[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
||
For the quarterly period
ended September
30, 2008
|
|||
OR
|
|||
[
]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
||
For
the transition period from
_____________to______________
|
|||
Commission
file
number 1-7677
|
|||
LSB
Industries, Inc.
|
|||
Exact
name of Registrant as specified in its charter
|
|||
Delaware
|
73-1015226
|
||
State
or other jurisdiction of
incorporation
or organization
|
I.R.S.
Employer Identification No.
|
||
16 South Pennsylvania
Avenue, Oklahoma City, Oklahoma 73107
|
|||
Address of
principal executive offices (Zip
Code)
|
|||
(405)
235-4546
|
|||
Registrant's
telephone number, including area code
|
|||
__ None _ ___
|
|||
Former
name, former address and former fiscal year, if changed since last
report.
|
PART
I – Financial Information
|
Page
|
|
Item
1.
|
3
|
|
Item
2.
|
38 | |
Item
3.
|
63
|
|
Item
4.
|
64
|
|
65
|
||
PART
II – Other Information
|
||
Item
1.
|
68 | |
Item
1A.
|
69 | |
Item
2.
|
69 | |
Item
3.
|
70 | |
Item
4.
|
70 | |
Item
5.
|
70 | |
Item
6.
|
70 |
September
30,
2008
|
December
31,
2007
|
(In
Thousands)
|
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 47,478 | $ | 58,224 | ||||
Restricted
cash
|
276 | 203 | ||||||
Accounts
receivable, net
|
106,348 | 70,577 | ||||||
Inventories:
|
||||||||
Finished
goods
|
38,888 | 28,177 | ||||||
Work
in process
|
3,526 | 3,569 | ||||||
Raw
materials
|
32,031 | 25,130 | ||||||
Total
inventories
|
74,445 | 56,876 | ||||||
Supplies,
prepaid items and other:
|
||||||||
Prepaid
insurance
|
927 | 3,350 | ||||||
Prepaid
income taxes
|
1,535 | - | ||||||
Precious
metals
|
14,400 | 10,935 | ||||||
Supplies
|
4,371 | 3,849 | ||||||
Other
|
1,619 | 1,464 | ||||||
Total
supplies, prepaid items and other
|
22,852 | 19,598 | ||||||
Deferred
income taxes
|
5,877 | 10,030 | ||||||
Total
current assets
|
257,276 | 215,508 | ||||||
Property,
plant and equipment, net
|
95,952 | 79,692 | ||||||
Other
assets:
|
||||||||
Debt
issuance and other debt-related costs, net
|
4,233 | 4,639 | ||||||
Investment
in affiliate
|
3,568 | 3,426 | ||||||
Goodwill
|
1,724 | 1,724 | ||||||
Other,
net
|
2,613 | 2,565 | ||||||
Total
other assets
|
12,138 | 12,354 | ||||||
$ | 365,366 | $ | 307,554 |
September
30,
2008
|
December
31,
2007
|
(In
Thousands)
|
Liabilities
and Stockholders’ Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
55,190
|
$
|
39,060
|
|||
Short-term
financing and drafts payable
|
-
|
919
|
|||||
Accrued
and other liabilities
|
44,193
|
38,942
|
|||||
Current
portion of long-term debt
|
1,495
|
1,043
|
|||||
Total
current liabilities
|
100,878
|
79,964
|
|||||
Long-term
debt
|
122,032
|
121,064
|
|||||
Noncurrent
accrued and other liabilities:
|
|||||||
Deferred
income taxes
|
5,601
|
5,330
|
|||||
Other
|
8,343
|
6,913
|
|||||
13,944
|
12,243
|
||||||
Contingencies
(Note 10)
|
|||||||
Stockholders'
equity:
|
|||||||
Series
B 12% cumulative, convertible preferred stock, $100 par value;
20,000 shares issued and outstanding
|
2,000
|
2,000
|
