility is subject to a borrowing base and an availability block of $7.5 million which is applied against the $75 million initially reducing the maximum (which can be removed by us at our sole discretion, subject to the satisfaction of certain conditions). The Revolving Credit Facility provides for a sub-facility for the issuance of letters of credit in an aggregate amount not to exceed $10 million, with the outstanding amount of any such letters of credit reducing availability for borrowings. As of June 30, 2025, our Revolving Credit Facility was undrawn and had approximately $46 million of availability. See Note 4 for further discussion of the Revolving Credit Facility.
For the full year of 2025, we expect capital expenditures to be approximately $80 million to $90 million of which $60 million to $65 million is expected to be spent on sustaining production, with the remainder spent on growth initiatives.
From time to time, when the Company exceeds the funding threshold in our natural gas purchase commitments, the Company is required to fund cash collateral to our counterparty.
As of June 30, 2025, we had approximately $124.9 million of cash and short-term investments. From time to time, we may seek to deploy capital through common stock repurchases or the early redemption of outstanding debt. Such repurchases may be made in open market purchases, privately negotiated transactions or otherwise and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
We believe that the combination of our cash and cash equivalents, short-term investments, the availability under our Revolving Credit Facility and our cash flow from operations will be sufficient to fund our anticipated liquidity needs for the next twelve months including the full repayment of the Secured Financing due 2025 in August 2025.
Compliance with Long-Term Debt Covenants
As discussed in Note 4, the Revolving Credit Facility requires, among other things, that we meet a financial covenant. The Revolving Credit Facility does not include financial covenant requirements unless a defined covenant trigger event has occurred and is continuing. As of June 30, 2025, no trigger event had occurred.
Loan Agreements
Senior Secured Notes due 2028 – LSB had $446.1 million aggregate principal amount of Senior Secured Notes outstanding as of June 30, 2025. Interest is to be paid semiannually in arrears on May 15 th and October 15 th . The Senior Secured Notes mature on October 15, 2028.
Secured Financing due 2025 – We are a party to a $30 million secured financing arrangement with an affiliate of Eldridge (the “Secured Financing due 2025”). Principal and interest are payable in 60 equal monthly installments with a final balloon payment of approximately $5 million due in August 2025.
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Revolving Credit Facility – At June 30, 2025, our Revolving Credit Facility was undrawn and had approximately $46 million of availability, based on our eligible collateral, less outstanding letters of credit as of that date. Also see discussion above under “Compliance with Long-Term Debt Covenants.”
Finance Leases – Our finance leases consist primarily of leases on railcars. Most of our railcar leases are classified as operating leases.
Capital Expenditures – First Six Months of 2025
For the first six months of 2025, capital expenditures relating to property, plant and equipment were $39.3 million. The capital expenditures were funded primarily from cash and working capital.
See discussion above under “Capitalization” for our total expected capital expenditures for the remainder of 2025.
Equity and Debt Repurchases
In May 2023, our Board of Directors authorized a $150 million stock repurchase program. The program is intended as a means to maximize stockholder value by returning capital to stockholders. Under the repurchase program, we are authorized to purchase shares from time to time through open market or privately negotiated transactions. Such purchases may be made pursuant to Rule 10b5-1 plans or other means as determined by our management and in accordance with the requirements of the Securities and Exchange Commission (the “SEC”). The repurchase program does not obligate us to purchase any particular number or type of securities. During the six months ended June 30, 2025, we did not repurchase any of our shares of common stock. The repurchase program may be suspended, terminated or modified at any time for any reason.
During the six months ended June 30, 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt. The debt repurchase was intended as a means to deleverage our balance sheet and reduce future interest costs while maintaining a balanced capital allocation strategy that provides an appropriate level of liquidity to fund our operations and future growth opportunities.
Expenses Associated with Environmental Regulatory Compliance
We are subject to specific federal and state environmental compliance laws, regulations and guidelines. As a result, our expenses were $1.9 million for the first six months ended June 30, 2025 in connection with environmental projects. For the remainder of 2025, we expect to incur expenses ranging from $2.1 million to $2.3 million in connection with additional environmental projects. However, it is possible that the actual costs could be significantly different than our estimates.
Seasonality
We believe sales of fertilizer products to the agricultural industry are seasonal, while sales into the industrial sectors generally are less susceptible to seasonal fluctuations. The selling seasons for fertilizer products are primarily during the spring and fall planting seasons, which typically extend from March through June and from September through November in the geographical markets where we distribute the majority of our fertilizer products. As a result, we typically increase our inventory of fertilizer products prior to the beginning of each planting season in order to meet the demand for our products. In addition, the amount and timing of sales to the agricultural markets depend upon weather conditions and other circumstances beyond our control.
