LSB INDUSTRIES, INC.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
LXU$10.60+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001193125-26-326147
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001193125-26-437807
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 177 previous paragraphs and 162 current paragraphs.
104 unchanged; 48 reworded; 10 added; 24 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
The fertilizer markets remain constructive, with ongoing geopolitical conflicts, including those in the Middle East and between Ukraine and Russia, continuing to affect international supply, pricing and logistics. Ammonia prices remain elevated relative to historical averages, although they have moderated from first-half highs, due in part to reduced ammonia demand from phosphate producers affected by constrained sulfur supply. As we look forward, we expect higher natural gas prices in Europe will be constructive to pricing. Constrained Urea supplies strengthened Urea pricing during the third quarter, which also improved Urea Ammonium Nitrate (UAN) pricing. We expect fall fertilizer applications to support demand in the fourth quarter. Other notable developments that could impact product pricing include continued attacks affecting Russian nitrogen plants, ports, and ships, and any further escalation of conflicts in the Middle East, including between Saudi Arabia and the Houthis.
Current report
The current USDA corn outlook compared to the prior report for the U.S. is for larger supplies, exports, domestic use and ending stocks. Corn beginning stocks were raised based on the September 30, 2026 Grain Stocks report. Corn production moved higher on a 2.7-bushel increase in yield to 181.2 bushels per acre compared to the prior month report. Harvested area for grain is unchanged at 88.5 million acres. Each component of use was increased. Exports increased due to increased supplies.
Current report
Does not include expenditures for the development of the carbon capture and sequestration facility.
Current report
Provision for Income Taxes
Current report
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Current report
Does not include expenditures for the development of the carbon capture and sequestration facility.
Current report
Other expense, net during the first nine months of 2026 was lower than the prior year period primarily due to sales and use tax recoveries resulting from our ongoing review, which reduced expense.
Current report
Provision for Income Taxes
Current report
Net cash used by financing activities was $13.2 million for the first nine months of 2026 compared to $52.9 million for the same period of 2025, a change of $39.7 million.
Current report
Capital Expenditures – First Nine Months of 2026
Removed paragraphs (24)
Previous report
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Previous report
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Previous report
In addition, we began Turnaround work at our Pryor Facility in the second quarter, accelerating the commencement date from its originally scheduled third quarter timeframe. The shift forward in the commencement of the Turnaround moved the majority of the costs and lost production from the Turnaround from the third quarter to the second quarter. The Turnaround at the Pryor Facility was completed during the third quarter.
Previous report
The fertilizer markets remain constructive as conditions continue to evolve following the Strait of Hormuz disruption earlier this year. Ammonia prices remain elevated relative to historical averages, although they have moderated from first-half highs as seasonal demand normalizes and supply conditions improve. Urea Ammonium Nitrate (UAN) pricing remains favorable even as prices normalize from elevated levels, with a constructive demand outlook expected to support increased demand in the second half of 2026. Other developments that could impact product pricing include the continued attacks affecting Russian nitrogen plants, ports, and ships, as well as the ongoing risk related to instability in the Middle East, including the U.S. – Iran conflict.
Previous report
The current USDA corn outlook compared to the prior report for the U.S. is for smaller supplies, greater exports, and reduced ending stocks. Corn beginning stocks were reduced reflecting an increase in feed and residual use that is partly offset by a reduction in corn used for ethanol. The yield is unchanged at 183.0 bushels per acre from the prior month’s report.
Previous report
Natural gas costs increased during the February settlement period primarily due to elevated market prices driven by Winter Storm Fern, which caused significant weather-related supply constraints and heightened regional demand, resulting in a higher average cost of natural gas for the period. Since that time, natural gas prices have moderated as market conditions normalized and weather-related constraints eased.
Previous report
Loss on Extinguishment of Senior Secured Notes (2025 only)
Previous report
Represents amount classified as cost of sales.
Previous report
Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.
Previous report
During the second quarter of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million. There were no repurchases during the second quarter of 2026.
Previous report
(Benefit) Provision for Income Taxes
Previous report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Previous report
Represents amount classified as cost of sales.
Previous report
Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.
