Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 28, 2021 | |
Cover Abstract | ||
Entity Registrant Name | UNITED STATES LIME & MINERALS INC | |
Entity Central Index Key | 0000082020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-04197 | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-0789226 | |
Entity Address, Address Line One | 5429 LBJ Freeway, Suite 230 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75240 | |
City Area Code | 972 | |
Local Phone Number | 991-8400 | |
Title of 12(b) Security | Common stock, $0.10 par value | |
Trading Symbol | USLM | |
Security Exchange Name | NASDAQ | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,655,321 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 89,651 | $ 83,562 |
Trade receivables, net | 23,957 | 22,979 |
Inventories, net | 15,409 | 15,210 |
Prepaid expenses and other current assets | 2,428 | 2,245 |
Total current assets | 131,445 | 123,996 |
Property, plant and equipment | 392,631 | 388,200 |
Less accumulated depreciation and depletion | (240,993) | (235,739) |
Property, plant and equipment, net | 151,638 | 152,461 |
Operating lease right-of-use assets | 1,929 | 2,226 |
Other assets, net | 398 | 415 |
Total assets | 285,410 | 279,098 |
Current liabilities: | ||
Accounts payable | 5,675 | 4,592 |
Current portion of operating lease liabilities | 1,073 | 1,187 |
Accrued expenses | 3,995 | 5,809 |
Total current liabilities | 10,743 | 11,588 |
Deferred tax liabilities, net | 22,271 | 21,531 |
Operating lease liabilities, excluding current portion | 858 | 1,030 |
Other liabilities | 1,768 | 1,757 |
Total liabilities | 35,640 | 35,906 |
Stockholders' equity: | ||
Common stock | 667 | 666 |
Additional paid-in capital | 30,003 | 29,457 |
Retained earnings | 274,312 | 268,186 |
Less treasury stock, at cost | (55,212) | (55,117) |
Total stockholders' equity | 249,770 | 243,192 |
Total liabilities and stockholders' equity | $ 285,410 | $ 279,098 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Revenues | $ 41,674 | $ 38,440 |
Cost of revenues | ||
Labor and other operating expenses | 24,593 | 23,962 |
Depreciation, depletion and amortization | 5,276 | 4,601 |
Total cost of revenues | 29,869 | 28,563 |
Gross profit | 11,805 | 9,877 |
Selling, general and administrative expenses | 3,067 | 3,219 |
Operating profit | 8,738 | 6,658 |
Other expense (income) | ||
Interest expense | 62 | 62 |
Interest and other income, net | (34) | (247) |
Total other expense (income) | 28 | (185) |
Income before income tax expense | 8,710 | 6,843 |
Income tax expense | 1,679 | 1,299 |
Net income | $ 7,031 | $ 5,544 |
Net income per share of common stock | ||
Basic (in dollars per share) | $ 1.24 | $ 0.99 |
Diluted (in dollars per share) | $ 1.24 | $ 0.98 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Percentage | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Revenues (as a percent) | 100.00% | 100.00% |
Cost of revenues | ||
Labor and other operating expenses (as a percent) | 59.00% | 62.30% |
Depreciation, depletion and amortization (as a percent) | 12.70% | 12.00% |
Total cost of revenues (as a percent) | 71.70% | 74.30% |
Gross profit (as a percent) | 28.30% | 25.70% |
Selling, general and administrative expenses (as a percent) | 7.40% | 8.40% |
Operating profit (as a percent) | 20.90% | 17.30% |
Other expense (income) | ||
Interest expense (as a percent) | 0.10% | 0.20% |
Interest and other income, net (as a percent) | (0.10%) | (0.70%) |
Total other expense (income) (as a percent) | 0.00% | (0.50%) |
Income before income tax expense (as a percent) | 20.90% | 17.80% |
Income tax expense (as a percent) | 4.00% | 3.40% |
Net income (as a percent) | 16.90% | 14.40% |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |
Net income | $ 5,544 |
Other comprehensive loss | |
Mark to market of foreign exchange hedges, net of tax benefit of $2 for 2020 period | (6) |
Total other comprehensive loss | (6) |
Comprehensive income | $ 5,538 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Mark to market on foreign exchange hedges, net of tax benefit of $0 for each of the three and nine months ended September 30, 2020, and $8 and $7 for the three months and nine months ended September 30, 2019, respectively | $ 2 | $ 2 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total |
Balances at Dec. 31, 2019 | $ 663 | $ 27,464 | $ (1) | $ 243,566 | $ (54,560) | $ 217,132 |
