Company Quick10K Filing
United States Lime & Minerals
Price82.06 EPS4
Shares6 P/E18
MCap461 P/FCF13
Net Debt-81 EBIT29
TEV381 TEV/EBIT13
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-04-30
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-10-31
10-Q 2018-06-30 Filed 2018-07-27
10-Q 2018-03-31 Filed 2018-04-27
10-K 2017-12-31 Filed 2018-03-02
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-07-31
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-03-03
10-Q 2016-09-30 Filed 2016-10-31
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-03-04
10-Q 2015-09-30 Filed 2015-11-02
10-Q 2015-06-30 Filed 2015-08-04
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-06
10-Q 2014-09-30 Filed 2014-10-31
10-Q 2014-06-30 Filed 2014-07-30
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-03-07
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-07-30
10-Q 2013-03-31 Filed 2013-05-01
10-K 2012-12-31 Filed 2013-03-07
10-Q 2012-09-30 Filed 2012-11-01
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-01
10-K 2011-12-31 Filed 2012-03-01
10-Q 2011-09-30 Filed 2011-11-01
10-Q 2011-06-30 Filed 2011-08-01
10-Q 2011-03-31 Filed 2011-04-29
10-K 2010-12-31 Filed 2011-03-08
10-Q 2010-09-30 Filed 2010-10-29
10-Q 2010-06-30 Filed 2010-07-28
10-Q 2010-03-31 Filed 2010-04-30
10-K 2009-12-31 Filed 2010-03-02
8-K 2020-07-29 Earnings, Exhibits
8-K 2020-05-01
8-K 2020-04-29
8-K 2020-03-19
8-K 2020-01-30
8-K 2019-11-22
8-K 2019-10-30
8-K 2019-07-31
8-K 2019-05-03
8-K 2019-05-01
8-K 2019-01-31
8-K 2018-11-16
8-K 2018-10-30
8-K 2018-07-25
8-K 2018-04-27
8-K 2018-04-25
8-K 2018-03-08
8-K 2018-01-30
8-K 2018-01-15

USLM 10Q Quarterly Report

Part I. Financial Information
Item 1: Financial Statements
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Item 4: Controls and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 4: Mine Safety Disclosures
Item 6: Exhibits
EX-31.1 uslm-20200630xex31d1.htm
EX-31.2 uslm-20200630xex31d2.htm
EX-32.1 uslm-20200630xex32d1.htm
EX-32.2 uslm-20200630xex32d2.htm
EX-95.1 uslm-20200630xex95d1.htm

United States Lime & Minerals Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
2752201651105502012201420172020
Assets, Equity
45362718902012201420172020
Rev, G Profit, Net Income
20124-4-12-202012201420172020
Ops, Inv, Fin