Previous report
Loss on Extinguishment of Debt
Previous report
Other expense, net during the first half of 2026 includes write-downs of assets no longer being used in operations, partially offset by gains from the sale of real estate and tangible property of certain former agricultural retail locations that had ceased operations and sales and use tax recoveries resulting from our ongoing review. Other expense, net, during the first half of 2025 consisted of asset write-downs related to assets no longer being used in operations.
Previous report
(Benefit) Provision for Income Taxes
Previous report
Net cash used by financing activities was $9.4 million for the first six months of 2026 compared to $44.4 million for the same period of 2025, a change of $35.1 million.
Previous report
Capital Expenditures – First Half of 2026
Previous report
Non-GAAP Financial Measures
Previous report
Management uses adjusted gross profit as a supplemental measure to review and assess the performance of our core business operations and for planning purposes. We define adjusted gross profit as gross profit (loss) excluding depreciation and amortization and Turnaround expenses included in our cost of sales, which we believe are not reflective of our operating performance in a given period.
Previous report
Adjusted gross profit is a metric that provides investors with greater transparency to the information used by management in its financial and operational decision-making. We believe this metric is useful to investors because it facilitates comparisons of our core business operations across periods on a consistent basis. Management believes that the non-GAAP measure presented in this Form 10-Q, when viewed in combination with our results prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”), provides a more complete understanding of the factors and trends affecting our business and performance.
Previous report
Adjusted gross profit is not a measure of financial performance under U.S. GAAP, and should not be considered a substitute for gross profit, which we consider to be the most directly comparable U.S. GAAP measure. Adjusted gross profit has limitations as an analytical tool, and when assessing our operating performance, investors should not consider adjusted gross profit in isolation, or as a substitute for gross profit prepared in accordance with U.S. GAAP. Adjusted gross profit may not be comparable to similarly titled measures of other companies and other companies may not calculate such measure in the same manner as we do.
Previous report
The following table reconciles gross profit to adjusted gross profit.
Reworded paragraphs (48)
Previous wording
This discussion is intended to provide a reader of our financial statements with management’s perspective on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Investors should read the following discussion and analysis in conjunction with the consolidated financial statements and related notes included in “Item 1. Financial Statements.” Notes referenced in this discussion and analysis refer to the notes to consolidated financial statements that are found in “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements.” Certain statements contained in this discussion may be deemed to be forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and in our Annual Report on Form 10-K for the year ended December 31, 2025, particularly in the section entitled “Risk Factors.” Unless we state otherwise or the context otherwise requires, the terms “LSB,” “we,” “us,” “our” and the “Company” refer to LSB Industries, Inc. and its consolidated subsidiaries.
Current wording
This discussion is intended to provide a reader of our financial statements with management’s perspective on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Investors should read the following discussion and analysis in conjunction with the condensed consolidated financial statements and related notes included in “Item 1. Financial Statements.” Notes referenced in this discussion and analysis refer to the notes to condensed consolidated financial statements that are found in “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements.” Certain statements contained in this discussion may be deemed to be forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and in our Annual Report on Form 10-K for the year ended December 31, 2025, particularly in the section entitled “Risk Factors.” Unless we state otherwise or the context otherwise requires, the terms “LSB,” “we,” “us,” “our” and the “Company” refer to LSB Industries, Inc. and its consolidated subsidiaries.
Previous wording
During the second quarter we successfully completed an extensive and complex Turnaround of our El Dorado ammonia plant on time, within budget and injury free.
Current wording
We successfully completed an extensive and complex Turnaround of our El Dorado ammonia plant during the second quarter of 2026. We also initiated Turnaround work at our Pryor Facility late in the second quarter of 2026, completing the work early in the third quarter. Planning is now currently underway for Turnaround activity at our Cherokee location, which is expected to begin in the third quarter of 2027.
Previous wording
In May 2026, we reached an agreement to assume full ownership of our project to capture and sequester CO 2 at our El Dorado Facility (the “Project”) from Lapis Carbon Solutions (“Lapis”). The milestone-based structure of the agreement aligns our capital deployment with Project advancement, while limiting upfront capital exposure. The Project is expected to be completed and operational in the first quarter of 2027, subject to United States Environmental Protection Agency (“EPA”) approval of our Class VI permit, at which time CO 2 injections are expected to begin.
