----

----

| [X]                                                                                                                                                                                                                                                                                                                                      | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934                                                                                      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                     | For the quarterly period      ended             March      31, 2010                |
|                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                     | 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.            | Financial Statements                                                                           | 4        |
|                    |                                                                                           |     |
| Item      2.            | Management's      Discussion and Analysis of Financial Condition and Results      ofOperations |  35 |
|                    |                                                                                           |     |
| Item      3.            | Quantitative and Qualitative Disclosures About      Market Risk                                |  56 |
|                    |                                                                                           |     |
| Item      4.            | Controls and Procedures                                                                        |  57 |
|                    |                                                                                           |     |
| Special      Note  | Regarding      Forward-Looking Statements                                                      | 58       |
|                    |                                                                                           |     |
|                    | PART      II – Other Information                                                         |     |
|                    |                                                                                           |     |
| Item      1.            | Legal Proceedings                                                                              | 60       |
|                    |                                                                                           |     |
| Item      1A.           | Risk      Factors                                                                              | 60       |
|                    |                                                                                           |     |
| Item      2.            | Unregistered Sales of Equity Securities and Use of      Proceeds                               | 60       |
|                    |                                                                                           |     |
| Item      3.            | Defaults Upon Senior      Securities                                                           | 60       |
|                    |                                                                                           |     |
| Item      4.            | (Reserved)                                                                                     | 60       |
|                    |                                                                                           |     |
| Item      5.            | Other Information                                                                              | 60       |
|                    |                                                                                           |     |
| Item      6.            | Exhibits                                                                                       | 61       |

----

|   | March      31,2010 |   | December      31,2009 |
|--------|--------------------|--------|-----------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Assets                                       |   |   |    |   |   |   |
|----------------------------------------------|--------|--------|---------|--------|--------|--------|
| Current      assets:                         |   |   |    |   |   |   |
| Cash      and cash equivalents               |   | $      | 45,067  |   |   | $      | 61,739 |   |
| Restricted      cash                         |   |   | 582     |   |   |   | 30 |   |
| Short-term      investments                  |   |   | 10,000  |   |   |   | 10,051 |   |
| Accounts      receivable, net                |   |   | 67,906  |   |   |   | 57,762 |   |
| Inventories:                                 |   |   |    |   |   |   |   |   |
| Finished      goods                          |   |   | 36,319  |   |   |   | 25,753 |   |
| Work      in process                         |   |   | 2,104   |   |   |   | 2,466 |   |
| Raw      materials                           |   |   | 22,690  |   |   |   | 22,794 |   |
| Total      inventories                       |   |   | 61,113  |   |   |   | 51,013 |   |
| Supplies,      prepaid items and other:      |   |   |    |   |   |   |   |   |
| Prepaid      insurance                       |   |   | 3,206   |   |   |   | 4,136 |   |
| Prepaid      income taxes                    |   |   | 1,181   |   |   |   | 1,642 |   |
| Precious      metals                         |   |   | 12,194  |   |   |   | 13,083 |   |
| Supplies                                     |   |   | 5,415   |   |   |   | 4,886 |   |
| Other                                        |   |   | 2,682   |   |   |   | 1,626 |   |
| Total      supplies, prepaid items and other |   |   | 24,678  |   |   |   | 25,373 |   |
| Deferred      income taxes                   |   |   | 5,459   |   |   |   | 5,527 |   |
| Total      current assets                    |   |   | 214,805 |   |   |   | 211,495 |   |
|                                         |   |   |    |   |   |   |   |   |
| Property,      plant and equipment, net      |   |   | 122,877 |   |   |   | 117,962 |   |
|                                         |   |   |    |   |   |   |   |   |
| Other      assets:                           |   |   |    |   |   |   |   |   |
| Debt      issuance costs, net                |   |   | 1,547   |   |   |   | 1,652 |   |
| Investment      in affiliate                 |   |   | 3,959   |   |   |   | 3,838 |   |
| Goodwill                                     |   |   | 1,724   |   |   |   | 1,724 |   |
| Other,      net                              |   |   | 2,168   |   |   |   | 1,962 |   |
| Total      other assets                      |   |   | 9,398   |   |   |   | 9,176 |   |
|                                         |   | $      | 347,080 |   |   | $      | 338,633 |   |

----

Table of Contents

|   | March      31,2010 |   | December      31,2009 |
|--------|--------------------|--------|-----------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Liabilities      and Stockholders’ Equity                                                                                  |   |   |    |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Current      liabilities:                                                                                                        |   |   |    |   |   |   |
| Accounts      payable                                                                                                            |   | $      | 39,297  |   |   | $      | 37,553 |   |
| Short-term      financing                                                                                                        |   |   | 1,905   |   |   |   | 3,017 |   |
| Accrued      and other liabilities                                                                                               |   |   | 25,367  |   |   |   | 23,054 |   |
| Current      portion of long-term debt                                                                                           |   |   | 3,438   |   |   |   | 3,205 |   |
| Total      current liabilities                                                                                                   |   |   | 70,007  |   |   |   | 66,829 |   |
|                                                                                                                             |   |   |    |   |   |   |   |   |
| Long-term      debt                                                                                                              |   |   | 101,775 |   |   |   | 98,596 |   |
|                                                                                                                             |   |   |    |   |   |   |   |   |
| Noncurrent      accrued and other liabilities                                                                                    |   |   | 10,776  |   |   |   | 10,626 |   |
|                                                                                                                             |   |   |    |   |   |   |   |   |
| Deferred      income taxes                                                                                                       |   |   | 12,094  |   |   |   | 11,975 |   |
|                                                                                                                             |   |   |    |   |   |   |   |   |
| Commitments      and contingencies (Note 11)                                                                                     |   |   |    |   |   |   |   |   |
|                                                                                                                             |   |   |    |   |   |   |   |   |
| 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, 25,371,925      shares issued (25,369,095 at December 31, 2009) |   |   | 2,537   |   |   |   | 2,537 |   |
| Capital      in excess of par value                                                                                              |   |   | 130,349 |   |   |   | 129,941 |   |
| Retained      earnings                                                                                                           |   |   | 42,495  |   |   |   | 41,082 |   |
|                                                                                                                             |   |   | 178,381 |   |   |   | 176,560 |   |
| Less      treasury stock at cost:                                                                                                |   |   |    |   |   |   |   |   |
| Common      stock, 4,143,362 shares                                                                                              |   |   | 25,953  |   |   |   | 25,953 |   |
| Total      stockholders' equity                                                                                                  |   |   | 152,428 |   |   |   | 150,607 |   |
|                                                                                                                             |   | $      | 347,080 |   |   | $      | 338,633 |   |

----

Table of Contents

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands, Except Per ShareAmounts) |
|--------|----------------------------------------------|

