United States Lime & Minerals(USLM) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements, highlighting significant Q1 2025 revenue and net income growth ITEM 1: FINANCIAL STATEMENTS Details unaudited condensed consolidated financial statements, showing strong Q1 2025 revenue and net income growth Condensed Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2025 Condensed Consolidated Balance Sheets (dollars in thousands) | Item | March 31, 2025 | December 31, 2024 | Change (QoQ) | | :-------------------------------- | :------------- | :---------------- | :------------- | | Total assets | $585,255 | $543,163 | +$42,092 | | Total liabilities | $53,048 | $45,422 | +$7,626 | | Total stockholders' equity | $532,207 | $497,741 | +$34,466 | | Cash and cash equivalents | $300,634 | $278,031 | +$22,603 | | Trade receivables, net | $55,772 | $43,982 | +$11,790 | | Inventories | $27,860 | $27,686 | +$174 | | Property, plant, and equipment, net | $191,810 | $182,891 | +$8,919 | | Accounts payable | $9,233 | $8,819 | +$414 | | Accrued expenses | $14,556 | $6,541 | +$8,015 | Condensed Consolidated Statements of Operations Outlines the company's financial performance, showing revenues, expenses, and net income for Q1 2025 and Q1 2024 Condensed Consolidated Statements of Operations (dollars in thousands, except per share data) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | Change (YoY %) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------------- | | Revenues | $91,253 | $71,687 | +$19,566 | +27.3% | | Cost of revenues | $45,097 | $41,080 | +$4,017 | +9.8% | | Gross profit | $46,156 | $30,607 | +$15,549 | +50.8% | | Selling, general, and administrative expenses | $6,262 | $4,848 | +$1,414 | +29.2% | | Operating profit | $39,894 | $25,759 | +$14,135 | +54.9% | | Other (income) expense, net | $(3,091) | $(2,540) | $(551) | +21.7% | | Income before income tax expense | $42,985 | $28,299 | +$14,686 | +51.9% | | Income tax expense | $8,872 | $5,860 | +$3,012 | +51.4% | | Net income | $34,113 | $22,439 | +$11,674 | +52.0% | | Basic net income per share | $1.19 | $0.79 | +$0.40 | +50.6% | | Diluted net income per share | $1.19 | $0.78 | +$0.41 | +52.6% | Condensed Consolidated Statements of Stockholders' Equity Details changes in stockholders' equity, including common stock, retained earnings, and treasury stock, for Q1 2025 Condensed Consolidated Statements of Stockholders' Equity (dollars in thousands) | Item | Balances at Dec 31, 2024 | Stock options exercised | Stock-based compensation | Treasury shares purchased | Cash dividends paid | Net income | Balances at Mar 31, 2025 | | :------------------------ | :----------------------- | :---------------------- | :----------------------- | :------------------------ | :------------------ | :--------- | :----------------------- | | Common Stock (Shares) | 28,619,837 | 12,000 | 4,800 | (3,838) | — | — | 28,632,799 | | Common Stock (Amount) | $2,968 | $1 | $— | $— | $— | $— | $2,969 | | Additional Paid-In Capital | $40,549 | $159 | $2,336 | $— | $— | $— | $43,044 | | Retained Earnings | $515,622 | $— | $— | $— | $(1,719) | $34,113 | $548,016 | | Treasury Stock | $(61,398) | $— | $— | $(424) | $— | $— | $(61,822) | | Total | $497,741 | $160 | $2,336 | $(424) | $(1,719) | $34,113 | $532,207 | Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities for Q1 2025 and Q1 2024 Condensed Consolidated Statements of Cash Flows (dollars in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net cash provided by operating activities | $39,434 | $27,167 | +$12,267 | | Net cash used in investing activities | $(14,848) | $(6,668) | $(8,180) | | Net cash used in financing activities | $(1,983) | $(1,468) | $(515) | | Net increase in cash and cash equivalents | $22,603 | $19,031 | +$3,572 | | Cash and cash equivalents at end of period | $300,634 | $206,995 | +$93,639 | - Operating cash flow increased by 45.2% YoY, primarily driven by higher net income and stock-based compensation, partially offset by an increase in trade receivables[12][42] - Investing activities saw a significant increase in cash usage, mainly due to higher capital expenditures, including $7.8 million related to the Texas kiln project in Q1 2025[12][43] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Basis of Presentation Explains the preparation and unaudited nature of the condensed consolidated financial statements - The condensed consolidated financial statements are unaudited and prepared by management, including all necessary normal and recurring adjustments. They should be read in conjunction with the Company's Annual Report on Form 10-K for the period ended December 31, 2024[14] 2. Organization Describes the company's primary business activities and operational locations - The Company manufactures lime and limestone products for construction, industrial, environmental, metals, roof shingle, agriculture, and oil and gas services industries[15] - Operations are headquartered in Dallas, Texas, with plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri, Oklahoma, and Texas[15] - The Company also holds royalty and non-operated working interests in natural gas wells in Johnson County, Texas (Barnett Shale Formation)[15] 3. Accounting Policies Outlines key accounting principles applied, including revenue recognition and trade receivables - Revenue for lime and limestone operations