LSB Industries, Inc.

Greetings. Welcome to LSB Industries' third quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. Any question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to Fred Bonacore, Vice President of Investor Relations. Mr. Bonacore, you may now begin.

Good morning, everyone. Joining me today are Mark Berman, our Chief Executive Officer, and Cheryl McGuire, our Chief Financial Officer. Please note that today's call includes forward-looking statements. 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 the actual results to differ materially. On the call, we will include references to non-GAAP results. Please see the press release in the investor section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. As a reminder, we have a stockholder rights plan to protect certain tax attributes. Please see the investor section of our website at lsbindustries.com for further important details. At this time, I'd like to go ahead and turn the call over to Mark.

Thank you, Fred. As noted on page four of our presentation, our trailing 12-month total recordable injury rate at the end of the third quarter was 0.34. That is a reflection of the focused efforts of our entire team, and I'd like to thank them for continuing to embrace this important core value of our company. Turning to our financial results, we were disappointed with the results of the quarter versus our expectations heading into the quarter. Our adjusted EBITDA was lower compared to the third quarter of 2022. While this is largely due to a decline in market prices for nitrogen products relative to last year, the results were also impacted by lower than expected downstream production, primarily in nitric acid. That somewhat limited our ability to upgrade ammonia, impacting our margins for the quarter. Although we stubbed our toe early in the quarter, our plants have run better since early September, with the exception of one of our nitric acid plants at our prior facility that had an expander failure. We expect that plant to be back in service by the end of November after we receive and install the rebuild expander. Cheryl will provide more color on the expected impact to our fourth quarter. We remain focused on our path to top quartile safety and reliability for all plants across our facilities. We also continue to progress on our growth initiatives. In early October, we announced a major milestone in the emergence of our company as a leader in the global energy transition. Our collaboration with Impex, Air Liquide, and Volpac Moda to develop a world-scale low-carbon ammonia production and export facility on the Houston Ship Channel is potentially transformative to LSB's growth profile as demand for clean energy increases. We are proud to be partnering with a group of companies of this caliber. More on this later. As you may recall, we submitted a project to expand our El Dorado facility with estimated costs of approximately $400 million. The USDA initially proposed to fund 25% of estimated project costs with $100 million maximum for an individual project. We recently learned that our project has been selected to receive funding under the USDA Fertilizer Production Expansion Program. However, the total amount of the funds requested by all the projects submitted to the USDA exceeded the total funds available under the program and the USDA elected to fund each project they selected at 80% of the requested amount. Therefore, assuming our project costs remain at approximately $400 million, we would receive a grant of approximately $80 million. We continue to evaluate and refine the scope, costs, and timing for this project and look forward to providing a more detailed update on our fourth quarter conference call. Please keep in mind that the final approval for the funding is subject to the successful completion of an environmental assessment, which is underway and expected to be completed in the first quarter of 2024, and our acceptance of the terms and conditions of the grant documents, which we have not seen yet. On page five of our presentation, we provide an overview of our end markets. Corn prices remain above multi-year averages, reflecting stable demand trends and ongoing dry conditions throughout many U.S. corn growing regions. We expect corn prices to remain at levels that would support strong fertilizer demand for the balance of 2023 and into 2024. We believe that lower farm input costs over the next several months and the goal of maximizing yields should incentivize farmers to optimize fertilizer application in the fourth quarter of 2023 and in the first half of 2024. Demand for our industrial business remains steady, supported by the resilient US economy. Nitric acid demand is stable as some global producers continue to shift production from international facilities to the U.S. operations to capitalize on lower U.S. input costs. Demand for ammonium nitrate in mining applications is strong as the expansion of infrastructure projects increases the demand for quarrying and aggregate production, and the growth in electric vehicles and other applications is raising the demand for metals in the U.S. Now I'll turn the call over to Cheryl to discuss our second quarter results and our outlook. Cheryl?