Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 27, 2020 | Jun. 30, 2019 | |
Document and Entity Information | |||
Entity Registrant Name | UNITED STATES LIME & MINERALS INC | ||
Entity Central Index Key | 0000082020 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 163,950,400 | ||
Entity Common Stock, Shares Outstanding | 5,625,185 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 54,260 | $ 67,218 |
Trade receivables, net | 22,948 | 19,602 |
Inventories, net | 13,388 | 12,846 |
Prepaid expenses and other current assets | 2,139 | 1,692 |
Total current assets | 92,735 | 101,358 |
Property, plant and equipment: | ||
Mineral reserves and land | 36,423 | 33,637 |
Proved natural gas properties, successful-efforts method | 17,484 | 18,414 |
Buildings and building and leasehold improvements | 7,251 | 5,814 |
Machinery and equipment | 304,379 | 286,173 |
Furniture and fixtures | 981 | 981 |
Automotive equipment | 3,837 | 3,453 |
Property, plant and equipment | 370,355 | 348,472 |
Less accumulated depreciation and depletion | (219,668) | (205,708) |
Property, plant and equipment, net | 150,687 | 142,764 |
Operating lease right-of-use assets | 3,192 | |
Other assets, net | 423 | 549 |
Total assets | 247,037 | 244,671 |
Current liabilities: | ||
Accounts payable | 4,430 | 4,570 |
Current portion of operating lease liabilities | 1,294 | |
Accrued expenses | 3,735 | 3,393 |
Total current liabilities | 9,459 | 7,963 |
Deferred tax liabilities, net | 17,218 | 12,365 |
Operating lease liabilities, excluding current portion | 1,866 | |
Other liabilities | 1,362 | 1,376 |
Total liabilities | 29,905 | 21,704 |
Stockholders' equity: | ||
Preferred stock, $5.00 par value; authorized 500,000 shares; none issued or outstanding | ||
Common stock | 663 | 661 |
Additional paid-in capital | 27,464 | 25,867 |
Accumulated other comprehensive loss | (1) | (13) |
Retained earnings | 243,566 | 250,568 |
Less treasury stock, at cost | (54,560) | (54,116) |
Total stockholders' equity | 217,132 | 222,967 |
Total liabilities and stockholders' equity | $ 247,037 | $ 244,671 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
Preferred stock, authorized shares | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Total revenues | $ 158,277 | $ 144,435 | $ 144,844 |
Cost of revenues | |||
Labor and other operating expenses | 99,207 | 96,558 | 94,124 |
Depreciation, depletion and amortization | 17,394 | 17,391 | 16,340 |
Total cost of revenues | 116,601 | 113,949 | 110,464 |
Gross profit | 41,676 | 30,486 | 34,380 |
Selling, general and administrative expenses | 11,500 | 10,484 | 10,153 |
Impairment of long-lived assets | 930 | ||
Operating profit | 29,246 | 20,002 | 24,227 |
Other expense (income) | |||
Interest expense | 244 | 243 | 241 |
Interest and other income, net | (1,898) | (1,809) | (957) |
Total other (income) expense | (1,654) | (1,566) | (716) |
Income before income tax expense (benefit) | 30,900 | 21,568 | 24,943 |
Income tax expense (benefit) | 4,844 | 1,883 | (2,205) |
Net income | $ 26,056 | $ 19,685 | $ 27,148 |
Net income per share of common stock | |||
Basic (in dollars per share) | $ 4.64 | $ 3.52 | $ 4.87 |
Diluted (in dollars per share) | $ 4.64 | $ 3.51 | $ 4.86 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 26,056 | $ 19,685 | $ 27,148 |
Other comprehensive income (loss) | |||
Mark to market of foreign exchange hedges, net of tax expense (benefit) of $4, and $(29) and $155 for 2019, 2018 and 2017, respectively | 12 | (99) | 309 |
Total other comprehensive income (loss) | 12 | (99) | 309 |
Comprehensive (loss) income | $ 26,068 | $ 19,586 | $ 27,457 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | |||
Mark to market on foreign exchange hedges, tax benefit (expense) | $ 4 | $ (29) | $ 155 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Treasury Stock | Total |
Balances at Dec. 31, 2016 | $ 657 | $ 22,831 | $ (223) | $ 209,770 | $ (53,396) | $ 179,639 |
Balances (in shares) at Dec. 31, 2016 | 5,574,140 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock options exercised | 73 | 73 | ||||
Stock options exercised (in shares) | 2,000 | |||||
Stock-based compensation | $ 2 | 1,403 | 1,405 | |||
Stock-based compensation (in shares) | 16,695 | |||||
Treasury shares purchased | (309) | $ (309) | ||||
Treasury shares purchased (in shares) | (4,014) | 0 | ||||
Cash dividends paid | (3,013) | $ (3,013) | ||||
Net income | 27,148 | 27,148 | ||||
Mark to market of foreign exchange hedges, net of $4 tax benefit and $29 tax benefit and $155 tax expense for the years ended December 31, 2109, 2018 and 2017, respectively | 309 | 309 | ||||
Comprehensive (loss) income | 309 | 27,148 | 27,457 | |||
Balances at Dec. 31, 2017 | $ 659 | 24,307 | 86 | 233,905 | (53,705) | 205,252 |
Balances (in shares) at Dec. 31, 2017 | 5,588,821 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock options exercised | 73 | 73 | ||||
Stock options exercised (in shares) | 6,339 | |||||
Stock-based compensation | $ 2 | 1,487 | 1,489 | |||
Stock-based compensation (in shares) | 17,626 | |||||
Treasury shares purchased | (411) | $ (411) | ||||
Treasury shares purchased (in shares) | (5,385) | 0 | ||||
Cash dividends paid | (3,022) | $ (3,022) | ||||
Net income | 19,685 | 19,685 | ||||
Mark to market of foreign exchange hedges, net of $4 tax benefit and $29 tax benefit and $155 tax expense for the years ended December 31, 2109, 2018 and 2017, respectively | (99) | (99) | ||||
Comprehensive (loss) income | (99) | 19,685 | 19,586 | |||
Balances at Dec. 31, 2018 | $ 661 | 25,867 | (13) | 250,568 | (54,116) | 222,967 |
Balances (in shares) at Dec. 31, 2018 | 5,607,401 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock options exercised | 75 | 75 | ||||
Stock options exercised (in shares) | 2,000 | |||||
Stock-based compensation | $ 2 | 1,522 | 1,524 | |||
Stock-based compensation (in shares) | 18,900 | |||||
Treasury shares purchased | (444) | $ (444) | ||||
Treasury shares purchased (in shares) | (5,475) | 0 | ||||
Cash dividends paid | (33,058) | $ (33,058) | ||||
Net income | 26,056 | 26,056 | ||||
Mark to market of foreign exchange hedges, net of $4 tax benefit and $29 tax benefit and $155 tax expense for the years ended December 31, 2109, 2018 and 2017, respectively | 12 | 12 | ||||
Comprehensive (loss) income | 12 | 26,056 | 26,068 | |||
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 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Stockholders' Equity | |||
Mark to market of foreign exchange hedges, tax expense (benefit) | $ 4 | $ (29) | $ 155 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES: | |||
Net income | $ 26,056 | $ 19,685 | $ 27,148 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 17,617 | 17,603 | 16,549 |
Impairment of long-lived assets | 930 | ||
Amortization of deferred financing costs | 9 | 14 | 15 |
Deferred income taxes | 4,848 | 20 | (7,612) |
Loss on disposition of property, plant and equipment | 439 | 624 | 377 |
Stock-based compensation | 1,524 | 1,489 | 1,405 |
Changes in operating assets and liabilities: | |||
Trade receivables, net | (3,346) | (3,129) | 308 |
Inventories, net | (542) | 700 | (1,113) |
Prepaid expenses and other current assets | (447) | 1,377 | (1,594) |
Other assets | 117 | (1) | 5 |
Accounts payable and accrued expenses | (165) | 438 | (1,130) |
Other liabilities | (29) | (85) | (76) |
Net cash provided by operating activities | 47,011 | 38,735 | 34,282 |
INVESTING ACTIVITIES: | |||
Purchase of property, plant and equipment | (27,100) | (53,762) | (21,337) |
Proceeds from sale of property, plant and equipment | 558 | 605 | 592 |
Net cash used in investing activities | (26,542) | (53,157) | (20,745) |
FINANCING ACTIVITIES: | |||
Cash dividends paid | (33,058) | (3,022) | (3,013) |
Proceeds from exercise of stock options | 75 | 73 | 73 |
Purchase of treasury shares | (444) | (411) | (309) |
Net cash used in financing activities | (33,427) | (3,360) | (3,249) |
Net (decrease) increase in cash and cash equivalents | (12,958) | (17,782) | 10,288 |
Cash and cash equivalents at beginning of period | 67,218 | 85,000 | 74,712 |
Cash and cash equivalents at end of period | $ 54,260 | $ 67,218 | $ 85,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (1) Summary (a) Organization and Presentation United States Lime & Minerals, Inc. (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), environmental (including municipal sanitation and water treatment facilities and flue gas treatment processes), metals (including steel producers), oil and gas services, roof shingle manufacturers and agriculture (including poultry and cattle feed producers) industries. The Company is headquartered in Dallas, Texas and 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. 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. During 2019, the Company’s natural gas interests did not reach any of the quantitative thresholds for a reportable segment, and the results from its natural gas interests are not expected to be of significance in future periods. The revenues, gross profit and operating profit of the natural gas interests are included in Other for reportable segment disclosures. Disclosures for 2018 and 2017 have been recast to be consistent with the 2019 presentation. (b) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. (c) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and judgments. (d) Statements of Cash Flows For purposes of reporting cash flows, the Company considers all bank deposits and highly liquid debt instruments, such as U.S. Treasury bills and notes, with maturities, at the time of purchase, of three months or less to be cash equivalents. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value. Supplemental cash flow information is presented below: Years Ended December 31, 2019 2018 2017 Cash paid during the year for: Interest $ 150 $ 179 $ 140 Income taxes $ 445 $ 331 $ 6,718 (e) 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. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. The Company’s returns and allowances are minimal. External freight billed to customers included in revenues was $28,397, $25,637 and $23,489 for 2019, 2018 and 2017, 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. 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 11 for disaggregation of revenues by the Lime and Limestone Operations segment and Other, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. (f) 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. Specific inputs used to value the Company’s foreign exchange hedges were Euro to U.S. Dollar exchange rates for the expected future payment dates for the Company’s commitments denominated in Euros. There were no changes in the methods and assumptions used in measuring fair value during the period. The carrying values of cash and cash equivalents, trade receivables, other current assets, accounts payable and accrued expenses approximate fair value due to the short maturity of these instruments. The Company’s foreign exchange hedges are carried at fair value at December 31, 2019 and 2018. See Notes 1(p), 5 and 10. Financial liabilities measured at fair value on a recurring basis are summarized below: Significant Other Observable Inputs (Level 2) December 31, December 31, December 31, December 31, 2019 2018 2019 2018 Valuation Technique Foreign exchange hedges $ (1) $ (16) $ (1) $ (16) Cash flows approach (g) Concentration of Credit Risk and Trade Receivables Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents, trade receivables and derivative financial instruments. The Company places its cash and cash equivalents with high-credit quality financial institutions and in highly rated commercial paper or U.S. Treasury bills and notes with maturities, at the time of purchase, of three months or less. The Company places its derivative financial instruments with financial institutions and other firms that management believes have high credit ratings. The Company’s cash and cash equivalents at commercial banking institutions normally exceed federally insured limits. For a discussion of the credit risks associated with the Company’s derivative financial instruments, see Note 10. 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. 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. Trade receivables are presented net of the related allowance for doubtful accounts, which totaled $361 and $430 at December 31, 2019 and 2018, respectively. Additions and write‑offs to the Company’s allowance for doubtful accounts during the years ended December 31 are as follows: 2019 2018 Beginning balance $ $ Additions 102 Write-offs (171) Ending balance $ 361 $ (h) Inventories, Net Inventories are valued principally at the lower of cost, determined using the average cost method, or net realizable value. Costs for raw materials and finished goods include materials, labor and production overhead. A summary of inventories is as follows: December 31, December 31, 2019 2018 Lime and limestone inventories: Raw materials $ 4,546 $ 4,693 Finished goods 1,954 2,153 6,500 6,846 Service parts inventories 6,888 6,000 $ 13,388 $ 12,846 (i) Property, Plant and Equipment For major constructed assets, the capitalized cost includes the price paid by the Company for labor and materials plus interest and internal and external project management costs that are directly related to the constructed assets. Machinery and equipment at December 31, 2019 and 2018 included $16,813 and $45,555, respectively, of construction in progress for various capital projects. No interest costs were capitalized for the years ended December 31, 2019 and 2018. At December 31, 2019 and 2018, accounts payable and accrued expenses included $1,303 and $936, respectively, of capitalized costs. Depreciation of property, plant and equipment is being provided for by the straight‑line method over estimated useful lives as follows: Buildings and building and leasehold improvements - 25 years Machinery and equipment - 30 years Furniture and fixtures - 10 years Automotive equipment - 10 years Maintenance and repairs are charged to expense as incurred; renewals and betterments are capitalized. When units of property are retired or otherwise disposed of, their cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is credited or charged to income. The Company expenses all exploration costs as incurred as well as costs incurred at an operating quarry or mine, other than capital expenditures and inventory. Costs to acquire mineral reserves or mineral interests are capitalized upon acquisition. Development costs incurred to develop new mineral reserves, to expand the capacity of a quarry or mine, or to develop quarry or mine areas substantially in advance of current production are capitalized once proven and probable reserves exist and can be economically produced. For each quarry or mine, capitalized costs to acquire and develop mineral reserves are depleted using the units‑of‑production method based on the proven and probable reserves for such quarry or mine. The Company reviews its long‑lived assets for impairment and, when events or circumstances indicate the carrying amount of an asset may not be recoverable, the Company determines if impairment of value exists. If the estimated undiscounted future net cash flows are less than the carrying amount of the asset, an impairment exists, and an impairment loss must be calculated and recorded. If an impairment exists, the impairment loss is calculated based on the excess of the carrying amount of the asset over the asset’s fair value. Any impairment loss is treated as a permanent reduction in the carrying value of the asset. During 2019, the Company recognized an impairment charge of $930 to adjust the carrying value of certain long-lived assets related to its natural gas interests. Prices for natural gas and natural gas liquids decreased substantially during 2019, which led the Company to determine that the estimated fair value of its natural gas assets was less than their carrying value. Fair value was determined as the present value of the estimated future cash flows of the natural gas interests. (j) 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. (k) Asset Retirement Obligations The Company recognizes legal obligations for reclamation and remediation associated with the retirement of long‑lived assets at their fair value at the time the obligations are incurred (“AROs”). Over time, the liability for AROs is recorded at its present value each period through accretion expense, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the AROs for the recorded amount or recognizes a gain or loss. The Company’s AROs of $1,482 and $1,519 as of December 31, 2019 and 2018, respectively, are included in Other liabilities and Accrued expenses on the Company’s Consolidated Balance Sheets. As of December 31, 2019, assets, net of accumulated depreciation, associated with the Company’s AROs totaled $826. During 2019 and 2018, the Company spent $93 and $178, respectively, on its AROs, and recognized accretion expense of $86, $84 and $73 in 2019, 2018 and 2017, respectively, on its AROs. The AROs were estimated based on studies and the Company’s process knowledge and estimates and are discounted using a credit adjusted risk-free interest rate. The AROs are adjusted when further information warrants an adjustment. The Company estimates annual expenditures of approximately $100 to $200 per year in years 2020 through 2024 relating to its AROs. (l) Other Assets, Net Other assets, net consist of the following: December 31, 2019 2018 Deferred financing costs $ 28 $ 19 Other 395 530 $ 423 $ 549 (m) Environmental Expenditures Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded at their present value when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals will coincide with completion of a feasibility study or the Company’s commitment to a formal plan of action. The Company incurred capital expenditures related to environmental matters of $1,156 in 2019, $1,152 in 2018 and $440 in 2017. (n) Income and Dividends Per Share of Common Stock The following table sets forth the computation of basic and diluted income per common share: Years Ended December 31, 2019 2018 2017 Net income for basic and diluted income per common share $ 26,056 $ 19,685 $ 27,148 Weighted-average shares for basic income per common share 5,612,048 Effect of dilutive securities: Employee and director stock options (1) 9,090 Adjusted weighted-average shares and assumed exercises for diluted income per common share 5,621,138 5,602,377 5,588,496 Basic net income per common share $ 4.64 $ 3.52 $ 4.87 Diluted net income per common share $ 4.64 $ 3.51 $ 4.86 (1) Excludes 8,700, 9,900 and 0 stock options in 2019, 2018 and 2017, respectively, as antidilutive because the exercise price exceeded the average per share market price for the periods presented. The Company paid $5.89, $0.54 and $0.54 of cash dividends per share of common stock in 2019, 2018 and 2017, respectively. The cash dividends for 2019 included a special dividend of $5.35 per share paid in 2019. (o) Stock‑Based Compensation The Company expenses all stock‑based payments to employees and directors, including grants of stock options and restricted stock, in the Company’s Consolidated Statements of Income based on their fair values. Compensation cost is recognized on a straight-line basis over the vesting period. (p) Derivative Instruments and Hedging Activities Every derivative instrument is recorded on the Company’s Consolidated Balance Sheets as either an asset or liability measured at its fair value. Changes in the derivative’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met. If the derivative is designated as a cash flow hedge, changes in fair value are recognized in comprehensive income or loss until the hedged item is recognized in earnings. The Company estimated fair value utilizing the cash flows valuation technique. The fair values of derivative contracts that expire in less than one year are recognized as current assets or liabilities. Those that expire in more than one year are recognized as long-term assets or liabilities. See Notes 1(f), 5 and 10. (q) Income Taxes The Company utilizes the asset and liability approach in its reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. Income tax related interest and penalties are included in income tax expense. The Company also assesses individual tax positions to determine if they meet the criteria for some or all of the benefits of that position to be recognized in the Company’s financial statements. The Company only recognizes tax positions that meet the more‑likely‑than‑not recognition threshold. (r) 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 and foreign exchange hedges, are reported as a separate component of the stockholders’ equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. See Notes 1(p), 5 and 10. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | (2) New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), “Leases,” which requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous guidance. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of one year or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. The Company adopted ASU 2016-02 at January 1, 2019, using the optional transition method. Under the optional transition method, a reporting entity continues to apply legacy guidance, including disclosure requirements, in the comparative periods presented in the year of adoption, recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if any. The Company elected the package of practical expedients permitted under the transition guidance, which, among other things, carried forward the historical lease classification. The Company also elected the component practical expedient, which includes lease and non-lease components as a single component in accounting for a lease. Adoption of ASU 2016-02 resulted in an increase in assets of $3.9 million with corresponding liabilities of $3.9 million and no impact on retained earnings at January 1, 2019. In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (“ASU 2018-02”), “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). The Company adopted ASU 2018-02 at January 1, 2019. Adoption of this standard had no impact on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326)”. The new standard is effective for public companies, excluding smaller reporting companies, for reporting periods beginning after December 15, 2019 and for smaller reporting companies, for reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. The standard replaces the incurred loss impairment methodology under current US GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company plans to adopt ASU 2016-13 as of January 1, 2020. Implementation of ASU 2016-03 will not have a material effect on the Company’s Consolidated Financial Statements . |
Banking Facilities and Debt
Banking Facilities and Debt | 12 Months Ended |
Dec. 31, 2019 | |
Banking Facilities and Debt | |
Banking Facilities and Debt | (3) 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 $75,000 revolving credit facility (the “Revolving Facility”) and an incremental four-year accordion feature to borrow up to an additional $50,000 on the same terms, subject to approval by the Lender or another lender selected by the Company. The credit agreement also provides for a $10,000 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 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 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. The Company had no debt outstanding at December 31, 2019 or 2018. The Company had $400 of letters of credit issued at December 31, 2019, which count as draws against the available commitment under the Revolving Facility. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | (4) 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 0 to 8 years, with a weighted-average remaining lease term of 3 years at December 31, 2019. Some operating leases include options to extend the leases for up to 5 years. At January 1, 2019, upon implementation of ASU 2016-02, the liability for the Company’s operating leases was discounted to present value using a weighted-average discount rate of 3.5%. Total lease and rent expense was $2,133, $2,260 and $2,359 for 2019, 2018 and 2017, respectively. The components of net operating lease costs for 2019 were as follows (in thousands): Year Ended December 31, Classification 2019 Operating lease costs (1) Cost of revenues $ 1,974 Operating lease costs Selling, general and administrative expenses 230 Rental revenues Other (income) expense (71) Net operating lease costs $ 2,133 (1) Includes the costs of leases with a term of one year or less. As of December 31, 2019, 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): 2020 $ 1,327 2021 1,085 2022 460 2023 187 2024 174 Thereafter 92 Total future minimum lease payments 3,325 Less imputed interest (165) Present value of lease liabilities $ 3,160 Supplemental cash flow information pertaining to the Company’s leasing activity for the year ended December 31, 2019 was as follows (in thousands): Year Ended December 31, 2019 Cash payments for operating lease liabilities $ 1,664 Right-of-use assets obtained in exchange for operating lease obligations $ 857 As of December 31, 2018, future minimum payments, under operating leases applying legacy guidance prior to the adoption of ASU 2016-02, that were either non-cancelable or subject to significant penalty upon cancellation, were $1,319 for 2019, $1,030 for 2020, $720 for 2021, $397 for 2022 and $0 for 2023 and thereafter. |
Comprehensive Income
Comprehensive Income | 12 Months Ended |
Dec. 31, 2019 | |
Share Repurchases | |
Comprehensive Income | (5) Comprehensive Income The components of comprehensive income for the years ended December 31 are as follows: 2019 2018 2017 Net income $ 26,056 $ 19,685 $ 27,148 Mark to market of foreign exchange hedges 16 (128) 464 Deferred income tax (expense) benefit (4) 29 (155) Comprehensive income $ 26,068 $ 19,586 $ 27,457 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | (6) Income Taxes Income tax expense (benefit) for the years ended December 31 is as follows: 2019 2018 2017 Current income tax (benefit) expense $ (4) $ 1,863 $ 5,407 Deferred income tax expense (benefit) 4,848 20 (7,612) Income tax expense (benefit) $ 4,844 $ 1,883 $ (2,205) A reconciliation of income taxes computed at the federal statutory rate to income tax expense (benefit) for the years ended December 31 is as follows: 2019 2018 2017 Percent of Percent of Percent of Pretax Pretax Pretax Amount Income Amount Income Amount Income Income taxes computed at the federal statutory rate $ 6,489 21.0 % $ 4,529 21.0 % $ 8,730 35.0 % (Reduction) increase in taxes resulting from: Benefit of reduced federal income tax rates — — — — (7,447) (29.9) Statutory depletion in excess of cost depletion (1,200) (3.9) (1,199) (5.6) (2,004) (8.0) Research and development tax credits (1,155) (3.7) (1,775) (8.2) (1,433) (5.7) Manufacturing deduction — — — — (674) (2.7) State income taxes, net of federal income tax benefit 155 0.5 178 0.8 235 0.9 Other 555 1.8 150 0.7 388 1.6 Income tax expense (benefit) $ 4,844 15.7 % $ 1,883 8.7 % $ (2,205) (8.8) % The $7,447 benefit of reduced federal income tax rates in 2017 resulted from the 2017 Tax Act, which was signed into law on December 22, 2017. The 2017 Tax Act reduced the enacted federal income tax rate for corporations from 35% to 21% beginning in 2018. Applying the lower federal income tax rate to the Company’s book to tax differences resulted in a one-time reduction to the Company’s deferred tax liabilities, net, recorded as an income tax benefit in the Consolidated Statements of Income for 2017. The research and development tax credits in 2019, 2018 and 2017 were primarily associated with the construction of the new kiln at St. Clair. Components of the Company’s deferred tax liabilities and assets are as follows: December 31, December 31, 2019 2018 Deferred tax liabilities Lime and limestone property, plant and equipment $ 16,928 $ 11,219 Operating lease right-of-use assets 735 — Natural gas interests drilling costs and equipment 1,040 1,475 18,703 12,694 Deferred tax assets Fair value liability of foreign exchange hedges — 3 Operating lease liabilities 728 — Other 757 326 1,485 329 Deferred tax liabilities, net $ 17,218 $ 12,365 Current income taxes are classified on the Company’s Consolidated Balance Sheets as follows: Prepaid expenses and other current assets $ 416 $ — Accrued expenses $ — $ 54 The Company had no federal net operating loss carry forwards at December 31, 2019. The Company reduces deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is “more likely than not” that some portion or all of the deferred tax assets will not be realized. Deferred tax assets are considered fully recognizable because of the Company’s recent income history and expectations of income in the future. The Company’s federal income tax returns for the year ended December 31, 2016 and subsequent years remain subject to examination. The Company’s income tax returns in certain state income tax jurisdictions remain subject to examination for various periods for the year ended December 31, 2016 and subsequent years. The Company treats interest and penalties on income tax liabilities as income tax expense. |
Employee Retirement Plans
Employee Retirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Retirement Plans | |