Current wording
In May 2026, we reached an agreement to assume full ownership of our project to capture and sequester CO 2 at our El Dorado Facility (the “Project”) from Lapis Carbon Solutions (“Lapis”). The milestone-based structure of the agreement aligns our capital deployment with Project advancement, while limiting upfront capital exposure. Completion of the Project and commencement of CO₂ injections are conditioned on the U.S. Environmental Protection Agency’s (“EPA”) issuance of our Class VI permit. The EPA’s technical review of our resubmitted application is ongoing. Although the EPA’s published Class VI Permit Tracker currently reflects a potential operational date in the second half of 2027, based on our continued engagement with the EPA’s Region 6 office, we believe an earlier operational date is possible, depending on the timing of the EPA’s completion of its review.
Previous wording
In May 2024, we announced an agreement to supply, for a five-year period commencing January 1, 2025, up to 150,000 short tons per year of low carbon ammonium nitrate solution (“ANS”) to Freeport Minerals Corporation (“Freeport”). In early 2025, we began supplying conventional ANS to Freeport from our El Dorado Facility and expect to phase-in the low carbon contracted volume in early 2027, once the Project is operational. Freeport intends to use the low carbon ANS purchased from us for its United States copper mining operations.
Current wording
In May 2024, we announced an agreement to supply, for a five-year period commencing January 1, 2025, up to 150,000 short tons per year of low carbon ammonium nitrate solution (“ANS”) to Freeport Minerals Corporation (“Freeport”). In early 2025, we began supplying conventional ANS to Freeport from our El Dorado Facility and expect to phase-in the low carbon contracted volume in 2027, once the Project is operational. Freeport intends to use the low carbon ANS purchased from us for its United States copper mining operations.
Previous wording
In May 2026, we reached an agreement to take full ownership of the Project. The sequestered CO₂ generated from the facility's ammonia production is expected to qualify for the enhanced federal tax credit, currently $85 per metric ton of CO 2, under Internal Revenue Code Section 45Q. Based on expected capture volumes, the Company estimates the Project could generate approximately $25 million to $30 million of annual earnings when fully operational, net of operating costs, over the 12-year credit period, subject to continued qualification. Although the credits are expected to be recognized in earnings as they are earned, the timing of related cash inflows may vary depending on the tax credit monetization method selected. As a result, cash receipts may not coincide with earnings recognition.
Current wording
In May 2026, we reached an agreement to take full ownership of the Project. The sequestered CO 2 generated from the facility's ammonia production is expected to qualify for the enhanced federal tax credit, currently $85 per metric ton of CO 2, under Internal Revenue Code Section 45Q. Based on expected capture volumes, the Company estimates the Project could generate approximately $25 million to $30 million of annual earnings when fully operational, net of operating costs, over the 12-year credit period, subject to continued qualification. Although the credits are expected to be recognized in earnings as they are earned, the timing of related cash inflows may vary depending on the tax credit monetization method selected. As a result, cash receipts may not coincide with earnings recognition.
Previous wording
Demand for our industrial products remains strong, including demand for AN, supported by continued mining-sector investment across North America and globally, as well as broader capital spending tied to AI-related infrastructure, data centers, power generation and electrification. Favorable supply / demand fundamentals, further supported by producer outages, continue to underpin both spot and contract pricing, while new mining and aggregate projects are expected to support medium to longer-term demand for explosives used in copper, iron ore, quarrying and infrastructure-related production.
Current wording
Demand for our industrial products remains strong, including demand for Ammonium Nitrate (AN), supported by continued mining-sector investment across North America and globally, as well as broader capital spending tied to AI-related infrastructure, data centers, power generation and electrification. Favorable supply / demand fundamentals, further supported by producer outages, continue to underpin both spot and contract pricing, while new mining and aggregate projects are expected to support medium to longer-term demand for explosives used in copper, iron ore, quarrying and infrastructure-related production.
