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LSB Industries Intends to Spin-Off Automotive Product Business

5 August 1998

LSB Industries, Inc. Intends to Spin-Off Automotive Product Business; Shareholders Would Receive Stock in the Automotive Business as a Dividend

    OKLAHOMA CITY, Okla., Aug. 5 -- LSB Industries, Inc.
("LSB") announced today that it intends, subject to satisfactory
completion of certain conditions, to spin-off its Automotive Products Business
("Automotive") to its shareholders as a dividend.  The shares in Automotive
would be distributed to LSB shareholders on a pro-rata basis, with the exact
number of shares of Automotive to be issued in connection with the spin-off to
be determined.
    The spin-off of Automotive is subject to, among other things, receipt from
the Internal Revenue Service of confirmation of tax-free treatment, certain
Securities and Exchange Commission filings, arrangement for lines of credit
for Automotive, and LSB Board of Directors' approval.  The Company is
investigating various alternatives to increase Automotive's capital base in
the event the spin-off is completed.  Automotive intends to apply to list its
shares for trading on the American Stock Exchange subject to Stock Exchange
approval.  Upon completion of the spin-off, Automotive is anticipated to have
assets of approximately $40 million, liabilities of approximately $30 million,
and annual sales of approximately $40 million.  LSB's total revenue in 1997
was $320 million.
    Jack E. Golsen, Chairman of the Board of LSB said, "This transaction
should enable LSB's management to concentrate on the growth of its core
Chemical and Environmental Control businesses."  He added, "The spin-off will
also allow Automotive's management to pursue an aggressive focused growth
strategy as an independent company."  Prior to the spin-off, LSB's
shareholders will be advised as to the specific plan.  In New York Stock
Exchange trading yesterday, LSB closed at $4.25 a share.
    LSB is a manufacturing, marketing and engineering company with activities
on a worldwide basis.  LSB's principal business activities consist of the
manufacture and sale of chemical products for the mining, agricultural and
industrial markets, the manufacture and sale of commercial and residential
climate control products, the provision of specialized engineering services,
and other activities.  LSB's common stock and Series 2 Preferred stock are
listed for trading on the New York Stock Exchange.
    This release contains certain forward-looking statements that are subject
to risks and uncertainties and which reflect management's current beliefs and
estimates of future economic circumstances, industry conditions, and LSB's
performance and financial results.  Forward-looking statements include
statements preceded by, followed by or including the words "believe",
"expectation", "outlook", "could", "may", "should" or similar expressions.
Forward-looking statements contained herein related to, among other things,
ability to complete a spin-off of Automotive, assets, liabilities and annual
sales of Automotive at the time of the spin-off, listing the shares of
Automotive on the American Stock Exchange, the spin-off allowing Automotive's
management to pursue an aggressive growth strategy and LSB's management to
concentrate on the growth of its core businesses and ability to increase
Automotive's capital base.  While LSB believes the expectations reflected in
this press release are reasonable and, it can give no assurance such
expectations will prove to be correct.  There are a variety of factors which
could cause future outcomes to differ materially from those described in this
release, including, but not limited to, future economic conditions, industry
conditions, competitive pressures, the occurrence of unanticipated events,
inability of Automotive to meet listing requirements of the American Stock
Exchange, inability to meet the conditions referenced in the second paragraph
of this release and inability to increase Automotive's capital base if the
spin-off is completed.