|||||
Series
D 6% cumulative, convertible Class C preferred stock, no par
value; 1,000,000 shares issued
|
1,000
|
1,000
|
|||||
Common
stock, $.10 par value; 75,000,000 shares authorized, 24,898,170
shares issued (24,466,506 at December 31, 2007)
|
2,490
|
2,447
|
|||||
Capital
in excess of par value
|
128,056
|
123,336
|
|||||
Accumulated
other comprehensive loss
|
(193
|
)
|
(411
|
)
|
|||
Retained
earnings (accumulated deficit)
|
16,232
|
(16,437
|
)
|
||||
149,585
|
111,935
|
||||||
Less
treasury stock at cost:
|
|||||||
Common
stock, 3,648,518 shares (3,448,518 at December 31, 2007)
|
21,073
|
17,652
|
|||||
Total
stockholders' equity
|
128,512
|
94,283
|
|||||
$
|
365,366
|
$
|
307,554
|
Nine
Months
|
Three
Months
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands, Except Per Share
Amounts)
|
Net
sales
|
$
|
569,427
|
$
|
451,754
|
$
|
210,920
|
$
|
147,613
|
|||||||
Cost
of sales
|
456,760
|
349,873
|
179,751
|
112,441
|
|||||||||||
Gross
profit
|
112,667
|
101,881
|
31,169
|
35,172
|
|||||||||||
Selling,
general and administrative expense
|
62,633
|
55,821
|
22,411
|
18,827
|
|||||||||||
Provisions
for (recovery of) losses on accounts receivable
|
159
|
874
|
(133
|
)
|
253
|
||||||||||
Other
expense
|
946
|
853
|
289
|
335
|
|||||||||||
Other
income
|
(8,417
|
)
|
(3,440
|
)
|
(88
|
)
|
(3,340
|
)
|
|||||||
Operating
income
|
57,346
|
47,773
|
8,690
|
19,097
|
|||||||||||
Interest
expense
|
6,363
|
8,062
|
2,643
|
3,482
|
|||||||||||
Non-operating
other income, net
|
(1,125
|
)
|
(605
|
)
|
(263
|
)
|
(532
|
)
|
|||||||
Income
from continuing operations before provisions
(benefits) for income taxes and equity
in earnings of affiliate
|
52,108
|
40,316
|
6,310
|
16,147
|
|||||||||||
Provisions
(benefits) for income taxes
|
19,817
|
(1,017
|
)
|
2,388
|
(1,549
|
)
|
|||||||||
Equity
in earnings of affiliate
|
(697
|
)
|
(654
|
)
|
(235
|
)
|
(223
|
)
|
|||||||
Income
from continuing operations
|
32,988
|
41,987
|
4,157
|
17,919
|
|||||||||||
Net
loss (income) from discontinued operations
|
13
|
(348
|
)
|
(4
|
)
|
(377
|
)
|
||||||||
Net
income
|
32,975
|
42,335
|
4,161
|
18,296
|
|||||||||||
Dividends,
dividend requirements and stock dividend
on preferred stocks
|
306
|
5,608
|
-
|
203
|
|||||||||||
Net
income applicable to common stock
|
$
|
32,669
|
$
|
36,727
|
$
|
4,161
|
$
|
18,093
|
|||||||
Weighted-average
common shares:
|
|||||||||||||||
Basic
|
21,156
|
19,150
|
21,237
|
20,220
|
|||||||||||
Diluted
|
24,884
|
22,990
|
22,654
|
25,072
|
|||||||||||
Income
per common share:
|
|||||||||||||||
Basic:
|
|||||||||||||||
Income
from continuing operations
|
$
|
1.54
|
$
|
1.90
|
$
|
.20
|
$
|
.87
|
|||||||
Net
income (loss) from discontinued operations
|
-
|
.02
|
-
|
.02
|
|||||||||||
Net
income
|
$
|
1.54
|
$
|
1.92
|
$
|
.20
|
$
|
.89
|
|||||||
Diluted:
|
|||||||||||||||
Income
from continuing operations
|
$
|
1.40
|
$
|
1.65
|
$
|
.18
|
$
|
.75
|
|||||||
Net
income (loss) from discontinued operations
|
-
|
.02
|
-
|
.02
|
|||||||||||
Net
income
|
$
|
1.40
