-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SVaW0MSXCB9bgyiA055xEgge34wkBBt3gAWMvsaRm3zyiqlCbVwPePm4/rfsGZ5M gtpyS6AwaFYwro/1imDn3A== 0000950134-00-004352.txt : 20000515 0000950134-00-004352.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950134-00-004352 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED STATES LIME & MINERALS INC CENTRAL INDEX KEY: 0000082020 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 750789226 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-04197 FILM NUMBER: 628105 BUSINESS ADDRESS: STREET 1: 12221 MERIT DRIVE SUITE 500 CITY: DALLAS STATE: TX ZIP: 75251 BUSINESS PHONE: 2149918400 MAIL ADDRESS: STREET 1: 12221 MERIT DRIVE STREET 2: SUITE 500 CITY: DALLAS STATE: TX ZIP: 75251 FORMER COMPANY: FORMER CONFORMED NAME: SCOTTISH HERITABLE INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: RANGAIRE CORP DATE OF NAME CHANGE: 19900405 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTS MANUFACTURING CO INC DATE OF NAME CHANGE: 19690311 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 2000 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, 2000 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 000-4197 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.) 13800 MONTFORT DRIVE, SUITE 330, DALLAS, TX 75240 - -------------------------------------------- -------------------- (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 April 24, 2000, 3,981,644 shares of common stock, $0.10 par value, were outstanding. 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)
MARCH 31, DECEMBER 31, 2000 1999 ------------- ------------- ASSETS Current Assets: Cash and cash equivalents $ 19,149 $ 18,021 Trade receivables, net 4,925 4,166 Inventories 4,469 4,266 Prepaid expenses and other assets 536 163 ------------- ------------- Total current assets 29,079 26,616 Property, plant and equipment, at cost: 87,340 82,511 Less accumulated depreciation and depletion (36,416) (35,381) ------------- ------------- Property, plant and equipment, net 50,924 47,130 Deferred tax asset, net 2,212 2,136 Other assets, net 1,716 1,806 ------------- ------------- Total assets $ 83,931 $ 77,688 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current installments of long-term debt and revolving credit facility $ 3,333 $ 2,500 Accounts payable 3,241 1,953 Accrued expenses 1,377 1,580 ------------- ------------- Total current liabilities 7,951 6,033 Long-term debt, excluding current installments 46,667 42,500 Other liabilities 354 358 ------------- ------------- Total liabilities 54,972 48,891 Stockholders' Equity: Common stock 529 529 Additional paid-in-capital 14,819 14,819 Retained earnings 27,538 27,376 ------------- ------------- 42,886 42,724 Less treasury stock at cost: 1,312,401 shares of common stock (13,927) (13,927) ------------- ------------- Total stockholders' equity 28,959 28,797 ------------- ------------- Total liabilities and stockholders' equity $ 83,931 $ 77,688 ============= =============
See accompanying notes to condensed consolidated financial statements. 2 3 UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of dollars, except per share data) (Unaudited)
THREE MONTHS ENDED MARCH 31, --------------------------------------------------- 2000 1999 ------------------------- ------------------------ REVENUES $ 7,686 100.0% $ 6,931 100.0% Cost of revenues: Labor and other operating expenses 4,595 59.8% 3,981 57.4% Depreciation, depletion and amortization 1,122 14.6% 1,073 15.5% ---------- ---------- ---------- ---------- 5,717 74.4% 5,054 72.9% ---------- ---------- ---------- ---------- GROSS PROFIT 1,969 25.6% 1,877 27.1% Selling, general and administrative expenses 955 12.4% 918 13.2% ---------- ---------- ---------- ---------- OPERATING PROFIT 1,014 13.2% 959 13.9% Other expenses (income): Interest expense 904 11.7% 343 4.9% Other income, net (240) (3.1%) (11) (0.0%) ---------- ---------- ---------- ---------- 664 8.6% 332 4.9% ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 350 4.6% 627 9.0% ---------- ---------- ---------- ---------- Income tax expense 88 1.2% 169 2.4% ---------- ---------- ---------- ---------- NET INCOME $ 262 3.4% $ 458 6.6% ========== ========== ========== ========== INCOME PER SHARE OF COMMON STOCK: Basic $ 0.07 $ 0.12 ========== ========== Diluted $ 0.07 $ 0.12 ========== ==========
See accompanying notes to condensed consolidated financial statements. 3 4 UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of dollars) (Unaudited)
