United States Lime & Minerals(USLM) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations ITEM 1: FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) | | :-------------------------------- | :----------------------------- | :------------------------------- | :------------------------ | | ASSETS | | | | | Cash and cash equivalents | $319,910 | $278,031 | +$41,879 | | Total current assets | $403,446 | $354,782 | +$48,664 | | Property, plant, and equipment, net | $199,223 | $182,891 | +$16,332 | | Total assets | $607,422 | $543,163 | +$64,259 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | Total current liabilities | $18,548 | $16,962 | +$1,586 | | Total liabilities | $44,131 | $45,422 | -$1,291 | | Total stockholders' equity | $563,291 | $497,741 | +$65,550 | Condensed Consolidated Statements of Operations This statement reports the company's revenues, expenses, and net income over specific periods, reflecting operational performance Three Months Ended June 30 | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | YoY Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------- | | Revenues | $91,518 | $76,545 | +19.6% | | Gross profit | $41,878 | $34,822 | +20.3% | | Operating profit | $35,689 | $29,940 | +19.2% | | Net income | $30,831 | $26,057 | +18.3% | | Basic Net income per share | $1.08 | $0.91 | +18.7% | | Diluted Net income per share | $1.07 | $0.91 | +17.6% | Six Months Ended June 30 | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | YoY Change (%) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------- | | Revenues | $182,771 | $148,232 | +23.3% | | Gross profit | $88,034 | $65,429 | +34.5% | | Operating profit | $75,583 | $55,699 | +35.7% | | Net income | $64,944 | $48,496 | +33.9% | | Basic Net income per share | $2.27 | $1.70 | +33.5% | | Diluted Net income per share | $2.26 | $1.69 | +33.7% | Condensed Consolidated Statements of Stockholders' Equity This statement details changes in equity accounts, including net income, dividends, and stock-based compensation, over specific periods | Item | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | | Balances at Dec 31 | $497,741 | $393,104 | | Stock options exercised | $160 | $130 | | Stock-based compensation | $4,307 | $2,388 | | Treasury shares purchased | $(424) | $(172) | | Cash dividends paid | $(3,437) | $(2,857) | | Net income | $64,944 | $48,496 | | Balances at June 30 | $563,291 | $441,089 | Condensed Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------ | | Net cash provided by operating activities | $73,465 | $48,364 | +$25,101 | | Net cash used in investing activities | $(27,885) | $(10,928) | -$16,957 | | Net cash used in financing activities | $(3,701) | $(2,899) | -$802 | | Net increase in cash and cash equivalents | $41,879 | $34,537 | +$7,342 | | Cash and cash equivalents at end of period | $319,910 | $222,501 | +$97,409 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Basis of Presentation This note outlines the preparation principles for the unaudited financial statements, including adjustments and comparability considerations 2. Organization and Business Description This note describes the company's core business of manufacturing lime and limestone products and its operational footprint - The Company manufactures lime and limestone products, supplying construction, industrial, environmental, metals, roof shingle, agriculture, and oil and gas services industries[15] - Operations are located in Arkansas, Colorado, Louisiana, Missouri, Oklahoma, and Texas, with headquarters in Dallas, Texas[15] - The Company also holds royalty and non-operated working interests in natural gas wells in Johnson County, Texas[15] 3. Accounting Policies This note details the company's key accounting policies for revenue recognition and trade receivables - Revenue for lime and limestone operations is recognized upon shipment, with external freight billed to customers included in revenues[16] - Natural gas interests recognize revenue in the month of production and delivery[16] - Trade receivables are unsecured with fixed, short-term payment terms; credit losses are estimated based on collection probability, historical trends, and economic conditions[17] 4. Reportable Segment This note clarifies the company's single reportable segment as lime and limestone operations, with prior period disclosures recast - The Company operates as one reportable segment: lime and limestone operations, with all activities in the United States[19] - Natural gas interests no longer meet the definition of an operating segment[19] Segment Revenues and Net Income | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenues | $91,518 | $76,545 | $182,771 | $148,232 | | Net income | $30,831 | $26,057 | $64,944 | $48,496 | 5. Income and Dividends Per Share of Common Stock This note presents basic and diluted net income per share and cash dividends per share for common stock Net Income Per Common Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic net income per common share | $1.08 | $0.91 | $2.27 | $1.70 | | Diluted net income per common share | $1.07 | $0.91 | $2.26 | $1.69 | Cash Dividends Per Share | Period | 2025 Dividend Per Share | 2024 Dividend Per Share | | :-------------------------- | :---------------------- | :---------------------- | | Three Months Ended June 30 | $0.06 | $0.05 | | Six Months Ended June 30 | $0.12 | $0.10 | 6. Inventories This note details the valuation method for inventories and provides a breakdown of inventory types and their values - Inventories are valued at the lower of cost (average cost method) or net realizable value, including materials, labor, and production overhead[25] Inventories (in thousands) | Inventory Type | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Raw materials | $5,972 | $8,947 | | Finished goods | $2,387 | $3,000 | | Parts inventories | $17,236 | $15,739 | | Total Inventories | $25,595 | $27,686 | 7. Banking Facilities and Debt This note describes the company's revolving credit facility and its debt status as of the reporting date - 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 determined by the Company's Cash Flow Leverage Ratio[27] - As of June 30, 2025, the Company had no debt outstanding, with $7.4 million in letters of credit related to the Texas kiln project counting as draws against the facility[30] 8. Leases This note outlines the company's operating lease commitments, associated 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) | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $1,012 | $615 | | Six Months Ended June 30 | $1,734 | $1,118 | Future Minimum Lease Payments (in thousands) | Year | Amount | | :--- | :----- | | 2025 (remaining) | $1,175 | | 2026 | $1,537 | | 2027 | $1,043 | | 2028 | $519 | | 2029 | $184 | | Thereafter | $413 | | Total future minimum lease payments | $4,871 | | Present value of lease liabilities | $4,478 | 9. Income Taxes This note provides the estimated effective income tax rate and discusses the impact of recent tax legislation - The estimated effective income tax rate for 2025 is 20.6%, primarily due to statutory depletion[35] - The "One Big Beautiful Bill Act" is expected to reclassify current taxes payable to deferred tax liabilities but not significantly impact future effective income tax rates[36] 10. Dividends This note reports the cash dividends paid per share during the reporting period - Cash dividends of $0.06 per share were paid on June 13, 2025, and March 14, 2025, each totaling $1.7 million[37] 11. Subsequent Event This note discloses a significant event that occurred after the reporting period but before the financial statements were issued - On July 30, 2025, the Board declared a regular quarterly cash dividend of $0.06 per share, payable on September 12, 2025[38] ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial performance and condition, discussing key drivers of revenue and profit changes, liquidity, capital resources, and operational results for the periods presented Forward-Looking Statements This section cautions readers about statements regarding future events, which are subject to risks and uncertainties - The report contains forward-looking statements regarding plans, strategies, objectives, expectations, and resources, identified by words like "will," "expect," "intend," and "project"[39] - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including changes in demand, costs, regulations, and economic conditions[39] - The Company does not undertake to publicly update or revise any forward-looking statements[39] Overview This section provides a high-level summary of the company's financial performance, including revenue and gross profit trends and key strategic initiatives - Revenues increased by 19.6% in Q2 2025 and 23.3% in the first six months of 2025 compared to the prior year, driven by increased sales volumes (12.1% in Q2, 15.7% in H1) and a 7.6% increase in average selling prices[41] - Increased demand from construction, environmental, and steel customers primarily drove the sales volume growth[41] - Gross profit increased by 20.3% in Q2 2025 and 34.5% in the first six months of 2025, primarily due to higher revenues[42] - Construction of a new vertical kiln at the Texas Lime Company plant began in 2024, with an estimated total cost of $65 million and completion in 2026[43] Liquidity and Capital Resources This section discusses the company's ability to generate and manage cash, including operating cash flows, capital expenditures, and available credit facilities - Net cash provided by operating activities increased by $25.1 million (51.9%) to $73.5 million in the first six months of 2025, primarily due to higher net income, depreciation, depletion, and amortization, and stock-based compensation[44] - Capital expenditures significantly increased to $28.1 million in the first six months of 2025 from $11.2 million in 2024, including $14.1 million for the Texas kiln project[45] - Cash and cash equivalents increased by $41.9 million to $319.9 million at June 30, 2025[46] - The Company has a $75 million revolving credit facility with no outstanding debt as of June 30, 2025, apart from $7.4 million in letters of credit for the Texas kiln project[51] - Management believes current cash and operating cash flows will be sufficient to meet operating, capital, and liquidity needs, including dividends, in the near future[51] Results of Operations This section analyzes the company's financial results, detailing changes in revenues, expenses, and net income for the reporting periods Key Financial Performance (YoY Changes) | Metric | Q2 2025 vs Q2 2024 | H1 2025 vs H1 2024 | | :-------------------------------- | :----------------- | :----------------- | | Revenues | +19.6% ($15.0M) | +23.3% ($34.5M) | | Gross profit | +20.3% ($7.1M) | +34.5% ($22.6M) | | Selling, general, and administrative expenses | +26.8% ($1.3M) | +28.0% ($2.7M) | | Other (income) expense, net | +$0.3M | +$0.9M | | Income tax expense | +$1.3M | +$4.3M | | Net income | +18.3% ($4.8M) | +33.9% ($16.4M) | - Increases in revenues and gross profit were driven by higher sales volumes from construction, environmental, and steel customers, and increased average selling prices[52][53] - SG&A expenses increased primarily due to higher personnel expenses, including stock-based compensation[54] - Other (income) expense, net, increased due to higher interest earned on increased cash and cash equivalents balances[56] - Income tax expense increased in line with the increase in income before taxes[57] PART II. OTHER INFORMATION This section includes disclosures on controls and procedures, equity security sales, and mine safety information ITEM 4: CONTROLS AND PROCEDURES This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[60] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[61] ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section details the company's equity incentive plan and confirms no repurchases of equity securities during the quarter - The Amended and Restated 2001 Long-Term Incentive Plan allows employees and directors to pay for stock option exercises and tax withholding liabilities with cash and/or common stock[62] - There were no repurchases of equity securities in the second quarter of 2025[62] ITEM 4: MINE SAFETY DISCLOSURES This section provides information on the company's compliance with federal mine safety regulations and its commitment to workplace safety - The Company's quarries, underground mines, and plants are subject to MSHA regulation under the Federal Mine Safety and Health Act of 1977[63] - The Company aims to provide a safe workplace through employee training, open communication, adherence to safety standards, employee involvement, and accident investigation[64] - MSHA enforcement and dollar penalties for citations have significantly increased since the Mine Improvement and New Emergency Response Act of 2006[65] EXHIBIT INDEX This section lists all supplementary documents and certifications filed as part of the Form 10-Q report - The Exhibit Index includes Rule 13a-14(a)/15d-14(a) Certifications by the CEO and CFO, Section 1350 Certifications, Mine Safety Disclosures, and Interactive Data Files (Inline XBRL)[68] SIGNATURES This section contains the official certifications and signatures of the company's authorized officers for the report filing - The report is signed by Timothy W. Byrne, President and Chief Executive Officer, and Michael L. Wiedemer, Vice President and Chief Financial Officer, on July 31, 2025[72]