| Net      sales                                                                                                     | $      | 130,410 |   |   | $      | 150,197 |   |
|--------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|
| Cost      of sales                                                                                                 |   | 102,144 |   |   |   | 109,469 |   |
| Gross      profit                                                                                                  |   | 28,266  |   |   |   | 40,728  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Selling,      general and administrative expense                                                                   |   | 24,589  |   |   |   | 21,375  |   |
| Provisions      for losses on accounts receivable                                                                  |   | 9       |   |   |   | 52      |   |
| Other      expense                                                                                                 |   | 58      |   |   |   | 43      |   |
| Other      income                                                                                                  |   | (806    | )      |   |   | (162    | )      |
| Operating      income                                                                                              |   | 4,416   |   |   |   | 19,420  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Interest      expense                                                                                              |   | 2,080   |   |   |   | 1,911   |   |
| Gain      on extinguishment of debt                                                                                |   | -       |   |   |   | (1,322  | )      |
| Non-operating      other income, net                                                                               |   | (38     | )      |   |   | (23     | )      |
| Income      from continuing operations before provisions for income      taxes and equity in earnings of affiliate |   | 2,374   |   |   |   | 18,854  |   |
| Provisions      for income taxes                                                                                   |   | 912     |   |   |   | 7,349   |   |
| Equity      in earnings of affiliate                                                                               |   | (261    | )      |   |   | (240    | )      |
| Income      from continuing operations                                                                             |   | 1,723   |   |   |   | 11,745  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Net      loss from discontinued operations                                                                         |   | 5       |   |   |   | 2       |   |
| Net      income                                                                                                    |   | 1,718   |   |   |   | 11,743  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Dividends      on preferred stocks                                                                                 |   | 305     |   |   |   | 306     |   |
| Net      income applicable to common stock                                                                         | $      | 1,413   |   |   | $      | 11,437  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Weighted-average      common shares:                                                                               |   |    |   |   |   |    |   |
| Basic                                                                                                              |   | 21,226  |   |   |   | 21,110  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Diluted                                                                                                            |   | 21,364  |   |   |   | 23,671  |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Income      per common share:                                                                                      |   |    |   |   |   |    |   |
| Basic                                                                                                              | $      | .07     |   |   | $      | .54     |   |
|                                                                                                               |   |    |   |   |   |    |   |
| Diluted                                                                                                            | $      | .07     |   |   | $      | .51     |   |
|                                                                                                               |   |    |   |   |   |    |   |

----

Table of Contents

|   |  Common      Stock Shares |   | Non-Redeemable      Preferred Stock |   |  CommonStock      Par Value |   |  Capital      in Excess of Par Value |   |   Retained      Earnings |   |  Treasury      Stock-Common |   |    Total |
|--------|--------------------------------|--------|-------------------------------------|--------|----------------------------------|--------|-------------------------------------------|--------|------------------------------------|--------|----------------------------------|--------|-------------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Balance      at December 31, 2009                                          |   | 25,369 |   |   | $      | 3,000  |   |   | $      | 2,537  |   |   | $      | 129,941 |   |   | $      | 41,082 |   |   | $      | (25,953 | )      |   | $      | 150,607 |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Net      income                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   | 1,718  |   |   |   |    |   |   |   | 1,718   |   |
| Dividends      paid on preferred stocks                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   | (305   | )      |   |   |    |   |   |   | (305    | )      |
| Stock-based      compensation                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | 247     |   |   |   |   |   |   |   |    |   |   |   | 247     |   |
| Exercise      of stock options                                             |   | 2      |   |   |   |   |   |   |   |   |   |   |   | 22      |   |   |   |   |   |   |   |    |   |   |   | 22      |   |
| Excess      income tax benefit associated with stock-basedcompensation     |   |   |   |   |   |   |   |   |   |   |   |   |   | 138     |   |   |   |   |   |   |   |    |   |   |   | 138     |   |
| Conversion      of 13 shares of redeemable preferred stock to common stock |   | 1      |   |   |   |   |   |   |   |   |   |   |   | 1       |   |   |   |   |   |   |   |    |   |   |   | 1       |   |
| Balance      at March 31, 2010                                             |   | 25,372 |   |   | $      | 3,000  |   |   | $      | 2,537  |   |   | $      | 130,349 |   |   | $      | 42,495 |   |   | $      | (25,953 | )      |   | $      | 152,428 |   |

----

Table of Contents

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Cash      flows from continuing operating activities:                                                         |   |    |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|
| Net      income                                                                                               | $      | 1,718   |   |   | $      | 11,743 |   |
| Adjustments      to reconcile net income to net cash provided (used) by continuing      operating activities: |   |    |   |   |   |   |   |
| Net      loss from discontinued operations                                                                    |   | 5       |   |   |   | 2      |   |
| Deferred      income taxes                                                                                    |   | 189     |   |   |   | 1,950  |   |
| Gain      on extinguishment of debt                                                                           |   | -       |   |   |   | (1,322 | )      |
| Losses      on sales and disposals of property and equipment                                                  |   | 3       |   |   |   | 13     |   |
| Gain      on property insurance recoveries associated with property, plant and      equipment                 |   | (495    | )      |   |   | -      |   |
| Depreciation      of property, plant and equipment                                                            |   | 4,060   |   |   |   | 3,796  |   |
| Amortization                                                                                                  |   | 153     |   |   |   | 245    |   |
| Stock-based      compensation                                                                                 |   | 247     |   |   |   | 261    |   |
| Provisions      for losses on accounts receivable                                                             |   | 9       |   |   |   | 52     |   |
| Provision      for (realization of) losses on inventory                                                       |   | 118     |   |   |   | (3,032 | )      |
| Realization      of losses on firm sales commitments                                                          |   | (351    | )      |   |   | -      |   |
| Equity      in earnings of affiliate                                                                          |   | (261    | )      |   |   | (240   | )      |
| Distributions      received from affiliate                                                                    |   | 140     |   |   |   | 175    |   |
| Changes      in fair value of commodities contracts                                                           |   | 310     |   |   |   | 1,498  |   |
| Changes      in fair value of interest rate contracts                                                         |   | 220     |   |   |   | 70     |   |
| Other                                                                                                         |   | (10     | )      |   |   | -      |   |
| Cash      provided (used) by changes in assets and liabilities:                                               |   |    |   |   |   |   |   |
| Accounts      receivable                                                                                      |   | (11,323 | )      |   |   | 4,055  |   |
| Inventories                                                                                                   |   | (10,218 | )      |   |   | 8,842  |   |
| Prepaid      and accrued income taxes                                                                         |   | 461     |   |   |   | 1,157  |   |
| Other      supplies and prepaid items                                                                         |   | 351     |   |   |   | (538   | )      |
| Accounts      payable                                                                                         |   | 3,291   |   |   |   | (7,748 | )      |
| Accrued      payroll and benefits                                                                             |   | 1,885   |   |   |   | 2,009  |   |
| Commodities      contracts                                                                                    |   | 124     |   |   |   | (3,127 | )      |
| Other      current and noncurrent liabilities                                                                 |   | 1,137   |   |   |   | (1,027 | )      |
| Net      cash provided (used) by continuing operating activities                                              |   | (8,237  | )      |   |   | 18,834 |   |
|                                                                                                          |   |    |   |   |   |   |   |
| Cash      flows from continuing investing activities:                                                         |   |    |   |   |   |   |   |
| Capital      expenditures                                                                                     |   | (6,524  | )      |   |   | (7,195 | )      |
| Proceeds      from property insurance recoveries associated with property, plant and      equipment           |   | 1,670   |   |   |   | -      |   |
| Proceeds      from sales of property and equipment                                                            |   | 2       |   |   |   | 1      |   |
| Proceeds      from short-term investments                                                                     |   | 10,051  |   |   |   | -      |   |
| Purchase      of short-term investments                                                                       |   | (10,000 | )      |   |   | -      |   |
| Proceeds      from (deposits of) restricted cash                                                              |   | (552    | )      |   |   | 148    |   |
| Other      assets                                                                                             |   | (209    | )      |   |   | (108   | )      |
| Net      cash used by continuing investing activities                                                         |   | (5,562  | )      |   |   | (7,154 | )      |

