LSB Industries, Inc., Reports Q2 Results
10 August 1998
LSB Industries, Inc., Reports Results for the Second Quarter Ended June 30, 1998
OKLAHOMA CITY, Aug. 10 -- LSB Industries, Inc. ,
today reported operating results for the three months and six months ended
June 30, 1998.
Total revenues for the three months ended June 30, 1998 were $87,646,000
compared to $91,439,000 for the same period in 1997. Revenues from operations
year to date were $166,794,000 compared to $166,303,000 in 1997.
Net income for the quarter ended June 30, 1998 was $1,421,000 or $.05 per
share compared to net income for the same period in 1997 of $1,467,000 or $.05
per share. After deducting $803,000 for dividends on the Company's
outstanding preferred stocks, the net income applicable to common stock for
the three months ended June 30, 1998 was $618,000 compared to net income of
$648,000 for the three months ended June 30, 1997. The net income for the six
months ended June 30, 1998 was $10,699,000 or $.65 per share diluted on
15.1 million average common shares compared to a net loss in 1997 of
$3,971,000 or $.43 per share on 12.9 million shares. Net income for the 1998
period includes a net after tax gain of $12.7 million on the sale of the Tower
office building.
The total sales revenue for the second quarter compared to the same period
a year ago reflect an increase in the Climate Control Business of $3.1 million
and a $5.5 million decrease in the Chemical Business.
In reporting the second quarter results, Jack E. Golsen, Chairman of the
Board, stated that the improvement in the Climate Control Business is the
result of increased customer demand for the fan coil and water source heat
pump products and the positive effect of programs put in place by management
during the past two years.
Jack Golsen stated that the Chemical Business was adversely affected by
extreme drought conditions in the mid-south market areas during the fertilizer
season. The Chemical Business experienced strong demand for the fertilizer
products through April, but in May and June, the lack of rainfall resulted in
a significant reduction of fertilizer shipments. Additionally, results were
affected by a drop-off in sales of the Company's Australian subsidiary which
services the mining industry, which was impacted by low gold prices and
reduced Asian demand for natural resources from Australian mines.
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 press release contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All
statements in this press release other than statements of historical facts
that address activities, events, or developments that the Company expects,
believes, or anticipates will or may occur in the future are forward looking
statements.
LSB Industries, Inc.
Financial Highlights (Notes)
Periods Ended June 30, 1998 and 1997
(Unaudited)
(In thousands, except per share amounts)
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
Total revenues $166,794 $166,303 $87,646 $91,439
Operating costs,
expenses and interest $168,828 $170,149 $86,245 $89,909
Gain on sale
of Tower, net of
income taxes $12,733 --- --- ---
Net income (loss) $10,699 $(3,971) $1,421 $1,467
Net income (loss)
applicable to common
stock $ 9,077 $(5,594) $618 $648
Earnings (loss) per
common share:
Basic $0.72 $(0.43) $0.05 $0.05
Diluted $0.65 $(0.43) $0.05 $0.05
Average common shares
outstanding used in
computing earnings
(loss) per common share:
Basic 12,661 12,941 12,576 12,907
Diluted 15,125 12,941 12,712 13,162
LSB Industries, Inc.
Notes to Unaudited Financial Highlights
Periods Ended June 30, 1998 and 1997
Note 1: Basic earnings (loss) per common share is based upon the weighted
average number of common shares outstanding during each period
after giving appropriate effect to preferred stock dividends.
Diluted earnings (loss) per share is based on the weighted
average number of common shares and dilutive common equivalent
shares, if any, outstanding and the assumed conversion of
dilutive convertible securities outstanding, if any, after
appropriate adjustment for interest, net of related income tax
effects on convertible notes payable, as applicable.
Note 2: Information about the Company's operations in different industry
segments for the six month and three month periods ended June 30,
1998 and 1997 is detailed below:
Six Months Three Months
1998 1997 1998 1997
Sales:
Chemical $77,523 $90,196 $44,098 $49,597
Climate Control 59,257 47,822 29,321 26,199
Automotive Products 21,198 17,037 10,708 9,045
Industrial Products 7,491 7,447 3,306 4,427
$165,469 $162,502 $87,433 $89,268
Gross Profit:
Chemical $12,309 $12,783 $7,717 $9,399
Climate Control 17,321 13,683 8,985 7,675
Automotive Products 4,965 2,226 2,826 1,117
Industrial Products 1,700 1,611 851 1,190
$36,295 $30,303 $20,379 $19,381
Operating Profit (Loss):
Chemical $5,611 $4,734 $4,460 $5,379
Climate Control 6,312 4,391 3,500 2,840
Automotive Products 71 (2,889) 478 (1,663)
Industrial Products (518) (710) (214) (45)
11,476 5,526 8,224 6,511
General Corporate
Expenses (4,671) (2,976) (2,842) (1,641)
Interest Expense (8,839) (6,396) (3,981) (3,340)
Gain on Sale of Tower 12,993 --- --- ---
Income (Loss) Before
Provision for Income
Taxes $10,959 $(3,846) $1,401 $1,530
Gross profit by industry segments represents net sales less cost of
sales. Operating profit (loss) by industry segments represents gross
profit less operating expense before deducting general corporate expenses,
interest expense and income taxes and, in 1998, before gain on sale of
Tower.