is recognized upon shipment, with external freight billed to customers included in revenues and related costs in cost of revenues[16] - External freight billed to customers was $11.4 million in Q1 2025 and $11.2 million in Q1 2024[16] - Revenue for natural gas interests is recognized in the month of production and delivery[16] - Trade receivables are unsecured, with payment terms generally fixed and short-term. Credit losses are estimated based on collection probability, historical trends, and economic conditions[17] 4. Reportable Segment Identifies the company's single reportable segment: lime and limestone operations - The Company is managed as one reportable segment: lime and limestone operations. All operations are in the United States[19] - Natural gas interests do not meet the definition of an operating segment[19] - Consolidated net income is used as the measure of segment profit or loss, and segment disclosures for Q1 2024 have been recast[19] Segment Revenues and Significant Expenses (dollars in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $91,253 | $71,687 | | Fuel, energy, and transportation | $20,265 | $18,311 | | Depreciation, depletion, and amortization | $6,050 | $5,979 | | Outside services, maintenance, and supplies | $8,355 | $6,222 | | Personnel expenses, cost of revenues | $7,940 | $7,671 | | Other cost of revenues | $2,487 | $2,897 | | Selling, general, and administrative expenses | $6,262 | $4,848 | | Other (income) expense, net | $(3,091) | $(2,540) | | Income tax expense | $8,872 | $5,860 | | Net income | $34,113 | $22,439 | 5. Income and Dividends Per Share of Common Stock Details basic and diluted net income per common share and cash dividends paid Income Per Common Share (in thousands, except per share amounts) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net income for basic and diluted | $34,113 | $22,439 | | Weighted-average shares for basic | 28,623 | 28,537 | | Basic net income per common share | $1.19 | $0.79 | | Diluted net income per common share | $1.19 | $0.78 | - Cash dividends paid were $0.06 per share in Q1 2025, up from $0.05 per share in Q1 2024[24] 6. Inventories Presents the valuation method and breakdown of inventory components - Inventories are valued at the lower of cost (average cost method) or net realizable value[25] Inventories (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Lime and limestone inventories: | | | | Raw materials | $7,961 | $8,947 | | Finished goods | $3,162 | $3,000 | | Total lime and limestone | $11,123 | $11,947 | | Parts inventories | $16,737 | $15,739 | | Total inventories | $27,860 | $27,686 | 7. Banking Facilities and Debt Describes the company's credit facility and debt status as of March 31, 2025 - The Company has a $75 million revolving credit facility with Wells Fargo Bank, N.A., maturing on August 3, 2028, with an incremental $50 million accordion feature[26] - Interest rates are SOFR-based or Prime Rate-based, with margins and commitment fees determined quarterly by the Cash Flow Leverage Ratio[27] - As of March 31, 2025, the Company had no debt outstanding and no draws on the Revolving Facility, other than $6.8 million in letters of credit related to the Texas kiln project[30] - Dividends and share repurchases are permitted subject to compliance with credit agreement provisions and Cash Flow Leverage Ratio thresholds[29] 8. Leases Details operating lease arrangements, costs, and future minimum lease payments - The Company has operating leases for equipment, corporate office space, and terminal/distribution facilities, with a weighted-average remaining lease term of 4 years[31] Net Operating Lease Costs (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Operating lease costs (Cost of revenues) | $724 | $585 | | Operating lease costs (SG&A) | $85 | $76 | | Rental revenues (Revenues) | $(55) | $(122) | | Rental revenues (Other income/expense) | $(31) | $(36) | | Net operating lease costs | $723 | $503 | Future Minimum Lease Payments (in thousands) as of March 31, 2025 | Year | Amount | | :------------------------------------------------ | :----- | | 2025 (excluding Q1 2025) | $1,301 | | 2026 | $1,572 | | 2027 | $1,205 | | 2028 | $541 | | 2029 | $184 | | Thereafter | $459 | | Total future minimum lease payments | $5,262 | | Less imputed interest | $(434) | | Present value of lease liabilities | $4,828 | 9. Income Taxes Explains the estimated effective income tax rate and its primary drivers - The estimated effective income tax rate for 2025 is 20.6%, primarily below the federal statutory rate due to statutory depletion[34] 10. Dividends Reports cash dividends paid during the first quarter of 2025 - On March 14, 2025, the Company paid $1.7 million in cash dividends, or $0.06 per share[35] 11. Subsequent Event Discloses a significant event occurring after the reporting period, specifically a declared dividend - On April 30, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.06 per share, payable on June 13, 2025[36] ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's analysis of Q1 2025 financial condition and results, highlighting revenue, gross profit, and net income growth Forward-Looking Statements Discusses forward-looking statements and associated risks that could impact actual financial results - The report contains forward-looking statements regarding plans, strategies, objectives, and