LSB Industries, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales increased to $158.6 million in Q3 2026 from $155.4 million in Q3 2025.
• Net income rose to $16.3 million in Q3 2026 compared to $7.1 million in Q3 2025.
• Diluted EPS was $0.22 in Q3 2026 versus $0.10 in Q3 2025.
• Adjusted EBITDA reached $62.3 million in Q3 2026, up from $40.1 million in Q3 2025.
• Gross profit for Q3 2026 was $43.1 million, compared to $25.5 million in Q3 2025.
• Operating income for Q3 2026 was $26.8 million, compared to $15.6 million in Q3 2025.
• Total cash, cash equivalents, and short-term investments stood at approximately $203.5 million as of September 30, 2026.
• Total debt was $442.2 million as of September 30, 2026.
• Average natural gas cost per MMBtu in cost of materials decreased to $2.93 in Q3 2026 from $3.10 in Q3 2025.

Guidance and Future Outlook:

• Management expects to be on pace for record annual nitric acid and AN solution production in 2026.
• The company anticipates robust nitrogen demand through the fall 2026 and spring 2027 fertilizer application seasons.
• New mining and aggregate projects are expected to support medium-to-long-term demand for explosives used in copper and iron ore mining, quarrying, and infrastructure.
• Management believes the company is well-positioned to continue progress toward consistently delivering higher earnings and cash flow.

Business Segments and Product Lines:

• AN & Nitric Acid sales increased 41% year-over-year to $80.9 million, driven by higher selling prices ($365/ton vs. $307/ton) and higher volumes (196,477 tons vs. 159,662 tons).
• Urea ammonium nitrate (UAN) sales decreased 61% year-over-year to $20.2 million, with volumes down 59% to 55,510 tons; average selling price fell 5% to $316/ton.
• Ammonia sales increased 22% year-over-year to $45.2 million, with average selling price rising 32% to $528/ton; volumes decreased 7% to 79,940 tons.
• Other product sales increased 30% year-over-year to $12.3 million.
• All three production facilities set new monthly production records during the first nine months of 2026.
• Two major turnarounds were completed in 2026, including a planned turnaround at the Pryor facility which commenced in Q2 and ended early in Q3.
• Production was partially shifted from UAN to AN due to strong industrial demand.

Market and Competitive Landscape:

• Ammonium Nitrate (AN) demand remains strong, supported by mining-sector investment across North America and globally, as well as capital spending tied to AI-related infrastructure, data centers, power generation, and electrification.
• Global nitrogen supply remains disrupted, with ammonia prices above historical averages.
• High natural gas costs continue to challenge European production economics.
• Constrained sulfur supply has reduced demand from phosphate producers, moderating ammonia prices from first-half highs.
• Globally constrained urea supplies strengthened third-quarter pricing and supported higher UAN prices.
• Continued Ukrainian attacks on Russian nitrogen plants, ports, and ships and conflicts in the Middle East are noted as market factors.
• USDA projects 96.8 million planted acres of corn for the 2026/27 marketing season with global ending stocks at the lowest levels in over a decade.

Risks and Challenges:

• Forward-looking statements cite risks including market conditions, price volatility for products and feedstocks, and global economic downturns.
• Potential disruptions in production at manufacturing facilities and increased competitive pressures are identified risks.
• Challenges include the availability of raw materials, recruiting and retaining skilled personnel, and obtaining necessary permits.
• The El Dorado Carbon Capture and Sequestration (CCS) project's operational date is conditioned on the EPA's issuance of a Class VI permit, with the technical review ongoing.
• Risks include the timing of tax credit monetization, which may not coincide with earnings recognition.
• Trade policy impacts and material increases in raw material costs are listed as potential risks.

Management Commentary and Tone:

• Chairman and CEO Mark Behrman stated the company delivered "another good quarter" and advanced the capability and reliability of production facilities.
• Management expressed pride in employees for their focus and commitment to safe, reliable operations.
• Initiatives executed over the last three years are described as paying off, positioning LSB to meet growing customer needs in a dynamic global environment.
• Management highlighted that customer demand remains strong and internal initiatives are driving progress.

Other Key Points:

• In May 2026, LSB reached an agreement to assume full ownership of the El Dorado Carbon Capture and Sequestration (CCS) project from Lapis Carbon Solutions.
• The CCS project is expected to capture and sequester between 400,000 and 500,000 metric tons of CO2 per year, reducing Scope 1 emissions by approximately 25%.
• The project is expected to yield between 305,000 and 380,000 metric tons per year of low carbon ammonia.
• The sequestered CO2 is expected to qualify for the Section 45Q federal tax credit at $85 per metric ton, potentially generating $25 million to $30 million of annual earnings when fully operational.
• A stratigraphic well was completed in June 2025 to support the EPA's review of the Class VI application.
• The company operates facilities in Cherokee, Alabama; El Dorado, Arkansas; and Pryor, Oklahoma, and operates a facility for a global chemical company in Baytown, Texas.
• A conference call was scheduled for October 29, 2026, at 10:00 am ET to discuss results.