Employee Retirement Plans | (7) Employee Retirement Plans The Company has a contributory retirement (401(k)) savings plans for non‑union employees and for union employees of Arkansas Lime Company and Texas Lime Company. Company contributions to these plans were $259, $251 and $209 in 2019, 2018 and 2017, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | (8) Stock‑Based Compensation The Company has a long-term incentive plan, the Amended and Restated 2001 Long‑Term Incentive Plan (the “2001 Plan”). The 2001 Plan provides for stock options, restricted stock and dollar‑denominated cash awards, including performance‑based awards. In addition to stock options, restricted stock and cash awards, the 2001 Plan provides for the grant of stock appreciation rights, deferred stock and other stock‑based awards to directors, officers, employees and consultants. The number of shares of common stock that may be subject to outstanding awards granted under the 2001 Plan (determined immediately after the grant of any award) may not exceed 874,589 from the inception of the 2001 Plan. In addition, no individual may receive awards in any one calendar year of more than 100,000 shares of common stock. Stock options granted under the 2001 Plan expire ten years from the date of grant and generally become exercisable, or vest, immediately. Restricted stock generally vests over periods of one‑half to three years. Upon the exercise of stock options, the Company issues common stock from its non‑issued authorized or treasury shares that have been reserved for issuance pursuant to the 2001 Plan. At December 31, 2019, the number of shares of common stock remaining available for future grants of stock options, restricted stock or other forms of stock‑based compensation under the 2001 Plan was 149,400. The Company recorded $1,524, $1,489 and $1,405 for stock‑based compensation expense related to stock options and shares of restricted stock for 2019, 2018 and 2017, respectively. The amounts included in cost of revenues were $170, $154 and $144 and in selling, general and administrative expense were $1,354, $1,335, and $1,261, for 2019, 2018 and 2017, respectively. A summary of the Company’s stock option and restricted stock activity and related information for the year ended December 31, 2019 and certain other information for the years ended December 31, 2019, 2018 and 2017 are as follows: Weighted- Weighted- Average Aggregate Average Stock Exercise Intrinsic Restricted Grant-Date Options Price Value Stock Fair Value Outstanding (stock options); non-vested (restricted stock) at December 31, 2018 60,300 $ 64.64 $ 507 17,594 $ 71.36 Granted 9,900 87.90 24 19,033 84.77 Exercised (stock options); vested (restricted stock) (2,000) 37.70 57 (18,024) 72.31 Forfeited — — — (133) 71.27 Outstanding (stock options); non-vested (restricted stock) at December 31, 2019 68,200 $ 68.81 $ 1,466 18,470 $ 84.26 Exercisable at December 31, 2019 68,200 $ 68.81 $ 1,466 n/a n/a 2019 2018 2017 Weighted-average fair value of stock options granted during the year $ 20.47 $ 17.74 $ 17.61 Weighted-average remaining contractual life for stock options in years 6.64 6.87 6.57 Total fair value of stock options vested during the year $ 203 $ 176 $ 174 Total intrinsic value of stock options exercised during the year $ 57 $ 447 $ 86 Total fair value of restricted stock vested during the year $ 1,303 $ 1,327 $ 1,232 There were no non‑vested stock options at December 31, 2019, and the weighted‑average remaining contractual life of the outstanding and exercisable stock options at such date was 6.64 years. The total compensation cost not yet recognized for restricted stock at December 31, 2019 was $1,361, which will be recognized over the weighted average of 1.07 years. The fair value for the stock options was estimated at the date of grant using a lattice‑based option valuation model, with the following weighted‑average assumptions for the 2019, 2018 and 2017 grants: risk‑free interest rates of 1.69% to 2.33% (weighted average 1.89%) in 2019, 2.51% to 2.80% (weighted average 2.59%) in 2018 and 1.45% to 1.81% (weighted average 1.73%) in 2017; a dividend yield of 0.60% to 0.67% (weighted average 0.62%) in 2019, 0.73% to 0.76% (weighted average 0.75%) in 2018 and 0.54% to 0.67% (weighted average of 0.57%) in 2017; and a volatility factor of .244 to .247 (weighted average .245) in 2019, .249 to .256 (weighted average .250) in 2018 and .258 to .265 (weighted average .260) in 2017, based on the monthly per‑share closing prices for three years preceding the date of issuance. In addition, the fair value of these options was estimated based on an expected life of three to five years. The fair value of restricted stock is based on the closing per‑share price of the Company’s common stock on the date of grant. |
Share Repurchases
Share Repurchases | 12 Months Ended |
Dec. 31, 2019 | |
Share Repurchases | |
Share Repurchases | (9) Share Repurchases The Company accounts for the repurchase of common stock using the cost method, with common stock in treasury classified in the Company’s Consolidated Balance Sheets as a reduction in stockholders’ equity. In December 2015, the Company commenced a publicly announced share repurchase program to repurchase up to $10,000 of its common stock. On November 30, 2019, the repurchase program expired. No shares were repurchased under the program in 2019, 2018 or 2017. During 2019, pursuant to provisions in the 2001 Plan that allow employees and directors to pay the tax withholding liability upon the lapse of restrictions on restricted stock in either cash and/or delivery of shares of the Company’s common stock, the Company repurchased 5,475 shares at a weighted-average price of $81.10 per share. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (10) Commitments and Contingencies The Company is party to lawsuits and claims arising in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company’s financial condition, results of operations, cash flows or competitive position. The Company is not contractually committed to any planned capital expenditures until actual orders are placed for equipment or services. At December 31, 2019, the Company had $979 for open equipment and construction contracts. At December 31, 2019, the Company had a contract related to a capital project at its Arkansas facility that required future payments totaling 0.3 million Euros, or $381. To hedge against potential losses due to changes in the Euro to U.S. Dollar exchange rates, the Company has entered into foreign exchange (“FX”) hedges with Wells Fargo Bank, N.A. as the counterparty to the hedges to fix the exchange rate for the 0.3 million Euros. The hedges have been effective as defined under applicable accounting rules. Therefore, changes in fair value of the FX hedges are reflected in comprehensive income. The Company will be exposed to credit losses in the event of non-performance by the counterparty to the hedges. Due to the strengthening of the Euro, compared to the U.S. Dollar during 2019, the fair value of the FX hedges resulted in a liability of $1 at December 31, 2019, and a liability of $16 at December 31, 2018, which is included in Accrued expenses in the Company’s Consolidated Balance Sheets. See Notes 1(f), 1(p) and 5. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2019 | |
Reportable Segments | |
Reportable Segments | (11) Reportable 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 income and expense and other expense to its lime and limestone operations. During 2019, the Company’s natural gas interests did not reach any of the quantitative thresholds for a reportable segment, and the Company does not expect the results from its natural gas interests to be of significance in future periods. The revenues, gross profit and operating profit from the Company’s natural gas interests are included in Other for the Company’s reportable segment disclosures. Other identifiable assets include assets related to its natural gas interests, unallocated corporate assets and cash items. Segment disclosures for 2018 and 2017 have been recast to be consistent with the 2019 presentation. Operating results and certain other financial data for the years ended December 31, 2019, 2018 and 2017 for the Company’s Lime and Limestone Operations segment and Other are as follows: Revenues 2019 2018 2017 Lime and limestone operations $ 156,981 $ 141,922 $ 142,612 Other 1,296 2,513 2,232 Total revenues $ 158,277 $ 144,435 $ 144,844 Depreciation, depletion and amortization Lime and limestone operations $ 16,432 $ 16,741 $ 15,694 Other 962 650 646 Total depreciation, depletion and amortization $ 17,394 $ 17,391 $ 16,340 Gross profit Lime and limestone operations $ 42,043 $ 29,482 $ 33,652 Other (367) 1,004 728 Total gross profit $ 41,676 $ 30,486 $ 34,380 Operating profit Lime and limestone operations $ 30,543 18,998 23,499 Other (1) (1,297) 1,004 728 Total operating profit $ 29,246 20,002 24,227 Identifiable assets, at year end Lime and limestone operations $ 185,657 $ 169,182 $ 133,350 Other 61,380 75,489 95,096 Total identifiable assets $ 247,037 $ 244,671 $ 228,446 Capital expenditures Lime and limestone operations $ 27,100 $ 53,762 $ 21,335 Other — — 2 Total capital expenditures $ 27,100 $ 53,762 $ 21,337 (1) Other Operating profit for the year ended December 31, 2019 was adversely impacted by an impairment charge of $930 to adjust the carrying value of long-lived assets related to the Company’s natural gas interests. |
Summary of Quarterly Financial
Summary of Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Quarterly Financial Data (Unaudited) | |
Summary of Quarterly Financial Data (Unaudited) | (12) Summary of Quarterly Financial Data (unaudited) 2019 March 31, June 30, September 30, December 31, Revenues Lime and limestone operations $ 37,465 $ 38,581 $ 43,265 $ 37,670 Other 334 373 294 295 $ 37,799 $ 38,954 $ 43,559 $ 37,965 Gross profit Lime and limestone operations $ 8,686 $ 9,690 $ 13,477 $ 10,190 Other 7 37 6 (417) $ 8,693 $ 9,727 $ 13,483 $ 9,773 Net income $ 5,128 $ 6,033 $ 9,902 $ 4,993 Basic income per common share $ 0.91 $ 1.07 $ 1.76 $ 0.89 Diluted income per common share $ 0.91 $ 1.07 $ 1.76 $ 0.89 2018 March 31, June 30, September 30, December 31, Revenues Lime and limestone operations $ 34,714 $ 38,557 $ 34,713 $ 33,938 Other 573 685 559 696 $ 35,287 $ 39,242 $ 35,272 $ 34,634 Gross profit Lime and limestone operations $ 6,793 $ 9,327 $ 6,992 $ 6,370 Other 244 310 204 246 $ 7,037 $ 9,637 $ 7,196 $ 6,616 Net income $ 4,262 $ 6,638 $ 4,554 $ 4,231 Basic income per common share $ 0.76 $ 1.19 $ 0.81 $ 0.76 Diluted income per common share $ 0.76 $ 1.18 $ 0.81 $ 0.75 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Event. | |
