“Don’t use up all the hot water!”

If you’ve ever uttered this, and many of us have while impatiently waiting to shower in the mornings, then your torrid water saviour might well be LSB Industries, Inc. (AMEX: LXU), formed in 1968.

The Oklahoma City-based small cap has two core businesses: chemicals and indoor climate control, but the key to the company’s growth are water source heat pumps (WSHP) and renewable energy geothermal heat pumps (GSP). Sales of these pumps surged 58% to $134 million in 2006 from 2005 and so far in the first nine months of 2007 have grown 30% from 2006 levels.

WSHP's are conventional cooling and heating units connected to a central HVAC system with a cooling tower and small boiler. They help move heat from zone to zone in a building and reduce both energy use and cost. LSB has a 43% U.S. market share for this pump.

Revenues for LSB Industries are split almost equally between the chemicals and indoor climate control segments: For the latter, LSB targets specialized niches of HVAC (Heating, Ventilating and Air Conditioning) building systems. The company enjoys a 41% U.S. market share in hydronic fans coils (air-handling units used in large commercial buildings). Its installed base of three million units includes placements in such New York City landmarks as Rockefeller Center and the Trump Tower.

In May 2007, Business Week named LXU one of its 100 hottest growth companies. The next month, the shares were added to the Russell 2000 and 3000 indices, making LXU a "must-have" stock for funds that track these indices.

With a growing emphasis on green energy, LSB is the nation's leading geothermal heat pump supplier with a 43% market share. Roughly 3/4 of the energy budget for a single-family house is consumed by heating, air conditioning and generating hot water. A geothermal HVAC system replaces a conventional source such as a natural gas furnace and dramatically reduces heating costs since the earth provides "free" energy.

For access to the full article, you must be a registered member - it's FREE.