10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

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 000-04197

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.)

5429 LBJ Freeway, Suite 230, Dallas, TX	75240
(Address of principal executive offices)	(Zip Code)

(972) 991-8400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.10 par value	USLM	The Nasdaq Stock Market LLC

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 ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer ☒
Non-accelerated filer	☐	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: As of July 28, 2021, 5,658,481 shares of common stock, $0.10 par value, were outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

(Unaudited)

	June 30,		December 31,
	2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	91,347	$	83,562
Trade receivables, net		27,547		22,979
Inventories, net		14,623		15,210
Prepaid expenses and other current assets		1,800		2,245
Total current assets		135,317		123,996
Property, plant and equipment		402,012		388,200
Less accumulated depreciation and depletion		(242,476)		(235,739)
Property, plant and equipment, net		159,536		152,461
Operating lease right-of-use assets		1,713		2,226
Other assets, net		546		415
Total assets	$	297,112	$	279,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,309	$	4,592
Current portion of operating lease liabilities		914		1,187
Accrued expenses		4,382		5,809
Total current liabilities		10,605		11,588
Deferred tax liabilities, net		23,300		21,531
Operating lease liabilities, excluding current portion		813		1,030
Other liabilities		1,781		1,757
Total liabilities		36,499		35,906
Stockholders’ equity
Common stock		667		666
Additional paid-in capital		30,657		29,457
Accumulated other comprehensive income		—		—
Retained earnings		284,501		268,186
Less treasury stock, at cost		(55,212)		(55,117)
Total stockholders’ equity		260,613		243,192
Total liabilities and stockholders’ equity	$	297,112	$	279,098

See accompanying notes to condensed consolidated financial statements.

2

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Revenues	$	49,162	100.0	%	$	37,547	100.0	%	$	90,836	100.0	%	$	75,987	100.0	%
Cost of revenues
Labor and other operating expenses		27,200	55.3	%		22,447	59.8	%		51,793	57.0	%		46,409	61.1	%
Depreciation, depletion and amortization		5,167	10.5	%		4,743	12.6	%		10,443	11.5	%		9,344	12.3	%
		32,367	65.8	%		27,190	72.4	%		62,236	68.5	%		55,753	73.4	%
Gross profit		16,795	34.2	%		10,357	27.6	%		28,600	31.5	%		20,234	26.6	%
Selling, general and administrative expenses		2,957	6.0	%		2,881	7.7	%		6,024	6.6	%		6,100	8.0	%
Operating profit		13,838	28.2	%		7,476	19.9	%		22,576	24.9	%		14,134	18.6	%
Other expense (income)
Interest expense		62	0.2	%		62	0.2	%		124	0.1	%		124	0.2	%
Interest and other income, net		(91)	(0.2)	%		(104)	(0.3)	%		(125)	(0.1)	%		(351)	(0.5)	%
		(29)	(0.0)	%		(42)	(0.1)	%		(1)	(0.0)	%		(227)	(0.3)	%
Income before income tax expense		13,867	28.2	%		7,518	20.0	%		22,577	24.9	%		14,361	18.9	%
Income tax expense		2,774	5.6	%		1,417	3.8	%		4,453	4.9	%		2,716	3.6	%
Net income	$	11,093	22.6	%	$	6,101	16.2	%	$	18,124	20.0	%	$	11,645	15.3	%
Net income per share of common stock
Basic	$	1.96			$	1.08			$	3.21			$	2.07
Diluted	$	1.96			$	1.08			$	3.20			$	2.07

See accompanying notes to condensed consolidated financial statements.

3

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	11,093	$	6,101	$	18,124	$	11,645
Other comprehensive income
Mark to market of foreign exchange hedges, net of tax expense of $2 and $0 for the three and six months ended June 30, 2020, respectively.		—		7		—		1
Total other comprehensive income		—		7		—		1
Comprehensive income	$	11,093	$	6,108	$	18,124	$	11,646

See accompanying notes to condensed consolidated financial statements.

4

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(dollars in thousands)

(Unaudited)

						Accumulated
	Common Stock			Additional		Other
	Shares			Paid-In		Comprehensive		Retained		Treasury
	Outstanding	Amount		Capital		Income		Earnings		Stock		Total
Balances at December 31, 2020	5,648,084	$	666	$	29,457	$	—	$	268,186	$	(55,117)	$	243,192
Stock options exercised	3,310		—		—		—		—		—		—
Stock-based compensation	2,685		1		546		—		—		—		547
Treasury shares purchased	(743)		—		—		—		—		(95)		(95)
Cash dividends paid	—		—		—		—		(905)		—		(905)
Net income	—		—		—		—		7,031		—		7,031
Comprehensive income	—		—		—		—		7,031		—		7,031
Balances at March 31, 2021	5,653,336	$	667	$	30,003	$	—	$	274,312	$	(55,212)	$	249,770
Stock options exercised	2,000		—		83		—		—		—		83
Stock-based compensation	3,145		—		571		—		—		—		571
Treasury shares purchased	—		—		—		—		—		—		—
Cash dividends paid	—		—		—		—		(904)		—		(904)
Net income	—		—		—		—		11,093		—		11,093
Comprehensive income	—		—		—		—		11,093		—		11,093
Balances at June 30, 2021	5,658,481	$	667	$	30,657	$	—	$	284,501	$	(55,212)	$	260,613

						Accumulated
	Common Stock			Additional		Other
	Shares			Paid-In		Comprehensive		Retained		Treasury
	Outstanding	Amount		Capital		(Loss) Income		Earnings		Stock		Total
Balances at December 31, 2019	5,622,826	$	663	$	27,464	$	(1)	$	243,566	$	(54,560)	$	217,132
Stock options exercised	2,000		—		81		—		—		—		81
Stock-based compensation	3,063		1		378		—		—		—		379
Treasury shares purchased	(704)		—		—		—		—		(64)		(64)
Cash dividends paid	—		—		—		—		(899)		—		(899)
Net income	—		—		—		—		5,544		—		5,544
Mark to market of foreign exchange hedges, net of $2 tax benefit	—		—		—		(6)		—		—		(6)
Comprehensive (loss) income	—		—		—		(6)		5,544		—		5,538
Balances at March 31, 2020	5,627,185	$	664	$	27,923	$	(7)	$	248,211	$	(54,624)	$	222,167
Stock-based compensation	3,143		—		463		—		—		—		463
Treasury shares purchased	(2,459)		—		—		—		—		(218)		(218)
Cash dividends paid	—		—		—		—		(901)		—		(901)
Net income	—		—		—		—		6,101		—		6,101
Mark to market of foreign exchange hedges, net of $2 tax expense	—		—		—		7		—		—		7
Comprehensive income	—		—		—		7		6,101		—		6,108
Balances at June 30, 2020	5,627,869	$	664	$	28,386	$	—	$	253,411	$	(54,842)	$	227,619

See accompanying notes to condensed consolidated financial statements.

5

UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	Six Months Ended June 30,
	2021		2020
OPERATING ACTIVITIES:
Net income	$	18,124	$	11,645
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		10,575		9,453
Amortization of deferred financing costs		2		2
Deferred income taxes		1,779		2,484
(Gain) loss on disposition of property, plant and equipment		(78)		239
Stock-based compensation		1,118		842
Changes in operating assets and liabilities:
Trade receivables, net		(4,483)		1,756
Inventories, net		587		(1,034)
Prepaid expenses and other current assets		445		896
Other assets		(132)		40
Accounts payable and accrued expenses		(618)		779
Other liabilities		53		27
Net cash provided by operating activities		27,372		27,129
INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(17,776)		(10,599)
Proceeds from sale of property, plant and equipment		10		46
Net cash used in investing activities		(17,766)		(10,553)
FINANCING ACTIVITIES:
Cash dividends paid		(1,809)		(1,800)
Proceeds from exercise of stock options		83		81
Purchase of treasury shares		(95)		(282)
Net cash used in financing activities		(1,821)		(2,001)
Net increase in cash and cash equivalents		7,785		14,575
Cash and cash equivalents at beginning of period		83,562		54,260
Cash and cash equivalents at end of period	$	91,347	$	68,835

See accompanying notes to condensed consolidated financial statements.

6

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 United States Lime & Minerals, Inc. (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, comprehensive income and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. These condensed consolidated financial statements should 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, 2020. The results of operations for the three- and six-month periods ended June 30, 2021 are not necessarily indicative of operating results for the full year.

On July 1, 2020, the Company acquired 100% of the equity interest of Carthage Crushed Limestone (“Carthage”), a limestone mining and production company located in Carthage, Missouri, for $8.4 million cash. Carthage produces aggregate and pulverized limestone products that are used primarily in the agricultural, construction, roofing, and industrial industries. Carthage contributed $2.5 and $4.7 million of revenues in the three- and six-month periods ended June 30, 2021, respectively, which are included in the condensed consolidated statements of operations.

2. Organization

The Company is a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building contractors), industrial (including paper and glass manufacturers), metals (including steel producers), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers, agriculture (including poultry and cattle feed producers), and oil and gas services industries. The Company is headquartered in Dallas, Texas and operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri, Oklahoma and Texas through its wholly owned subsidiaries, Arkansas Lime Company, Colorado Lime Company, Texas Lime Company, U.S. Lime Company, U.S. Lime Company – Shreveport, U.S. Lime Company – St. Clair, ART Quarry TRS LLC (DBA Carthage Crushed Limestone) and U.S. Lime Company – Transportation. In addition, the Company, through its wholly owned subsidiary, U.S. Lime Company – O & G, LLC, has royalty and non-operated working interests in natural gas wells located in Johnson County, Texas, in the Barnett Shale Formation.

3. Accounting Policies

Revenue Recognition. The Company recognizes revenue for its lime and limestone operations when (i) a contract with the customer exists and the performance obligations are identified; (ii) the price has been established; and (iii) the performance obligations have been satisfied, which is generally upon shipment. The Company’s returns and allowances are minimal. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. External freight billed to customers included in 2021 and 2020 revenues was $8.7 million and $6.5 million, for the respective three-month periods ended June 30, and $16.5 million and $13.3 million for the respective six-month periods ended June 30, which approximates the amount of external freight included in cost of revenues. Sales taxes billed to customers are not included in revenues. For its natural gas interests, the Company recognizes revenue in the month of production and delivery.

The Company operates its lime and limestone operations within a single geographic region and derives all revenues from that segment from the sale of lime and limestone products. See Note 4 to the condensed consolidated financial statements for disaggregation of revenues by segment, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

7

Accounts Receivable. The majority of the Company’s trade receivables are unsecured. Payment terms for all trade receivables are based on the underlying purchase orders, contracts or purchase agreements. The Company estimates credit losses relating to trade receivables based on an assessment of the current and forecasted probability of collection, historical trends, economic conditions and other significant events that may impact the collectability of accounts receivables. Due to the relatively homogenous nature of its trade receivables, the Company does not believe there is any meaningful asset-specific differences within its accounts receivable portfolio that would require the portfolio to be grouped below the consolidated level for review of credit losses. Credit losses relating to trade receivables have generally been within management expectations and historical trends. Uncollected trade receivables are charged-off when identified by management to be unrecoverable. The Company maintains an allowance for credit losses to reflect currently expected estimated losses resulting from the failure of customers to make required payments. See Note 7 to the condensed consolidated financial statements.

