LSB Industries Reports Decrease in Net Income Despite Increased Net Sales in Q2 2025

LSB Industries, Inc. reported its financial results for the second quarter and first half of 2025, revealing a net income of $3.0 million for the quarter, a significant decrease from $9.6 million in the same period last year. For the first half of 2025, net income fell to $1.4 million from $15.2 million in 2024. The company's net sales increased to $151.3 million in the second quarter, up from $140.1 million a year earlier, and totaled $294.7 million for the first half, compared to $278.3 million in 2024. However, gross profit declined to $23.2 million for the quarter and $37.6 million for the half-year, reflecting higher costs, particularly in natural gas.

The financial performance indicates a shift in profitability, with gross profit margins decreasing to 15.3% in the second quarter from 19.6% in the previous year. The decline in profitability was attributed to increased costs of sales, particularly due to higher natural gas prices, which impacted the overall gross profit. Selling, general, and administrative expenses also decreased to $9.8 million for the quarter, down from $11.5 million, contributing to a reduction in operating income to $10.5 million from $14.4 million year-over-year.

In terms of operational developments, LSB Industries has focused on enhancing its production capabilities and expanding its product offerings. The company has initiated several capital improvement projects, including the construction of additional storage and loading capabilities at its El Dorado Facility, which is expected to increase sales volumes of higher-value products. Additionally, LSB is pursuing the development of low carbon ammonia, a product anticipated to meet growing environmental standards and market demand. The company has entered into agreements to supply low carbon ammonium nitrate solution to Freeport Minerals Corporation, marking a strategic move towards sustainable product offerings.

The company’s balance sheet reflects a decrease in total assets to $1.13 billion as of June 30, 2025, down from $1.19 billion at the end of 2024. Cash and cash equivalents also saw a decline, totaling $5.6 million compared to $20.2 million at the end of the previous year. Long-term debt decreased to $446.4 million from $478.4 million, following the repurchase of $32.4 million in Senior Secured Notes during the quarter. The company maintains a revolving credit facility with approximately $46 million available, which it plans to utilize for operational needs and potential growth initiatives.

Looking ahead, LSB Industries anticipates continued challenges from fluctuating natural gas prices and market conditions but remains optimistic about its strategic initiatives. The company is focused on improving operational reliability, expanding its product distribution, and developing low carbon products to enhance its market position. Management expects that these efforts will contribute to stabilizing financial performance and driving future growth, despite the current economic uncertainties.