Previous wording
We believe our industrial business provides a meaningful degree of downside protection from risks associated with economic uncertainty, including those related to tariffs, fluctuating oil and commodity prices, concerns about inflation and the ongoing instability in the Middle East, including the U.S.-Iran conflict. A significant portion of our volumes are already contracted, our customer base is diverse and located almost entirely in the United States, and we have the ability to optimize our product mix. In addition, we expect European marginal cost of production to be higher throughout the remainder of 2026, driven by elevated natural gas costs and a tight global market for nitrogen products, particularly as demand for fertilizers in India remains strong and export capacity from China and other sources continues to be limited.
Current wording
We believe our industrial business provides a meaningful degree of downside protection from risks associated with economic uncertainty, including those related to tariffs, fluctuating oil and commodity prices, concerns about inflation and the ongoing instability in the Middle East, including the conflict involving the U.S. and Iran. A significant portion of our volumes are already contracted, our customer base is diverse and located almost entirely in the United States, and we have the ability to optimize our product mix. In addition, we expect European marginal cost of production to remain elevated throughout the remainder of 2026, driven primarily by elevated natural gas costs and a tight global market for nitrogen products, particularly as demand for fertilizers in India remains strong and nitrogen exports from China and certain other sources remain constrained.
Previous wording
The outlook for U.S. corn calls for approximately 95 million planted acres of corn for the 2026/2027 marketing season with global ending stocks projected to be at the lowest levels in over a decade supporting improved corn prices. We believe this will support strong fertilizer application rates and we anticipate robust nitrogen demand through the fall fertilizer application season.
Current wording
The outlook for U.S. corn calls for approximately 96.8 million planted acres of corn for the 2026/2027 marketing season with global ending stocks projected to be at the lowest levels in over a decade supporting improved corn prices. We believe this will support strong fertilizer application rates and we anticipate robust nitrogen demand through the fall 2026 and spring 2027 fertilizer application season.
Previous wording
According to the World Agricultural Supply and Demand Estimates Report dated July 10, 2026 (the “July Report”), farmers planted approximately 95.3 million acres of corn in the 2026 planting season, down 3.5% compared to the 2025 planting season. According to the July Report, the U.S. Department of Agriculture (“USDA”) estimates the U.S. ending stocks for the 2026 Harvest will be approximately 45.5 million metric tons, a 11.3% decrease from the 2025 Harvest. The USDA's expected yield per acre for the 2026 Harvest is 183.0 bushels, down approximately 1.9% from a year ago.
Current wording
According to the World Agricultural Supply and Demand Estimates Report dated October 9, 2026 (the “October Report”), farmers planted approximately 96.8 million acres of corn in the 2026 planting season, down 1.9% compared to the 2025 planting season. According to the October Report, the U.S. Department of Agriculture (“USDA”) estimates the U.S. ending stocks for the 2026 Harvest will be approximately 47.0 million metric tons, an 11.7% decrease from the 2025 Harvest. The USDA's expected yield per acre for the 2026 Harvest is 181.2 bushels, down approximately 2.8% from a year ago.
Previous wording
We recently completed the scheduled ammonia plant Turnaround at our El Dorado Facility, which commenced during the second quarter of 2026. Additionally, we made the decision to pull forward the commencement of scheduled Turnaround work at our Pryor Facility from the third quarter into the second quarter of 2026. We did not perform any major planned ammonia Turnaround events during 2025.
Current wording
We completed the scheduled ammonia plant Turnaround at our El Dorado Facility during the second quarter of 2026 and the scheduled Turnaround at our Pryor Facility early in the third quarter of 2026. The timing of the Turnaround at our Pryor Facility was accelerated to commence during the second quarter of 2026 instead of the third quarter, as originally planned. We did not perform any major planned ammonia Turnaround events during 2025.
Previous wording
Consolidated Results of the Second Quarter of 2026
Current wording
Consolidated Results of the Third Quarter of 2026
Previous wording
Our consolidated net sales for the second quarter of 2026 were $168.1 million compared to $151.3 million for the same period in 2025. Our consolidated operating loss for the second quarter of 2026 was $2.7 million compared to operating income of $10.5 million for the same period in 2025. The items impacting our operating results are discussed in more detail below and under “Results of Operations.”