----

Table of Contents

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Cash      flows from continuing financing activities:                                                             |   |     |   |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|--------|----------|--------|
| Proceeds      from revolving debt facilities                                                                      | $      | 113,111  |   |   | $      | 143,503  |   |
| Payments      on revolving debt facilities                                                                        |   | (113,111 | )      |   |   | (143,503 | )      |
| Acquisition      of 5.5% convertible debentures                                                                   |   | -        |   |   |   | (4,174   | )      |
| Proceeds      from other long-term debt, net of fees                                                              |   | 47       |   |   |   | -        |   |
| Payments      on other long-term debt                                                                             |   | (1,588   | )      |   |   | (267     | )      |
| Payments      on short-term financing                                                                             |   | (1,112   | )      |   |   | (888     | )      |
| Proceeds      from exercise of stock options                                                                      |   | 22       |   |   |   | -        |   |
| Excess      income tax benefit associated with stock-basedcompensation                                            |   | 136      |   |   |   | 79       |   |
| Dividends      paid on preferred stocks                                                                           |   | (305     | )      |   |   | (306     | )      |
| Net      cash used by continuing financing activities                                                             |   | (2,800   | )      |   |   | (5,556   | )      |
|                                                                                                              |   |     |   |   |   |     |   |
| Cash      flows of discontinued operations:                                                                       |   |     |   |   |   |     |   |
| Operating      cash flows                                                                                         |   | (73      | )      |   |   | (20      | )      |
| Net      increase (decrease) in cash and cash equivalents                                                         |   | (16,672  | )      |   |   | 6,104    |   |
|                                                                                                              |   |     |   |   |   |     |   |
| Cash      and cash equivalents at beginning of period                                                        |   | 61,739   |   |   |   | 46,204   |   |
| Cash      and cash equivalents at end of period                                                                   | $      | 45,067   |   |   | $      | 52,308   |   |
|                                                                                                              |   |     |   |   |   |     |   |
| Supplemental      cash flow information:                                                                          |   |     |   |   |   |     |   |
|                                                                                                              |   |     |   |   |   |     |   |
| Cash      payments for income taxes, net of refunds                                                               | $      | 150      |   |   | $      | 4,159    |   |
|                                                                                                              |   |     |   |   |   |     |   |
| Noncash      investing and financing activities:                                                                  |   |     |   |   |   |     |   |
|                                                                                                              |   |     |   |   |   |     |   |
| Receivable      associated with a property insurance claim                                                        | $      | -        |   |   | $      | 1,135    |   |
| Current      other assets, accounts payable and long-term debt associated with      property, plant and equipment | $      | 6,074    |   |   | $      | 2,444    |   |
| Debt      issuance costs associated with the acquisition of the 5.5% convertible      debentures                  | $      | -        |   |   | $      | 204      |   |
|                                                                                                              |   |     |   |   |   |     |   |

----

Table of Contents

----

Table of Contents

|   |   | March      31,2010 |   | December      31,2009 |
|--------|--------|--------------------|--------|-----------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Trade      receivables               | $      | 67,085 |   |   | $      | 55,318 |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Insurance      claims                |   | 364    |   |   |   | 1,517  |   |
| Other                                |   | 1,138  |   |   |   | 1,603  |   |
|                                 |   | 68,587 |   |   |   | 58,438 |   |
| Allowance      for doubtful accounts |   | (681   | )      |   |   | (676   | )      |
|                                 | $      | 67,906 |   |   | $      | 57,762 |   |

|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Balance      at beginning of period        | $      | 1,676 |   |   | $      | 4,141  |   |
|--------------------------------------------|--------|-------|--------|--------|--------|--------|--------|
| Provision      for (realization of) losses |   | 118   |   |   |   | (3,032 | )      |
| Write-offs/disposals                       |   | (50   | )      |   |   | -      |   |
| Balance      at end of period              | $      | 1,744 |   |   | $      | 1,109  |   |

----

Table of Contents

|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |   |
|--------|------|--------|------|--------|

|   | (In      Thousands) |
|--------|---------------------|

| Precious      metals expense                   | $      | 1,379 |   |   | $      | 1,727  |   |
|------------------------------------------------|--------|-------|--------|--------|--------|--------|--------|
| Recoveries      of precious metals             |   | -     |   |   |   | (2,213 | )      |
| Gains      on sales of precious metals         |   | (112  | )      |   |   | -      |   |
| Precious      metals expense (recoveries), net | $      | 1,267 |   |   | $      | (486   | )      |

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|   | March      31,2010 |   | December      31,2009 |
|--------|--------------------|--------|-----------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Accrued      payroll and benefits                     |   | $      | 7,785  |   |   | $      | 5,900  |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Deferred      revenue on extended warranty contracts  |   |   | 4,967  |   |   |   | 4,884  |   |
| Accrued      insurance                                |   |   | 4,224  |   |   |   | 3,667  |   |
| Accrued      death benefits                           |   |   | 3,528  |   |   |   | 3,356  |   |
| Accrued      warranty costs                           |   |   | 2,991  |   |   |   | 3,138  |   |
| Fair      value of derivatives                        |   |   | 2,705  |   |   |   | 1,929  |   |
| Accrued      contractual manufacturing obligations    |   |   | 1,606  |   |   |   | 732    |   |
| Accrued      executive benefits                       |   |   | 1,084  |   |   |   | 1,102  |   |
| Accrued      interest                                 |   |   | 1,014  |   |   |   | 1,593  |   |
| Accrued      commissions                              |   |   | 958    |   |   |   | 1,035  |   |
| Other                                                 |   |   | 5,281  |   |   |   | 6,344  |   |
|                                                  |   |   | 36,143 |   |   |   | 33,680 |   |
| Less      noncurrent portion                          |   |   | 10,776 |   |   |   | 10,626 |   |
| Current      portion of accrued and other liabilities |   | $      | 25,367 |   |   | $      | 23,054 |   |

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|   | Three      Months EndedMarch      31, |   |
|--------|---------------------------------------|--------|

|   | 2010                |   | 2009 |
|--------|---------------------|--------|------|
|   | (In      Thousands) |   |

| Balance      at beginning of period      | $      | 3,138  |   |   | $      | 2,820  |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Add:      Charged to costs and expenses  |   | 998    |   |   |   | 1,858  |   |
| Deduct:      Costs and expenses incurred |   | (1,145 | )      |   |   | (1,814 | )      |
| Balance      at end of period            | $      | 2,991  |   |   | $      | 2,864  |   |

|   | March      31, |   | December      31, |
|--------|----------------|--------|-------------------|
|   | 2010           |   | 2009              |

|   | (In      Thousands) |
|--------|---------------------|

| Working      Capital Revolver Loan due 2012 (A)                                                                                           |   | $      | -       |   |   | $      | -       |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| 5.5%      Convertible Senior Subordinated Notes due 2012 (B)                                                                              |   |   | 29,400  |   |   |   | 29,400  |   |
| Secured      Term Loan due 2012 (C)                                                                                                       |   |   | 49,151  |   |   |   | 50,000  |   |
| Other,      with a current weighted-average interest rate of 6.42%, most of which is      secured by machinery, equipment and real estate |   |   | 26,662  |   |   |   | 22,401  |   |
|                                                                                                                                      |   |   | 105,213 |   |   |   | 101,801 |   |
| Less      current portion of long-term debt                                                                                               |   |   | 3,438   |   |   |   | 3,205   |   |
| Long-term      debt due after one year                                                                                                    |   | $      | 101,775 |   |   | $      | 98,596  |   |

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| ·   | 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. |
|--------------------|----------------------|

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| A. | Environmental      Matters |
|----|----------------------------|

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| ·   | for      a period of five years from the completion of an exchange or tender to      repurchase, redeem or otherwise acquire shares of our common stock,      without approval of the outstanding Series 2 Preferred irrespective that      dividends are accrued and unpaid with respect to the Series 2 Preferred;      or |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | to      provide that holders of Series 2 Preferred may not elect two directors to      our board of directors when dividends are unpaid on the Series 2 Preferred      if less than 140,000 shares of Series 2 Preferred remain      outstanding. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | fraudulent      inducement and fraud, |
|--------------------|---------------------------------------|

| ·   | violation      of 10(b) of the Exchange Act and Rule10b-5, |
|--------------------|------------------------------------------------------------|

| ·   | violation      of 17-12A501 of the Kansas Uniform Securities Act,  and |
|--------------------|------------------------------------------------------------------------|

| ·   | breach      of contract. |
|--------------------|--------------------------|