P1YP1YUNITED STATES LIME & MINERALS INC0000082020--12-312020Q2false0000082020srt:MinimumMember2020-01-012020-06-300000082020srt:MinimumMember2019-01-012019-12-310000082020srt:MaximumMember2019-01-012019-12-310000082020srt:MaximumMember2020-01-012020-06-300000082020srt:MaximumMember2015-05-072015-05-070000082020us-gaap:RevolvingCreditFacilityMember2015-05-072015-05-070000082020us-gaap:TreasuryStockCommonMember2020-04-012020-06-300000082020us-gaap:TreasuryStockCommonMember2020-01-012020-03-310000082020us-gaap:TreasuryStockCommonMember2019-04-012019-06-300000082020us-gaap:TreasuryStockCommonMember2019-01-012019-03-310000082020us-gaap:OtherNonoperatingIncomeExpenseMember2020-04-012020-06-300000082020us-gaap:OtherNonoperatingIncomeExpenseMember2020-01-012020-06-300000082020us-gaap:OtherNonoperatingIncomeExpenseMember2019-04-012019-06-300000082020us-gaap:OtherNonoperatingIncomeExpenseMember2019-01-012019-06-300000082020us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300000082020us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000082020us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-300000082020us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-310000082020us-gaap:CommonStockMember2020-04-012020-06-300000082020us-gaap:CommonStockMember2020-01-012020-03-310000082020us-gaap:CommonStockMember2019-04-012019-06-300000082020us-gaap:CommonStockMember2019-01-012019-03-310000082020us-gaap:TreasuryStockCommonMember2020-06-300000082020us-gaap:RetainedEarningsMember2020-06-300000082020us-gaap:AdditionalPaidInCapitalMember2020-06-300000082020us-gaap:TreasuryStockCommonMember2020-03-310000082020us-gaap:RetainedEarningsMember2020-03-310000082020us-gaap:AdditionalPaidInCapitalMember2020-03-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100000820202020-03-310000082020us-gaap:TreasuryStockCommonMember2019-12-310000082020us-gaap:RetainedEarningsMember2019-12-310000082020us-gaap:AdditionalPaidInCapitalMember2019-12-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000082020us-gaap:TreasuryStockCommonMember2019-06-300000082020us-gaap:RetainedEarningsMember2019-06-300000082020us-gaap:AdditionalPaidInCapitalMember2019-06-300000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300000082020us-gaap:TreasuryStockCommonMember2019-03-310000082020us-gaap:RetainedEarningsMember2019-03-310000082020us-gaap:AdditionalPaidInCapitalMember2019-03-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-3100000820202019-03-310000082020us-gaap:TreasuryStockCommonMember2018-12-310000082020us-gaap:RetainedEarningsMember2018-12-310000082020us-gaap:AdditionalPaidInCapitalMember2018-12-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000082020us-gaap:CommonStockMember2020-06-300000082020us-gaap:CommonStockMember2020-03-310000082020us-gaap:CommonStockMember2019-12-310000082020us-gaap:CommonStockMember2019-06-300000082020us-gaap:CommonStockMember2019-03-310000082020us-gaap:CommonStockMember2018-12-310000082020us-gaap:OilAndGasMemberus-gaap:AllOtherSegmentsMember2020-04-012020-06-300000082020us-gaap:MineralMemberuslm:LimeAndLimestoneOperationsSegmentMember2020-04-012020-06-300000082020us-gaap:OilAndGasMemberus-gaap:AllOtherSegmentsMember2020-01-012020-06-300000082020us-gaap:MineralMemberuslm:LimeAndLimestoneOperationsSegmentMember2020-01-012020-06-300000082020us-gaap:OilAndGasMemberus-gaap:AllOtherSegmentsMember2019-04-012019-06-300000082020us-gaap:MineralMemberuslm:LimeAndLimestoneOperationsSegmentMember2019-04-012019-06-300000082020us-gaap:OilAndGasMemberus-gaap:AllOtherSegmentsMember2019-01-012019-06-300000082020us-gaap:MineralMemberuslm:LimeAndLimestoneOperationsSegmentMember2019-01-012019-06-300000082020uslm:CarthageCrushedLimestoneMemberus-gaap:SubsequentEventMember2020-07-012020-07-010000082020us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-04-012020-06-300000082020us-gaap:CostOfSalesMember2020-04-012020-06-300000082020us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-06-300000082020us-gaap:CostOfSalesMember2020-01-012020-06-300000082020us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-04-012019-06-300000082020us-gaap:CostOfSalesMember2019-04-012019-06-300000082020us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-01-012019-06-300000082020us-gaap:CostOfSalesMember2019-01-012019-06-300000082020us-gaap:LetterOfCreditMember2020-06-300000082020us-gaap:RevolvingCreditFacilityMember2019-05-020000082020srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2015-05-072015-05-070000082020srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2015-05-072015-05-070000082020us-gaap:RevolvingCreditFacilityMember2020-06-300000082020srt:MaximumMember2020-06-300000082020us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMember2019-12-310000082020us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMember2019-12-310000082020srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:PrimeRateMember2015-05-072015-05-070000082020srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2015-05-072015-05-070000082020srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:PrimeRateMember2015-05-072015-05-070000082020srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2015-05-072015-05-070000082020uslm:LimeAndLimestoneOperationsSegmentMember2020-04-012020-06-300000082020us-gaap:AllOtherSegmentsMember2020-04-012020-06-300000082020uslm:LimeAndLimestoneOperationsSegmentMember2020-01-012020-06-300000082020us-gaap:AllOtherSegmentsMember2020-01-012020-06-300000082020uslm:LimeAndLimestoneOperationsSegmentMember2019-04-012019-06-300000082020us-gaap:AllOtherSegmentsMember2019-04-012019-06-300000082020uslm:LimeAndLimestoneOperationsSegmentMember2019-01-012019-06-300000082020us-gaap:AllOtherSegmentsMember2019-01-012019-06-300000082020us-gaap:RetainedEarningsMember2020-04-012020-06-300000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-3000000820202020-04-012020-06-300000082020us-gaap:RetainedEarningsMember2020-01-012020-03-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-3100000820202020-01-012020-03-310000082020us-gaap:RetainedEarningsMember2019-04-012019-06-300000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-3000000820202019-04-012019-06-300000082020us-gaap:RetainedEarningsMember2019-01-012019-03-310000082020us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-3100000820202019-01-012019-03-310000082020us-gaap:SubsequentEventMember2020-07-292020-07-2900000820202020-06-122020-06-1200000820202020-03-132020-03-130000082020uslm:LimeAndLimestoneOperationsSegmentMember2020-06-300000082020us-gaap:AllOtherSegmentsMember2020-06-300000082020uslm:LimeAndLimestoneOperationsSegmentMember2019-06-300000082020us-gaap:AllOtherSegmentsMember2019-06-300000082020uslm:EmployeeAndNonemployeeStockOptionMember2020-04-012020-06-300000082020uslm:EmployeeAndNonemployeeStockOptionMember2020-01-012020-06-300000082020uslm:EmployeeAndNonemployeeStockOptionMember2019-04-012019-06-300000082020uslm:EmployeeAndNonemployeeStockOptionMember2019-01-012019-06-3000000820202019-01-012019-06-3000000820202019-06-3000000820202018-12-3100000820202020-06-3000000820202019-12-3100000820202020-07-3000000820202020-01-012020-06-30xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:pureuslm:segment