Leases. The Company determines if an arrangement is a lease at inception. When recording operating leases, the Company records a lease liability based on the net present value of the lease payments over the lease term, using the interest rate implicit in the lease, if known, or an incremental rate on a collateralized basis over a similar term and amount to the lease, and a corresponding right-of-use asset. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, excluding current portion, on the condensed consolidated balance sheets. Lease expense is recognized over the lease term on a straight-line basis. Lease terms include options to extend the lease when it is reasonably certain the Company will exercise the option. For leases with a term of twelve months or less, the Company does not record a right-of-use asset and a lease liability and records lease expense on a straight-line basis. See Note 10 to the condensed consolidated financial statements.

4. Business Segment

The Company has identified one reportable segment based on the distinctness of the Company’s activities and products: lime and limestone operations. All operations are in the United States. In evaluating the operating results of the Company, management primarily reviews revenues, gross profit and operating profit from the lime and limestone operations. Operating profit from its lime and limestone operations includes all of the Company’s selling, general and administrative costs. The Company does not allocate interest expense and interest and other income (expense), net to its lime and limestone operations. Other revenues, gross profit and operating profit in the Company’s segment disclosures include the Company’s natural gas interests. Other identifiable assets include assets related to its natural gas interests, unallocated corporate assets and cash items.

8

The following table sets forth operating results and certain other financial data for the Company’s lime and limestone operations segment and other (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Revenues	2021		2020		2021		2020
Lime and limestone operations	$	48,742	$	37,362	$	90,098	$	75,576
Other		420		185		738		411
Total revenues	$	49,162	$	37,547	$	90,836	$	75,987
Depreciation, depletion and amortization
Lime and limestone operations	$	5,087	$	4,616	$	10,289	$	9,084
Other		147		180		286		369
Total depreciation, depletion and amortization	$	5,234	$	4,796	$	10,575	$	9,453
Gross profit (loss)
Lime and limestone operations	$	16,682	$	10,507	$	28,506	$	20,546
Other		113		(150)		94		(312)
Total gross profit	$	16,795	$	10,357	$	28,600	$	20,234
Operating profit (loss)
Lime and limestone operations	$	13,725	$	7,626	$	22,482	$	14,446
Other		113		(150)		94		(312)
Total operating profit	$	13,838	$	7,476	$	22,576	$	14,134
Identifiable assets, at period end
Lime and limestone operations	$	202,179	$	184,397	$	202,179	$	184,397
Other		94,933		74,873		94,933		74,873
Total identifiable assets	$	297,112	$	259,270	$	297,112	$	259,270
Capital expenditures
Lime and limestone operations	$	13,233	$	4,493	$	17,776	$	10,599
Other		—		—		—		—
Total capital expenditures	$	13,233	$	4,493	$	17,776	$	10,599

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5. Income Per Share of Common Stock

On April 30, 2021, the shareholders approved an increase in the Company’s number of authorized shares of common stock from 15,000,000 to 30,000,000. At June 30, 2021, the Company had 30,000,000 shares of common stock authorized and 5,658,481 shares outstanding.

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income for basic and diluted income per common share	$	11,093	$	6,101	$	18,124	$	11,645
Weighted-average shares for basic income per common share		5,657		5,629		5,654		5,627
Effect of dilutive securities:
Employee and director stock options(1)		12		8		13		9
Adjusted weighted-average shares and assumed exercises for diluted income per common share		5,669		5,637		5,667		5,636
Basic net income per common share	$	1.96	$	1.08	$	3.21	$	2.07
Diluted net income per common share	$	1.96	$	1.08	$	3.20	$	2.07

(1) Excludes 15 and 11 stock options for the three- and six-month 2020 periods, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the period.

6. Accumulated Other Comprehensive Income

The following table presents the components of comprehensive income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	11,093	$	6,101	$	18,124	$	11,645
Mark to market of foreign exchange hedges		—		9		—		1
Deferred income tax expense		—		(2)		—		—
Comprehensive income	$	11,093	$	6,108	$	18,124	$	11,646

In May 2018, to hedge against potential losses due to changes in the Euro to U.S. Dollar exchange rates, the Company entered into foreign exchange hedges with a counterparty to the foreign exchange hedges to fix the exchange rates. The last of the foreign exchange hedges expired in April 2020. The foreign exchange hedges were effective as defined under applicable accounting rules. Therefore, changes in the fair value of the foreign exchange hedges were reflected in comprehensive income.

10

7. Trade Receivables, Net

Additions, adjustments, and write-offs to the Company’s allowance for credit losses for the six months ended June 30, 2021 and 2020 were as follows (in thousands):

	June 30,
	2021		2020
Beginning balance	$	398	$	361
Additions		35		14
Adjustments for expected credit loss factors		(14)		—
Write-offs		—		—
Ending balance	$	419	$	375

8. Inventories, Net

Inventories are valued principally at the lower of cost, determined using the average cost method, or market. Costs for raw materials and finished goods include materials, labor, and production overhead. Inventories, net consisted of the following (in thousands):

	June 30,		December 31,
	2021		2020
Lime and limestone inventories:
Raw materials	$	3,398	$	4,279
Finished goods		2,752		2,866
		6,150		7,145
Service parts inventories		8,473		8,065
	$	14,623	$	15,210

9. Banking Facilities and Debt

The Company’s credit agreement with Wells Fargo Bank, N.A. (the “Lender”), as amended as of May 2, 2019 and November 21, 2019, provides for a $75 million revolving credit facility (the “Revolving Facility”) and an incremental four year accordion feature to borrow up to an additional $50 million on the same terms, subject to approval by the Lender or another lender selected by the Company. The credit agreement also provides for a $10 million letter of credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature on May 2, 2024.

Interest rates on the Revolving Facility are, at the Company’s option, LIBOR (or a replacement rate as determined by the Lender and the Company) plus a margin of 1.000% to 2.000%, or the Lender’s Prime Rate plus a margin of 0.000% to 1.000%, and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon the Company’s Cash Flow Leverage Ratio, defined as the ratio of the Company’s total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and stock-based compensation expense (“EBITDA”) for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period. Pursuant to a security agreement, dated August 25, 2004, the Revolving Facility is secured by the Company’s existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. The Company’s maximum Cash Flow Leverage Ratio is 3.50 to 1.

The Company may pay dividends so long as it remains in compliance with the provisions of the Company’s credit agreement, and it may purchase, redeem or otherwise acquire shares of its common stock so long as its pro forma Cash Flow Leverage Ratio is less than 3.00 to 1.00 and no default or event of default exists or would exist after giving effect to such stock repurchase.

11

As of June 30, 2021, the Company had no debt outstanding and no draws on the Revolving Facility other than $0.4 million of letters of credit, which count as draws against the available commitment under the Revolving Facility.

10. Leases

The Company has operating leases for the use of equipment, corporate office space, and some of its terminal and distribution facilities. The leases have remaining lease terms of 1 to 7 years, with a weighted-average remaining lease term of 2 years at June 30, 2021 and 3 years at December 31, 2020. Some operating leases include options to extend the leases for up to 5 years. The liability for the Company’s operating leases was discounted to present value using a weighted-average discount rate of 3.4% at each of June 30, 2021 and December 31, 2020. On July 12, 2021, the Company amended and extended the lease of its Dallas, Texas corporate office through November 2028.

The components of lease costs for the three and six months ended June 30, 2021 and 2020 were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2021		2020		2021		2020
Operating lease costs(1)	Cost of revenues	$	450	$	455	$	835	$	840
Operating lease costs(1)	Selling, general and administrative expenses		67		57		132		114
Rental revenues	Interest and other income, net		(20)		(8)		(41)		(35)
Net operating lease costs		$	497	$	504	$	926	$	919

(1) Includes the costs of leases with a term of 12 months or less.

As of June 30, 2021, future minimum payments under operating leases that were either non-cancelable or subject to significant penalty upon cancellation, including future minimum payments under renewal options that the Company is reasonably certain to exercise, were as follows (in thousands):

2021 (excluding the six months ended June 30, 2021)	$	599
2022		626
2023		288
2024		188
2025		36
Thereafter		54
Total future minimum lease payments		1,791
Less imputed interest		(64)
Present value of lease liabilities	$	1,727

Supplemental cash flow information pertaining to the Company’s leasing activity for the six months ended June 30, 2021 and 2020 is as follows (in thousands):

	Six Months Ended June 30,
	2021		2020
Cash payments for operating lease liabilities	$	708	$	821
Right-of-use assets obtained in exchange for operating lease obligations	$	96	$	53

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11. Income Taxes

The Company has estimated that its effective income tax rate for 2021 will be 19.7%. The primary reason for the effective income tax rate being below the federal statutory rate is due to statutory depletion, which is allowed for income tax purposes and is a permanent difference between net income for financial reporting purposes and taxable income.

12. Dividends

On June 11, 2021, the Company paid $0.9 million in cash dividends, based on a dividend of $0.16 per share of its common stock, to shareholders of record at the close of business on May 21, 2021. On March 12, 2021, the Company paid $0.9 million in cash dividends, based on a dividend of $0.16 per share of its common stock, to shareholders of record at the close of business on February 19, 2021.

13. Subsequent Event

On July 28, 2021, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share on the Company’s common stock. This dividend is payable on September 10, 2021 to shareholders of record at the close of business on August 20, 2021.

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ITEM 2:     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements. Any statements contained in this 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,” “would,” “believe,” “possible,” “potential,” “expect,” “intend,” “plan,” “schedule,” “estimate,” “anticipate” and “project.” The Company undertakes no obligation to publicly update or revise any forward-looking statements. The Company cautions 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 Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including possible acquisitions and paying dividends, and conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cyber-security incidents or ransomware attacks, utility disruptions, supply chain disruptions, labor shortages, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis at competitive prices; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects; (vii) the Company’s ability to expand its lime and limestone operations through projects and acquisitions of businesses with related or similar operations, including the Carthage acquisition, and the Company’s ability to obtain any required financing for such projects and acquisitions, to integrate the projects and acquisitions into the Company’s overall operations, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to increased competition from competitors, increasing competition for certain customer accounts, conditions in the U.S. economy, recessionary pressures in, and the impact of government policies on, particular industries, including oil and gas services, utility plants, steel, construction, and industrial, effects of governmental fiscal and budgetary constraints, including the level of highway construction and infrastructure funding, changes to tax law, legislative impasses, extended governmental shutdowns, trade wars, tariffs, economic and regulatory uncertainties under state governments and the United States Administration and Congress, Federal Reserve responses to inflationary concerns, and inability to continue to maintain or increase prices for the Company’s products, including passing through the increased costs of transportation, supplies, and services; (ix) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change, health and safety, human capital, diversity, and other environmental, social, governance, and sustainability considerations, and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; (x) estimates of reserves and remaining lives of reserves; (xi) the ongoing impact of the novel coronavirus (“COVID-19”) pandemic and current or future variants of the COVID-19 virus and governmental responses thereto, including decreased demand, lower prices, tightened labor and other markets, and increased costs, and the risk of non-compliance with health and safety protocols, social distancing and mask guidelines, and vaccination recommendations, on the Company’s financial condition, results of operations, cash flows, and competitive position; (xii) the impact of social or political unrest; (xiii) risks relating to mine safety and reclamation and remediation; and (xiv) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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Overview.