Balances (in shares) at Dec. 31, 2019 | 5,622,826 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock options exercised | 81 | 81 | ||||
Stock options exercised (in shares) | 2,000 | |||||
Stock-based compensation | $ 1 | 378 | 379 | |||
Stock-based compensation (in shares) | 3,063 | |||||
Treasury shares purchased | (64) | (64) | ||||
Treasury shares purchased (in shares) | (704) | |||||
Cash dividends paid | (899) | (899) | ||||
Net income | 5,544 | 5,544 | ||||
Mark to market of foreign exchange hedges, net of tax benefit of $2 for 2020 period | (6) | (6) | ||||
Comprehensive income | (6) | 5,544 | 5,538 | |||
Balances at Mar. 31, 2020 | $ 664 | 27,923 | $ (7) | 248,211 | (54,624) | 222,167 |
Balances (in shares) at Mar. 31, 2020 | 5,627,185 | |||||
Balances at Dec. 31, 2020 | $ 666 | 29,457 | 268,186 | (55,117) | 243,192 | |
Balances (in shares) at Dec. 31, 2020 | 5,648,084 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock options exercised (in shares) | 3,310 | |||||
Stock-based compensation | $ 1 | 546 | 547 | |||
Stock-based compensation (in shares) | 2,685 | |||||
Treasury shares purchased | (95) | (95) | ||||
Treasury shares purchased (in shares) | (743) | |||||
Cash dividends paid | (905) | (905) | ||||
Net income | 7,031 | 7,031 | ||||
Comprehensive income | 7,031 | 7,031 | ||||
Balances at Mar. 31, 2021 | $ 667 | $ 30,003 | $ 274,312 | $ (55,212) | $ 249,770 | |
Balances (in shares) at Mar. 31, 2021 | 5,653,336 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY | ||
Mark to market of foreign exchange hedges, tax expense (benefit) | $ (2) | $ (2) |
CONDENSED CONSOLIDATED STATEM_7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES: | ||
Net income | $ 7,031 | $ 5,544 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 5,341 | 4,655 |
Amortization of deferred financing costs | 2 | 2 |
Deferred income taxes | 750 | 990 |
Loss (gain) on disposition of property, plant and equipment | 3 | (13) |
Stock-based compensation | 547 | 379 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (978) | (200) |
Inventories, net | (199) | (146) |
Prepaid expenses and other current assets | (183) | 249 |
Other assets | 16 | 14 |
Accounts payable and accrued expenses | (719) | 21 |
Other liabilities | 11 | 13 |
Net cash provided by operating activities | 11,622 | 11,508 |
INVESTING ACTIVITIES: | ||
Purchase of property, plant and equipment | (4,543) | (6,106) |
Proceeds from sale of property, plant and equipment | 10 | 16 |
Net cash used in investing activities | (4,533) | (6,090) |
FINANCING ACTIVITIES: | ||
Cash dividends paid | (905) | (899) |
Proceeds from exercise of stock options | 81 | |
Purchase of treasury shares | (95) | (64) |
Net cash used in financing activities | (1,000) | (882) |
Net increase in cash and cash equivalents | 6,089 | 4,536 |
Cash and cash equivalents at beginning of period | 83,562 | 54,260 |
Cash and cash equivalents at end of period | $ 89,651 | $ 58,796 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Basis of Presentation | |
Basis of Presentation | 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, 2020. The results of operations for the three-month period ended March 31, 2021 are not necessarily indicative of operating results for the full year. On July 1, 2020, the Company acquired 100% of the equity interest of Carthage Crushed Limestone (“Carthage”), a limestone mining and production company located in Carthage, Missouri, for $8.4 million cash, subject to adjustment for working capital balances acquired. Carthage produces aggregate and pulverized limestone products that are used primarily in the agricultural, construction, roofing, and industrial industries. Carthage contributed |
Organization
Organization | 3 Months Ended |
Mar. 31, 2021 | |
Organization | |
Organization | 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. |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies | |
Accounting Policies | 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. The Company’s returns and allowances are minimal. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. External freight billed to customers in each of the first quarters 2021 and 2020 revenues was million, respectively, 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 . Accounts Receivable. 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. 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 condensed consolidated balance sheets. 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 (“FX”) 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. |
