LSB Industries (LXU) Q1 2026 Earnings Transcript

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DATE

Thursday, April 30, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• President & CEO — Mark T. Behrman
• Chief Commercial Officer — Damien J. Renwick
• EVP & CFO — Cheryl A. Maguire

TAKEAWAYS

• Adjusted EBITDA -- $52 million, growing 44% from $29 million in the prior year, reflecting increased pricing, stronger volumes, and product mix benefits despite higher natural gas and operating costs.
• Free Cash Flow -- $37 million, calculated after $15 million of sustaining capital expenditures from operating cash flow of $52 million.
• Cash Balance -- Approximately $180 million at quarter-end, supporting a net leverage ratio of 1.4 times.
• Legal Settlement -- Received approximately $20.9 million from Benham Constructors, with claims against Leidos for damages exceeding $300 million proceeding to trial in October.
• Industrial Sales Position -- The industrial business operated in a sold-out position, with ammonium nitrate spot sales optimized at above typical market prices to support customers facing supply disruptions.
• Market Pricing -- Second quarter prices to date: Tampa ammonia at approximately $775 per metric ton, NOLA UAN near $480 per ton, and natural gas costs below $3 per MMBtu.
• El Dorado Turnaround -- Planned outage underway, expected to reduce ammonia production by about 35,000 tons and incur $15 million to $20 million in related expenses, with inventory buildup supporting downstream production.
• Q2 Guidance -- Management expects meaningfully higher adjusted EBITDA sequentially and versus the prior year, supported by ongoing tight market conditions and downstream improvement.
• Capital Deployment -- Evaluating investments focused on fertilizer and industrial production capacity expansion, including debottlenecking and potential El Dorado plant initiatives, with a portion funded by a USDA grant.
• El Dorado CCS Project -- Horizontal pipeline drilling completed, with capture equipment delivery scheduled for summer and project commissioning expected by late fall, targeting CO2 sequestration by early next year.

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RISKS

• Management expects turnaround activities at El Dorado to reduce ammonia output by approximately 35,000 tons in Q2 and result in $15 million to $20 million in expenses.
• "We currently believe that the North American market is at risk of being short nitrogen," reflecting concerns over uncertain urea imports, low UAN inventories, and possible further reductions from production outages or reduced imports.

SUMMARY

Management disclosed that U.S. natural gas pricing remains "well below $3 per MMBtu," contributing to a domestic cost advantage as global supply remains disrupted by Middle East strife, curtailments, and transportation bottlenecks. The team described the industrial business as "sold-out," with particular demand strength in the mining and nitrogen markets due to strong U.S. mining activity and persistent fertilizer deficits. Executives outlined plans to continue value creation projects, targeting a run-rate increase in EBITDA through specific production and efficiency improvements as well as the completion of the El Dorado carbon capture project.

• Cheryl A. Maguire said, "we expect Q2 adjusted EBITDA to be meaningfully higher" compared to both the previous quarter and last year, citing strong fundamentals and improved downstream production.
• LSB Industries (NYSE:LXU) projects sustained elevated pricing for nitrogen products throughout 2026 and into early 2027, anticipating a prolonged recovery from ongoing global supply disruptions.
• Management confirmed that a significant portion of the $50 million incremental EBITDA from current value creation initiatives is expected to be realized by year-end, with the balance accruing through next year on a run-rate basis.
• The company is actively reviewing potential capacity expansions—both organic and through possible partnerships or acquisitions—with flexibility from its fortified balance sheet and incoming settlement funds.
• Management intends to leverage the current domestic policy environment and USDA grant support to accelerate U.S. fertilizer production initiatives, consistent with stated federal priorities on food security and supply independence.

INDUSTRY GLOSSARY

• NOLA UAN: New Orleans, Louisiana price benchmark for urea ammonium nitrate solutions utilized in fertilizer pricing.
• CCS Project: Carbon capture and sequestration project to capture and store CO2 emissions from industrial operations, targeting decarbonization and potential environmental credit monetization.
• MDI: Methylene diphenyl diisocyanate, a chemical used in polyurethanes where domestic producers are supported by antidumping duties against imports.

