<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 MARCH 31, 1997
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.
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(Exact name of registrant as specified in its charter)
TEXAS 75-0789226
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(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
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(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 May 2, 1997, 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>
MARCH 31, DECEMBER 31,
ASSETS 1997 1996
- ------ -------- --------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 43 $ 1,000
Trade receivables 4,749 5,152
Inventories 5,284 5,054
Prepaid expenses and other assets 770 434
-------- --------
Total current assets 10,846 11,640
-------- --------
Property, plant and equipment at cost: 61,452 59,785
Less accumulated depreciation (42,054) (41,045)
-------- --------
Net property, plant and equipment 19,398 18,740
-------- --------
Other assets, net 961 939
-------- --------
Total assets $ 31,205 $ 31,319
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term debt $ 1,143 $ 1,143
Accounts payable-trade 2,438 3,117
Accrued expenses 1,980 1,941
-------- --------
Total current liabilities 5,561 6,201
Long-term debt, excluding current installments 4,352 3,238
Other liabilities 713 714
Stockholders' equity:
Common stock 529 529
Additional paid-in capital 15,311 15,311
Retained earnings 19,301 19,888
-------- --------
35,141 35,728
Less treasury stock at cost;
1,372,212 shares of common stock (14,562) (14,562)
-------- --------
Total stockholders' equity 20,579 21,166
-------- --------
Total liabilities and stockholders' equity $ 31,205 $ 31,319
======== ========
</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 THREE MONTHS ENDED
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C> <C> <C>
Revenues $ 7,808 100.00% $ 8,523 100.00%
Cost of revenues:
Labor and other operating expenses 6,233 79.83% 5,872 68.90%
Depreciation, depletion and amortization 980 12.55% 841 9.87%
------- ------ ------- ------
7,213 92.38% 6,713 78.76%
------- ------ ------- ------
GROSS PROFIT 595 7.62% 1,810 21.24%
Selling, general and administrative expenses 1,116 14.29% 1,105 12.96%
------- ------ ------- ------
OPERATING PROFIT (LOSS) (521) -6.67% 705 8.27%
------- ------ ------- ------
Other deductions (income):
Interest expense 133 1.70% 134 1.57%
Other, net (44) -0.56% (58) -0.68%
------- ------ ------- ------
89 1.14% 76 0.89%
------- ------ ------- ------
NET INCOME (LOSS) BEFORE INCOME TAXES (610) -7.81% 629 7.38%
Federal and state income taxes (benefit) (122) -1.56% 126 1.48%
------- ------ ------- ------
NET INCOME (LOSS) $ (488) -6.25% $ 503 5.90%
======= ====== ======= ======
NET INCOME (LOSS) PER SHARE OF COMMON STOCK $ (0.12) $ 0.13
======= =======
</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>
THREE MONTHS ENDED
------------------
MARCH 31,
---------
1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (488) $ 503
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion and amortization 1,023 884
Amortization of financing costs 25 25
(Gain) on sale of property (5) --
Current assets (net change) [1] (188) (696)
Other assets (22) (163)
Current liabilities (net change) [2] (640) 299
Other liabilities (1) (1)
------- -------
Net cash provided by (used in) operating activities (296) 851
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (1,681) (1,691)
Proceeds from sale of property, plant and equipment 5 --
------- -------
Net cash (used in) investing activities (1,676) (1,691)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options -- 84
Payment of common stock dividends (99) (95)
Proceeds from borrowings 1,400 --
Principal payments of debt and lease obligations (286) (286)
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Net cash provided by (used in) financing activities 1,015 (297)
------- -------
Net (decrease) in cash (957) (1,137)
Cash at beginning of period 1,000 1,161
------- -------
Cash at end of period $ 43 $ 24
======= =======
Supplemental cash flow information:
Interest paid $ 98 $ 109
======= =======
Income taxes paid $ 0 $ 219
======= =======
</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,
1996. The results of operations for the period ended March 31, 1997 are
not necessarily indicative of what the operating results for the full year
will be.
2. Earnings Per Common Share
Earnings per share of common stock are based on the weighted average
number of common shares outstanding during each period of 3,921,853 and
3,846,371, respectively.
3. Inventories
Inventories consist of the following at:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
(In thousands of dollars)
<S> <C> <C>
Raw materials $ 803 860
Finished goods 2,376 2,190
Service parts 2,106 2,004
------- -----
Total Inventories $ 5,284 5,054
======= =====
</TABLE>
4. Prepaid Expenses
At March 31, 1997, prepaid expenses included $375,000 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 March 31, 1996 were $557,000.
The 1997 costs relate to a planned aggregates production shut-down of one
of the plant facilities during the first quarter of 1997. 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 used in operating activities was $296,000 for the three months
ended March 31, 1997, as compared to net cash provided by operating
activities of $851,000 for the three months ended March 31, 1996. In
addition, the Company made $1,681,000 in capital expenditures for the
first quarter of 1997, compared to $1,691,000 for the same quarter a year
ago.