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

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 is 000-04197

UNITED STATES LIME & MINERALS, INC.

(Exact name of registrant as specified in its charter)

Texas

75-0789226

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

5429 LBJ Freeway, Suite 230, Dallas, TX

75240

(Address of principal executive offices)

(Zip Code)

(972) 991-8400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.10 par value

USLM

The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: As of July 30, 2020, 5,627,869 shares of common stock, $0.10 par value, were outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

(Unaudited)

June 30,

December 31,

    

2020

    

2019

    

ASSETS

Current assets

Cash and cash equivalents

$

68,835

$

54,260

Trade receivables, net

 

21,192

 

22,948

Inventories, net

 

14,422

 

13,388

Prepaid expenses and other current assets

 

1,243

 

2,139

Total current assets

 

105,692

 

92,735

Property, plant and equipment

 

378,988

 

370,355

Less accumulated depreciation and depletion

 

(228,328)

 

(219,668)

Property, plant and equipment, net

 

150,660

 

150,687

Operating lease right-of-use assets

2,536

3,192

Other assets, net

 

382

 

423

Total assets

$

259,270

$

247,037

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable

$

4,212

$

4,430

Current portion of operating lease liabilities

1,169

1,294

Accrued expenses

 

3,843

 

3,735

Total current liabilities

 

9,224

 

9,459

Deferred tax liabilities, net

 

19,692

 

17,218

Operating lease liabilities, excluding current portion

1,352

1,866

Other liabilities

 

1,383

 

1,362

Total liabilities

 

31,651

 

29,905

Stockholders’ equity

Common stock

 

664

 

663

Additional paid-in capital

 

28,386

 

27,464

Accumulated other comprehensive loss

 

 

(1)

Retained earnings

 

253,411

 

243,566

Less treasury stock, at cost

 

(54,842)

 

(54,560)

Total stockholders’ equity

 

227,619

 

217,132

Total liabilities and stockholders’ equity

$

259,270

$

247,037

See accompanying notes to condensed consolidated financial statements.