We have identified one reportable business segment based on the distinctness of our activities and products: lime and limestone operations. All of our operations are in the United States. Operating profit from our lime and limestone operations includes all of our selling, general and administrative costs. We do not allocate interest expense and interest and other income (expense), net to our lime and limestone operations.

Through our lime and limestone operations, we are a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building contractors), industrial (including paper and glass manufacturers), metals (including steel producers), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers, agriculture (including poultry and cattle feed producers), and oil and gas services industries. We are headquartered in Dallas, Texas and operate lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri, Oklahoma and Texas through our wholly owned subsidiaries, Arkansas Lime Company, Colorado Lime Company, Texas Lime Company, U.S. Lime Company, U.S. Lime Company – Shreveport, U.S. Lime Company – St. Clair, ART Quarry TRS LLC (DBA Carthage Crushed Limestone) and U.S. Lime Company – Transportation. The lime and limestone operations represent our principal business.

On July 1, 2020, we acquired Carthage Crushed Limestone (“Carthage”), a limestone mining and production company located in Carthage, Missouri, for $8.4 million cash. Carthage provides aggregate and pulverized limestone products that are used primarily in the agriculture, roofing, construction, and industrial industries. Carthage contributed $2.5 million and $4.7 to our revenues for the three- and six-month periods ended June 30, 2021, respectively.

In addition to our lime and limestone operations, we hold natural gas interests through our wholly owned subsidiary, U.S. Lime Company – O & G, LLC. The revenues, gross profit and operating profit from our natural gas interests are included in Other for our reportable segment disclosures. Assets related to our natural gas interests, unallocated corporate assets, and cash items are included in Other identified assets.

Our lime and limestone revenues increased 30.5% and 19.2% in the second quarter and first six months 2021, respectively, compared to the second quarter and first six months 2020. In the second quarter 2020, the COVID-19 pandemic and related governmental restrictions on business activities resulted in a general economic slowdown, which disproportionately impacted certain industries that purchase our products, including oil and gas services, environmental, and steel. In addition to the limestone sales by Carthage to agriculture, roofing and construction customers, noted above, the increases in our lime and limestone revenues in the second quarter and first six months 2021 resulted primarily from increased sales to our construction, steel, roofing and environmental customers. In the second quarter 2021, we also saw demand from our oil and gas services customers increase compared to the second quarter 2020. Revenues in in the second quarter and first six months 2021 were also favorably impacted by increases in the average selling prices of 2.2% and 1.8%, respectively, for our lime and limestone products.

Our lime and limestone gross profit increased 58.8% and 38.7% in the second quarter and first six months 2021, respectively, compared to the second quarter and first six months 2020. The increases in gross profit in the 2021 periods, compared to the comparable 2020 periods, resulted primarily from the increased revenues discussed above and increased operating efficiencies.

Federal, state, and local governmental restrictions in response to the COVID-19 pandemic have generally been lifted or curtailed in recent months, which has continued to reduce the impact of the pandemic on general business activities in the markets for our lime and limestone products. In the locations where we operate, normal business activities have largely resumed. With the resumption of normal business activities, we are experiencing lower availability of labor and certain supplies and services and rising costs. Additionally, new variants of COVID-19 and the possibility of new wide-spread or localized outbreaks of the virus could have a material adverse effect on our financial condition, results of operations, cash flows and competitive position.

Looking ahead, we anticipate continued challenges in the availability and costs of labor and supplies and services for a period of time, while the broader economy adjusts to its reopened status, and we will continue to monitor the evolving COVID-19 situation and adjust our operations accordingly.

At our 2021 Annual Meeting of Shareholders, our shareholders approved an increase in the number of our authorized shares of common stock from 15,000,000 to 30,000,000. Possible uses of the additional authorized shares

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include, without limitation, future stock splits, stock dividends, rights offerings, acquiring other companies, businesses or products in exchange for shares, attracting and retaining employees by the issuance of additional shares under our Amended and Restated 2001 Long-Term Incentive Plan and any future equity compensation plans, issuance of securities convertible into shares, and other transactions and corporate purposes which our Board of Directors deems to be in the best interests of us and our shareholders.

Liquidity and Capital Resources.

Net cash provided by operating activities was $27.4 million in the first six months 2021, compared to $27.1 million in the first six months 2020, an increase of $0.2 million, or 0.9%. Our net cash provided by operating activities is composed of net income, depreciation, depletion and amortization (“DD&A”), deferred income taxes, stock-based compensation, other non-cash items included in net income and changes in working capital. In the first six months 2021, net cash provided by operating activities was principally composed of $18.1 million net income, $10.6 million DD&A, $1.8 million deferred income taxes, $1.1 million stock-based compensation, and a $4.1 million decrease from changes in operating assets and liabilities. Changes in operating assets and liabilities in the first six months 2021 included an increase of $4.5 million in trade receivables, net, due primarily from increased sales in the second quarter 2021 compared to the fourth quarter 2020, a decrease of $0.6 million in inventories, and a decrease of $0.6 million in accounts payable and accrued expenses. In the first six months 2020, net cash provided by operating activities was principally composed of $11.6 million net income, $9.5 million DD&A, $2.5 million deferred income taxes, $0.8 million stock-based compensation, and a $2.5 million increase from changes in operating assets and liabilities. Changes in operating assets and liabilities in the first six months 2020 included a decrease of $1.8 million in trade receivables, net, due primarily from reduced revenues and favorable timing of collections in the second quarter, an increase of $1.0 million in inventories, and an increase of $0.8 million in accounts payable and accrued expenses, primarily from deferral of the payment of certain payroll taxes provided for under the CARES Act in the second quarter.

We had $17.8 million in capital expenditures in the first six months 2021, compared to $10.6 million in the first six months 2020. Capital expenditures in the first six months 2021 included $7.0 million of investment to develop our Love Hollow Quarry and improve the transportation infrastructure between the Love Hollow Quarry and our Arkansas Lime production facilities. Net cash used in financing activities was $1.8 million in the first six months 2021, compared to $2.0 million in the first six months 2020, consisting primarily of cash dividends paid in each period.

Cash and cash equivalents increased $7.8 million to $91.3 million at June 30, 2021, from $83.6 million at December 31, 2020.

We are not committed to any planned capital expenditures until actual orders are placed for equipment. As of June 30, 2021, we did not have any material commitments for open purchase orders.

Our credit agreement with Wells Fargo Bank, N.A. (the “Lender”), as amended as of May 2, 2019 and November 21, 2019, provides for a $75 million revolving credit facility (the “Revolving Facility”) and an incremental four-year accordion feature to borrow up to an additional $50 million on the same terms, subject to approval by the Lender or another lender selected by us. The credit agreement also provides for a $10 million letter of credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature on May 2, 2024.

Interest rates on the Revolving Facility are, at our option, LIBOR (or a replacement rate as determined by the Lender and the Company) plus a margin of 1.000% to 2.000%, or the Lender’s Prime Rate plus a margin of 0.000% to 1.000%; and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon our Cash Flow Leverage Ratio, defined as the ratio of our total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and stock-based compensation expense (“EBITDA”) for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period. Pursuant to a security agreement, dated August 25, 2004, the Revolving Facility is secured by our existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. Our maximum Cash Flow Leverage Ratio is 3.50 to 1.

We may pay dividends so long as we remain in compliance with the provisions of our credit agreement, and we may purchase, redeem or otherwise acquire shares of our common stock so long as our pro forma Cash Flow Leverage

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Ratio is less than 3.00 to 1.00 and no default or event of default exists or would exist after giving effect to such stock repurchase.

At June 30, 2021, we had no debt outstanding and no draws on the Revolving Facility other than $0.4 million of letters of credit which count as draws against the available commitment under the Revolving Facility. We believe that, absent a significant acquisition, cash on hand and cash flows from operations will be sufficient to meet our operating needs, ongoing capital needs, including current and possible future modernization, expansion, and development projects, and liquidity needs and allow us to pay regular quarterly cash dividends for the near future.

Results of Operations.

Revenues in the second quarter 2021 were $49.2 million, compared to $37.5 million in the second quarter 2020, an increase of $11.6 million, or 30.9%. For the first six months 2021, revenues were $90.8 million, compared to $76.0 million in the first six months 2020, an increase of $14.8 million, or 19.5%. Revenues from our lime and limestone operations in the second quarter 2021 increased $11.4 million, or 30.5%, to $48.7 million from $37.4 million in the second quarter 2020. For the first six months 2021, revenues from our lime and limestone operations increased $14.5 million, or 19.2%, to $90.1 million, compared to $75.6 million in the first six months 2020. The increases in lime and limestone revenues in the second quarter and first six months 2021 were primarily due to increases in sales volumes of 28.3% and 17.4%, respectively, compared to the comparable 2020 periods, principally due to increased demand from our construction, steel, roofing and environmental customers. In the second quarter 2021, we also saw demand from our oil and gas services customers increase compared to the second quarter 2020. Revenues also included $0.4 million and $0.7 million from our natural gas interests in the second quarter and first six months 2021, respectively, compared to $0.2 million and $0.4 million in the comparable 2020 periods, respectively.

Gross profit was $16.8 million and $28.6 million in the second quarter and first six months 2021, respectively, compared to $10.4 million and $20.2 million in the comparable 2020 periods, increases of $6.4 million and $8.4 million, or 62.2% and 41.3%, respectively. Gross profit from our lime and limestone operations in the second quarter and first six months 2021 was $16.7 million and $28.5 million, respectively, compared to $10.5 million and $20.5 million in the comparable 2020 periods, increases of $6.2 million, or 58.8%, and $8.0 million, or 38.7%, respectively. The increases in gross profit in the 2021 periods, compared to the comparable 2020 periods, resulted primarily from the increased revenues discussed above and increased operating efficiencies. Gross profit also included $113 thousand and $94 thousand from our natural gas interests in the second quarter and first six months 2021, respectively, compared to losses of $150 thousand and $312 thousand in the second quarter and first six months 2020, respectively.

Selling, general and administrative (“SG&A”) expenses were $3.0 million in the second quarter 2021, compared to $2.9 million in the second quarter 2020, an increase of $0.1 million, or 2.6%. SG&A expenses were $6.0 million in the first six months 2021, compared to $6.1 million in the first six months 2020, a decrease of $0.1 million, or 1.2%. Increased personnel expenses, including stock-based compensation, during the 2021 periods were offset by the higher legal expenses in the 2020 periods related to the acquisition of Carthage.