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|   | Fair      Value Measurements atMarch      31, 2010 Using |
|--------|----------------------------------------------------------|

|     Description |   |  Total      FairValue      atMarch      31,2010 |   | Quoted      Prices in      ActiveMarkets      for Identical      Assets (Level      1) |   | SignificantOtherObservableInputs(Level      2) |   |  Significant      Unobservable      Inputs(Level      3) |   |  Total      FairValue      atDecember      31,2009 |
|-------------------------------------|--------|------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------------------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Assets      - Supplies, prepaid items      and other:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commodities      contracts                                                         | $      | 267    |   | $      | 267    |   |   | $      | -      |   |   | $      | -      |   |   | $      | 150    |   |
| Total                                                                              | $      | 267    |   | $      | 267    |   |   | $      | -      |   |   | $      | -      |   |   | $      | 150    |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      - Current and noncurrent      accrued and other      liabilities: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodities      contracts                                                         | $      | 551    |   | $      | 551    |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |
| Foreign      exchange contracts                                                    |   | 5      |   |   | -      |   |   |   | 5      |   |   |   | -      |   |   |   | -      |   |
| Interest      rate contracts                                                       |   | 2,149  |   |   | -      |   |   |   | 2,149  |   |   |   | -      |   |   |   | 1,929  |   |
| Total                                                                              | $      | 2,705  |   | $      | 551    |   |   | $      | 2,154  |   |   | $      | -      |   |   | $      | 1,929  |   |

|   | Commodities      Contracts |   |
|--------|----------------------------|--------|

|   | (In      Thousands) |
|--------|---------------------|

| Beginning      balance                                       |   | $      | (1,388 | )      |
|--------------------------------------------------------------|--------|--------|--------|--------|
| Total      realized and unrealized gain included in earnings |   |   | 493    |   |
| Purchases,      issuances, and settlements                   |   |   | 895    |   |
| Transfers      in and/or out of Level 3                      |   |   | -      |   |
| Ending      balance                                          |   | $      | -      |   |

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|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Total      net losses included in earnings:           |   |   |   |   |   |   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Cost      of sales – Commodities contracts      | $      | (688   | )      |   | $      | (1,156 | )      |
| Cost      of sales – Foreign exchange contracts |   | (24    | )      |   |   | (30    | )      |
| Interest      expense – Interest rate contracts |   | (614   | )      |   |   | (269   | )      |
|                                                  | $      | (1,326 | )      |   | $      | (1,455 | )      |

| Change      in unrealized gains and losses relating to      contracts still held at period end: |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Cost      of sales – Commodities contracts                                                | $      | (310   | )      |   | $      | (1,498 | )      |
| Cost      of sales – Foreign exchange contracts                                           |   | (5     | )      |   |   | (1     | )      |
| Interest      expense – Interest rate contracts                                           |   | (220   | )      |   |   | (70    | )      |
|                                                                                            | $      | (535   | )      |   | $      | (1,569 | )      |

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|   | March      31, 2010 |   | December      31, 2009 |
|--------|---------------------|--------|------------------------|

|   | Estimated      Fair      Value |   | Carrying      Value |   | Estimated      Fair      Value |   | Carrying Value |
|--------|--------------------------------|--------|---------------------|--------|--------------------------------|--------|---------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Variable      Rate:                             |   |   |   |   |   |   |    |   |   |   |   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Secured      Term Loan                          |   | $      | 26,090 |   |   | $      | 49,151  |   |   | $      | 27,640 |   |   | $ | 50,000 |   |
| Working      Capital Revolver Loan              |   |   | -      |   |   |   | -       |   |   |   | -      |   |   |   | - |   |
| Other      debt                                 |   |   | 2,525  |   |   |   | 2,525   |   |   |   | 2,553  |   |   |   | 2,553 |   |
|                                            |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Fixed      Rate:                                |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| 5.5%      Convertible Senior Subordinated Notes |   |   | 29,400 |   |   |   | 29,400  |   |   |   | 29,106 |   |   |   | 29,400 |   |
| Other      bank debt and equipment financing    |   |   | 24,811 |   |   |   | 24,137  |   |   |   | 20,231 |   |   |   | 19,848 |   |
|                                            |   | $      | 82,826 |   |   | $      | 105,213 |   |   | $      | 79,530 |   |   | $ | 101,801 |   |

| ·   | we      paid cash dividends on our Series B 12% cumulative, convertible preferred      stock (“Series B Preferred”), Series D 6% cumulative, convertible Class C      preferred stock (“Series D Preferred”) and noncumulative redeemable      preferred stock (“Noncumulative Preferred”) totaling approximately      $240,000, $60,000 and $5,000,respectively. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we      paid cash dividends on our Series B Preferred, Series D Preferred and      Noncumulative Preferred totaling approximately $240,000, $60,000 and      $6,000, respectively; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we      acquired $5.7 million aggregate principal amount of our 2007      Debentures. |
|--------------------|---------------------------------------------------------------------------------------|

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|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

| Numerator:                                                                                                                                                   |   |       |   |   |   |       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|--------|------------|--------|
| Net      income                                                                                                                                              | $      | 1,718      |   |   | $      | 11,743     |   |
| Dividends      on Series B Preferred                                                                                                                         |   | (240       | )      |   |   | (240       | )      |
| Dividends      on Series D Preferred                                                                                                                         |   | (60        | )      |   |   | (60        | )      |
| Dividends      on Noncumulative Preferred                                                                                                                    |   | (5         | )      |   |   | (6         | )      |
| Total      dividends on preferred stock                                                                                                                      |   | (305       | )      |   |   | (306       | )      |
| Numerator      for basic net income per common share - net income applicable to common      stock                                                            |   | 1,413      |   |   |   | 11,437     |   |
| Dividends      on preferred stock assumed to be converted, if dilutive                                                                                       |   | -          |   |   |   | 306        |   |
| Interest      expense including amortization of debt issuance costs,      net of income taxes, on convertible debt assumed to be converted, if      dilutive |   | -          |   |   |   | 349        |   |
| Numerator      for diluted net income per common share                                                                                                       | $      | 1,413      |   |   | $      | 12,092     |   |
|                                                                                                                                                         |   |       |   |   |   |       |   |
| Denominator:                                                                                                                                                 |   |       |   |   |   |       |   |
| Denominator      for basic net income per common share - weighted-average      shares                                                                        |   | 21,226,411 |   |   |   | 21,109,812 |   |
| Effect      of dilutive securities:                                                                                                                          |   |       |   |   |   |       |   |
| Stock      options                                                                                                                                           |   | 133,192    |   |   |   | 351,888    |   |
| Convertible      notes payable                                                                                                                               |   | 4,000      |   |   |   | 1,270,720  |   |
| Convertible      preferred stock                                                                                                                             |   | -          |   |   |   | 938,546    |   |
| Dilutive      potential common shares                                                                                                                        |   | 137,192    |   |   |   | 2,561,154  |   |
| Denominator      for diluted net income per common share - adjusted      weighted-average shares and assumed conversions                                     |   | 21,363,603 |   |   |   | 23,670,966 |   |
|                                                                                                                                                         |   |       |   |   |   |       |   |
| Basic      net income per common share                                                                                                                       | $      | .07        |   |   | $      | .54        |   |
|                                                                                                                                                         |   |       |   |   |   |       |   |
| Diluted      net income per common share                                                                                                                     | $      | .07        |   |   | $      | .51        |   |

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|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

| Convertible      notes payable   | 1,070,160 |   |   |   | -       |   |
|----------------------------------|-----------|--------|--------|--------|---------|--------|
| Convertible      preferred stock | 936,846   |   |   |   | -       |   |
| Stock      options               | 375,000   |   |   |   | 842,000 |   |
|                             | 2,382,006 |   |   |   | 842,000 |   |

|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Current:                         |   |   |   |   |   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
| Federal                          | $      | 516    |   | $      | 4,808  |   |
| State                            |   | 207    |   |   | 590    |   |
| Total      current provisions    | $      | 723    |   | $      | 5,398  |   |
|                             |   |   |   |   |   |   |
| Deferred:                        |   |   |   |   |   |   |
| Federal                          | $      | 177    |   | $      | 1,751  |   |
| State                            |   | 12     |   |   | 200    |   |
| Total      deferred provisions   |   | 189    |   |   | 1,951  |   |
| Provisions      for income taxes | $      | 912    |   | $      | 7,349  |   |