Subsequent Event | (13) Subsequent Event On January 30, 2020, the Company declared an increased regular quarterly cash dividend of $0.16 (16 cents) per share on the Company’s common stock. This dividend is payable on March 13, 2020 to shareholders of record at the close of business on February 21, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | (c) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and judgments. |
Statements of Cash Flows | (d) Statements of Cash Flows For purposes of reporting cash flows, the Company considers all bank deposits and highly liquid debt instruments, such as U.S. Treasury bills and notes, with maturities, at the time of purchase, of three months or less to be cash equivalents. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value. Supplemental cash flow information is presented below: Years Ended December 31, 2019 2018 2017 Cash paid during the year for: Interest $ 150 $ 179 $ 140 Income taxes $ 445 $ 331 $ 6,718 |
Revenue Recognition | (e) 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. Revenues include external freight billed to customers with related costs accounted for as fulfillment costs and included in cost of revenues. The Company’s returns and allowances are minimal. External freight billed to customers included in revenues was $28,397, $25,637 and $23,489 for 2019, 2018 and 2017, 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. 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 11 for disaggregation of revenues by the Lime and Limestone Operations segment and Other, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. |
Fair Values of Financial Instruments | (f) 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. Specific inputs used to value the Company’s foreign exchange hedges were Euro to U.S. Dollar exchange rates for the expected future payment dates for the Company’s commitments denominated in Euros. There were no changes in the methods and assumptions used in measuring fair value during the period. The carrying values of cash and cash equivalents, trade receivables, other current assets, accounts payable and accrued expenses approximate fair value due to the short maturity of these instruments. The Company’s foreign exchange hedges are carried at fair value at December 31, 2019 and 2018. See Notes 1(p), 5 and 10. Financial liabilities measured at fair value on a recurring basis are summarized below: Significant Other Observable Inputs (Level 2) December 31, December 31, December 31, December 31, 2019 2018 2019 2018 Valuation Technique Foreign exchange hedges $ (1) $ (16) $ (1) $ (16) Cash flows approach |
Concentration of Credit Risk and Trade Receivables | (g) Concentration of Credit Risk and Trade Receivables Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents, trade receivables and derivative financial instruments. The Company places its cash and cash equivalents with high-credit quality financial institutions and in highly rated commercial paper or U.S. Treasury bills and notes with maturities, at the time of purchase, of three months or less. The Company places its derivative financial instruments with financial institutions and other firms that management believes have high credit ratings. The Company’s cash and cash equivalents at commercial banking institutions normally exceed federally insured limits. For a discussion of the credit risks associated with the Company’s derivative financial instruments, see Note 10. 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. 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. Trade receivables are presented net of the related allowance for doubtful accounts, which totaled $361 and $430 at December 31, 2019 and 2018, respectively. Additions and write‑offs to the Company’s allowance for doubtful accounts during the years ended December 31 are as follows: 2019 2018 Beginning balance $ $ Additions 102 Write-offs (171) Ending balance $ 361 $ |
Inventories, Net | (h) Inventories, Net Inventories are valued principally at the lower of cost, determined using the average cost method, or net realizable value. Costs for raw materials and finished goods include materials, labor and production overhead. A summary of inventories is as follows: December 31, December 31, 2019 2018 Lime and limestone inventories: Raw materials $ 4,546 $ 4,693 Finished goods 1,954 2,153 6,500 6,846 Service parts inventories 6,888 6,000 $ 13,388 $ 12,846 |
Property, Plant and Equipment | (i) Property, Plant and Equipment For major constructed assets, the capitalized cost includes the price paid by the Company for labor and materials plus interest and internal and external project management costs that are directly related to the constructed assets. Machinery and equipment at December 31, 2019 and 2018 included $16,813 and $45,555, respectively, of construction in progress for various capital projects. No interest costs were capitalized for the years ended December 31, 2019 and 2018. At December 31, 2019 and 2018, accounts payable and accrued expenses included $1,303 and $936, respectively, of capitalized costs. Depreciation of property, plant and equipment is being provided for by the straight‑line method over estimated useful lives as follows: Buildings and building and leasehold improvements - 25 years Machinery and equipment - 30 years Furniture and fixtures - 10 years Automotive equipment - 10 years Maintenance and repairs are charged to expense as incurred; renewals and betterments are capitalized. When units of property are retired or otherwise disposed of, their cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is credited or charged to income. The Company expenses all exploration costs as incurred as well as costs incurred at an operating quarry or mine, other than capital expenditures and inventory. Costs to acquire mineral reserves or mineral interests are capitalized upon acquisition. Development costs incurred to develop new mineral reserves, to expand the capacity of a quarry or mine, or to develop quarry or mine areas substantially in advance of current production are capitalized once proven and probable reserves exist and can be economically produced. For each quarry or mine, capitalized costs to acquire and develop mineral reserves are depleted using the units‑of‑production method based on the proven and probable reserves for such quarry or mine. The Company reviews its long‑lived assets for impairment and, when events or circumstances indicate the carrying amount of an asset may not be recoverable, the Company determines if impairment of value exists. If the estimated undiscounted future net cash flows are less than the carrying amount of the asset, an impairment exists, and an impairment loss must be calculated and recorded. If an impairment exists, the impairment loss is calculated based on the excess of the carrying amount of the asset over the asset’s fair value. Any impairment loss is treated as a permanent reduction in the carrying value of the asset. During 2019, the Company recognized an impairment charge of $930 to adjust the carrying value of certain long-lived assets related to its natural gas interests. Prices for natural gas and natural gas liquids decreased substantially during 2019, which led the Company to determine that the estimated fair value of its natural gas assets was less than their carrying value. Fair value was determined as the present value of the estimated future cash flows of the natural gas interests. |
Successful-Efforts Method Used for Natural Gas Interests | (j) 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. |
Asset Retirement Obligations | (k) Asset Retirement Obligations The Company recognizes legal obligations for reclamation and remediation associated with the retirement of long‑lived assets at their fair value at the time the obligations are incurred (“AROs”). Over time, the liability for AROs is recorded at its present value each period through accretion expense, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the AROs for the recorded amount or recognizes a gain or loss. The Company’s AROs of $1,482 and $1,519 as of December 31, 2019 and 2018, respectively, are included in Other liabilities and Accrued expenses on the Company’s Consolidated Balance Sheets. As of December 31, 2019, assets, net of accumulated depreciation, associated with the Company’s AROs totaled $826. During 2019 and 2018, the Company spent $93 and $178, respectively, on its AROs, and recognized accretion expense of $86, $84 and $73 in 2019, 2018 and 2017, respectively, on its AROs. The AROs were estimated based on studies and the Company’s process knowledge and estimates and are discounted using a credit adjusted risk-free interest rate. The AROs are adjusted when further information warrants an adjustment. The Company estimates annual expenditures of approximately $100 to $200 per year in years 2020 through 2024 relating to its AROs. |
Other Assets, Net | (l) Other Assets, Net Other assets, net consist of the following: December 31, 2019 2018 Deferred financing costs $ 28 $ 19 Other 395 530 $ 423 $ 549 |
Environmental Expenditures | (m) Environmental Expenditures Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded at their present value when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals will coincide with completion of a feasibility study or the Company’s commitment to a formal plan of action. The Company incurred capital expenditures related to environmental matters of $1,156 in 2019, $1,152 in 2018 and $440 in 2017. |
