LSB Industries, Inc. Provides Update on Repair and Upgrade Activities at Its Pryor, Oklahoma and Cherokee, Alabama Facilities
by Business Wire
LSB Industries, Inc. (the “Company”) (NYSE: LXU) today announced that it expects to complete the installation of a new ammonia converter and resume production at its Pryor, Oklahoma chemical facility (“Pryor Facility”) in the first half of February 2013. As announced on November 21, 2012, the Company had stopped production at the Pryor Facility to perform unplanned maintenance on a compressor, as well as for the planned installation of a new ammonia converter designed to improve and increase ammonia production capacity. The Company initially anticipated an outage of approximately six to eight weeks; however, while the compressor maintenance has been completed, delay in the delivery of certain components related to the converter installation has pushed out by approximately four weeks the expected timeframe for restarting the Pryor Facility. The Company estimated that the adverse effect of this downtime on operating income is approximately $2 million per week until production resumes.
Additionally, the Company provided an update on its Cherokee Nitrogen facility (“Cherokee Facility”), following its November 14, 2012 announcement that the Cherokee Facility suffered a pipe rupture that damaged the heat exchanger portion of its ammonia plant. Since that time, the Cherokee Facility has been producing nitric acid and ammonium nitrate at the targeted production level, using purchased ammonia feedstock. Management expects repairs to be completed and production to be resumed within the previously estimated three to five month range.
LSB is a manufacturing and marketing company. LSB’s principal business activities consist of the manufacture and sale of chemical products for the agricultural, mining, and industrial markets and the manufacture and sale of commercial and residential climate control products, such as geothermal and water source heat pumps, hydronic fan coils, modular geothermal chillers, and large custom air handlers.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements generally are identifiable by use of the words “believe,” “expects,” “intends,” “plans to,” “estimates,” “projects,” or similar expressions, and such forward-looking statements include, but are not limited to the time when the new ammonia converter will be installed and production will resume at the Pryor Facility, the amount of the adverse effect on operating income during the downtime at the Pryor Facility, and the time when the repairs will be completed and production will resume at the Cherokee Facility. Investors are cautioned that such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from the forward-looking statements, as a result of various factors, including, without limitation, general economic conditions, ability to obtain replacement and repair equipment and parts in a timely manner, weather conditions, labor conditions, and other factors set forth under “A Special Note Regarding Forward-Looking Statements” in our Form 10-K for year ended December 31, 2011, and the Form 10-Qs for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012.