LSB Industries (LXU) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 increased 18% year-over-year to $169.5 million, driven by higher selling prices, improved product mix, and operational discipline, resulting in significant growth in adjusted EBITDA and EPS.

• Net income reached $19.7 million, reversing a net loss of $1.6 million in Q1 2025, aided by higher operating income and a discrete tax benefit.

• Operational improvements, reliability, and product mix optimization contributed to profitability, with further gains expected.

• 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, up from $29.1 million, with margin improving to 31% from 20% and gross profit rising to $35.8 million.

• Operating cash flow was $51.8 million; free cash flow after sustaining capital was $37 million.

• Cash and short-term investments at quarter-end were approximately $181.7 million; net leverage at 1.4x.

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

• Long-term debt stood at $441.2 million as of March 31, 2026.

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.

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

• Full-year 2026 capital expenditures are expected to be approximately $75 million, with $55 million for sustaining production.