Business Segment
Business Segment | 3 Months Ended |
Mar. 31, 2021 | |
Business Segment | |
Business Segment | 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. Other revenues, gross profit and operating profit in the Company’s segment disclosures include the Company’s natural gas interest. Other identifiable assets include assets related to its natural gas interests, unallocated corporate assets and cash items. 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 March 31, Revenues 2021 2020 Lime and limestone operations $ 41,356 $ 38,214 Other 318 226 Total revenues $ 41,674 $ 38,440 Depreciation, depletion and amortization Lime and limestone operations $ 5,137 $ 4,413 Other 139 188 Total depreciation, depletion and amortization $ 5,276 $ 4,601 Gross profit (loss) Lime and limestone operations $ 11,804 $ 10,039 Other 1 (162) Total gross profit $ 11,805 $ 9,877 Operating profit (loss) Lime and limestone operations $ 8,737 $ 6,820 Other 1 (162) Total operating profit $ 8,738 $ 6,658 Identifiable assets, at period end Lime and limestone operations $ 191,419 $ 186,702 Other 93,991 65,165 Total identifiable assets $ 285,410 $ 251,867 Capital expenditures Lime and limestone operations $ 4,543 $ 6,106 Other — — Total capital expenditures $ 4,543 $ 6,106 |
Income Per Share of Common Stoc
Income Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Income Per Share of Common Stock | |
Income Per Share of Common Stock | 5. Income Per Share of Common Stock At March 31, 2021, the Company had 15,000,000 shares of common stock authorized and 5,653,336 shares outstanding. On April 30, 2021, shareholders will vote at the Company’s 2021 Annual Meeting of Shareholders on a proposal to increase the number of authorized shares of common stock to . The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts): Three Months Ended March 31, 2021 2020 Net income for basic and diluted income per common share $ 7,031 $ 5,544 Weighted-average shares for basic income per common share 5,651 5,624 Effect of dilutive securities: Employee and director stock options (1) 13 10 Adjusted weighted-average shares and assumed exercises for diluted income per common share 5,664 5,634 Basic net income per common share $ 1.24 $ 0.99 Diluted net income per common share $ 1.24 $ 0.98 (1) Excludes 0 and 8 stock options for the three months ended March 31, 2021 and 2020, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the period. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | 6. Accumulated Other Comprehensive Income The following table presents the components of comprehensive income (in thousands): Three Months Ended March 31, 2021 2020 Net income $ 7,031 $ 5,544 Mark to market of foreign exchange hedges — (8) Deferred income tax benefit — 2 Comprehensive income $ 7,031 $ 5,538 In May 2018, to hedge against potential losses due to changes in the Euro to U.S. Dollar exchange rates, the Company entered into FX hedges with a counterparty to the FX hedges to fix the exchange rates. The last of the FX hedges expired in April 2020. The FX hedges were effective as defined under applicable accounting rules. Therefore, changes in the fair value of the FX hedges were reflected in comprehensive income. |
Trade Receivables, Net
Trade Receivables, Net | 3 Months Ended |
Mar. 31, 2021 | |
Trade Receivables, Net | |
Trade Receivables, Net | 7. Trade Receivables, Net Additions, adjustments and write-offs to the Company’s allowance for credit losses for the three months ended March 31, 2021 and 2020 were as follows (in thousands): March 31, 2021 2020 Beginning balance $ 398 $ 361 Additions — 39 Adjustment for expected credit loss factors (14) — Write-offs — — Ending balance $ 384 $ 400 |
Inventories, Net
Inventories, Net | 3 Months Ended |
Mar. 31, 2021 | |
Inventories, Net | |
Inventories, Net | 8. Inventories, Net Inventories are valued principally at the lower of cost, determined using the average cost method, or market. Costs for raw materials and finished goods include materials, labor, and production overhead. Inventories, net consisted of the following (in thousands): March 31, December 31, 2021 2020 Lime and limestone inventories: Raw materials $ 4,495 $ 4,279 Finished goods 2,713 2,866 7,208 7,145 Service parts inventories 8,201 8,065 $ 15,409 $ 15,210 |