THREE MONTHS ENDED MARCH 31, ------------------------------ 2000 1999 ------------ ------------ OPERATING ACTIVITIES: Net income $ 262 $ 458 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 1,225 1,116 Deferred income taxes (benefit) (76) 329 Loss on sale of property, plant and equipment 0 1 Current assets, net change[1] (1,334) 46 Other assets 24 (57) Current liabilities, net change[2] 1,085 (1,751) Other liabilities (5) 292 ------------ ------------ Net cash provided by operating activities $ 1,181 $ 434 INVESTING ACTIVITIES: Purchase of property, plant and equipment $ (4,953) $ (1,607) Proceeds from sale of property, plant and equipment 0 60 ------------ ------------ Net cash used in investing activities $ (4,953) $ (1,547) FINANCING ACTIVITIES: Payment of common stock dividends $ (100) $ (99) Proceeds from borrowings on term loan 5,000 -- Principal payments on term loan -- (661) Proceeds from borrowing on revolving credit facility -- 2,000 ------------ ------------ Net cash provided by financing activities $ 4,900 $ 1,240 ------------ ------------ Net increase in cash 1,128 127 Cash at beginning of period 18,021 688 ------------ ------------ Cash at end of period $ 19,149 $ 815 ============ ============ Supplemental cash flow information: Interest paid $ 904 $ 347 ============ ============ Income taxes paid $ 395 $ -- ============ ============
[1] Exclusive of net change in cash [2] Exclusive of net change in current portion of debt See accompanying notes to condensed consolidated financial statements. 4 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, 1999. The results of operations for the three-month period ended March 31, 2000 are not necessarily indicative of operating results for the full year. 2. Inventories
Inventories consisted of the following at: (In thousands of dollars) MARCH 31, DECEMBER 31, 2000 1999 ------------ ------------ Lime and limestone inventories: Raw materials $ 1,641 $ 1,499 Finished goods 992 955 ------------ ------------ 2,563 2,454 Service parts 1,836 1,812 ------------ ------------ Total inventories $ 4,469 $ 4,266 ============ ============
3. Long-Term Debt On April 22, 1999, the Company entered into a new credit agreement with a consortium of commercial banks for a $50,000,000 Senior Secured Term Loan (the "Loan"). The Loan is repayable over a period of approximately 8 years, maturing on March 30, 2007, and requires monthly principal payments of $277,777.78 beginning April 30, 2000, with a final principal payment of $26,944,444.26 on March 30, 2007, which equates to a 15-year amortization. The Company agreed to pay a fee equivalent to 2-1/2% of the Loan value to the placement agent. The fee due on the first $30,000,000 advanced was paid on closing, and the fee due on the remaining $20,000,000 was paid in September 1999 when the first installment of this portion was funded. Upon execution of the Loan agreement, the first $30,000,000 was advanced, of which approximately $20,000,000 was used to retire all existing bank loans, with the balance to be used primarily for the modernization and expansion of the Arkansas operations. Under the terms of the Loan agreement, the remaining $20,000,000 of the Loan facility was drawn down in four equal quarterly installments beginning June 30, 1999, and ending March 30, 2000, and will be used 5 6 exclusively for the Arkansas project. Commencement of the draw down of the quarterly installments was conditional upon the Company receiving an operating air permit for the first phase of the Arkansas project by December 31, 1999. In September 1999, the Company received an operating air permit for the first phase of the modernization and expansion of its Arkansas plant, and immediately placed construction orders. As a consequence of receiving this permit, during September the Company drew down a further $10,000,000, making a total of $40,000,000 advanced under the terms of the Loan. The final two installments of $5,000,000 each were drawn down on December 30, 1999 and March 30, 2000. As of April 22, 1999, the Company also entered into a second amendment of its amended and restated loan and security agreement with the lead bank that provides for a $4,000,000 revolving credit facility. This agreement contained essentially the same terms as the previous agreement and had a maturity date of April 21, 2000. The Company has renewed this agreement, which now expires May 31, 2001. The Loan is secured by a first lien on substantially all of the Company's assets, with the exception of accounts receivable and inventories that have been used to secure the amended $4,000,000 revolving credit facility. The interest rate on the first $30,000,000 of the Loan is 8.75%. In addition to the fixed interest rate, there is a servicing fee of 0.125% of the outstanding principal balance due to the administrative agent. Subsequent installments bear a fixed rate of interest at the date they are funded at 3.52% above the secondary market yield of the United States Treasury obligation maturing May 15, 2005. On September 24, 1999, the Company drew down $5,000,000, bearing an interest rate of 9.54%. On September 30, 1999, the Company drew down a further $5,000,000, bearing an interest rate of 9.35%. On December 30, 1999, the Company drew down another $5,000,000, bearing an interest rate of 9.94%. On March 30, 2000, the Company drew down the final $5,000,000, bearing an interest rate of 10.02%. The revolving credit facility bears interest at LIBOR plus 1.40%, which rate will increase in accordance with a defined rate spread based upon the Company's then-current ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (EBITDA). The Loan agreement contains covenants that restrict the incurrence of debt, guaranties and liens, and places certain restrictions on the payment of dividends and the sale of significant assets. The Company is also required to meet minimum debt service coverage ratios on an on-going basis and maintain a minimum level of tangible net worth. A summary of outstanding debt at the dates indicated is as follows: (In thousands of dollars)