Current wording
Our consolidated net sales for the third quarter of 2026 were $158.6 million compared to $155.4 million for the same period in 2025. Our consolidated operating income for the third quarter of 2026 was $26.8 million compared to operating income of $15.6 million for the same period in 2025. The items impacting our operating results are discussed in more detail below and under “Results of Operations.”
Previous wording
Items Affecting Comparability of Results of the Second Quarter
Current wording
Items Affecting Comparability of Results of the Third Quarter
Previous wording
For the second quarter of 2026, average selling prices for all of our major products increased compared to the second quarter of 2025.
Current wording
For the third quarter of 2026, average selling prices for AN & Nitric Acid and Ammonia increased, while UAN decreased slightly compared to the third quarter of 2025.
Previous wording
As discussed above, during the second quarter of 2026, we performed major Turnaround activities at our El Dorado Facility and started a full plant Turnaround at our Pryor Facility. The Pryor Facility Turnaround was completed during the third quarter of 2026. When such activities are performed, overall results are negatively impacted. This impact includes lost contribution margin from lost sales, lost fixed cost absorption from lower production, and increased costs associated with repairs and maintenance. In addition, Turnaround-related costs may be incurred in periods earlier than the actual outage of the plant for activities such as planning and procurement of materials. Turnaround costs for the three months ended June 30, 2026 and 2025, were $28.8 million and $2.6 million, respectively, while Turnaround costs for the six months ended June 30, 2026 and 2025, were $32.7 million and $4.6 million, respectively.
Current wording
As discussed above, during the second quarter of 2026, we performed major Turnaround activities at our El Dorado Facility and started a full plant Turnaround at our Pryor Facility. The Pryor Facility Turnaround was completed during the third quarter of 2026. When such activities are performed, overall results are negatively impacted. This impact includes lost contribution margin from lost sales, lost fixed cost absorption from lower production, and increased costs associated with repairs and maintenance. In addition, Turnaround-related costs may be incurred in periods earlier than the actual outage of the plant for activities such as planning and procurement of materials. Turnaround costs for the three months ended September 30, 2026 and 2025, were $6.3 million and $1.1 million, respectively, while Turnaround costs for the nine months ended September 30, 2026 and 2025, were $39.0 million and $5.7 million, respectively.
Previous wording
Plant, Property and Equipment Impairments (2025 only)
Current wording
Plant, Property and Equipment Write-downs
Previous wording
For the second quarter of 2025, we recorded asset write-downs primarily related to assets no longer in use in the amount of $2.5 million. These write-downs are included in “Other expense, net” on our condensed consolidated statements of operations.
Current wording
For the third quarter of 2026 and 2025, we recorded asset write-downs primarily related to assets no longer in use in the amount of $2.9 million and $0.4 million, respectively. These write-downs are primarily included in “Other expense (income), net” on our condensed consolidated statements of operations.
Previous wording
In 2025, we transitioned our production from fertilizer grade ammonium nitrate (“HDAN”), an agricultural product, to ANS, a product used in industrial and mining applications. The transition was completed during the third quarter of 2025, at which time we ceased production of HDAN. This shift in production mix is consistent with our strategy to transition a portion of our sales from agricultural sales made at spot market pricing, which can be volatile, to sales under multi-year contracts that provide the pass-through of natural gas feedstock costs.
Current wording
In 2025, we transitioned our production from fertilizer grade ammonium nitrate (“HDAN”), an agricultural product, to ANS, a product used in industrial and mining applications. The transition was completed during the third quarter of 2025, at which time we ceased production of HDAN. This shift in production mix is consistent with our strategy to transition a portion of our sales from agricultural sales made at spot market pricing, which can be volatile, to sales under multi-year contracts that provide the pass-through of natural gas feedstock costs. In 2026 we shifted our production mix to AN & Nitric Acid at the expense of UAN volumes in response to market conditions.
Previous wording
The following is a discussion and analysis of our condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025.
Current wording
The following is a discussion and analysis of our condensed consolidated results of operations for the three and nine months ended September 30, 2026 and 2025.