Interest expense was $62 thousand in each of the second quarters 2021 and 2020, and $124 thousand in each of the first six months 2021 and 2020. We had no outstanding debt during any of the periods. Interest and other income, net was $0.1 million in each of the second quarter and first six months 2021, compared to $0.1 million and $0.4 million, respectively, in the comparable 2020 periods.

Income tax expense was $2.8 million and $4.5 million in the second quarter and first six months 2021, respectively, compared to $1.4 million and $2.7 million, respectively, in the comparable 2020 periods. Our effective income tax rate was reduced from the federal rate primarily due to statutory depletion, which is allowed for income tax purposes and is a permanent difference between net income for financial reporting purposes and taxable income.

Our net income was $11.1 million ($1.96 per share diluted) in the second quarter 2021, compared to net income of $6.1 million ($1.08 per share diluted) in the second quarter 2020, an increase of $5.0 million, or 81.8%. Net income in the first six months 2021 was $18.1 million ($3.20 per share diluted), an increase of $6.5 million, or 55.6%, compared to net income of $11.6 million ($2.07 per share diluted) in the first six months 2020.

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ITEM 3:     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk.

We could be exposed to changes in interest rates, primarily as a result of floating interest rates on the Revolving Facility. There was no outstanding balance on the Revolving Facility subject to interest rate risk at June 30, 2021. Any future borrowings under the Revolving Facility would be subject to interest rate risk. See Note 9 of Notes to Condensed Consolidated Financial Statements.

ITEM 4:     CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures as of the end of the period covered by this Report were effective.

No change in our internal control over financial reporting occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.     OTHER INFORMATION

ITEM 2:     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Our Amended and Restated 2001 Long-Term Incentive Plan allows employees and directors to pay the exercise price for stock options and the tax withholding liability upon the lapse of restrictions on restricted stock by payment in cash and/or delivery of shares of common stock.   There were no repurchases in the second quarter 2021 pursuant to these provisions or otherwise.

ITEM 4:    MINE SAFETY DISCLOSURES

Under Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of SEC Regulation S-K, each operator of a coal or other mine is required to include disclosures regarding certain mine safety results in its periodic reports filed with the SEC. The operation of our quarries, underground mine and plants is subject to regulation by the federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977. The required information regarding certain mining safety and health matters, broken down by mining complex, for the quarter ended June 30, 2021 is presented in Exhibit 95.1 to this Report.

We believe we are responsible to employees to provide a safe and healthy workplace environment. We seek to accomplish this by: training employees in safe work practices; openly communicating with employees; following safety standards and establishing and improving safe work practices; involving employees in safety processes; and recording, reporting and investigating accidents, incidents and losses to avoid reoccurrence.

Following passage of the Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the enforcement of mining safety and health standards on all aspects of mining operations. There has also been an increase in the dollar penalties assessed for citations and orders issued in recent years.

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ITEM 6:    EXHIBITS

The Exhibit Index set forth below is incorporated by reference in response to this Item.

EXHIBIT INDEX

EXHIBIT
NUMBER	DESCRIPTION
3.1	Restated Articles of Incorporation, as Amended.
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).

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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.
July 30, 2021	By:	/s/ Timothy W. Byrne
		Timothy W. Byrne
		President and Chief Executive Officer
		(Principal Executive Officer)
July 30, 2021	By:	/s/ Michael L. Wiedemer
		Michael L. Wiedemer
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-3.1

Exhibit 3.1

RESTATED ARTICLES OF INCORPORATION

OF United States Lime & Minerals, Inc., as amended

First:

The name of this corporation is United States Lime & Minerals, Inc.

Second:

The purposes for which the corporation is organized are to mine, produce, process and sell minerals of every kind and to buy, sell, and deal in personal property, real property and services subject to Part Four of the Texas Miscellaneous Corporation Laws Act.

Third:

The street address of the registered office of the corporation is 1999 Bryan St., Ste. 900, Dallas, Texas 75201-3136, and the name of its registered agent at such address is CT Corporation System.

Fourth:

The period of duration of the corporation is perpetual.

Fifth:

The number of directors of the corporation shall be as fixed by the bylaws but shall not be less than three.

Sixth:

The aggregate number of shares which the corporation shall have authority to issue is Thirty Million Five Hundred Thousand (30,500,000) divided into: one class of Thirty Million (30,000,000) shares of Common Stock, $.10 par value each, and one class of Five Hundred Thousand (500,000) shares of Preferred Stock, $5.00 par value each, which may be divided into and issued in Series as follows:

6.1The Board of Directors is authorized, from time to time, to divide the Preferred Stock into Series, to designate each Series, to fix and determine separately for each Series any one or more of the following relative rights and preferences, and to issue shares of any Series then or previously designated, fixed and determined:

(A)   the rate of dividend;

(B)   the price at and the terms and conditions on which shares may be redeemed;

(C)   the amount payable upon shares in event of involuntary liquidation;

(D)   the amount payable upon shares in event of voluntary liquidation;

(E)   sinking fund provisions (if any) for the redemption or purchase of shares;

(F)   the terms and conditions on which shares may be converted if the shares of any Series are issued with the privilege of conversion; and

(G)   voting rights (including the number of votes per share, the matters on which the shares can vote, and the contingencies which make the voting rights effective).

6.2All shares of Common Stock shall have identical rights with each other. Except as provided in this Article Sixth, all shares of Preferred Stock shall have preferences, limitations, and relative rights identical with each other. Except as otherwise expressly provided by laws, shares of Preferred Stock shall have only the preferences and relative rights expressly stated in this Article Sixth.

6.3(a)The Preferred Stock at the time outstanding shall be entitled to receive, when and as declared by the Board of Directors, out of any funds legally available therefor, dividends at the rate fixed by the Board of Directors (pursuant to paragraph 6.1 above), and no more, payable at the date or dates fixed by the Board of Directors.

6.3(b)Dividends on Preferred Stock shall be cumulative from date of issue. Cumulations of dividends shall not bear interest.

6.3(c)No dividend shall be declared or paid on Common Stock (other than a dividend payable in common stock of the corporation), and no Common Stock shall be purchased by the corporation, unless full dividends on outstanding Preferred Stock for all past dividend periods and for the current dividend period shall have been declared and paid.

6.3(d)No dividend shall be declared on any Series of Preferred Stock: (1) for any dividend period unless all dividends cumulated for all prior dividend periods shall have been declared or shall then be declared at the same time upon all Preferred Stock then outstanding; or (2) unless a dividend for the same period shall be declared at the same time upon all Preferred Stock then outstanding in like proportion to the dividend rate then declared.

6.4In event of dissolution, liquidation, or winding up of the corporation (whether voluntary or involuntary), after payment or provision for payment of debts but before any distribution to the holders of Common Stock, the holders of each Series of Preferred Stock then outstanding shall be entitled to receive the amount fixed by the Board of Directors (pursuant to paragraph 6.1 above) plus a sum equal to all cumulated but unpaid dividends (whether or not earned or declared) to the date fixed for distribution, and no more. All remaining assets shall be distributed pro rata among the holders of Common Stock. If the assets distributable among the holders of Preferred Stock are insufficient to permit full payment to them, the entire assets shall be distributed among the holders of the Preferred Stock in proportion to their respective liquidation preferences. None of the following events is a dissolution, liquidation, or winding up within the meaning of this

paragraph: consolidation, merger, or reorganization of the corporation with any other corporation or corporations, sale of all or substantially all of the assets of the corporation, or any purchase or redemption by the corporation of any of its outstanding shares.

6.5(a)All or any part of any one or more Series of Preferred Stock may be redeemed at any time or times at the option of the corporation, by resolution of the Board of Directors, in accordance with the terms and conditions of this Article Sixth and those fixed by the Board of Directors (pursuant to paragraph 6.1 above). The corporation may redeem shares of any one or more Series without redeeming shares of any other Series. If less than all of the shares of any Series are to be redeemed, the shares of the Series to be redeemed shall be selected ratably or by lot or by any other equitable method determined by the Board of Directors.

6.5(b)Notice shall be given to the holders of shares to be redeemed, either personally or by mail, not less than twenty (20) nor more than fifty (50) days before the date fixed for redemption.

6.5(c)Redeemed shares shall be paid in cash or property or rights (including securities of this corporation or another corporation), the amount fixed by the Board of Directors (pursuant to paragraph 6.1 above) plus a sum equal to all cumulated but unpaid dividends (whether or not earned or declared) to the date fixed for redemption, and no more.

6.5(d)On or before the date fixed for redemption, the corporation may provide for payment of a sum sufficient to redeem the shares called for redemption either (1) by setting aside the sum, separate from its other funds, in trust for the benefit of the holders of the shares to be redeemed, or (2) by depositing such sum in a bank or trust company (either

one in Texas having capital and surplus of at least ten million dollars ($10,000,000) according to its latest statement of condition, or one anywhere in the United States duly appointed and acting as transfer agent of the corporation] as a trust fund, with irrevocable instructions and authority to the bank or trust company to give or complete the notice of redemption and to pay, on or after the date fixed for redemption, the redemption price on surrender of their respective share certificates. The holders may be evidenced by a list certified by the corporation (by its president or a vice president and by its secretary or an assistant secretary) or by its transfer agent. If the corporation so provides for payment, then from and after the date fixed for redemption: (a) the shares shall be deemed to be redeemed, (b) dividends thereon shall cease to accrue, (c) such setting aside or deposit shall be deemed to constitute full payment for the shares, (d) the shares shall no longer be deemed to be outstanding, (e) the holders thereof shall cease to be shareholders with respect to such shares, and (f) the holders shall have no rights with respect thereto except the right to receive (without interest) their proportionate shares of the funds so set aside or deposited upon surrender of their respective certificates, and any right to convert such shares which may exist. Any interest accrued on funds so set aside or deposited shall belong to the corporation. If the holders of the shares do not, within six (6) years after such deposit, claim any amount so deposited for redemption thereof, the bank or trust company shall upon demand pay over to the corporation the balance of the funds so deposited, and the bank or trust company shall thereupon be relieved of all responsibility to such holders.

6.5(e)Shares of Preferred Stock which are redeemed shall be cancelled and shall be restored to the status of authorized but unissued shares.

6.6Except as specified in paragraph 6.3(c) nothing herein shall limit the right of the corporation to purchase any of its outstanding shares in accordance with law, by public or private transaction.

6.7Except as fixed by the Board of Directors (pursuant to paragraph 6.1 above), and except as otherwise expressly provided by law, all voting power shall be in the Common Stock and none in the Preferred Stock. Where Preferred Stock as a class has voting power, all series of Preferred Stock shall be a single class. The affirmative vote of the holders of a majority of the outstanding shares of the Preferred Stock shall be sufficient for any action which requires the vote or concurrence of such class.

6.8No holder of any stock of the corporation shall be entitled as a matter of right to purchase or subscribe for any part of any stock of the corporation, presently authorized or of any additional stock of any class to be issued by reason of any increase of the authorized stock of the corporation or of any bonds, certificates of indebtedness, debentures or other securities convertible into stock of the corporation, but any stock presently authorized or any such additional authorized issue of new stock or of securities convertible into stock may be issued and disposed of by the Board of Directors to such persons, firms, corporations or associations for such consideration and upon such terms and in such manner as the Board of Directors may in their discretion determine without offering any thereof on the same terms or on any terms to the shareholders then of record or to any class of shareholders.