Full Conference Call Transcript

Mark T. Behrman: Thank you, Kristy, and good morning, everyone. I am pleased with our first quarter 2026 results. They were in line with our overall expectations and reflect the growing contribution from the impact of the operational discipline we have been building and executing over the past several years. Our progress has become increasingly evident over the past two quarters, driving improved operating and financial performance. The investments we have made to increase the safety, reliability, efficiency, and output at our facilities continue to bear fruit in the form of improving overall O&S performance, and significant year-over-year growth in net sales, adjusted EBITDA, and EPS.

Our results reflect the progress we have made so far, and we expect to see additional improvement going forward. Our emphasis on production performance improvement, optimizing our product mix, and disciplined commercial execution reinforce our ability to maximize profitability. This will become even more important as current market dynamics begin to be reflected in pricing over the coming quarters. Regarding the progress of our CCS project at our El Dorado site, we feel good about meeting our projected timeline. I will provide an update later on in this call.

Lastly, as we previously discussed, we have been involved in litigation with respect to engineering and procurement contracts related to the construction of the ammonia plant at our El Dorado, Arkansas facility. Earlier this month, we entered into a settlement agreement with Benham Constructors, one of the two defendants in the case. Pursuant to the terms of the settlement agreement, Benham agreed to pay us approximately $20.9 million. The settlement agreement does not release or otherwise discharge any claims, rights, or remedies we have against Leidos, including our claims for fraud and breach of contract.

We plan to continue the vigorous prosecution of our filed claims against Leidos and continue to seek actual and punitive damages in excess of $300 million. The trial against Leidos is scheduled to begin in October. I will now turn the call over to Damien to provide more detail on the commercial environment.

Damien J. Renwick: Thank you, Mark, and good morning, everyone. Let me start by discussing the ongoing conflict in the Middle East and the impact that it is having on our industry. This is one of the more significant and prolonged supply disruptions that we have experienced. The Strait of Hormuz alone represents 20% of global ammonia seaborne trade and 30% of global urea seaborne trade. While the situation remains fluid, these dynamics are creating meaningful supply constraints across both markets. We are seeing this manifest in two primary ways. The first is the disruption to shipping through the Strait and the ability to move product globally.

Second, potentially more significant, is the impact to existing fertilizer production facilities in the Middle East, the full extent of which is not yet fully known. These dynamics are additive to the existing supply challenges across global markets, including reduced ammonia production in Trinidad, gas curtailments in India, outages in Australia, increasingly frequent drone strikes on Russian nitrogen plants, the potential export restriction of ammonia from China, as well as the ongoing export restriction of urea from China. While supply disruptions have been significant to date, global demand for ammonia and urea has remained consistent.

Despite some demand destruction in phosphates globally, fertilizer and industrial demand have been reasonably strong, supported by Indian domestic consumption and fertilizer and industrial upgrades globally. Moving to natural gas, approximately 20% of the world's LNG transits through the Strait. This has been severely disrupted, and there is very little alternative supply of LNG that can offset this. We expect European natural gas prices to be increasingly elevated as they work to fill up their storage ahead of next winter. During this time, we expect to be advantaged on U.S. natural gas prices, which have been incredibly resilient and affordable. Today, it trades well below $3 per MMBtu.

We also believe that the implications for the market will not be short-lived. Even when the Strait is fully opened, it will take some time before normality is restored. We expect elevated pricing throughout 2026 and even into early 2027. Our industrial business is in a sold-out position, even with our improved production volumes. During the first quarter, we optimized our production mix to maximize ammonium nitrate spot sales at above typical market prices. This allowed us to support customers whose AN supply has been disrupted. The U.S. AN market continues to be under pressure, with significantly lower domestic production available while demand is strong.

We expect these constructive market dynamics to continue to impact market prices, with supply interruptions expected to continue through most of 2026. As we think about the mining market segment, we are encouraged to see a renaissance in mining. What we are seeing is not temporal, but structural. Copper demand is strongly outpacing supply, and record gold prices are incentivizing new supply. Much of this activity is taking place in the Western U.S. Quarrying and aggregate production has also been growing. Lower demand in residential construction is being offset by higher demand in private and public construction. Even coal remains resilient, supported by policy changes and insatiable demand for electricity. The chemical segment has also been positive.

The antidumping duties on imported methylene diphenyl diisocyanate (MDI) have been positively finalized for five years. Generally, the chemical producers in the U.S. are feedstock-advantaged with U.S. natural gas liquids, while international peers are paying much higher naphtha inputs, which have been disrupted from the Strait of Hormuz. Moving to the domestic ammonia market, we had a good spring ammonia campaign and exited with minimal inventories. Inland prices continue to track with international prices, so we expect this to carry through to summer fill. New domestic supply in the U.S. Gulf continues to ramp up, albeit with some delays.