2

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

   

2020

2019

2020

2019

    

Revenues

$

37,547

   

100.0

%

$

38,954

   

100.0

%

$

75,987

   

100.0

%

$

76,753

   

100.0

%

Cost of revenues

Labor and other operating expenses

 

22,447

59.8

25,002

64.2

46,409

61.1

50,040

65.2

%

Depreciation, depletion and amortization

 

4,743

12.6

 

4,225

10.8

%

 

9,344

12.3

%

 

8,293

10.8

%

 

27,190

72.4

 

29,227

75.0

 

55,753

73.4

 

58,333

76.0

%

Gross profit

 

10,357

27.6

 

9,727

25.0

 

20,234

26.6

 

18,420

24.0

%

Selling, general and administrative expenses

 

2,881

7.7

 

2,639

6.8

 

6,100

8.0

 

5,312

6.9

%

Operating profit

 

7,476

19.9

 

7,088

18.2

 

14,134

18.6

 

13,108

17.1

%

Other expense (income)

Interest expense

 

62

0.2

 

60

0.2

 

124

0.2

 

122

0.2

%

Interest and other income, net

 

(104)

(0.3)

 

(490)

(1.3)

 

(351)

(0.5)

 

(982)

(1.3)

%

 

(42)

(0.1)

 

(430)

(1.1)

 

(227)

(0.3)

 

(860)

(1.1)

%

Income before income tax expense

 

7,518

20.0

 

7,518

19.3

 

14,361

18.9

 

13,968

18.2

%

Income tax expense

 

1,417

3.8

 

1,485

3.8

 

2,716

3.6

 

2,807

3.7

%

Net income

$

6,101

16.2

$

6,033

15.5

$

11,645

15.3

$

11,161

14.5

%

Net income per share of common stock

Basic

$

1.08

$

1.07

$

2.07

$

1.99

Diluted

$

1.08

$

1.07

$

2.07

$

1.99

See accompanying notes to condensed consolidated financial statements.

3

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Net income

    

$

6,101

    

$

6,033

    

$

11,645

    

$

11,161

    

Other comprehensive income

Mark to market of foreign exchange hedges, net of tax expense of $2 and $0 for the three months and six months ended June 30, 2020, respectively, and $7 and $1 for the three months and six months ended June 30, 2019, respectively

7

25

1

5

Total other comprehensive income

 

7

 

25

 

1

 

5

Comprehensive income

$

6,108

$

6,058

$

11,646

$

11,166

See accompanying notes to condensed consolidated financial statements.

4

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(dollars in thousands)

(Unaudited)

Accumulated

 

Common Stock

Additional

Other

 

    

Shares

    

    

Paid-In

    

Comprehensive

    

Retained

    

Treasury

    

 

Outstanding

Amount

Capital

(Loss) Income

Earnings

Stock

Total

 

Balances at December 31, 2019

 

5,622,826

$

663

$

27,464

$

(1)

$

243,566

$

(54,560)

$

217,132

Stock options exercised

 

2,000

 

 

81

 

 

 

 

81

Stock-based compensation

 

3,063

 

1

 

378

 

 

 

 

379

Treasury shares purchased

 

(704)

 

 

 

 

 

(64)

 

(64)

Cash dividends paid

 

 

 

 

(899)

 

 

(899)

Net income

 

5,544

5,544

Mark to market of foreign exchange hedges, net of $2 tax benefit

 

 

 

 

(6)

 

 

 

(6)

Comprehensive (loss) income

 

 

 

 

(6)

 

5,544

 

 

5,538

Balances at March 31, 2020

 

5,627,185

$

664

$

27,923

$

(7)

$

248,211

$

(54,624)

$

222,167

Stock-based compensation

 

3,143

 

 

463

 

 

 

 

463

Treasury shares purchased

 

(2,459)

 

 

 

 

 

(218)

 

(218)