6.9The corporation shall be entitled to treat the person in whose name any share, right or option is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such share, right or option

on the part of any other person, whether or not the corporation shall have notice thereof, save as may be expressly provided by the laws of the State of Texas.

6.10A director shall be fully protected in relying in good faith upon the books of account of the corporation or statements prepared by any of its officials as to the value and amount of the assets, liabilities and/or net profits of the corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

6.11Without action by the shareholders, a share of stock may be issued by the corporation from time to time for such consideration as may be fixed from time to time by the Board of Directors thereof, and any and all such shares so issued, the full consideration for which has been paid or delivered, shall be deemed fully paid stock and not liable to any further call or assessment thereon; and the holder of such shares shall not be liable for any further call or assessment thereon, or for any other payment thereon.

Seventh:

Cumulative voting in the election of directors is prohibited.

Eighth:

The power and authority to alter, amend, repeal, or adopt Bylaws of the corporation is expressly delegated by the stockholders to the Board of Directors.

Ninth:

A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for acts or omissions in such director’s capacity as a director except for liability (i) for a breach of a director’s duty of loyalty to the Corporation or its shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct

or a knowing violation of law; (iii) for a transaction from which a director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director’s office; (iv) for acts or omissions for which liability of a director is expressly provided by statute; or (v) for an act related to an unlawful stock repurchase or payment of a dividend.

EX-31.1

EXHIBIT 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER

I, Timothy W. Byrne, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United States Lime & Minerals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 30, 2021	/s/ Timothy W. Byrne
	Timothy W. Byrne
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION BY THE CHIEF FINANCIAL OFFICER

I, Michael L. Wiedemer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United States Lime & Minerals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 30, 2021	/s/ Michael L. Wiedemer
	Michael L. Wiedemer
	Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER

I, Timothy W. Byrne, Chief Executive Officer of United States Lime & Minerals, Inc. (the “Company”), hereby certify that, to my knowledge:

(1) The Company’s periodic report on Form 10-Q for the quarterly period ended June 30, 2021 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 30, 2021	/s/ Timothy W. Byrne
	Timothy W. Byrne
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

SECTION 1350 CERTIFICATION BY THE CHIEF FINANCIAL OFFICER

I, Michael L. Wiedemer, Chief Financial Officer of United States Lime & Minerals, Inc. (the “Company”), hereby certify that, to my knowledge:

(1) The Company’s periodic report on Form 10-Q for the quarterly period ended June 30, 2021 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 30, 2021	/s/ Michael L. Wiedemer
	Michael L. Wiedemer
	Vice President and Chief Financial Officer

EX-95.1

EXHIBIT 95.1

MINE SAFETY DISCLOSURES

The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of SEC Regulation S-K, which require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).

The Mine Act has been construed as authorizing MSHA to issue citations and orders pursuant to the legal doctrine of strict liability, or liability without fault. If, in the opinion of an MSHA inspector, a condition that violates the Mine Act or regulations promulgated pursuant to it exists, then a citation or order will be issued regardless of whether the operator had any knowledge of, or fault in, the existence of that condition. Many of the Mine Act standards include one or more subjective elements, so that issuance of a citation or order often depends on the opinions or experience of the MSHA inspector involved and the frequency and severity of citations and orders will vary from inspector to inspector.

Whenever MSHA believes that a violation of the Mine Act, any health or safety standard, or any regulation has occurred, it may issue a citation or order which describes the violation and fixes a time within which the operator must abate the violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order requiring cessation of operations, or removal of miners from the area of the mine, affected by the condition until the hazards are corrected. Whenever MSHA issues a citation or order, it has authority to propose a civil penalty or fine, as a result of the violation, that the operator is ordered to pay.

The table that follows reflects citations, orders, violations and proposed assessments issued to the Company by MSHA during the quarter ended June 30, 2021 and all pending legal actions as of June 30, 2021. Due to timing and other factors, the data may not agree with the mine data retrieval system maintained by MSHA. The proposed assessments for the quarter ended June 30, 2021 were taken from the MSHA system as of July 28, 2021.

Additional information follows about MSHA references used in the table:

● Section 104(a) Citations: The total number of citations received from MSHA under section 104(a) of the Mine Act for alleged violations of health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.

● Section 104(b) Orders: The total number of orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

● Section 104(d) Citations and Orders: The total number of citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

● Section 110(b)(2) Violations: The total number of flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

● Section 107(a) Orders: The total number of orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.

Citations and orders can be contested before the Federal Mine Safety and Health Review Commission (the “Commission”), and as part of that process, are often reduced in severity and amount, and are sometimes dismissed. The Commission is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under section 105 of the Mine Act.

1

			Section
			104(d)			Proposed
	Section	Section	Citations	Section	Section	MSHA		Pending
	104 S & S	104(b)	and	110(b)(2)	107(a)	Assessments(2)		Legal
Mine(1)	Citations	Orders	Orders	Violations	Orders	($ in thousands)	Fatalities	Actions(3)
Texas Lime Company	—	—	—	—	—	—	—	—
Arkansas Lime Company
Plant	—	—	—	—	—	—	—	—
Limedale Quarry	—	—	—	—	—	—	—	—
U.S. Lime Company—St. Clair	—	—	—	—	—	0.5	—	—
Carthage Crushed Limestone	1	—	—	—	—	0.5	—	—
Colorado Lime Company
Monarch Quarry	—	—	—	—	—	—	—	—
Delta Plant	—	—	—	—	—	—	—	—

(1) The definition of a mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting and processing limestone, such as roads, land, structures, facilities, equipment, machines, tools, kilns, and other property. These other items associated with a single mine have been aggregated in the totals for that mine.

(2) The proposed MSHA assessments issued during the reporting period do not necessarily relate to the citations or orders issued by MSHA during the reporting period or to any pending contests reported above.

(3) Includes any pending legal actions before the Commission involving such mine as of June 30, 2021. Any pending legal actions were initiated by the Company. The pending legal actions may relate to the citations or orders issued by MSHA during the reporting period or to citations or orders issued in prior periods. Due to timing and other factors, the data may not agree with the mine data retrieval system maintained by MSHA. There were no legal actions resolved or instituted during the reporting period.

Pattern or Potential Pattern of Violations. During the quarter ended June 30, 2021, none of the mines operated by the Company received written notice from MSHA of either (a) a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to mine health or safety hazards under section 104(e) of the Mine Act or (b) the potential to have such a pattern.

2

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Jul. 28, 2021
Cover Abstract
Entity Registrant Name	UNITED STATES LIME & MINERALS INC
Entity Central Index Key	0000082020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	000-04197
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	75-0789226
Entity Address, Address Line One	5429 LBJ Freeway, Suite 230
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75240
City Area Code	972
Local Phone Number	991-8400
Title of 12(b) Security	Common stock, $0.10 par value
Trading Symbol	USLM
Security Exchange Name	NASDAQ
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,658,481
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 91,347	$ 83,562
Trade receivables, net	27,547	22,979
Inventories, net	14,623	15,210
Prepaid expenses and other current assets	1,800	2,245
Total current assets	135,317	123,996
Property, plant and equipment	402,012	388,200
Less accumulated depreciation and depletion	(242,476)	(235,739)
Property, plant and equipment, net	159,536	152,461
Operating lease right-of-use assets	1,713	2,226
Other assets, net	546	415
Total assets	297,112	279,098
Current liabilities:
Accounts payable	5,309	4,592
Current portion of operating lease liabilities	914	1,187
Accrued expenses	4,382	5,809
Total current liabilities	10,605	11,588
Deferred tax liabilities, net	23,300	21,531
Operating lease liabilities, excluding current portion	813	1,030
Other liabilities	1,781	1,757
Total liabilities	36,499	35,906
Stockholders' equity:
Common stock	667	666
Additional paid-in capital	30,657	29,457
Retained earnings	284,501	268,186
Less treasury stock, at cost	(55,212)	(55,117)
Total stockholders' equity	260,613	243,192
Total liabilities and stockholders' equity	$ 297,112	$ 279,098

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues
Revenues	$ 49,162	$ 37,547	$ 90,836	$ 75,987
Cost of revenues
Labor and other operating expenses	27,200	22,447	51,793	46,409
Depreciation, depletion and amortization	5,167	4,743	10,443	9,344
Total cost of revenues	32,367	27,190	62,236	55,753
Gross profit	16,795	10,357	28,600	20,234
Selling, general and administrative expenses	2,957	2,881	6,024	6,100
Operating profit	13,838	7,476	22,576	14,134
Other expense (income)
Interest expense	62	62	124	124
Interest and other income, net	(91)	(104)	(125)	(351)
Total other expense (income)	(29)	(42)	(1)	(227)
Income before income tax expense	13,867	7,518	22,577	14,361
Income tax expense	2,774	1,417	4,453	2,716
Net income	$ 11,093	$ 6,101	$ 18,124	$ 11,645
Net income per share of common stock
Basic (in dollars per share)	$ 1.96	$ 1.08	$ 3.21	$ 2.07
Diluted (in dollars per share)	$ 1.96	$ 1.08	$ 3.20	$ 2.07

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Percentage	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues
Revenues (as a percent)	100.00%	100.00%	100.00%	100.00%
Cost of revenues
Labor and other operating expenses (as a percent)	55.30%	59.80%	57.00%	61.10%
Depreciation, depletion and amortization (as a percent)	10.50%	12.60%	11.50%	12.30%
Total cost of revenues (as a percent)	65.80%	72.40%	68.50%	73.40%
Gross profit (as a percent)	34.20%	27.60%	31.50%	26.60%
Selling, general and administrative expenses (as a percent)	6.00%	7.70%	6.60%	8.00%
Operating profit (as a percent)	28.20%	19.90%	24.90%	18.60%
Other expense (income)
Interest expense (as a percent)	0.20%	0.20%	0.10%	0.20%
Interest and other income, net (as a percent)	(0.20%)	(0.30%)	(0.10%)	(0.50%)
Total other expense (income) (as a percent)	0.00%	(0.10%)	0.00%	(0.30%)
Income before income tax expense (as a percent)	28.20%	20.00%	24.90%	18.90%
Income tax expense (as a percent)	5.60%	3.80%	4.90%	3.60%
Net income (as a percent)	22.60%	16.20%	20.00%	15.30%

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 11,093	$ 6,101	$ 18,124	$ 11,645
Other comprehensive income
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively	0	7	0	1
Total other comprehensive income	0	7	0	1
Comprehensive income	$ 11,093	$ 6,108	$ 18,124	$ 11,646