However, this new supply is nowhere near the extent of the supply that is disrupted globally, and would only approximately offset the loss of production in Trinidad. Favorable weather windows during the first quarter allowed growers to apply ammonia, resulting in higher-than-expected shipments out of our Pryor facility and low inventory levels at the end of the quarter. Ammonia supply appeared to be constrained during March, with many customers seemingly dealing with allocations and the inability to secure enough supply to meet growers' application demand. Agricultural demand for ammonia is being supported by nitrogen pricing spreads, with ammonia trading at a significant discount to urea and UAN.

Growers are especially incentivized this year to minimize input costs given the current challenging grain economics. While side-dress ammonia demand is a relatively modest percentage of total nitrogen demand, we would expect this pricing relationship to persist and growers to be incentivized to maximize ammonia purchases and application during the second quarter. Turning to UAN, grower economics, as previously mentioned, are challenging for the upcoming crop year. We believe the difficult margin environment for growers is resulting in limited risk-taking and positioning of product throughout the supply chain. We currently believe that the North American market is at risk of being short nitrogen due to uncertainty around forward urea imports.

Urea pricing has strengthened since February due to the Iranian conflict and the Strait of Hormuz issues, and the U.S. has consistently priced at a discount relative to the rest of the world, putting import volumes for late April and May at risk. UAN demand has been steady throughout 2026, and we expect that to continue through the second quarter and into July. We believe that current supply chain inventory levels are low, and that demand may attempt to switch away from urea if pricing spreads or availability of urea become an issue during Q2. We are currently estimating a very low carry of UAN inventories on June 30, at around 2025 levels.

Urea shortages, unplanned downtime across the U.S. production system, or reduced imports could reduce carryout even further than currently expected. Lastly, the USDA recently projected 95 million planted corn acres for the 2026 crop season, and we anticipate robust nitrogen demand through the full fertilizer application season. I will now turn the call over to Cheryl to discuss our first quarter financial results and our outlook.

Cheryl A. Maguire: Thanks, Damien, and good morning. On page six, you will see a summary of our first quarter 2026 financial results. As Mark mentioned earlier, we focus consistently on improving the reliability and efficiency of our assets, and we believe these results, as with last quarter's results, reflect those efforts and the progress we continue to make, which is contributing to our ability to capitalize on tight market conditions. As shown on page seven, Q1 adjusted EBITDA grew 44% year over year from $29 million in Q1 last year to $52 million this year. This increase reflects higher pricing, coupled with stronger volumes and product mix, which were partly offset by higher natural gas and other operating costs.

On page eight, you can see that our balance sheet remains solid, with approximately $180 million in cash at the end of the first quarter and net leverage at 1.4 times. Operating cash flow for the quarter was $52 million. After subtracting $15 million of sustaining capital, which is the capital required to maintain our operations, our free cash flow was approximately $37 million. This reflects strong free cash flow generation in the quarter, and we are encouraged by these results. Looking ahead, we remain focused on sustaining a high level of free cash flow generation, and our strong balance sheet gives us meaningful flexibility to invest in growth opportunities and drive long-term value creation.

Looking ahead to the second quarter, we expect demand for our products to remain strong as we operate in a sold-out position. We also expect pricing to remain elevated. Tampa ammonia and NOLA UAN have averaged approximately $775 per metric ton and $480 per ton, respectively, while natural gas costs have averaged below $3 per MMBtu thus far in the second quarter. Our planned turnaround at our El Dorado facility is underway and is a key step to continued operational improvement. The outage is expected to impact ammonia production by approximately 35 thousand tons. Additionally, we expect to incur approximately $15 million to $20 million of turnaround-related expenses during the period.

As discussed on our last call, we built ammonia inventory heading into the turnaround and therefore expect to operate our downstream production during the majority of the ammonia outage. Putting it all together, despite the turnaround, we expect Q2 adjusted EBITDA to be meaningfully higher as compared to 2026 Q1 and the second quarter of last year, driven by strong market fundamentals and continued improvement in downstream production. And now I will turn it back over to Mark. Thank you.

