Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | UNITED STATES LIME & MINERALS INC | |
Entity Central Index Key | 82,020 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5,599,704 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 54,519 | $ 58,332 |
Trade receivables, net | 19,214 | 17,444 |
Inventories | 14,121 | 13,436 |
Prepaid expenses and other current assets | 927 | 2,550 |
Total current assets | 88,781 | 91,762 |
Property, plant and equipment | 268,505 | 262,462 |
Less accumulated depreciation and depletion | (163,941) | (153,949) |
Property, plant and equipment, net | 104,564 | 108,513 |
Other assets, net | 138 | 145 |
Total assets | 193,483 | 200,420 |
Current liabilities: | ||
Current installments of debt | 16,667 | |
Accounts payable | 4,075 | 5,166 |
Accrued expenses | 3,771 | 3,132 |
Total current liabilities | 7,846 | 24,965 |
Deferred tax liabilities, net | 19,491 | 19,259 |
Other liabilities | 1,151 | 1,505 |
Total liabilities | 28,488 | 45,729 |
Stockholders' equity: | ||
Common stock | 654 | 652 |
Additional paid-in capital | 21,353 | 20,418 |
Accumulated other comprehensive loss | (1,024) | |
Retained earnings | 193,211 | 184,710 |
Less treasury stock, at cost | (50,223) | (50,065) |
Total stockholders' equity | 164,995 | 154,691 |
Total liabilities and stockholders' equity | $ 193,483 | $ 200,420 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Lime and limestone operations | $ 36,452 | $ 37,855 | $ 97,593 | $ 110,226 |
Natural gas | 577 | 1,218 | 1,950 | 4,214 |
Total revenues | 37,029 | 39,073 | 99,543 | 114,440 |
Cost of revenues: | ||||
Labor and other operating expenses | 22,695 | 25,461 | 64,563 | 74,590 |
Depreciation, depletion and amortization | 3,967 | 3,729 | 11,736 | 10,952 |
Total cost of revenues | 26,662 | 29,190 | 76,299 | 85,542 |
Gross profit | 10,367 | 9,883 | 23,244 | 28,898 |
Selling, general and administrative expenses | 2,467 | 2,404 | 7,266 | 7,004 |
Operating profit | 7,900 | 7,479 | 15,978 | 21,894 |
Other expenses (income): | ||||
Interest expense | 57 | 369 | 969 | 1,176 |
Other (income) expense, net | (54) | 10 | 651 | (43) |
Total other expense (income) | 3 | 379 | 1,620 | 1,133 |
Income before income taxes | 7,897 | 7,100 | 14,358 | 20,761 |
Income tax expense | 2,221 | 1,674 | 3,758 | 5,125 |
Net income | $ 5,676 | $ 5,426 | $ 10,600 | $ 15,636 |
Income per share of common stock: | ||||
Basic (in dollars per share) | $ 1.01 | $ 0.97 | $ 1.89 | $ 2.80 |
Diluted (in dollars per share) | 1.01 | 0.97 | 1.89 | 2.80 |
Cash dividends per share of common stock (in dollars per share) | $ 0.125 | $ 0.125 | $ 0.375 | $ 0.375 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Percentage | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Lime and limestone operations (as a percent) | 98.40% | 96.90% | 98.00% | 96.30% |
Natural gas (as a percent) | 1.60% | 3.10% | 2.00% | 3.70% |
Total revenues (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Cost of revenues: | ||||
Labor and other operating expenses (as a percent) | 61.30% | 65.20% | 64.80% | 65.20% |
Depreciation, depletion and amortization (as a percent) | 10.70% | 9.50% | 11.80% | 9.50% |
Total cost of revenues (as a percent) | 72.00% | 74.70% | 76.60% | 74.70% |
Gross profit (as a percent) | 28.00% | 25.30% | 23.40% | 25.30% |
Selling, general and administrative expenses (as a percent) | 6.70% | 6.20% | 7.30% | 6.10% |
Operating profit (as a percent) | 21.30% | 19.10% | 16.10% | 19.20% |
Other expenses (income): | ||||
Interest expense (as a percent) | 0.10% | 0.90% | 1.00% | 1.00% |
Other (income) expense, net (as a percent) | (0.10%) | 0.00% | 0.70% | 0.00% |
Total other expense (income) (as a percent) | 0.00% | 0.90% | 1.70% | 1.00% |
Income before income taxes (as a percent) | 21.30% | 18.20% | 14.40% | 18.20% |
Income tax expense (as a percent) | 6.00% | 4.30% | 3.80% | 4.50% |
Net income (as a percent) | 15.30% | 13.90% | 10.60% | 13.70% |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income | |||
Net income | $ 5,426 | $ 10,600 | $ 15,636 |
Other comprehensive income | |||
Mark to market of interest rate hedges, net of tax expenses of $0 and $83, respectively, for the three-month periods, and $241 and $245, respectively, for the nine-month periods | 145 | 422 | 430 |
Minimum pension liability adjustments, net of tax expenses of $344 for the 2015 nine-month period and $0 for each of the other periods | 602 | ||
Total other comprehensive income | 145 | 1,024 | 430 |
Comprehensive income | $ 5,571 | $ 11,624 | $ 16,066 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Mark to market of interest rate hedges, tax expense | $ 0 | $ 83 | $ 241 | $ 245 |
Minimum pension liability adjustments, tax (expense) benefit | $ 0 | $ 0 | $ 344 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating Activities: | ||