In addition to the above capital expenditures, the Company currently plans
to undertake major modernization and expansion projects at the Arkansas
and Texas facilities. The Company has for some time considered
constructing a new kiln at the Arkansas plant. As part of this process, a
new plant-wide permit was obtained in order to be in position to build the
new kiln. Recent firm bid proposals indicate that the current costs of the
new kiln have increased substantially from the preliminary cost estimates
supplied from the vendors. Because of this change, management believes it
is now necessary to again review in detail the various kiln processing
systems that can be employed at Arkansas. In addition, the crushing,
handling, loadout, and storage facilities at Arkansas will be evaluated in
order to develop a comprehensive modernization and expansion plan for this
facility.
The Company has decided to move ahead with the Texas modernization and
expansion project at this time. The Texas plans are a result of a thorough
study of both the projected replacement horizon of the existing equipment
and certain current inefficiencies of the plant. The plans include the
installation of a new stone crushing and stone handling system, the
addition of a pre-heater to one of the existing kilns, additional storage,
screening and shipping capacity, and a new support building which will
house a laboratory and administrative and shop facilities.
The planned Texas improvements will allow the Company to better serve its
customers by improving both quality and service. With the improvements,
the Company will be in a position to compete for customers who currently
cannot use the Company's lime in their processes. The additional storage
will improve both kiln utilization and the plant's ability to meet peek
customer demand. The storage and load-out facilities will also
substantially reduce the amount of time required for the loading of bulk
quicklime trucks. The pre-heater addition to a current kiln will reduce
fuel consumption and will also increase the plant's quicklime capacity by
approximately 25%. These improvements will result in lower operating costs
and in more efficient utilization of the work force. The cost of the Texas
modernization and expansion project is currently expected to be
approximately $20,000,000. The project is subject to obtaining various
permits. This project will be financed from a combination of internally
generated funds and banking facilities.
On April 22, 1997, the Company entered into a definitive agreement to sell
substantially all of the assets of Corson Lime Company to Highway
Materials, Inc. Highway Materials is a construction materials company
affiliated with the DePaul Group of Blue Bell, Pennsylvania. Highway
Materials has been a long-time user of Corson's products. The Corson sale
is currently expected to close before the end of June, 1997.
6
<PAGE> 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS
Revenues decreased from $8,523,000 in the first quarter of 1996 to
$7,808,000 in the first quarter of 1997, a decrease of $715,000 or 8.4%.
This resulted from a 8.9% decrease in sales volume and a 0.5% increase in
prices.
The Company's gross profit was $595,000 in the first quarter of 1997,
compared to $1,810,000 in the first quarter of 1996, a 67.1% decrease.
Gross profit margin for the first quarter of 1996 decreased to 7.6%, from
21.2% in 1996. The lower gross profit and gross profit margins were
attributed to decreased shipments and production volumes as a result of
poor weather in the first quarter and continued operating and productivity
problems at the Corson plant.
Selling, general and administrative expenses (SG&A) increased less than 1%
to $1,116,000 in the first quarter of 1997, compared to $1,105,000 in the
first quarter of 1996. As a percent of revenues, SG&A increased from 13.0%
to 14.3%, primarily as a result of lower sales in the first quarter of
1997.
Other, net decreased by $15,000 in the first quarter of 1997, compared to
the first quarter of 1996.
Interest expense decreased by $1,000 in the first quarter of 1997,
compared to the first quarter of 1996.
The Company reported net loss of $488,000 or 12 cents per share during the
first quarter of 1997, compared to net income of $503,000 or 13 cents per
share during the first quarter of 1996.
7
<PAGE> 8
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 March 31, 1997.
8
<PAGE> 9
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.
May 2, 1997 By: /s/ Robert F. Kizer
---------------------
Robert F. Kizer
President and Chief Executive Officer
May 2, 1997 By: /s/ Timothy W. Byrne
----------------------
Timothy W. Byrne
Senior Vice President
and Chief Financial Officer
9
<PAGE> 10
UNITED STATES LIME & MINERALS, INC.
Quarterly Report on Form 10-Q
Quarter Ended
March 31, 1997
Index to Exhibits
Exhibit No. Exhibit
----------- ----------------------------------------------
11 Statement re computation of per share earnings
27 Financial Data Schedule
<PAGE> 1
Exhibit 11
STATEMENT RE COMPUTATION
OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Net income (loss) $ (488,000) 503,000
============== =========
Weighted average shares outstanding 3,921,853 3,846,371
============== =========
Net income (loss) per share $ (0.12) 0.13
============== =========
</TABLE>
NOTE: Outstanding stock options are excluded from the computation as the
effective dilution in earnings per share data was insignificant.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 43
<SECURITIES> 0
<RECEIVABLES> 4749
<ALLOWANCES> 0
<INVENTORY> 5284
<CURRENT-ASSETS> 10846
<PP&E> 61452
<DEPRECIATION> 42054
<TOTAL-ASSETS> 31205
<CURRENT-LIABILITIES> 5561
<BONDS> 0
0
0
<COMMON> 529
<OTHER-SE> 20050
<TOTAL-LIABILITY-AND-EQUITY> 31205
<SALES> 7808
<TOTAL-REVENUES> 7808
<CGS> 7213
<TOTAL-COSTS> 7213
<OTHER-EXPENSES> 1072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 133
<INCOME-PRETAX> (610)
<INCOME-TAX> (122)
<INCOME-CONTINUING> (488)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (488)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> 0
</TABLE>