Mark T. Behrman: Turning to page nine, our El Dorado low-carbon project is progressing, and we continue to work closely with senior officials from the EPA's Region 6 with a goal of sequestering CO2 by the end of this year or early next year. In addition to the previously drilled injection well, this quarter we completed the drilling of the underground horizontal pipeline that will transport CO2 from the capture equipment area to the injection well that will sequester the CO2. The next step is to complete the capture area civil work and prepare the area for delivery of the capture equipment this summer.

The assembly and connection of the different pieces of capture equipment is expected to be completed in late fall this year. On the commercial front, our team continues to pursue low-carbon product supply opportunities where we can generate premiums for those products, as well as evaluate the potential to sell environmental attributes generated. We are excited as we are getting closer to completing our project and realizing our vision of decarbonizing ammonia. As I mentioned earlier, we have been highly focused over the last several years on increasing the reliability of our facilities, which has translated into higher production rates, improved product mix, and lower costs.

During this time, we have often been asked about when we would begin to see the results of these investments. I think I can safely say that after two consecutive quarters of $50 million-plus in EBITDA, led by significantly improved production performance, we are beginning to see the fruits of all the hard work our teams have accomplished over the last three years. And we are not done. As we continue to invest in our business, including the El Dorado turnaround Cheryl mentioned, along with the scheduled turnaround at our Pryor, Oklahoma facility in the third quarter, we expect continued improvement in our overall production performance.

In previous calls, we have laid out a path to a $50 million of annual EBITDA through specific initiatives including production targets, process efficiencies, and our El Dorado carbon capture project. A good portion of this is expected to be realized by the end of this year with the balance coming by the end of next year. We ended the quarter with a strong cash position, having generated significant free cash flow for the quarter. We also believe we will generate meaningful free cash flow for the remainder of this year.

This, plus the approximately $21 million settlement payment I mentioned earlier, will provide us with financial flexibility and numerous options as we consider the best way to create value for our shareholders. We are currently reviewing several opportunities to invest capital into projects that would enable us to expand both our fertilizer and industrial production capacity. These include debottlenecking activities, as well as evaluating potential acquisition or partnership opportunities that offer the ability to increase our production while gaining meaningful scale.

There is no question that the evolving geopolitical landscape, including the conflict in the Middle East and associated disruption of production facilities there, as well as the ongoing impact of important trade channels, is having a significant impact on the global availability of nitrogen fertilizers. We expect this will continue throughout the remainder of 2026 and into 2027. Our improved operating performance is enabling us to maximize fertilizer production and support U.S. farmers with additional supply in this difficult time. We are encouraged by our continued execution across the business and believe it positions us to continue supporting our customers and deliver sustainable growth and long-term value creation.

Before we open it up for questions, I would like to mention that Cheryl will be participating in the Barclays Leveraged Finance Conference in Austin on May 18 and the Wolfe Research Materials Future Conference in June in New York City. Additionally, Damien and I will be participating in the Granite Research Virtual Conference Series on June 30 and July 1. We look forward to speaking with some of you at these events. That concludes our prepared remarks. We will now open the call for questions.

Operator: Ladies and gentlemen, if you would like to ask a question, please press star 1 and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Lucas Charles Beaumont with UBS. Please proceed.

Lucas Charles Beaumont: Good morning. Thank you. I want to get your view on where the nitrogen market is going. It seems like there has been a bit of a disconnect between what is happening in the physical market and the degree of the disruption that we are seeing. Prices have moved up a lot in certain areas, urea or UAN, but the cost curve not as much so far. We have not seen any resumption yet in trade flows, and I think even if things were to be credibly reopened tomorrow, we would probably still have four-plus weeks before production would restart over there, and then two to three months before we could start seeing deliveries again into import markets.

From where we stand today, how do you see market dynamics evolving over the next couple of months and what does that mean for pricing and, ultimately, demand and demand destruction? Thanks.

Mark T. Behrman: Morning, Lucas. I think you are right. There is the perception that if there was a permanent ceasefire, things would go back to normal relatively quickly, and I think that is a misnomer. First off, there is so much supply that has been taken out of the marketplace that it will take a relatively long time to make that up. Part of the reason is there has been damage to facilities in the Middle East, and I think most of us do not really understand what type of damage the production facilities have incurred, and so we do not know how long it will be before some of those plants that were damaged come back online.

I also think people may be miscalculating the backup of vessels that are waiting to get out of the Strait, how long that will take, the coordination, and which vessels get priority. Big picture, we think that it is going to take certainly through the end of this year and into next year until we see things back to normal again. As far as our view on pricing and supply-demand, I will pass it over to Damien for a more current view on the ground.