Net income | $ 10,600 | $ 15,636 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 11,916 | 11,091 |
Amortization of deferred financing costs | 25 | 34 |
Deferred income taxes | (353) | 165 |
(Gain) loss on sale of property, plant and equipment | (137) | 54 |
Stock-based compensation | 908 | 822 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (1,770) | (5,590) |
Inventories | (685) | 829 |
Prepaid expenses and other current assets | 1,623 | 213 |
Other assets | (20) | 1 |
Accounts payable and accrued expenses | 208 | (267) |
Other liabilities | 585 | 298 |
Net cash provided by operating activities | 22,900 | 23,286 |
Investing Activities: | ||
Purchase of property, plant and equipment | (8,080) | (8,725) |
Proceeds from sale of property, plant and equipment | 263 | 246 |
Net cash used in investing activities | (7,817) | (8,479) |
Financing Activities: | ||
Repayment of term loans | (16,667) | (3,750) |
Cash dividends paid | (2,099) | (2,092) |
Exercise of stock options | 28 | |
Purchase of treasury shares | (158) | (168) |
Net cash used in financing activities | (18,896) | (6,010) |
Net (decrease) increase in cash and cash equivalents | (3,813) | 8,797 |
Cash and cash equivalents at beginning of period | 58,332 | 49,475 |
Cash and cash equivalents at end of period | $ 54,519 | $ 58,272 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
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, 2014. The results of operations for the three- and nine-month periods ended September 30, 2015 are not necessarily indicative of operating results for the full year. |
Organization
Organization | 9 Months Ended |
Sep. 30, 2015 | |
Organization | |
Organization | 2. Organization The Company is headquartered in Dallas, Texas, and operates through two business segments. Through its Lime and Limestone Operations, the Company is a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building contractors), metals (including steel producers), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), oil and gas services, industrial (including paper and glass manufacturers), roof shingle and agriculture (including poultry and cattle feed producers) industries. The Company operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, 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 and U.S. Lime Company — Transportation. The Company’s Natural Gas Interests segment is held in its wholly owned subsidiary, U.S. Lime Company — O & G, LLC (“U.S. Lime O & G”). Under a lease agreement (the “O & G Lease”), U.S. Lime O & G has royalty interests ranging from 15.4% to 20% and a 20% non-operating working interest, resulting in an overall average revenue interest of 34.7%, with respect to oil and gas rights in 33 wells drilled and currently producing on the Company’s approximately 3,800 acres of land located in Johnson County, Texas, in the Barnett Shale Formation. Through U. S. Lime O & G, the Company also has a drillsite and production facility lease agreement and subsurface easement (the “Drillsite Agreement”) relating to approximately 538 acres of land contiguous to the Company’s Johnson County, Texas property. Pursuant to the Drillsite Agreement, the Company receives a 3% royalty interest and a 12.5% non-operating working interest, resulting in a 12.4% revenue interest, in the six wells drilled and currently producing from pad sites located on the Company’s property. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies | |
Accounting Policies | 3. Accounting Policies Revenue Recognition. The Company recognizes revenue for its Lime and Limestone Operations in accordance with the terms of its purchase orders, contracts or purchase agreements, which are generally upon shipment, and when payment is considered probable. Revenues include external freight billed to customers with related costs in cost of revenues. The Company’s returns and allowances are minimal. External freight billed to customers included in 2015 and 2014 revenues was $6.4 million and $7.0 million for the three-month periods, and $17.9 million and $20.4 for the nine-month periods, respectively, 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. Successful-Efforts Method Used for Natural Gas Interests. The Company uses the successful-efforts method to account for oil and gas exploration and development expenditures. Under this method, drilling, completion and workover costs for successful exploratory wells and all development well costs are capitalized and depleted using the units-of-production method. Costs to drill exploratory wells that do not find proved reserves are expensed. Fair Values of Financial Instruments. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values, in determining the fair value of its financial assets and liabilities. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no changes in the methods and assumptions used in measuring fair value during the period, which include, as of the valuation date, LIBOR rates over the term of the outstanding debt. The Company’s financial liabilities measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 are summarized below (in thousands): Significant Other Observable Inputs (Level 2) September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Valuation Technique Interest rate swap liabilities $ — $ ) $ — $ ) Cash flows approach Comprehensive Income. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as mark-to-market gains or losses of interest rate hedges, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2015 | |
Business Segments | |
Business Segments | 4. Business Segments The Company has identified two business segments based on the distinctness of their activities and products: Lime and Limestone Operations and Natural Gas Interests. All operations are in the United States. In evaluating the operating results of the Company’s segments, management primarily reviews revenues and gross profit. The Company does not allocate corporate overhead or interest costs to its business segments. The following table sets forth operating results and certain other financial data for the Company’s two business segments (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues Lime and limestone operations $ $ Natural gas interests Total revenues $ $ Depreciation, depletion and amortization Lime and limestone operations $ $ Natural gas interests Total depreciation, depletion and amortization $ $ Gross profit Lime and limestone operations $ $ Natural gas interests Total gross profit $ $ Capital expenditures Lime and limestone operations $ $ Natural gas interests Total capital expenditures $ $ |
Income Per Share of Common Stoc
Income Per Share of Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Income Per Share of Common Stock | |
Income Per Share of Common Stock | 5. Income Per Share of Common Stock The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income for basic and diluted income per common share $ $ Weighted-average shares for basic income per share Effect of dilutive securities: Employee and director stock options (1) Adjusted weighted-average shares and assumed exercises for diluted income per share Basic net income per common share $ $ Diluted net income per common share $ $ (1) Excludes 35.0 and 15.0 stock options for the 2015 and 2014 periods, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the periods presented. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 6. Accumulated Other Comprehensive Loss The following table presents the components of comprehensive income (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income $ $ Minimum pension liability adjustments — — — Reclassification to interest expense — Deferred income tax expense — ) ) ) Mark to market of interest rate hedges — ) ) Comprehensive income $ $ Amounts reclassified to interest expense were for payments made by the Company pursuant to the Company’s interest rate hedges. Accumulated other comprehensive loss consisted of the following (in thousands) : September 30, 2015 December 31, 2014 Mark to market of interest rate hedges, net of tax benefit $ — $ ) Minimum pension liability adjustments, net of tax benefit — ) Accumulated other comprehensive loss $ — $ ) |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | 7. Inventories 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 consisted of the following (in thousands): September 30, 2015 December 31, 2014 Lime and limestone inventories: Raw materials $ $ Finished goods Service parts inventories $ $ |
Banking Facilities and Debt
Banking Facilities and Debt | 9 Months Ended |
Sep. 30, 2015 | |
Banking Facilities and Debt | |
Banking Facilities and Debt | 8. Banking Facilities and Debt On May 7, 2015, the Company amended its credit agreement with Wells Fargo Bank, N.A. (the “Lender”) to, among other things, provide for a $75 million revolving credit facility (the “New Revolving Facility”) and reductions to interest rate margins and commitment fees (the “Amendment”). The Amendment also provides for 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 terms of the Amendment provide for a final maturity of the New Revolving Facility and any incremental loan on May 7, 2020; interest rates, at the Company’s option, of LIBOR plus a margin of 1.000% to 2.000% or the Lender’s Prime Rate plus a margin of 0.000% to plus 1.000%; and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the New Revolving Facility. The New 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 