Forward‐Looking Statements
Statements in this presentation that are not historical are forward‐looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward‐looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance including the effects of the COVID‐19 pandemic and anticipated performance based on our growth and other strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or actual achievements to differ materially from the results, level of activity, performance or anticipated achievements expressed or implied by the forward‐looking statements. Significant risks and uncertainties may relate to, but are not limited to, business and market disruptions related to the COVID‐19 pandemic, market conditions and price volatility for our products and feedstocks, as well as global and regional economic downturns, including as a result of the COVID‐19 pandemic, that adversely affect the demand for our end‐use products; disruptions in production at our manufacturing facilities; and other financial, economic, competitive, environmental, political, legal and regulatory factors. These and other risk factors are discussed in the Company's filings with the Securities and Exchange Commission (SEC).
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐ looking statements. Although we believe the expectations reflected in the forward‐looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward‐ looking statements. You should not rely upon forward‐looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward‐ looking statements, whether because of new information or future developments.
Q1'22 Overview - Record Performance with Strong OutlookQ1'22
Net SalesAdjusted EBITDA1
Adjusted EBITDA Margin1
Adjusted
EPS1
Net Debt2/ TTM EBITDA
Q1'21
Net sales up 103% year over year driven by higher selling prices and continued strong plant operations
Record Q1 Adjusted EBITDA of $101.1M ‐ an increase of 484% year over year
Adjusted EBITDA Margin of 50.8% compared to 17.6% in the first quarter of 2021
Total liquidity at 3/31/22 of over $400M
Completed $200M senior notes offering further enhancing liquidity
Net debt/ TTM Adjusted EBITDA of ~1.4X at 3/31/22
Robust market conditions and solid operating performance expected to continue throughout 2022 and into 2023
(1) EBITDA, Adjusted EBITDA and Adjusted EPS are non‐GAAP measures; see reconciliations in appendix
(2) Net debt calculated as total long‐term debt including current portion plus preferred stock minus cash and cash equivalents
Fertilizer Market Overview (1)
Corn trading at ~$8.00/bushel, highest level since 2012
- Strong demand for ethanol (~40% of total annual U.S. corn use) as miles driven have returned to near pre‐ pandemic levels
- USDA expectation for reduction in corn planting of ~3M acres in 2022 vs 2021 in face of historically low stocks
- Drought conditions in South America and the Western U.S. have reduced global corn supply
- Wet weather through U.S. corn belt delaying start of planting season
Robust nitrogen pricing continued in Q1'22; expected to persist throughout 2022 and into 2023
- High European natural gas prices forced producers to curtail nitrogen production over past eight months reducing global supply
- Tampa ammonia benchmark for May settled at $1,425/mt, close to the highest price on record
- NOLA UAN benchmark pricing at over $600/ton
Russian military aggression towards Ukraine exacerbating global supply constraints of corn, wheat and nitrogen
10‐Year Corn Price
$9
$8
($ per bushel)
$7
$6
$5
$4
$3
$2
$1
$0
Apr‐ 12
$1,800
Apr‐ 13
$1,600
Apr‐ 14
Apr‐ 15
Apr‐ 16
Apr‐ 17
Apr‐ 18
Apr‐ 19
10‐Year Tampa Ammonia Price
($ per metric ton)
Apr‐ 20
Apr‐ 21
Apr‐22
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
May‐ 12
May‐ 13
May‐ 14
May‐ 15
May‐ 16
May‐ 17
May‐ 18
May‐ 19
May‐ 20
May‐ 21
May‐22
(1)Sources: USDA, Green Markets, Macrotrends.net, Federal Reserve Economic Data
Industrial and Mining Market Fundamentals Remain Strong
Industrial
U.S. Federal Reserve data indicates that new housing starts are at their highest level since 2006
Pent up U.S. demand for new autos resulting from microprocessor shortage in 2021 likely to ease in 2022 translating into increased auto manufacturing
Full year 2022 GDP expansion of 3.0%, as forecast by The Conference Board, represents a healthy rate of economic growth
Mining
Production of construction aggregates has increased over the past decade driven by infrastructure repair, upgrade and expansion and increased commercial and residential development
Copper prices sit near all‐time highs above $4.70 per pound in April as a result of rising demand from various end markets, including electric vehicle production. This should translate into increase copper mine production in the coming years
US New Housing Starts (1)
(thousands)
2000
1800
1600
1400
1200
1000
800
600
400
Mar ‐ 12
Sep ‐ 12
Mar ‐ 13
Sep ‐ 13
Mar ‐ 14
Sep ‐ 14
Mar ‐ 15
Sep ‐ 15
Mar ‐ 16
Monthly Starts
Sep ‐ 16
Mar ‐ 17
Sep ‐ 17
Mar ‐ 18
Sep ‐ 18
Mar ‐ 19
Sep ‐ 19
12‐Month Rolling Avg.
U.S. Crushed Stone Production (2)
Mar ‐ 20
Sep ‐ 20
Mar ‐ 21
Sep ‐ 21
1,600
Mar ‐ 22
1,500
MIllionMetricTons
1,400
1,300
1,200
1,100
1,000
Overall demand for nitrogen products is supporting higher prices for ammonium nitrate
2021 | ||
(1) | Housing starts obtained from Federal Reserve Economic Data | |
(2) | Crushed stone production obtained from USGS.gov | 5 |
2012
2013
2014
2015
2016
2017
2018
2019
2020
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LSB Industries Inc. published this content on 04 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2022 13:10:05 UTC.