Banking Facilities and Debt
Banking Facilities and Debt | 3 Months Ended |
Mar. 31, 2021 | |
Banking Facilities and Debt | |
Banking Facilities and Debt | 9. Banking Facilities and Debt The Company’s credit agreement with Wells Fargo Bank, N.A. (the “Lender”), as amended as of May 2, 2019 and November 21, 2019, provides for a $75 million revolving credit facility (the “Revolving Facility”) and an incremental four year accordion feature to borrow up to an additional $50 million on the same terms, subject to approval by the Lender or another lender selected by the Company. The credit agreement also provides for a $10 million letter of credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature on May 2, 2024. Interest rates on the Revolving Facility are, at the Company’s option, LIBOR plus a margin of 1.000% to 2.000%, or the Lender’s Prime Rate plus a margin of 0.000% to 1.000%, and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon the Company’s Cash Flow Leverage Ratio, defined as the ratio of the Company’s total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and stock-based compensation expense (“EBITDA”) for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period. Pursuant to a security agreement, dated August 25, 2004, the Revolving Facility is secured by the Company’s existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. The Company’s maximum Cash Flow Leverage Ratio is The Company may pay dividends so long as it remains in compliance with the provisions of the Company’s credit agreement, and it may purchase, redeem or otherwise acquire shares of its common stock so long as its pro forma Cash Flow Leverage Ratio is less than 3.00 to 1.00 and no default or event of default exists or would exist after giving effect to such stock repurchase. As of March 31, 2021, the Company had no debt outstanding and no draws on the Revolving Facility other than $0.4 million of letters of credit, which count as draws against the available commitment under the Revolving Facility. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases | |
Leases | 10. Leases The Company has operating leases for the use of equipment, corporate office space, and some of its terminal and distribution facilities. The leases have remaining lease terms of 1 to 7 years , with a weighted-average remaining lease term of 2 years at March 31, 2021 and 3 at December 31, 2020 . Some operating leases include options to extend the leases for up to 5 years . The liability for the Company’s operating leases was discounted to present value using a weighted-average discount rate of 3.4% at each of March 31, 2021 and March 31, 2020. The components of lease costs for the three months ended March 31, 2021 and 2020 were as follows (in thousands): Three Months Ended March 31, Classification 2021 2020 Operating lease costs (1) Cost of revenues $ 385 $ 385 Operating lease costs (1) Selling, general and administrative expenses 65 56 Rental revenues Interest and other income, net (21) (27) Net operating lease costs $ 429 $ 414 (1) Includes the costs of leases with a term of 12 months or less. As of March 31, 2021, future minimum payments under operating leases that were either non-cancelable or subject to significant penalty upon cancellation, including future minimum payments under renewal options that the Company is reasonably certain to exercise, were as follows (in thousands): 2021 (excluding the three months ended March 31, 2021) $ 873 2022 590 2023 258 2024 186 2025 36 Thereafter 54 Total future minimum lease payments 1,997 Less imputed interest (66) Present value of lease liabilities $ 1,931 Supplemental cash flow information pertaining to the Company’s leasing activity for the three months ended March 31, 2021 and 2020 is as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash payments for operating lease liabilities $ 345 $ 447 Right-of-use assets obtained in exchange for operating lease obligations $ 11 $ — |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The Company has estimated that its effective income tax rate for 2021 will be 19.3% . The primary reason for the effective income tax rate being below the federal statutory rate is due to statutory depletion, which is allowed for income tax purposes and is a permanent difference between net income for financial reporting purposes and taxable income. |