New Revolving Facility is secured by the Company’s existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the New Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. Prior to the Amendment, the Company’s credit agreement had included a ten-year $40 million term loan (the “Term Loan”), a ten-year $20 million multiple draw term loan (the “Draw Term Loan”) and a $30 million revolving credit facility (the “Revolving Facility”) (collectively, the “Credit Facilities”). The Term Loan required quarterly principal payments of $0.8 million, with a final principal payment of $10.0 million due on December 31, 2015. The Draw Term Loan required quarterly principal payments of $0.4 million, with a final principal payment of $6.7 million due on December 31, 2015. The Revolving Facility was scheduled to mature on June 1, 2015. The maturity of the Term Loan, the Draw Term Loan and the Revolving Facility could have been accelerated if any event of default, as defined under the Credit Facilities, had occurred. The Revolving Facility commitment fee had ranged from 0.250% to 0.400%. The Credit Facilities had borne interest, at the Company’s option, at either LIBOR plus a margin of 1.750% to 2.750%, or the Lender’s Prime Rate plus a margin of 0.000% to plus 1.000%. The Company had interest rate hedges, with the Lender as the counterparty to the hedges, that fixed LIBOR through maturity at 4.695%, 4.875% and 5.500% on the outstanding balance of the Term Loan, 75% of the outstanding balance of the Draw Term Loan and 25% of the outstanding balance of the Draw Term Loan, respectively. As discussed below, the Company repurchased these hedges during the second quarter 2015. Based on the LIBOR margin of 1.750% prior to the Amendment, the Company’s interest rates had been: 6.445% on the outstanding balance of the Term Loan; 6.625% on 75% of the outstanding balance of the Draw Term Loan; and 7.250% on 25% of the outstanding balance of the Draw Term Loan. The hedges had been effective as defined under applicable accounting rules. Therefore, changes in fair value of the hedges were reflected in comprehensive income. The Company would have been exposed to credit losses in the event of non-performance by the counterparty to the hedges. The Company’s mark to market of its hedges, at December 31, 2014, resulted in a liability of $0.7 million, which was included in accrued expenses on the Company’s Condensed Consolidated Balance Sheets. The Company paid $0.2 million in quarterly settlement payments pursuant to its hedges during the first quarter 2015 and $0.2 million and $0.7 million in the prior year three- and nine-month periods ended September 30, 2014, respectively. These payments were included in interest expense in the Condensed Consolidated Statements of Operations. On May 7, 2015, the Company paid off the $15.4 million balance then outstanding on the Term Loan and Draw Term Loan, as well as paid $0.5 million to repurchase the related hedges, from cash on hand. The cost to repurchase the hedges was included in interest expense. A summary of outstanding debt at the dates indicated is as follows (in thousands): September 30, December 31, 2015 2014 Term Loan $ — $ Draw Term Loan — Revolving Facility (1) — — Total current installments of debt $ — $ (1) The Company had letters of credit totaling $0.7 million issued on the New Revolving Facility at September 30, 2015 and the Revolving Facility at December 31, 2014. As the Company’s debt bore interest at floating rates, the Company estimated that the carrying values of its debt at December 31, 2014 approximated fair value. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The Company has estimated that its effective income tax rate for 2015 will be approximately 26.2%. As in prior periods, the primary reason for the effective 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. |
Dividends
Dividends | 9 Months Ended |
Sep. 30, 2015 | |
Dividends | |
Dividends | 10. Dividends On September 18, 2015, the Company paid $0.7 million in cash dividends, based on a dividend of $0.125 (12.5 cents) per share on its common stock, to shareholders of record at the close of business on August 28, 2015. On each of March 19 and June 19, 2015, the Company paid $0.7 million in cash dividends, based on a dividend of $0.125 (12.5 cents) per share on its common stock, to shareholders of record at the close of business on February 27 and May 29, 2015, respectively. |
Employee Retirement Plan
Employee Retirement Plan | 9 Months Ended |
Sep. 30, 2015 | |
Employee Retirement Plan | |
