United States Lime & Minerals, Inc. (NASDAQ: USLM) today
reported third quarter 2020 results: The Company’s revenues in the
third quarter 2020 were $43.7 million, compared to $43.6 million in
the third quarter 2019, an increase of $0.2 million, or 0.4%. For
the first nine months 2020, the Company’s revenues were $119.7
million, compared to $120.3 million in the first nine months 2019,
a decrease of $0.6 million, or 0.5%. Carthage Crushed Limestone
(“Carthage”), which the Company acquired on July 1, 2020 for $8.4
million cash, subject to adjustment, contributed $2.3 million to
the Company’s revenues for the third quarter and first nine months
2020.
The increase in revenues in the third quarter 2020,
compared to the third quarter 2019, resulted primarily from
increased sales volumes of the Company’s lime and limestone
products to the Company’s agriculture and roofing customers,
principally due to the addition of Carthage, partially offset by
decreased demand from the Company’s oil and gas services,
environmental, and construction customers. Third quarter 2020
revenues were also favorably impacted by an increase in the average
selling prices for the Company’s lime and limestone products.
The decrease in revenues for the first nine months
2020, compared to the first nine months 2019, resulted primarily
from reduced sales volumes of the Company’s lime and limestone
products due to decreased demand, principally from the Company’s
oil and gas services, environmental, and steel customers, partially
offset by increased demand from the Company’s construction
customers and the additional sales provided by Carthage revenues
discussed above, and an increase in the average selling prices for
the Company’s lime and limestone products.
The Company’s gross profit was $14.2 million in the
third quarter 2020, compared to $13.5 million in the third quarter
2019, an increase of $0.7 million, or 5.2%. Gross profit in the
first nine months 2020 was $34.4 million, an increase of $2.5
million, or 7.9%, from $31.9 million in the first nine months 2019.
The increases in gross profit in the 2020 periods, compared to the
comparable 2019 periods, resulted primarily from the increase in
the average selling prices for the Company’s lime and limestone
products, lower fuel costs, and increased operating efficiencies
associated, in part, with the new kiln at the Company’s St. Clair
facility, which began producing commercially saleable quicklime in
the second quarter 2019, partially offset by increased costs
incurred in the second and third quarters 2020 associated with
responding to the COVID-19 pandemic.
Selling, general and administrative (“SG&A”)
expenses were $2.9 million in each of the third quarters 2020 and
2019. SG&A expenses were $9.0 million in the first nine months
2020, compared to $8.2 million in the first nine months 2019, an
increase of $0.8 million, or 9.3%. The increases in SG&A
expenses for the first nine months 2020, compared to the first nine
months 2019, resulted primarily from increased personnel expenses,
including stock-based compensation, increased legal expenses,
including acquisition-related legal fees, and COVID-19 pandemic
costs in the second quarter 2020.
The Company’s revenues in the third quarter and
first nine months 2020 included $254 thousand and $665 thousand,
respectively, from natural gas interests, compared to $294 thousand
and $1,001 thousand in the third quarter and first nine months
2019, respectively. The Company’s gross profit in the third quarter
and first nine months 2020 included losses of $74 thousand and $386
thousand from natural gas interests, respectively, compared to
income of $6 thousand and $50 thousand in the third quarter and
first nine months 2019, respectively. In the fourth quarter 2019,
the Company assessed the recent trends of revenue, gross profit or
loss, and total assets of its natural gas interests and determined
that those interests no longer represented a reportable
segment.
Income tax expense increased to $1.9 million in the
third quarter 2020, compared to $1.1 million in the third quarter
2019. Income tax expense increased to $4.7 million in the first
nine months 2020, compared to $3.9 million in the first nine months
2019. For the year ended December 31, 2019, the Company’s effective
income tax rate was reduced as a result of research and development
tax credits. The Company does not expect a reduction in its income
tax rate due to research and development tax credits in 2020.
The Company reported net income of $9.3 million
($1.65 per share diluted) and $21.0 million ($3.72 per share
diluted) in the third quarter and first nine months 2020,
respectively, compared to $9.9 million ($1.76 per share diluted)
and $21.1 million ($3.75 per share diluted) in the third quarter
and first nine months 2019, respectively, decreases of $0.6
million, or 5.8%, and $0.1 million, or 0.4%, respectively.
Federal, state, and local governmental responses to
the COVID-19 pandemic, which include restrictions requiring social
distancing and restrictions on business activities and movement of
people in the markets for the Company’s lime and limestone
products, began to take effect the last two weeks of March 2020. In
the second quarter 2020, the pandemic and related restrictions on
business activities resulted in a general economic slowdown, which
has disproportionately impacted certain industries that purchase
the Company’s products, including oil and gas services,
environmental, and steel. In the third quarter 2020,
business activity began to resume, and pandemic-related
restrictions were eased; however, the recent surge of COVID-19
cases in the United States could impact the economic recovery that
has occurred to date. The Company expects a continued slowdown in
economic activity as restrictions continue, or even expand, which
it anticipates will have an adverse impact on the demand for its
lime and limestone products, particularly with respect to its
customers in certain industries. In addition, a continued economic
slowdown may put downward pressure on the prices the Company is
able to realize for its products.
