LB Industries Says Chemical Damage at Cherokee, Alabama Facility; Sees Prelim Est 3-5M Outage at Plant; Insurance Has $2.5M Deductible; No Serious Injuries or Environmental Effect

LSB Industries, Inc. (the “Company”) LXU today announced that the facility of its subsidiary, Cherokee Nitrogen Company (“Cherokee Nitrogen Facility”), suffered a pipe rupture causing damage to the heat exchanger portion of its ammonia plant. The Company is determining whether damages extend beyond the area where the rupture occurred. No serious injuries, or environmental impact, resulted from the pipe rupture. Management preliminarily estimates a three to five month outage at the ammonia plant, depending on lead times for repair parts. Until the ammonia plant is repaired, we believe that the Cherokee Nitrogen Facility can produce, on a limited basis, nitric acid and ammonium nitrate solution to be produced from purchased ammonia. The Company has notified its insurer of this event. The Company's insurance policy, which provides replacement cost coverage, has a $2.5 million deductible for property damage. The Company's business interruption insurance covering certain lost profits and extra expense has a 30 day waiting period.