Employee Retirement Plan | 11. Employee Retirement Plan During the second quarter 2015, after receipt of a favorable determination letter from the Internal Revenue Service, the Company terminated a noncontributory defined benefit plan that, prior to the termination, covered substantially all of the union employees previously employed by its wholly owned subsidiary, Corson Lime Company (the “Corson Plan”). In 1997, the Company sold substantially all of the assets of Corson Lime Company, and the benefits for participants in the Corson Plan were frozen. As a result of the termination of the Corson Plan, the Company made a cash payment of $0.2 million and recognized a second quarter expense of $0.9 million ($0.6 million, net of tax benefit), included in other (income) expense, net, that was previously included in accumulated other comprehensive loss. The following table sets forth the funded status of the Corson Plan as of December 31, 2014 and Pre-Settlement, Settlement and Post-Settlement as of June 30, 2015 (in thousands): December 31, June 30, 2015 2014 Pre-Settlement Settlement Post-Settlement Projected benefit obligation $ $ $ ) $ — Fair value of plan assets ) — Underfunded status $ ) $ — $ — $ — The liability recognized for the Corson Plan on the Company’s Condensed Consolidated Balance Sheets at December 31, 2014 and September 30, 2015 are as follows (in thousands): December 31, 2014 September 30, 2015 Accrued benefit cost $ — The following table provides the components of the Corson Plan net periodic benefit cost for the period ended September 30, 2015 (in thousands): Net periodic benefit cost $ Settlement charge Total net periodic benefit cost $ |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events On October 28, 2015, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.125 (12.5 cents) per share on the Company’s common stock. This dividend is payable on December 18, 2015 to shareholders of record at the close of business on November 27, 2015. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies | |
Revenue Recognition | Revenue Recognition. The Company recognizes revenue for its Lime and Limestone Operations in accordance with the terms of its purchase orders, contracts or purchase agreements, which are generally upon shipment, and when payment is considered probable. Revenues include external freight billed to customers with related costs in cost of revenues. The Company’s returns and allowances are minimal. External freight billed to customers included in 2015 and 2014 revenues was $6.4 million and $7.0 million for the three-month periods, and $17.9 million and $20.4 for the nine-month periods, respectively, 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. |
Successful-Efforts Method Used for Natural Gas Interests | Successful-Efforts Method Used for Natural Gas Interests. The Company uses the successful-efforts method to account for oil and gas exploration and development expenditures. Under this method, drilling, completion and workover costs for successful exploratory wells and all development well costs are capitalized and depleted using the units-of-production method. Costs to drill exploratory wells that do not find proved reserves are expensed. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values, in determining the fair value of its financial assets and liabilities. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no changes in the methods and assumptions used in measuring fair value during the period, which include, as of the valuation date, LIBOR rates over the term of the outstanding debt. The Company’s financial liabilities measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 are summarized below (in thousands): Significant Other Observable Inputs (Level 2) September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Valuation Technique Interest rate swap liabilities $ — $ ) $ — $ ) Cash flows approach |
Comprehensive Income | Comprehensive Income. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as mark-to-market gains or losses of interest rate hedges, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies | |
Schedule of the entity's financial liabilities measured at fair value on a recurring basis | The Company’s financial liabilities measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 are summarized below (in thousands): Significant Other Observable Inputs (Level 2) September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Valuation Technique Interest rate swap liabilities $ — $ ) $ — $ ) Cash flows approach |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Segments | |