MARCH 31, DECEMBER 31, 2000 1999 ------------- ------------- Term loan $ 50,000 $ 45,000 Revolving credit facility -- -- ------------- ------------- Subtotal 50,000 45,000 Less current installments and revolving credit facility 3,333 2,500 ------------- ------------- Long-term debt, excluding current installments and revolving credit facility $ 46,667 $ 42,500 ============= =============
The carrying amount of the Company's long-term debt approximates its fair value. 6 7 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 $1,181,000 for the three months ended March 31, 2000, as compared to $434,000 for the three months ended March 31, 1999. The increase in cash provided by operating activities was primarily attributable to the increase in accounts payable due in the first quarter of 2000, as compared to the first quarter of 1999. The Company invested $4,953,000 in capital expenditures in the first three months of 2000, compared to $1,607,000 in the same period last year. Capital expenditures of approximately $4,181,000 were related to the modernization and expansion project at the Arkansas facility in the first three months of 2000. The planned second production line for pulverized limestone at the Texas plant will be commenced upon issue of the required state permit, which is now anticipated in May 2000, and commissioning is anticipated during the third quarter. As currently planned, the Arkansas modernization and expansion project will be completed in two phases: Phase I covers the redevelopment of the quarry plant, rebuilding of the railroad, establishment of an out-of-state terminal, and installation of a rotary kiln with a preheater, along with increased product storage and loading capacity. Construction is well underway, and the Company anticipates producing lime from the new plant during the third quarter of 2000. At March 31, 2000, the Company had cash or cash equivalents totaling $19,149,000, compared with $18,021,000 at December 31,1999. The Company took the final $5,000,000 drawdown on its $50,000,000 Senior Secured Term Loan (the "Loan") on March 30, 2000. Phase II of the Arkansas project would further expand the plant capacity through the installation of a second kiln with additional storage capacity. Although the Company could determine to defer Phase II depending upon such factors as securing satisfactory permits, market demand and the availability of financing, it currently plans to complete Phase II in the first half of 2001. The Arkansas improvements should allow the Company to better serve its customers by improving both quality and service while increasing the production capacity of quicklime and hydrated lime. With the improvements, the Company expects to be in a better position to compete for customers who currently cannot use the Company's lime in their processes due to insufficient production capacity at the plant or quality constraints. The rotary kiln will have lower operating costs and a greater capacity than the six shaft kilns currently in use. In addition to increasing capacity, this kiln will also be able to consistently produce high-quality lime for use by certain manufacturing customers who currently do not buy lime from the Arkansas facility. The storage, screening, and load-out facilities will also substantially reduce the amount of time required for the loading of bulk quicklime trucks and railcars. The planned modernization and expansion project will increase both production and shipping capacity, will lower operating costs, and will allow for a more efficient utilization of the work force. Phase I of the Arkansas project is currently projected to cost approximately $25,500,000. If Phase II proceeds on schedule, it is currently estimated to cost approximately $9,500,000. The Company intends to finance the Arkansas project through a combination of internally generated funds and bank 7 8 borrowings. There can be no assurance that sufficient funds will be available to the Company to complete Phase II of the Arkansas project as currently contemplated. The Company is not contractually committed to any planned capital expenditures until actual orders are placed for equipment. As of March 31, 2000, the Company had approximately $10,000,000 of liability for open equipment and construction orders. All future billings related to the Arkansas project will be recorded as work is performed and billed to the Company. As of March 31, 2000, the Company had $50,000,000 in total debt outstanding, up from the $45,000,000 at December 31, 1999. The additional borrowing in March 2000 was the final $5,000,000 drawdown under the Loan