Investor Presentaiton
LSB
INDUSTRIES
Adjusted EBITDA Reconciliation - 6/30/23 TTM
Net income (loss)
Plus:
3 Months Ended
12/31/202
TTM 6/30/23 (4)
$109
6/30/2023 3/31/2023
$25
29/30/2022
$16
$66
$2
Interest expense, net
37
8
10
10
Gain on extinguishment of debt
Depreciation and amortization
(9)
(9)
68
17
18
17
16
Provision for income taxes
17
3
6
7
1
EBITDA (1)
$222
$45
$48
$100
$29
Stock-based compensation
LO
5
2
1
1
1
Legal fees (Leidos)
1
0
0
0
1
Loss on disposal of assets
3
1
2
0
0
Turnaround costs
23
(0)
(0)
4
19
Adjusted EBITDA (2)
$254
$47
$51
$105
$50
Adjusted EBITDA Margin (3)
33%
28%
28%
45%
27%
Net Sales
$765
$166
$181
$234
$184
(1)
(2)
(3)
EBITDA is defined as net income (loss) plus interest expense net, plus gain on extinguishment of debt, plus depreciation and amortization (D&A) (which includes D&A of property, plant and equipment and amortization of intangible and other assets), plus provision for income taxes. We believe that
certain investors consider EBITDA a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. EBITDA has limitations and should not be considered in isolation or as a substitute for net income, operating income, cash flow from operations or
other consolidated income or cash flow data prepared in accordance with GAAP. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to a similarly titled measure of other companies. The above table provides a reconciliation of net income (loss) to
EBITDA for the periods indicated.
2) Adjusted EBITDA is reported to show the impact of one time/non-cash or non-operating items-such as, non-cash stock-based compensation, loss on disposal of assets and others, one-time income or fees, certain fair market value adjustments, and consulting costs associated with our reliability and
purchasing initiatives. We historically have performed Turnaround activities on an annual basis, however we are moving towards extending Turnarounds to a two or three-year cycle. Rather than being capitalized and amortized over the period of benefit, our accounting policy is to recognize the costs as
incurred. Given these Turnarounds are essentially investments we exclude them from our calculation of adjusted EBITDA used to assess our performance. We believe that the inclusion of supplementary adjustments to EBITDA is appropriate to provide additional information to investors about certain
items. The above table provides reconciliations of EBITDA excluding the impact of the supplementary adjustments. Our policy is to adjust for non-cash, non-recurring, non-operating items that are greater than $0.5 million quarterly or cumulatively.
Adjusted EBITDA Margin is adjusted EBITDA as a percentage of net sales.
(4) Quarterly amounts may not sum exactly to the TTM 6/30/23 amounts due to rounding.
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