Income and Dividends Per Share of Common Stock | (n) Income and Dividends Per Share of Common Stock The following table sets forth the computation of basic and diluted income per common share: Years Ended December 31, 2019 2018 2017 Net income for basic and diluted income per common share $ 26,056 $ 19,685 $ 27,148 Weighted-average shares for basic income per common share 5,612,048 Effect of dilutive securities: Employee and director stock options (1) 9,090 Adjusted weighted-average shares and assumed exercises for diluted income per common share 5,621,138 5,602,377 5,588,496 Basic net income per common share $ 4.64 $ 3.52 $ 4.87 Diluted net income per common share $ 4.64 $ 3.51 $ 4.86 (1) Excludes 8,700, 9,900 and 0 stock options in 2019, 2018 and 2017, respectively, as antidilutive because the exercise price exceeded the average per share market price for the periods presented. The Company paid $5.89, $0.54 and $0.54 of cash dividends per share of common stock in 2019, 2018 and 2017, respectively. The cash dividends for 2019 included a special dividend of $5.35 per share paid in 2019. |
Stock-Based Compensation | (o) Stock‑Based Compensation The Company expenses all stock‑based payments to employees and directors, including grants of stock options and restricted stock, in the Company’s Consolidated Statements of Income based on their fair values. Compensation cost is recognized on a straight-line basis over the vesting period. |
Derivative Instruments and Hedging Activities | (p) Derivative Instruments and Hedging Activities Every derivative instrument is recorded on the Company’s Consolidated Balance Sheets as either an asset or liability measured at its fair value. Changes in the derivative’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met. If the derivative is designated as a cash flow hedge, changes in fair value are recognized in comprehensive income or loss until the hedged item is recognized in earnings. The Company estimated fair value utilizing the cash flows valuation technique. The fair values of derivative contracts that expire in less than one year are recognized as current assets or liabilities. Those that expire in more than one year are recognized as long-term assets or liabilities. See Notes 1(f), 5 and 10. |
Income Taxes | (q) Income Taxes The Company utilizes the asset and liability approach in its reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. Income tax related interest and penalties are included in income tax expense. The Company also assesses individual tax positions to determine if they meet the criteria for some or all of the benefits of that position to be recognized in the Company’s financial statements. The Company only recognizes tax positions that meet the more‑likely‑than‑not recognition threshold. |
Comprehensive Income | (r) 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 and foreign exchange hedges, are reported as a separate component of the stockholders’ equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. See Notes 1(p), 5 and 10. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of supplemental cash flow information (in thousands) | Years Ended December 31, 2019 2018 2017 Cash paid during the year for: Interest $ 150 $ 179 $ 140 Income taxes $ 445 $ 331 $ 6,718 |
Schedule of the entity's financial liabilities measured at fair value on a recurring basis (in thousands) | Significant Other Observable Inputs (Level 2) December 31, December 31, December 31, December 31, 2019 2018 2019 2018 Valuation Technique Foreign exchange hedges $ (1) $ (16) $ (1) $ (16) Cash flows approach |
Schedule of additions and write-offs to the Company's allowance for doubtful accounts (in thousands) | 2019 2018 Beginning balance $ $ Additions 102 Write-offs (171) Ending balance $ 361 $ |
Schedule of inventories, net | December 31, December 31, 2019 2018 Lime and limestone inventories: Raw materials $ 4,546 $ 4,693 Finished goods 1,954 2,153 6,500 6,846 Service parts inventories 6,888 6,000 $ 13,388 $ 12,846 |
Schedule of estimated useful lives of property, plant and equipment (in thousands) | Buildings and building and leasehold improvements - 25 years Machinery and equipment - 30 years Furniture and fixtures - 10 years Automotive equipment - 10 years |
Schedule of other assets (in thousands) | December 31, 2019 2018 Deferred financing costs $ 28 $ 19 Other 395 530 $ 423 $ 549 |
Schedule of computation of basic and diluted income per common share | Years Ended December 31, 2019 2018 2017 Net income for basic and diluted income per common share $ 26,056 $ 19,685 $ 27,148 Weighted-average shares for basic income per common share 5,612,048 Effect of dilutive securities: Employee and director stock options (1) 9,090 Adjusted weighted-average shares and assumed exercises for diluted income per common share 5,621,138 5,602,377 5,588,496 Basic net income per common share $ 4.64 $ 3.52 $ 4.87 Diluted net income per common share $ 4.64 $ 3.51 $ 4.86 (1) Excludes 8,700, 9,900 and 0 stock options in 2019, 2018 and 2017, respectively, as antidilutive because the exercise price exceeded the average per share market price for the periods presented. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of lease costs | Year Ended December 31, Classification 2019 Operating lease costs (1) Cost of revenues $ 1,974 Operating lease costs Selling, general and administrative expenses 230 Rental revenues Other (income) expense (71) Net operating lease costs $ 2,133 (1) Includes the costs of leases with a term of one year or less. |
Schedule of maturity of lease liability | 2020 $ 1,327 2021 1,085 2022 460 2023 187 2024 174 Thereafter 92 Total future minimum lease payments 3,325 Less imputed interest (165) Present value of lease liabilities $ 3,160 |
Schedule of supplemental cash flow information | Year Ended December 31, 2019 Cash payments for operating lease liabilities $ 1,664 Right-of-use assets obtained in exchange for operating lease obligations $ 857 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share Repurchases | |
Schedule of components of comprehensive income | 2019 2018 2017 Net income $ 26,056 $ 19,685 $ 27,148 Mark to market of foreign exchange hedges 16 (128) 464 Deferred income tax (expense) benefit (4) 29 (155) Comprehensive income $ 26,068 $ 19,586 $ 27,457 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of income tax (benefit) expense (in thousands) | 2019 2018 2017 Current income tax (benefit) expense $ (4) $ 1,863 $ 5,407 Deferred income tax expense (benefit) 4,848 20 (7,612) Income tax expense (benefit) $ 4,844 $ 1,883 $ (2,205) |
Schedule of reconciliation of income taxes computed at the federal statutory rate to income tax expense (in thousands) | 2019 2018 2017 Percent of Percent of Percent of Pretax Pretax Pretax Amount Income Amount Income Amount Income Income taxes computed at the federal statutory rate $ 6,489 21.0 % $ 4,529 21.0 % $ 8,730 35.0 % (Reduction) increase in taxes resulting from: Benefit of reduced federal income tax rates — — — — (7,447) (29.9) Statutory depletion in excess of cost depletion (1,200) (3.9) (1,199) (5.6) (2,004) (8.0) Research and development tax credits (1,155) (3.7) (1,775) (8.2) (1,433) (5.7) Manufacturing deduction — — — — (674) (2.7) State income taxes, net of federal income tax benefit 155 0.5 178 0.8 235 0.9 Other 555 1.8 150 0.7 388 1.6 Income tax expense (benefit) $ 4,844 15.7 % $ 1,883 8.7 % $ (2,205) (8.8) % |
Summary of the Company's deferred tax liabilities and assets (in thousands) | December 31, December 31, 2019 2018 Deferred tax liabilities Lime and limestone property, plant and equipment $ 16,928 $ 11,219 Operating lease right-of-use assets 735 — Natural gas interests drilling costs and equipment 1,040 1,475 18,703 12,694 Deferred tax assets Fair value liability of foreign exchange hedges — 3 Operating lease liabilities 728 — Other 757 326 1,485 329 Deferred tax liabilities, net $ 17,218 $ 12,365 Current income taxes are classified on the Company’s Consolidated Balance Sheets as follows: Prepaid expenses and other current assets $ 416 $ — Accrued expenses $ — $ 54 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Summary of the Company's stock option and restricted stock activity (in thousands) | Weighted- Weighted- Average Aggregate Average Stock Exercise Intrinsic Restricted Grant-Date Options Price Value Stock Fair Value Outstanding (stock options); non-vested (restricted stock) at December 31, 2018 60,300 $ 64.64 $ 507 17,594 $ 71.36 Granted 9,900 87.90 24 19,033 84.77 Exercised (stock options); vested (restricted stock) (2,000) 37.70 57 (18,024) 72.31 Forfeited — — — (133) 71.27 Outstanding (stock options); non-vested (restricted stock) at December 31, 2019 68,200 $ 68.81 $ 1,466 18,470 $ 84.26 Exercisable at December 31, 2019 68,200 $ 68.81 $ 1,466 n/a n/a 2019 2018 2017 Weighted-average fair value of stock options granted during the year $ 20.47 $ 17.74 $ 17.61 Weighted-average remaining contractual life for stock options in years 6.64 6.87 6.57 Total fair value of stock options vested during the year $ 203 $ 176 $ 174 Total intrinsic value of stock options exercised during the year $ 57 $ 447 $ 86 Total fair value of restricted stock vested during the year $ 1,303 $ 1,327 $ 1,232 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reportable Segments | |
Schedule of operating results and certain other financial data for the business segments) | Revenues 2019 2018 2017 Lime and limestone operations $ 156,981 $ 141,922 $ 142,612 Other 1,296 2,513 2,232 Total revenues $ 158,277 $ 144,435 $ 144,844 Depreciation, depletion and amortization Lime and limestone operations $ 16,432 $ 16,741 $ 15,694 Other 962 650 646 Total depreciation, depletion and amortization $ 17,394 $ 17,391 $ 16,340 Gross profit Lime and limestone operations $ 42,043 $ 29,482 $ 33,652 Other (367) 1,004 728 Total gross profit $ 41,676 $ 30,486 $ 34,380 Operating profit Lime and limestone operations $ 30,543 18,998 23,499 Other (1) (1,297) 1,004 728 Total operating profit $ 29,246 20,002 24,227 Identifiable assets, at year end Lime and limestone operations $ 185,657 $ 169,182 $ 133,350 Other 61,380 75,489 95,096 Total identifiable assets $ 247,037 $ 244,671 $ 228,446 Capital expenditures Lime and limestone operations $ 27,100 $ 53,762 $ 21,335 Other — — 2 Total capital expenditures $ 27,100 $ 53,762 $ 21,337 Other Operating profit for the year ended December 31, 2019 was adversely impacted by an impairment charge of $930 to adjust the carrying value of long-lived assets related to the Company’s natural gas interests |