Schedule of operating results and certain other financial data for the business segments | The following table sets forth operating results and certain other financial data for the Company’s two business segments (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues Lime and limestone operations $ $ Natural gas interests Total revenues $ $ Depreciation, depletion and amortization Lime and limestone operations $ $ Natural gas interests Total depreciation, depletion and amortization $ $ Gross profit Lime and limestone operations $ $ Natural gas interests Total gross profit $ $ Capital expenditures Lime and limestone operations $ $ Natural gas interests Total capital expenditures $ $ |
Income Per Share of Common St23
Income Per Share of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income for basic and diluted income per common share $ $ Weighted-average shares for basic income per share Effect of dilutive securities: Employee and director stock options (1) Adjusted weighted-average shares and assumed exercises for diluted income per share Basic net income per common share $ $ Diluted net income per common share $ $ (1) Excludes 35.0 and 15.0 stock options for the 2015 and 2014 periods, respectively, as anti-dilutive because the exercise price exceeded the average per share market price for the periods presented. |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of components of comprehensive income | The following table presents the components of comprehensive income (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income $ $ Minimum pension liability adjustments — — — Reclassification to interest expense — Deferred income tax expense — ) ) ) Mark to market of interest rate hedges — ) ) Comprehensive income $ $ |
Schedule of accumulated other comprehensive loss | Accumulated other comprehensive loss consisted of the following (in thousands) : September 30, 2015 December 31, 2014 Mark to market of interest rate hedges, net of tax benefit $ — $ ) Minimum pension liability adjustments, net of tax benefit — ) Accumulated other comprehensive loss $ — $ ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in thousands): September 30, 2015 December 31, 2014 Lime and limestone inventories: Raw materials $ $ Finished goods Service parts inventories $ $ |
Banking Facilities and Debt (Ta
Banking Facilities and Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Banking Facilities and Debt | |
Summary of outstanding debt | A summary of outstanding debt at the dates indicated is as follows (in thousands): September 30, December 31, 2015 2014 Term Loan $ — $ Draw Term Loan — Revolving Facility (1) — — Total current installments of debt $ — $ (1) The Company had letters of credit totaling $0.7 million issued on the New Revolving Facility at September 30, 2015 and the Revolving Facility at December 31, 2014. |
Employee Retirement Plan (Table
Employee Retirement Plan (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Employee Retirement Plan | |
Schedule of funded status of the Corson Plan accrued pension benefit obligation | The following table sets forth the funded status of the Corson Plan as of December 31, 2014 and Pre-Settlement, Settlement and Post-Settlement as of June 30, 2015 (in thousands): December 31, June 30, 2015 2014 Pre-Settlement Settlement Post-Settlement Projected benefit obligation $ $ $ ) $ — Fair value of plan assets ) — Underfunded status $ ) $ — $ — $ — |
Schedule of net liability recognized for the Corson Plan on the Company's Consolidated Balance Sheets | The liability recognized for the Corson Plan on the Company’s Condensed Consolidated Balance Sheets at December 31, 2014 and September 30, 2015 are as follows (in thousands) December 31, 2014 September 30, 2015 Accrued benefit cost $ — |
Schedule of components of the Corson Plan net periodic benefit cost | The following table provides the components of the Corson Plan net periodic benefit cost for the period ended September 30, 2015 (in thousands): Net periodic benefit cost $ Settlement charge Total net periodic benefit cost $ |
Organization (Details)
Organization (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015a | Sep. 30, 2015asegment | |
Organization | ||
Number of business segments | segment | 2 | |
O & G Lease | ||
Organization | ||
Area of land (in acres) | 3,800 | 3,800 |
U.S. Lime O & G | O & G Lease | ||
Organization | ||
Percentage of non-operating working interest | 20.00% | |
Overall average revenue interest (as a percent) | 34.70% | |
Number of wells | 33 | |
U.S. Lime O & G | O & G Lease | Minimum | ||
Organization | ||
Percentage of royalty interest | 15.40% | |
U.S. Lime O & G | O & G Lease | Maximum | ||
Organization | ||
Percentage of royalty interest | 20.00% | |
U.S. Lime O & G | Drillsite Agreement | ||
Organization | ||
Percentage of royalty interest | 3.00% | |
Percentage of non-operating working interest | 12.50% | |
Overall average revenue interest (as a percent) | 12.40% | |
Number of wells | 6 | |
Area of land under a lease (in acres) | 538 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Revenue Recognition | |||||