Performance and Payment Bonds
We are contingently liable to sureties in respect of insurance bonds issued by the sureties in connection with certain contracts entered into by subsidiaries in the normal course of business. These insurance bonds primarily represent guarantees of future performance of our subsidiaries. As of June 30, 2025, we have agreed to indemnify the sureties for payments, up to $10.3 million, made by them in respect of such bonds.
New Accounting Pronouncements
Refer to Note 1 for recently issued accounting standards.
Critical Accounting Policies and Estimates
See “Critical Accounting Policies and Estimates,” Item 7 of our Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025 (the “2024 Form 10-K”). In addition, the preparation of financial statements requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosures of contingencies and fair values, including, but not limited to, various environmental and legal matters, including matters discussed under footnote A of Note 5.
Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. We establish valuation allowances if we believe it is more-likely-than-not that some or all of deferred tax assets will not be realized. Significant judgment is applied in evaluating the need for and the magnitude of appropriate valuation allowances against deferred tax assets.
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It is also reasonably possible that the estimates and assumptions utilized as of June 30, 2025, could change in the near term. Actual results could differ materially from these estimates and judgments, as additional information becomes known.
Non-GAAP Financial Measures
Management uses adjusted gross profit as a supplemental measure to review and assess the performance of our core business operations and for planning purposes. We define adjusted gross profit as gross profit excluding depreciation and amortization and Turnaround expenses included in our cost of sales, which we believe are not reflective of our operating performance in a given period.
Adjusted gross profit is a metric that provides investors with greater transparency to the information used by management in its financial and operational decision-making. We believe this metric is useful to investors because it facilitates comparisons of our core business operations across periods on a consistent basis. Management believes that the non-GAAP measure presented in this Form 10-Q, when viewed in combination with our results prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”), provides a more complete understanding of the factors and trends affecting our business and performance.
Adjusted gross profit is not a measure of financial performance under U.S. GAAP, and should not be considered a substitute for gross profit, which we consider to be the most directly comparable U.S. GAAP measure. Adjusted gross profit has limitations as an analytical tool, and when assessing our operating performance, investors should not consider adjusted gross profit in isolation, or as a substitute for gross profit prepared in accordance with U.S. GAAP. Adjusted gross profit may not be comparable to similarly titled measures of other companies and other companies may not calculate such measure in the same manner as we do.
The following table reconciles gross profit to adjusted gross profit.
Three Months Ended June 30,
2025
2024
Reconciliation of Gross Profit to Adjusted Gross Profit:
(In Thousands)
Gross profit:
23,173
27,415
Depreciation and amortization
20,617
18,754
Turnaround expenses
2,639
3,439
Adjusted gross profit
46,429
49,608
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 3. Quantitative and Qualitat ive Disclosures about Market Risk
General
Our results of operations and operating cash flows are impacted by changes in market prices of ammonia and natural gas and changes in market interest rates.
Forward Sales Commitments Risk
Periodically, we enter into forward firm sales commitments for products to be delivered in future periods. As a result, we could be exposed to embedded losses should our product costs exceed the firm sales prices at the end of a reporting period. At June 30, 2025, we had no embedded losses associated with sales commitments with firm sales prices.
Commodity Price Risk
A substantial portion of our products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. Since we are exposed to commodity price risk, we periodically enter into contracts to purchase natural gas for anticipated production needs to manage risk related to changes in prices of natural gas commodities. Generally, these contracts are considered normal purchases because they provide for the purchase of natural gas that will be delivered in quantities expected to be used over a reasonable period of time in the normal course of business, and as such, are exempt from derivative accounting requirements. At June 30, 2025, we had no outstanding natural gas contracts which are subject to derivative accounting requirements.
Interest Rate Risk
We may be exposed to variable interest rate risk with respect to our Revolving Credit Facility when there are outstanding borrowings. As of June 30, 2025, we had no outstanding borrowings on this credit facility and no other variable rate borrowings. We currently do not hedge our interest rate risk associated with our variable interest loan.