Previous wording
We recorded net sales of $168.1 million during the second quarter of 2026 compared to $151.3 million for the second quarter of 2025, representing an increase of $16.8 million. The increase was primarily due to higher sales prices on all our products partially offset by volume decreases resulting from of Turnarounds at two of our facilities. In addition to the impact of the Turnarounds, UAN volumes were lower as production shifted to AN and Nitric Acid as part of our product mix strategy in response to tight market conditions.
Current wording
We recorded net sales of $158.6 million during the third quarter of 2026 compared to $155.4 million for the third quarter of 2025, representing an increase of $3.2 million. The increase was primarily due to higher sales prices for AN & Nitric Acid and Ammonia products and was partially offset by volume decreases primarily caused by the Turnaround at our Pryor Facility, which commenced during the second quarter and was completed during the third quarter. In addition to the impact of the Turnaround, UAN volumes were lower as production shifted to AN & Nitric Acid as part of our product mix strategy in response to tight market conditions.
Previous wording
We recognized a gross profit of $11.5 million for the second quarter of 2026 compared to $23.2 million for the same period in 2025, or an $11.7 million reduction. Overall, our gross profit percentage for the second quarter of 2026 was 6.8% compared to 15.3% for the same period in 2025. Our adjusted gross profit percentage increased to 37.0% for the second quarter of 2026 from 30.7% for the second quarter of 2025. Our gross profit for the second quarter of 2026 was lower compared to the same period of 2025 primarily due to the cost of the two major Turnarounds, partially offset by an increase in sales, as discussed above.
Current wording
We recognized a gross profit of $43.1 million for the third quarter of 2026 compared to $25.5 million for the same period in 2025, or a $17.6 million increase. Our gross profit percentage for the third quarter of 2026 was 27.2% compared to 16.4% for the same period in 2025. Our gross profit for the third quarter of 2026 was higher compared to the same period of 2025 primarily due to the impact of favorable pricing, a recovery of precious metals and lower plant fixed costs, partially offset by decreased UAN and Ammonia sales volumes and Turnaround expenses.
Previous wording
Our SG&A expenses were higher for the second quarter of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short term incentive compensation, stock-based compensation from a one-time retention grant (see “Equity Awards” in Note 1) and professional fees.
Current wording
Our SG&A expenses were higher for the third quarter of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short term incentive compensation, stock-based compensation from a one-time retention award (see discussion of the retention grant within “Equity Awards” in Note 1) and professional fees.
Previous wording
Other expense, net, during the second quarter of 2026 consisted primarily of asset write-offs partially offset by sales and use tax recoveries resulting from our ongoing review whereas other expense, net, during the second quarter of 2025 consisted primarily of asset write-downs.
Current wording
Other expense, net, during the third quarter of 2026 consisted primarily of losses from asset write-downs partially offset by sales and use tax recoveries resulting from our ongoing review.
Previous wording
Interest expense for the second quarter of 2026 was $7.1 million compared to $7.9 million for the same period in 2025. The decrease was primarily due to a lower outstanding balance on our Senior Secured Notes as a result of repurchases in 2025.
Current wording
Interest expense for the third quarter of 2026 was $6.8 million compared to $7.4 million for the same period in 2025. The decrease was primarily due to an increase in the amount of interest that we capitalized and a lower balance on our Senior Secured Notes as a result of repurchases in 2025.
Previous wording
Non-operating other income, net for the second quarter of 2026 was $1.7 million compared to $1.5 million for the same period of 2025, primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the second quarter of 2026 but interest rates were lower during this period compared to the second quarter of 2025.
Current wording
Non-operating other income, net for the third quarter of 2026 was $1.8 million compared to $1.4 million for the same period of 2025, primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the third quarter of 2026 but interest rates were lower during this period compared to the third quarter of 2025.