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Mark to market on foreign exchange hedges, net of tax expense of $2 and $0 for the three and six months ended June 30, 2020, respectively	$ (2)	$ 2	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earnings	Treasury Stock	Total
Balances at Dec. 31, 2019	$ 663	$ 27,464	$ (1)	$ 243,566	$ (54,560)	$ 217,132
Balances (in shares) at Dec. 31, 2019	5,622,826
Increase (Decrease) in Stockholders' Equity
Stock options exercised		81				81
Stock options exercised (in shares)	2,000
Stock-based compensation	$ 1	378				379
Stock-based compensation (in shares)	3,063
Treasury shares purchased					(64)	(64)
Treasury shares purchased (in shares)	(704)
Cash dividends paid				(899)		(899)
Net income				5,544		5,544
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively			(6)			(6)
Comprehensive income			(6)	5,544		5,538
Balances at Mar. 31, 2020	$ 664	27,923	(7)	248,211	(54,624)	222,167
Balances (in shares) at Mar. 31, 2020	5,627,185
Balances at Dec. 31, 2019	$ 663	27,464	(1)	243,566	(54,560)	217,132
Balances (in shares) at Dec. 31, 2019	5,622,826
Increase (Decrease) in Stockholders' Equity
Net income						11,645
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively						1
Comprehensive income						11,646
Balances at Jun. 30, 2020	$ 664	28,386		253,411	(54,842)	227,619
Balances (in shares) at Jun. 30, 2020	5,627,869
Balances at Mar. 31, 2020	$ 664	27,923	(7)	248,211	(54,624)	222,167
Balances (in shares) at Mar. 31, 2020	5,627,185
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		463				463
Stock-based compensation (in shares)	3,143
Treasury shares purchased					(218)	(218)
Treasury shares purchased (in shares)	(2,459)
Cash dividends paid				(901)		(901)
Net income				6,101		6,101
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively			7			7
Comprehensive income			$ 7	6,101		6,108
Balances at Jun. 30, 2020	$ 664	28,386		253,411	(54,842)	227,619
Balances (in shares) at Jun. 30, 2020	5,627,869
Balances at Dec. 31, 2020	$ 666	29,457		268,186	(55,117)	243,192
Balances (in shares) at Dec. 31, 2020	5,648,084
Increase (Decrease) in Stockholders' Equity
Stock options exercised (in shares)	3,310
Stock-based compensation	$ 1	546				547
Stock-based compensation (in shares)	2,685
Treasury shares purchased					(95)	(95)
Treasury shares purchased (in shares)	(743)
Cash dividends paid				(905)		(905)
Net income				7,031		7,031
Comprehensive income				7,031		7,031
Balances at Mar. 31, 2021	$ 667	30,003		274,312	(55,212)	249,770
Balances (in shares) at Mar. 31, 2021	5,653,336
Balances at Dec. 31, 2020	$ 666	29,457		268,186	(55,117)	243,192
Balances (in shares) at Dec. 31, 2020	5,648,084
Increase (Decrease) in Stockholders' Equity
Net income						18,124
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively						0
Comprehensive income						18,124
Balances at Jun. 30, 2021	$ 667	30,657		284,501	(55,212)	260,613
Balances (in shares) at Jun. 30, 2021	5,658,481
Balances at Mar. 31, 2021	$ 667	30,003		274,312	(55,212)	249,770
Balances (in shares) at Mar. 31, 2021	5,653,336
Increase (Decrease) in Stockholders' Equity
Stock options exercised		83				83
Stock options exercised (in shares)	2,000
Stock-based compensation		571				571
Stock-based compensation (in shares)	3,145
Cash dividends paid				(904)		(904)
Net income				11,093		11,093
Mark to market of foreign exchange hedges, net of tax benefit of $2 and $0 for the three and six months ended June 30, 2020, respectively						0
Comprehensive income				11,093		11,093
Balances at Jun. 30, 2021	$ 667	$ 30,657		$ 284,501	$ (55,212)	$ 260,613
Balances (in shares) at Jun. 30, 2021	5,658,481

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Mark to market of foreign exchange hedges, tax expense (benefit)	$ 2	$ (2)	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
OPERATING ACTIVITIES:
Net income	$ 18,124	$ 11,645
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	10,575	9,453
Amortization of deferred financing costs	2	2
Deferred income taxes	1,779	2,484
(Gain) loss on disposition of property, plant and equipment	(78)	239
Stock-based compensation	1,118	842
Changes in operating assets and liabilities:
Trade receivables, net	(4,483)	1,756
Inventories, net	587	(1,034)
Prepaid expenses and other current assets	445	896
Other assets	(132)	40
Accounts payable and accrued expenses	(618)	779
Other liabilities	53	27
Net cash provided by operating activities	27,372	27,129
INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(17,776)	(10,599)
Proceeds from sale of property, plant and equipment	10	46
Net cash used in investing activities	(17,766)	(10,553)
FINANCING ACTIVITIES:
Cash dividends paid	(1,809)	(1,800)
Proceeds from exercise of stock options	83	81
Purchase of treasury shares	(95)	(282)
Net cash used in financing activities	(1,821)	(2,001)
Net increase in cash and cash equivalents	7,785	14,575
Cash and cash equivalents at beginning of period	83,562	54,260
Cash and cash equivalents at end of period	$ 91,347	$ 68,835

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Basis of Presentation

6 Months Ended

Jun. 30, 2021

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by United States Lime & Minerals, Inc. (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, comprehensive income and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. These condensed consolidated financial statements should 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, 2020. The results of operations for the three- and six-month periods ended June 30, 2021 are not necessarily indicative of operating results for the full year.

On July 1, 2020, the Company acquired 100% of the equity interest of Carthage Crushed Limestone (“Carthage”), a limestone mining and production company located in Carthage, Missouri, for $8.4 million cash. Carthage produces aggregate and pulverized limestone products that are used primarily in the agricultural, construction, roofing, and industrial industries. Carthage contributed $2.5 and $4.7 million of revenues in the three- and six-month periods ended June 30, 2021, respectively, which are included in the condensed consolidated statements of operations.

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Organization

6 Months Ended

Jun. 30, 2021

Organization

Organization

2. Organization

The Company is a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building contractors), industrial (including paper and glass manufacturers), metals (including steel producers), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers, agriculture (including poultry and cattle feed producers), and oil and gas services industries. The Company is headquartered in Dallas, Texas and operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri, Oklahoma and Texas through its wholly owned subsidiaries, Arkansas Lime Company, Colorado Lime Company, Texas Lime Company, U.S. Lime Company, U.S. Lime Company – Shreveport, U.S. Lime Company – St. Clair, ART Quarry TRS LLC (DBA Carthage Crushed Limestone) and U.S. Lime Company – Transportation. In addition, the Company, through its wholly owned subsidiary, U.S. Lime Company – O & G, LLC, has royalty and non-operated working interests in natural gas wells located in Johnson County, Texas, in the Barnett Shale Formation.

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Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies

Accounting Policies

3. Accounting Policies

Revenue Recognition. The Company recognizes revenue for its lime and limestone operations when (i) a contract with the customer exists and the performance obligations are identified; (ii) the price has been established; and (iii) the performance obligations have been satisfied, which is generally upon shipment. The Company’s returns and allowances are minimal. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. External freight billed to customers included in 2021 and 2020 revenues was $8.7 million and $6.5 million, for the respective three-month periods ended June 30, and $16.5 million and $13.3 million for the respective six-month periods ended June 30, which approximates the amount of external freight included in cost of revenues. Sales taxes billed to customers are not included in revenues. For its natural gas interests, the Company recognizes revenue in the month of production and delivery.

The Company operates its lime and limestone operations within a single geographic region and derives all revenues from that segment from the sale of lime and limestone products. See Note 4 to the condensed consolidated financial statements for disaggregation of revenues by segment, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Accounts Receivable. The majority of the Company’s trade receivables are unsecured. Payment terms for all trade receivables are based on the underlying purchase orders, contracts or purchase agreements. The Company estimates credit losses relating to trade receivables based on an assessment of the current and forecasted probability of collection, historical trends, economic conditions and other significant events that may impact the collectability of accounts receivables. Due to the relatively homogenous nature of its trade receivables, the Company does not believe there is any meaningful asset-specific differences within its accounts receivable portfolio that would require the portfolio to be grouped below the consolidated level for review of credit losses. Credit losses relating to trade receivables have generally been within management expectations and historical trends. Uncollected trade receivables are charged-off when identified by management to be unrecoverable. The Company maintains an allowance for credit losses to reflect currently expected estimated losses resulting from the failure of customers to make required payments. See Note 7 to the condensed consolidated financial statements.

Leases. The Company determines if an arrangement is a lease at inception. When recording operating leases, the Company records a lease liability based on the net present value of the lease payments over the lease term, using the interest rate implicit in the lease, if known, or an incremental rate on a collateralized basis over a similar term and amount to the lease, and a corresponding right-of-use asset. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, excluding current portion, on the condensed consolidated balance sheets. Lease expense is recognized over the lease term on a straight-line basis. Lease terms include options to extend the lease when it is reasonably certain the Company will exercise the option. For leases with a term of twelve months or less, the Company does not record a right-of-use asset and a lease liability and records lease expense on a straight-line basis. See Note 10 to the condensed consolidated financial statements.

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Business Segment

6 Months Ended

Jun. 30, 2021

Business Segment

Business Segment

4. Business Segment

The Company has identified one reportable segment based on the distinctness of the Company’s activities and products: lime and limestone operations. All operations are in the United States. In evaluating the operating results of the Company, management primarily reviews revenues, gross profit and operating profit from the lime and limestone operations. Operating profit from its lime and limestone operations includes all of the Company’s selling, general and administrative costs. The Company does not allocate interest expense and interest and other income (expense), net to its lime and limestone operations. Other revenues, gross profit and operating profit in the Company’s segment disclosures include the Company’s natural gas interests. Other identifiable assets include assets related to its natural gas interests, unallocated corporate assets and cash items.

The following table sets forth operating results and certain other financial data for the Company’s lime and limestone operations segment and other (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Revenues	2021		2020		2021		2020
Lime and limestone operations	$	48,742	$	37,362	$	90,098	$	75,576
Other		420		185		738		411
Total revenues	$	49,162	$	37,547	$	90,836	$	75,987
Depreciation, depletion and amortization
Lime and limestone operations	$	5,087	$	4,616	$	10,289	$	9,084
Other		147		180		286		369
Total depreciation, depletion and amortization	$	5,234	$	4,796	$	10,575	$	9,453
Gross profit (loss)
Lime and limestone operations	$	16,682	$	10,507	$	28,506	$	20,546
Other		113		(150)		94		(312)
Total gross profit	$	16,795	$	10,357	$	28,600	$	20,234
Operating profit (loss)
Lime and limestone operations	$	13,725	$	7,626	$	22,482	$	14,446
Other		113		(150)		94		(312)
Total operating profit	$	13,838	$	7,476	$	22,576	$	14,134
Identifiable assets, at period end
Lime and limestone operations	$	202,179	$	184,397	$	202,179	$	184,397
Other		94,933		74,873		94,933		74,873
Total identifiable assets	$	297,112	$	259,270	$	297,112	$	259,270
Capital expenditures
Lime and limestone operations	$	13,233	$	4,493	$	17,776	$	10,599
Other		—		—		—		—
Total capital expenditures	$	13,233	$	4,493	$	17,776	$	10,599

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Income Per Share of Common Stock

6 Months Ended

Jun. 30, 2021

Income Per Share of Common Stock

Income Per Share of Common Stock

5. Income Per Share of Common Stock

On April 30, 2021, the shareholders approved an increase in the Company’s number of authorized shares of common stock from 15,000,000 to 30,000,000. At June 30, 2021, the Company had 30,000,000 shares of common stock authorized and 5,658,481 shares outstanding.