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|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Other      expense:                                                  |   |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Total      other expense (1)                                         | $      | 58     |   |   | $      | 43     |   |
|                                                                 |   |   |   |   |   |   |   |
| Other      income:                                                   |   |   |   |   |   |   |   |
| Property      insurance recoveries in excess of losses      incurred | $      | 739    |   |   | $      | -      |   |
| Miscellaneous      income (1)                                        |   | 67     |   |   |   | 162    |   |
| Total      other income                                              | $      | 806    |   |   | $      | 162    |   |
|                                                                 |   |   |   |   |   |   |   |
| Non-operating      other income, net:                                |   |   |   |   |   |   |   |
| Interest      income                                                 | $      | 56     |   |   | $      | 45     |   |
| Miscellaneous      expense (1)                                       |   | (18    | )      |   |   | (22    | )      |
| Total      non-operating other income, net                           | $      | 38     |   |   | $      | 23     |   |

| (1)   | Amounts      represent numerous unrelated transactions, none of which are individually      significant requiring separatedisclosure. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

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|   | Three      Months EndedMarch      31, |
|--------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Net      sales:                                                             |   |    |   |   |   |    |   |
|-----------------------------------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|
| Climate      Control                                                        | $      | 53,671  |   |   | $      | 72,048  |   |
| Chemical                                                                    |   | 74,872  |   |   |   | 74,478  |   |
| Other                                                                       |   | 1,867   |   |   |   | 3,671   |   |
|                                                                        | $      | 130,410 |   |   | $      | 150,197 |   |
|                                                                        |   |    |   |   |   |    |   |
| Gross      profit: (1)                                                      |   |    |   |   |   |    |   |
| Climate      Control                                                        | $      | 18,399  |   |   | $      | 22,428  |   |
| Chemical      (2)                                                           |   | 9,158   |   |   |   | 17,148  |   |
| Other                                                                       |   | 709     |   |   |   | 1,152   |   |
|                                                                        | $      | 28,266  |   |   | $      | 40,728  |   |
|                                                                        |   |    |   |   |   |    |   |
| Operating      income: (3)                                                  |   |    |   |   |   |    |   |
| Climate      Control                                                        | $      | 5,527   |   |   | $      | 8,978   |   |
| Chemical      (2) (4)                                                       |   | 1,885   |   |   |   | 12,638  |   |
| General      corporate expenses and other business operations,      net (5) |   | (2,996  | )      |   |   | (2,196  | )      |
|                                                                        |   | 4,416   |   |   |   | 19,420  |   |
| Interest      expense                                                       |   | (2,080  | )      |   |   | (1,911  | )      |
| Gain      on extinguishment of debt                                         |   | -       |   |   |   | 1,322   |   |
| Non-operating      other income, net:                                       |   |    |   |   |   |    |   |
| Climate      Control                                                        |   | 1       |   |   |   | -       |   |
| Chemical                                                                    |   | 2       |   |   |   | 3       |   |
| Corporate      and other business operations                                |   | 35      |   |   |   | 20      |   |
| Provisions      for income taxes                                            |   | (912    | )      |   |   | (7,349  | )      |
| Equity      in earnings of affiliate-Climate Control                        |   | 261     |   |   |   | 240     |   |
| Income      from continuing operations                                      | $      | 1,723   |   |   | $      | 11,745  |   |

| (1)   | Gross      profit by industry segment represents net sales less cost of sales. Gross      profit classified as “Other” relates to the sales of industrial machinery      and related components. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | As      the result of entering into sales commitments with higher firm sales      prices during 2008, we recognized sales with a gross profit of $761,000      and $2,500,000 higher than our comparable product sales made at lower      market prices available during the first quarter of 2010 and 2009,      respectively. In addition, during the first quarter of 2010 and 2009, we      recognized gains on sales and recoveries of precious metals totaling      $112,000 and $2,213,000, respectively. The impact of these transactions      increased gross profit and operating income for each respective period.      During the first quarter of 2010 and 2009, we incurred expenses of      $1,432,000 and $120,000, respectively, relating to planned major      maintenance activities. During the first quarter of 2010 and 2009, we      recognized losses totaling $838,000 and $1,619,000, respectively, on our      futures/forward contracts fornatural |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (3) | Our      chief operating decision makers use operating income by industry segment      for purposes of making decisions, which include resource allocations and      performance evaluations. Operating income by industry segment represents      gross profit by industry segment less selling, general and administration      expense (“SG&A”) incurred by each industry segment plus other income      and other expense earned/incurred by each industry segment before general      corporate expenses and other business operations, net. General corporate      expenses and other business operations, net, consist of unallocated      portions of gross profit, SG&A, other income and other      expense. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | During      the first quarter of 2010, we began limited production of anhydrous      ammonia and urea ammonium nitrate (“UAN”) at our previously idled chemical      facility located in Pryor, Oklahoma (the “Pryor      Facility”).  However the production was at rates lower than our      targeted production rates. As a result, we incurred expenses of $6,037,000      (including the $770,000 net loss on firm sales commitments discussed above      in footnote 2). During the first quarter of 2009, we incurred start up      expenses of $1,996,000 relating to the Pryor Facility. Excluding the net      loss on firm sales commitments, which are included in cost of sales, these      expenses are primarily included in SG&A for each respective      period. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | The      amounts included are not allocated to our Climate Control and Chemical      Businesses since these items are not included in the operating results      reviewed by our chief operating decision makers for purposes of making      decisions as discussed above. A detail of these amounts are as      follows: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    | Three      Months EndedMarch      31, |
|--------------|---------------------------------------|

|   | 2010 |   | 2009 |
|--------|------|--------|------|

|   | (In      Thousands) |
|--------|---------------------|

| Gross      profit-Other                                                       | $      | 709    |   |   | $      | 1,152  |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Selling,      general and administrative:                                     |   |   |   |   |   |   |   |
| Personnel      costs                                                          |   | (1,747 | )      |   |   | (1,725 | )      |
| Professional      fees                                                        |   | (1,170 | )      |   |   | (984   | )      |
| Office      overhead                                                          |   | (163   | )      |   |   | (188   | )      |
| Property,      franchise and other taxes                                      |   | (86    | )      |   |   | (83    | )      |
| Advertising                                                                   |   | (66    | )      |   |   | (70    | )      |
| All      other                                                                |   | (503   | )      |   |   | (385   | )      |
| Total      selling, general and administrative                                |   | (3,735 | )      |   |   | (3,435 | )      |
|                                                                          |   |   |   |   |   |   |   |
| Other      income                                                             |   | 40     |   |   |   | 110    |   |
| Other      expense                                                            |   | (10    | )      |   |   | (23    | )      |
| Total      general corporate expenses and other business      operations, net | $      | (2,996 | )      |   | $      | (2,196 | )      |

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|   | March      31,2010 |   | December      31,2009 |
|--------|--------------------|--------|-----------------------|

|   | (In      Thousands) |
|--------|---------------------|

| Climate      Control            | $      | 107,390 |   | $      | 102,029 |   |
|---------------------------------|--------|---------|--------|--------|---------|--------|
| Chemical                        |   | 165,000 |   |   | 143,800 |   |
| Corporate      assets and other |   | 74,690  |   |   | 92,804  |   |
| Total      assets               | $      | 347,080 |   | $      | 338,633 |   |