Previous wording
The benefit for income taxes for the second quarter of 2026 was $1.9 million compared to a provision for income taxes of $1.1 million for the same period of 2025. The resulting effective tax rate for the second quarter of 2026 was a benefit on pre-tax loss of 23.7% compared to a provision for income taxes of 26.5% for the same period of 2025. For the second quarter of 2026, the effective tax rate was higher than the statutory rate primarily due to state taxes and deferred benefits from state tax law changes, partially offset by nondeductible compensation expense. For the second quarter of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
Current wording
The provision for income taxes for the third quarter of 2026 was $5.5 million compared to $2.5 million for the same period of 2025. The resulting effective tax rate for the third quarter of 2026 was a provision on pre-tax income of 25.3% compared to a provision for income taxes of 26.3% for the same period of 2025. For the third quarter of 2026, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. For the third quarter of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
Previous wording
The following table contains certain financial information for the six months ended June 30, 2026 and 2025, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
Current wording
The following table contains certain financial information for the nine months ended September 30, 2026 and 2025, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:
Previous wording
Net sales of our primary products increased during the first half of 2026 compared to the prior year period primarily due to higher sales prices on all our products partially offset by volume decreases resulting from Turnarounds at two of our facilities. In addition to the impact of the Turnarounds, UAN volumes were lower as production shifted to AN and Nitric Acid as part of our product mix strategy in response to current market conditions, while ammonia volumes were lower as more was utilized downstream on upgraded product.
Current wording
Net sales increased during the first nine months of 2026 compared to the prior year period primarily due to higher sales prices on all our products partially offset by lower volumes of UAN and Ammonia sold. Total volumes were lower due to the impact of the Turnarounds at our El Dorado and Pryor Facilities. Furthermore, UAN volumes were lower as production shifted to AN & Nitric Acid as part of our product mix strategy in response to current market conditions.
Previous wording
As noted in the table above, we recognized a gross profit of $47.3 million for the first half of 2026 compared to $37.6 million for the same period in 2025, a $9.7 million increase. Overall, our gross profit percentage was 14.0% compared to a gross profit percentage of 12.7% for the same period in 2025. Our adjusted gross profit percentage was 36.3% for the first half of 2026 compared to 28.1% for the same period in 2025. Our gross profit for the first half of 2026 was higher compared to the same period of 2025 primarily due to the increase in sales discussed above, partially offset by Turnaround costs, higher natural gas and sulfur costs and higher depreciation due to recent investments in our facilities.
Current wording
As noted in the table above, we recognized a gross profit of $90.4 million for the first nine months of 2026 compared to $63.1 million for the same period in 2025, a $27.3 million increase. Our gross profit percentage was 18.2% compared to a gross profit percentage of 14.0% for the same period in 2025. Our gross profit for the first nine months of 2026 was higher compared to the same period of 2025 primarily due to increased sales from favorable product pricing and a recovery of precious metals partially offset by decreased sales volumes, Turnaround expenses and higher depreciation due to recent investments in our facilities.
Previous wording
Our SG&A expenses were higher for the first half of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short-term incentive compensation and stock-based compensation (see discussion of the Side Letter and retention grant within “Equity Awards” in Note 1) and professional fees.
Current wording
Our SG&A expenses were higher for the first nine months of 2026 compared to the same period of 2025, primarily due to an increase in salaries and wages, short-term incentive compensation and stock-based compensation from a one-time retention award (see discussion of the Side Letter and retention grant within “Equity Awards” in Note 1) and professional fees.
Previous wording
Interest expense for the first half of 2026 was $14.2 million compared to $16.0 million for the same period in 2025. The decrease primarily related to reduced interest expense as a result of repurchases of Senior Secured Notes made during the second and fourth quarters of 2025.
Current wording
Interest expense for the first nine months of 2026 was $20.9 million compared to $23.3 million for the same period in 2025. The decrease primarily related to a lower balance of Senior Secured Notes as a result of repurchases made during the second and fourth quarters of 2025 and an increase in the amount of interest that we capitalized.
Previous wording
During the first half of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million. There have been no repurchases so far during 2026.
Current wording
During the first nine months of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million. There have been no repurchases so far during 2026.
Previous wording
Non-operating other income, net for the first half of 2026 and 2025 was $3.2 million for both periods and primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the first half of 2026 but interest rates were lower during this period compared to the first half of 2025.