agreement, which will be used to fund the Arkansas modernization and expansion project. RESULTS OF OPERATIONS Revenues increased from $6,931,000 in the first quarter of 1999 to $7,686,000 in the first quarter of 2000, an increase of $755,000, or 10.9%. This resulted from a 6.6% increase in sales volume and a 4.3% increase in prices. Demand remained strong in both the Texas and Arkansas markets relative to the winter quarter. Sales prices continue to be firm. The Company's gross profit was $1,969,000 for the first quarter of 2000, compared to $1,877,000 for the first quarter of 1999, a 4.9% increase. Gross profit margin as a percentage of revenues for the first quarter of 2000 decreased to 25.6% from 27.1% in 1999. The gross profit margin was negatively impacted by an extensive planned maintenance outage on the largest kiln at our Texas operation, in order to maximize availability during the peak summer months. Increased fuel costs, particularly natural gas, also contributed to the decline in gross profit margin. The Company is taking steps to mitigate the effects of increased fuel costs, particularly natural gas, at the Texas plant where the recently completed modernization project now enables various fuels to be utilized or blended. Selling, general and administrative expenses ("SG&A") increased by $37,000, or 4.0%, to $955,000 in the first quarter of 2000, as compared to $918,000 in the first quarter of 1999. However, as a percentage of sales, SG&A decreased to 12.4% as compared to 13.2% in the first quarter a year ago. The primary reason for the increase is the SG&A cost associated with the Colorado Lime Company operations in Salida, Colorado, which the Company acquired in June 1999. Interest expense in the first quarter of 2000 was $904,000 net, after $200,000 had been capitalized as part of the Arkansas project costs, as compared to $343,000 in 1999. The increase in interest was attributable to the increased debt incurred to finance the project at Arkansas Lime Company. Other income increased by $229,000 to $240,000 in the first quarter of 2000, as compared to $11,000 in the first quarter of 1999. The increase was attributable to interest income received on funds held in escrow to finance the redevelopment of the Company's Arkansas operations. The Company reported net income of $262,000 ($0.07 per share) during the first quarter of 2000, compared to net income of $458,000 ($0.12 per share) during the first quarter of 1999. EBITDA (earnings before interest, taxes, depreciation and amortization) was $2,479,000 for the first quarter of 2000, an increase of 18.8% from first quarter 1999 EBITDA of $2,086,000. 8 9 FORWARD-LOOKING STATEMENTS. Any statements contained in this Quarterly Report that are not statements of historical fact are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this Report, 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." The Company undertakes no obligation to publicly update or revise any forward-looking statements. Investors are cautioned that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth and modernization; and (iii) other risks and uncertainties, including without limitation, those risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the fiscal year ended December 31, 1999. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not Applicable. 9 10 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, 2000. 10 11 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 10, 2000 By: /s/ Herbert G.A. Wilson ------------------------------------ Herbert G.A. Wilson President and Chief Executive Officer (Principal Executive Officer) May 10, 2000 By: /s/ Larry T. Ohms ------------------------------------ Larry T. Ohms Vice President of Finance, Corporate Controller and Secretary (Principal Financial and Accounting Officer) 11 12 UNITED STATES LIME & MINERALS, INC. Quarterly Report on Form 10-Q Quarter Ended March 31, 2000 Index to Exhibits Exhibit No. Exhibit - ---------- ---------------------------------------------- 11 Statement re computation of per share earnings 27 Financial Data Schedule EX-11 2 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED MARCH 31, ---------------------------- 2000 1999 ------------- ------------- Numerator: Net income for basic and diluted earnings per share $ 262,000 $ 458,000 ------------- ------------- Denominator: Denominator for basic earnings per common share - weighted-average shares 3,981,664 3,977,189 Effect of dilutive securities: Employee stock options -- 2,310 ------------- ------------- Denominator for diluted earnings per common share - weighted-average shares 3,981,664 3,979,499 ============= ============= Basic earnings per common share $ 0.07 $ 0.12 ============= ============= Diluted earnings per common share $ 0.07 $ 0.12 ============= =============
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 19,149 0 4,925 0 4,469 29,079 87,340 (36,416) 83,391 7,951 0 0 0 529 28,430 83,391 7,686 7,686 5,717 5,717 715 0 904 350 88 262 0 0 0 262 0.07 0.07
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