<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1996
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 0-4197
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.)
12221 MERIT DRIVE, SUITE 500, DALLAS, TX 75251
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(972) 991-8400
---------------
(Registrant's telephone number, including area code)
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 X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of October 17, 1996,
3,921,853 shares of common stock, $.10 par value, were outstanding.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1996 1995
- ------ ---- ----
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 601 $ 1,161
Trade receivables 5,965 5,509
Inventories 5,314 5,332
Prepaid expenses and other assets 542 234
------------- --------------
Total current assets 12,422 12,236
------------- --------------
Property, plant and equipment at cost: 58,578 53,927
Less accumulated depreciation (40,164) (37,503)
------------- --------------
Net property, plant and equipment 18,414 16,424
Other assets, net 1,057 1,133
------------- --------------
Total assets $ 31,893 $ 29,793
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current installments of long-term debt $ 1,143 $ 1,143
Accounts payable-trade 3,022 2,568
Accrued expenses 2,255 2,369
------------- --------------
Total current liabilities 6,420 6,080
Long-term debt, excluding current installments 3,524 4,381
Other liabilities 579 583
------------- --------------
Total liabilities 10,523 11,044
Stockholders' equity:
Common stock 529 529
Additional paid-in capital 15,306 15,848
Retained earnings 20,097 17,844
------------- --------------
35,932 34,221
Less treasury stock at cost;
1,372,212 and 1,458,002 shares of common stock (14,562) (15,472)
------------- --------------
Total stockholders' equity 21,370 18,749
------------- --------------
Total liabilities and stockholders' equity $ 31,893 $ 29,793
============= ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 3
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------ ------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 10,452 100.0% $ 11,106 100.0% $ 30,558 100.0% $ 31,213 100.0%
Cost of revenues:
Labor and other operating expenses 7,730 74.0% 7,410 66.7% 21,151 69.2% 20,874 66.9%
Depreciation, depletion and amortization 832 8.0% 784 7.1% 2,644 8.7% 2,360 7.5%
-------------------- ------------------- ------------------- -------------------
8,562 81.9% 8,194 73.8% 23,795 77.9% 23,234 74.4%
-------------------- ------------------- ------------------- -------------------
GROSS PROFIT 1,890 18.1% 2,912 26.2% 6,763 22.1% 7,979 25.6%
Selling, general and administrative expenses 1,091 10.4% 1,041 9.4% 3,349 10.9% 3,438 11.0%
-------------------- ------------------- ------------------- -------------------
OPERATING PROFIT 799 7.7% 1,871 16.8% 3,414 11.2% 4,541 14.6%
-------------------- ------------------- ------------------- -------------------
Other deductions (income):
Interest expense 143 1.4% 166 1.5% 439 1.4% 518 1.7%
Other, net (37) -0.4% (221) -2.0% (166) -0.5% (228) -0.7%
-------------------- ------------------- ------------------- -------------------
106 1.0% (55) -0.5% 274 0.9% 290 1.0%
-------------------- ------------------- ------------------- -------------------
NET INCOME BEFORE
INCOME TAXES 693 6.7% 1,926 17.3% 3,141 10.3% 4,251 13.6%
Federal and state income taxes 123 1.2% 391 3.5% 597 2.0% 850 2.7%
-------------------- ------------------- ------------------- -------------------
Net income $ 570 5.5% $ 1,535 13.8% $ 2,544 8.3% $ 3,401 10.9%
========== ========== ========== =========
NET INCOME PER SHARE OF
COMMON STOCK $ 0.15 $ 0.40 $ 0.66 $ 0.89
========== ========== ========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------
SEPTEMBER 30,
-------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,544 $ 3,401
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion and amortization 2,771 2,475
Amortization of financing costs 76 56
Gain on sale of property (68) (126)
Current assets (net change) [1] (746) (550)
Other assets - (330)
Current liabilities (net change) [2] 340 1,022
Other liabilities (4) (126)
---------- ----------
Net cash provided by operating activities 4,913 5,822
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (4,708) (4,024)
Proceeds from sale of property, plant and equipment 15 187
---------- ----------
Net cash (used in) investing activities (4,693) (3,837)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 368 -
Proceeds from borrowings 3,100 2,200
Principal payments of debt (3,957) (3,758)
Payment of common stock dividends (291) (190)
---------- ----------
Net cash (used in) financing activities (780) (1,748)
---------- ----------
Net increase (decrease) in cash and cash equivalents (560) 237
Cash and cash equivalents at beginning of period 1,161 23
---------- ----------
Cash and cash equivalents at end of period $ 601 $ 260
========== ==========
Supplemental cash flow information:
Interest paid $ 348 $ 463
========== ==========
Income taxes paid $ 689 $ 518
========== ==========
</TABLE>
[1] Exclusive of net change in cash.
[2] Exclusive of net change in debt and lease obligations.
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
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 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
and cash flows for the periods presented have been made. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements 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,
1995. The results of operations for the periods ended September 30, 1996
are not necessarily indicative of what the operating results will be for
the full year. Certain prior year amounts have been reclassified for
comparison purposes.
2. Inventories
Inventories consist of the following at:
September 30, December 31,
1996 1995
---- ----
(In thousands of dollars)
Raw materials $ 943 $ 1,000
Finished goods 2,363 2,436
Service parts 2,008 1,896
------- -------
Total Inventories $ 5,314 $ 5,332
======= =======
3. Prepaid Expenses and Other Assets
At September 30, 1996, prepaid expenses and other assets included $142,000
of deferred costs that will be absorbed in inventory by the end of the year
based on units of production method. The deferred costs at September 30,
1995 were $88,000. The 1996 costs relate to a planned aggregates
production shut-down of one of the plant facilities during the first
quarter of 1996. Deferred costs include maintenance and other expenses
incurred during the first quarter that will contribute towards revenues in
subsequent quarters.
