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EXHIBIT 99.1
[COMPANY LOGO APPEARS HERE]
UNITED STATES LIME & MINERALS, INC. -- NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: TIMOTHY W. BYRNE
(972) 991-8400
UNITED STATES LIME & MINERALS ANNOUNCES APPOINTMENT OF
TIMOTHY W. BYRNE AS PRESIDENT AND CHIEF EXECUTIVE OFFICER
AND PRICING OF RIGHTS OFFERING
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Dallas, Texas, December 27, 2000 -- United States Lime and Minerals,
Inc. (NASDAQ: USLM) announced today that the Board of Directors has accepted the
resignation of Herbert G.A. Wilson as President, Chief Executive Officer, and
Director effective December 8, 2000, and has appointed Timothy W. Byrne as
President and CEO effective that date. Mr. Byrne has been a member of the
Company's Board since 1991. Additionally, Mr. Byrne served as the Company's
President and CEO during 1997 and 1998, and as the Company's Chief Financial
Officer prior to 1997.
"The Board of Directors is very pleased to have Tim return to take
charge of the Company's management at this critical time in the Company's growth
and development. The Company will benefit from his experience, management
expertise, leadership, and long history with the Company," said Edward A.
Odishaw, Chairman of the Board of Directors. "He has had a track record of
success with the Company, and he is the right person to take charge of the
Company at this time," added Mr. Odishaw.
Recently, the Company announced plans to make a rights offering to its
existing shareholders to raise $10 million to partially finance the construction
of a second kiln as part of Phase II of its continuing modernization and
expansion project at Arkansas Lime and to provide additional working capital.
The Company had also reported that it had determined to seek an additional $7
million term loan to provide the remaining funds necessary to finance the
expected $12 million capital cost of building the second kiln and related
storage and infrastructure.
The Company announced today that it intends to proceed with the rights
offering shortly, but that it does not expect to use any of the proceeds of the
offering for the construction of Phase II at this time. "We are still planning
to build the second kiln, and are excited about the project. We believe that
Phase II will bring even more operating efficiencies to Arkansas, which will
improve our cash flow and operating profits," said Mr. Byrne. "Until we firm up
a starting date
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for construction of Phase II, we are also deferring our plans to formalize the
additional $7 million term loan, which we had intended to dedicate to the
project," added Mr. Byrne.
Proceeds of the $10 million rights offering will be used for working
capital and to repay all or a portion of the Company's $4 million revolver,
which the Company has fully drawn down. Proceeds will also be used to repay a $5
million short-term bridge loan that the Company has secured, under normal
commercial terms, from its majority shareholder, Inberdon Enterprises Ltd.
("Inberdon"). The bridge loan was necessitated because of a further $4 million
increase in the capital costs of Phase I, a $0.5 million increase in the capital
costs of the new pulverized limestone production line in Texas, and lower than
expected cash flow and operating profits generated during the second half of
2000. "The Company's operating results have continued to suffer during the
fourth quarter of 2000 from inclement weather, higher fuel costs (natural gas),
and high costs at Arkansas due to the delay in completion of the construction of
the new kiln, which necessitated the continuing operation of the old kilns using
expensive natural gas as a fuel," Mr. Odishaw said. "While the fourth quarter is
not over yet, we currently expect a loss for the quarter and expect to break
even for the year."
The Company also announced that the shares offered under the rights
offering to existing shareholders will be priced at $5.50 per share. "We are
pleased that Inberdon has confidence in the Company as demonstrated by its
indication that it will subscribe for its full pro-rata amount, and that it will
purchase additional shares, not subscribed for by other shareholders, for a
total investment of at least $8 million and possibly up to $10 million through
the rights offering," reported Mr. Byrne. The Board of Directors made a
determination to set the price at $5.50 based on the historical trading prices
of the Common Stock, the current book value per share of the Company, and
Inberdon's willingness to pay a higher-than-market price.
"The Company has, over the past few years, made large investments in
modernizing and expanding its facilities, and the Company's goal now is to
realize an appropriate return on these large capital investments," commented Mr.
Byrne. "The new kiln in Phase I of the Arkansas project began producing lime on
October 22, which is of excellent quality and has been well received by our
customers. Currently, our lime is being tested by a number of new customers that
we previously could not serve because of the quality of the lime produced by our
retired vertical kilns. Additionally, the new kiln has successfully achieved
design volumes in excess of 600 tons per day on a consistent basis as warranted
by the manufacturer," stated Mr. Byrne.
Mr. Odishaw added that "demand for the Company's products remains
strong, and that management under Tim's leadership is committed to build on the
new facilities and to develop strategies to improve the Company's cash flow and
operating profits. Tim is faced with the challenge to further improve operating
efficiencies at both the Arkansas and Texas plants at the same time as
increasing the Company's market share to take full advantage of its increased
production capacity. Management also has to strengthen the Company's excellent
and growing customer base, which exists in the economically robust geographic
region that includes Texas, Oklahoma, Arkansas and Louisiana. In working towards
these goals, Tim and the rest of the
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management team will have to review all of the Company's current operations,
capital programs, and strategic marketing plans."
The Company estimates that total capital expenditures for Phase I of
the Arkansas project will be approximately $34 million ($4 million more than
previously estimated). The current estimate of $34 million includes
approximately $1.8 million of costs associated with the pre-building of certain
facilities for Phase II of the Arkansas project and the purchase of, but not all
of the improvements to, the terminal in Shreveport, Louisiana. This estimate is
subject to final completion of some of the material handling infrastructure in
Phase I, as well as a satisfactory resolution of various outstanding matters
with vendors and contractors.
Final completion of the new facilities in Texas and Arkansas will
enable the Company to improve the quality of its products, to increase the
efficiency of its production, and to begin to realize the full benefits of its
investments. With the completion of the modernization and expansion of both the
Texas and Arkansas plants, the Company will have two extremely efficient and
low-cost producing facilities. "The Company has been reducing its reliance on
natural gas in its lime production facilities, and now the primary fuel for lime
production at both plants will be petroleum coke and coal rather than natural
gas, which currently is priced at record highs," stated Mr. Byrne.
United States Lime and Minerals, Inc. is a Nasdaq-listed public company
with headquarters in Dallas, Texas, supplying lime and limestone products
primarily to the steel, paper, agriculture, environmental protection, and
construction industries from its plants situated in Texas, Arkansas, and
Colorado.
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements in this press release, including without limitation, statements
relating to the Company's plans, strategies, objectives, expectations,
intentions, and adequacy of resources, are identified by such words as "will,"
"could," "should," "believe," "expect," "intend," "plan," "schedule,"
"estimate," and "project." We undertake no obligation to publicly update or
revise any forward-looking statements. These statements are based on
management's current expectations and are subject to uncertainty and changes in
circumstances. There are various factors that could cause actual results to
differ materially from those expected or anticipated as stated herein. Those
factors include inclement weather, increased fuel costs, unanticipated delays or
additional cost overruns in completion of current construction projects, delay
in receiving expected proceeds from the bridge loan from Inberdon and the rights
offering, and management's achievement of stated business goals. More detailed
information about these factors and the Company's operations and modernization
and expansion program is contained in the Company's filings with the Securities
and Exchange Commission, including its registration statement for the proposed
rights offering.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR
SALE, AND SUCH OFFER MAY BE MADE ONLY BY PROSPECTUS.
