United States Lime & Minerals Inc. (USLM, Financial) filed Quarterly Report for the period ended 2010-03-31.
United States Lime & Minerals Inc. has a market cap of $258.9 million; its shares were traded at around $40.52 with a P/E ratio of 19.1 and P/S ratio of 2.2. United States Lime & Minerals Inc. had an annual average earning growth of 22.9% over the past 10 years. GuruFocus rated United States Lime & Minerals Inc. the business predictability rank of 2.5-star.USLM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
The Company has a hedge that fixes LIBOR at 4.695% on the outstanding balance of the Term Loan for the period December 30, 2005 through its maturity date, resulting in an interest rate of 5.82% based on the current LIBOR margin of 1.125%. Effective December 30, 2005, the Company also entered into a hedge that fixes LIBOR at 4.875% on 75% of the outstanding balance on the Draw Term Loan through its maturity date, resulting in an interest rate of 6.00% based on the current LIBOR margin of 1.125%. Effective June 30, 2006, the Company entered into a third hedge that fixes LIBOR at 5.50% on the remaining 25% of the outstanding balance of the Draw Term Loan through its maturity date, resulting in an interest rate of 6.625% based on the current LIBOR margin of 1.125%. The hedges have been effective as defined under applicable accounting rules. Therefore, changes in fair value of the interest rate hedges are reflected in comprehensive income (loss). The Company will be exposed to credit losses in the event of non-performance by the counterparty, Wells Fargo Bank, N.A., to the hedges. Due to interest rate declines, the Company marked its interest rate hedges to market at March 31, 2010 and December 31, 2009, resulting in liabilities of $3.5 million and $3.2 million, respectively, that are included in accrued expenses ($1.7 million at both dates) and other liabilities ($1.8 million and $1.5 million, respectively) on the Companys Condensed Consolidated Balance Sheets. The Company paid $476 thousand and $395 thousand in the first quarters 2010 and 2009, respectively, in quarterly settlement payments pursuant to its hedges, which amounts were included in interest expense.
Revenues in the first quarter 2010 increased to $33.6 million from $28.3 million in the prior year comparable quarter, an increase of $5.3 million, or 18.7%. Revenues from the Companys Lime and Limestone Operations in the first quarter 2010 increased $5.0 million, or 18.7%, to $31.5 million from $26.5 million in the comparable 2009 quarter, while revenues from the Companys Natural Gas Interests increased $334 thousand, or 18.6%, to $2.1 million from $1.8 million in the comparable 2009 quarter. The increase in lime and limestone revenues in the first quarter 2010 as compared to last years comparable quarter primarily resulted from increased sales volumes of the Companys lime products due to improved demand, principally from its steel and oil and gas services customers, and average product price increases of approximately 9.8%.
The Companys gross profit for the first quarter 2010 was $9.5 million, compared to $6.2 million for the comparable 2009 quarter, an increase of $3.3 million, or 52.9%. Included in gross profit for the 2010 quarter was $7.9 million from the Companys Lime and Limestone Operations, compared to $5.2 million in the comparable 2009 quarter, an increase of $2.7 million, or 52.9%. The benefits of cost reductions and other operating efficiencies, along with the increase in prices, resulted in improved gross profit and gross profit margin for the Companys Lime and Limestone Operations in the first quarter 2010 compared to last years quarter.
Gross profit from the Companys Natural Gas Interests was $1.6 million in the first quarter 2010, compared to $1.1 million in the comparable 2009 quarter, an increase of $559 thousand, or 52.9%. Production volumes for the Companys Natural Gas Interests for the first quarter 2010 totaled 236 thousand MCF, sold at an average price of $9.03 per MCF. Production volumes in the comparable prior year quarter were 364 thousand MCF, sold at an average price of $5.71. The unitization of five natural gas wells, which lowered the Companys revenue interest to 30% from 36%, resulted in a retroactive net adjustment of approximately $300 thousand that reduced gross profit for the first quarter 2009.
The Companys Amended and Restated 2001 Long-Term Incentive Plan allows employees and directors to pay the exercise price for stock options and the tax withholding liability for the lapse of restrictions on restricted stock by payment in cash and/or delivery of shares of the Companys common stock. In the first quarter 2010, pursuant to these provisions the Company received 1,087 shares of its common stock for the payment of tax withholding liability for the lapse of restrictions on restricted stock. The 1,087 shares were valued at $35.01 to $38.20 per share (weighted average of $36.85 per share), the fair market value of one share of the Companys common stock on the date that they were tendered to the Company. In the first quarter 2010, pursuant to these provisions the Company also received a total of 1,955 shares of its common stock in payment to exercise stock options. The 1,955 shares were valued at $39.29 to $39.45 per share (weighted average of $39.32 per share), the fair market value of one share of the Companys common stock on the date they were tendered to the Company.