“During the third quarter 2020, we continued to see
the negative impact on demand from some of our customers in
industries more heavily impacted by the COVID-19 induced economic
slowdown, especially oil and gas services and power generation. Our
positive results from the third quarter 2020 are the result of the
agility of our people as they face constantly evolving challenges
presented by the fallout from the COVID-19 pandemic. We will
continue to be diligent in controlling our costs and finding ways
to further increase operating efficiencies to mitigate some of the
adverse effects of the decreases in demand resulting from the
pandemic,” said Timothy W. Byrne, President and Chief Executive
Officer.
Dividend
The Company also announced today that the Board of
Directors has declared a regular quarterly cash dividend of $0.16
per share on the Company’s common stock. This dividend is payable
on December 11, 2020 to shareholders of record at the close of
business on November 20, 2020.
United States Lime & Minerals, Inc.,
a NASDAQ-listed public company with headquarters in Dallas, Texas,
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 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-operating working interests pursuant to an
oil and gas lease and a drillsite agreement on its Johnson County,
Texas property, located in the Barnett Shale Formation.
Any statements contained in this news release,
including, but not limited to, statements relating to the impact of
the COVID-19 pandemic, that are not statements of historical fact
are forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, and
investors are cautioned that such statements involve risks and
uncertainties that could cause actual results to differ materially
from expectations, including without limitation those risks and
uncertainties indicated from time to time in the Company’s filings
with the Securities and Exchange Commission.
Contact: Timothy W. Byrne(972) 991-8400
(Tables Follow)United States
Lime & Minerals, Inc.CONDENSED
CONSOLIDATED FINANCIAL DATA(In thousands, except
per share amounts)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
INCOME STATEMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
43,727 |
|
|
$ |
43,559 |
|
|
$ |
119,714 |
|
|
$ |
120,312 |
|
Cost of sales |
|
|
29,545 |
|
|
|
30,076 |
|
|
|
85,298 |
|
|
|
88,409 |
|
Gross profit |
|
$ |
14,182 |
|
|
$ |
13,483 |
|
|
$ |
34,416 |
|
|
$ |
31,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
$ |
2,909 |
|
|
$ |
2,928 |
|
|
$ |
9,009 |
|
|
$ |
8,240 |
|
Operating profit |
|
$ |
11,273 |
|
|
$ |
10,555 |
|
|
$ |
25,407 |
|
|
$ |
23,663 |
|
Interest expense |
|
|
62 |
|
|
|
61 |
|
|
|
186 |
|
|
|
183 |
|
Interest and other income,
net |
|
|
(49 |
) |
|
|
(477 |
) |
|
|
(400 |
) |
|
|
(1,459 |
) |
Income tax expense |
|
|
1,936 |
|
|
|
1,069 |
|
|
|
4,652 |
|
|
|
3,876 |
|
Net income |
|
$ |
9,324 |
|
|
$ |
9,902 |
|
|
$ |
20,969 |
|
|
$ |
21,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share of common
stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.66 |
|
|
$ |
1.76 |
|
|
$ |
3.73 |
|
|
$ |
3.75 |
|
Diluted |
|
$ |
1.65 |
|
|
$ |
1.76 |
|
|
$ |
3.72 |
|
|
$ |
3.75 |
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
5,630 |
|
|
|
5,613 |
|
|
|
5,628 |
|
|
|
5,612 |
|
Diluted |
|
|
5,641 |
|
|
|
5,622 |
|
|
|
5,637 |
|
|
|
5,620 |
|
Cash dividends per share of
common stock |
|
$ |
0.160 |
|
|
$ |
0.135 |
|
|
$ |
0.480 |
|
|
$ |
0.405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
BALANCE
SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
$ |
113,068 |
|
|
$ |
92,735 |
|
Property, plant and equipment, net |
|
|
|
|
|
|
|
|
|
|
156,043 |
|
|
|
150,687 |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
2,596 |
|
|
|
3,615 |
|
Total assets |
|
|
|
|
|
|
|
|
|
$ |
271,707 |
|
|
$ |
247,037 |
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
$ |
11,072 |
|
|
$ |
9,459 |
|
Deferred tax liabilities, net |
|
|
|
|
|
|
|
|
|
|
21,587 |
|
|
|
17,218 |
|
Other long-term liabilities |
|
|
|
|
|
|
|
|
|
|
2,504 |
|
|
|
3,228 |
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
236,544 |
|
|
|
217,132 |
|
Total liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
$ |
271,707 |
|
|
$ |
247,037 |
|
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