Summary of Quarterly Financia_2
Summary of Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Quarterly Financial Data (Unaudited) | |
Summary of unaudited quarterly financial data (in thousands) | 2019 March 31, June 30, September 30, December 31, Revenues Lime and limestone operations $ 37,465 $ 38,581 $ 43,265 $ 37,670 Other 334 373 294 295 $ 37,799 $ 38,954 $ 43,559 $ 37,965 Gross profit Lime and limestone operations $ 8,686 $ 9,690 $ 13,477 $ 10,190 Other 7 37 6 (417) $ 8,693 $ 9,727 $ 13,483 $ 9,773 Net income $ 5,128 $ 6,033 $ 9,902 $ 4,993 Basic income per common share $ 0.91 $ 1.07 $ 1.76 $ 0.89 Diluted income per common share $ 0.91 $ 1.07 $ 1.76 $ 0.89 2018 March 31, June 30, September 30, December 31, Revenues Lime and limestone operations $ 34,714 $ 38,557 $ 34,713 $ 33,938 Other 573 685 559 696 $ 35,287 $ 39,242 $ 35,272 $ 34,634 Gross profit Lime and limestone operations $ 6,793 $ 9,327 $ 6,992 $ 6,370 Other 244 310 204 246 $ 7,037 $ 9,637 $ 7,196 $ 6,616 Net income $ 4,262 $ 6,638 $ 4,554 $ 4,231 Basic income per common share $ 0.76 $ 1.19 $ 0.81 $ 0.76 Diluted income per common share $ 0.76 $ 1.18 $ 0.81 $ 0.75 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Additions and write-offs to the company's allowance for doubtful accounts | |||
Beginning balance | $ 430 | $ 346 | |
Additions | 102 | 109 | |
Write-offs | (171) | (25) | |
Ending balance | 361 | 430 | $ 346 |
Lime and limestone inventories: | |||
Raw materials | 4,546 | 4,693 | |
Finished goods | 1,954 | 2,153 | |
Total | 6,500 | 6,846 | |
Service parts inventories | 6,888 | 6,000 | |
Total inventories | 13,388 | 12,846 | |
Supplemental cash flow information | |||
Interest | 150 | 179 | 140 |
Income taxes | 445 | 331 | 6,718 |
Revenue Recognition | |||
External freight billed to customers included in revenue | 28,397 | 25,637 | $ 23,489 |
Recurring | Fair value | Cash flows approach | |||
Fair Values of Financial Instruments | |||
Foreign exchange hedges liabilities | (1) | (16) | |
Recurring | Significant Other Observable Inputs (Level 2) | Fair value | Cash flows approach | |||
Fair Values of Financial Instruments | |||
Foreign exchange hedges liabilities | $ (1) | $ (16) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - PP&E, ARO and Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment | |||
Construction in progress | $ 16,813 | $ 45,555 | |
Interest costs capitalized | 0 | 0 | |
Capitalized cost in accounts payable and accrued expenses | 1,303 | 936 | |
Impairment of long-lived assets | 930 | ||
Asset Retirement Obligations | |||
ARO included in other liabilities and accrued expenses | 1,482 | 1,519 | |
Amount of assets associated with AROs not fully depreciated | 826 | ||
Amount spent on AROs | 93 | 178 | |
Accretion expense recognized on AROs | 86 | 84 | $ 73 |
Other Assets | |||
Deferred financing costs | 28 | 19 | |
Other | 395 | 530 | |
Total | 423 | 549 | |
Environmental Expenditures | |||
Capital expenditures related to environmental matters | 1,156 | $ 1,152 | $ 440 |
Minimum | |||
Asset Retirement Obligations | |||
Estimated annual expenditures in years 2018 through 2022 relating to AROs | 100 | ||
Maximum | |||
Asset Retirement Obligations | |||
Estimated annual expenditures in years 2018 through 2022 relating to AROs | $ 200 | ||
Buildings and building and leasehold improvements. | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
Buildings and building and leasehold improvements. | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 25 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 2 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 30 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 10 years | ||
Automotive equipment. | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
Automotive equipment. | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives of property, plant and equipment | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Anti-dilutive securities | |||||||||||
Net income for basic and diluted income per common share | $ 4,993 | $ 9,902 | $ 6,033 | $ 5,128 | $ 4,231 | $ 4,554 | $ 6,638 | $ 4,262 | $ 26,056 | $ 19,685 | $ 27,148 |
Weighted-average shares for basic income per common share (in shares) | 5,612,048 | 5,595,384 | 5,577,312 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee and director stock options (in shares) | 9,090 | 6,993 | 11,184 | ||||||||
Adjusted weighted-average shares and assumed exercises for diluted income per common share (in shares) | 5,621,138 | 5,602,377 | 5,588,496 | ||||||||
Basic net income per common share (in dollars per share) | $ 0.89 | $ 1.76 | $ 1.07 | $ 0.91 | $ 0.76 | $ 0.81 | $ 1.19 | $ 0.76 | $ 4.64 | $ 3.52 | $ 4.87 |
Diluted net income per common share (in dollars per share) | $ 0.89 | $ 1.76 | $ 1.07 | $ 0.91 | $ 0.75 | $ 0.81 | $ 1.18 | $ 0.76 | 4.64 | 3.51 | 4.86 |
Cash dividends per share of common stock (in dollars per share) | 5.89 | $ 0.54 | $ 0.54 | ||||||||
Special cash dividends per share of common stock (in dollars per share) | $ 5.35 | ||||||||||
Options | |||||||||||
Effect of dilutive securities: | |||||||||||
Anti-dilutive shares of common stock excluded from the calculation of dilutive securities | 8,700 | 9,900 | 0 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncement | ||
Right-of-use asset | $ 3,192 | |
Right-of-use liability | $ 3,160 | |
Accounting Standards Update 2016-02 "Leases" | Adjustment | ||
New Accounting Pronouncement | ||
Right-of-use asset | $ 3,900 | |
Right-of-use liability | $ 3,900 |
Banking Facilities and Debt (De
Banking Facilities and Debt (Details) $ in Thousands | May 07, 2015USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 27, 2016USD ($) |
Summary of outstanding 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 | |||
Cash flow leverage ratio | 3.50 | |||
Revolving Facility | ||||
Banking facilities and other debt | ||||
Maximum borrowing capacity | $ 75,000 | |||
Accordion feature period | 4 years | |||
Maximum borrowing capacity accordion feature | $ 50,000 | |||
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 | $ 10,000 | |||
Revolving Facility | ||||
Banking facilities and other debt | ||||
Letters of credit outstanding | $ 400 |
Leases - Costs Disclosure (Deta
Leases - Costs Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Leases | ||||
Weighted average remaining lease term | 3 years | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |||
Average discount rate (as a percent) | 3.50% | |||
Lease cost | ||||
Net operating lease costs | $ 2,133 | $ 2,260 | $ 2,359 | |
Minimum | ||||
Leases | ||||
Remaining lease term | 0 years | |||
Maximum | ||||
Leases | ||||
Remaining lease term | 8 years | |||
Lease extension term | 5 years | |||
Cost of revenues | ||||
Lease cost | ||||
Operating lease cost | $ 1,974 | |||
Selling, general and administrative expense. | ||||
Lease cost | ||||
Operating lease cost | 230 | |||
Other (income) expense, net | ||||
Lease cost | ||||
Rental revenues | $ (71) |
Leases - Maturity (Details)
Leases - Maturity (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Maturity | |
2020 | $ 1,327 |
2021 | 1,085 |
2022 | 460 |
2023 | 187 |
2024 | 174 |
Thereafter | 92 |
Total future minimum lease payments | 3,325 |
Less imputed interest | (165) |
Present value of lease liabilities | 3,160 |
Future minimum payments under operating leases | |
2019 | 1,319 |
2020 | 1,030 |
2021 | 720 |
2022 | 397 |
2023 | $ 0 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Cash payments for operating lease liabilities | $ 1,664 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 857 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of comprehensive income | |||||||||||
Net income | $ 4,993 | $ 9,902 | $ 6,033 | $ 5,128 | $ 4,231 | $ 4,554 | $ 6,638 | $ 4,262 | $ 26,056 | $ 19,685 | $ 27,148 |
Mark to market of foreign exchange hedges | 16 | (128) | 464 | ||||||||
Deferred income tax (expense) benefit | (4) | 29 | (155) | ||||||||
Comprehensive (loss) income | $ 26,068 | $ 19,586 | $ 27,457 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amount | |||
Income taxes computed at the federal statutory rate | $ 6,489 | $ 4,529 | $ 8,730 |
(Reduction) increase in taxes resulting from: | |||
Benefit of reduced federal income tax rates | (7,447) | ||
Statutory depletion in excess of cost depletion | (1,200) | (1,199) | (2,004) |
Research and development tax credit | (1,155) | (1,775) | (1,433) |
Manufacturing deduction | (674) | ||
State income taxes, net of federal income tax benefit | 155 | 178 | 235 |
Other | 555 | 150 | 388 |
Income tax expense (benefit) | $ 4,844 | $ 1,883 | $ (2,205) |
Percent of Pretax Income | |||
Income taxes computed at the federal statutory rate (as a percent) | 21.00% | 21.00% | 35.00% |
(Reduction) increase in taxes resulting from (as a percent): | |||
Benefit of reduced federal income tax rates (as a percent) | (29.90%) | ||
Statutory depletion in excess of cost depletion (as a percent) | (3.90%) | (5.60%) | (8.00%) |
Research and development tax credit (as a percent) | (3.70%) | (8.20%) | (5.70%) |
Manufacturing deduction (as a percent) | (2.70%) | ||
State income taxes, net of federal income tax benefit (as a percent) | 0.50% | 0.80% | 0.90% |
Other (as a percent) | 1.80% | 0.70% | 1.60% |
Income tax expense (benefit) (as a percent) | 15.70% | 8.70% | (8.80%) |
Deferred tax liabilities | |||
Lime and limestone property, plant and equipment | $ 16,928 | $ 11,219 | |
Operating lease right-of-use assets | 735 | ||
Natural gas interests drilling costs and equipment | 1,040 | 1,475 | |