5
<PAGE> 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $4,917,000 for the nine months
ended September 30, 1996 compared to $5,822,000 for the nine months ended
September 30, 1995. The decrease was largely the results of reduced earnings
and increased spending on property, plant and equipment.
The Company has completed the feasibility studies for a new kiln at the
Arkansas plant and has decided to proceed with this project. The new kiln
will complement the existing shaft kilns by allowing the Company to expand its
customer base. The lime produced on the new kiln will meet the specific
chemical needs of both the existing customer base and customers the Company
currently is unable to serve. The project is expected to cost approximately
$9-10 million. The Company's progress on this project was slowed due to the
state regulatory authorities requiring the Arkansas plant to apply for and
obtain a new plant-wide permit. The new permit replaced the existing permit
and now allows the Company to proceed with the permitting process of the new
kiln. This permit is expected to be secured within the next six months. The
new kiln will be financed by internally generated funds and/or alternative
sources of financing.
RESULTS OF OPERATIONS
Revenues decreased from $11,106,000 in the third quarter of 1995 to
$10,452,000 in the third quarter of 1996, a decrease of $654,000 or 5.9%.
This resulted from a 8.8% decrease in sales volume and a 2.9% increase in
prices. Revenues for the nine months ended September 30, 1996 decreased by
2.1% over 1995, caused by a 6.4% decrease in sales volume and a 4.3% increase
in prices.
The Company's gross profit was $1,890,000 in the third quarter of 1996,
compared to $2,912,000 in the third quarter of 1995, a 35.1% decrease. Gross
profit margin decreased for the third quarter of 1996 to 18.1%, from 26.2% in
1995. Gross profit decreased to $6,763,000 in the first nine months of 1996,
from $7,979,000 in the first nine months of 1995, a 15.2% decrease. Gross
profit margin for the nine months ended September 30, 1995 decreased to 22.1%,
from 25.6% in 1995. Decreased production volumes, combined with higher
depreciation, negatively impacted both gross profit and gross profit margins.
The three and nine month results also were adversely impacted by operating
problems at Corson Lime Company. The Company is reviewing various options to
improve the situation at Corson.
Selling, general and administrative expenses (SG&A) increased slightly in the
third quarter of 1996 ($1,091,000), from the comparable period in 1995
($1,041,000). SG&A as a percentage of sales increased to 10.4%, from 9.4% a
year earlier. In the first nine months of 1996, SG&A decreased by $89,000
compared to 1995 and, as a percentage of sales, improved slightly.
Interest expense decreased in both the third quarter and the first nine months
of 1996 over 1995, by $23,000 and $79,000, respectively. This decrease was
due to further decreases in the Revolving Credit Loan and the Term Loan
balances.
6
<PAGE> 7
Other, net decreased by $184,000 in the third quarter of 1996 due, in large
part, to the sale of various surplus equipment in the third quarter of 1995.
Other, net decreased by $62,000 in the first nine months of 1996, as compared
to the first nine months of 1995.
The Company reported net income of $570,000, ($0.15 per share) during the
third quarter of 1996, compared to net income of $1,535,000, ($0.40 per share)
during the third quarter of 1995 a decrease of 62.9%. For the first nine
months of 1996, the Company recorded net income of $2,544,000 ($0.66 per
share), a decrease of 25.2% from the net income of $3,401,000 ($0.89 per
share) in the first nine months of 1995.
PART II. OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
11 Statement re computation of per share earnings
27 Financial Data Schedule
b. Reports on Form 8-K:
The Company filed no Reports on Form 8-K during the quarter
ended September 30, 1996.
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED STATES LIME & MINERALS, INC.
October 18, 1996 By: /s/ Robert F. Kizer
-------------------------------
Robert F. Kizer,
President and Chief Executive Officer
October 18, 1996 By: /s/ Timothy W. Byrne
------------------------------
Timothy W. Byrne,
Senior Vice President
and Chief Financial Officer
8
<PAGE> 9
UNITED STATES LIME & MINERALS, INC.
Quarterly Report on Form 10-Q
Quarter Ended
September 30, 1996
Index to Exhibits
<TABLE>
Exhibit No. Exhibit
----------- ---------------------------------------------
<S> <C>
11 Statement re computation of per share earnings
27 Financial data schedule
</TABLE>
<PAGE> 1
Exhibit 11
STATEMENT RE COMPUTATION
OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
1996 1995 1996 1995
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Net income $ 570,000 1,535,000 $2,544,000 3,401,000
========= ========= ========== =========
Weighted average number of common
shares outstanding 3,921,853 3,836,063 3,880,168 3,836,063
========= ========= ========== =========
Net income per share
of common stock $ 0.15 0.40 $ 0.66 0.89
========= ========= ========== =========
</TABLE>
NOTE: Outstanding stock options are excluded from the computation as the
effective dilution in earnings per share data is less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 601
<SECURITIES> 0
<RECEIVABLES> 5,965
<ALLOWANCES> 0
<INVENTORY> 5,314
<CURRENT-ASSETS> 12,422
<PP&E> 58,578
<DEPRECIATION> 40,164
<TOTAL-ASSETS> 31,893
<CURRENT-LIABILITIES> 6,420
<BONDS> 0
0
0
<COMMON> 529
<OTHER-SE> 20,841
<TOTAL-LIABILITY-AND-EQUITY> 31,893
<SALES> 10,452
<TOTAL-REVENUES> 10,452
<CGS> 8,562
<TOTAL-COSTS> 8,562
<OTHER-EXPENSES> 1,091
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143
<INCOME-PRETAX> 693
<INCOME-TAX> 123
<INCOME-CONTINUING> 570
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 570
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