Cash dividends paid

 

 

 

 

 

(901)

 

 

(901)

Net income

 

6,101

6,101

Mark to market of foreign exchange hedges, net of $2 tax expense

 

 

 

 

7

 

 

 

7

Comprehensive income

 

 

 

 

7

 

6,101

 

 

6,108

Balances at June 30, 2020

 

5,627,869

$

664

$

28,386

$

$

253,411

$

(54,842)

$

227,619

Accumulated

 

Common Stock

Additional

Other

 

    

Shares

    

    

Paid-In

    

Comprehensive

    

Retained

    

Treasury

    

 

Outstanding

Amount

Capital

(Loss) Income

Earnings

Stock

Total

 

Balances at December 31, 2018

 

5,607,401

$

661

$

25,867

$

(13)

$

250,568

$

(54,116)

$

222,967

Stock-based compensation

 

3,333

 

 

309

 

 

 

 

309

Treasury shares purchased

 

(753)

 

 

 

 

 

(52)

 

(52)

Cash dividends paid

 

 

 

 

(757)

 

 

(757)

Net income

 

5,128

5,128

Mark to market of foreign exchange hedges, net of $6 tax benefit

 

 

 

 

(20)

 

 

 

(20)

Comprehensive (loss) income

 

 

 

 

(20)

 

5,128

 

 

5,108

Balances at March 31, 2019

 

5,609,981

$

661

$

26,176

$

(33)

$

254,939

$

(54,168)

$

227,575

Stock options exercised

 

2,000

 

 

75

 

 

 

 

75

Stock-based compensation

 

3,173

 

1

 

381

 

 

 

 

382

Treasury shares purchased

 

(2,361)

 

 

 

 

 

(189)

 

(189)

Cash dividends paid

 

 

 

 

 

(760)

 

 

(760)

Net income

 

6,033

6,033

Mark to market of foreign exchange hedges, net of $7 tax expense

 

 

 

 

25

 

 

 

25

Comprehensive income

 

 

 

 

25

 

6,033

 

 

6,058

Balances at June 30, 2019

 

5,612,793

$

662

$

26,632

$

(8)

$

260,212

$

(54,357)

$

233,141

See accompanying notes to condensed consolidated financial statements.

5

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

Six Months Ended June 30,

2020

2019

OPERATING ACTIVITIES:

    

    

Net income

$

11,645

$

11,161

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

 

9,453

 

8,404

Amortization of deferred financing costs

 

2

 

6

Deferred income taxes

 

2,484

 

2,619

Loss on disposition of property, plant and equipment

 

239

 

97

Stock-based compensation

 

842

 

691

Changes in operating assets and liabilities:

Trade receivables, net

 

1,756

 

(3,344)

Inventories, net

 

(1,034)

 

517

Prepaid expenses and other current assets

 

896

 

341

Other assets

 

40

 

50

Accounts payable and accrued expenses

 

779

 

(452)

Other liabilities

 

27

 

(54)

Net cash provided by operating activities

 

27,129

 

20,036

INVESTING ACTIVITIES:

Purchase of property, plant and equipment

 

(10,599)

 

(12,360)

Proceeds from sale of property, plant and equipment

 

46

 

461

Net cash used in investing activities

 

(10,553)

 

(11,899)

FINANCING ACTIVITIES:

Cash dividends paid

(1,800)

(1,517)

Proceeds from exercise of stock options

 

81

 

75

Purchase of treasury shares

 

(282)

 

(241)

Net cash used in financing activities

 

(2,001)

 

(1,683)

Net increase in cash and cash equivalents

 

14,575

 

6,454

Cash and cash equivalents at beginning of period

 

54,260

 

67,218

Cash and cash equivalents at end of period

$

68,835

$

73,672

See accompanying notes to condensed consolidated financial statements.

6

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by United States Lime & Minerals, Inc. (the “Company”) without independent audit. In the opinion of the Company’s management, all adjustments of a normal and recurring nature necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2019. The results of operations for the three-and six-month periods ended June 30, 2020 are not necessarily indicative of operating results for the full year.