|
$
|
1.67
|
$
|
.18
|
$
|
.77
|
Common Stock Shares |
Non-
Redeemable Preferred Stock |
Common Stock
Par
Value |
Capital in Excess of Par Value |
Accumulated
Other Comprehensive Loss |
Retained
Earnings
(Accumulated
Deficit)
|
Treasury Stock- Common |
Total |
(In
Thousands)
|
Balance
at December 31, 2007
|
24,467
|
$
|
3,000
|
$
|
2,447
|
$
|
123,336
|
$
|
(411
|
)
|
$
|
(16,437
|
)
|
$
|
(17,652
|
)
|
$
|
94,283
|
||||
Net
income
|
32,975
|
32,975
|
||||||||||||||||||||
Amortization
of cash flow hedge
|
218
|
218
|
||||||||||||||||||||
Total
comprehensive income
|
33,193
|
|||||||||||||||||||||
Dividends
paid on preferred stock
|
(306
|
)
|
(306
|
)
|
||||||||||||||||||
Stock-based
compensation
|
577
|
577
|
||||||||||||||||||||
Exercise
of stock options
|
430
|
43
|
728
|
771
|
||||||||||||||||||
Income
tax benefit from exercise of stock options
|
3,412
|
3,412
|
||||||||||||||||||||
Acquisition
of 200,000 shares of common stock
|
(3,421
|
)
|
(3,421
|
)
|
||||||||||||||||||
Conversion
of shares of redeemable preferred stock to common stock
|
1
|
3
|
3
|
|||||||||||||||||||
Balance
at September 30, 2008
|
24,898
|
$
|
3,000
|
$
|
2,490
|
$
|
128,056
|
$
|
(193
|
)
|
$
|
16,232
|
$
|
(21,073
|
)
|
$
|
128,512
|
2008
|
2007
|
(In
Thousands)
|
Cash
flows from continuing operating activities:
|
|||||||
Net
income
|
$
|
32,975
|
$
|
42,335
|
|||
Adjustments
to reconcile net income to net cash provided by continuing operating
activities:
|
|||||||
Net
loss (income) from discontinued operations
|
13
|
(348
|
)
|
||||
Deferred
income taxes
|
4,424
|
(3,150
|
)
|
||||
Gain
on litigation judgment associated with property, plant and
equipment
|
(3,943
|
)
|
-
|
||||
Loss
on sales of property and equipment
|
130
|
446
|
|||||
Depreciation
of property, plant and equipment
|
9,784
|
9,201
|
|||||
Amortization
|
914
|
841
|
|||||
Stock-based
compensation
|
577
|
228
|
|||||
Provisions
for losses on accounts receivable
|
159
|
874
|
|||||
Provision
for (realization of) losses on inventory
|
400
|
(360
|
)
|
||||
Provisions
for impairment of long-lived assets
|
192
|
250
|
|||||
Realization
of losses on firm sales commitments
|
-
|
(328
|
)
|
||||
Equity
in earnings of affiliate
|
(697
|
)
|
(654
|
)
|
|||
Distributions
received from affiliate
|
555
|
570
|
|||||
Changes
in fair value of commodities contracts
|
4,931
|
(133
|
)
|
||||
Changes
in fair value of interest rate contracts
|
(237
|
)
|
241
|
||||
Other
|
-
|
(8
|
)
|
||||
Cash
provided (used) by changes in assets and liabilities:
|
|||||||
Accounts
receivable
|
(36,043
|
)
|
(20,656
|
)
|
|||
Inventories
|
(17,969
|
)
|
(1,587
|
)
|
|||
Other
supplies and prepaid items
|
(3,254
|
)
|
(2,541
|
)
|
|||
Accounts
payable
|
14,410
|
(3,849
|
)
|
||||
Customer
deposits
|
(269
|
)
|
(233
|
)
|
|||
Deferred
rent expense
|
(2,909
|
)
|
(2,423
|
)
|
|||
Other
current and noncurrent liabilities
|
5,178
|
7,889
|
|||||
Net
cash provided by continuing operating activities
|
9,321
|
26,605
|
|||||
Cash
flows from continuing investing activities:
|
|||||||
Capital
expenditures
|
(22,693
|
)
|
(10,300
|
)
|
|||
Proceeds
from litigation judgment associated with property, plant and
equipment
|
5,948
|
-
|
|||||
Payment
of legal costs relating to litigation judgment associated with property,
plant and equipment
|
(1,884
|
)
|
-
|
||||
Proceeds
from sales of property and equipment
|
63
|
192
|
|||||
Proceeds
from (deposits of) restricted cash
|
(73
|
)
|
3,651
|
||||
Purchase
of interest rate cap contracts
|
-
|
(621
|
)
|
||||
Other
assets
|
(305
|
)
|
(70
|
)
|
|||
Net
cash used by continuing investing activities
|
(18,944
|
)
|
(7,148
|
)
|
2008
|
2007
|
(In
Thousands)
|
Cash
flows from continuing financing activities:
|
|||||||
Proceeds
from revolving debt facilities
|
$
|
475,372
|
$
|
381,835
|
|||
Payments
on revolving debt facilities
|
(475,372
|
)
|
(408,242
|
)
|
|||
Proceeds
from 5.5% convertible debentures, net of fees
|
-
|
56,985
|
|||||
Proceeds
from other long-term debt, net of fees
|
-
|
2,424
|
|||||
Payments
on other long-term debt
|
(524
|
)
|
(7,629
|
)
|
|||
Payments
of debt issuance costs
|
-
|
(143
|
)
|
||||
Proceeds
from short-term financing and drafts payable
|
-
|
56
|
|||||
Payments
on short-term financing and drafts payable
|
(919
|
)
|
(2,909
|
)
|
|||
Proceeds
from exercise of stock options
|
771
|
1,112
|
|||||
Acquisition
of common stock
|
(3,421
|
)
|
-
|
||||
Excess
income tax benefit on stock options exercised
|
3,412
|
-
|
|||||
Dividends
paid on preferred stock
|
(306
|
)
|
(2,934
|
)
|
|||
Acquisition
of non-redeemable preferred stock
|
-
|
(1,292
|
)
|
||||
Net
cash provided (used) by continuing financing activities
|
(987
|
)
|
19,263
|
||||
Cash
flows of discontinued operations:
|
|||||||
Operating
cash flows
|
(136
|
)
|
(106
|
)
|
|||
Net
increase (decrease) in cash and cash equivalents
|
(10,746
|
)
|
38,614
|
||||
Cash
and cash equivalents at beginning of period
|
58,224
|
2,255
|
|||||
Cash
and cash equivalents at end of period
|
$
|
47,478
|
$
|
40,869
|
|||
Supplemental
cash flow information:
|
|||||||
Cash
payments for income taxes, net of refunds
|
$
|
16,814
|
$
|
1,399
|
|||
Noncash
investing and financing activities:
|
|||||||
Accounts
payable and other long-term debt associated with purchases of property,
plant and equipment
|
$
|
4,009
|
$
|
2,203
|
|||
Debt
issuance costs
|
$
|
-
|
$
|
3,026
|
|||
Debt
issuance costs associated with 7% convertible debentures converted to
common stock
|
$
|
-
|
$
|
266
|
|||
7%
convertible debentures converted to common stock
|
$
|
-
|
$
|
4,000
|
|||
Series
2 preferred stock converted to common stock of which $12,303,000 was
charged to accumulated deficit
|
$
|
-
|
$
|
27,593
|
|||
September
30,
2008
|
December
31,
2007
|
(In
Thousands)
|
Trade
receivables
|
$
|
105,646
|
$
|
68,234
|
|||
Insurance
claims
|
174
|
2,469
|
|||||
Other
|
1,099
|
1,182
|
|||||
106,919
|
71,885
|
||||||
Allowance
for doubtful accounts
|
(571
|
)
|
(1,308
|
)
|
|||
$
|
106,348
|
$
|
70,577
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Balance