Damien J. Renwick: Good morning, Lucas. It has been interesting to observe how the market has responded. The U.S., particularly with urea, is priced at a fairly significant discount to market prices. India bid very heavily on the basis of their government support for tonnes, so they are in a reasonably good position now following their latest tender. You have also got Brazil trading upwards of where NOLA urea is at the moment. I think there is some concern on product availability here in the U.S. that may materialize over the next four to eight weeks as we work through the full season, and that is where it will all bear out.

Also, Tampa ammonia has not settled yet; it should go upwards from where it is today. As Mark said, we have months before you see anything calm down after the Strait has reopened, and then the world gets a sense of what plants have been damaged or what the restart profile looks like, notwithstanding all of the other issues you have throughout the world with damage to Russian plants, Trinidad production being out probably for the long term, and the typical interruptions you are seeing, like with Burrup in Australia being out for many weeks. We are pretty positive, optimistic on pricing.

Lucas Charles Beaumont: Thanks. That is helpful. On the industrial side, I know a large portion of your book is contracted. How is industrial demand responding more broadly and pricing there? What are you doing to capitalize most on the current market? And second, on the industrial versus fertilizer mix, where do you think the demand destruction in the industry comes from to equilibrate demand with the lower supply available this year?

Damien J. Renwick: Our portfolio is weighted nicely to mining, and as I said earlier, mining activity globally, particularly in the U.S., is very strong, with a strong pipeline for new projects. That is underpinning very strong demand for ammonium nitrates for explosives, and we are leaning into that as best we can, optimizing our production mix to take advantage of the current situation, particularly in the U.S. with some supply being out of the market. We are maximizing our spot sales into that market. In terms of other industrial demand, it has been steady. We talked about nitric demand through polyurethane and MDI, and that is still strong in the U.S.

The fundamentals around that industry continue to hold true, and U.S. producers are well shielded from some of the issues in the Middle East that other global producers are experiencing. We are seeing them maximize production, which is maintaining very strong levels of demand for our products. In terms of demand destruction, you will see buyers opt out when their economics get too strained, and you have already seen that in phosphates with those producers experiencing a double whammy with both ammonia and sulfur. Sulfur prices are at extremely high levels, and sulfuric acid prices have followed.

You will also see, through the nitrogen molecule, some regions of the world decide not to apply nitrogen, particularly parts of Africa or Asia, and even countries that cannot get product; they will not have a choice. You will see that start to happen, and the market will act rationally and efficiently as it tends to do.

Mark T. Behrman: One thought to add: security of supply is now front and center. Going back to the beginning of the Russia-Ukraine conflict and now this conflict, people are really focused on security of supply. In our industrial business, customers need product because it is either a feedstock for another product, as Damien talked about with nitric acid, or you need AN to mine copper or gold. This focus on security of supply is creating interesting opportunities for us because we have customers that desire long-term product and want to know they have it. We may have opportunities to expand at our sites—some brownfield expansion or debottlenecking—supported by customer contracts and demand.

Damien J. Renwick: To build on that, with our three facilities we have the ability to support our industrial customer base through each of the three facilities with the core industrial products. That is a huge strength of our business, and our customers value that security of supply. We expect that to continue to be reflected in what we do going forward, with customers attracted to that value proposition.

Lucas Charles Beaumont: Lastly, on free cash flow, it looks like you could easily do an extra $100 million this year, maybe $200 million more in free cash flow than last year, plus the $20 million from the legal settlement. You mentioned looking at new projects to deploy that. Any more detail? Should we refer back to the last Investor Day projects, or is there anything else under consideration?

Mark T. Behrman: We have talked on previous calls about the ability to expand the ammonia plant production at El Dorado. We do have a USDA grant to provide some capital for that. While we have not FID’d that project, we will do our last stage of engineering before FID, and I think there is a high probability that we would move forward with that project. With the current administration focused on increasing domestic fertilizer production, we are thinking about how we can expand other parts of El Dorado and maybe even some new products at El Dorado with the support of the administration, plus the capital we have available.

That would be the plan at El Dorado—figure out how to expand given the current environment and the capital we have and will generate. At our other two facilities, there are things at our Pryor facility we are looking at—whether debottlenecking, increasing nitric acid production, or other things. We have the ability with our current assets to invest that capital to get attractive returns, and we are focused on doing the work to make sure our assumptions are correct before moving forward. The administration is looking to onshore or increase domestic fertilizer production, and we want to support that.