2. Organization

The Company is a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building contractors), industrial (including paper and glass manufacturers), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), metals (including steel producers), oil and gas services, roof shingle manufacturers and agriculture (including poultry and cattle feed producers) industries. The Company is headquartered in Dallas, Texas and operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri, Oklahoma and Texas through its wholly owned subsidiaries, Arkansas Lime Company, Colorado Lime Company, Texas Lime Company, U.S. Lime Company, U.S. Lime Company – Shreveport, U.S. Lime Company – St. Clair, ART Quarry TRS LLC (DBA Carthage Crushed Limestone) and U.S. Lime Company – Transportation. In addition, the Company, through its wholly owned subsidiary, U.S. Lime Company – O & G, LLC, has royalty and non-operated working interests in natural gas wells located in Johnson County, Texas, in the Barnett Shale Formation.

During 2019, the Company’s natural gas interests did not reach any of the quantitative thresholds for a reportable segment, and the results from its natural gas interests are not expected to be of significance in future periods. The revenues, gross profit and operating profit of the natural gas interests are included in Other for reportable segment disclosures. Segment disclosures for the three- and six-month periods ended June 30, 2019 have been recast to be consistent with the presentation for the respective periods ended June 30, 2020.

3. Accounting Policies

Revenue Recognition. The Company recognizes revenue for its lime and limestone operations when (i) a contract with the customer exists and the performance obligations are identified; (ii) the price has been established; and (iii) the performance obligations have been satisfied, which is generally upon shipment. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. The Company’s returns and allowances are minimal. External freight billed to customers included in 2020 and 2019 revenues was $6.5 million and $7.1 million, for the respective three-month periods ended June 30, and $13.3 million and $13.9 million for the respective six-month periods ended June 30, which approximates the amount of external freight included in cost of revenues. Sales taxes billed to customers are not included in revenues. For its natural gas interests, the Company recognizes revenue in the month of production and delivery.

The Company operates its lime and limestone operations within a single geographic region and derives all revenues from that segment from the sale of lime and limestone products. See Note 4 to the condensed consolidated financial statements for disaggregation of revenues by segment, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

7

Accounts Receivable. On January 1, 2020, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the incurred impairment methodology in previous GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company applied the amendments of ASU 2016-13 using a modified-retrospective approach, and as a result, amounts recorded prior to January 1, 2020 have not been retrospectively restated. The implementation of ASU 2016-13 did not have a material impact on the Company’s results of operation, financial position, or cash flows.

The majority of the Company’s trade receivables are unsecured. Payment terms for all trade receivables are based on the underlying purchase orders, contracts or purchase agreements. The Company estimates credit losses relating to trade receivables based on an assessment of the current and forecasted probability of collection, historical trends, economic conditions and other significant events that may impact the collectability of accounts receivables. Due to the relatively homogenous nature of its trade receivables, the Company does not believe there is any meaningful asset-specific differences within its accounts receivable portfolio that would require the portfolio to be grouped below the consolidated level for review of credit losses. Credit losses relating to trade receivables have generally been within management expectations and historical trends. Uncollected trade receivables are charged-off when identified by management to be unrecoverable. The Company maintains an allowance for credit losses to reflect currently expected estimated losses resulting from the failure of customers to make required payments. See Note 7 to the condensed consolidated financial statements.

Comprehensive Income. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as mark-to-market gains or losses on foreign exchange derivative instruments designated as hedges, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

Leases. The Company determines if an arrangement is a lease at inception. When recording operating leases, the Company records a lease liability based on the net present value of the lease payments over the lease term, using the interest rate implicit in the lease, if known, or an incremental rate on a collateralized basis over a similar term and amount to the lease, and a corresponding right-of-use asset. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, excluding current portion, on the balance sheet. Lease expense is recognized over the lease term on a straight-line basis. Lease terms include options to extend the lease when it is reasonably certain the Company will exercise the option. For leases with a term of twelve months or less, the Company does not record a right-of-use asset and a lease liability and records lease expense on a straight-line basis. See Note 10 to the condensed consolidated financial statements.