at beginning of period
|
$
|
473
|
$
|
1,255
|
$
|
583
|
$
|
847
|
|||||||
Provisions
for (realization of) losses
|
400
|
(360
|
)
|
216
|
(15
|
)
|
|||||||||
Write-offs/disposals
|
(138
|
)
|
(327
|
)
|
(64
|
)
|
(264
|
)
|
|||||||
Balance
at end of period
|
$
|
735
|
$
|
568
|
$
|
735
|
$
|
568
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Precious
metals expense
|
$
|
6,209
|
$
|
4,779
|
$
|
1,855
|
$
|
1,665
|
|||||||
Recoveries
of precious metals
|
(1,343
|
)
|
(1,233
|
)
|
(551
|
)
|
-
|
||||||||
Gains
on sales of precious metals
|
-
|
(1,876
|
)
|
-
|
(1,387
|
)
|
|||||||||
Precious
metals expense, net
|
$
|
4,866
|
$
|
1,670
|
$
|
1,304
|
$
|
278
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Balance
at beginning of period
|
$
|
1,944
|
$
|
1,251
|
$
|
2,278
|
$
|
1,521
|
|||||||
Add:
Charged to costs and expenses
|
3,406
|
2,097
|
1,119
|
762
|
|||||||||||
Deduct:
Costs and expenses incurred
|
(3,032
|
)
|
(1,838
|
)
|
(1,079
|
)
|
(773
|
)
|
|||||||
Balance
at end of period
|
$
|
2,318
|
$
|
1,510
|
$
|
2,318
|
$
|
1,510
|
September
30,
2008
|
December
31,
2007
|
(In
Thousands)
|
Customer
deposits
|
$ | 9,256 | $ | 9,525 | ||||
Accrued
payroll and benefits
|
7,363 | 5,362 | ||||||
Deferred
income taxes
|
5,601 | 5,330 | ||||||
Fair
value of derivatives
|
5,060 | 172 | ||||||
Deferred
revenue on extended warranty contracts
|
3,901 | 3,387 | ||||||
Accrued
precious metals costs
|
2,669 | 1,359 | ||||||
Accrued
death benefits
|
2,525 | 2,051 | ||||||
Accrued
contractual manufacturing obligations
|
2,467 | 1,548 | ||||||
Accrued
commissions
|
2,429 | 2,256 | ||||||
Accrued
warranty costs
|
2,318 | 1,944 | ||||||
Accrued
insurance
|
2,032 | 2,975 | ||||||
Accrued
property and franchise taxes
|
1,944 | 707 | ||||||
Accrued
interest
|
1,722 | 1,056 | ||||||
Accrued
income taxes
|
1,241 | 4,540 | ||||||
Deferred
rent expense
|
1,391 | 4,300 | ||||||
Billings
in excess of costs and estimated earnings on uncompleted
contracts
|
1,350 | 62 | ||||||
Accrued
executive benefits
|
989 | 1,040 | ||||||
Other
|
3,879 | 3,571 | ||||||
58,137 | 51,185 | |||||||
Less
noncurrent portion
|
13,944 | 12,243 | ||||||
Current
portion of accrued and other liabilities
|
$ | 44,193 | $ | 38,942 |
September
30,
|
December
31,
|
||
2008
|
2007
|
(In
Thousands)
|
Working
Capital Revolver Loan due 2012 (A)
|
$
|
-
|
$
|
-
|
|||
5.5%
Convertible Senior Subordinated Notes due 2012 (B)
|
60,000
|
60,000
|
|||||
Secured
Term Loan due 2012 (C)
|
50,000
|
50,000
|
|||||
Other,
with a current weighted-average interest rate of 6.71%, most of which is
secured by machinery, equipment and real estate
|
13,527
|
12,107
|
|||||
123,527
|
122,107
|
||||||
Less
current portion of long-term debt
|
1,495
|
1,043
|
|||||
Long-term
debt due after one year
|
$
|
122,032
|
$
|
121,064
|
·
|
incur
additional indebtedness,
|
·
|
incur
liens,
|
·
|
make
restricted payments or loans to affiliates who are not
Borrowers,
|
·
|
engage
in mergers, consolidations or other forms of recapitalization, or dispose
assets.