External freight billed to customers included in revenue | $ 6,400 | $ 7,000 | $ 17,900 | $ 20,400 | |
Recurring | Cash flows approach | |||||
Fair Values of Financial Instruments | |||||
Interest rate swap liabilities | $ (661) | ||||
Recurring | Significant Other Observable Inputs (Level 2) | Cash flows approach | |||||
Fair Values of Financial Instruments | |||||
Interest rate swap liabilities | $ (661) |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | |
Business Segments | ||||
Number of business segments | segment | 2 | |||
Business segments | ||||
Revenues | $ 37,029 | $ 39,073 | $ 99,543 | $ 114,440 |
Depreciation, depletion and amortization | 3,967 | 3,729 | 11,736 | 10,952 |
Gross profit | 10,367 | 9,883 | 23,244 | 28,898 |
Capital expenditures | 1,770 | 3,178 | 8,080 | 8,725 |
Lime and limestone operations | ||||
Business segments | ||||
Revenues | 36,452 | 37,855 | 97,593 | 110,226 |
Depreciation, depletion and amortization | 3,786 | 3,514 | 11,175 | 10,293 |
Gross profit | 10,320 | 9,271 | 22,826 | 26,637 |
Capital expenditures | 1,766 | 3,171 | 8,069 | 8,702 |
Natural gas interests | ||||
Business segments | ||||
Revenues | 577 | 1,218 | 1,950 | 4,214 |
Depreciation, depletion and amortization | 181 | 215 | 561 | 659 |
Gross profit | 47 | 612 | 418 | 2,261 |
Capital expenditures | $ 4 | $ 7 | $ 11 | $ 23 |
Income Per Share of Common St31
Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Per Share of Common Stock | ||||
Net income for basic and diluted income per common share | $ 5,676 | $ 5,426 | $ 10,600 | $ 15,636 |
Weighted-average shares for basic income per share | 5,600,000 | 5,578,000 | 5,599,000 | 5,578,000 |
Effect of dilutive securities: | ||||
Employee and director stock options (in shares) | 4,000 | 11,000 | 6,000 | 10,000 |
Adjusted weighted-average shares and assumed exercises for diluted income per share | 5,604,000 | 5,589,000 | 5,605,000 | 5,588,000 |
Basic net income per common share (in dollars per share) | $ 1.01 | $ 0.97 | $ 1.89 | $ 2.80 |
Diluted net income per common share (in dollars per share) | $ 1.01 | $ 0.97 | $ 1.89 | $ 2.80 |
Options | ||||
Anti-dilutive securities | ||||
Anti-dilutive shares of common stock excluded from the calculation of dilutive securities | 35,000 | 15,000 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Components of comprehensive income | |||||
Net income | $ 5,676 | $ 5,426 | $ 10,600 | $ 15,636 | |
Minimum pension liability adjustments | 946 | ||||
Reclassification to interest expense | 225 | 678 | 710 | ||
Deferred income tax expense | (83) | (585) | (245) | ||
Mark to market of interest rate hedges | 3 | (15) | (35) | ||
Comprehensive income | $ 5,676 | $ 5,571 | $ 11,624 | $ 16,066 | |
Accumulated other comprehensive loss | |||||
Mark to market of interest rate hedges, net of tax benefit | $ (422) | ||||
Minimum pension liability adjustments, net of tax benefit | (602) | ||||
Accumulated other comprehensive loss | $ (1,024) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Lime and limestone inventories: | ||
Raw materials | $ 5,821 | $ 5,693 |
Finished goods | 2,281 | 2,283 |
Total | 8,102 | 7,976 |
Service parts inventories | 6,019 | 5,460 |
Total inventories | $ 14,121 | $ 13,436 |
Banking Facilities and Debt (De
Banking Facilities and Debt (Details) - USD ($) | May. 07, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | May. 06, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 |
Banking facilities and other debt | |||||||
Paid off the outstanding Term loan and Draw term loan | $ 15,400,000 | ||||||
Summary of outstanding debt | |||||||
Total current installments of debt | $ 16,667,000 | ||||||
Interest rate swaps | |||||||
Interest rate hedges | |||||||
Interest rate swap liabilities | 700,000 | ||||||
Quarterly settlement payment pursuant to hedges | 500,000 | $ 200,000 | $ 200,000 | $ 700,000 | |||
LIBOR | |||||||
Banking facilities and other debt | |||||||
Interest rate basis | LIBOR | ||||||
Lender's prime rate | |||||||
Banking facilities and other debt | |||||||
Interest rate basis | Lender's Prime Rate | ||||||
New Revolving Facility | |||||||
Banking facilities and other debt | |||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||
Accordion feature period | 4 years | ||||||
Maximum borrowing capacity accordion feature | $ 50,000,000 | ||||||
Letters of credit outstanding | $ 700,000 | ||||||
New Revolving Facility | Minimum | |||||||
Banking facilities and other debt | |||||||
Commitment fee (as a percent) | 0.20% | ||||||
New Revolving Facility | Minimum | LIBOR | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 1.00% | ||||||
New Revolving Facility | Minimum | Lender's prime rate | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 0.00% | ||||||