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results ofOperations

| ·   | Climate      Control Business manufactures and sells a broad range of air conditioning      and heating products in the niche markets we serve consisting of      geothermal and water source heat pumps, hydronic fan coils, large custom      air handlers and other related products used to control the environment in      commercial and residential new building construction, renovation of      existing buildings and replacement of existing systems. For the first      quarter of 2010, approximately 41% of our consolidated net sales relates      to the Climate Control Business. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Chemical      Business manufactures and sells nitrogen based chemical products produced      from three plants located in Arkansas, Alabama and Texas for the      industrial, mining and agricultural markets. In addition, we are      continuing the restart of our previously idled Pryor Facility located in      Pryor, Oklahoma. Our products include industrial and fertilizer grade AN,      UAN, anhydrous ammonia, sulfuric acids, nitric acids in various      concentrations, nitrogen solutions and various other products. For the      first quarter of 2010, approximately 57% of our consolidated net sales      relates to the Chemical Business. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Multi-Family      Residential (apartments andcondominiums) |
|--------------------|------------------------------------------------------------|

| ·   | Single-Family      Residential |
|--------------------|--------------------------------|

| ·   | Lodging |
|--------------------|---------|

| ·   | Education |
|--------------------|-----------|

| ·   | Healthcare |
|--------------------|------------|

| ·   | Offices |
|--------------------|---------|

| ·   | Manufacturing |
|--------------------|---------------|

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|   | 2010 |   | 2009 |
|--------|------|--------|------|

| Natural      gas average price per MMBtu based upon Tennessee      500 pipeline pricing point | $ | 5.64                                                                             |   |   | $      | 5.16         |   |
|----------------------------------------------------------------------------------------------------|---|----------------------------------------------------------------------------------|--------|--------|--------|--------------|--------|
| Ammonia      average price based upon low Tampa metric      price per ton                     | $ | 381                                                                              |   |   | $      | 223          |   |
| Sulfur      price based upon Tampa average quarterly price per      long ton                       | $ |              90 |   |   |   | See      (1) |   |

| (1)   |  The      average quarterly price was negligible for the first quarter of      2009. |
|-----------------|-------------------------------------------------------------------------------------------|

|   | Percentage      Change of |
|--------|---------------------------|

|   | Tons |   | Dollars |
|--------|------|--------|---------|

|                    | Increase  (Decrease) |
|-------------------------|--------------------------------|
| Chemical      products: |                           |

| Agricultural                       |   | (14 | )%      |   |   | (25 | )%      |
|------------------------------------|--------|-----|---------|--------|--------|-----|---------|
| Industrial      acids and other    |   | 44  |  % |   |   | 23  |  % |
| Mining                             |   | (14 | )%      |   |   | 17  |  % |
| Total      weighted-average change |   | 9   |  % |   |   | 1   |  % |

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|   | March      31,2010 |   | December      31,2009 |
|--------|--------------------|--------|-----------------------|
|   | (In      Millions) |

| Cash      and cash equivalents                       | $      | 45.1   |   | $      | 61.7   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Short-term      investments (1)                      |   | 10.0   |   |   | 10.1   |   |
|                                                 | $      | 55.1   |   | $      | 71.8   |   |
|                                                 |   |   |   |   |   |   |
| Long-term      debt:                                 |   |   |   |   |   |   |
| 2007      Debentures due 2012                        | $      | 29.4   |   | $      | 29.4   |   |
| Secured      Term Loan due 2012                      |   | 49.2   |   |   | 50.0   |   |
| Other                                                |   | 26.6   |   |   | 22.4   |   |
| Total      long-term debt, including current portion | $      | 105.2  |   | $      | 101.8  |   |
|                                                 |   |   |   |   |   |   |
| Total      stockholders’ equity                | $      | 152.4  |   | $      | 150.6  |   |

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| ·   | the      amount of income taxes that ThermaClime would be required to pay if they      were not consolidated with us; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | an      amount not to exceed fifty percent (50%) of ThermaClime's consolidated net      income during each fiscal year determined in accordance with generally      accepted accounting principles plus amounts paid to us within the first      bullet above, provided that certain other conditions are    met; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amount of direct and indirect costs and expenses incurred by us on behalf      of ThermaClime pursuant to a certain services  agreement; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amount under a certain management agreement between us and ThermaClime,      provided certain conditions are met,and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | outstanding      loans entered into subsequent to November 2, 2007 not to exceed $2.0      million at any time. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Series      D Preferred at the rate of $.06 a share payable on October 9, which      dividend is cumulative; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | Series      B Preferred at the rate of $12.00 a share payable January 1, which      dividend is cumulative; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Noncumulative      Preferred at the rate of $10.00 a share payable April 1, which is      noncumulative. |
|--------------------|----------------------------------------------------------------------------------------------------------|

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|   |  2010 |   |  2009 |   |  Change |   | Percentage      Change |
|--------|------------|--------|------------|--------|--------------|--------|------------------------|

|   | (Dollars      In Thousands) |
|--------|-----------------------------|

| Net      sales:                                          |   |   |   |   |   |   |   |   |   |    |   |   |   |                |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------------------|
| Geothermal      and water source heat pumps              | $      | 36,958 |   |   | $      | 50,482 |   |   | $      | (13,524 | )      |   | (26.8  | )  %      |
| Hydronic      fan coils                                  |   | 7,274  |   |   |   | 13,566 |   |   |   | (6,292  | )      |   | (46.4  | )  %      |
| Other      HVAC products                                 |   | 9,439  |   |   |   | 8,000  |   |   |   | 1,439   |   |   | 18.0   |    % |
| Total      Climate Control                               | $      | 53,671 |   |   | $      | 72,048 |   |   | $      | (18,377 | )      |   | (25.5  | )  %      |
|                                                     |   |   |   |   |   |   |   |   |   |    |   |   |   |                |
| Gross      profit – Climate Control                | $      | 18,399 |   |   | $      | 22,428 |   |   | $      | (4,029  | )      |   | (18.0  | )  %      |
|                                                     |   |   |   |   |   |   |   |   |   |    |   |   |   |                |
| Gross      profit percentage – Climate Control (1) |   | 34.3   |   | %      |   | 31.1   |   | %      |   | 3.2     |   | %      |   |                |
|                                                     |   |   |   |   |   |   |   |   |   |    |   |   |   |                |
| Operating      income – Climate Control            | $      | 5,527  |   |   | $      | 8,978  |   |   | $      | (3,451  | )      |   | (38.4  | )      %            |

| · | Net sales of      our geothermal and water source heat pump products decreased primarily as      a result of a 32% decline in sales of our commercial products due to the      slowdown in the construction and renovation activities in the markets we      serve and a 15% decline in sales of our residential products. Shipments of      residential products during the first quarter of 2009 were particularly      strong due to a larger backlog of customer orders carried forward from      2008. During the first quarter of 2010, we continued to maintain a market      share leadership position of approximately 38%, based on market data      supplied by the Air-Conditioning, Heating and Refrigeration Institute      (“AHRI”); |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Net      sales of our hydronic fan coils decreased primarily due to a 28% decline      in the number of units sold due to the slowdown in the construction and      renovation activities in the markets we serve and a 28% decrease in the      average unit sales price due to change in product mix. During the first      quarter of 2010, we continue to have a market share leadership position of      approximately 28% based on market data supplied by the    AHRI; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Net      sales of our other HVAC products increased primarily as the result of an      increase in the sales of our large custom air handlers and modular      chillers partially offset by a decrease in engineering and construction      services. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  2010 |   |  2009 |   |  Change |   | Percentage      Change |
|--------|------------|--------|------------|--------|--------------|--------|------------------------|

|   | (Dollars      In Thousands) |
|--------|-----------------------------|

| Net      sales:                                   |   |   |   |   |   |   |   |   |   |    |   |   |   |          |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------------|
| Industrial      acids and other chemical products | $      | 31,061 |   |   | $      | 25,231 |   |   | $      | 5,830   |   |   | 23.1   |   % |
| Agricultural      products                        |   | 24,536 |   |   |   | 32,838 |   |   |   | (8,302  | )      |   | (25.3  | )      %      |
| Mining      products                              |   | 19,275 |   |   |   | 16,409 |   |   |   | 2,866   |   |   | 17.5   |        % |
| Total      Chemical                               | $      | 74,872 |   |   | $      | 74,478 |   |   | $      | 394     |   |   | 0.5    |   % |
|                                              |   |   |   |   |   |   |   |   |   |    |   |   |   |          |
| Gross      profit – Chemical                | $      | 9,158  |   |   | $      | 17,148 |   |   | $      | (7,990  | )      |   | (46.6  | )      %      |
|                                              |   |   |   |   |   |   |   |   |   |    |   |   |   |          |
| Gross      profit percentage – Chemical (1) |   | 12.2   |   | %      |   | 23.0   |   | %      |   | (10.8   | )      | %      |   |          |
|                                              |   |   |   |   |   |   |   |   |   |    |   |   |   |          |
| Operating      income – Chemical            | $      | 1,885  |   |   | $      | 12,638 |   |   | $      | (10,753 | )      |   | (85.1  | )      %      |

