LSB Industries
A Business Transformed
Market Cap: $564,960,000
P/B: 1.15x (understated book value)
Net Debt: $363,630,000
EV: $928,590,000
Shares Outstanding: 71,880,000
Business Overview
LSB Industries is the fifth largest producer of Ammonia in North America and the leading merchant seller of Nitric Acid in the US with four plants located in Alabama, Arkansas, Texas, and Oklahoma with the plant in Texas being a Nitric Acid plant owned by Covestro. The businesses nameplate capacity is 900K tons of production on an annual basis and the company continues to push utilization rates which is critical as running chemical plants has a lot of sunken costs associated therefore 90%+ operating rates are essential to the long-term viability of the firm. The company provides a mix of products in both the industrial and agricultural markets with industrial being more contract based and predictable and the agricultural market being tied to weather conditions and is more volatile in terms of the pricing the LSB can obtain for its product. There are a range of end uses for the Ammonia that LSB makes to include Urea Ammonium Nitrate (UAN), Ammonium Nitrate (AN), Ammonia, Nitric Acid, Sulfuric Acid, Co2 that are used in products ranging from Liquid fertilizers to Semiconductors.
