LSB Industries Inc. (NYSE:LXU) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 10:00 am ET

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LSB Industries Inc. (NYSE:LXU) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the LSB Industries' First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Kristy Carver, Vice President and Treasurer for LSB Industries. Please go ahead, Kristy.

Executive
Kristy Carver

Thank you, Kevin. Good morning, everyone. Please note that today's call will include forward-looking statements, and because these statements are based on the Company's current intent, expectations, and projections, they are not guarantees of future performance and a variety of factors could cause actual results to differ materially. As this call will include references to non-GAAP results, please reference the press release in the Investors section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results.

At this time, I would like to go ahead and turn the call over to Dan for opening remarks.

Executive
Daniel Greenwell

Thank you, Kristy, and good morning, everyone. We're pleased to have you on our call and appreciate your time. Today, we'll discuss our 2018 first quarter results and share some early thoughts on both the second quarter and the second half of 2018. We'll also discuss our progress on improving our plan uptime.

As we noted during our last quarter's call back in February, we are in full implementation mode of a new maintenance management system as well as overhauling our company-wide procurement processes. These activities are going well and I'm pleased with the Company's progress. Both John and Mark will provide further details during their discussions. In last quarter's call, we also discussed the engineering studies and review we had initiated on our prior plan. We'll provide an update on those activities during today's call.

In summary, the outside engineering studies and review affirmed our internal assessments. We do as a follow-up work that we will undertake from those efforts. Lastly, we will provide a longer-term view on our strategic direction. We believe the nitrogen industry will further consolidate over time.

During the first quarter of 2018, our revenues of $100.5 million were slightly lower than the first quarter of 2017 on a comparative basis. Our EBITDA increased by approximately $3.4 million on a comparative basis. In general, product pricing was higher with the exception of UAN. Mark will provide an analysis of the first quarter 2018 volume and pricing on UAN during his financial review. We believe our second quarter UAN prices will be much higher.

Our current market pricing for UAN, ammonium nitrate and agricultural ammonia remain robust despite a slight softening in the Gulf urea market. To date, we have not seen the Gulf softness in our markets for UAN, ammonium nitrate or agricultural ammonia. We continue to reduce selling, general and administrative expenses during the quarter. We've made great strides in eliminating unneeded costs and becoming more efficient.

Our overall ammonia on-stream rates were approximately 94% for the quarter. We have