30
Item 4. Control s and Procedures
The Company maintains disclosure controls and procedures as defined in Rule 13a-15 under the Exchange Act designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, at the reasonable assurance level. There were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
31
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained within this report may be deemed “Forward-Looking Statements” within the meaning of U.S. federal securities laws. All statements in this report other than statements of historical fact are Forward-Looking Statements that are subject to known and unknown risks, uncertainties and other factors, many of which are difficult to predict or outside of the Company’s control, which could cause actual results and performance of the Company to differ materially from those expressed in, or implied or projected by, such statements. Any such Forward-Looking Statements are not guarantees of future performance. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “may,” “could,” and similar expressions identify Forward-Looking Statements. All Forward-Looking Statements speak only as of the date on which they are made. Forward-Looking Statements contained herein include, but are not limited to:
• our ability to invest in projects that will generate the best returns for our stockholders;
• our future liquidity outlook;
• the outlook of our chemical products and related markets;
• our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our advanced low carbon ammonia initiatives, including our strategy to become a leader in the energy transition in the chemical industry;
• the amount, timing and effect on the nitrogen market from current nitrogen expansion projects;
• the effect from the lack of non-seasonal volume;
• our belief that competition is based upon service, price, location of production and distribution sites, and product quality and performance;
• the outlook for the industrial end markets;
• the availability of raw materials;
• our ability to broaden the distribution of our products, including our ability to leverage our nitric acid production capacity at our El Dorado Facility;
• our expectations regarding future ammonia pricing;
• the result of our product and market diversification strategy;
• changes in domestic fertilizer production;
• the increasing output, capacity and production volumes of our existing production facilities;
• our ability to moderate risk inherent in agricultural markets;
• the sources to fund our cash needs and how this cash will be used;
• the ability to enter into the additional borrowings;
• the anticipated cost and timing of our capital projects;
• certain costs covered under warranty provisions;
• our ability to pass to our customers cost increases in the form of higher prices;
• our belief as to whether we have sufficient sources for materials and components;
• annual natural gas requirements;
• the development of the market and demand for low carbon ammonia;
• compliance by our facilities with the terms of our permits;
• the costs of compliance with environmental laws, health laws, security regulations and transportation regulations;
• our belief as to when Turnarounds will be performed and completed;
• expenses in connection with environmental projects;
• the effect of litigation, legal actions and other contingencies on our business, financial condition, results of operations or cash flows, including the potential financial penalties associated with the NOV from ADEQ regarding wastewater discharges from our El Dorado Facility;
• our ability to comply with debt servicing and covenants, including our beliefs as to whether we can meet all required covenant tests for the next twelve months;
• our ability to meet debt maturities or redemption obligations when due; and
• the impact of our repurchase program on our stock price and cash reserves.
While we believe, the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance such expectations will prove to have been correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this report, including, but not limited to, the following:
• changes in general economic conditions, both domestic and foreign;
32
• material reductions in revenues;
• material changes in interest rates;
• our ability to collect in a timely manner a material amount of receivables;
• increased competitive pressures;
• changes in federal, state and local laws and regulations, or in the interpretation of such laws and regulations;
• changes in laws, regulations or other issues related to climate change;
• releases of pollutants into the environment exceeding our permitted limits;
• material increases in equipment, maintenance, operating or labor costs not presently anticipated by us;
• the requirement to use internally generated funds for purposes not presently anticipated;
• the inability to secure additional financing for planned capital expenditures or financing obligations due in the near future;
• our substantial existing indebtedness;
• material changes in the cost of natural gas and certain precious metals;
• limitations due to financial covenants;
• changes in competition;
• the loss of any significant customer;
• increases in cost to maintain internal control over financial reporting;
• changes in operating strategy or development plans;
• an inability to fund the working capital and expansion of our businesses;
• changes in the production efficiency of our facilities;
• adverse results in our contingencies including pending litigation;
• unplanned downtime at one or more of our facilities;
• changes in production rates at any of our facilities;
• an inability to obtain necessary raw materials and purchased components;
• material increases in cost of raw materials;
• material changes in our accounting estimates;
• significant problems within our production equipment;
• fire or natural disasters;
• an inability to obtain or retain our insurance coverage;
• difficulty obtaining necessary permits;
• difficulty obtaining third-party financing;
• risks associated with proxy contests initiated by dissident stockholders;
• changes in fertilizer production;
• reduction in acres planted for crops requiring fertilizer;
• decreases in duties for products we sell resulting in an increase in imported products into the United States;
• adverse effects from regulatory policies, including tariffs;
• geopolitical concerns;
• volatility of natural gas prices;
• price increases resulting from increased inflation;
• weather conditions, including the effects of climate change;
• increases in imported agricultural products;
• global supply chain disruptions;
• other factors described in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report; and
• other factors described in Item 1A. Risk Factors in our Form 10-K for the year ended December 31, 2024.
Given these uncertainties, all parties are cautioned not to place undue reliance on such Forward-Looking Statements. Except to the extent required by law, we disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the Forward-Looking Statements contained herein to reflect future events or developments.
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PART II
OTHER INFORMATION
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.