|
Fair
Value Measurements at
September
30, 2008 Using
|
Description |
September 30, 2008
|
Quoted
Prices
in
Active
Markets
for
Identical Assets (Level 1) |
Significant
Other
Observable
Inputs
(Level
2)
|
(In
Thousands)
|
Assets:
|
||||||||||||
Interest
rate contracts
|
$
|
663
|
$
|
-
|
$
|
663
|
||||||
Liabilities:
|
||||||||||||
Commodities
futures/forward contracts
|
$
|
4,931
|
$
|
246
|
$
|
4,685
|
||||||
Foreign
currency contracts
|
129
|
-
|
129
|
|||||||||
Total
|
$
|
5,060
|
$
|
246
|
$
|
4,814
|
Nine
Months Ended
September
30,
2008 |
Three
Months Ended
September
30,
2008 |
(In
Thousands)
|
Total
gains (losses) included in earnings:
|
|||||||
Cost
of sales
|
$
|
(3,938
|
)
|
$
|
(8,391
|
)
|
|
Interest
expense
|
209
|
(499
|
)
|
||||
$
|
(3,729
|
)
|
$
|
(8,890
|
)
|
Change
in unrealized gains and losses relating to
contracts still held at September 30, 2008:
|
|||||||
Cost
of sales
|
$
|
(5,060
|
)
|
$
|
(5,514
|
)
|
|
Interest
expense
|
275
|
(361
|
)
|
||||
$
|
(4,785
|
)
|
$
|
(5,875
|
)
|
·
|
we
acquired 200,000 shares of our common
stock;
|
·
|
we
issued 430,304 shares of our common stock as the result of the exercise of
stock options; and
|
·
|
we
paid cash dividends on our Series B Preferred, Series D Preferred and
noncumulative redeemable preferred stock (“Noncumulative Preferred”)
totaling approximately $240,000, $60,000 and $6,000,
respectively.
|
·
|
we
sold $60 million of the 2007
Debentures;
|
·
|
$4,000,000
of the 7% Convertible Senior Subordinated Debentures (the “2006
Debentures”) was converted into 564,789 shares of common
stock;
|
·
|
we
issued 2,262,965 shares of common stock for 305,807 shares of our Series 2
Preferred that were tendered pursuant to a tender
offer;
|
·
|
we
redeemed 25,820 shares of our Series 2 Preferred and issued 724,993 shares
of common stock for 167,475 shares of our Series 2
Preferred;
|
·
|
we
received shareholders’ approval in granting 450,000 shares of
non-qualified stock options;
|
·
|
we
issued 291,100 shares of our common stock as the result of the exercise of
stock options;
|
·
|
we
paid cash dividends of approximately $678,000 on the shares of Series 2
Preferred we redeemed as discussed above;
and
|
·
|
we
paid cash dividends on our Series B Preferred, Series D Preferred and
Noncumulative Preferred totaling approximately $1,890,000, $360,000 and
$6,000, respectively.