Fair Values of Financial Instruments. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values, in determining the fair value of its financial assets and liabilities.  These tiers include:  Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.  Specific inputs used to value the Company’s foreign exchange hedges were Euro to U.S. Dollar exchange rates for the expected future payment dates for the Company’s commitments denominated in Euros. The last of these foreign exchange hedges expired in April 2020. See Note 6 to the condensed consolidated financial statements. There were no changes in the methods and assumptions used in measuring fair value during the period.

The Company’s financial liabilities measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019, respectively, are summarized below (in thousands):

8

Significant Other

 

Observable Inputs

 

(Level 2)

 

June 30,

December 31,

June 30,

December 31,

2020

2019

2020

2019

Valuation Technique

 

Foreign exchange hedges

    

$

    

$

(1)

    

$

    

$

(1)

    

Cash flows approach

4. Business Segment

The Company has identified one reportable segment based on the distinctness of the Company’s activities and products: lime and limestone operations. All operations are in the United States. In evaluating the operating results of the Company, management primarily reviews revenues, gross profit and operating profit from the lime and limestone operations. Operating profit from its lime and limestone operations includes all of the Company’s selling, general and administrative costs. The Company does not allocate interest expense and interest and other income (expense), net to its lime and limestone operations.

During 2019, the Company’s natural gas interests did not reach any of the quantitative thresholds for a reportable segment, and the Company does not expect the results from its natural gas interests to be of significance in future periods. The revenues, gross profit and operating profit from the Company’s natural gas interests are included in Other for the Company’s reportable segment disclosures. Other identifiable assets include assets related to its natural gas interests, unallocated corporate assets and cash items. Segment disclosures for the three and six months ended June 30, 2019 have been recast to be consistent with the presentation for the three and six months ended June 30, 2020.

The following table sets forth operating results and certain other financial data for the Company’s lime and limestone operations segment and other (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Revenues

2020

2019

2020

2019

Lime and limestone operations

$

37,362

$

38,581

$

75,576

$

76,046

Other

 

185

 

373

 

411

 

707

Total revenues

$

37,547

$

38,954

$

75,987

$

76,753

Depreciation, depletion and amortization

Lime and limestone operations

$

4,563

$

4,089

$

8,975

$

8,018

Other

 

180

 

136

 

369

 

275

Total depreciation, depletion and amortization

$

4,743

$

4,225

$

9,344

$

8,293

Gross profit (loss)

Lime and limestone operations

$

10,507

$

9,690

$

20,546

$

18,376

Other

 

(150)

 

37

 

(312)

 

44

Total gross profit

$

10,357

$

9,727

$

20,234

$

18,420

Operating profit (loss)

Lime and limestone operations

$

7,626

$

7,051

$

14,446

$

13,064

Other

(150)

 

37

 

(312)

 

44

Total operating profit

$

7,476

$

7,088

$

14,134

$

13,108

Identifiable assets, at period end

Lime and limestone operations

$

184,397

$

179,780

$

184,397

$

179,780

Other

 

74,873

 

81,693

74,873

81,693

Total identifiable assets

$

259,270

$

261,473

$

259,270

$

261,473

Capital expenditures

Lime and limestone operations

$

4,493

$

6,676

$

10,599

$

12,360

Other

 

 

 

 

Total capital expenditures

$

4,493

$

6,676

$

10,599

$

12,360

9

5. Income Per Share of Common Stock

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

    

2020

    

2019

    

2020

    

2019

    

Net income for basic and diluted income per common share

$

6,101

$

6,033

$

11,645

$

11,161

Weighted-average shares for basic income per common share

 

5,629

 

5,614

 

5,627

 

5,612

Effect of dilutive securities:

Employee and director stock options(1)

 

8

 

10

 

9

 

7

Adjusted weighted-average shares and assumed exercises for diluted income per common share

 

5,637

 

5,624

 

5,636

 

5,619

Basic net income per common share

$

1.08

$

1.07

$

2.07

$