New Revolving Facility | Maximum | |||||||
Banking facilities and other debt | |||||||
Commitment fee (as a percent) | 0.35% | ||||||
New Revolving Facility | Maximum | LIBOR | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 2.00% | ||||||
New Revolving Facility | Maximum | Lender's prime rate | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 1.00% | ||||||
Term Loan | |||||||
Banking facilities and other debt | |||||||
Term | 10 years | ||||||
Face amount of term loan | $ 40,000,000 | ||||||
Quarterly principal payments | 800,000 | ||||||
Final principal payment | $ 10,000,000 | ||||||
Summary of outstanding debt | |||||||
Total current installments of debt | 10,000,000 | ||||||
Term Loan | LIBOR | Interest rate swaps | |||||||
Interest rate hedges | |||||||
LIBOR (as a percent) | 4.695% | ||||||
Current interest rate (as a percent) | 6.445% | ||||||
Draw Term Loan | |||||||
Banking facilities and other debt | |||||||
Term | 10 years | ||||||
Face amount of term loan | $ 20,000,000 | ||||||
Quarterly principal payments | 400,000 | ||||||
Final principal payment | $ 6,700,000 | ||||||
Summary of outstanding debt | |||||||
Total current installments of debt | 6,667,000 | ||||||
75% of the outstanding balance of the Draw Term Loan | Interest rate swaps | |||||||
Interest rate hedges | |||||||
Percentage of outstanding balance of debt hedged | 75.00% | ||||||
75% of the outstanding balance of the Draw Term Loan | LIBOR | Interest rate swaps | |||||||
Interest rate hedges | |||||||
LIBOR (as a percent) | 4.875% | ||||||
Current interest rate (as a percent) | 6.625% | ||||||
25% of the outstanding balance of the Draw Term Loan | Interest rate swaps | |||||||
Interest rate hedges | |||||||
Percentage of outstanding balance of debt hedged | 25.00% | ||||||
25% of the outstanding balance of the Draw Term Loan | LIBOR | Interest rate swaps | |||||||
Interest rate hedges | |||||||
LIBOR (as a percent) | 5.50% | ||||||
Current interest rate (as a percent) | 7.25% | ||||||
Revolving Facility | |||||||
Banking facilities and other debt | |||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||
Letters of credit outstanding | $ 700,000 | ||||||
Revolving Facility | Minimum | |||||||
Banking facilities and other debt | |||||||
Commitment fee (as a percent) | 0.25% | ||||||
Revolving Facility | Minimum | LIBOR | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 1.75% | ||||||
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) | 0.40% | ||||||
Revolving Facility | Maximum | LIBOR | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 2.75% | ||||||
Revolving Facility | Maximum | Lender's prime rate | |||||||
Banking facilities and other debt | |||||||
Interest rate margin (as a percent) | 1.00% |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income tax expense (as a percent) | 26.20% |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 18, 2015 | Jun. 19, 2015 | Mar. 19, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
Dividends | |||||
Cash dividends paid | $ 700 | $ 700 | $ 700 | $ 2,099 | $ 2,092 |
Cash dividend (in dollars per share) | $ 0.125 | $ 0.125 | $ 0.125 | ||
Dividends payable date of record | Aug. 28, 2015 | May 29, 2015 | Feb. 27, 2015 |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Employee Retirement Plan | ||||
Cash payment on termination of contract | $ 200 | |||
Expense on providing contractual termination benefits recognized | 900 | |||
Expense on providing contractual termination benefits recognized, net of tax benefit | $ 600 | |||
Funded status | ||||
Projected benefit obligation | $ 2,137 | |||
Fair value of plan assets | 1,862 | |||
Underfunded status | (275) | |||
Projected benefit obligation, Pre Settlement | $ 2,039 | |||
Fair value of plan assets, Pre Settlement | 2,039 | |||
Projected benefit obligation, Settlement | (2,039) | |||
Fair value of plan assets, Settlement | $ (2,039) | |||
Liability recognized on the consolidated balance sheets | ||||
Accrued benefit cost | $ 275 | |||
Components of the net periodic benefit cost | ||||
Net periodic benefit cost | $ 91 | |||
Settlement charge | 814 | |||
Total net periodic benefit cost | $ 905 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Oct. 28, 2015 | Sep. 18, 2015 | Jun. 19, 2015 | Mar. 19, 2015 |
Subsequent event | ||||
Quarterly cash dividend (in dollars per share) | $ 0.125 | $ 0.125 | $ 0.125 | |
Dividends payable date of record | Aug. 28, 2015 | May 29, 2015 | Feb. 27, 2015 | |
Subsequent event | ||||
Subsequent event | ||||
Quarterly cash dividend (in dollars per share) | $ 0.125 | |||
Dividends payable date declared | Oct. 28, 2015 | |||
Dividends payable date of record | Nov. 27, 2015 | |||
Dividends payable date to be paid | Dec. 18, 2015 |