Current wording
Non-operating other income, net for the first nine months of 2026 and 2025 primarily related to interest income earned during both periods from our short-term investments. Our average short-term investments balance including cash equivalents, was higher during the first nine months of 2026 but interest rates were lower during this period compared to the first nine months of 2025.
Previous wording
The benefit for income taxes for the first half of 2026 was $4.0 million compared to a provision for income taxes of $0.8 million for the same period of 2025. The resulting effective tax rate for the first half of 2026 was a benefit of 42.8% compared to a provision for income taxes of 37.0% for the same period of 2025. For the first half of 2026, the effective tax rate was lower than the statutory rate primarily due to the release of state valuation allowances, partially offset by nondeductible compensation expense. For the first half of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
Current wording
The provision for income taxes for the first nine months of 2026 was $1.5 million compared to a provision for income taxes of $3.3 million for the same period of 2025. The resulting effective tax rate for the first nine months of 2026 was a provision for income taxes of 4.8% compared to a provision for income taxes of 28.2% for the same period of 2025. For the first nine months of 2026, the effective tax rate was lower than the statutory rate primarily due to the release of state valuation allowances, partially offset by nondeductible compensation expense. For the first nine months of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes. See discussion in Note 7.
Previous wording
The following table summarizes our cash flow activities for the six months ended June 30:
Current wording
The following table summarizes our cash flow activities for the nine months ended September 30:
Previous wording
Net cash provided by operating activities was $111.2 million for the first six months of 2026 compared to $25 million for the same period of 2025, a change of $86.2 million. The increase was primarily a result of improved operating income and changes in working capital.
Current wording
Net cash provided by operating activities was $131.7 million for the first nine months of 2026 compared to $77.6 million for the same period of 2025, a change of $54.1 million. The increase was primarily a result of improved operating income and changes in working capital.
Previous wording
Net cash used by investing activities was $101.0 million for the first six months of 2026 compared to net cash provided by investing activities of $4.8 million for the same period of 2025, a change of $105.8 million.
Current wording
Net cash used by investing activities was $100.3 million for the first nine months of 2026 compared to net cash used by investing activities of $16.9 million for the same period of 2025, a change of $83.3 million.
Previous wording
For the first six months of 2026, the net cash used by investing activities primarily related to purchases of short-term investments of $215.8 million, expenditures for property, plant and equipment of $46.2 million and development of our CO 2 capture and sequestration project of $10.8 million partially offset by proceeds from short-term investments, a recovery of PP&E costs and proceeds from sales of property, plant and equipment totaling $171.8 million.
Current wording
For the first nine months of 2026, the net cash used by investing activities primarily related to purchases of short-term investments of $257.2 million, expenditures for property, plant and equipment of $64.4 million and development of our CO 2 capture and sequestration project of $24.1 million partially offset by proceeds from short-term investments of $221.4 million, a recovery of PP&E costs of $20.9 million and proceeds from sales of property, plant and equipment totaling $3.2 million.
Previous wording
For the first six months of 2025, the net cash provided by investing activities primarily related to proceeds from short-term investments of $154.6 million, partially offset by purchases of short-term investments of $110.3 million and expenditures for property, plant and equipment of $39.3 million.
Current wording
For the first nine months of 2025, the net cash used by investing activities primarily related to purchases of short-term investments of $171.8 million and expenditures for property, plant and equipment of $56.3 million, partially offset by proceeds from short-term investments of $211.4 million.
Previous wording
For the first six months of 2026, the net cash used by financing activities primarily consisted of payments on short-term financing and finance leases of $7.4 million and $2.1 million for tax withholding obligations related to the vesting of equity awards.
Current wording
For the first nine months of 2026, the net cash used by financing activities primarily consisted of payments on short-term financing and finance leases of $11.3 million, $2.1 million for tax withholding obligations related to the vesting of equity awards and $1.4 million in payments on our revolving debt facility partially offset by proceeds of $1.4 million from our revolving debt facility.
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Previous report — wording carried elsewhere
During the second quarter of 2025 we repurchased $32.4 million in principal amount of our Senior Secured Notes due 2028 (“Senior Secured Notes”) for approximately $32.1 million, which was accounted for as an extinguishment of debt. Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million.