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United States Lime & Minerals Inc. has a market cap of $258.9 million; its shares were traded at around $40.52 with a P/E ratio of 19.1 and P/S ratio of 2.2. United States Lime & Minerals Inc. had an annual average earning growth of 22.9% over the past 10 years. GuruFocus rated United States Lime & Minerals Inc. the business predictability rank of 2.5-star.USLM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net cash provided by operating activities was $5.9 million in the first quarter 2010, compared to $6.2 million in the comparable 2009 period, a decrease of $360 thousand, or 5.8%. Net cash provided by operating activities is composed of net income, depreciation, depletion and amortization (DD&A), deferred income taxes and other non-cash items included in net income, and changes in working capital. In the 2010 quarter, cash provided by operating activities was principally composed of net income of $4.7 million, DD&A of $3.3 million and deferred income taxes of $740 thousand, compared to $2.7 million of net income, $3.5 million of DD&A and $450 thousand of deferred income taxes in the first quarter 2009. The most significant changes in working capital in the 2010 quarter were net increases in trade receivables of $4.6 million and in accounts payable and accrued expenses of $930 thousand. The most significant changes in working capital in the 2009 quarter were net decreases of $1.5 million in trade receivables and $2.1 million in accounts payable and accrued expenses. The net increase in trade receivables in 2010 primarily resulted from increased revenues in the first quarter 2010 compared to the fourth quarter 2009, and the net decrease in trade receivables in 2009 was primarily due to a decrease in natural gas revenues in the first quarter 2009 compared to the fourth quarter 2008. The increase in accounts payable and accrued expenses for the 2010 quarter primarily related to increased income tax liability resulting from the $2.9 million increase in net income before income taxes in the 2010 quarter compared to the 2009 quarter. The decrease in accounts payable and accrued expenses for the 2009 quarter primarily related to the payment of property taxes and other year-end accruals in the first quarter 2009 and greater December 2008 solid fuel deliveries compared to March 2009 deliveries.The Company has a hedge that fixes LIBOR at 4.695% on the outstanding balance of the Term Loan for the period December 30, 2005 through its maturity date, resulting in an interest rate of 5.82% based on the current LIBOR margin of 1.125%. Effective December 30, 2005, the Company also entered into a hedge that fixes LIBOR at 4.875% on 75% of the outstanding balance on the Draw Term Loan through its maturity date, resulting in an interest rate of 6.00% based on the current LIBOR margin of 1.125%. Effective June 30, 2006, the Company entered into a third hedge that fixes LIBOR at 5.50% on the remaining 25% of the outstanding balance of the Draw Term Loan through its maturity date, resulting in an interest rate of 6.625% based on the current LIBOR margin of 1.125%. The hedges have been effective as defined under applicable accounting rules. Therefore, changes in fair value of the interest rate hedges are reflected in comprehensive income (loss). The Company will be exposed to credit losses in the event of non-performance by the counterparty, Wells Fargo Bank, N.A., to the hedges. Due to interest rate declines, the Company marked its interest rate hedges to market at March 31, 2010 and December 31, 2009, resulting in liabilities of $3.5 million and $3.2 million, respectively, that are included in accrued expenses ($1.7 million at both dates) and other liabilities ($1.8 million and $1.5 million, respectively) on the Companys Condensed Consolidated Balance Sheets. The Company paid $476 thousand and $395 thousand in the first quarters 2010 and 2009, respectively, in quarterly settlement payments pursuant to its hedges, which amounts were included in interest expense.
Revenues in the first quarter 2010 increased to $33.6 million from $28.3 million in the prior year comparable quarter, an increase of $5.3 million, or 18.7%. Revenues from the Companys Lime and Limestone Operations in the first quarter 2010 increased $5.0 million, or 18.7%, to $31.5 million from $26.5 million in the comparable 2009 quarter, while revenues from the Companys Natural Gas Interests increased $334 thousand, or 18.6%, to $2.1 million from $1.8 million in the comparable 2009 quarter. The increase in lime and limestone revenues in the first quarter 2010 as compared to last years comparable quarter primarily resulted from increased sales volumes of the Companys lime products due to improved demand, principally from its steel and oil and gas services customers, and average product price increases of approximately 9.8%.
The Companys gross profit for the first quarter 2010 was $9.5 million, compared to $6.2 million for the comparable 2009 quarter, an increase of $3.3 million, or 52.9%. Included in gross profit for the 2010 quarter was $7.9 million from the Companys Lime and Limestone Operations, compared to $5.2 million in the comparable 2009 quarter, an increase of $2.7 million, or 52.9%. The benefits of cost reductions and other operating efficiencies, along with the increase in prices, resulted in improved gross profit and gross profit margin for the Companys Lime and Limestone Operations in the first quarter 2010 compared to last years quarter.
Gross profit from the Companys Natural Gas Interests was $1.6 million in the first quarter 2010, compared to $1.1 million in the comparable 2009 quarter, an increase of $559 thousand, or 52.9%. Production volumes for the Companys Natural Gas Interests for the first quarter 2010 totaled 236 thousand MCF, sold at an average price of $9.03 per MCF. Production volumes in the comparable prior year quarter were 364 thousand MCF, sold at an average price of $5.71. The unitization of five natural gas wells, which lowered the Companys revenue interest to 30% from 36%, resulted in a retroactive net adjustment of approximately $300 thousand that reduced gross profit for the first quarter 2009.
The Companys Amended and Restated 2001 Long-Term Incentive Plan allows employees and directors to pay the exercise price for stock options and the tax withholding liability for the lapse of restrictions on restricted stock by payment in cash and/or delivery of shares of the Companys common stock. In the first quarter 2010, pursuant to these provisions the Company received 1,087 shares of its common stock for the payment of tax withholding liability for the lapse of restrictions on restricted stock. The 1,087 shares were valued at $35.01 to $38.20 per share (weighted average of $36.85 per share), the fair market value of one share of the Companys common stock on the date that they were tendered to the Company. In the first quarter 2010, pursuant to these provisions the Company also received a total of 1,955 shares of its common stock in payment to exercise stock options. The 1,955 shares were valued at $39.29 to $39.45 per share (weighted average of $39.32 per share), the fair market value of one share of the Companys common stock on the date they were tendered to the Company.
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