Operator: The next question comes from the line of Andrew D. Wong with RBC Capital Markets. Please proceed.

Andrew D. Wong: Good morning. I wanted to follow up on the comment around the administration's support for fertilizers. There was funding from the USDA earlier. Is there anything else that has come up more recently? Is there anything larger the administration may look at that LSB Industries, Inc. could participate in?

Mark T. Behrman: Morning, Andrew. I do not know that there is another USDA funding program like the original one that came out during the Biden administration. What I can tell you is I was in D.C. a couple of weeks ago as part of an industry trade group talking with the administration, and there is a fair amount of capital that the administration has and would like to commit to increasing domestic fertilizer production. I think they want to support that. They have done a number of press releases, and they are talking about the abundance and low cost of natural gas in the United States, and nitrogen fertilizers being a derivative of natural gas.

They would prefer not to depend on other countries for fertilizer. They look at it as food security, which is extremely important—even to the point of, if we ever got there, being an exporter versus an importer. I do think there is capital available, and for the right projects, they would support new projects with capital.

Andrew D. Wong: For this year, I understand there is a heavier turnaround schedule. How flexible is that? Are you able to hold off on some of the work and maybe have the plants come on faster given the current price environment, or is that too disruptive to the plans you already have in place?

Mark T. Behrman: We are currently in our turnaround at El Dorado. We discussed whether to delay it prior to going in, but we pushed off that turnaround from last year already. When you do major project work like a turnaround, lining up the contractors and getting the right people is critical, and if you start pushing things around, you run the risk of not having the desired contractor or people. We elected not to push off that turnaround. I think we will come out of it in great shape.

I am excited about that because I think not only will we increase reliability, but we have done a lot of work on the site that sets us up for the expansion I talked about—whether electrical work or other infrastructure that will allow us to leverage that to do some expansion. For Pryor, we have a turnaround in July. There is specifically one item we need to address, and we will try to get through that turnaround as quickly as we can, but we would run the risk of having extended downtime if we do not go through it. We are focused on that.

I do not think we are going to see pricing fall off a cliff later in the fall, so we expect an opportunity to take advantage of the pricing market, which we think will last longer.

Operator: The next question comes from the line of Robert Miles McGuire with Granite Research. Please proceed.

Robert Miles McGuire: Good morning and congratulations on the quarter. MDI tariffs and countervailing duties—how are they affecting nitric acid demand and LSB Industries, Inc.'s debottlenecking plans? How do you think the tariffs and duties will shape the market from here?

Damien J. Renwick: Hi, Rob. It is a very positive story for U.S. domestic producers of MDI. Our customer base is running flat out. They are contemplating their own expansions, and we are in early discussions with them about what that might look like from a supply perspective. There is a very positive tailwind in the U.S. because of that, and we are also seeing it more broadly with some other producers bringing on additional capacity.

Robert Miles McGuire: Thank you, Damien. With regards to the projects, what should we be looking for exiting the turnarounds this year that relate to progress with your value creation projects?

Mark T. Behrman: As I mentioned in the prepared comments, we expect to see a good portion of that $50 million in value creation as we come out of this year on a run-rate basis, with the balance occurring by the end of next year. So about half by the end of this year and the balance by the end of next year, on a run-rate basis.

Robert Miles McGuire: On AN, should we be looking for a similar mix of AN and UAN in the second quarter that we saw in the first quarter? Is there room for further AN production?

Damien J. Renwick: You will see the same mix. We are probably at our limit of what we can lean into, so that will continue through at least the end of the year.

Robert Miles McGuire: Lastly, sulfuric acid—do you still produce and sell on a commercial basis? Can you benefit from the recent price increase, or is that not really a product at this point?

Damien J. Renwick: We are still in that market, although it is immaterial to the overall profile. Yes, sulfur prices are going up, but so too are sulfur costs, so margins are pretty stable.

Operator: Thank you. This concludes the question-and-answer session. I will hand the call back over to Mark T. Behrman for closing remarks.

Mark T. Behrman: I appreciate everyone's interest in LSB Industries, Inc. I hope you can see that we are making progress. We are excited about the progress we have going forward, and I hope to talk to some of you at the upcoming conferences. Thanks, and have a great day.

Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

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