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
Numerator:
|
|||||||||||||||
Net
income
|
$
|
32,975
|
$
|
42,335
|
$
|
4,161
|
$
|
18,296
|
|||||||
Dividends
and dividend requirements on Series B Preferred
|
(240
|
)
|
(240
|
)
|
-
|
(120
|
)
|
||||||||
Dividend
requirements on shares of Series 2 Preferred which did not exchange
pursuant to tender offer or redemption in 2007
|
-
|
(272
|
)
|
-
|
-
|
||||||||||
Dividends
and dividend requirements on shares of Series 2 Preferred redeemed in
2007
|
-
|
(59
|
)
|
-
|
(17
|
)
|
|||||||||
Stock
dividend on shares of Series 2 Preferred pursuant to tender offer in
2007(1)
|
-
|
(4,971
|
)
|
-
|
-
|
||||||||||
Dividends
on Series D Preferred
|
(60
|
)
|
(60
|
)
|
-
|
(60
|
)
|
||||||||
Dividends
on Noncumulative Preferred
|
(6
|
)
|
(6
|
)
|
-
|
(6
|
)
|
||||||||
Total
dividends, dividend requirements and stock dividend on preferred
stock
|
(306
|
)
|
(5,608
|
)
|
-
|
(203
|
)
|
||||||||
Numerator
for basic net income per common share - net income applicable to common
stock
|
32,669 |
36,727
|
4,161
|
18,093
|
|||||||||||
Dividends
and dividend requirements on preferred stock assumed to be converted, if
dilutive
|
306
|
637
|
-
|
203
|
|||||||||||
Interest
expense including amortization of debt issuance costs, net of income
taxes, on convertible debt assumed to be converted, if
dilutive
|
1,805
|
1,007
|
-
|
924
|
|||||||||||
Numerator
for diluted net income per common share
|
$
|
34,780
|
$
|
38,371
|
$
|
4,161
|
$
|
19,220
|
|||||||
Denominator:
|
|||||||||||||||
Denominator
for basic net income per common share - weighted-average
shares
|
21,155,724
|
19,150,030
|
21,237,268
|
20,220,419
|
|||||||||||
Effect
of dilutive securities:
|
|||||||||||||||
Convertible
notes payable
|
2,188,000
|
870,725
|
4,000
|
2,188,000
|
|||||||||||
Convertible
preferred stock
|
938,999
|
1,657,335
|
939,286
|
1,414,784
|
|||||||||||
Stock
options
|
600,917
|
1,222,133
|
473,882
|
1,154,480
|
|||||||||||
Warrants
|
-
|
90,241
|
-
|
94,209
|
|||||||||||
Dilutive
potential common shares
|
3,727,916
|
3,840,434
|
1,417,168
|
4,851,473
|
|||||||||||
Denominator
for diluted net income per common share - adjusted weighted-average shares
and assumed conversions
|
24,883,640
|
22,990,464
|
22,654,436
|
25,071,892
|
|||||||||||
Basic
net income per common share
|
$
|
1.54
|
$
|
1.92
|
$
|
.20
|
$
|
.89
|
|||||||
Diluted
net income per common share
|
$
|
1.40
|
$
|
1.67
|
$
|
.18
|
$
|
.77
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
Stock
options
|
425,000 | 177,747 | 425,000 | 444,293 | ||||||||||||
Convertible
notes payable
|
- | - | 2,184,000 | - | ||||||||||||
Series
2 Preferred pursuant to tender offer in 2007 (2)
|
- | 348,120 | - | - | ||||||||||||
425,000 | 525,867 | 2,609,000 | 444,293 |
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Federal
|
$
|
13,641
|
$
|
1,550
|
$
|
2,121
|
$
|
1,104
|
||||||
State
|
1,752
|
583
|
28
|
497
|
||||||||||
Total
Current
|
$
|
15,393
|
$
|
2,133
|
$
|
2,149
|
$
|
1,601
|
Federal
|
$
|
3,927
|
$
|
(2,827
|
)
|
$
|
388
|
$
|
(2,827
|
)
|
||||
State
|
497
|
(323
|
)
|
(149
|
)
|
(323
|
)
|
|||||||
Total
Deferred
|
4,424
|
(3,150
|
)
|
239
|
(3,150
|
)
|
||||||||
Provisions
(benefits) for income taxes
|
$
|
19,817
|
$
|
(1,017
|
)
|
$
|
2,388
|
$
|
(1,549
|
)
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Other
expense:
|
|||||||||||||||
Potential
litigation settlements
|
$
|
367