Dividends
Dividends | 3 Months Ended |
Mar. 31, 2021 | |
Dividends | |
Dividends | 12. Dividends On March 12, 2021, the Company paid $0.9 million in cash dividends, based on a dividend of $0.16 per share of its common stock, to shareholders of record at the close of business on February 19, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events. | |
Subsequent Events | 13. Subsequent Event On April 28, 2021 , the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share on the Company’s common stock. This dividend is payable on June 11, 2021 to shareholders of record at the close of business on May 21, 2021 . |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies | |
Revenue Recognition | 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. The Company’s returns and allowances are minimal. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. External freight billed to customers in each of the first quarters 2021 and 2020 revenues was million, respectively, 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 . |
Accounts Receivable | Accounts Receivable. 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. |
Leases | 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 condensed consolidated balance sheets. 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 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 (“FX”) 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. |
Business Segment (Tables)
Business Segment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Segment | |
Schedule of operating results and certain other financial data for the business segment) | 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 March 31, Revenues 2021 2020 Lime and limestone operations $ 41,356 $ 38,214 Other 318 226 Total revenues $ 41,674 $ 38,440 Depreciation, depletion and amortization Lime and limestone operations $ 5,137 $ 4,413 Other 139 188 Total depreciation, depletion and amortization $ 5,276 $ 4,601 Gross profit (loss) Lime and limestone operations $ 11,804 $ 10,039 Other 1 (162) Total gross profit $ 11,805 $ 9,877 Operating profit (loss) Lime and limestone operations $ 8,737 $ 6,820 Other 1 (162) Total operating profit $ 8,738 $ 6,658 Identifiable assets, at period end Lime and limestone operations $ 191,419 $ 186,702 Other 93,991 65,165 Total identifiable assets $ 285,410 $ 251,867 Capital expenditures Lime and limestone operations $ 4,543 $ 6,106 Other — — Total capital expenditures $ 4,543 $ 6,106 |
Income Per Share of Common St_2
Income Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Per Share of Common Stock | |
Schedule of computation of basic and diluted income per common share | The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts): Three Months Ended March 31, 2021 2020 Net income for basic and diluted income per common share $ 7,031 $ 5,544 Weighted-average shares for basic income per common share 5,651 5,624 Effect of dilutive securities: Employee and director stock options (1) 13 10 Adjusted weighted-average shares and assumed exercises for diluted income per common share 5,664 5,634 Basic net income per common share $ 1.24 $ 0.99 Diluted net income per common share $ 1.24 $ 0.98 (1) Excludes 0 and 8 stock options for the three months ended March 31, 2021 and 2020, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the period. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income | |
Schedule of components of comprehensive income | The following table presents the components of comprehensive income (in thousands): Three Months Ended March 31, 2021 2020 Net income $ 7,031 $ 5,544 Mark to market of foreign exchange hedges — (8) Deferred income tax benefit — 2 Comprehensive income $ 7,031 $ 5,538 |
Trade Receivables, Net (Tables)
Trade Receivables, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Trade Receivables, Net | |
Schedule of additions and write-offs to allowance for doubtful accounts | Additions, adjustments and write-offs to the Company’s allowance for credit losses for the three months ended March 31, 2021 and 2020 were as follows (in thousands): March 31, 2021 2020 Beginning balance $ 398 $ 361 Additions — 39 Adjustment for expected credit loss factors (14) — Write-offs — — Ending balance $ 384 $ 400 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventories, Net | |