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| · | Sales      prices for products produced at the El Dorado Facility increased 5%      related, in part, to the higher cost of anhydrous ammonia, part of which      is passed through to our customers pursuant to contracts and/or pricing      arrangements that include raw material feedstock as a pass-through      component in the sales price. Pricing for agricultural grade AN was      approximately the same as the prior year quarter. However, fertilizer      grade AN volume of tons shipped at the El Dorado Facility decreased 31,000      tons primarily due to unfavorable weather      conditions.  Industrial grade AN volumes were also down 13,000      tons primarily due to reduced demand for coal and other mining services      all resulting from the economic downturn.  Our industrial grade      AN is sold to one customer pursuant to a multi-year take or pay supply      contract in which the customer has agreed to purchase, and our El Dorado      Facility has agreed to reserve, certain minimum volumes of industrial      grade AN during the year.  Pursuant to the terms of the      contract, the customer has been invoiced for the fixed costs and profit      associated with the reserved capacity despite not taking the minimum      volume requirement. Overall volume of all products sold from the El Dorado      Facility decreased 37,000 tons. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Sales      prices at the Cherokee Facility were approximately the same as the prior      year quarter.  However, volumes increased 12% primarily related      to higher UAN fertilizer demand.  In the first quarter 2009, UAN      fertilizer sales were affected by high inventory levels in the      distribution chain left over from 2008, as well as poor weather      conditions.  While weather conditions were also poor in the      first quarter of 2010, distributors began filling available storage left      vacant from the prior year in preparation for the 2010 spring fertilizer      season. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Sales      prices decreased approximately 20% for products produced at the Baytown      Facility due to decreased fixed expenses under the new agreement compared      to the prior agreement. These expenses are a pass-through component to      Bayer.  Overall volumes increased 76% as the result of improved      demand from the Baytown site’s customers.  The decreased sales      prices and increased volumes had only a minimum impact to gross profit and      operating income due to certain provisions of the Bayer      Agreement. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |  2010 |   |  2009 |   |  Change |   | Percentage      Change |
|--------|------------|--------|------------|--------|--------------|--------|------------------------|

|   | (Dollars      In Thousands) |
|--------|-----------------------------|

| Net      sales – Other                                      | $      | 1,867  |   |   | $      | 3,671  |   |   | $      | (1,804 | )      |   | (49.1  | )%     |
|-------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      profit – Other                                   | $      | 709    |   |   | $      | 1,152  |   |   | $      | (443   | )      |   | (38.5  | )%     |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      profit percentage – Other (1)                    |   | 38.0   |   | %      |   | 31.4   |   | %      |   | 6.6    |   | %      |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General      corporate expense and other business operations, net | $      | (2,996 | )      |   | $      | (2,196 | )      |   | $      | (800   | )      |   | 36.4   | %      |

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|   | · | an      increase of $13.7 million relating to the Chemical Business as the result      of the spring fertilizer seasonality and increased demand at our Baytown      Facility, partially offset by |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease of $2.2 million relating to the Climate Control Business due      primarily to lower sales volume and improved  collections. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase of $7.5 million relating to the Chemical Business primarily      relating to building inventory in preparation for the spring fertilizer      season and the increased production of inventory at our Pryor Facility      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase of $2.7 million relating to the Climate Control Business due      primarily to lower sales volume in the first quarter of    2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase of $5.3 million in the Chemical Business primarily as the result      of |
|--------|--------|-------------------------------------------------------------------------------------------|

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|   |   | increased      production at our Baytown and Pryor Facilities which resulted in increased      raw material purchases, partially offsetby |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | a      decrease of $2.0 million in the Climate Control Business due primarily to      a reduction in the average number of days  outstanding. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | long-term      debt, |
|--------|--------|----------------------|

|   | · | interest      payments on long-term debt, |
|--------|--------|-------------------------------------------|

|  | ·   | interest      rate contracts, |
|--|--------------------|-------------------------------|

|   | · | capital      expenditures, |
|--------|--------|----------------------------|

|   | · | operating      leases, |
|--------|--------|------------------------|

|   | · | futures/forward      contracts, |
|--------|--------|---------------------------------|

|  | ·   | contractual      manufacturing obligations, |
|--|--------------------|---------------------------------------------|

|   | · | purchase      obligations and |
|--------|--------|-------------------------------|

|   | · | other      contractual obligations. |
|--------|--------|-------------------------------------|

|   | · | our      contractual obligations relating to futures/forward contracts were $5.8      million as of March 31, 2010 and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | our      committed capital expenditures were approximately $4.4 million for the      remainder of 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

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Item 3. Quantitative andQualitative Disclosures about Market Risk

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Item 4. Controls and Procedures

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FORWARD-LOOKINGSTATEMENTS

| · | another      factor that may affect product order rates going forward is the potential      for growth in our highly energy-efficient geothermal water-source heat      pumps, which could benefit significantly from government stimulus      programs, including various tax incentives;                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | it      appears that market demand for industrial and mining products could be      flat to slightly up for the second quarter of 2010;                                                                                                                                                                               |
| · | the      current outlook according to most market indicators, including reports in      Green Markets, Fertilizer Week and other industry publications, point to      positive supply and demand fundamentals for the types of nitrogen      fertilizer products we produce and sell;                                 |
| · | we      expect to ship substantially all of these orders within the next twelve      months; however, due to the current economic conditions in the markets we      serve, it is possible that some of our customers could cancel a portion of      our backlog or extend the shipment terms beyond twelve    months; |
| · | our      GHPs use a form of renewable energy and can, under certain conditions,      reduce energy costs up to 80% compared to conventional all-electric HVAC      systems;                                                                                                                                           |
| · | we      expect to see continued slowness in our Climate Control Business’ results      in the short-term;                                                                                                                                                                                                       |
| · | the      sales in all three sectors of our Chemical Business for the remainder of      2010 will continue to be affected by the overall economic      conditions;                                                                                                                                                     |
| · | for      the remainder of 2010, we expect our primary cash needs will be for      working capital and capital expenditures;                                                                                                                                                                                           |
| · | we      and our subsidiaries plan to rely upon internally generated cash flows,      cash and short-term investments on hand, secured property and equipment      financing, and the borrowing availability under the Working Capital      Revolver Loan to fund operations and pay obligations;                      |
| · | based      upon our current projections, we believe that cash, short-term investments      and borrowing availability under our Working Capital Revolver Loan is      adequate to fund operations during the remainder of  2010;                                                                                      |
| · | we      plan to fund these expenditures from working capital, which may include      utilizing our Working Capital Revolver Loan, and financing      arrangements;                                                                                                                                                    |
| · | our      Chemical Business management believes, subject to further review,      investigation and discussion with the EPA, that certain changes to its      production equipment may be needed in order to comply with the      requirements of the Clean Air Act;                                                    |
| · | we      believe that certain facilities within our Chemical Business may be      required to pay certain penalties and may be required to make certain      capital improvements to certain emission equipment;                                                                                                       |
| · | the      amount we will incur for capital expenditures, turnarounds and expenses      associated with environmental regulatory compliance for the remainder of      2010;                                                                                                                                             |