Total | 18,703 | 12,694 | |
Deferred tax assets | |||
Fair value liability of foreign exchange hedges | 3 | ||
Operating lease liabilities | 728 | ||
Other | 757 | 326 | |
Total | 1,485 | 329 | |
Deferred tax liabilities, net, Total | 17,218 | 12,365 | |
Current income taxes: | |||
Prepaid expenses and other current assets | 416 | ||
Accrued expenses | 54 | ||
Current income tax (benefit) expense | (4) | 1,863 | $ 5,407 |
Deferred income tax expense (benefit) | 4,848 | 20 | (7,612) |
Income tax expense (benefit) | 4,844 | $ 1,883 | $ (2,205) |
Federal | |||
Operating loss carry forwards | |||
Net operating loss carryforwards | $ 0 |
Employee Retirement Plans (Deta
Employee Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contributory retirement (401(k)) savings plans | |||
Company contributions | $ 259 | $ 251 | $ 209 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation | |||
Maximum number of awards that may be received by an individual in any one calendar year (in shares) | 100,000 | ||
Number of shares of common stock remaining available for future grants of stock options, restricted stock or other forms of stock-based compensation under the 2001 Plan | 149,400 | ||
Stock-based compensation expense | $ 1,524 | $ 1,489 | $ 1,405 |
Cost of revenues | |||
Stock-based compensation | |||
Stock-based compensation expense | 170 | 154 | 144 |
Selling, general and administrative expense. | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 1,354 | $ 1,335 | $ 1,261 |
Maximum | |||
Stock-based compensation | |||
Number of shares of common stock that may be subject to outstanding awards granted under the 2001 Plan | 874,589 | ||
Options | |||
Stock-based compensation | |||
Expiration period | 10 years | ||
Stock Options | |||
Outstanding at the beginning of the period (in shares) | 60,300 | ||
Granted (in shares) | 9,900 | ||
Exercised (in shares) | (2,000) | ||
Outstanding at the end of the period (in shares) | 68,200 | 60,300 | |
Exercisable at the end of the period (in shares) | 68,200 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 64.64 | ||
Granted (in dollars per share) | 87.90 | ||
Exercised (in dollars per share) | 37.70 | ||
Outstanding at the end of the period (in dollars per share) | 68.81 | $ 64.64 | |
Exercisable at the end of the period (in dollars per share) | $ 68.81 | ||
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period | $ 507 | ||
Granted | 24 | ||
Exercised | 57 | ||
Outstanding at the end of the period | 1,466 | $ 507 | |
Exercisable at the end of the period | $ 1,466 | ||
Additional disclosures | |||
Weighted-average fair value of stock options granted during the year (in dollars per share) | $ 20.47 | $ 17.74 | $ 17.61 |
Weighted-average remaining contractual life for stock options | 6 years 7 months 21 days | 6 years 10 months 13 days | 6 years 6 months 26 days |
Total fair value of stock options vested during the year | $ 203 | $ 176 | $ 174 |
Total intrinsic value of stock options exercised during the year | $ 57 | $ 447 | $ 86 |
Weighted-average remaining contractual life of the outstanding and exercisable stock options | 6 years 7 months 21 days | ||
Non-vested stock options | 0 | ||
Weighted-average assumptions used to estimate the fair value for the stock options | |||
Time period used to calculate weighted averages for fair value assumptions | 3 years | ||
Options | Minimum | |||
Weighted-average assumptions used to estimate the fair value for the stock options | |||
Risk-free interest rates (as a percent) | 1.69% | 2.51% | 1.45% |
Dividend yield (as a percent) | 0.60% | 0.73% | 0.54% |
Volatility factor (as a percent) | 0.244% | 0.249% | 0.258% |
Expected life | 3 years | ||
Options | Maximum | |||
Weighted-average assumptions used to estimate the fair value for the stock options | |||
Risk-free interest rates (as a percent) | 2.33% | 2.80% | 1.81% |
Dividend yield (as a percent) | 0.67% | 0.76% | 0.67% |
Volatility factor (as a percent) | 0.247% | 0.256% | 0.265% |
Expected life | 5 years | ||
Options | Weighted-average | |||
Weighted-average assumptions used to estimate the fair value for the stock options | |||
Risk-free interest rates (as a percent) | 1.89% | 2.59% | 1.73% |
Dividend yield (as a percent) | 0.62% | 0.75% | 0.57% |
Volatility factor (as a percent) | 0.245% | 0.25% | 0.26% |
Restricted stock | |||
Restricted Stock | |||
Non-vested at the beginning of the period (in shares) | 17,594 | ||
Granted (in shares) | 19,033 | ||
Vested (in shares) | (18,024) | ||
Forfeited (in shares) | (133) | ||
Non-vested at the end of the period (in shares) | 18,470 | 17,594 | |
Weighted-Average Grant-Date Fair Value | |||
Non-vested at the beginning of the period (in dollars per share) | $ 71.36 | ||
Granted (in dollars per share) | 84.77 | ||
Vested (in dollars per share) | 72.31 | ||
Forfeited (in dollars per share) | 71.27 | ||
Non-vested at the end of the period (in dollars per share) | $ 84.26 | $ 71.36 | |
Additional disclosures | |||
Total fair value of restricted stock vested during the year | $ 1,303 | $ 1,327 | $ 1,232 |
Total compensation cost not yet recognized | $ 1,361 | ||
Weighted-average period for recognition of total compensation cost not yet recognized | 1 year 26 days | ||
Restricted stock | Minimum | |||
Stock-based compensation | |||
Vesting period | 6 months | ||
Restricted stock | Maximum | |||
Stock-based compensation | |||
Vesting period | 3 years |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | |
Share Repurchases | ||||
Share repurchase program amount authorized | $ 10,000 | |||
Shares repurchased (in shares) | 0 | 0 | 0 | |
Shares paid for tax withholding for share-based compensation | 5,475 | |||
Weighted average per share prices for shares used to pay tax withholding liability (in dollars per share) | $ 81.10 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, € in Millions | 12 Months Ended | ||
Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accrued Expenses | |||
Commitment and Contingencies | |||
Foreign exchange hedges liabilities | $ 1 | $ 16 | |
Equipment and Construction Contracts | |||
Commitment and Contingencies | |||
Purchase commitment | € 0.3 | 979 | |
Arkansas Location | Equipment and Construction Contracts | |||
Commitment and Contingencies | |||
Purchase commitment | € 0.3 | $ 381 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Business segments | |||||||||||
Number of business segments | segment | 1 | ||||||||||
Revenues | $ 37,965 | $ 43,559 | $ 38,954 | $ 37,799 | $ 34,634 | $ 35,272 | $ 39,242 | $ 35,287 | $ 158,277 | $ 144,435 | $ 144,844 |
Depreciation, depletion and amortization | 17,394 | 17,391 | 16,340 | ||||||||
Gross profit (loss) | 9,773 | 13,483 | 9,727 | 8,693 | 6,616 | 7,196 | 9,637 | 7,037 | 41,676 | 30,486 | 34,380 |
Operating profit | 29,246 | 20,002 | 24,227 | ||||||||
Assets | 247,037 | 244,671 | 247,037 | 244,671 | 228,446 | ||||||
Capital expenditures | 27,100 | 53,762 | 21,337 | ||||||||
Impairment of long-lived assets | 930 | ||||||||||
Unallocated corporate assets and cash items | |||||||||||
Business segments | |||||||||||
Assets | 61,380 | 75,489 | 61,380 | 75,489 | 95,096 | ||||||
Lime and limestone operations | |||||||||||
Business segments | |||||||||||
Depreciation, depletion and amortization | 16,432 | 16,741 | 15,694 | ||||||||
Gross profit (loss) | 42,043 | 29,482 | 33,652 | ||||||||
Operating profit | 30,543 | 18,998 | 23,499 | ||||||||
Assets | 185,657 | 169,182 | 185,657 | 169,182 | 133,350 | ||||||
Capital expenditures | 27,100 | 53,762 | 21,335 | ||||||||
Other | |||||||||||
Business segments | |||||||||||
Depreciation, depletion and amortization | 962 | 650 | 646 | ||||||||
Gross profit (loss) | (367) | 1,004 | 728 | ||||||||
Operating profit | (1,297) | 1,004 | 728 | ||||||||
Capital expenditures | 2 | ||||||||||
Lime and limestone operations | |||||||||||
Business segments | |||||||||||
Revenues | 37,670 | 43,265 | 38,581 | 37,465 | 33,938 | 34,713 | 38,557 | 34,714 | |||
Lime and limestone operations | Lime and limestone operations | |||||||||||
Business segments | |||||||||||
Revenues | 156,981 | 141,922 | 142,612 | ||||||||
Other | |||||||||||
Business segments | |||||||||||
Revenues | $ 295 | $ 294 | $ 373 | $ 334 | $ 696 | $ 559 | $ 685 | $ 573 | |||
Other | Other | |||||||||||
Business segments | |||||||||||
Revenues | $ 1,296 | $ 2,513 | $ 2,232 |
Summary of Quarterly Financia_3
Summary of Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition | |||||||||||
Revenues | $ 37,965 | $ 43,559 | $ 38,954 | $ 37,799 | $ 34,634 | $ 35,272 | $ 39,242 | $ 35,287 | $ 158,277 | $ 144,435 | $ 144,844 |
Gross profit | |||||||||||
Gross profit (loss), Lime and limestone operations | 10,190 | 13,477 | 9,690 | 8,686 | 6,370 | 6,992 | 9,327 | 6,793 | |||
Gross profit (loss), other | (417) | 6 | 37 | 7 | 246 | 204 | 310 | 244 | |||
Gross profit | 9,773 | 13,483 | 9,727 | 8,693 | 6,616 | 7,196 | 9,637 | 7,037 | 41,676 | 30,486 | 34,380 |
Net income | $ 4,993 | $ 9,902 | $ 6,033 | $ 5,128 | $ 4,231 | $ 4,554 | $ 6,638 | $ 4,262 | $ 26,056 | $ 19,685 | $ 27,148 |
Basic income per common share (in dollars per share) | $ 0.89 | $ 1.76 | $ 1.07 | $ 0.91 | $ 0.76 | $ 0.81 | $ 1.19 | $ 0.76 | $ 4.64 | $ 3.52 | $ 4.87 |
Diluted income per common share (in dollars per share) | $ 0.89 | $ 1.76 | $ 1.07 | $ 0.91 | $ 0.75 | $ 0.81 | $ 1.18 | $ 0.76 | $ 4.64 | $ 3.51 | $ 4.86 |
Lime and limestone operations | |||||||||||
Revenue Recognition | |||||||||||
Revenues | $ 37,670 | $ 43,265 | $ 38,581 | $ 37,465 | $ 33,938 | $ 34,713 | $ 38,557 | $ 34,714 | |||
Other | |||||||||||
Revenue Recognition | |||||||||||
Revenues | $ 295 | $ 294 | $ 373 | $ 334 | $ 696 | $ 559 | $ 685 | $ 573 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent event | Jan. 30, 2020$ / shares |
Subsequent event | |
Quarterly cash dividend declared (in dollars per share) | $ 0.16 |
Dividends payable date declared | Jan. 30, 2020 |
Dividends payable date of record | Feb. 21, 2020 |
Dividends payable date to be paid | Mar. 13, 2020 |