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income for basic and diluted income per common share	$	11,093	$	6,101	$	18,124	$	11,645
Weighted-average shares for basic income per common share		5,657		5,629		5,654		5,627
Effect of dilutive securities:
Employee and director stock options(1)		12		8		13		9
Adjusted weighted-average shares and assumed exercises for diluted income per common share		5,669		5,637		5,667		5,636
Basic net income per common share	$	1.96	$	1.08	$	3.21	$	2.07
Diluted net income per common share	$	1.96	$	1.08	$	3.20	$	2.07

(1) Excludes 15 and 11 stock options for the three- and six-month 2020 periods, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the period.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income.

Accumulated Other Comprehensive Income

6. Accumulated Other Comprehensive Income

The following table presents the components of comprehensive income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	11,093	$	6,101	$	18,124	$	11,645
Mark to market of foreign exchange hedges		—		9		—		1
Deferred income tax expense		—		(2)		—		—
Comprehensive income	$	11,093	$	6,108	$	18,124	$	11,646

In May 2018, to hedge against potential losses due to changes in the Euro to U.S. Dollar exchange rates, the Company entered into foreign exchange hedges with a counterparty to the foreign exchange hedges to fix the exchange rates. The last of the foreign exchange hedges expired in April 2020. The foreign exchange hedges were effective as defined under applicable accounting rules. Therefore, changes in the fair value of the foreign exchange hedges were reflected in comprehensive income.

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Trade Receivables, Net

6 Months Ended

Jun. 30, 2021

Trade Receivables, Net

Trade Receivables, Net

7. Trade Receivables, Net

Additions, adjustments, and write-offs to the Company’s allowance for credit losses for the six months ended June 30, 2021 and 2020 were as follows (in thousands):

	June 30,
	2021		2020
Beginning balance	$	398	$	361
Additions		35		14
Adjustments for expected credit loss factors		(14)		—
Write-offs		—		—
Ending balance	$	419	$	375

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Inventories, Net

6 Months Ended

Jun. 30, 2021

Inventories, Net

Inventories, Net

8. Inventories, Net

Inventories are valued principally at the lower of cost, determined using the average cost method, or market. Costs for raw materials and finished goods include materials, labor, and production overhead. Inventories, net consisted of the following (in thousands):

	June 30,		December 31,
	2021		2020
Lime and limestone inventories:
Raw materials	$	3,398	$	4,279
Finished goods		2,752		2,866
		6,150		7,145
Service parts inventories		8,473		8,065
	$	14,623	$	15,210

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Banking Facilities and Debt

6 Months Ended

Jun. 30, 2021

Banking Facilities and Debt

Banking Facilities and Debt

9. Banking Facilities and Debt

The Company’s credit agreement with Wells Fargo Bank, N.A. (the “Lender”), as amended as of May 2, 2019 and November 21, 2019, provides for a $75 million revolving credit facility (the “Revolving Facility”) and an incremental four year accordion feature to borrow up to an additional $50 million on the same terms, subject to approval by the Lender or another lender selected by the Company. The credit agreement also provides for a $10 million letter of credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature on May 2, 2024.

Interest rates on the Revolving Facility are, at the Company’s option, LIBOR (or a replacement rate as determined by the Lender and the Company) plus a margin of 1.000% to 2.000%, or the Lender’s Prime Rate plus a margin of 0.000% to 1.000%, and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon the Company’s Cash Flow Leverage Ratio, defined as the ratio of the Company’s total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and stock-based compensation expense (“EBITDA”) for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period. Pursuant to a security agreement, dated August 25, 2004, the Revolving Facility is secured by the Company’s existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. The Company’s maximum Cash Flow Leverage Ratio is 3.50 to 1.

The Company may pay dividends so long as it remains in compliance with the provisions of the Company’s credit agreement, and it may purchase, redeem or otherwise acquire shares of its common stock so long as its pro forma Cash Flow Leverage Ratio is less than 3.00 to 1.00 and no default or event of default exists or would exist after giving effect to such stock repurchase.

As of June 30, 2021, the Company had no debt outstanding and no draws on the Revolving Facility other than $0.4 million of letters of credit, which count as draws against the available commitment under the Revolving Facility.

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Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

10. Leases

The Company has operating leases for the use of equipment, corporate office space, and some of its terminal and distribution facilities. The leases have remaining lease terms of 1 to 7 years, with a weighted-average remaining lease term of 2 years at June 30, 2021 and 3 years at December 31, 2020. Some operating leases include options to extend the leases for up to 5 years. The liability for the Company’s operating leases was discounted to present value using a weighted-average discount rate of 3.4% at each of June 30, 2021 and December 31, 2020. On July 12, 2021, the Company amended and extended the lease of its Dallas, Texas corporate office through November 2028.

The components of lease costs for the three and six months ended June 30, 2021 and 2020 were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2021		2020		2021		2020
Operating lease costs(1)	Cost of revenues	$	450	$	455	$	835	$	840
Operating lease costs(1)	Selling, general and administrative expenses		67		57		132		114
Rental revenues	Interest and other income, net		(20)		(8)		(41)		(35)
Net operating lease costs		$	497	$	504	$	926	$	919

(1) Includes the costs of leases with a term of 12 months or less.

As of June 30, 2021, future minimum payments under operating leases that were either non-cancelable or subject to significant penalty upon cancellation, including future minimum payments under renewal options that the Company is reasonably certain to exercise, were as follows (in thousands):

2021 (excluding the six months ended June 30, 2021)	$	599
2022		626
2023		288
2024		188
2025		36
Thereafter		54
Total future minimum lease payments		1,791
Less imputed interest		(64)
Present value of lease liabilities	$	1,727

Supplemental cash flow information pertaining to the Company’s leasing activity for the six months ended June 30, 2021 and 2020 is as follows (in thousands):

	Six Months Ended June 30,
	2021		2020
Cash payments for operating lease liabilities	$	708	$	821
Right-of-use assets obtained in exchange for operating lease obligations	$	96	$	53

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

11. Income Taxes

The Company has estimated that its effective income tax rate for 2021 will be 19.7%. The primary reason for the effective income tax rate being below the federal statutory rate is due to statutory depletion, which is allowed for income tax purposes and is a permanent difference between net income for financial reporting purposes and taxable income.

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Dividends

6 Months Ended

Jun. 30, 2021

Dividends

Dividends

12. Dividends

On June 11, 2021, the Company paid $0.9 million in cash dividends, based on a dividend of $0.16 per share of its common stock, to shareholders of record at the close of business on May 21, 2021. On March 12, 2021, the Company paid $0.9 million in cash dividends, based on a dividend of $0.16 per share of its common stock, to shareholders of record at the close of business on February 19, 2021.

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events.

Subsequent Events

13. Subsequent Event

On July 28, 2021, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share on the Company’s common stock. This dividend is payable on September 10, 2021 to shareholders of record at the close of business on August 20, 2021.

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies

Revenue Recognition

Revenue Recognition. The Company recognizes revenue for its lime and limestone operations when (i) a contract with the customer exists and the performance obligations are identified; (ii) the price has been established; and (iii) the performance obligations have been satisfied, which is generally upon shipment. The Company’s returns and allowances are minimal. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. External freight billed to customers included in 2021 and 2020 revenues was $8.7 million and $6.5 million, for the respective three-month periods ended June 30, and $16.5 million and $13.3 million for the respective six-month periods ended June 30, which approximates the amount of external freight included in cost of revenues. Sales taxes billed to customers are not included in revenues. For its natural gas interests, the Company recognizes revenue in the month of production and delivery.

The Company operates its lime and limestone operations within a single geographic region and derives all revenues from that segment from the sale of lime and limestone products. See Note 4 to the condensed consolidated financial statements for disaggregation of revenues by segment, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Accounts Receivable

Accounts Receivable. The majority of the Company’s trade receivables are unsecured. Payment terms for all trade receivables are based on the underlying purchase orders, contracts or purchase agreements. The Company estimates credit losses relating to trade receivables based on an assessment of the current and forecasted probability of collection, historical trends, economic conditions and other significant events that may impact the collectability of accounts receivables. Due to the relatively homogenous nature of its trade receivables, the Company does not believe there is any meaningful asset-specific differences within its accounts receivable portfolio that would require the portfolio to be grouped below the consolidated level for review of credit losses. Credit losses relating to trade receivables have generally been within management expectations and historical trends. Uncollected trade receivables are charged-off when identified by management to be unrecoverable. The Company maintains an allowance for credit losses to reflect currently expected estimated losses resulting from the failure of customers to make required payments. See Note 7 to the condensed consolidated financial statements.

Leases

Leases. The Company determines if an arrangement is a lease at inception. When recording operating leases, the Company records a lease liability based on the net present value of the lease payments over the lease term, using the interest rate implicit in the lease, if known, or an incremental rate on a collateralized basis over a similar term and amount to the lease, and a corresponding right-of-use asset. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, excluding current portion, on the condensed consolidated balance sheets. Lease expense is recognized over the lease term on a straight-line basis. Lease terms include options to extend the lease when it is reasonably certain the Company will exercise the option. For leases with a term of twelve months or less, the Company does not record a right-of-use asset and a lease liability and records lease expense on a straight-line basis. See Note 10 to the condensed consolidated financial statements.