Schedule of inventories, net | Inventories are valued principally at the lower of cost, determined using the average cost method, or market. Costs for raw materials and finished goods include materials, labor, and production overhead. Inventories, net consisted of the following (in thousands): March 31, December 31, 2021 2020 Lime and limestone inventories: Raw materials $ 4,495 $ 4,279 Finished goods 2,713 2,866 7,208 7,145 Service parts inventories 8,201 8,065 $ 15,409 $ 15,210 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases | |
Schedule of lease costs | The components of lease costs for the three months ended March 31, 2021 and 2020 were as follows (in thousands): Three Months Ended March 31, Classification 2021 2020 Operating lease costs (1) Cost of revenues $ 385 $ 385 Operating lease costs (1) Selling, general and administrative expenses 65 56 Rental revenues Interest and other income, net (21) (27) Net operating lease costs $ 429 $ 414 (1) Includes the costs of leases with a term of 12 months or less. |
Schedule of maturity of lease liability | 2021 (excluding the three months ended March 31, 2021) $ 873 2022 590 2023 258 2024 186 2025 36 Thereafter 54 Total future minimum lease payments 1,997 Less imputed interest (66) Present value of lease liabilities $ 1,931 |
Schedule of supplemental cash flow information | Three Months Ended March 31, 2021 2020 Cash payments for operating lease liabilities $ 345 $ 447 Right-of-use assets obtained in exchange for operating lease obligations $ 11 $ — |
Basis of Presentation (Details)
Basis of Presentation (Details) - Carthage Crushed Limestone - USD ($) $ in Millions | Jul. 01, 2020 | Mar. 31, 2021 |
Ownership acquired (as a percent) | 100.00% | |
Cash paid for acquisition | $ 8.4 | |
Revenue of business acquisition | $ 2.2 |
Accounting Policies - Revenue R
Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue Recognition | ||
External freight billed to customers included in revenue | $ 7.8 | $ 6.9 |
Business Segment (Details)
Business Segment (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Business segments | |||
Number of business segments | segment | 1 | ||
Revenues | $ 41,674 | $ 38,440 | |
Depreciation, depletion and amortization | 5,276 | 4,601 | |
Gross profit (loss) | 11,805 | 9,877 | |
Operating profit (loss) | 8,738 | 6,658 | |
Identifiable assets, at period end | 285,410 | 251,867 | $ 279,098 |
Capital expenditures | 4,543 | 6,106 | |
Lime and limestone operations | |||
Business segments | |||
Depreciation, depletion and amortization | 5,137 | 4,413 | |
Gross profit (loss) | 11,804 | 10,039 | |
Operating profit (loss) | 8,737 | 6,820 | |
Identifiable assets, at period end | 191,419 | 186,702 | |
Capital expenditures | 4,543 | 6,106 | |
Other | |||
Business segments | |||
Depreciation, depletion and amortization | 139 | 188 | |
Gross profit (loss) | 1 | (162) | |
Operating profit (loss) | 1 | (162) | |
Identifiable assets, at period end | 93,991 | 65,165 | |
Lime and limestone operations | Lime and limestone operations | |||
Business segments | |||
Revenues | 41,356 | 38,214 | |
Natural gas interests | Other | |||
Business segments | |||
Revenues | $ 318 | $ 226 |
Income Per Share of Common St_3
Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2021 | |
Anti-dilutive securities | |||
Common stock, authorized shares | 15,000,000 | 30,000,000 | |
Common stock, shares issued | 5,653,336 | ||
Income per share of common stock: | |||
Net income for basic and diluted income per common share | $ 7,031 | $ 5,544 | |
Weighted-average shares for basic income per common share (in shares) | 5,651,000 | 5,624,000 | |
Effect of dilutive securities: | |||
Employee and director stock options (in shares) | 13,000 | 10,000 | |
Adjusted weighted-average shares and assumed exercises for diluted income per common share (in shares) | 5,664,000 | 5,634,000 | |
Basic net income per common share (in dollars per share) | $ 1.24 | $ 0.99 | |
Diluted net income per common share (in dollars per share) | $ 1.24 | $ 0.98 | |
Options | |||
Anti-dilutive securities | |||
Anti-dilutive shares of common stock excluded from the calculation of dilutive securities | 0 | 8,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Components of comprehensive income | ||
Net income | $ 7,031 | $ 5,544 |
Mark to market of foreign exchange hedges | (8) | |
