LSB Industries (LXU) investor relations material

Executive summary

• Q1 2026 delivered significant year-over-year growth in net sales, adjusted EBITDA, and EPS, driven by operational discipline, improved production, and favorable market conditions.

• Net sales rose to $169.5 million, up 18% from $143.4 million, with net income reaching $19.7 million, reversing a prior year loss.

• Adjusted EBITDA increased to $52.1 million from $29.1 million, with margin improving to 31% from 20%.

• Focus on reliability, efficiency, and product mix optimization supported profitability and future gains.

• Settlement agreement reached for $20.9 million in litigation related to the El Dorado ammonia plant; claims against another party continue.

Financial highlights

• Adjusted EBITDA grew 44% year-over-year to $52.1 million, driven by higher pricing, volumes, and product mix, partially offset by higher costs.

• Net sales increased to $169.5 million in Q1 2026 from $143.4 million in Q1 2025.

• Operating cash flow was $52 million; free cash flow after sustaining capital was $37 million.

• Total cash, cash equivalents, and short-term investments stood at $181.7 million; net leverage at 1.4x.

• Diluted EPS improved to $0.27 from $(0.02) year-over-year.

Outlook and guidance

• Q2 adjusted EBITDA expected to be meaningfully higher than both Q1 2026 and Q2 last year, despite planned turnaround at El Dorado.

• Strong demand and elevated pricing anticipated through 2026 and into early 2027 due to ongoing supply disruptions and market fundamentals.

• El Dorado CCS project expected to begin operations in Q4 2026 or Q1 2027, targeting a 25% reduction in Scope 1 emissions.

• Agricultural market outlook remains strong with robust fertilizer pricing and anticipated high nitrogen demand for the 2026/27 crop season.

• Planned turnarounds at El Dorado and Pryor facilities are expected to further improve reliability and production performance.