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Business Segment (Tables)

6 Months Ended

Jun. 30, 2021

Business Segment

Schedule of operating results and certain other financial data for the business segment)

The following table sets forth operating results and certain other financial data for the Company’s lime and limestone operations segment and other (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Revenues	2021		2020		2021		2020
Lime and limestone operations	$	48,742	$	37,362	$	90,098	$	75,576
Other		420		185		738		411
Total revenues	$	49,162	$	37,547	$	90,836	$	75,987
Depreciation, depletion and amortization
Lime and limestone operations	$	5,087	$	4,616	$	10,289	$	9,084
Other		147		180		286		369
Total depreciation, depletion and amortization	$	5,234	$	4,796	$	10,575	$	9,453
Gross profit (loss)
Lime and limestone operations	$	16,682	$	10,507	$	28,506	$	20,546
Other		113		(150)		94		(312)
Total gross profit	$	16,795	$	10,357	$	28,600	$	20,234
Operating profit (loss)
Lime and limestone operations	$	13,725	$	7,626	$	22,482	$	14,446
Other		113		(150)		94		(312)
Total operating profit	$	13,838	$	7,476	$	22,576	$	14,134
Identifiable assets, at period end
Lime and limestone operations	$	202,179	$	184,397	$	202,179	$	184,397
Other		94,933		74,873		94,933		74,873
Total identifiable assets	$	297,112	$	259,270	$	297,112	$	259,270
Capital expenditures
Lime and limestone operations	$	13,233	$	4,493	$	17,776	$	10,599
Other		—		—		—		—
Total capital expenditures	$	13,233	$	4,493	$	17,776	$	10,599

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Income Per Share of Common Stock (Tables)

6 Months Ended

Jun. 30, 2021

Income Per Share of Common Stock

Schedule of computation of basic and diluted income per common share

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income for basic and diluted income per common share	$	11,093	$	6,101	$	18,124	$	11,645
Weighted-average shares for basic income per common share		5,657		5,629		5,654		5,627
Effect of dilutive securities:
Employee and director stock options(1)		12		8		13		9
Adjusted weighted-average shares and assumed exercises for diluted income per common share		5,669		5,637		5,667		5,636
Basic net income per common share	$	1.96	$	1.08	$	3.21	$	2.07
Diluted net income per common share	$	1.96	$	1.08	$	3.20	$	2.07

(1) Excludes 15 and 11 stock options for the three- and six-month 2020 periods, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the period.

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income.

Schedule of components of comprehensive income

The following table presents the components of comprehensive income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	11,093	$	6,101	$	18,124	$	11,645
Mark to market of foreign exchange hedges		—		9		—		1
Deferred income tax expense		—		(2)		—		—
Comprehensive income	$	11,093	$	6,108	$	18,124	$	11,646

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Trade Receivables, Net (Tables)

6 Months Ended

Jun. 30, 2021

Trade Receivables, Net

Schedule of additions and write-offs to allowance for doubtful accounts

Additions, adjustments, and write-offs to the Company’s allowance for credit losses for the six months ended June 30, 2021 and 2020 were as follows (in thousands):

	June 30,
	2021		2020
Beginning balance	$	398	$	361
Additions		35		14
Adjustments for expected credit loss factors		(14)		—
Write-offs		—		—
Ending balance	$	419	$	375

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Inventories, Net (Tables)

6 Months Ended

Jun. 30, 2021

Inventories, Net

Schedule of inventories, net

Inventories are valued principally at the lower of cost, determined using the average cost method, or market. Costs for raw materials and finished goods include materials, labor, and production overhead. Inventories, net consisted of the following (in thousands):

	June 30,		December 31,
	2021		2020
Lime and limestone inventories:
Raw materials	$	3,398	$	4,279
Finished goods		2,752		2,866
		6,150		7,145
Service parts inventories		8,473		8,065
	$	14,623	$	15,210

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases

Schedule of lease costs

The components of lease costs for the three and six months ended June 30, 2021 and 2020 were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2021		2020		2021		2020
Operating lease costs(1)	Cost of revenues	$	450	$	455	$	835	$	840
Operating lease costs(1)	Selling, general and administrative expenses		67		57		132		114
Rental revenues	Interest and other income, net		(20)		(8)		(41)		(35)
Net operating lease costs		$	497	$	504	$	926	$	919

(1) Includes the costs of leases with a term of 12 months or less.

Schedule of maturity of lease liability

2021 (excluding the six months ended June 30, 2021)	$	599
2022		626
2023		288
2024		188
2025		36
Thereafter		54
Total future minimum lease payments		1,791
Less imputed interest		(64)
Present value of lease liabilities	$	1,727

Schedule of supplemental cash flow information

	Six Months Ended June 30,
	2021		2020
Cash payments for operating lease liabilities	$	708	$	821
Right-of-use assets obtained in exchange for operating lease obligations	$	96	$	53

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Basis of Presentation (Details) - Carthage Crushed Limestone - USD ($) $ in Millions		3 Months Ended	6 Months Ended
	Jul. 01, 2020	Jun. 30, 2021	Jun. 30, 2021
Ownership acquired (as a percent)	100.00%
Cash paid for acquisition	$ 8.4
Revenue of business acquisition		$ 2.5	$ 4.7

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Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue Recognition
External freight billed to customers included in revenue	$ 8.7	$ 6.5	$ 16.5	$ 13.3

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Business Segment (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) segment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Business segments
Number of business segments | segment			1
Revenues	$ 49,162	$ 37,547	$ 90,836	$ 75,987
Depreciation, depletion and amortization	5,234	4,796	10,575	9,453
Gross profit (loss)	16,795	10,357	28,600	20,234
Operating profit (loss)	13,838	7,476	22,576	14,134
Identifiable assets, at period end	297,112	259,270	297,112	259,270	$ 279,098
Capital expenditures	13,233	4,493	17,776	10,599
Lime and limestone operations
Business segments
Depreciation, depletion and amortization	5,087	4,616	10,289	9,084
Gross profit (loss)	16,682	10,507	28,506	20,546
Operating profit (loss)	13,725	7,626	22,482	14,446
Identifiable assets, at period end	202,179	184,397	202,179	184,397
Capital expenditures	13,233	4,493	17,776	10,599
Other
Business segments
Depreciation, depletion and amortization	147	180	286	369
Gross profit (loss)	113	(150)	94	(312)
Operating profit (loss)	113	(150)	94	(312)
Identifiable assets, at period end	94,933	74,873	94,933	74,873
Lime and limestone operations | Lime and limestone operations
Business segments
Revenues	48,742	37,362	90,098	75,576
Natural gas interests | Other
Business segments
Revenues	$ 420	$ 185	$ 738	$ 411

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Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Apr. 30, 2021	Apr. 29, 2021
Anti-dilutive securities
Common stock, authorized shares	30,000,000				30,000,000		30,000,000	15,000,000
Common stock, shares issued	5,658,481				5,658,481
Income per share of common stock:
Net income for basic and diluted income per common share	$ 11,093	$ 7,031	$ 6,101	$ 5,544	$ 18,124	$ 11,645
Weighted-average shares for basic income per common share (in shares)	5,657,000		5,629,000		5,654,000	5,627,000
Effect of dilutive securities:
Employee and director stock options (in shares)	12,000		8,000		13,000	9,000
Adjusted weighted-average shares and assumed exercises for diluted income per common share (in shares)	5,669,000		5,637,000		5,667,000	5,636,000
Basic net income per common share (in dollars per share)	$ 1.96		$ 1.08		$ 3.21	$ 2.07
Diluted net income per common share (in dollars per share)	$ 1.96		$ 1.08		$ 3.20	$ 2.07
Options
Anti-dilutive securities
Anti-dilutive shares of common stock excluded from the calculation of dilutive securities			15,000			11,000

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Components of comprehensive income
Net income	$ 11,093	$ 7,031	$ 6,101	$ 5,544	$ 18,124	$ 11,645
Mark to market of foreign exchange hedges			9			1
Deferred income tax expense			(2)
Comprehensive income	$ 11,093	$ 7,031	$ 6,108	$ 5,538	$ 18,124	$ 11,646

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Trade Receivables, Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Additions and write-offs to the company's allowance for doubtful accounts
Beginning balance	$ 398	$ 361
Additions	35	14
Adjustment for expected credit loss factors	(14)
Ending balance	$ 419	$ 375

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Inventories, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Lime and limestone inventories:
Raw materials	$ 3,398	$ 4,279
Finished goods	2,752	2,866
Total	6,150	7,145
Service parts inventories	8,473	8,065
Total inventories	$ 14,623	$ 15,210

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Banking Facilities and Debt (Details) $ in Millions		6 Months Ended
	May 07, 2015 USD ($)	Jun. 30, 2021 USD ($)	May 02, 2019 USD ($)
Banking facilities and other debt
Total Debt		$ 0.0
Maximum
Banking facilities and other debt
Pro forma Cash Flow Leverage Ratio to be maintained to purchase, redeem or otherwise acquire shares of common stock		3.00
Cash flow leverage ratio	3.50
Revolving Facility
Banking facilities and other debt
Maximum borrowing capacity			$ 75.0
Accordion feature period	4 years
Maximum borrowing capacity accordion feature	$ 50.0
Letters of credit outstanding		$ 0.4
Revolving Facility | Minimum
Banking facilities and other debt
Commitment fee (as a percent)	0.20%
Revolving Facility | Minimum | LIBOR
Banking facilities and other debt
Interest rate margin (as a percent)	1.00%
Revolving Facility | Minimum | Lender's prime rate
Banking facilities and other debt
Interest rate margin (as a percent)	0.00%
Revolving Facility | Maximum
Banking facilities and other debt
Commitment fee (as a percent)	0.35%
Revolving Facility | Maximum | LIBOR
Banking facilities and other debt
Interest rate margin (as a percent)	2.00%
Revolving Facility | Maximum | Lender's prime rate
Banking facilities and other debt
Interest rate margin (as a percent)	1.00%
Letter of Credit
Banking facilities and other debt
Maximum borrowing capacity		$ 10.0

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Leases - Costs Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Leases
Weighted average remaining lease term	2 years		2 years		3 years
Lessee, Operating Lease, Existence of Option to Extend [true false]			true
Average discount rate (as a percent)	3.40%		3.40%		3.40%
Lease cost
Net operating lease costs	$ 497	$ 504	$ 926	$ 919
Minimum
Leases
Remaining lease term	1 year		1 year		1 year
Maximum
Leases
Remaining lease term	7 years		7 years		7 years
Lease extension term			5 years
Lease Term	12 months		12 months
Cost of revenues
Lease cost
Operating lease cost	$ 450	455	$ 835	840
Selling, general and administrative expense.
Lease cost
Operating lease cost	67	57	132	114
Interest and other income, net
Lease cost
Rental revenues	$ (20)	$ (8)	$ (41)	$ (35)

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Leases - Maturity (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Maturity
2021 (excluding the six months ended June 30, 2021)	$ 599
2022	626
2023	288
2024	188
2025	36
Thereafter	54
Total future minimum lease payments	1,791
Less imputed interest	(64)
Present value of lease liabilities	$ 1,727

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Leases
Cash payments for operating lease liabilities	$ 708	$ 821
Right-of-use assets obtained in exchange for operating lease obligations	$ 96	$ 53

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Income Taxes (Details)	6 Months Ended
	Jun. 30, 2021
Income Taxes
Effective income tax rate (as a percent)	19.70%

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Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands			6 Months Ended
	Jun. 11, 2021	Mar. 12, 2021	Jun. 30, 2021	Jun. 30, 2020
Dividends
Cash dividends paid	$ 900	$ 900	$ 1,809	$ 1,800
Cash dividend (in dollars per share)	$ 0.16	$ 0.16

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Subsequent Events (Details) - $ / shares	Jul. 28, 2021	Jun. 11, 2021	Mar. 12, 2021
Subsequent event
Quarterly cash dividend declared (in dollars per share)		$ 0.16	$ 0.16
Subsequent event
Subsequent event
Dividends payable date declared	Jul. 28, 2021
Quarterly cash dividend declared (in dollars per share)	$ 0.16
Dividends payable date to be paid	Sep. 10, 2021
Dividends payable date of record	Aug. 20, 2021