expectations, identified by words like "will," "expect," "intend," etc[37] - These statements involve risks and uncertainties that could cause actual results to differ materially, including changes in demand, costs, regulations, and economic conditions[37] Overview Provides a high-level summary of Q1 2025 financial performance, including revenue and gross profit drivers - Revenues increased by 27.3% in Q1 2025 compared to Q1 2024, primarily due to a 19.2% increase in sales volumes and a 7.9% increase in average selling prices[39] - Increased demand from construction and environmental customers, amplified by large ongoing construction projects, contributed to sales volume growth[39] - Gross profit increased by 50.8% in Q1 2025, mainly driven by the higher revenues[40] - Construction of a new vertical kiln at the Texas Lime Company plant began in 2024, with estimated total costs of approximately $65 million and completion in 2026[40] Liquidity and Capital Resources Assesses the company's ability to meet short-term and long-term obligations and fund operations Key Liquidity and Capital Resources Data (dollars in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | Change (YoY %) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------------- | | Net cash provided by operating activities | $39,434 | $27,167 | +$12,267 | +45.2% | | Capital expenditures | $14,900 | $6,800 | +$8,100 | +119.1% | | Net cash used in financing activities | $2,000 | $1,500 | +$500 | +33.3% | | Cash and cash equivalents (period end) | $300,634 | $206,995 | +$93,639 | +45.2% | - Capital expenditures in Q1 2025 included $7.8 million for the Texas kiln project[43] - As of March 31, 2025, $10.5 million had been incurred on the Texas kiln project, with $9.1 million paid in cash, and $28.2 million in material commitments for open purchase orders related to the project[44] - The Company believes existing cash and operating cash flows will be sufficient to meet operating, capital, and liquidity needs, including dividends, for the near future, absent a significant acquisition[48] Results of Operations Details the financial performance for Q1 2025, analyzing key revenue and expense items Key Financial Results (dollars in thousands, except per share data) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | Change (YoY %) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------------- | | Revenues | $91,300 | $71,700 | +$19,600 | +27.3% | | Gross profit | $46,200 | $30,600 | +$15,500 | +50.8% | | SG&A expenses | $6,300 | $4,800 | +$1,400 | +29.2% | | Other (income) expense, net | $3,100 (income) | $2,500 (income) | +$600 | +24.0% | | Income tax expense | $8,900 | $5,900 | +$3,000 | +50.8% | | Net income | $34,100 | $22,400 | +$11,700 | +52.0% | | Diluted EPS | $1.19 | $0.78 | +$0.41 | +52.6% | - The increase in SG&A expenses was primarily due to increased personnel expenses, including stock-based compensation[51] - The increase in other (income) expense, net, was primarily due to higher interest earned on increased cash and cash equivalents balances[52] ITEM 4: CONTROLS AND PROCEDURES Management assessed disclosure controls and procedures as effective, with no material changes to internal control over financial reporting - Disclosure controls and procedures were deemed effective as of March 31, 2025[55] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[56] PART II. OTHER INFORMATION Contains additional disclosures not covered in the financial information section ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Details unregistered equity sales, specifically shares purchased to cover tax withholding liabilities for restricted stock - In Q1 2025, the Company purchased 3,838 shares at an average price of $110.47 per share to cover tax withholding liability upon the lapse of restrictions on restricted stock[57] ITEM 4: MINE SAFETY DISCLOSURES Discloses information on mine safety, MSHA regulations, and the company's commitment to a safe workplace - The Company's quarries, underground mine, and plants are regulated by the federal Mine Safety and Health Administration (MSHA)[58] - The Company is committed to providing a safe workplace through training, communication, safety standards, employee involvement, and accident investigation[59] - MSHA has significantly increased enforcement and dollar penalties for citations since the Mine Improvement and New Emergency Response Act of 2006[60] EXHIBIT INDEX Provides a comprehensive list of all exhibits filed with the Form 10-Q, including certifications and data files Exhibit Index | Exhibit Number | Description | | :------------- | :-------------------------------------------------------------------------------- | | 31.1 | Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer. | | 31.2 | Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer. | | 32.1 | Section 1350 Certification by the Chief Executive Officer. | | 32.2 | Section 1350 Certification by the Chief Financial Officer. | | 95.1 | Mine Safety Disclosures. | | 101 | Interactive Data Files (formatted as Inline XBRL). | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | SIGNATURES Contains the required signatures for the Form 10-Q, certifying its submission by the CEO and CFO - The report was signed on May 1, 2025, by Timothy W. Byrne (President and CEO) and Michael L. Wiedemer (Vice President and CFO)[67]