Deferred income tax benefit | 2 | |
Comprehensive income | $ 7,031 | $ 5,538 |
Trade Receivables, Net (Details
Trade Receivables, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Additions and write-offs to the company's allowance for doubtful accounts | ||
Beginning balance | $ 398 | $ 361 |
Additions | 39 | |
Adjustment for expected credit loss factors | (14) | |
Ending balance | $ 384 | $ 400 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Lime and limestone inventories: | ||
Raw materials | $ 4,495 | $ 4,279 |
Finished goods | 2,713 | 2,866 |
Total | 7,208 | 7,145 |
Service parts inventories | 8,201 | 8,065 |
Total inventories | $ 15,409 | $ 15,210 |
Banking Facilities and Debt (De
Banking Facilities and Debt (Details) $ in Millions | May 07, 2015USD ($) | Mar. 31, 2021USD ($) | May 02, 2019USD ($) |
Banking facilities and other debt | |||
Total Debt | $ 0 | ||
Maximum | |||
Banking facilities and other debt | |||
Pro forma Cash Flow Leverage Ratio to be maintained to purchase, redeem or otherwise acquire shares of common stock | 3 | ||
Cash flow leverage ratio | 3.50 | ||
Revolving Facility | |||
Banking facilities and other debt | |||
Maximum borrowing capacity | $ 75 | ||
Accordion feature period | 4 years | ||
Maximum borrowing capacity accordion feature | $ 50 | ||
Letters of credit outstanding | $ 0.4 | ||
Revolving Facility | Minimum | |||
Banking facilities and other debt | |||
Commitment fee (as a percent) | 0.20% | ||
Revolving Facility | Minimum | LIBOR | |||
Banking facilities and other debt | |||
Interest rate margin (as a percent) | 1.00% | ||
Revolving Facility | Minimum | Lender's prime rate | |||
Banking facilities and other debt | |||
Interest rate margin (as a percent) | 0.00% | ||
Revolving Facility | Maximum | |||
Banking facilities and other debt | |||
Commitment fee (as a percent) | 0.35% | ||
Revolving Facility | Maximum | LIBOR | |||
Banking facilities and other debt | |||
Interest rate margin (as a percent) | 2.00% | ||
Revolving Facility | Maximum | Lender's prime rate | |||
Banking facilities and other debt | |||
Interest rate margin (as a percent) | 1.00% | ||
Letter of Credit | |||
Banking facilities and other debt | |||
Maximum borrowing capacity | $ 10 |
Leases - Costs Disclosure (Deta
Leases - Costs Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Leases | |||
Weighted average remaining lease term | 2 years | 3 years | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Average discount rate (as a percent) | 3.40% | 3.40% | |
Lease cost | |||
Net operating lease costs | $ 429 | $ 414 | |
Minimum | |||
Leases | |||
Remaining lease term | 1 year | 1 year | |
Maximum | |||
Leases | |||
Remaining lease term | 7 years | 7 years | |
Lease extension term | 5 years | ||
Lease Term | 12 months | ||
Cost of revenues | |||
Lease cost | |||
Operating lease cost | $ 385 | 385 | |
Selling, general and administrative expense. | |||
Lease cost | |||
Operating lease cost | 65 | 56 | |
Interest and other income, net | |||
Lease cost | |||
Rental revenues | $ (21) | $ (27) |
Leases - Maturity (Details)
Leases - Maturity (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Maturity | |
2021 (excluding the three months ended March 31, 2021) | $ 873 |
2022 | 590 |
2023 | 258 |
2024 | 186 |
2025 | 36 |
Thereafter | 54 |
Total future minimum lease payments | 1,997 |
Less imputed interest | (66) |
Present value of lease liabilities | $ 1,931 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases | ||
Cash payments for operating lease liabilities | $ 345 | $ 447 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 11 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes | |
Effective income tax rate (as a percent) | 19.30% |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 12, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Dividends | |||
Cash dividends paid | $ 900 | $ 905 | $ 899 |
Cash dividend (in dollars per share) | $ 0.16 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Apr. 28, 2021 | Mar. 12, 2021 |
Subsequent event | ||
Quarterly cash dividend declared (in dollars per share) | $ 0.16 | |
Subsequent event | ||
Subsequent event | ||
Dividends payable date declared | Apr. 28, 2021 | |
Quarterly cash dividend declared (in dollars per share) | $ 0.16 | |
Dividends payable date to be paid | Jun. 11, 2021 | |
Dividends payable date of record | May 21, 2021 |