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| · | greenhouse      gas regulation could increase the price of the electricity purchased by      these chemical facilities and increase costs for our use of natural gas,      other raw materials (such as anhydrous ammonia), and other energy sources,      potentially restrict access to or the use of natural gas and certain other      raw materials necessary to produce certain of our chemical products and      require us to incur substantial expenditures to retrofit these chemical      facilities to comply with the proposed new laws and regulations regulating      greenhouse gas emissions, if adopted; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | significant      additional UAN production is expected to begin in the Caribbean during      2010, and we believe this additional UAN production will be marketed in      the United States;                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | we      do not currently anticipate paying cash dividends on our outstanding      common stock in the near future;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| · | meeting      all required covenant tests for all the remaining quarters of 2010 and the      year ending in 2010, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · | environmental      and health laws and enforcement policies thereunder could result, in      compliance expenses, cleanup costs, penalties or other liabilities      relating to the handling, manufacture, use, emission, discharge or      disposal of pollutants or other substances at or from our facilities or      the use or disposal of certain of its chemical  products.                                                                                                                                                                                                                                        |

| · | changes      in general economic conditions, both domestic and  foreign,                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
| · | material      reduction in revenues,                                                                                                    |
| · | material      changes in interest rates,                                                                                                |
| · | ability      to collect in a timely manner a material amount of      receivables,                                                       |
| · | increased      competitive pressures,                                                                                                   |
| · | changes      in federal, state and local laws and regulations, especially environmental      regulations, or in interpretation of such, |
| · | additional      releases (particularly air emissions) into the  environment,                                                            |
| · | material      increases in equipment, maintenance, operating or labor costs not      presently anticipated by us,                       |
| · | the      requirement to use internally generated funds for purposes not presently      anticipated,                                     |
| · | the      inability to pay or secure additional financing for planned capital      expenditures,                                         |
| · | material      changes in the cost of certain precious metals, anhydrous ammonia, natural      gas, copper and steel,                    |
| · | changes      in competition,                                                                                                            |
| · | the      loss of any significant customer,                                                                                              |
| · | changes      in operating strategy or development plans,                                                                                |
| · | inability      to fund the working capital and expansion of our    businesses,                                                          |
| · | changes      in the production efficiency of our facilities,                                                                            |
| · | adverse      results in any of our pending litigation,                                                                                  |
| · | activating      operations at full production rates at the Pryor  Facility,                                                             |
| · | inability      to obtain necessary raw materials,                                                                                       |
| · | other      factors described in the MD&A contained in this report,      and                                                         |

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| · | other      factors described in “Risk Factors” of our 2009 Form 10-K and “Special      Note Regarding Forward-Looking Statements” contained in our 2009 Form      10-K. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 1. LegalProceedings

Item 1A. RiskFactors

Item 2.Unregistered Sales of Equity Securities and Use ofProceeds

Item 3. Defaults upon SeniorSecurities

Item4.

Item 5. OtherInformation

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Item 6.Exhibits

| (a) |   Exhibits The      Company has included the following exhibits in this  report: |
|-----|--------------------------------------------------------------------------------------------|

| 10.1   | Promissory      Note, dated March 26, 2010, executed by Climate Master, Inc. in favor of      Coppermark Bank, which the Company hereby incorporates by reference from      Exhibit 99.1 to the Company’s Form 8-K, filed March 31,    2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.2   | Realignment      Agreement, dated March 18, 2010, between LSB Industries, Inc.,      Consolidated Industries Corp., Prime Financial Corporation, Northwest      Capital Corporation, ThermaClime, Inc., LSB Holdings, Inc., Summit Machine      Tool Inc. Corp., Summit Machine Tool Manufacturing Corp., Summit Machinery      Company, Hercules Energy Mfg. Corporation, LSB Chemical Corp., El Dorado      Chemical Company, Chemex I Corp., DSN Corporation, The Climate Control      Group, Inc., and Chemex II Corp., which the Company hereby incorporates by      reference from Exhibit 99.2 to the Company’s Form 8-K, filed April 7,      2010. Certain exhibits listed in this document have been omitted. A copy      of such exhibits will be provided to the Securities and Exchange      Commission upon request.                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.3   | Consent,      Joinder and Second Amendment, dated as of April 1, 2010, by and among LSB      Industries, Inc., ThermaClime, Inc., each of the Subsidiaries of      ThermaClime identified on the signature pages thereof, the lenders      identified on the signature pages thereof, Wells Fargo Capital finance,      Inc., as the arranger and administrative agent, and Consolidated      Industries Corp., which the Company hereby incorporates by reference from      Exhibit 99.3 to the Company’s Form 8-K, filed April 7,    2010.                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.4   | Amendment      and Waiver to the Term Loan, dated April 1, 2010, by and among      ThermaClime, Inc., Cherokee Nitrogen Holdings, Inc., Northwest Financial      Corporation, Chemex I Corp., Chemex II Corp., Cherokee Nitrogen      Company,  ClimaCool Corp., ClimateCraft, Inc., Climate Master,      Inc., DSN Corporation, El Dorado Chemical Company, International      Environmental Corporation, Koax Corp., LSB Chemical Corp., The Climate      Control Group, Inc., Trison Construction, Inc.,  ThermaClime      Technologies, Inc., XpediAir, Inc., LSB Industries, Inc., each lender      party thereto, Banc of America Leasing & Capital, LLC, as      Administrative Agent and as Collateral Agent, Bank of Utah, as Payment      Agent, and Consolidated Industries Corp., which the Company hereby      incorporates by reference from Exhibit 99.4 to the Company’s Form 8-K,      filed April 7, 2010. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.5   | AN      Supply Agreement, dated effective January 1, 2010, between El Dorado      Chemical Company and Orica International Pte Ltd., which the Company      hereby incorporates by reference from Exhibit 10.27 to the Company’s Form      10-K, filed March 8, 2010.  CERTAIN      INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF      COMMISSION ORDER CF #24842, DATED MARCH 25, 2010, GRANTING A REQUEST FOR      CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE      SECURITIES EXCHANGE ACT OF 1934, AS  AMENDED.                                                                                                                                                                                                                                                                                                                                                                     |

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| 10.6   | Second      Amendment to Anhydrous Ammonia Sales Agreement, dated February 23, 2010,      between Koch Nitrogen International Sarl and El Dorado Chemical Company,      which the Company hereby incorporates by reference from Exhibit 10.35 to      the Company’s Form 10-K, filed March 8, 2010.  CERTAIN      INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF      COMMISSION ORDER CF #24842, DATED MARCH 25, 2010, GRANTING A REQUEST FOR      CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE      SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.1   | Certification      of Jack E. Golsen, Chief Executive Officer, pursuant to Sarbanes-Oxley Act      of 2002, Section 302.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.2   | Certification      of Tony M. Shelby, Chief Financial Officer, pursuant to Sarbanes-Oxley Act      of 2002, Section 302.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 32.1   | Certification      of Jack E. Golsen, Chief Executive Officer, furnished pursuant to      Sarbanes-Oxley Act of 2002, Section 906.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 32.2   | Certification      of Tony M. Shelby, Chief Financial Officer, furnished pursuant to      Sarbanes-Oxley Act of 2002, Section906.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|   | LSB      INDUSTRIES, INC. |
|--------|---------------------------|

|   | By:      /s/ Tony M. Shelby                                                                                               |   |
|--------|---------------------------------------------------------------------------------------------------------------------------|--------|
|   | Tony      M. ShelbyExecutive      Vice President of Finance and Chief Financial Officer(Principal      Financial Officer) |

|   | By:      /s/ Harold L. Rieker, Jr.                                            |   |
|--------|-------------------------------------------------------------------------------|--------|
|   | Harold      L. Rieker, Jr.Vice      President and Principal AccountingOfficer |

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