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||
Impairments
of long-lived assets (1)
|
192
|
250
|
-
|
250
|
|||||||||||
Income
tax related penalties
|
176
|
7
|
175
|
-
|
|||||||||||
Losses
on sales and disposals of property and equipment
|
130
|
446
|
48
|
15
|
|||||||||||
Other
miscellaneous expense (2)
|
81
|
150
|
66
|
70
|
|||||||||||
Total
other expense
|
$
|
946
|
$
|
853
|
$
|
289
|
$
|
335
|
|||||||
Other
income:
|
|||||||||||||||
Litigation
judgment and settlements (3)
|
$
|
8,235
|
$
|
3,272
|
$
|
-
|
$
|
3,272
|
|||||||
Other
miscellaneous income (2)
|
182
|
168
|
88
|
68
|
|||||||||||
Total
other income
|
$
|
8,417
|
$
|
3,440
|
$
|
88
|
$
|
3,340
|
|||||||
Non-operating
other income, net:
|
|||||||||||||||
Interest
income
|
$
|
1,188
|
$
|
607
|
$
|
289
|
$
|
549
|
|||||||
Miscellaneous
income (2)
|
10
|
73
|
(1
|
)
|
8
|
||||||||||
Miscellaneous
expense (2)
|
(73
|
)
|
(75
|
)
|
(25
|
)
|
(25
|
)
|
|||||||
Total
non-operating other income, net
|
$
|
1,125
|
$
|
605
|
$
|
263
|
$
|
532
|
(1)
|
Based
on estimates of the fair values obtained from external sources and
estimates made internally based on inquiry and other techniques, we
recognized impairments associated with certain corporate assets during the
nine months ended September 30, 2008 and certain equipment associated with
our Chemical Business during the nine and three months ended September 30,
2007.
|
(2)
|
Amounts
represent numerous unrelated transactions, none of which are individually
significant requiring separate
disclosure.
|
(3)
|
For
the nine months ended September 30, 2008, income from litigation judgment
and settlements includes approximately $7.6 million, net of attorneys’
fees, relating to a previously reported litigation judgment involving a
subsidiary within our Chemical Business. On June 6, 2008, we received
proceeds of approximately $11.2 million for this litigation judgment,
which includes interest of approximately $1.4 million, from which we paid
attorneys’ fees of approximately $3.6 million. The payment of attorneys’
fees of 31.67% of our recovery was contingent upon the cash receipt of the
litigation judgment. Cash flows relating to this litigation
judgment are included in cash flows from continuing operating activities,
except for the portion of the judgment associated with the recovery of
damages relating to property, plant and equipment and its pro-rata portion
of the attorneys’ fees. These cash flows are included in cash flows from
continuing investing activities. In addition, a settlement was reached for
$0.4 million for the
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
2008
|
2007
|
2008
|
2007
|
(In
Thousands)
|
Net
sales:
|
|||||||||||||||
Climate
Control
|
$
|
230,303
|
$
|
221,464
|
$
|
83,354
|
$
|
75,641
|
|||||||
Chemical
|
329,271
|
222,394
|
124,483
|
69,252
|
|||||||||||
Other
|
9,853
|
7,896
|
3,083
|
2,720
|
|||||||||||
$
|
569,427
|
$
|
451,754
|
$
|
210,920
|
$
|
147,613
|
||||||||
Gross
profit: (1)
|
|||||||||||||||
Climate
Control
|
$
|
72,346
|
$
|
65,061
|
$
|
24,892
|
$
|
22,433
|
|||||||
Chemical
(2) (3)
|
37,181
|
33,980
|
5,329
|
11,738
|
|||||||||||
Other
|
3,140
|
2,840
|
948
|
1,001
|
|||||||||||
$
|
112,667
|
$
|
101,881
|
$
|
31,169
|
$
|
35,172
|
||||||||
Operating
income (loss): (4)
|
|||||||||||||||
Climate
Control
|
$
|
31,017
|
$
|
27,875
|
$
|
9,835
|
$
|
9,750
|
|||||||
Chemical
(2) (3) (5)
|
34,487
|
27,123
|
1,860
|
11,477
|
|||||||||||
General
co |